FROM: U.S. DEFENSE DEPARTMENT
Service Chiefs Detail 2014 Sequestration Effects
By Cheryl Pellerin
American Forces Press Service
WASHINGTON, Sept. 19, 2013 - One after another yesterday in a hearing before a House panel, the nation's service chiefs described how severe budget cuts required by law in fiscal year 2014 would slash their forces, capabilities and readiness and raise security risks to the American people.
The House Armed Services Committee heard testimony on planning for sequestration in fiscal 2014 from Army Chief of Staff Gen. Ray Odierno, Chief of Naval Operations Adm. Jonathan W. Greenert, Air Force Chief of Staff Gen. Mark A. Welsh III and Marine Corps Commandant Gen. James F. Amos.
Sequestration is the name for a decade-long series of severe budget cuts mandated by the Budget Control Act of 2011 that amount to $470 billion taken from defense spending in addition to an equivalent cut that already was planned.
In fiscal 2013 the cuts, implemented only in the last half of the year and leading to six furlough days for DOD civilian employees, were $37 billion. In fiscal 2014 they are estimated to be $52 billion.
It is imperative to preserve the range of strategic options for the commander in chief, the secretary of defense, and Congress, Odierno told the panel.
"Together," the general said, "we must ensure our Army can deliver a trained and ready force that deters conflict but when necessary has the capability and capacity to execute a sustained successful major combat operation. The Budget Control Act with sequestration simply does not allow us to do this."
If Congress does not act to mitigate the magnitude and speed of reductions with sequestration, Odierno said, the Army will not be able to fully execute requirements of the defense strategic guidance issued in 2012.
By the end of fiscal 2014, the Army will have significantly degraded readiness, as 85 percent of active and reserve brigade combat teams will be unprepared for contingency requirements, he said.
From fiscal 2014 to fiscal 2017, as the Army continues to draw down and is restructured into a smaller force, its readiness will continue to degrade and modernization programs will experience extensive shortfalls, the general added.
"We'll be required to end, restructure or delay over 100 acquisition programs, putting at risk the ground combat vehicle program, the armed aerial scout, the production and modernization of our other aviation programs, system upgrades for unmanned aerial vehicles, and the modernization of air defense command-and-control systems, just to name a few," Odierno told the panel.
Only in fiscal 2018 to fiscal 2023 will the Army begin to rebalance readiness and remodernization, the general said, but this will come at the expense of significant reductions in the Army's number of soldiers and its force structure.
The Army will be forced to take further cuts from a wartime high of 570,000 soldiers in the active Army, 358,000 in the Army National Guard and 205,000 in the Army Reserve to no more than 420,000 in the active Army, 315,000 in the Army National Guard and 185,000 in the Army Reserve, the general said.
This represents a total Army end-strength reduction of more than 18 percent over seven years, a 26 percent reduction in the active Army, a 12 percent reduction in the Army National Guard and a 9 percent reduction in the Army Reserve, he explained, adding that it also will cause a 45-percent reduction in active Army brigade combat teams.
"In my view, these reductions will put at substantial risk our ability to conduct even one sustained major combat operation," Odierno said.
Today's international environment and its emerging threats require a joint force with a ground component that has the capability and the capacity to deter and compel adversaries who threaten our national security interests," he said. "Sequestration severely threatens our ability to do this."
The Army is increasing its investment in the cyber domain, however, the general said, adding at least 1,800 people to that effort.. And noting that the Army provides intelligence not only for the Army, but also for the broader strategic and operational force -- he said Army officials are reviewing how they do that, but that the primacy of what it does in the intelligence community will not change.
In his comments to the panel, Greenert said sequestration also would reduce readiness in the Navy's preparations for fiscal 2014, its impacts realized mainly in operations and maintenance and in investments.
"There are several operational impacts, but the most concerning to me is that reductions in operations and maintenance accounts are going to result in having only one nondeployed carrier strike group and one amphibious ready group trained and ready for surge operations," Greenert said.
"We have a covenant with the global combatant commanders and the national command authority," he told the panel. "We provide carrier strike groups forward ready on deployment, and that's generally two. We have two to three, generally three, ready to respond within about 14 days. And then we have about three within 60 to 90 days. That's what we've signed up to. That's called the fleet response plan. That has to change now."
The Navy also will be forced to cancel maintenance, inevitably leading to reduced life for ships and aircraft, he said, adding that the service will conduct only safety-essential renovation of facilities, further increasing the maintenance backlog.
The Navy probably will be compelled to keep a hiring freeze in place for most of its civilian positions, Greenert added, affecting the spectrum and balance of the civilian force.
Because the Navy will not be able to use prior-year funds to mitigate sequestration cuts in its investment accounts as it could in fiscal 2013, without congressional action it will lose at least a Virginia-class submarine, a littoral combat ship, and an afloat forward-staging base, the admiral said.
"We will be forced to delay the delivery of the next aircraft carrier, the Ford, and will delay the mid-life overhaul of the George Washington aircraft carrier. Also we'll cancel procurement of 11 tactical aircraft," he noted.
Greenert said the Navy needs to transfer $1 billion into its operations and maintenance account by January and $1 billion into its procurement accounts post-sequestration to get shipbuilding back on track and to meet its essential needs.
"Other deliveries of programs and weapon systems may be delayed regardless," he added, "depending on the authority that we are granted to reapportion funds between accounts."
On the topics of nuclear deterrence and cyber, Greenert said, "My job is to provide strategic nuclear deterrence, safe and credible, No. 1. Right behind that is cyber. ... We are staying the course on our cyber warrior plan that we've briefed in here. Through any budget scenario ... we have got to maintain that."
In his remarks, Welsh told the panel that if sequestration stays in place in fiscal 2014, the Air Force will be forced to cut flying hours by up to 15 percent.
"Within three to four months, many of our flying units will be unable to maintain mission readiness," he said. "We'll cancel or significantly curtail major exercises again, and we'll reduce our initial pilot production targets."
Over the long term, sequestration will significantly affect the service's force structure, readiness and modernization, Welsh said, adding that over the next five years the service could be forced to cut up to 25,000 total force airmen, or about 4 percent of its people.
"We also will probably have to cut up to 550 aircraft, about 9 percent of our inventory," the general said. "And to achieve the necessary savings in aircraft force structure, we'll be forced to divest entire fleets of aircraft."
To determine the proper force structure, the Air Force will prioritize global, long-range capabilities and multirole platforms needed to operate in a highly contested environment. Other platforms will be at risk, the general said.
"We plan to protect readiness to the maximum extent possible [and to] prioritize full-spectrum training, because if we're not ready for all possible scenarios, we'll be forced to accept what I believe is unnecessary risk, which means we may not get there in time, it may take the joint team longer to win, and our people will be placed at greater risk," Welsh added.
Air Force modernization and recapitalization forecasts will be bleak if sequestration continues, he said, affecting every program.
"We will favor recapitalization over modernization whenever that decision is required," he said. "That's why our top three acquisition priorities will remain the KC-46, the F-35, and the long-range strike bomber."
The U.S. Air Force is the best in the world and a vital piece of the world's best military team, the general said, "but the impacts are going to be significant, and the risk occurs from readiness in the ways it impacts our airmen."
In his remarks to the panel, Amos said that for the Marine Corps to meet requirements of the defense strategic guidance it needs 186,800 active-duty Marines to meet steady-state requirements, go to war, and preserve a 1-to-3 ratio of deployed time to home-station time for Marines.
"Our share of the 2011 Budget Control Act's $487 billion reduction cut our end strength to 182,000," he said. "Based on sequestration, I simply cannot afford a force that size." Sequestration will force the Marines to plow through scarce resources, funding old equipment and weapon systems to try to keep them functional, the general said.
The Marines will be forced to reduce or cancel modernization programs and infrastructure investments to maintain readiness for deployed and next-to-deploy units, he said. Money that should be available for procuring new equipment will be rerouted to maintenance and spare accounts for legacy equipment, including a 42-year-old Nixon-era amphibious assault vehicle, he added.
In February, the Marines initiated a parallel study to the Defense Department's Strategic Choices and Management Review, Amos said.
"Our exhaustive research, backed by independent analysis, determined that a force of 174,000 Marines is the smallest force that can meet mission requirements. This is a force with levels of risk that are minimally acceptable," he said.
"For instance," he added, "assuming that global requirements for Marine forces remain the same over the foreseeable future, a force of 174,000 will drive the Marine Corps to a 1-to-2 dwell –[ratio] for virtually all Marine units -- gone six months, home 12 months, gone six months."
A force of that size accepts risk when the nation commits itself to the next major theater war, Amos said. The Marines would have 11 fewer combat arms battalions and 14 fewer aircraft squadrons.
"This is a single Marine major contingency operation force that would deploy and fight until the war's end," the general said. "In other words, we would come home when the war was over."
Marines who joined the corps during that period likely would go from drill field to battlefield, he added. Across the joint force, America would start to see shortfalls in the military's ability to accomplish its national strategy.
"Today we are seeing only the tip of the iceberg," Amos said. "Tomorrow's Marines will face violent extremism, battles for influence and natural disasters. Developing states and nonstate actors will acquire new technology and advanced conventional weapons that will challenge our ability to project power and gain access."
To be effective in the new environment, he said, Marines must maintain their forward influence, strategic mobility, power projection, and rapid response capabilities they are known for today.
Sunday, September 22, 2013
CFTC CHAIRMAN GENSLER MAKES REMARKS BEFORE THE ISDA EUROPEAN CONFERENCE
FROM: COMMODITY FUTURES TRADING COMMISSION
Remarks of Chairman Gary Gensler before the ISDA European Conference
September 19, 2013
Thank you, Bob, for that introduction. I would also like to thank the International Swaps and Derivatives Association (ISDA) for the invitation to speak at this annual European conference.
Five years ago this week, the U.S. economy was in a free fall. Federal Reserve Chairman Bernanke and then Treasury Secretary Paulson faced the unthinkable – asking the American people to bail out financial institutions to save the economy.
Five years ago, the swaps market was at the center of the crisis. It cost middle-class Americans – and hardworking people across the globe – their jobs, their pensions and their homes.
Five years ago, there was no reporting of swaps to the public or to regulators
Five years ago, the swaps market was largely uncleared.
Five years ago, unregulated dealers dominated the market.
Five years ago, swaps were not exchange traded – all classic attributes of a dark market.
President Obama then met in 2009 with the G-20 leaders in Pittsburgh. They committed to bringing the swaps market into the light through transparency and oversight.
The President, working with the U.S. Congress, in 2010 gave the task of implementing swaps market reform to the Commodity Futures Trading Commission (CFTC) and security-based swaps market reform to the Securities and Exchange Commission.
Today, the CFTC has substantially completed these reforms.
The CFTC’s 61 final rules, orders and guidance have brought traffic lights, stop signs, and speed limits to the once dark and unregulated swaps roads.
This new era of swaps market reform began to be implemented last October 12. With numerous implementation dates behind us and a number of critical dates coming up, the transition to a reformed swaps market is fully in motion.
This represents a paradigm shift to a transparent, regulated marketplace.
Transparency
Today, the public can see the price and volume of each swap transaction as it occurs on a website, like a modern-day tickertape. Further, half of the swaps market (by volume) is being reported to the public without delay – or as Congress mandated “as soon as technologically practicable.” Soon swaps will be traded on transparent platforms.
This transparency lowers costs for investors, consumers and businesses. It increases liquidity, efficiency and competition.
Regulators have benefited as well. Nearly $400 trillion in market facing swaps now are being reported into data repositories. There is still work to be done to ensure the data in the warehouses is reliable and accessible. There is still work to be done to aggregate across data warehouses as well. But this market transparency is a reality.
This transparency also spans the entire marketplace – cleared as well as bilateral or customized swaps. All categories of market participant from swap dealers to end-users now are to report transactions. Every product, without exception, now must be reported – interest rate; cross currency; foreign exchange; credit index; equity index; and commodities, such as energy and agricultural.
On September 30, the far-flung operations of U.S. financial entities, the guaranteed affiliates and the branches of U.S. persons, also will begin required public reporting.
Further, starting October 2 the public will benefit from the competition and transparency that swap execution facilities (SEFs) will bring to the marketplace. All market participants will have impartial access to SEFs where they can leave live, executable bids or offers in an order book.
We have 18 SEF applications, with seven of them now temporarily registered.
These reforms will finally close what had been known in the U.S. as the “Enron Loophole,” which had allowed for unregistered, multilateral swaps trading platforms.
Five years ago, this market transparency was nonexistent.
Clearing
This month, with the completion of phased implementation, mandatory clearing of interest rate and credit index swaps is a reality. Clearinghouses lower risk and promote access for market participants.
In the month of August, even before our last domestic clearing compliance date, 63 percent of new interest rate swaps were cleared. In total, nearly $180 trillion of the approximately $330 trillion market facing interest rate swaps market, or 53 percent, was cleared at the end of August. This compares to only 21 percent of the market in 2008, according to information on ISDA’s website.
On October 9, the guaranteed affiliates and branches of U.S. persons also will come into central clearing. This includes hedge funds that are operating in the United States but are incorporated in the Cayman Islands.
As we move into 2014, I would anticipate that closer to two-thirds of the interest rate swaps market will be in central clearing.
Yet five years ago, there was no required clearing in the swaps market.
We’ve also made significant progress since the crisis on reforms to protect both futures and swaps customers through the CFTC’s gross margining and the so-called “LSOC” (legal segregation with operational comingling) rules.
Commissioners now are considering final rules that would further strengthen controls around customer funds.
Swap Dealer Oversight
In 2008, swaps were basically not regulated in the United States, Europe or Asia. Among the reasons for this, it was claimed that financial institutions did not need to be specifically regulated for their swaps activity, as they or their affiliates already were generally regulated as banks, investment banks, or insurance companies.
AIG’s downfall was a clear example of what happens with such limited oversight.
Today, we have 82 swap dealers and two major swap participants registered. This group includes the world’s 16 largest financial institutions in the global swaps market, commonly referred to as the G16 dealers. It also includes a number of energy swap dealers.
These reforms help protect the public, lower risk and increase market integrity as swap dealers now must report their transactions and comply with sales practice and other business conduct standards.
Working closely with our counterparts in Europe, we have essentially identical risk mitigation rules that include promoting the timely confirmation of trades and documentation of the trading relationship. Through ISDA protocols, 9,100 market participants have amended their documents to conform to the new U.S. risk mitigation requirements, and 5,200 market participants have conformed to European standards. More than 10,900 market participants are adhering to ISDA’s protocols for sales practices.
These reforms will significantly lower the risk of the swaps market to the public and the economy.
Five years ago, such oversight of swap dealers did not exist.
International Coordination on Swap Market Reform
AIG nearly brought down the U.S. economy through the operations of its offshore guaranteed affiliate.
It wasn’t the only U.S. financial institution that brought risk back home from its far-flung operations during the 2008 crisis.
It was also true at Lehman Brothers, Citigroup, and Bear Stearns. Ten years earlier, it was true at Long-Term Capital Management.
The nature of modern finance is that financial institutions commonly set up hundreds, or even thousands, of legal entities around the globe. When a run starts on any part of an overseas affiliate or branch of a modern financial institution, risk crosses international borders.
The U.S. Congress was clear in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) that the far-flung operations of U.S. enterprises are to be covered by reform.
The CFTC, coordinating closely with global regulators, completed guidance on the cross-border application of the Dodd-Frank Act in July. Swaps market reform covers transactions between non-U.S. swap dealers and guaranteed affiliates of U.S. persons, as well as swaps between two guaranteed affiliates.
Further, the guidance captures offshore hedge funds and collective investment vehicles that have their principal place of business in the U.S. or that are majority owned by U.S. persons.
The guidance embraces the concept of substituted compliances where there are comparable and comprehensive rules abroad. We are currently reviewing submissions for entity-level substituted compliance in six jurisdictions (the European Union, Australia, Canada, Hong Kong, Japan and Switzerland). We’re consulting closely with regulators in those jurisdictions and look forward to making determinations prior to December 21 of this year.
Benchmark Interest Rates
Five years ago, interest rate benchmarks such as LIBOR and Euribor were being readily and pervasively rigged.
Working with the Financial Conduct Authority and the U.S. Justice Department, we brought actions against three global banks for such abuses.
LIBOR and Euribor are critical reference rates for global futures and swaps markets. In the U.S., LIBOR is the reference rate for 70 percent of the futures market and more than half of the swaps market. It is the reference rate for more than $10 trillion in loans.
We must ensure that these benchmark interest rates have market integrity and that they are based on fact, not fiction.
The interbank, unsecured market that the benchmarks are intended to measure, however, essentially no longer exists, particularly for longer tenors.
The U.S. Financial Stability Oversight Council recommended that U.S. regulators work with foreign regulators, international bodies, and market participants to promptly identify alternative interest rate benchmarks anchored in observable transactions and supported by appropriate governance structures, and to develop a plan to accomplish a transition.
An International Organization of Securities Commissions (IOSCO) task force took an important step in announcing new principles in July that require benchmarks to be anchored by observable transactions and subject to robust governance processes that address potential conflicts of interest.
Building on IOSCO’s work, the Financial Stability Board is initiating a review of alternatives to existing benchmark interest rates, as well as considering any potential transition issues.
I want to thank Martin Wheatley, with whom I’ve worked so closely on these issues, for all of his efforts and leadership.
Conclusion
In the five years since the financial crisis, the swaps market has experienced a paradigm shift.
No longer is the market closed and dark.
With the substantially completed reforms, the public and regulators have transparency. We have a majority of the market moving to central clearing. We have oversight of swap dealers, including the far-flung operations of U.S financial institutions.
The public and the markets are benefitting from these common-sense rules of the road.
I’d like to close by saying that the CFTC is currently an underfunded agency. We are only slightly larger than we were 20 years ago. At that time, we oversaw just the futures market, which is less than a tenth of the size of the swaps market we now oversee as well.
It is critical to the public’s confidence in these markets that the regulator is well funded.
Investments in both people and technology are needed for effective market oversight – like having more cops on the beat.
It’s only with a well-funded CFTC that market participants, including this association’s members, will get timely reviews of applications and petitions and answers to your questions.
Last Updated: September 19, 2013
Remarks of Chairman Gary Gensler before the ISDA European Conference
September 19, 2013
Thank you, Bob, for that introduction. I would also like to thank the International Swaps and Derivatives Association (ISDA) for the invitation to speak at this annual European conference.
Five years ago this week, the U.S. economy was in a free fall. Federal Reserve Chairman Bernanke and then Treasury Secretary Paulson faced the unthinkable – asking the American people to bail out financial institutions to save the economy.
Five years ago, the swaps market was at the center of the crisis. It cost middle-class Americans – and hardworking people across the globe – their jobs, their pensions and their homes.
Five years ago, there was no reporting of swaps to the public or to regulators
Five years ago, the swaps market was largely uncleared.
Five years ago, unregulated dealers dominated the market.
Five years ago, swaps were not exchange traded – all classic attributes of a dark market.
President Obama then met in 2009 with the G-20 leaders in Pittsburgh. They committed to bringing the swaps market into the light through transparency and oversight.
The President, working with the U.S. Congress, in 2010 gave the task of implementing swaps market reform to the Commodity Futures Trading Commission (CFTC) and security-based swaps market reform to the Securities and Exchange Commission.
Today, the CFTC has substantially completed these reforms.
The CFTC’s 61 final rules, orders and guidance have brought traffic lights, stop signs, and speed limits to the once dark and unregulated swaps roads.
This new era of swaps market reform began to be implemented last October 12. With numerous implementation dates behind us and a number of critical dates coming up, the transition to a reformed swaps market is fully in motion.
This represents a paradigm shift to a transparent, regulated marketplace.
Transparency
Today, the public can see the price and volume of each swap transaction as it occurs on a website, like a modern-day tickertape. Further, half of the swaps market (by volume) is being reported to the public without delay – or as Congress mandated “as soon as technologically practicable.” Soon swaps will be traded on transparent platforms.
This transparency lowers costs for investors, consumers and businesses. It increases liquidity, efficiency and competition.
Regulators have benefited as well. Nearly $400 trillion in market facing swaps now are being reported into data repositories. There is still work to be done to ensure the data in the warehouses is reliable and accessible. There is still work to be done to aggregate across data warehouses as well. But this market transparency is a reality.
This transparency also spans the entire marketplace – cleared as well as bilateral or customized swaps. All categories of market participant from swap dealers to end-users now are to report transactions. Every product, without exception, now must be reported – interest rate; cross currency; foreign exchange; credit index; equity index; and commodities, such as energy and agricultural.
On September 30, the far-flung operations of U.S. financial entities, the guaranteed affiliates and the branches of U.S. persons, also will begin required public reporting.
Further, starting October 2 the public will benefit from the competition and transparency that swap execution facilities (SEFs) will bring to the marketplace. All market participants will have impartial access to SEFs where they can leave live, executable bids or offers in an order book.
We have 18 SEF applications, with seven of them now temporarily registered.
These reforms will finally close what had been known in the U.S. as the “Enron Loophole,” which had allowed for unregistered, multilateral swaps trading platforms.
Five years ago, this market transparency was nonexistent.
Clearing
This month, with the completion of phased implementation, mandatory clearing of interest rate and credit index swaps is a reality. Clearinghouses lower risk and promote access for market participants.
In the month of August, even before our last domestic clearing compliance date, 63 percent of new interest rate swaps were cleared. In total, nearly $180 trillion of the approximately $330 trillion market facing interest rate swaps market, or 53 percent, was cleared at the end of August. This compares to only 21 percent of the market in 2008, according to information on ISDA’s website.
On October 9, the guaranteed affiliates and branches of U.S. persons also will come into central clearing. This includes hedge funds that are operating in the United States but are incorporated in the Cayman Islands.
As we move into 2014, I would anticipate that closer to two-thirds of the interest rate swaps market will be in central clearing.
Yet five years ago, there was no required clearing in the swaps market.
We’ve also made significant progress since the crisis on reforms to protect both futures and swaps customers through the CFTC’s gross margining and the so-called “LSOC” (legal segregation with operational comingling) rules.
Commissioners now are considering final rules that would further strengthen controls around customer funds.
Swap Dealer Oversight
In 2008, swaps were basically not regulated in the United States, Europe or Asia. Among the reasons for this, it was claimed that financial institutions did not need to be specifically regulated for their swaps activity, as they or their affiliates already were generally regulated as banks, investment banks, or insurance companies.
AIG’s downfall was a clear example of what happens with such limited oversight.
Today, we have 82 swap dealers and two major swap participants registered. This group includes the world’s 16 largest financial institutions in the global swaps market, commonly referred to as the G16 dealers. It also includes a number of energy swap dealers.
These reforms help protect the public, lower risk and increase market integrity as swap dealers now must report their transactions and comply with sales practice and other business conduct standards.
Working closely with our counterparts in Europe, we have essentially identical risk mitigation rules that include promoting the timely confirmation of trades and documentation of the trading relationship. Through ISDA protocols, 9,100 market participants have amended their documents to conform to the new U.S. risk mitigation requirements, and 5,200 market participants have conformed to European standards. More than 10,900 market participants are adhering to ISDA’s protocols for sales practices.
These reforms will significantly lower the risk of the swaps market to the public and the economy.
Five years ago, such oversight of swap dealers did not exist.
International Coordination on Swap Market Reform
AIG nearly brought down the U.S. economy through the operations of its offshore guaranteed affiliate.
It wasn’t the only U.S. financial institution that brought risk back home from its far-flung operations during the 2008 crisis.
It was also true at Lehman Brothers, Citigroup, and Bear Stearns. Ten years earlier, it was true at Long-Term Capital Management.
The nature of modern finance is that financial institutions commonly set up hundreds, or even thousands, of legal entities around the globe. When a run starts on any part of an overseas affiliate or branch of a modern financial institution, risk crosses international borders.
The U.S. Congress was clear in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) that the far-flung operations of U.S. enterprises are to be covered by reform.
The CFTC, coordinating closely with global regulators, completed guidance on the cross-border application of the Dodd-Frank Act in July. Swaps market reform covers transactions between non-U.S. swap dealers and guaranteed affiliates of U.S. persons, as well as swaps between two guaranteed affiliates.
Further, the guidance captures offshore hedge funds and collective investment vehicles that have their principal place of business in the U.S. or that are majority owned by U.S. persons.
The guidance embraces the concept of substituted compliances where there are comparable and comprehensive rules abroad. We are currently reviewing submissions for entity-level substituted compliance in six jurisdictions (the European Union, Australia, Canada, Hong Kong, Japan and Switzerland). We’re consulting closely with regulators in those jurisdictions and look forward to making determinations prior to December 21 of this year.
Benchmark Interest Rates
Five years ago, interest rate benchmarks such as LIBOR and Euribor were being readily and pervasively rigged.
Working with the Financial Conduct Authority and the U.S. Justice Department, we brought actions against three global banks for such abuses.
LIBOR and Euribor are critical reference rates for global futures and swaps markets. In the U.S., LIBOR is the reference rate for 70 percent of the futures market and more than half of the swaps market. It is the reference rate for more than $10 trillion in loans.
We must ensure that these benchmark interest rates have market integrity and that they are based on fact, not fiction.
The interbank, unsecured market that the benchmarks are intended to measure, however, essentially no longer exists, particularly for longer tenors.
The U.S. Financial Stability Oversight Council recommended that U.S. regulators work with foreign regulators, international bodies, and market participants to promptly identify alternative interest rate benchmarks anchored in observable transactions and supported by appropriate governance structures, and to develop a plan to accomplish a transition.
An International Organization of Securities Commissions (IOSCO) task force took an important step in announcing new principles in July that require benchmarks to be anchored by observable transactions and subject to robust governance processes that address potential conflicts of interest.
Building on IOSCO’s work, the Financial Stability Board is initiating a review of alternatives to existing benchmark interest rates, as well as considering any potential transition issues.
I want to thank Martin Wheatley, with whom I’ve worked so closely on these issues, for all of his efforts and leadership.
Conclusion
In the five years since the financial crisis, the swaps market has experienced a paradigm shift.
No longer is the market closed and dark.
With the substantially completed reforms, the public and regulators have transparency. We have a majority of the market moving to central clearing. We have oversight of swap dealers, including the far-flung operations of U.S financial institutions.
The public and the markets are benefitting from these common-sense rules of the road.
I’d like to close by saying that the CFTC is currently an underfunded agency. We are only slightly larger than we were 20 years ago. At that time, we oversaw just the futures market, which is less than a tenth of the size of the swaps market we now oversee as well.
It is critical to the public’s confidence in these markets that the regulator is well funded.
Investments in both people and technology are needed for effective market oversight – like having more cops on the beat.
It’s only with a well-funded CFTC that market participants, including this association’s members, will get timely reviews of applications and petitions and answers to your questions.
Last Updated: September 19, 2013
TRAFFICKER IN BLACK RHINOCEROS HORNS ARRESTED
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, September 18, 2013
Rhino Horn Trafficker Arrested and Detained
Irish National Arrested for Passing Fraudulent Documents in Connection with His Sale of Four Black Rhinoceros Horns for $50,000
Earlier today, a federal magistrate judge in Brooklyn detained an Irish national who was arrested on Saturday and charged in a complaint for false labeling in connection with his alleged role in international rhinoceros horn smuggling in violation of the Lacey Act. The arrest and charge is a result of “Operation Crash,” a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.
The Department of Justice filed a complaint in federal court in the Eastern District of New York alleging that Michael Slattery, Jr., a 25-year-old Irish national, fraudulently purchased a set of black rhinoceros horns in Texas and then travelled to New York and used a falsified document to sell the horns for $50,000.
The charge and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division.
According to the complaint filed in on September 14, 2013, in 2010 Slattery traveled from England to Texas to acquire black rhinoceros horns. Slattery and others then used a day laborer with a Texas driver’s license as a straw buyer to purchase two horns from an auction house in Austin. The complaint charges that Slattery and his group then traveled to New York where they presented a fraudulent Endangered Species Bill of Sale and sold those two and two other horns to an individual for $50,000.
According to court records and government statements made in court, Slattery is a member of The Rathkeale Rovers (also known as the “Irish Travelers”), which are tight-knit extended family groups that live a nomadic lifestyle. The group leverages the rising price for rhinoceros horns in the black market to be used for traditional medicines and carving. According to information made public by Europol, the Rathkeale Rovers have been involved in an epidemic of raids on museums in Europe in which rhinoceros horns have been stolen.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups. Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. As a result of this demand, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.
The charge in the complaint is merely and allegation, and the defendant is presumed innocent unless and until proven guilty. The government’s case is being prosecuted by Assistant U.S. Attorney Julia Nestor of the Eastern District of New York and Trial Attorney Gary N. Donner of the Justice Department’s Environmental and Natural Resources Division.
Wednesday, September 18, 2013
Rhino Horn Trafficker Arrested and Detained
Irish National Arrested for Passing Fraudulent Documents in Connection with His Sale of Four Black Rhinoceros Horns for $50,000
Earlier today, a federal magistrate judge in Brooklyn detained an Irish national who was arrested on Saturday and charged in a complaint for false labeling in connection with his alleged role in international rhinoceros horn smuggling in violation of the Lacey Act. The arrest and charge is a result of “Operation Crash,” a nationwide effort led by the U.S. Fish & Wildlife Service (FWS) and the Justice Department to investigate and prosecute those involved in the black market trade of endangered rhinoceros horns.
The Department of Justice filed a complaint in federal court in the Eastern District of New York alleging that Michael Slattery, Jr., a 25-year-old Irish national, fraudulently purchased a set of black rhinoceros horns in Texas and then travelled to New York and used a falsified document to sell the horns for $50,000.
The charge and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division.
According to the complaint filed in on September 14, 2013, in 2010 Slattery traveled from England to Texas to acquire black rhinoceros horns. Slattery and others then used a day laborer with a Texas driver’s license as a straw buyer to purchase two horns from an auction house in Austin. The complaint charges that Slattery and his group then traveled to New York where they presented a fraudulent Endangered Species Bill of Sale and sold those two and two other horns to an individual for $50,000.
According to court records and government statements made in court, Slattery is a member of The Rathkeale Rovers (also known as the “Irish Travelers”), which are tight-knit extended family groups that live a nomadic lifestyle. The group leverages the rising price for rhinoceros horns in the black market to be used for traditional medicines and carving. According to information made public by Europol, the Rathkeale Rovers have been involved in an epidemic of raids on museums in Europe in which rhinoceros horns have been stolen.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by more than 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population. In China, there is a tradition dating back centuries of intricately carved rhinoceros horn cups. Drinking from such a cup was believed to bring good health and such carvings are highly prized by collectors. As a result of this demand, rhino populations have declined by more than 90 percent since 1970. South Africa, for example, has witnessed a rapid escalation in poaching of live animals, rising from 13 in 2007 to more than 618 in 2012.
The charge in the complaint is merely and allegation, and the defendant is presumed innocent unless and until proven guilty. The government’s case is being prosecuted by Assistant U.S. Attorney Julia Nestor of the Eastern District of New York and Trial Attorney Gary N. Donner of the Justice Department’s Environmental and Natural Resources Division.
SEC VOTES ON EXECUTIVE "PAY RATIO" PROPOSAL AND DISSENTING OPINION
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Sept. 18, 2013
The Securities and Exchange Commission today voted 3-2 to propose a new rule that would require public companies to disclose the ratio of the compensation of its chief executive officer (CEO) to the median compensation of its employees.
The new rule, required under the Dodd-Frank Act, would not prescribe a specific methodology for companies to use in calculating a “pay ratio.” Instead, companies would have the flexibility to determine the median annual total compensation of its employees in a way that best suits its particular circumstances.
“This proposal would provide companies significant flexibility in complying with the disclosure requirement while still fulfilling the statutory mandate,” said SEC Chair Mary Jo White. “We are very interested in receiving comments on the proposed approach and the flexibility it affords.”
The proposal will have a 60-day public comment period following its publication in the Federal Register.
Dissenting Statement of Commissioner Daniel M. Gallagher Concerning the Proposal of Rules to Implement the Section 953(b) Pay Ratio Disclosure Provision of the Dodd-Frank Act
Commissioner Daniel M. Gallagher
SEC Open Meeting, Washington, D.C.
Sept. 18, 2013
Today, the Commission will vote on proposed rules to implement yet another Dodd-Frank mandate having nothing to do with the SEC’s mission and everything to do with the politics of not letting a serious crisis go to waste.
The pay ratio computation that the proposed rules would require is sure to cost a lot and teach very little. Its only conceivable purpose is to name and, presumably in the view of its proponents, shame U.S. issuers and their executives. This political wish-list mandate represents another page of the Dodd-Frank playbook for special interest groups who seem intent on turning the notion of materiality-based disclosure on its head.
There are no – count them, zero – benefits that our staff have been able to discern. As the proposal explains, “[T]he lack of a specific market failure identified as motivating the enactment of this provision poses significant challenges in quantifying potential economic benefits, if any, from the pay ratio disclosure[.]”[1]
So much for the benefits. If you don’t have a good imagination – or a robust political agenda – you simply won’t find any.
* * *
It could have been worse, and I commend, as always, our expert staff in the Division of Corporation Finance, under the Chair’s direction, for taking a somewhat more flexible approach to the proposal than many which have been considered. But the fact that the Commission could have imposed even greater costs does not create some otherwise absent benefit to mitigate the wasteful costs of the proposal. It merely confirms that there are even more costly ways to accomplish nothing.
So why do this at all? Simple. Dodd-Frank says we must.[2] Crossing one more required rule proposal off our long to-do list of unfinished Dodd-Frank mandates might be the closest thing to a benefit that an objective analysis can squeeze out of today’s proposal.
It's important not to forget, however, that the pay ratio mandate, unlike so many in Dodd-Frank, carries no congressionally imposed deadline. We need not act on it now or soon. It has, nevertheless, jumped to the front of the queue.
We must, therefore, acknowledge as another cost of the rule the decision not to do something else, something more pressing, something that would have yielded discernible benefits – a JOBS Act rulemaking to address the ongoing employment crisis in this country, perhaps, or something – anything – to do with the financial crisis – maybe, for example, the Dodd-Frank section 939A rulemaking that is years overdue.
Given the tremendous strain placed on our resources by Dodd-Frank's seemingly endless stream of mandates as well as our "day job" of doing the blocking-and-tackling work that actually protects investors, maintains fair, orderly, and efficient markets, and facilitates capital formation, today's rulemaking represents a significant and distressing misallocation of time and resources.
* * *
Section 953(b) of Dodd-Frank mandates the application of the pay ratio requirement to “each issuer.” A flexible approach, designed to reduce costs to issuers, would have defined the word “issuer” simply to mean the registrant itself, thus requiring issuers to include only their own employees in the median employee compensation calculation. Such an interpretation would also have the benefit of being consistent with the plain language of the statute. It would have been consistent with the definition of the term “issuer” in both the Securities Act and the Exchange Act, which define the term to mean any person who issues or proposes to issue any security.[3]
This morning’s proposal, however, interprets the term “issuer” by reference to Item 402 of Regulation S-K, which has enterprise-wide applicability and so concludes that in section 953(b) the term “issuer” should likewise have enterprise-wide scope.[4] This inflexible interpretation has the effect of bringing exponentially more entities – and all of their employees’ compensation – into the pay ratio provision’s costly ambit.
Even more problematically, the proposal would extend the scope of the proposed rules further by requiring the calculation of the median salary and, therefore, the resulting ratio, to be global – that is, applicable not only to the full-time U.S. employees of the issuer and its subsidiaries, but to all of its employees everywhere in the world – including the worldwide employees of its subsidiaries. And the median calculation must include seasonal, temporary, and part-time employees – assuming they are on the rolls at fiscal year’s end – without, however, requiring annualization of their compensation.[5]
Even from the perspective of the 953(b) supporters, these interpretations of the statute are unnecessary overkill. Requiring issuers to calculate the median salary based solely on their own full-time employees located in the United States would still have yielded pay ratio figures more than impressive enough to serve the law’s scapegoating and shaming goals. Such a calculation would still have been complex, although much less costly and more in line with our responsibility as regulators to strike an appropriate balance between costs and benefits.
In addition, a more reasonable, literal interpretation of the statutory mandate would have avoided the distortions the chosen method inevitably introduces. Why, after all, should we require a global calculation, thereby introducing a non-scientific and uninstructive comparison that ignores the variances in the costs of labor and the costs of living in widely disparate economies worldwide?[6] Of what conceivable use could comparing the pay of workers in developing nations to that of U.S. CEOs be to the investors the SEC is tasked with protecting? Why include part-time and temporary and seasonal employees? Why incorporate currency exchange assumptions or pay variations due to governmental social benefits schemes that vary from country to country? These and other extraneous variables introduce a degree of complexity and obfuscation that renders meaningless what was meant to be a simple ratio.
The only logical conclusion is that the real point of this exercise is to ensure the most eye-poppingly huge ratios possible. Gimmicks like these don’t belong in corporate filings. The agency would sanction issuers who acted so “creatively” in other areas of their 10K or proxy disclosure.
* * *
Finally, I remind the Commission, once again, that the Exchange Act mandates that we consider the effect of what we do on competition,[7] which even the proposal itself acknowledges by noting, “the competitive impact of compliance with the disclosure requirements prescribed by Section 953(b) could disproportionately fall on U.S. companies with large workforces and global operations….”[8] Notwithstanding this clear mandate, today’s proposal continues a trend of politically motivated new disclosure requirements that impose unnecessary compliance costs on U.S. issuers, reducing their international competitiveness while providing no benefits to investors and political benefits to special interest groups.[9]
* * *
Putting the most positive face possible on today’s proposal, then, its benefits are not so much elusive, as illusory. Indeed, the “benefits” portion of our economists’ evaluation of the proposed rules is really just a discussion of relative costs. It amounts to this: Congress told us to do it, and since we could have done it in a more costly way than we did, the result is an implicit net benefit. I believe this is the best that DERA could do with such a rotten mandate, but none of us should be happy about it.
I cannot see any way to support today’s proposal. I lament the time wasted on it, and I urge investors, public companies and others directly affected by the proposal to submit detailed, data-heavy comments.
[1] Release at p. 91 (“Economic Analysis”).
[2] Note, however, that on June 19, 2013, a bipartisan majority of the House Financial Services Committee reported favorably H.R. 1135, which would repeal Section 953(b).
[3] Securities Act, sec. 2(a)(4); Exchange Act, sec. 3(a)(8).
[4] “By directing the Commission to amend Item 402, we believe that Section 953(b) is intended to cover employees on an enterprise-wide basis, including both the registrant and its subsidiaries, which is the same approach as that taken for other Item 402 information” (Release at p. 110), and “we believe it is appropriate to apply the same definition of subsidiary that is used for other disclosure under Item 402” (id. at 111).
[5] The Release permits annualization for permanent employees, which would include those employed at fiscal year’s end but not for the whole fiscal year, as well as permanent part-time employees. It does not permit annualization for seasonal or temporary employees employed at year’s end. Release at 33-34 and 114-15.
[6] The Release acknowledges that any comparison of registrants’ pay ratios would be uninstructive: “[W]e do not believe that precise comparability or conformity of disclosure from registrant to registrant is necessarily achievable due to the variety of factors that could cause the ratio to differ…” (Release at 35).
[7] Exchange Act, sec. 23(a)(2).
[8] Release at p. 104 (“Economic Analysis”).
[9] See, e.g., Release No. 34-67716 (“Conflict Minerals”), Aug. 22, 2012, and Rel. No. 34-67717 (“Disclosure of Payments by Resource Extraction Issuers”), Aug. 22, 2012 (subsequently vacated and remanded).
Sept. 18, 2013
The Securities and Exchange Commission today voted 3-2 to propose a new rule that would require public companies to disclose the ratio of the compensation of its chief executive officer (CEO) to the median compensation of its employees.
The new rule, required under the Dodd-Frank Act, would not prescribe a specific methodology for companies to use in calculating a “pay ratio.” Instead, companies would have the flexibility to determine the median annual total compensation of its employees in a way that best suits its particular circumstances.
“This proposal would provide companies significant flexibility in complying with the disclosure requirement while still fulfilling the statutory mandate,” said SEC Chair Mary Jo White. “We are very interested in receiving comments on the proposed approach and the flexibility it affords.”
The proposal will have a 60-day public comment period following its publication in the Federal Register.
Dissenting Statement of Commissioner Daniel M. Gallagher Concerning the Proposal of Rules to Implement the Section 953(b) Pay Ratio Disclosure Provision of the Dodd-Frank Act
Commissioner Daniel M. Gallagher
SEC Open Meeting, Washington, D.C.
Sept. 18, 2013
Today, the Commission will vote on proposed rules to implement yet another Dodd-Frank mandate having nothing to do with the SEC’s mission and everything to do with the politics of not letting a serious crisis go to waste.
The pay ratio computation that the proposed rules would require is sure to cost a lot and teach very little. Its only conceivable purpose is to name and, presumably in the view of its proponents, shame U.S. issuers and their executives. This political wish-list mandate represents another page of the Dodd-Frank playbook for special interest groups who seem intent on turning the notion of materiality-based disclosure on its head.
There are no – count them, zero – benefits that our staff have been able to discern. As the proposal explains, “[T]he lack of a specific market failure identified as motivating the enactment of this provision poses significant challenges in quantifying potential economic benefits, if any, from the pay ratio disclosure[.]”[1]
So much for the benefits. If you don’t have a good imagination – or a robust political agenda – you simply won’t find any.
* * *
It could have been worse, and I commend, as always, our expert staff in the Division of Corporation Finance, under the Chair’s direction, for taking a somewhat more flexible approach to the proposal than many which have been considered. But the fact that the Commission could have imposed even greater costs does not create some otherwise absent benefit to mitigate the wasteful costs of the proposal. It merely confirms that there are even more costly ways to accomplish nothing.
So why do this at all? Simple. Dodd-Frank says we must.[2] Crossing one more required rule proposal off our long to-do list of unfinished Dodd-Frank mandates might be the closest thing to a benefit that an objective analysis can squeeze out of today’s proposal.
It's important not to forget, however, that the pay ratio mandate, unlike so many in Dodd-Frank, carries no congressionally imposed deadline. We need not act on it now or soon. It has, nevertheless, jumped to the front of the queue.
We must, therefore, acknowledge as another cost of the rule the decision not to do something else, something more pressing, something that would have yielded discernible benefits – a JOBS Act rulemaking to address the ongoing employment crisis in this country, perhaps, or something – anything – to do with the financial crisis – maybe, for example, the Dodd-Frank section 939A rulemaking that is years overdue.
Given the tremendous strain placed on our resources by Dodd-Frank's seemingly endless stream of mandates as well as our "day job" of doing the blocking-and-tackling work that actually protects investors, maintains fair, orderly, and efficient markets, and facilitates capital formation, today's rulemaking represents a significant and distressing misallocation of time and resources.
* * *
Section 953(b) of Dodd-Frank mandates the application of the pay ratio requirement to “each issuer.” A flexible approach, designed to reduce costs to issuers, would have defined the word “issuer” simply to mean the registrant itself, thus requiring issuers to include only their own employees in the median employee compensation calculation. Such an interpretation would also have the benefit of being consistent with the plain language of the statute. It would have been consistent with the definition of the term “issuer” in both the Securities Act and the Exchange Act, which define the term to mean any person who issues or proposes to issue any security.[3]
This morning’s proposal, however, interprets the term “issuer” by reference to Item 402 of Regulation S-K, which has enterprise-wide applicability and so concludes that in section 953(b) the term “issuer” should likewise have enterprise-wide scope.[4] This inflexible interpretation has the effect of bringing exponentially more entities – and all of their employees’ compensation – into the pay ratio provision’s costly ambit.
Even more problematically, the proposal would extend the scope of the proposed rules further by requiring the calculation of the median salary and, therefore, the resulting ratio, to be global – that is, applicable not only to the full-time U.S. employees of the issuer and its subsidiaries, but to all of its employees everywhere in the world – including the worldwide employees of its subsidiaries. And the median calculation must include seasonal, temporary, and part-time employees – assuming they are on the rolls at fiscal year’s end – without, however, requiring annualization of their compensation.[5]
Even from the perspective of the 953(b) supporters, these interpretations of the statute are unnecessary overkill. Requiring issuers to calculate the median salary based solely on their own full-time employees located in the United States would still have yielded pay ratio figures more than impressive enough to serve the law’s scapegoating and shaming goals. Such a calculation would still have been complex, although much less costly and more in line with our responsibility as regulators to strike an appropriate balance between costs and benefits.
In addition, a more reasonable, literal interpretation of the statutory mandate would have avoided the distortions the chosen method inevitably introduces. Why, after all, should we require a global calculation, thereby introducing a non-scientific and uninstructive comparison that ignores the variances in the costs of labor and the costs of living in widely disparate economies worldwide?[6] Of what conceivable use could comparing the pay of workers in developing nations to that of U.S. CEOs be to the investors the SEC is tasked with protecting? Why include part-time and temporary and seasonal employees? Why incorporate currency exchange assumptions or pay variations due to governmental social benefits schemes that vary from country to country? These and other extraneous variables introduce a degree of complexity and obfuscation that renders meaningless what was meant to be a simple ratio.
The only logical conclusion is that the real point of this exercise is to ensure the most eye-poppingly huge ratios possible. Gimmicks like these don’t belong in corporate filings. The agency would sanction issuers who acted so “creatively” in other areas of their 10K or proxy disclosure.
* * *
Finally, I remind the Commission, once again, that the Exchange Act mandates that we consider the effect of what we do on competition,[7] which even the proposal itself acknowledges by noting, “the competitive impact of compliance with the disclosure requirements prescribed by Section 953(b) could disproportionately fall on U.S. companies with large workforces and global operations….”[8] Notwithstanding this clear mandate, today’s proposal continues a trend of politically motivated new disclosure requirements that impose unnecessary compliance costs on U.S. issuers, reducing their international competitiveness while providing no benefits to investors and political benefits to special interest groups.[9]
* * *
Putting the most positive face possible on today’s proposal, then, its benefits are not so much elusive, as illusory. Indeed, the “benefits” portion of our economists’ evaluation of the proposed rules is really just a discussion of relative costs. It amounts to this: Congress told us to do it, and since we could have done it in a more costly way than we did, the result is an implicit net benefit. I believe this is the best that DERA could do with such a rotten mandate, but none of us should be happy about it.
I cannot see any way to support today’s proposal. I lament the time wasted on it, and I urge investors, public companies and others directly affected by the proposal to submit detailed, data-heavy comments.
[1] Release at p. 91 (“Economic Analysis”).
[2] Note, however, that on June 19, 2013, a bipartisan majority of the House Financial Services Committee reported favorably H.R. 1135, which would repeal Section 953(b).
[3] Securities Act, sec. 2(a)(4); Exchange Act, sec. 3(a)(8).
[4] “By directing the Commission to amend Item 402, we believe that Section 953(b) is intended to cover employees on an enterprise-wide basis, including both the registrant and its subsidiaries, which is the same approach as that taken for other Item 402 information” (Release at p. 110), and “we believe it is appropriate to apply the same definition of subsidiary that is used for other disclosure under Item 402” (id. at 111).
[5] The Release permits annualization for permanent employees, which would include those employed at fiscal year’s end but not for the whole fiscal year, as well as permanent part-time employees. It does not permit annualization for seasonal or temporary employees employed at year’s end. Release at 33-34 and 114-15.
[6] The Release acknowledges that any comparison of registrants’ pay ratios would be uninstructive: “[W]e do not believe that precise comparability or conformity of disclosure from registrant to registrant is necessarily achievable due to the variety of factors that could cause the ratio to differ…” (Release at 35).
[7] Exchange Act, sec. 23(a)(2).
[8] Release at p. 104 (“Economic Analysis”).
[9] See, e.g., Release No. 34-67716 (“Conflict Minerals”), Aug. 22, 2012, and Rel. No. 34-67717 (“Disclosure of Payments by Resource Extraction Issuers”), Aug. 22, 2012 (subsequently vacated and remanded).
FTC WARNS PUBLIC OF POSSIBLE DONATION SCAMS AFTER COLORADO FLOODING DISASTER
FROM: FEDERAL TRADE COMMISSION
If You're Helping Colorado Flood Victims, Make Sure Your Donations Count
In the wake of the flooding in Colorado, the Federal Trade Commission, the nation’s consumer protection agency, urges people to be wary of charity scams.
If you’re looking for a way to give, do some research to ensure that your donation will go to a reputable organization. Urgent appeals that you get in person, by phone or mail, by e-mail, on websites, or on social networking sites may not be on the up-and-up. Unfortunately, legitimate charities face competition from fraudsters who either solicit for bogus charities or aren't entirely honest about how a so-called charity will use your contribution.
If you’re asked to make a charitable donation to support victims of the flooding in Colorado, consider these tips:
Donate to charities you know and trust. Be alert for charities that seem to have sprung up overnight in connection with current events.
Ask if a caller is a paid fundraiser, who they work for, and what percentage of your donation goes to the charity and to the fundraiser. If you don’t get a clear answer – or if you don’t like the answer – consider donating to a different organization.
Don’t give out personal or financial information – including your credit card or bank account number – a unless you know the charity is reputable.
Never send cash: you can’t be sure the organization will receive your donation, and you won’t have a record for tax purposes.
Check out the charity with the Better Business Bureau's (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
Find out if the charity or fundraiser must be registered in your state by contacting the National Association of State Charity Officials.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
If You're Helping Colorado Flood Victims, Make Sure Your Donations Count
In the wake of the flooding in Colorado, the Federal Trade Commission, the nation’s consumer protection agency, urges people to be wary of charity scams.
If you’re looking for a way to give, do some research to ensure that your donation will go to a reputable organization. Urgent appeals that you get in person, by phone or mail, by e-mail, on websites, or on social networking sites may not be on the up-and-up. Unfortunately, legitimate charities face competition from fraudsters who either solicit for bogus charities or aren't entirely honest about how a so-called charity will use your contribution.
If you’re asked to make a charitable donation to support victims of the flooding in Colorado, consider these tips:
Donate to charities you know and trust. Be alert for charities that seem to have sprung up overnight in connection with current events.
Ask if a caller is a paid fundraiser, who they work for, and what percentage of your donation goes to the charity and to the fundraiser. If you don’t get a clear answer – or if you don’t like the answer – consider donating to a different organization.
Don’t give out personal or financial information – including your credit card or bank account number – a unless you know the charity is reputable.
Never send cash: you can’t be sure the organization will receive your donation, and you won’t have a record for tax purposes.
Check out the charity with the Better Business Bureau's (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
Find out if the charity or fundraiser must be registered in your state by contacting the National Association of State Charity Officials.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
Saturday, September 21, 2013
DOD OFFICIAL SITES LESSONS LEARNED FROM FORT HOOD SHOOTINGS
FROM: U.S. DEPARTMENT OF DEFENSE
Officials: Fort Hood Lessons May Have Saved Lives at Navy Yard
By Cheryl Pellerin
American Forces Press Service
WASHINGTON, Sept. 20, 2013 - Of 89 recommendations that came from two reviews of the 2009 shooting that killed 13 people at Fort Hood in Texas, 52 are fully implemented, and some may have helped to save lives during the Navy Yard shooting here Sept. 16, senior defense officials said.
The officials, who briefed reporters here this week, were unable to discuss the ongoing investigation involving a civilian contractor, 34-year-old Aaron Alexis, who killed 12 people and wounded several others at the Naval Sea Systems Command headquarters building before being killed by police.
But they did discuss results of the Defense Department's 2010 independent review of events at Fort Hood and final recommendations from that review, and of a 2012 Defense Science Board review sought by DOD to look deeper into the motivations of Fort Hood shooter Nidal Hasan, a U.S. Army major and psychiatrist, and other potential violent actors.
"In the area of response, there are a few very specific things that I believe helped save lives as a result and led to a faster response time [and] greater cooperation between local law enforcement with the FBI and in terms of warning people ... on the Navy Yard at the time," a senior defense official said.
Specifically, he added, as a result of one of the DOD recommendations, the department is using a North American telephone network feature called enhanced 911, or E-911, to push out alert notices during emergencies on DOD installations.
Because of some of the recommendations, the official said, guards have received training for scenarios in which they must respond to emergencies involving an active shooter or shooters, and there are new information-sharing agreements between the FBI and local law enforcement agencies that allow military-civilian collaboration.
"There are two examples of how we've increased information sharing," the official said. First, "the Department of Defense and the FBI signed a memorandum of understanding by which if either organization has information about a threat to or from DOD personnel, we are obligated to share with each other."
The senior defense official said that's important because DOD persons and installations are a prime target of what's called homegrown violent extremism.
For those wanting to commit acts of violence, DOD people and facilities often are the target, he added, "so it matters to us when FBI has an operational case that they share information about threats that might be around a particular location or base."
Second, he said, the Defense Department now has people working in a significant number of FBI-led joint terrorism task forces, giving DOD personnel insight into and awareness of FBI cases and how they may be relevant to DOD safety and security.
"I think we're in a significantly better place," the official said. "Obviously we're not there fully, based on Monday's events, but there has been a lot of progress."
After the Fort Hood incident, he added, then-Defense Secretary Robert M. Gates established an independent review of events that produced an August 2010 report and 79 recommendations to improve the ability to identify patterns that might lead to violence and to safety and security on installations.
One of the recommendations was to ask the Defense Science Board to look for useful indicators of warning in individuals who might be prone to acts of violence, the official said, adding that the board's task force provided 10 recommendations of its own, for a total of 89 recommendations from reviews of the Fort Hood incident.
About 52 of the recommendations have been adopted and fully implemented, he said, and the vast majority of the remaining recommendations have been agreed to. Most are in various stages of implementation, he added.
The defense official said that some of the remaining tasks have to do with a Defense Science Board recommendation that the defense secretary direct a departmentwide requirement for the military departments and DOD agencies to establish a multidisciplinary threat management unit that identifies, assesses and responds to or manages threats of targeted violence.
"The kinds of things we're wrestling with right now [are], 'How tailored do they have to be? Should there be one unique to the Navy, one to the Army, one to the Marines, one to the Air Force? Do you have something at headquarters?" he said.
And DOD officials are still working through some of the privacy issues involved in sharing information, he said.
"When an individual is assigned to one base and events and incidents that might happen at a base don't rise to the level of criminality -- because for criminal cases there's a pre-existing system by which that information is captured permanently -- and here someone could be going through a difficult period of life, and it could be a one-time incident," he explained.
"We're trying to make sure we have a system by which we are appropriately protecting [people] but providing information to the experts who need to know it," the official said.
Such details, he added, "are difficult and important things for our military families."
In March, the official said, Defense Secretary Chuck Hagel issued an instruction directing rapid completion of the remaining tasks. "So this is something that's been very much on his mind as well," he added.
This week, before a news conference with Pentagon reporters, Hagel and Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, expressed condolences to the families and coworkers of the 12 Navy employees gunned down at the Navy Yard.
Hagel said he's asked Deputy Defense Secretary Ash Carter to lead two departmentwide reviews. The first will examine physical security and access procedures at all DOD installations.
In the second, Carter will look at DOD practices and procedures for granting and renewing security clearances, including those held by contractors. He will coordinate with officials at the Office of the Director of National Intelligence and the Office of Management and Budget, Hagel said.
The secretary also has directed an independent panel to conduct its own assessment of security at DOD facilities and of the department's security clearance procedures and practices.
Officials: Fort Hood Lessons May Have Saved Lives at Navy Yard
By Cheryl Pellerin
American Forces Press Service
WASHINGTON, Sept. 20, 2013 - Of 89 recommendations that came from two reviews of the 2009 shooting that killed 13 people at Fort Hood in Texas, 52 are fully implemented, and some may have helped to save lives during the Navy Yard shooting here Sept. 16, senior defense officials said.
The officials, who briefed reporters here this week, were unable to discuss the ongoing investigation involving a civilian contractor, 34-year-old Aaron Alexis, who killed 12 people and wounded several others at the Naval Sea Systems Command headquarters building before being killed by police.
But they did discuss results of the Defense Department's 2010 independent review of events at Fort Hood and final recommendations from that review, and of a 2012 Defense Science Board review sought by DOD to look deeper into the motivations of Fort Hood shooter Nidal Hasan, a U.S. Army major and psychiatrist, and other potential violent actors.
"In the area of response, there are a few very specific things that I believe helped save lives as a result and led to a faster response time [and] greater cooperation between local law enforcement with the FBI and in terms of warning people ... on the Navy Yard at the time," a senior defense official said.
Specifically, he added, as a result of one of the DOD recommendations, the department is using a North American telephone network feature called enhanced 911, or E-911, to push out alert notices during emergencies on DOD installations.
Because of some of the recommendations, the official said, guards have received training for scenarios in which they must respond to emergencies involving an active shooter or shooters, and there are new information-sharing agreements between the FBI and local law enforcement agencies that allow military-civilian collaboration.
"There are two examples of how we've increased information sharing," the official said. First, "the Department of Defense and the FBI signed a memorandum of understanding by which if either organization has information about a threat to or from DOD personnel, we are obligated to share with each other."
The senior defense official said that's important because DOD persons and installations are a prime target of what's called homegrown violent extremism.
For those wanting to commit acts of violence, DOD people and facilities often are the target, he added, "so it matters to us when FBI has an operational case that they share information about threats that might be around a particular location or base."
Second, he said, the Defense Department now has people working in a significant number of FBI-led joint terrorism task forces, giving DOD personnel insight into and awareness of FBI cases and how they may be relevant to DOD safety and security.
"I think we're in a significantly better place," the official said. "Obviously we're not there fully, based on Monday's events, but there has been a lot of progress."
After the Fort Hood incident, he added, then-Defense Secretary Robert M. Gates established an independent review of events that produced an August 2010 report and 79 recommendations to improve the ability to identify patterns that might lead to violence and to safety and security on installations.
One of the recommendations was to ask the Defense Science Board to look for useful indicators of warning in individuals who might be prone to acts of violence, the official said, adding that the board's task force provided 10 recommendations of its own, for a total of 89 recommendations from reviews of the Fort Hood incident.
About 52 of the recommendations have been adopted and fully implemented, he said, and the vast majority of the remaining recommendations have been agreed to. Most are in various stages of implementation, he added.
The defense official said that some of the remaining tasks have to do with a Defense Science Board recommendation that the defense secretary direct a departmentwide requirement for the military departments and DOD agencies to establish a multidisciplinary threat management unit that identifies, assesses and responds to or manages threats of targeted violence.
"The kinds of things we're wrestling with right now [are], 'How tailored do they have to be? Should there be one unique to the Navy, one to the Army, one to the Marines, one to the Air Force? Do you have something at headquarters?" he said.
And DOD officials are still working through some of the privacy issues involved in sharing information, he said.
"When an individual is assigned to one base and events and incidents that might happen at a base don't rise to the level of criminality -- because for criminal cases there's a pre-existing system by which that information is captured permanently -- and here someone could be going through a difficult period of life, and it could be a one-time incident," he explained.
"We're trying to make sure we have a system by which we are appropriately protecting [people] but providing information to the experts who need to know it," the official said.
Such details, he added, "are difficult and important things for our military families."
In March, the official said, Defense Secretary Chuck Hagel issued an instruction directing rapid completion of the remaining tasks. "So this is something that's been very much on his mind as well," he added.
This week, before a news conference with Pentagon reporters, Hagel and Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, expressed condolences to the families and coworkers of the 12 Navy employees gunned down at the Navy Yard.
Hagel said he's asked Deputy Defense Secretary Ash Carter to lead two departmentwide reviews. The first will examine physical security and access procedures at all DOD installations.
In the second, Carter will look at DOD practices and procedures for granting and renewing security clearances, including those held by contractors. He will coordinate with officials at the Office of the Director of National Intelligence and the Office of Management and Budget, Hagel said.
The secretary also has directed an independent panel to conduct its own assessment of security at DOD facilities and of the department's security clearance procedures and practices.
SECRETARY OF STATE KERRY MAKES REMARKS WITH SOMALI PRESIDENT SHEIKH MOHAMUD
FROM: U.S. STATE DEPARTMENT
Remarks With Somali President Hassan Sheikh Mohamud Before Their Meeting
Remarks
John Kerry
Secretary of State
Washington, DC
September 20, 2013
SECRETARY KERRY: Good morning, everybody. It’s my privilege to welcome to Washington and to the State Department His Excellency, the President of Somalia Hassan Sheikh Mohamud. Actually, I’m welcoming him back to Washington, and we have met previously and I’m very pleased to be able to welcome him here.
The United States, obviously, has been engaged in helping Somalia fight back against tribal terror and the challenges to the cohesion of the state of Somalia. And the President and his allies have really done an amazing job of fighting back and building a state structure. There’s work yet to be done in Puntland and Somaliland, and we encourage you to continue the work of reaching out, of reconciliation and rebuilding the democracy, and I know he’s committed to that.
Also, I want to thank the President for his rapid support of the Joint Statement on Syria. We appreciate that kind of global recognition of what is at stake in Syria.
And finally, I’d just say that Somalia is working hard now to create its own ability to defend itself, to defend the state. We will continue to work. There is a United Nations mission there. We are committed to both – to the independent ability of the state of Somalia as well as the United Nations mission to help it in this transition. And we’re very happy to welcome the President here to talk today about issues of mutual interest.
Thank you, Mr. President.
PRESIDENT MOHAMUD: Thank you. Thank you, Secretary. And it’s – really, it was a pleasure and privilege to be here again this year in the State Department and the United States. And we – as the Secretary said rightly we’re working very hard together to establish the national institutions in all areas, particularly in security, where we are working very hard with the UNOSOM forces, and our national army is now taking shape and building up, of course, with the support of the United States Government that has always been with us. And this is a time we came here to share the ideas, the way forward we have, and particularly, the Vision 2016, where we want Somalia to go into the poll stations and make a voting for the first time in 40 years – more than 40 years, even.
And as you rightly said, we have been engaging with different stakeholders in Somalia. The federal government has the leadership, the parliament, all visiting different corners of Somalia to consult on this event. And the product of that consultation was the recent compact document signed in Brussels of the 16th of this month. I, myself, and the Prime Minister, the Speaker of the House, the parliamentarians, key ministers have been traveling all over Somalia. Although the situation in traveling locally is very difficult, but even then, you have to sit with the people, listen them, share with them the plans that we are intending, and asking them the type of Somalia they want to see in the future.
So based on that, we have signed agreements with Puntland State, and recently agreement with the Jubba regional administrations. And of course, we also did the same with Ahlu Sunna Wal Jama’a in the central region. So it takes some time. We have our own differences, but we are in a better shape than ever before now. We’re shaping for the first time a united and federal Somalia. The constitution is progressing and the federal system is working very hard. This federal government is working on all its capability to establish the federal unities in an orderly manner and with – in accordance and compliance with the federal constitution.
So there’s a huge progress that is going on in Somalia, and again, we are very much grateful with the support we received from the United States Government through bilateral and through multilateral. Thank you very much.
SECRETARY KERRY: Thank you, Mr. President.
PRESIDENT MOHAMUD: Thank you.
SECRETARY KERRY: Thank you, sir, very much. Please come. Thank you.
Remarks With Somali President Hassan Sheikh Mohamud Before Their Meeting
Remarks
John Kerry
Secretary of State
Washington, DC
September 20, 2013
SECRETARY KERRY: Good morning, everybody. It’s my privilege to welcome to Washington and to the State Department His Excellency, the President of Somalia Hassan Sheikh Mohamud. Actually, I’m welcoming him back to Washington, and we have met previously and I’m very pleased to be able to welcome him here.
The United States, obviously, has been engaged in helping Somalia fight back against tribal terror and the challenges to the cohesion of the state of Somalia. And the President and his allies have really done an amazing job of fighting back and building a state structure. There’s work yet to be done in Puntland and Somaliland, and we encourage you to continue the work of reaching out, of reconciliation and rebuilding the democracy, and I know he’s committed to that.
Also, I want to thank the President for his rapid support of the Joint Statement on Syria. We appreciate that kind of global recognition of what is at stake in Syria.
And finally, I’d just say that Somalia is working hard now to create its own ability to defend itself, to defend the state. We will continue to work. There is a United Nations mission there. We are committed to both – to the independent ability of the state of Somalia as well as the United Nations mission to help it in this transition. And we’re very happy to welcome the President here to talk today about issues of mutual interest.
Thank you, Mr. President.
PRESIDENT MOHAMUD: Thank you. Thank you, Secretary. And it’s – really, it was a pleasure and privilege to be here again this year in the State Department and the United States. And we – as the Secretary said rightly we’re working very hard together to establish the national institutions in all areas, particularly in security, where we are working very hard with the UNOSOM forces, and our national army is now taking shape and building up, of course, with the support of the United States Government that has always been with us. And this is a time we came here to share the ideas, the way forward we have, and particularly, the Vision 2016, where we want Somalia to go into the poll stations and make a voting for the first time in 40 years – more than 40 years, even.
And as you rightly said, we have been engaging with different stakeholders in Somalia. The federal government has the leadership, the parliament, all visiting different corners of Somalia to consult on this event. And the product of that consultation was the recent compact document signed in Brussels of the 16th of this month. I, myself, and the Prime Minister, the Speaker of the House, the parliamentarians, key ministers have been traveling all over Somalia. Although the situation in traveling locally is very difficult, but even then, you have to sit with the people, listen them, share with them the plans that we are intending, and asking them the type of Somalia they want to see in the future.
So based on that, we have signed agreements with Puntland State, and recently agreement with the Jubba regional administrations. And of course, we also did the same with Ahlu Sunna Wal Jama’a in the central region. So it takes some time. We have our own differences, but we are in a better shape than ever before now. We’re shaping for the first time a united and federal Somalia. The constitution is progressing and the federal system is working very hard. This federal government is working on all its capability to establish the federal unities in an orderly manner and with – in accordance and compliance with the federal constitution.
So there’s a huge progress that is going on in Somalia, and again, we are very much grateful with the support we received from the United States Government through bilateral and through multilateral. Thank you very much.
SECRETARY KERRY: Thank you, Mr. President.
PRESIDENT MOHAMUD: Thank you.
SECRETARY KERRY: Thank you, sir, very much. Please come. Thank you.
SEC STATEMENT ON ENFORCEMENT ACTION AGAINST JPMORGAN
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Statement on SEC Enforcement Action Against JPMorgan
George Canellos
Co-Director of the SEC's Division of Enforcement
Sept. 19, 2013
Today we are announcing that JPMorgan Chase & Co. has agreed to admit wrongdoing and pay a $200 million penalty for its conduct in connection with the trading losses suffered by JPMorgan’s chief investment office (CIO) in 2012.
Last month, when we filed fraud charges against JPMorgan’s former traders, Javier Martin-Artajo and Julien Grout, we said these traders exploited massive shortcomings in JPMorgan’s internal controls infrastructure.
Today’s action makes clear that JPMorgan’s control breakdowns went far beyond the CIO trading book. In addition to failing to keep watch over how the traders valued a very complex portfolio, JPMorgan’s senior management broke a cardinal rule of corporate governance: inform your board of directors of matters that call into question the truth of what the company is disclosing to investors. Here, at the very moment JPMorgan’s management was grappling with how to fix its internal control breakdowns and disclose the full scope of its CIO trading disaster, the bank’s Audit Committee was in the dark about the extent of these problems.
By not sharing these troubling facts with its directors, JPMorgan deprived them of information they vitally needed to make proper judgments about how to address the company’s problems — including what information could be relied upon as accurate and what information needed to be disclosed to investors and regulators.
At its core, today’s case is about transparency and accountability, and JPMorgan’s admissions are a key component in that message. While not every case will be appropriate for admissions of wrongdoing, the SEC required JPMorgan to admit the facts in the SEC’s order – and acknowledge that it broke the law – because JPMorgan’s egregious breakdowns in controls and governance put its millions of shareholders at risk and resulted in inaccurate public filings.
The facts described in the SEC’s action called for a substantial penalty in addition to admissions of wrongdoing. The $200 million penalty against JPMorgan is unprecedented for an internal controls case and is one of the largest penalties in the history of the SEC. The penalty reflects the SEC’s assessment of the gravity of the control failures and the risks to which they exposed the firm and investors. The $200 million will be placed in a fund for compensation of investors harmed by JPMorgan’s inaccurate financial reports.
Although today’s settlement resolves claims against JPMorgan relating to this matter, our investigation is continuing as to individuals.
I would like to thank the U.S. Attorney’s Office for the Southern District of New York, the FBI, the Federal Reserve, and the Office of the Controller of the Currency for their assistance in this investigation.
I also thank the United Kingdom Financial Conduct Authority for its tremendous collaboration with the SEC in this matter. The securities markets are global, and many of the leading participants in those markets operate all over the world. Complex cases like this one — involving cross-border conduct in New York and London — cannot be effectively investigated and prosecuted without close cooperation of financial regulators in different countries. Such cooperation is vital not only in developing the evidence of wrongdoing but in determining the appropriate regulatory response, including assessment of sanctions that reflect JPMorgan’s violation of the distinct laws in both countries but avoid duplication of punishment for the same conduct.
Last, I want to recognize the hard work and dedication of the SEC staff from the New York Regional Office that conducted this investigation, and that continue to aggressively investigate the facts surrounding this case: Michael Osnato, Steven Rawlings, Daniel Michael, Peter Altenbach, Joshua Brodsky, and Joseph Boryshansky.
Just as last month’s trader mismarking case was the product of the SEC staff’s expertise and determination, the staff propelled today’s action forward by analyzing millions of documents, questioning dozens of witnesses, and ultimately discovering the facts that led to JPMorgan’s acknowledgement of wrongdoing. Using e-mail inboxes, calendars, and witness statements, the staff was able to reconstruct in vivid detail and as they unfolded the events in the first half of 2012, exposing both control weaknesses at CIO and the deficiencies in corporate governance at the highest level of the bank that JPMorgan has admitted in today’s action.
Statement on SEC Enforcement Action Against JPMorgan
George Canellos
Co-Director of the SEC's Division of Enforcement
Sept. 19, 2013
Today we are announcing that JPMorgan Chase & Co. has agreed to admit wrongdoing and pay a $200 million penalty for its conduct in connection with the trading losses suffered by JPMorgan’s chief investment office (CIO) in 2012.
Last month, when we filed fraud charges against JPMorgan’s former traders, Javier Martin-Artajo and Julien Grout, we said these traders exploited massive shortcomings in JPMorgan’s internal controls infrastructure.
Today’s action makes clear that JPMorgan’s control breakdowns went far beyond the CIO trading book. In addition to failing to keep watch over how the traders valued a very complex portfolio, JPMorgan’s senior management broke a cardinal rule of corporate governance: inform your board of directors of matters that call into question the truth of what the company is disclosing to investors. Here, at the very moment JPMorgan’s management was grappling with how to fix its internal control breakdowns and disclose the full scope of its CIO trading disaster, the bank’s Audit Committee was in the dark about the extent of these problems.
By not sharing these troubling facts with its directors, JPMorgan deprived them of information they vitally needed to make proper judgments about how to address the company’s problems — including what information could be relied upon as accurate and what information needed to be disclosed to investors and regulators.
At its core, today’s case is about transparency and accountability, and JPMorgan’s admissions are a key component in that message. While not every case will be appropriate for admissions of wrongdoing, the SEC required JPMorgan to admit the facts in the SEC’s order – and acknowledge that it broke the law – because JPMorgan’s egregious breakdowns in controls and governance put its millions of shareholders at risk and resulted in inaccurate public filings.
The facts described in the SEC’s action called for a substantial penalty in addition to admissions of wrongdoing. The $200 million penalty against JPMorgan is unprecedented for an internal controls case and is one of the largest penalties in the history of the SEC. The penalty reflects the SEC’s assessment of the gravity of the control failures and the risks to which they exposed the firm and investors. The $200 million will be placed in a fund for compensation of investors harmed by JPMorgan’s inaccurate financial reports.
Although today’s settlement resolves claims against JPMorgan relating to this matter, our investigation is continuing as to individuals.
I would like to thank the U.S. Attorney’s Office for the Southern District of New York, the FBI, the Federal Reserve, and the Office of the Controller of the Currency for their assistance in this investigation.
I also thank the United Kingdom Financial Conduct Authority for its tremendous collaboration with the SEC in this matter. The securities markets are global, and many of the leading participants in those markets operate all over the world. Complex cases like this one — involving cross-border conduct in New York and London — cannot be effectively investigated and prosecuted without close cooperation of financial regulators in different countries. Such cooperation is vital not only in developing the evidence of wrongdoing but in determining the appropriate regulatory response, including assessment of sanctions that reflect JPMorgan’s violation of the distinct laws in both countries but avoid duplication of punishment for the same conduct.
Last, I want to recognize the hard work and dedication of the SEC staff from the New York Regional Office that conducted this investigation, and that continue to aggressively investigate the facts surrounding this case: Michael Osnato, Steven Rawlings, Daniel Michael, Peter Altenbach, Joshua Brodsky, and Joseph Boryshansky.
Just as last month’s trader mismarking case was the product of the SEC staff’s expertise and determination, the staff propelled today’s action forward by analyzing millions of documents, questioning dozens of witnesses, and ultimately discovering the facts that led to JPMorgan’s acknowledgement of wrongdoing. Using e-mail inboxes, calendars, and witness statements, the staff was able to reconstruct in vivid detail and as they unfolded the events in the first half of 2012, exposing both control weaknesses at CIO and the deficiencies in corporate governance at the highest level of the bank that JPMorgan has admitted in today’s action.
$474.5 MILLION AVAILABLE IN GRANTS EXPANDING DEMAND-DRIVEN SKILLS TRAINING, PROMOTING EMPLOYER PARTNERSHIPS
FROM: U.S. DEPARTMENT OF LABOR
Obama administration announces $474.5 million in grants to expand demand-driven skills training and strengthen employer partnerships
Grants are third installment of nearly $2 billion community college initiative
WASHINGTON — Secretary of Labor Thomas E. Perez today announced $474.5 million in grants to community colleges and universities around the country for the development and expansion of innovative training programs in partnership with local employers. The grants are part of the Trade Adjustment Assistance Community College and Career Training grant program, a multiyear, nearly $2 billion initiative to expand targeted training programs for unemployed workers, especially those impacted by foreign trade.
The 57 grants announced today will support 190 projects in at least 183 schools in every state plus the District of Columbia and Puerto Rico. The grants will expand programs in growing industries, such as advanced manufacturing, transportation and health care, and encourage geographic and industry sector collaboration through the development of both statewide and multistate college consortia. The U.S. Department of Labor is implementing and administering the program in coordination with the U.S. Department of Education. All course materials developed using these public funds will be available through the Open Educational Resources initiative so that others can access and build on successful training models. The U.S. Department of Commerce is also encouraging employers to collaborate with local colleges eligible for funding through this program.
This latest round of funding is fostering deeper partnerships between community colleges, employers and other community partners. This year's grantees have more employer partners than in the past, and many of those employer partners will offer work-based learning opportunities. At least 10 of the individual grants will be focused on these work-based training opportunities and many consortia grants will incorporate similar strategies into their programs. Strong partnerships and work-based training will help ensure that curricula and training are aligned with the practical skills and competencies industries seek from workers.
Speaking in Colorado at Front Range Community College — the lead college in a $25 million grant to a consortium of nine schools across the state focused on developing a pipeline of skilled advanced manufacturing workers — Secretary Perez said: "These investments in demand-driven skills training bring together education, labor, business and community leaders to meet the real-world needs of the changing global marketplace. These partnerships strengthen not only the American workforce, but the American economy as well."
The initiative complements President Obama's broader goals of ensuring that every American has at least one year of postsecondary education, and that the U.S. has the highest proportion of college graduates in the world by 2020. The program is designed to have a lasting impact on higher education, emphasizing the use of evidence-based program design, collection of student outcome data and evaluation to add to the growing body of knowledge about which strategies best develop skills that lead to good jobs. This year's grants also build on the administration's goal of providing individuals with the information they need
to choose education and training programs that fits their needs. The 11 single-state consortia grantees will be required to use graduate employment and earnings data to improve their programming and to create employment results scorecards that will help prospective students make informed choices about training programs.
"Community colleges play a vital role in training Americans to meet the needs of employers today," said U.S. Secretary of Education Arne Duncan. "As our economy continues to rebuild, businesses are looking for employees with the skills their company needs to stay competitive, and America's students and adult workers want to be equipped to fill those roles. These grants help to meet those demands, providing critical investments in education and supporting key partnerships."
The grants include 20 awards to community college and university consortia totaling $377,452,319 and 23 awards to individual institutions totaling $61,943,218. Fourteen states and territories, which were not funded through the competitive award process, will develop a qualifying project and receive an approximately $2.5 million grant.
"For America's workforce to be competitive in the 21st century, our workers must possess the skills employers need for their businesses to succeed. That is why employers should partner with educational institutions and government to help develop curriculum and credentialing programs at the local level," said U.S. Secretary of Commerce Penny Pritzker. "This round of grants has an increased emphasis on creating the types of training programs that will prepare community college students for the jobs in which they are needed, which is good for employees, employers and the strength of our economy."
Grantees will use these funds to transform the way they schedule, sequence and deliver education and training programs that can be completed in two years or less. A variety of activities will be made possible, including: hiring or training instructors to expand capacity to offer in-demand courses or certifications, leveraging online learning to accelerate skills attainment, developing new curricula and training models to add additional classes and certifications, purchasing new equipment to ensure students train on what employers actually use, designing new programs based on the input and needs of local employers, and expanding career pathways in which stackable credentials are linked to industry skills and lead participants to higher-skill jobs.
Grantees in this round were also required to demonstrate: local labor market need for enhanced training in specific industries; strong engagement with employers in the design and delivery of training activities and work-based learning; a commitment to evidence-based program design and rigorous third-party evaluation; the use of stacked and latticed credentials; a clear plan for the transferability and articulation of course credit, application of advanced online and technology-enabled learning; strategic alignment with the workforce system, philanthropic organizations and other community partners; and the ability to leverage previously funded TAACCCT projects.
Obama administration announces $474.5 million in grants to expand demand-driven skills training and strengthen employer partnerships
Grants are third installment of nearly $2 billion community college initiative
WASHINGTON — Secretary of Labor Thomas E. Perez today announced $474.5 million in grants to community colleges and universities around the country for the development and expansion of innovative training programs in partnership with local employers. The grants are part of the Trade Adjustment Assistance Community College and Career Training grant program, a multiyear, nearly $2 billion initiative to expand targeted training programs for unemployed workers, especially those impacted by foreign trade.
The 57 grants announced today will support 190 projects in at least 183 schools in every state plus the District of Columbia and Puerto Rico. The grants will expand programs in growing industries, such as advanced manufacturing, transportation and health care, and encourage geographic and industry sector collaboration through the development of both statewide and multistate college consortia. The U.S. Department of Labor is implementing and administering the program in coordination with the U.S. Department of Education. All course materials developed using these public funds will be available through the Open Educational Resources initiative so that others can access and build on successful training models. The U.S. Department of Commerce is also encouraging employers to collaborate with local colleges eligible for funding through this program.
This latest round of funding is fostering deeper partnerships between community colleges, employers and other community partners. This year's grantees have more employer partners than in the past, and many of those employer partners will offer work-based learning opportunities. At least 10 of the individual grants will be focused on these work-based training opportunities and many consortia grants will incorporate similar strategies into their programs. Strong partnerships and work-based training will help ensure that curricula and training are aligned with the practical skills and competencies industries seek from workers.
Speaking in Colorado at Front Range Community College — the lead college in a $25 million grant to a consortium of nine schools across the state focused on developing a pipeline of skilled advanced manufacturing workers — Secretary Perez said: "These investments in demand-driven skills training bring together education, labor, business and community leaders to meet the real-world needs of the changing global marketplace. These partnerships strengthen not only the American workforce, but the American economy as well."
The initiative complements President Obama's broader goals of ensuring that every American has at least one year of postsecondary education, and that the U.S. has the highest proportion of college graduates in the world by 2020. The program is designed to have a lasting impact on higher education, emphasizing the use of evidence-based program design, collection of student outcome data and evaluation to add to the growing body of knowledge about which strategies best develop skills that lead to good jobs. This year's grants also build on the administration's goal of providing individuals with the information they need
to choose education and training programs that fits their needs. The 11 single-state consortia grantees will be required to use graduate employment and earnings data to improve their programming and to create employment results scorecards that will help prospective students make informed choices about training programs.
"Community colleges play a vital role in training Americans to meet the needs of employers today," said U.S. Secretary of Education Arne Duncan. "As our economy continues to rebuild, businesses are looking for employees with the skills their company needs to stay competitive, and America's students and adult workers want to be equipped to fill those roles. These grants help to meet those demands, providing critical investments in education and supporting key partnerships."
The grants include 20 awards to community college and university consortia totaling $377,452,319 and 23 awards to individual institutions totaling $61,943,218. Fourteen states and territories, which were not funded through the competitive award process, will develop a qualifying project and receive an approximately $2.5 million grant.
"For America's workforce to be competitive in the 21st century, our workers must possess the skills employers need for their businesses to succeed. That is why employers should partner with educational institutions and government to help develop curriculum and credentialing programs at the local level," said U.S. Secretary of Commerce Penny Pritzker. "This round of grants has an increased emphasis on creating the types of training programs that will prepare community college students for the jobs in which they are needed, which is good for employees, employers and the strength of our economy."
Grantees will use these funds to transform the way they schedule, sequence and deliver education and training programs that can be completed in two years or less. A variety of activities will be made possible, including: hiring or training instructors to expand capacity to offer in-demand courses or certifications, leveraging online learning to accelerate skills attainment, developing new curricula and training models to add additional classes and certifications, purchasing new equipment to ensure students train on what employers actually use, designing new programs based on the input and needs of local employers, and expanding career pathways in which stackable credentials are linked to industry skills and lead participants to higher-skill jobs.
Grantees in this round were also required to demonstrate: local labor market need for enhanced training in specific industries; strong engagement with employers in the design and delivery of training activities and work-based learning; a commitment to evidence-based program design and rigorous third-party evaluation; the use of stacked and latticed credentials; a clear plan for the transferability and articulation of course credit, application of advanced online and technology-enabled learning; strategic alignment with the workforce system, philanthropic organizations and other community partners; and the ability to leverage previously funded TAACCCT projects.
SERVICE MEMBERS, RETIREES SHOULD CHECK OUT 'SPACE-A' FOR BUDGET TRAVEL DEALS
FROM: U.S. DEFENSE DEPARTMENT
Budget-minded Travelers Take Flight With 'Space-A'
By Donna Miles
American Forces Press Service
WASHINGTON, Sept. 17, 2013 - Fantasizing about an exotic getaway but finding yourself strapped for cash? A "Space-A" seat aboard a military aircraft might be just your ticket to that vacation of your dreams.
Military-owned or -contracted aircraft fly to more places than many people realize, even to areas without U.S. military installations. When all mission-related passengers and cargo are accommodated, empty seats are offered up to eligible passengers on a space-available basis.
Last year, almost 215,000 service members, military family members and retirees took advantage of these "Space-A" flights all over the world, Air Force Master Sgt. Chris Alexander of Air Mobility Command's passenger policy and fleet management branch told American Forces Press Service.
They flew stateside at no cost on military planes and paid just $3.90 for a seat on a commercially chartered flight, Alexander reported. Those on international flights paid $17.20 or less to cover the cost of head taxes and federal inspection fees.
The travelers didn't require high-placed contacts or insider information -- just a basic understanding of how the system works.
In general, active-duty members and retirees and their families can fly Space-A between Army, Navy, Air Force, Marine Corps and Coast Guard facilities around the world. Flights also are available from the Seattle-Tacoma and Baltimore-Washington international airports.
Seats are offered to Space-A passengers only after all official-duty passengers and cargo have been accommodated, Alexander emphasized. Once those requirements are met, empty seats are offered to any qualified Space-A traveler. They may get a standard seat on a contracted commercial aircraft. But in other cases, it might be a backward-facing seat on a C-5 Galaxy aircraft or a jump seat on a C-130 Hercules cargo plane or KC-135 Stratotanker, or anything in between, Alexander said.
Passengers with a sense of adventure willing to try Space-A travel can sign up at the terminal they plan to fly from in person, online or by email or phone and stay on the roster for up to 60 days or, if applicable, until their military leave expires. It's possible to sign up for more than one destination, and at more than one terminal to improve the chances of getting a seat.
When passengers register, they get assigned to a passenger category that designates their place in "line" for a seat.
Space-A may be the one instance in which rank doesn't have its privilege. Seats are offered on a first-come, first-served basis, depending on a Space-A passenger's travel category and date and time they registered.
First priority, Category 1, goes to active-duty service members and their accompanying family members on unfunded emergency leave. Category 2 is assigned to those on environmental morale leave. Category 3 is for members and their families on ordinary leave or in a house-hunting status in conjunction with a permanent-change-of-station move. Category 4 goes to unaccompanied active-duty family members on environmental and morale leave. Category 5 is assigned to unaccompanied family members and service members on permissive temporary duty. Category 6 goes to military retirees, reservists, National Guard members and ROTC cadets.
Once official mission requirements are met, the likelihood that any would-be traveler gets a Space-A seat depends on a multitude of factors, Alexander said. Some air terminals have more flights than others, and larger commercially contracted aircraft tend to have more seats than cargo planes.
Timing is an important factor, too, he said. During the summer months, when many military families are making PCS moves or vacationing, Space-A seats fill up quickly. In Germany, for example, an aircraft with 100 or more available seats may fill up with travelers in Categories 1 to 3 alone, Alexander said.
Yet, Alexander said, retirees, who are in the lowest-priority group for Space-A seats, are big fans of the program and frequently get seat assignments. Many make a point of learning how the system works and avoid the busiest travel times so they are more likely to get a seat, he said.
AMC, which enforces the policies for the Space-A program, spells out the details of Space-A travel on its website. The site, including a downloadable Space-A handbook, is updated regularly.
The command's Facebook page provides travelers the most current information possible to help them plan better than ever before and to answer any questions they might have, Alexander said. The site offers 72-hour flight schedules that are updated daily.
One of its newest features is a Space A "roll call report." It provides information about seats provided to Space-A passengers within the previous 24 hours, including the latest date and time they signed up and which travel category they had been assigned.
AMC introduced the feature as part of its efforts to give travelers more predictability, but works closely with its operational security team to make sure it's not divulging too much information that could tip off potential adversaries, Alexander said.
Admittedly, Space-A travel can be a gamble. Many people have heard horror stories about seemingly endless waits for empty seats on outgoing flights, wasted leave days and destinations never reached. Passengers are cautioned to be prepared to buy a return flight on a commercial aircraft, as well as meals and lodging, if they find themselves unable to secure a Space-A flight home.
But trends show that many travelers are willing to sacrifice some of their leave for a free or almost-free seat on an unfilled military contract aircraft. Alexander attributes it to higher ticket prices on commercial aircraft and more awareness across the military about Space-A travel opportunities.
"People say, 'Wow, this is a great service, and I am going to use this, because it is one of my benefits,'" Alexander said. "As long as you have an open mind and you are educated on the processes and you have some time available, Space-A can definitely work well in your favor."
Budget-minded Travelers Take Flight With 'Space-A'
By Donna Miles
American Forces Press Service
WASHINGTON, Sept. 17, 2013 - Fantasizing about an exotic getaway but finding yourself strapped for cash? A "Space-A" seat aboard a military aircraft might be just your ticket to that vacation of your dreams.
Military-owned or -contracted aircraft fly to more places than many people realize, even to areas without U.S. military installations. When all mission-related passengers and cargo are accommodated, empty seats are offered up to eligible passengers on a space-available basis.
Last year, almost 215,000 service members, military family members and retirees took advantage of these "Space-A" flights all over the world, Air Force Master Sgt. Chris Alexander of Air Mobility Command's passenger policy and fleet management branch told American Forces Press Service.
They flew stateside at no cost on military planes and paid just $3.90 for a seat on a commercially chartered flight, Alexander reported. Those on international flights paid $17.20 or less to cover the cost of head taxes and federal inspection fees.
The travelers didn't require high-placed contacts or insider information -- just a basic understanding of how the system works.
In general, active-duty members and retirees and their families can fly Space-A between Army, Navy, Air Force, Marine Corps and Coast Guard facilities around the world. Flights also are available from the Seattle-Tacoma and Baltimore-Washington international airports.
Seats are offered to Space-A passengers only after all official-duty passengers and cargo have been accommodated, Alexander emphasized. Once those requirements are met, empty seats are offered to any qualified Space-A traveler. They may get a standard seat on a contracted commercial aircraft. But in other cases, it might be a backward-facing seat on a C-5 Galaxy aircraft or a jump seat on a C-130 Hercules cargo plane or KC-135 Stratotanker, or anything in between, Alexander said.
Passengers with a sense of adventure willing to try Space-A travel can sign up at the terminal they plan to fly from in person, online or by email or phone and stay on the roster for up to 60 days or, if applicable, until their military leave expires. It's possible to sign up for more than one destination, and at more than one terminal to improve the chances of getting a seat.
When passengers register, they get assigned to a passenger category that designates their place in "line" for a seat.
Space-A may be the one instance in which rank doesn't have its privilege. Seats are offered on a first-come, first-served basis, depending on a Space-A passenger's travel category and date and time they registered.
First priority, Category 1, goes to active-duty service members and their accompanying family members on unfunded emergency leave. Category 2 is assigned to those on environmental morale leave. Category 3 is for members and their families on ordinary leave or in a house-hunting status in conjunction with a permanent-change-of-station move. Category 4 goes to unaccompanied active-duty family members on environmental and morale leave. Category 5 is assigned to unaccompanied family members and service members on permissive temporary duty. Category 6 goes to military retirees, reservists, National Guard members and ROTC cadets.
Once official mission requirements are met, the likelihood that any would-be traveler gets a Space-A seat depends on a multitude of factors, Alexander said. Some air terminals have more flights than others, and larger commercially contracted aircraft tend to have more seats than cargo planes.
Timing is an important factor, too, he said. During the summer months, when many military families are making PCS moves or vacationing, Space-A seats fill up quickly. In Germany, for example, an aircraft with 100 or more available seats may fill up with travelers in Categories 1 to 3 alone, Alexander said.
Yet, Alexander said, retirees, who are in the lowest-priority group for Space-A seats, are big fans of the program and frequently get seat assignments. Many make a point of learning how the system works and avoid the busiest travel times so they are more likely to get a seat, he said.
AMC, which enforces the policies for the Space-A program, spells out the details of Space-A travel on its website. The site, including a downloadable Space-A handbook, is updated regularly.
The command's Facebook page provides travelers the most current information possible to help them plan better than ever before and to answer any questions they might have, Alexander said. The site offers 72-hour flight schedules that are updated daily.
One of its newest features is a Space A "roll call report." It provides information about seats provided to Space-A passengers within the previous 24 hours, including the latest date and time they signed up and which travel category they had been assigned.
AMC introduced the feature as part of its efforts to give travelers more predictability, but works closely with its operational security team to make sure it's not divulging too much information that could tip off potential adversaries, Alexander said.
Admittedly, Space-A travel can be a gamble. Many people have heard horror stories about seemingly endless waits for empty seats on outgoing flights, wasted leave days and destinations never reached. Passengers are cautioned to be prepared to buy a return flight on a commercial aircraft, as well as meals and lodging, if they find themselves unable to secure a Space-A flight home.
But trends show that many travelers are willing to sacrifice some of their leave for a free or almost-free seat on an unfilled military contract aircraft. Alexander attributes it to higher ticket prices on commercial aircraft and more awareness across the military about Space-A travel opportunities.
"People say, 'Wow, this is a great service, and I am going to use this, because it is one of my benefits,'" Alexander said. "As long as you have an open mind and you are educated on the processes and you have some time available, Space-A can definitely work well in your favor."
BALLISTIC MISSILE DEFENSE SYSTEM COMPLETES SUCCESSFUL TEST
FROM: U.S. DEFENSE DEPARTMENT
Aegis Ballistic Missile Defense System Completes Successful Intercept Flight Test
The Missile Defense Agency (MDA), U.S. Pacific Command, and U.S. Navy sailors aboard the USS Lake Erie (CG 70) successfully conducted a flight test today of the Aegis Ballistic Missile Defense (BMD) system, resulting in the intercept of a complex separating short-range ballistic missile target over the Pacific Ocean by the Aegis BMD 4.0 Weapon System and a Standard Missile-3 (SM-3) Block IB guided missile.
At approximately 2:30 p.m. Hawaii Standard Time (8:30 p.m. EDT), a complex separating short-range ballistic missile target was launched from the Pacific Missile Range Facility on Kauai, Hawaii. The target flew northwest towards a broad ocean area of the Pacific Ocean. Following target launch, the USS Lake Erie detected and tracked the missile with its onboard AN/SPY-1 radar. The ship, equipped with the second-generation Aegis BMD weapon system, developed a fire control solution and launched two SM-3 Block IB guided missiles to engage the target. The first SM-3 that was launched successfully intercepted the target warhead. This was the first salvo mission of two SM-3 Block IB guided missiles launched against a single separating target.
Program officials will assess and evaluate system performance based upon telemetry and other data obtained during the test.
This test exercised the latest version of the second-generation Aegis BMD Weapon System, capable of engaging longer range and more sophisticated ballistic missiles. This was an operationally realistic test, in which the target's launch time and bearing are not known in advance, and the target complex was the most difficult target engaged to date.
Today's event, designated Flight Test-Standard Missile-21 (FTM-21), was the fourth consecutive successful intercept test of the SM-3 Block IB guided missile with the Aegis BMD 4.0 Weapon System.
FTM-21 is the 27th successful intercept in 33 flight test attempts for the Aegis BMD program since flight testing began in 2002. Across all Ballistic Missile Defense System programs, this is the 63rd successful hit-to-kill intercept in 79 flight test attempts since 2001.
Aegis BMD is the naval component of the MDA's Ballistic Missile Defense System. The Aegis BMD engagement capability defeats short- to intermediate-range, unitary and separating, midcourse-phase ballistic missile threats with the SM-3, as well as short-range ballistic missiles in the terminal phase with the Standard Missile-2 (SM-2) Block IV missile. The MDA and the U.S. Navy cooperatively manage the Aegis BMD program.
Aegis Ballistic Missile Defense System Completes Successful Intercept Flight Test
The Missile Defense Agency (MDA), U.S. Pacific Command, and U.S. Navy sailors aboard the USS Lake Erie (CG 70) successfully conducted a flight test today of the Aegis Ballistic Missile Defense (BMD) system, resulting in the intercept of a complex separating short-range ballistic missile target over the Pacific Ocean by the Aegis BMD 4.0 Weapon System and a Standard Missile-3 (SM-3) Block IB guided missile.
At approximately 2:30 p.m. Hawaii Standard Time (8:30 p.m. EDT), a complex separating short-range ballistic missile target was launched from the Pacific Missile Range Facility on Kauai, Hawaii. The target flew northwest towards a broad ocean area of the Pacific Ocean. Following target launch, the USS Lake Erie detected and tracked the missile with its onboard AN/SPY-1 radar. The ship, equipped with the second-generation Aegis BMD weapon system, developed a fire control solution and launched two SM-3 Block IB guided missiles to engage the target. The first SM-3 that was launched successfully intercepted the target warhead. This was the first salvo mission of two SM-3 Block IB guided missiles launched against a single separating target.
Program officials will assess and evaluate system performance based upon telemetry and other data obtained during the test.
This test exercised the latest version of the second-generation Aegis BMD Weapon System, capable of engaging longer range and more sophisticated ballistic missiles. This was an operationally realistic test, in which the target's launch time and bearing are not known in advance, and the target complex was the most difficult target engaged to date.
Today's event, designated Flight Test-Standard Missile-21 (FTM-21), was the fourth consecutive successful intercept test of the SM-3 Block IB guided missile with the Aegis BMD 4.0 Weapon System.
FTM-21 is the 27th successful intercept in 33 flight test attempts for the Aegis BMD program since flight testing began in 2002. Across all Ballistic Missile Defense System programs, this is the 63rd successful hit-to-kill intercept in 79 flight test attempts since 2001.
Aegis BMD is the naval component of the MDA's Ballistic Missile Defense System. The Aegis BMD engagement capability defeats short- to intermediate-range, unitary and separating, midcourse-phase ballistic missile threats with the SM-3, as well as short-range ballistic missiles in the terminal phase with the Standard Missile-2 (SM-2) Block IV missile. The MDA and the U.S. Navy cooperatively manage the Aegis BMD program.
Friday, September 20, 2013
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT FOR WEEK ENDING SEPTEMBER 14, 2013
SEASONALLY ADJUSTED DATA
In the week ending September 14, the advance figure for seasonally adjusted initial claims was 309,000, an increase of 15,000 from the previous week's revised figure of 294,000. The 4-week moving average was 314,750, a decrease of 7,000 from the previous week's revised average of 321,750.
The advance seasonally adjusted insured unemployment rate was 2.1 percent for the week ending September 7, a decrease of 0.1 percentage point from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 7 was 2,787,000, a decrease of 28,000 from the preceding week's revised level of 2,815,000. The 4-week moving average was 2,885,000, a decrease of 54,000 from the preceding week's revised average of 2,939,000.
UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 271,747 in the week ending September 14, an increase of 42,262 from the previous week. There were 330,454 initial claims in the comparable week in 2012.
The advance unadjusted insured unemployment rate was 1.9 percent during the week ending September 7, unchanged from the prior week's revised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,505,514, a decrease of 13,496 from the preceding week's revised level of 2,519,010. A year earlier, the rate was 2.3 percent and the volume was 2,927,923.
The total number of people claiming benefits in all programs for the week ending August 31 was 4,037,491, a decrease of 235,250 from the previous week. There were 5,173,597 persons claiming benefits in all programs in the comparable week in 2012.
No state was triggered "on" the Extended Benefits program during the week ending August 31.
Initial claims for UI benefits filed by former Federal civilian employees totaled 927 in the week ending September 7, a decrease of 519 from the prior week. There were 2,073 initial claims filed by newly discharged veterans, a decrease of 124 from the preceding week.
There were 18,651 former Federal civilian employees claiming UI benefits for the week ending August 31, a decrease of 1,301 from the previous week. Newly discharged veterans claiming benefits totaled 31,296, a decrease of 1,989 from the prior week.
States reported 1,454,824 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending August 31, unchanged from the prior week. There were 2,162,532 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first, second, third, and fourth tier activity.
The highest insured unemployment rates in the week ending September 7 were in Puerto Rico (4.0), New Jersey (3.5), Alaska (3.1), Connecticut (3.0), Pennsylvania (3.0), New Mexico (2.9), New York (2.7), Virgin Islands (2.7), Illinois (2.5), Oregon (2.4), and Rhode Island (2.4).
The largest increases in initial claims for the week ending September 7 were in Tennessee (+681), Oklahoma (+601), Mississippi (+298), Maine (+219), and South Carolina (+192), while the largest decreases were in California (-25,412), New York (-2,260), Florida (-1,808), Oregon (-1,738), and Pennsylvania (-1,295).
In the week ending September 14, the advance figure for seasonally adjusted initial claims was 309,000, an increase of 15,000 from the previous week's revised figure of 294,000. The 4-week moving average was 314,750, a decrease of 7,000 from the previous week's revised average of 321,750.
The advance seasonally adjusted insured unemployment rate was 2.1 percent for the week ending September 7, a decrease of 0.1 percentage point from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 7 was 2,787,000, a decrease of 28,000 from the preceding week's revised level of 2,815,000. The 4-week moving average was 2,885,000, a decrease of 54,000 from the preceding week's revised average of 2,939,000.
UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 271,747 in the week ending September 14, an increase of 42,262 from the previous week. There were 330,454 initial claims in the comparable week in 2012.
The advance unadjusted insured unemployment rate was 1.9 percent during the week ending September 7, unchanged from the prior week's revised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,505,514, a decrease of 13,496 from the preceding week's revised level of 2,519,010. A year earlier, the rate was 2.3 percent and the volume was 2,927,923.
The total number of people claiming benefits in all programs for the week ending August 31 was 4,037,491, a decrease of 235,250 from the previous week. There were 5,173,597 persons claiming benefits in all programs in the comparable week in 2012.
No state was triggered "on" the Extended Benefits program during the week ending August 31.
Initial claims for UI benefits filed by former Federal civilian employees totaled 927 in the week ending September 7, a decrease of 519 from the prior week. There were 2,073 initial claims filed by newly discharged veterans, a decrease of 124 from the preceding week.
There were 18,651 former Federal civilian employees claiming UI benefits for the week ending August 31, a decrease of 1,301 from the previous week. Newly discharged veterans claiming benefits totaled 31,296, a decrease of 1,989 from the prior week.
States reported 1,454,824 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending August 31, unchanged from the prior week. There were 2,162,532 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first, second, third, and fourth tier activity.
The highest insured unemployment rates in the week ending September 7 were in Puerto Rico (4.0), New Jersey (3.5), Alaska (3.1), Connecticut (3.0), Pennsylvania (3.0), New Mexico (2.9), New York (2.7), Virgin Islands (2.7), Illinois (2.5), Oregon (2.4), and Rhode Island (2.4).
The largest increases in initial claims for the week ending September 7 were in Tennessee (+681), Oklahoma (+601), Mississippi (+298), Maine (+219), and South Carolina (+192), while the largest decreases were in California (-25,412), New York (-2,260), Florida (-1,808), Oregon (-1,738), and Pennsylvania (-1,295).
$90 MILLION AWARDED TO SUPPORT TRIBAL JUSTICE AND SAFETY
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, September 18, 2013
Justice Department Awards $90 Million to Enhance, Support Tribal Justice and Safety
Streamlined Grant Program Offers Financial Assistance with Indian Tribes’ Prevention and Law Enforcement Efforts, Victim Services and Youth Programs
The Department of Justice today announced the awarding of 192 grants to 110 American Indian tribes, Alaska Native villages, tribal consortia and tribal designated non-profits. The grants will provide more than $90 million to enhance law enforcement practices and sustain crime prevention and intervention efforts in nine purpose areas including public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; violence against women; juvenile justice; and tribal youth programs. The awards are made through the department’s Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs.
Associate Attorney General Tony West and Office of Justice Programs Assistant Attorney General Karol V. Mason made the announcement during a meeting of northwest tribal leaders with the Attorney General’s Advisory Committee’s Native American Issues Subcommittee (NAIS) in Celilo Village, Ore.
“These programs take a community-based and comprehensive approach to the root causes and consequences of crime, as well as target areas of possible intervention and treatment,” said Associate Attorney General West. “The CTAS programs are critical tools to help reverse unacceptably high rates of crime in Indian country, and they are a product of the shared commitment by the Department of Justice and tribal nations to strengthen and sustain healthy communities today and for future generations.”
“The Department of Justice has a responsibility to make sure its resources are not only available but accessible to tribes in a manner that they have defined and envisioned to meet the needs of their communities,” said Assistant Attorney General Mason. “As we have shown over the last four years, the Department of Justice takes this responsibility very seriously.”
The department developed CTAS through its Office of Community Oriented Policing, Office of Justice Programs and Office on Violence against Women, and administered the first round of consolidated grants in September 2010. Over the past four years, it has awarded 989 grants totaling more than $437 million. Information about the consolidated solicitation is available at www.justice.gov/tribal/. A fact sheet on CTAS is available at www.justice.gov/tribal/ctas2013/ctas-factsheet.pdf.
Thirty U.S. Attorneys from districts that include Indian country or one or more federally recognized tribes serve on the NAIS. The NAIS focuses exclusively on Indian country issues, both criminal and civil, and is responsible for making policy recommendations to the Attorney General regarding public safety and legal issues.
Next month, the Justice Department will hold its annual consultation on violence against native women on Oct. 31st, 2013, in Bismarck, N.D. In addition, an Interdepartmental Tribal Justice, Safety and Wellness Session will be held in Bismarck on Oct. 29-30, 2013. It will include an important listening session with tribal leaders to obtain their views on the Department grants, as well as valuable training and technical assistance.
Wednesday, September 18, 2013
Justice Department Awards $90 Million to Enhance, Support Tribal Justice and Safety
Streamlined Grant Program Offers Financial Assistance with Indian Tribes’ Prevention and Law Enforcement Efforts, Victim Services and Youth Programs
The Department of Justice today announced the awarding of 192 grants to 110 American Indian tribes, Alaska Native villages, tribal consortia and tribal designated non-profits. The grants will provide more than $90 million to enhance law enforcement practices and sustain crime prevention and intervention efforts in nine purpose areas including public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; violence against women; juvenile justice; and tribal youth programs. The awards are made through the department’s Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs.
Associate Attorney General Tony West and Office of Justice Programs Assistant Attorney General Karol V. Mason made the announcement during a meeting of northwest tribal leaders with the Attorney General’s Advisory Committee’s Native American Issues Subcommittee (NAIS) in Celilo Village, Ore.
“These programs take a community-based and comprehensive approach to the root causes and consequences of crime, as well as target areas of possible intervention and treatment,” said Associate Attorney General West. “The CTAS programs are critical tools to help reverse unacceptably high rates of crime in Indian country, and they are a product of the shared commitment by the Department of Justice and tribal nations to strengthen and sustain healthy communities today and for future generations.”
“The Department of Justice has a responsibility to make sure its resources are not only available but accessible to tribes in a manner that they have defined and envisioned to meet the needs of their communities,” said Assistant Attorney General Mason. “As we have shown over the last four years, the Department of Justice takes this responsibility very seriously.”
The department developed CTAS through its Office of Community Oriented Policing, Office of Justice Programs and Office on Violence against Women, and administered the first round of consolidated grants in September 2010. Over the past four years, it has awarded 989 grants totaling more than $437 million. Information about the consolidated solicitation is available at www.justice.gov/tribal/. A fact sheet on CTAS is available at www.justice.gov/tribal/ctas2013/ctas-factsheet.pdf.
Thirty U.S. Attorneys from districts that include Indian country or one or more federally recognized tribes serve on the NAIS. The NAIS focuses exclusively on Indian country issues, both criminal and civil, and is responsible for making policy recommendations to the Attorney General regarding public safety and legal issues.
Next month, the Justice Department will hold its annual consultation on violence against native women on Oct. 31st, 2013, in Bismarck, N.D. In addition, an Interdepartmental Tribal Justice, Safety and Wellness Session will be held in Bismarck on Oct. 29-30, 2013. It will include an important listening session with tribal leaders to obtain their views on the Department grants, as well as valuable training and technical assistance.
INSPECTOR GENERAL'S OFFICE DETERMINES PHARMACY HOME DELIVERY TO HAVE BENEFITS
FROM: U.S. DEFENSE DEPARTMENT
IG Finds Pharmacy Home Delivery Cost-Efficient, Safe
From a TRICARE Management Activity News Release
FALLS CHURCH, Va., Sept. 16, 2013 - Following an almost year-long study of the TRICARE Pharmacy Home Delivery program requested by members of Congress, the Defense Department inspector general's office has determined it is a cost-efficient way for beneficiaries to get their prescription medications, TRICARE Management Activity officials reported.
The inspector general's study found that the Home Delivery mail-order program saved the government 16.7 percent -- nearly $67 million -- in the third quarter of fiscal year 2012, officials said.
The audit compared what the government spent on prescription drugs through Home Delivery and what the cost would have been at retail pharmacies. Additionally, the TRICARE pharmacy contractor, Express Scripts, reported to the inspector general that Home Delivery offers a 99.99 percent prescription fill accuracy rate, high beneficiary satisfaction and improved patient outcomes.
"Although not surprised, we are certainly pleased at the results of the report," said Navy Rear Adm. Thomas J. McGinnis, chief of TRICARE pharmaceutical operations. "Home Delivery saves beneficiaries and the Department of Defense millions of dollars every year, and gives beneficiaries a safe and secure way to receive their prescription medications."
In June 2013, the 1.64 million prescriptions filled through Home Delivery represented a 17 percent increase in volume compared to the previous year, while retail prescription volume fell 10 percent, officials said.
When TRICARE beneficiaries use the Home Delivery pharmacy to fill maintenance medication prescriptions, they receive a 90-day supply through the mail and have no copayment for generic formulary medications and a $13 copay for brand-name formulary medications. At retail network pharmacies, beneficiaries pay $5 for a 30-day supply of generic formulary medications and $17 for brand name formulary medications.
TRICARE beneficiaries can sign up for Home Delivery online, by mail or by phone.
IG Finds Pharmacy Home Delivery Cost-Efficient, Safe
From a TRICARE Management Activity News Release
FALLS CHURCH, Va., Sept. 16, 2013 - Following an almost year-long study of the TRICARE Pharmacy Home Delivery program requested by members of Congress, the Defense Department inspector general's office has determined it is a cost-efficient way for beneficiaries to get their prescription medications, TRICARE Management Activity officials reported.
The inspector general's study found that the Home Delivery mail-order program saved the government 16.7 percent -- nearly $67 million -- in the third quarter of fiscal year 2012, officials said.
The audit compared what the government spent on prescription drugs through Home Delivery and what the cost would have been at retail pharmacies. Additionally, the TRICARE pharmacy contractor, Express Scripts, reported to the inspector general that Home Delivery offers a 99.99 percent prescription fill accuracy rate, high beneficiary satisfaction and improved patient outcomes.
"Although not surprised, we are certainly pleased at the results of the report," said Navy Rear Adm. Thomas J. McGinnis, chief of TRICARE pharmaceutical operations. "Home Delivery saves beneficiaries and the Department of Defense millions of dollars every year, and gives beneficiaries a safe and secure way to receive their prescription medications."
In June 2013, the 1.64 million prescriptions filled through Home Delivery represented a 17 percent increase in volume compared to the previous year, while retail prescription volume fell 10 percent, officials said.
When TRICARE beneficiaries use the Home Delivery pharmacy to fill maintenance medication prescriptions, they receive a 90-day supply through the mail and have no copayment for generic formulary medications and a $13 copay for brand-name formulary medications. At retail network pharmacies, beneficiaries pay $5 for a 30-day supply of generic formulary medications and $17 for brand name formulary medications.
TRICARE beneficiaries can sign up for Home Delivery online, by mail or by phone.
DOD REPORTS AFGHAN AIR FORCE DOING WELL
FROM: U.S. DEFENSE DEPARTMENT
Afghan Air Force Flourishing, ISAF Official Says
By Karen Parrish
American Forces Press Service
NATIONAL HARBOR, Md., Sept. 19, 2013 - The mission: build an independent, self-sustaining air force from the inside out, from the ground up. The commander leading that effort calls it the most complex undertaking NATO and the U.S. Air Force have ever tackled.
Air Force Brig. Gen. John Michel leads NATO Air Training Command Afghanistan, the organization charged with training the Afghan air force. He is here this week attending an Air Force conference, and spoke to American Forces Press Service about the Afghan air capability that he maintains no longer is fledgling, but rather is flourishing.
Not only are Afghan pilots now carrying out combat, resupply and medevac missions, he said, the humanitarian capability they bring to their government is helping to legitimize their nation. In a country largely inaccessible by road, the general noted, air reach equals government reach. And Afghan aviation dates to 1919, he said.
"It's a source of national pride," Michel said. About a month ago, he said, the Afghan air force was called to respond to a flood that had left citizens stranded, "and they saved over 300 men, women and children."
The force is critical to the Afghan army as well, he said. Close air support, evacuating the wounded, and in many cases, even basic resupply are only possible in Afghanistan with aircraft, Michel noted.
The Afghan air force, he said, "is really the foundational element for legitimacy locally, nationally and internationally." For example, he said, the core of trained air traffic controllers that will grow up around the air force and ultimately transfer to the civilian world will form part of the infrastructure backbone Afghanistan will need to attract long-term foreign investment.
The air training command's staff includes some 600 people from 14 coalition nations. They work with their Afghan counterparts on Afghan bases at six locations within the country, training and advising every member of the Afghan air force, from the highest-level leaders down to the newest junior recruits.
Michel pointed out the timeline that makes 2014 the handoff year for combat operations doesn't apply to his command. The Afghan air force is on a separate timeline from the army and police forces, and is not set for full operational autonomy until 2017, he said. The NATO air training command is set to grow during that time to 1,114 military and defense contractors, plus 530 base support personnel.
Meanwhile, coalition aircrews fly alongside their Afghan counterparts during training missions, combat missions, and joint missions conducting resupply, infiltration, exfiltration, passenger movements and casualty evacuation for the Afghan army. Coalition advisors also train in all the support roles including maintenance, logistics, finance and communications. About 200 Afghan students are now in various phases of the pilot training pipeline, Michel said.
The Afghan air force is divided into three wings, located respectively in Kabul, Kandahar and Shindand, in western Afghanistan's Herat province. The command center is in Kabul, and the Shindand Air Base is the main training area. The Afghan force currently has a fleet of 92 fixed-wing and rotary aircraft, with 12 more Mi-17 transport helicopters being delivered starting this month. Ultimately, the force's fleet will include 58 Mi-17s, six Mi-35 attack helicopters, 20 C-208 turboprop airliners, four C-130 transport aircraft and 20 A-29 light attack aircraft.
Michel noted the Soviet influence in Afghanistan dating to the 1920s but dominant from the 1950s to the 1990s extended to the air force, which followed the Soviet model of essentially a client force trained to fly but reliant on its patrons for equipment, maintenance, support and administration.
Command and control will be the essence of the "small, but mighty" air capability Afghanistan plans to grow to a force of 8,000, Michel said. "That was not present in the dependency model," he added. And while the model encouraged brilliant flying, it omitted "disciplined execution," the general said, "which is what makes [the U.S.] Air Force the best in the history of mankind."
Disciplined execution includes doctrine and an emphasis on safety, Michel said, which his command is training or developing in the growing Afghan force, along with English, military science and a host of other subjects and resources.
"Among those 8,000 people, there are seven specific capabilities and 60 [military occupational specialties]," he noted. The mission set for the Afghan air force rests on core capabilities of air movement, aerial fires, aerial reconnaissance, force protection, sustainment and intelligence, Michel said. That integration of capabilities is crucial to the self-sustaining force that Afghanistan needs, he said.
"The maintainer number that we're going to is sub-1,400," he said. "And then we'll have some number less than that for pilots." The A-29 "Super Takano" program aims at 30 pilots for 20 aircraft, he said, but those 30 will over time "grow out of the cockpit."
"We're growing a profession," he said. Establishing a military education network that will produce professional officers and noncommissioned officers -- Michel called the NCO corps "the secret sauce" of the U.S. military -- recruiting and marketing are all part of the mission, he said.
"Is it hard?" the general said of his mission. "Let's see; we're building it from the inside out, the ground up. The more capability we start to garner, the more they want to employ. The more they employ, the less we can train. ... And, as of a week from today, we're adding the first two of four C-130s."
As capabilities grow, so do costs and complications, Michel acknowledged. The Afghan government may choose to adjust its timeline for some capabilities as its contributors' budgets tighten, he said, and his command is prepared with a range of options to scale capability to cost as needed.
"I have 39 months from today to finish this mission," he said. "We're not building capabilities they don't need to have."
Afghan Air Force Flourishing, ISAF Official Says
By Karen Parrish
American Forces Press Service
NATIONAL HARBOR, Md., Sept. 19, 2013 - The mission: build an independent, self-sustaining air force from the inside out, from the ground up. The commander leading that effort calls it the most complex undertaking NATO and the U.S. Air Force have ever tackled.
Air Force Brig. Gen. John Michel leads NATO Air Training Command Afghanistan, the organization charged with training the Afghan air force. He is here this week attending an Air Force conference, and spoke to American Forces Press Service about the Afghan air capability that he maintains no longer is fledgling, but rather is flourishing.
Not only are Afghan pilots now carrying out combat, resupply and medevac missions, he said, the humanitarian capability they bring to their government is helping to legitimize their nation. In a country largely inaccessible by road, the general noted, air reach equals government reach. And Afghan aviation dates to 1919, he said.
"It's a source of national pride," Michel said. About a month ago, he said, the Afghan air force was called to respond to a flood that had left citizens stranded, "and they saved over 300 men, women and children."
The force is critical to the Afghan army as well, he said. Close air support, evacuating the wounded, and in many cases, even basic resupply are only possible in Afghanistan with aircraft, Michel noted.
The Afghan air force, he said, "is really the foundational element for legitimacy locally, nationally and internationally." For example, he said, the core of trained air traffic controllers that will grow up around the air force and ultimately transfer to the civilian world will form part of the infrastructure backbone Afghanistan will need to attract long-term foreign investment.
The air training command's staff includes some 600 people from 14 coalition nations. They work with their Afghan counterparts on Afghan bases at six locations within the country, training and advising every member of the Afghan air force, from the highest-level leaders down to the newest junior recruits.
Michel pointed out the timeline that makes 2014 the handoff year for combat operations doesn't apply to his command. The Afghan air force is on a separate timeline from the army and police forces, and is not set for full operational autonomy until 2017, he said. The NATO air training command is set to grow during that time to 1,114 military and defense contractors, plus 530 base support personnel.
Meanwhile, coalition aircrews fly alongside their Afghan counterparts during training missions, combat missions, and joint missions conducting resupply, infiltration, exfiltration, passenger movements and casualty evacuation for the Afghan army. Coalition advisors also train in all the support roles including maintenance, logistics, finance and communications. About 200 Afghan students are now in various phases of the pilot training pipeline, Michel said.
The Afghan air force is divided into three wings, located respectively in Kabul, Kandahar and Shindand, in western Afghanistan's Herat province. The command center is in Kabul, and the Shindand Air Base is the main training area. The Afghan force currently has a fleet of 92 fixed-wing and rotary aircraft, with 12 more Mi-17 transport helicopters being delivered starting this month. Ultimately, the force's fleet will include 58 Mi-17s, six Mi-35 attack helicopters, 20 C-208 turboprop airliners, four C-130 transport aircraft and 20 A-29 light attack aircraft.
Michel noted the Soviet influence in Afghanistan dating to the 1920s but dominant from the 1950s to the 1990s extended to the air force, which followed the Soviet model of essentially a client force trained to fly but reliant on its patrons for equipment, maintenance, support and administration.
Command and control will be the essence of the "small, but mighty" air capability Afghanistan plans to grow to a force of 8,000, Michel said. "That was not present in the dependency model," he added. And while the model encouraged brilliant flying, it omitted "disciplined execution," the general said, "which is what makes [the U.S.] Air Force the best in the history of mankind."
Disciplined execution includes doctrine and an emphasis on safety, Michel said, which his command is training or developing in the growing Afghan force, along with English, military science and a host of other subjects and resources.
"Among those 8,000 people, there are seven specific capabilities and 60 [military occupational specialties]," he noted. The mission set for the Afghan air force rests on core capabilities of air movement, aerial fires, aerial reconnaissance, force protection, sustainment and intelligence, Michel said. That integration of capabilities is crucial to the self-sustaining force that Afghanistan needs, he said.
"The maintainer number that we're going to is sub-1,400," he said. "And then we'll have some number less than that for pilots." The A-29 "Super Takano" program aims at 30 pilots for 20 aircraft, he said, but those 30 will over time "grow out of the cockpit."
"We're growing a profession," he said. Establishing a military education network that will produce professional officers and noncommissioned officers -- Michel called the NCO corps "the secret sauce" of the U.S. military -- recruiting and marketing are all part of the mission, he said.
"Is it hard?" the general said of his mission. "Let's see; we're building it from the inside out, the ground up. The more capability we start to garner, the more they want to employ. The more they employ, the less we can train. ... And, as of a week from today, we're adding the first two of four C-130s."
As capabilities grow, so do costs and complications, Michel acknowledged. The Afghan government may choose to adjust its timeline for some capabilities as its contributors' budgets tighten, he said, and his command is prepared with a range of options to scale capability to cost as needed.
"I have 39 months from today to finish this mission," he said. "We're not building capabilities they don't need to have."
JP MORGAN TO PAY $200 MILLION PENALTY TO SETTLE SEC CHARGES
FROM: US. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today charged JPMorgan Chase & Co. with misstating financial results and lacking effective internal controls to detect and prevent its traders from fraudulently overvaluing investments to conceal hundreds of millions of dollars in trading losses.
The SEC previously charged two former JPMorgan traders with committing fraud to hide the massive losses in one of the trading portfolios in the firm’s chief investment office (CIO). The SEC’s subsequent action against JPMorgan faults its internal controls for failing to ensure that the traders were properly valuing the portfolio, and its senior management for failing to inform the firm’s audit committee about the severe breakdowns in CIO’s internal controls.
JPMorgan has agreed to settle the SEC’s charges by paying a $200 million penalty, admitting the facts underlying the SEC’s charges, and publicly acknowledging that it violated the federal securities laws.
“JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses,” said George S. Canellos, Co-Director of the SEC’s Division of Enforcement. “While grappling with how to fix its internal control breakdowns, JPMorgan’s senior management broke a cardinal rule of corporate governance and deprived its board of critical information it needed to fully assess the company’s problems and determine whether accurate and reliable information was being disclosed to investors and regulators.”
As part of a coordinated global settlement, three other agencies also announced settlements with JPMorgan today: the U.K. Financial Conduct Authority, the Federal Reserve, and the Office of the Comptroller of the Currency. JPMorgan will pay a total of approximately $920 million in penalties in these actions by the SEC and the other agencies.
According to the SEC’s order instituting a settled administrative proceeding against JPMorgan, the Sarbanes-Oxley Act of 2002 established important requirements for public companies and their management regarding corporate governance and disclosure. Public companies such as JPMorgan are required to create and maintain internal controls that provide investors with reasonable assurances that their financial statements are reliable, and ensure that senior management shares important information with key internal decision makers such as the board of directors. JPMorgan failed to adhere to these requirements, and consequently misstated its financial results in public filings for the first quarter of 2012.
According to the SEC’s order, in late April 2012 after the portfolio began to significantly decline in value, JPMorgan commissioned several internal reviews to assess, among other matters, the effectiveness of the CIO’s internal controls. From these reviews, senior management learned that the valuation control group within the CIO – whose function was to detect and prevent trader mismarking – was woefully ineffective and insufficiently independent from the traders it was supposed to police. As JPMorgan senior management learned additional troubling facts about the state of affairs in the CIO, they failed to timely escalate and share that information with the firm’s audit committee.
Among the facts that JPMorgan has admitted in settling the SEC’s enforcement action:
The trading losses occurred against a backdrop of woefully deficient accounting controls in the CIO, including spreadsheet miscalculations that caused large valuation errors and the use of subjective valuation techniques that made it easier for the traders to mismark the CIO portfolio.
JPMorgan senior management personally rewrote the CIO’s valuation control policies before the firm filed with the SEC its first quarter report for 2012 in order to address the many deficiencies in existing policies.
By late April 2012, JPMorgan senior management knew that the firm’s Investment Banking unit used far more conservative prices when valuing the same kind of derivatives held in the CIO portfolio, and that applying the Investment Bank valuations would have led to approximately $750 million in additional losses for the CIO in the first quarter of 2012.
External counterparties who traded with CIO had valued certain positions in the CIO book at $500 million less than the CIO traders did, precipitating large collateral calls against JPMorgan.
As a result of the findings of certain internal reviews of the CIO, some executives expressed reservations about signing sub-certifications supporting the CEO and CFO certifications required under the Sarbanes-Oxley Act.
Senior management failed to adequately update the audit committee on these and other important facts concerning the CIO before the firm filed its first quarter report for 2012.
Deprived of access to these facts, the audit committee was hindered in its ability to discharge its obligations to oversee management on behalf of shareholders and to ensure the accuracy of the firm’s financial statements.
The SEC’s order requires JPMorgan to cease and desist from causing any violations and any future violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 13a-11, 13a-13, and 13a-15. The order also requires JPMorgan to pay a $200 million penalty that may be distributed to harmed investors in a Fair Fund distribution.
The SEC’s investigation, which is continuing, has been conducted by Michael Osnato, Steven Rawlings, Peter Altenbach, Joshua Brodsky, Joseph Boryshansky, Daniel Michael, Kapil Agrawal, Eli Bass, Sharon Bryant, Daniel Nigro, and Christopher Mele. The SEC appreciates the coordination of the U.K. Financial Conduct Authority, Federal Reserve, and Office of the Comptroller of the Currency as well as the assistance of the U.S. Attorney’s Office for the Southern District of New York, Federal Bureau of Investigation, Commodity Futures Trading Commission, and Public Company Accounting Oversight Board.
The Securities and Exchange Commission today charged JPMorgan Chase & Co. with misstating financial results and lacking effective internal controls to detect and prevent its traders from fraudulently overvaluing investments to conceal hundreds of millions of dollars in trading losses.
The SEC previously charged two former JPMorgan traders with committing fraud to hide the massive losses in one of the trading portfolios in the firm’s chief investment office (CIO). The SEC’s subsequent action against JPMorgan faults its internal controls for failing to ensure that the traders were properly valuing the portfolio, and its senior management for failing to inform the firm’s audit committee about the severe breakdowns in CIO’s internal controls.
JPMorgan has agreed to settle the SEC’s charges by paying a $200 million penalty, admitting the facts underlying the SEC’s charges, and publicly acknowledging that it violated the federal securities laws.
“JPMorgan failed to keep watch over its traders as they overvalued a very complex portfolio to hide massive losses,” said George S. Canellos, Co-Director of the SEC’s Division of Enforcement. “While grappling with how to fix its internal control breakdowns, JPMorgan’s senior management broke a cardinal rule of corporate governance and deprived its board of critical information it needed to fully assess the company’s problems and determine whether accurate and reliable information was being disclosed to investors and regulators.”
As part of a coordinated global settlement, three other agencies also announced settlements with JPMorgan today: the U.K. Financial Conduct Authority, the Federal Reserve, and the Office of the Comptroller of the Currency. JPMorgan will pay a total of approximately $920 million in penalties in these actions by the SEC and the other agencies.
According to the SEC’s order instituting a settled administrative proceeding against JPMorgan, the Sarbanes-Oxley Act of 2002 established important requirements for public companies and their management regarding corporate governance and disclosure. Public companies such as JPMorgan are required to create and maintain internal controls that provide investors with reasonable assurances that their financial statements are reliable, and ensure that senior management shares important information with key internal decision makers such as the board of directors. JPMorgan failed to adhere to these requirements, and consequently misstated its financial results in public filings for the first quarter of 2012.
According to the SEC’s order, in late April 2012 after the portfolio began to significantly decline in value, JPMorgan commissioned several internal reviews to assess, among other matters, the effectiveness of the CIO’s internal controls. From these reviews, senior management learned that the valuation control group within the CIO – whose function was to detect and prevent trader mismarking – was woefully ineffective and insufficiently independent from the traders it was supposed to police. As JPMorgan senior management learned additional troubling facts about the state of affairs in the CIO, they failed to timely escalate and share that information with the firm’s audit committee.
Among the facts that JPMorgan has admitted in settling the SEC’s enforcement action:
The trading losses occurred against a backdrop of woefully deficient accounting controls in the CIO, including spreadsheet miscalculations that caused large valuation errors and the use of subjective valuation techniques that made it easier for the traders to mismark the CIO portfolio.
JPMorgan senior management personally rewrote the CIO’s valuation control policies before the firm filed with the SEC its first quarter report for 2012 in order to address the many deficiencies in existing policies.
By late April 2012, JPMorgan senior management knew that the firm’s Investment Banking unit used far more conservative prices when valuing the same kind of derivatives held in the CIO portfolio, and that applying the Investment Bank valuations would have led to approximately $750 million in additional losses for the CIO in the first quarter of 2012.
External counterparties who traded with CIO had valued certain positions in the CIO book at $500 million less than the CIO traders did, precipitating large collateral calls against JPMorgan.
As a result of the findings of certain internal reviews of the CIO, some executives expressed reservations about signing sub-certifications supporting the CEO and CFO certifications required under the Sarbanes-Oxley Act.
Senior management failed to adequately update the audit committee on these and other important facts concerning the CIO before the firm filed its first quarter report for 2012.
Deprived of access to these facts, the audit committee was hindered in its ability to discharge its obligations to oversee management on behalf of shareholders and to ensure the accuracy of the firm’s financial statements.
The SEC’s order requires JPMorgan to cease and desist from causing any violations and any future violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 13a-11, 13a-13, and 13a-15. The order also requires JPMorgan to pay a $200 million penalty that may be distributed to harmed investors in a Fair Fund distribution.
The SEC’s investigation, which is continuing, has been conducted by Michael Osnato, Steven Rawlings, Peter Altenbach, Joshua Brodsky, Joseph Boryshansky, Daniel Michael, Kapil Agrawal, Eli Bass, Sharon Bryant, Daniel Nigro, and Christopher Mele. The SEC appreciates the coordination of the U.K. Financial Conduct Authority, Federal Reserve, and Office of the Comptroller of the Currency as well as the assistance of the U.S. Attorney’s Office for the Southern District of New York, Federal Bureau of Investigation, Commodity Futures Trading Commission, and Public Company Accounting Oversight Board.
DOD READINESS AND WORKFORCE DIVERSITY
FROM: U.S. DEPARTMENT OF DEFENSE
Official: DOD Readiness Depends on Workforce Diversity
By Terri Moon Cronk
American Forces Press Service
WASHINGTON, Sept. 16, 2013 - The Defense Department's commitment to equity and inclusion is rooted in the belief that diversity is a readiness imperative that gives a strategic advantage, a senior DOD official said recently during the 10th annual National Latina Style symposium.
Nearing the eve of National Hispanic Heritage Month, observed from Sept. 15 to Oct. 15, Army Lt. Gen. Michael S. Linnington, military deputy to the undersecretary of defense for personnel and readiness, addressed a largely Latina audience of about 300 people at the symposium and a DOD Distinguished Military Service Awards luncheon.
"Your military remains the most effective fighting force on the globe," Linnington said. "We recognize that diversity goes well beyond race and gender and we rely on the diverse backgrounds, perspectives, and expertise of our people to successfully respond to the many complex challenges of the 21st century national security landscape."
The Defense Department appreciates that its total force stems from a rich tapestry of America, the general said. "And we believe our all-volunteer force is better when it reflects the nation it serves," he added.
Linnington said diversity progress continues, and women and minorities in the military make "tremendous contributions" in roles critical to national defense.
"But actions speak louder than words," he said, citing DOD's January rescinding of the policy that excluded women from serving in direct combat roles.
"This is a huge step for our armed forces," the general said. "Today, nearly 200,000 women serve ... and make up nearly 15 percent of the force. Under the new policy, DOD will ensure the mission is met with the best qualified and most capable people, regardless of gender."
For Latinas and other women in uniform, the opening of combat roles to women is a chance to continue meeting and exceeding new challenges and paving the way for future leadership success, Linnington said.
"Our military workforce has grown to about 35 percent minorities and 15 percent women, with minorities comprising about 29 percent of our civilian workforce and women over a third of our civilians," he said. The number of Latina officers has more than doubled in the last decade, he noted, with more than 2,000 serving across the armed forces.
Yet, while DOD celebrates its progress and the great strides it's made, work remains to be done, Linnington said, stressing the need to increase diversity in DOD's civilian positions and in senior leadership.
"For this and other efforts, we look toward partner organizations, like Latina Style, to work with us to continue progress and improvement," he said of increasing minority representation in the civilian workforce.
An important factor that affects advancement and retention of top talent is mentorship, Linnington said.
"When groups of diverse talent gather together, we learn a great deal from one another and build relationships that carry us into the future," the general explained. "We must continue to look toward the future. Let's take a moment to ask ourselves, 'Where do we go from here?' In the audience today are key influencers from our society. ... Each of you is a mentor, and I call on you to help increase awareness of what DOD has to offer by sharing with young people the value of public service, ... either in the military ranks or as civil servants."
The Defense Department gives people the opportunities to develop leadership skills that cannot be found anywhere else and offers a full range of choices and opportunities for Latinas to fulfill great potential, Linnington added.
"Every individual here is in a unique position to help us address many of our challenges and ... help us build a more diverse and inclusive total force ... that not only possesses the diverse backgrounds and experiences to conquer global challenges, but also reflect the changing face of our nation," he said.
This month provides an excellent opportunity for DOD and other organizations to take time to recognize the immeasurable contributions made by the nation's Hispanic-Americans and reflect on diversity and inclusiveness, Linnington noted.
"We are not going to solve our challenges overnight, but together, we can continue our progress," he said.
Official: DOD Readiness Depends on Workforce Diversity
By Terri Moon Cronk
American Forces Press Service
WASHINGTON, Sept. 16, 2013 - The Defense Department's commitment to equity and inclusion is rooted in the belief that diversity is a readiness imperative that gives a strategic advantage, a senior DOD official said recently during the 10th annual National Latina Style symposium.
Nearing the eve of National Hispanic Heritage Month, observed from Sept. 15 to Oct. 15, Army Lt. Gen. Michael S. Linnington, military deputy to the undersecretary of defense for personnel and readiness, addressed a largely Latina audience of about 300 people at the symposium and a DOD Distinguished Military Service Awards luncheon.
"Your military remains the most effective fighting force on the globe," Linnington said. "We recognize that diversity goes well beyond race and gender and we rely on the diverse backgrounds, perspectives, and expertise of our people to successfully respond to the many complex challenges of the 21st century national security landscape."
The Defense Department appreciates that its total force stems from a rich tapestry of America, the general said. "And we believe our all-volunteer force is better when it reflects the nation it serves," he added.
Linnington said diversity progress continues, and women and minorities in the military make "tremendous contributions" in roles critical to national defense.
"But actions speak louder than words," he said, citing DOD's January rescinding of the policy that excluded women from serving in direct combat roles.
"This is a huge step for our armed forces," the general said. "Today, nearly 200,000 women serve ... and make up nearly 15 percent of the force. Under the new policy, DOD will ensure the mission is met with the best qualified and most capable people, regardless of gender."
For Latinas and other women in uniform, the opening of combat roles to women is a chance to continue meeting and exceeding new challenges and paving the way for future leadership success, Linnington said.
"Our military workforce has grown to about 35 percent minorities and 15 percent women, with minorities comprising about 29 percent of our civilian workforce and women over a third of our civilians," he said. The number of Latina officers has more than doubled in the last decade, he noted, with more than 2,000 serving across the armed forces.
Yet, while DOD celebrates its progress and the great strides it's made, work remains to be done, Linnington said, stressing the need to increase diversity in DOD's civilian positions and in senior leadership.
"For this and other efforts, we look toward partner organizations, like Latina Style, to work with us to continue progress and improvement," he said of increasing minority representation in the civilian workforce.
An important factor that affects advancement and retention of top talent is mentorship, Linnington said.
"When groups of diverse talent gather together, we learn a great deal from one another and build relationships that carry us into the future," the general explained. "We must continue to look toward the future. Let's take a moment to ask ourselves, 'Where do we go from here?' In the audience today are key influencers from our society. ... Each of you is a mentor, and I call on you to help increase awareness of what DOD has to offer by sharing with young people the value of public service, ... either in the military ranks or as civil servants."
The Defense Department gives people the opportunities to develop leadership skills that cannot be found anywhere else and offers a full range of choices and opportunities for Latinas to fulfill great potential, Linnington added.
"Every individual here is in a unique position to help us address many of our challenges and ... help us build a more diverse and inclusive total force ... that not only possesses the diverse backgrounds and experiences to conquer global challenges, but also reflect the changing face of our nation," he said.
This month provides an excellent opportunity for DOD and other organizations to take time to recognize the immeasurable contributions made by the nation's Hispanic-Americans and reflect on diversity and inclusiveness, Linnington noted.
"We are not going to solve our challenges overnight, but together, we can continue our progress," he said.
SECRETARY OF STATE KERRY'S REMARKS ON SYRIA
FROM: U.S. STATE DEPARTMENT
Remarks to the Press on Syria
Remarks
John Kerry
Secretary of State
Press Briefing Room
Washington, DC
September 19, 2013
SECRETARY KERRY: Good afternoon, everybody.
QUESTION: Good afternoon.
SECRETARY KERRY: Sorry to keep you waiting. We ran over with our friends from China.
QUESTION: (Off-mike.)
SECRETARY KERRY: Beg your pardon?
QUESTION: Was lunch good?
SECRETARY KERRY: Lunch was good. Thank you, Matt.
As you all know, before I became Secretary, I spent 28 years in the United States Senate and I witnessed some great debates and some of the best senators there produced some of the best debates that I’ve seen – sometimes. And some of the senators, I learned, liked to debate about just about anything. As my pal John McCain was fond of saying, a fight not joined is a fight not enjoyed. But it was also in the Senate where I personally heard former Ambassador of the United Nations-turned-Senator from New York Daniel Patrick Moynihan end more than a few debates with his own bottom-line reminder: “You are entitled to your own opinion, but you are not entitled to your own facts.” And those words are really worth using and focusing on as we head into next week’s General Assembly meeting in New York of the United Nations.
We really don’t have time today to pretend that anyone can have their own set of facts approaching the issue of chemical weapons in Syria. This fight about Syria’s chemical weapons is not a game. It’s real. It’s important. It’s important to the lives of people in Syria, it’s important to the region, it’s important to the world that this be enforced – this agreement that we came out of Geneva with. And for many weeks, we heard from Russia and from others, “Wait for the UN report. Those are the outside experts.” That’s a quote. “That is the independent gold standard.” That’s a quote.
Well, despite the efforts of some to suggest otherwise, thanks to this week’s long-awaited UN report, the facts in Syria only grew clearer and the case only grew more compelling. The findings in the Sellstrom report were as categorical as they were convincing. Every single data point – the types of munitions and launchers that were used, their origins, their trajectory, their markings, and the confirmation of sarin – every single bit of it confirms what we already knew and what we told America and the world. It confirms what we have brought to the attention of our Congress, the American people, and the rest of the world. The UN report confirms unequivocally that chemical weapons, including the nerve agent sarin, were used in Syria. And despite the regime’s best efforts to shell the area and destroy the evidence, the UN interviewed more than 50 survivors – patients, victims, health workers, first responders. They documented munitions and subcomponents. They assessed symptoms of survivors, analyzed hair, urine, blood samples. And they analyzed 30 soil and environmental samples.
And what did they learn? They returned with several crucial details that confirmed that the Assad regime is guilty of carrying out that attack, even though that was not the mandate of the UN report. But anybody who reads the facts and puts the dots together, which is easy to do – and they made it easy to do – understands what those facts mean.
We, the United States, have associated one of the munitions identified in the UN report, the 122-millimeter improvised rocket, with previous Assad regime attacks. There’s no indication – none – that the opposition is in possession or has launched a CW variant of these rockets such as the kind that was used in the 21st of August attack.
Equally significant, the environmental, chemical, and medical samples that the UN investigators collected provide clear and compelling evidence that the surface-to-surface rockets used in this attack contained the nerve agent sarin. We know the Assad regime possesses sarin and there’s not a shred of evidence, however, that the opposition does.
And rocket components identified in the ground photos taken at the alleged chemical weapons impact location areas are associated with the unique type of rocket launcher that we know the Assad regime has. We have observed these exact type of rocket launchers at the Assad regime facilities in Damascus and in the area around the 21st of August.
So there you have it. Sarin was used. Sarin killed. The world can decide whether it was used by the regime, which has used chemical weapons before, the regime which had the rockets and the weapons, or whether the opposition secretly went unnoticed into territory they don’t control to fire rockets they don’t have containing sarin that they don’t possess to kill their own people. And then without even being noticed, they just disassembled it all and packed up and got out of the center of Damascus, controlled by Assad.
Please. This isn’t complicated. When we said we know what is true, we meant it. And now, before I head to New York for the UN General Assembly, we have a definitive UN report strengthening the case and solidifying our resolve. Now the test comes. The Security Council must be prepared to act next week. It is vital for the international community to stand up and speak out in the strongest possible terms about the importance of enforceable action to rid the world of Syria’s chemical weapons.
So I would say to the community of nations: Time is short. Let’s not spend time debating what we already know. Instead, we have to recognize that the world is watching to see whether we can avert military action and achieve, through peaceful means, even more than what those military strikes promised. The complete removal of Syria’s chemical weapons is possible here, through peaceful means. And that will be determined by the resolve of the United Nations to follow through on the agreement that Russia and the United States reached in Geneva, an agreement that clearly said this must be enforceable, it must be done as soon as possible, it must be real.
We need everyone’s help in order to see that the Security Council lives up to its founding values and passes a binding resolution that codifies the strongest possible mechanism to achieve the goal and to achieve it rapidly. We need to make the Geneva agreement meaningful and to make it meaningful in order to eliminate Syria’s CW program and to do it with transparency and with the accountability, the full accountability that is demanded here. It is important that we accomplish the goal in New York and accomplish it as rapidly as possible.
Thank you all.
QUESTION: Could you --
QUESTION: Secretary, on a related subject --
SECRETARY KERRY: If you have any questions – Marie’s going to answer some questions.
QUESTION: On a related subject, can we just ask you whether you think the President might meet with President Rouhani to test the seriousness of what Iran has said?
SECRETARY KERRY: I think the White House needs to speak to that at the appropriate time.
QUESTION: Is it a positive sign, coming from Rouhani in these – in this interview?
SECRETARY KERRY: I think Rouhani’s comments have been very positive, but everything needs to be put to the test and we’ll see where we go. And at the right moment, I think the White House and the State Department will make clear where we’re heading.
Remarks to the Press on Syria
Remarks
John Kerry
Secretary of State
Press Briefing Room
Washington, DC
September 19, 2013
SECRETARY KERRY: Good afternoon, everybody.
QUESTION: Good afternoon.
SECRETARY KERRY: Sorry to keep you waiting. We ran over with our friends from China.
QUESTION: (Off-mike.)
SECRETARY KERRY: Beg your pardon?
QUESTION: Was lunch good?
SECRETARY KERRY: Lunch was good. Thank you, Matt.
As you all know, before I became Secretary, I spent 28 years in the United States Senate and I witnessed some great debates and some of the best senators there produced some of the best debates that I’ve seen – sometimes. And some of the senators, I learned, liked to debate about just about anything. As my pal John McCain was fond of saying, a fight not joined is a fight not enjoyed. But it was also in the Senate where I personally heard former Ambassador of the United Nations-turned-Senator from New York Daniel Patrick Moynihan end more than a few debates with his own bottom-line reminder: “You are entitled to your own opinion, but you are not entitled to your own facts.” And those words are really worth using and focusing on as we head into next week’s General Assembly meeting in New York of the United Nations.
We really don’t have time today to pretend that anyone can have their own set of facts approaching the issue of chemical weapons in Syria. This fight about Syria’s chemical weapons is not a game. It’s real. It’s important. It’s important to the lives of people in Syria, it’s important to the region, it’s important to the world that this be enforced – this agreement that we came out of Geneva with. And for many weeks, we heard from Russia and from others, “Wait for the UN report. Those are the outside experts.” That’s a quote. “That is the independent gold standard.” That’s a quote.
Well, despite the efforts of some to suggest otherwise, thanks to this week’s long-awaited UN report, the facts in Syria only grew clearer and the case only grew more compelling. The findings in the Sellstrom report were as categorical as they were convincing. Every single data point – the types of munitions and launchers that were used, their origins, their trajectory, their markings, and the confirmation of sarin – every single bit of it confirms what we already knew and what we told America and the world. It confirms what we have brought to the attention of our Congress, the American people, and the rest of the world. The UN report confirms unequivocally that chemical weapons, including the nerve agent sarin, were used in Syria. And despite the regime’s best efforts to shell the area and destroy the evidence, the UN interviewed more than 50 survivors – patients, victims, health workers, first responders. They documented munitions and subcomponents. They assessed symptoms of survivors, analyzed hair, urine, blood samples. And they analyzed 30 soil and environmental samples.
And what did they learn? They returned with several crucial details that confirmed that the Assad regime is guilty of carrying out that attack, even though that was not the mandate of the UN report. But anybody who reads the facts and puts the dots together, which is easy to do – and they made it easy to do – understands what those facts mean.
We, the United States, have associated one of the munitions identified in the UN report, the 122-millimeter improvised rocket, with previous Assad regime attacks. There’s no indication – none – that the opposition is in possession or has launched a CW variant of these rockets such as the kind that was used in the 21st of August attack.
Equally significant, the environmental, chemical, and medical samples that the UN investigators collected provide clear and compelling evidence that the surface-to-surface rockets used in this attack contained the nerve agent sarin. We know the Assad regime possesses sarin and there’s not a shred of evidence, however, that the opposition does.
And rocket components identified in the ground photos taken at the alleged chemical weapons impact location areas are associated with the unique type of rocket launcher that we know the Assad regime has. We have observed these exact type of rocket launchers at the Assad regime facilities in Damascus and in the area around the 21st of August.
So there you have it. Sarin was used. Sarin killed. The world can decide whether it was used by the regime, which has used chemical weapons before, the regime which had the rockets and the weapons, or whether the opposition secretly went unnoticed into territory they don’t control to fire rockets they don’t have containing sarin that they don’t possess to kill their own people. And then without even being noticed, they just disassembled it all and packed up and got out of the center of Damascus, controlled by Assad.
Please. This isn’t complicated. When we said we know what is true, we meant it. And now, before I head to New York for the UN General Assembly, we have a definitive UN report strengthening the case and solidifying our resolve. Now the test comes. The Security Council must be prepared to act next week. It is vital for the international community to stand up and speak out in the strongest possible terms about the importance of enforceable action to rid the world of Syria’s chemical weapons.
So I would say to the community of nations: Time is short. Let’s not spend time debating what we already know. Instead, we have to recognize that the world is watching to see whether we can avert military action and achieve, through peaceful means, even more than what those military strikes promised. The complete removal of Syria’s chemical weapons is possible here, through peaceful means. And that will be determined by the resolve of the United Nations to follow through on the agreement that Russia and the United States reached in Geneva, an agreement that clearly said this must be enforceable, it must be done as soon as possible, it must be real.
We need everyone’s help in order to see that the Security Council lives up to its founding values and passes a binding resolution that codifies the strongest possible mechanism to achieve the goal and to achieve it rapidly. We need to make the Geneva agreement meaningful and to make it meaningful in order to eliminate Syria’s CW program and to do it with transparency and with the accountability, the full accountability that is demanded here. It is important that we accomplish the goal in New York and accomplish it as rapidly as possible.
Thank you all.
QUESTION: Could you --
QUESTION: Secretary, on a related subject --
SECRETARY KERRY: If you have any questions – Marie’s going to answer some questions.
QUESTION: On a related subject, can we just ask you whether you think the President might meet with President Rouhani to test the seriousness of what Iran has said?
SECRETARY KERRY: I think the White House needs to speak to that at the appropriate time.
QUESTION: Is it a positive sign, coming from Rouhani in these – in this interview?
SECRETARY KERRY: I think Rouhani’s comments have been very positive, but everything needs to be put to the test and we’ll see where we go. And at the right moment, I think the White House and the State Department will make clear where we’re heading.
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