REMARKS BY SECRETARY OF STATE KERRY WITH POLISH FOREIGN MINISTER SIKORSKI

FROM:  U.S. STATE DEPARTMENT 
Joint Press Availability With Polish Foreign Minister RadosBaw Sikorski
Remarks
John Kerry
Secretary of State
Warsaw, Poland
November 5, 2013

FOREIGN MINISTER SIKORSKI: (Via interpreter) John, welcome to Warsaw and Poland. We’ve known each other for a very long time. I knew you when you weren’t the Secretary of State and I personally wasn’t a Minister of Foreign Affairs with the Republic of Poland, actually. I’m very glad to keep in touch with you, and I mean keep in touch not only when it comes to Syria and our bilateral relations.

Today’s meeting is proof and confirms the good strategic relationship between the United States and Poland. An example of the close link can be the political cooperation and our military cooperation. What’s more, we have common economic interest and we conduct democratic dialogue.

When we recall our common actions, I would like to thank you cordially for your yesterday’s visit. You visited the resting place of Tadeusz Mazowiecki, the first non-communist prime minister of the Republic of Poland, thanks to whom we are where we are, who paved the way for Poland to the EU, to NATO, the way to freedom, the way for Poland to become a secure and safe and wealthier country.

Next year, the summit of NATO takes place in London. We will sum up our joint operations in Afghanistan and we will set directions for further operations of NATO for common security.

As for the topic of Afghanistan, I’d like to say that this topic is personally – it’s very close to me, and I’d like to recall to the Polish media the person of Sergeant Michael Ollis, who on the 28th of August during (inaudible) of a Polish base in Ghazny sacrificed his life to save a Polish soldier. I think this is the best proof of the fact that Poles and Americans are brothers in arms. So my condolences go to the family of Sergeant Ollis. And I’d like to thank you for our military cooperation in Afghanistan.

We have spoken about the ongoing issues that are on the international agenda. John is just returning from the Middle East, but we’ve not only spoken about the southern neighbors of the EU but also about the eastern neighbors of the EU. We are approaching the Eastern Partnership Summit, and there still is the question of signing association agreement with Ukraine.

Poland, for obvious reasons, supports the signing of a free trade agreement between the EU and the U.S. We promised ourselves that we would consult each other in that matters. Poland is one of the countries who think that for the sake of environment and for the sake of our economies in Europe and in Poland, we should explore and produce shale gas, and gas should flow to our NLG terminal also from the United States.

So John, once again a very warm welcome in Poland, and I hope the rest of your visit will be very fruitful. Thank you.

SECRETARY KERRY: Well, Radek, thank you very, very, very much. Witam serdecznie. I’m very honored to be here with all of you, and I am particularly grateful to revisit with my friend, the Foreign Minister of Poland. We have collaborated on a number of different issues and engaged in a number of important and close, constructive dialogues. And he has visited with me in Washington; I’m now privileged to visit with him here. And together we have met at a number of other multilateral meetings.

It’s a pleasure for me to be back in Poland. I’ve had the privilege of being here a number of times, particularly for environmental conferences, and we applaud Poland’s extraordinary leadership with respect to the environment and environmental issues. And it’s no accident that I chose to be here in Poland for my first bilateral meeting in Central Europe. In less than 25 years, since the restoration of democracy, the Polish people have turned the country into an economic and security powerhouse, and the progress that has been made is really quite extraordinary. And the impact of Poland is really felt now throughout the transatlantic community.

Last night, as Radek mentioned, I had the privilege of standing at the gravesite of former (inaudible) Minister Mazowiecki. It was a very moving moment. It was very beautiful in that cemetery with the birch trees and the aroma of the birch trees and the flowers on the graves and the lights of all the various candles. It was really mystical and spiritual, and I was very proud to lay a wreath from the people of the United States to recognize the extraordinary contribution of this man to the cause of freedom and independence and human rights. It is a great story.

I also, knowing the history of this great city and of Poland itself, cannot help but come here with a sense of respect for the remarkable journey of the Polish people. Warsaw – the name Warsaw is associated with so much: the Warsaw Pact, the Warsaw Convention, the Warsaw Uprising. The resistance and the incredible rebuilding of an entire country has come out of the remarkable spirit of the Polish people. And so I feel privileged as an American, and as an American Secretary of State who has great appreciation, having run for President of the United States, for the vast diaspora of the Polish people that contribute to the United States now as Polish Americans.

So I’m glad to come back here, and I am struck by how much has changed in just one generation, and frankly, how much of that change came from the visionary leadership of the Prime Minister, Prime Minister Mazowiecki and also of other great polish leaders whose names are known around the world. Prime Minister Mazowiecki was obviously an advocate for the best of human rights, the best of democracy, and he launched Poland’s extraordinary aspirations that now neighbors and friends around the world can touch and appreciate.

I’m also proud that in this march of progress, the United States and Poland, as allies and friends, continue to promote our shared values and our shared aspirations. And our partnership, quite frankly, is growing stronger because of that.

On the economic side, today the Foreign Minister and I discussed the Transatlantic Trade Investment Partnership, TTIP as it’s known, which can lead to even further economic and political transformation. In addition, as a NATO member now for almost 15 years and as an EU member for nearly 10 years, Poland’s influence in both organizations has grown significantly over that time.

And that is because of the smart choices that the Polish people continue to make. You are opening markets, you are embracing transparency, you are continuing with your defense modernization and building the strength of the country, you are continuing to diversify your energy marketplace, and you are generously supporting the democratic EU and have begun negotiating and recognizing our shared interest in a comprehensive economic agreement that can grow both of our countries and all of the region. Europe and the United States joined together in an economic association would be one of the most powerful economic forces on the planet, and it will raise the standards by which all countries are engaging in economic activity.

Poland is also the largest commercial partner of the United States in Central Europe, and our bilateral trade has quadrupled over the course of the last 10 years. We think we can do even better, and we believe that the TTIP is the key to being able to do that.

On the environmental front, as I mentioned earlier in my comments, Poland is not only hosting the UN Framework Convention on Climate Change for the 19th conference of the parties next week, but Poland continues to send a signal for all of us that we need to demonstrate our commitment to a cleaner energy base and to live up to our responsibilities to lower emissions on a global basis.

As NATO allies, our security partnership, from Afghanistan to Kosovo to Lask, all of these – right here in Poland at the air base – make our relationship even more important and stronger. I look forward to going to Lask later in the day and saluting the work of our armed forces and the work that they accomplish together.

I also want to commend Poland for its $45 billion investment in defense modernization. The United States defense industry, which we believe is the most innovative, creative, and technologically advanced in the world, is going to compete vigorously here with our government in support of the goals and the upgrades that Poland seeks.

Poland is a very important part of the European phased adaptive approach on NATO missile defense, and we will deploy a missile defense site in Poland in the 2018 timeframe.

We’re also enormously proud of our work together to promote democracy on this continent and around the world. I want to commend Minister Sikorski for his tireless efforts in particular for mentoring the Eastern Partnership countries in advance of the meeting in Vilnius. This is a very important opportunity for everybody, and I think Poland has been front and center in its efforts to help advance all of our interests through that association.

The bottom line is this: Poland is thriving and our alliance is thriving. And I look forward to celebrating here today the economic and security benefits with the leaders of Poland, and I particularly look forward to continuing to grow this partnership. We’re respectful, enormously respectful of the extraordinary history of the people of Poland, of this city, of this region; mindful that we always have to be vigilant. We know that things can change. The march of democracy is important. We believe in it, but it takes work; it takes nurturing. And all of us have a responsibility to continue to do our part in order to live up to the legacy left us by those who weren’t as lucky as we are today, some of whom gave their lives, many of whom were dislocated, all of whom have been through an extraordinary history to arrive at the place we are today. We have work to do, but the journey of the past convinces us we can get that work done.

Thank you.

MODERATOR: (Via interpreter) Ladies and gentlemen, the time for questions. Mr. Cegielski from Polish Radio.

QUESTION: (Via interpreter) Good morning The question goes to both of you gentlemen. Several days ago, Minister Sikorski spoke on the Polish Radio and said that there will be a chance to ask a question about the invigilation. My question is: Have you spoken about NSA (inaudible) and what has been said?

And the question to Secretary Kerry: Have the Americans – are the Americans eavesdropping on Polish politicians?

FOREIGN MINISTER SIKORSKI: (Via interpreter) Yes, we have spoken about it and we have agreed on closer consultations between our services on combatting common threats.

SECRETARY KERRY: Happy to say to you that this is a subject, obviously, of concern – and we understand that – to people. First of all, we need to understand, as the Foreign Minister does, we’re all in this together. We are all in the effort to try to be able to provide protection to our citizens, and we have to strike the right balance between protecting our citizens and, obviously, the privacy of all of our citizens. That is a balance that we do try to strike. The President of the United States has ordered a complete review of all of our activity, and we will work very closely with our friends in order to make certain that the road ahead is one that is understood and that is mutually agreed upon.

MS. PSAKI: The next question will be from Jo Biddle of AFP.

QUESTION: Excuse me, sorry about that. Could I just follow up on the NSA allegations and with respect to how this might – how the fallout from all these revelations might affect the TTIP talks which are going to resume from November the 11th in Brussels? It was announced yesterday.

Secretary Kerry, how do you think the trade talks would be affected by these revelations which have left some of the European leaders in very political difficulties back home?

And Foreign Minister Sikorski, also how concerned is Poland about the fallout on U.S.-EU relations as a result of this?

And If I could just ask one more to Foreign Minister Sikorski on the CIA – the allegations of the CIA prison in Poland. There’s a European Court of Human Rights hearing next month, and I believe that the Polish Government has asked for this to be closed to the public and press. Why is that? And how is your own government investigation to this going, and are the Americans participating?

Thank you.

SECRETARY KERRY: Well, let me just say, first of all, we are very appreciative of the Foreign Minister’s and Poland’s strong support for the Transatlantic Trade Investment Partnership. This is a trade partnership that has the ability to lift all of our countries. Europe has obviously been having a very challenging economic time. The United States has also had its challenges; we’re starting to come back and get a lot stronger.

But the Transatlantic Trade Partnership is really separate from and different from any other issues that people may have on their minds. This is about jobs. It’s about the economy. It’s about economic competition in a global community that competes sometimes by rules that are very questionable and shaky.

If the United States and the European Community can come together around this Transatlantic Trade Partnership, we have the ability to raise the standards by which countries around the world are doing business, and we will have one of the most powerful economic marketplaces on the face of this planet. Together, that can have a profound positive impact for our people. It will put millions of people to work, create new jobs, more opportunities, and it’s worth pushing for.

Now, that should not be confused with whatever legitimate questions exist with respect to NSA or other activities. And as I have said previously, we want to hear from our allies, we want to have this conversation. President Obama welcomes this opportunity to work with our allies. And ultimately, if we get it right – which we will – we can not only alleviate concerns, but we can actually strengthen our intelligence relationships going forward and we can all be more secure and safer as a result, as well as protecting the privacy of citizens. We will work together very effectively on this.

FOREIGN MINISTER SIKORSKI: (Via interpreter) The TTIP, the deepened foreign trade agreement, is an agreement between the EU and the U.S. Let me remind you that we are represented by the European Commission in these talks. The Commission has the sole competence in this respect. The EU has no competences when it comes to cooperation of intelligence services. Intelligence services cooperation is very important. It is also vital to make sure that our rights and regulations and procedures keep up with the technological progress so that our citizens can feel safe and the alliances are not threatened, are not over-burdened by such incidents as the escape of Mr. Snowden.

But these are two separate things, two separate orders: One belongs to Europe itself, to the Community; the second one is rather national in character; it depends on individual and states vis-a-vis the U.S. And as I promised, as I mentioned, we promised that we will have closer cooperation between our services so that we can make certain that the cooperation is based on frankness, openness, and transparency, but also so that our citizens can feel safe, can be sure that their personal life is not the object of some unjustified interest.

As for the second question, you, Madam, answered your question yourself. Poland is the only country, actually, that is currently running an investigation on the alleged activities. The investigation is closed in nature; therefore, the materials have to be classified. They are not open to the public, so whatever we would like to communicate on an international basis is classified.

Thank you very much.

QUESTION: (Via interpreter) Mr. Wronski from Gazeta Wyborczaadsky, Polish daily. My first question goes to Minister – to Secretary Kerry. At the beginning of this year, the U.S. changed its plan related to the missile defense. You mentioned that due to lower threats, the fourth phase of the missile defense in Poland will not be carried out. In the light of the current situation, i.e., Syria and the violence there, and the (inaudible) of Iran getting different, will the plans of missile defense be changed, the plans related to Poland? Will they be reviewed, maybe?

And my second question is: How does the U.S. want to cooperate in construction of the Polish missile defense?

My third question goes to Minister Sikorski: Have you obtained any clear declaration from Secretary Kerry that Polish politicians have not been the subject of eavesdropping of NSA, have not been the target of NSA? You mentioned the word “consultations.” It was a bit worrying. It awoke some concerns. Does it mean that the Americans are to warn us that they are going to eavesdrop on us, or are we going to do eavesdropping together? What does it mean?

FOREIGN MINISTER SIKORSKI: (Via interpreter) Well, they are very good questions, actually, very good questions for my colleague, for Secretary Kerry.

SECRETARY KERRY: Thank you. Obviously, it’s premature to make any kind of judgment that would alter the current path, because there’s nothing that’s been altered otherwise. We don’t have an agreement with Iran, nothing has changed, and the plans for missile defense are absolutely on target. We’ve already – on October 28th we broke ground on the phase two adaptive, and we intend to provide for the next phase by 2018, and we’ll deploy that site by that period of time. That is our plan, and nothing has changed in that at this point in time. I don’t foresee it changing at this point. And obviously, we will fulfill our obligations and work together with the Government of Poland with respect to the deployment.

MS. PSAKI: The last question will be from Scott Stearns with VOA.

QUESTION: A question for both of you, if I might. With U.S. and Russian officials meeting in Geneva today on the Syria talks, Syria’s Information Minister has said that the Assad government will not take part in Geneva 2 if the goal is the removal of the Assad government. You said yesterday in Saudi Arabia, Mr. Secretary, that that was the goal of Geneva 2. So how do you move forward to a negotiated settlement where one, if not both, of the parties to the Syrian conflict are doubtful to attend a Geneva 2?

SECRETARY KERRY: Well, the words “regime” and individuals and this and that get confused in this process. The Assad regime knows full well that the purpose of Geneva 2 is to implement Geneva 1. That has always been true. The Russians have accepted that. Every support group of the Syrian opposition has accepted that.

The purpose is to implement Geneva 1. What does that mean? What is Geneva 1? Geneva 1 calls for the installation of a transition government with full executive authority by mutual consent, so both parties have to agree to put in place a transition government that is neutral that will bring about a choice for the Syrian people for the long-term future.

Now, I don’t know how anybody believes the opposition is going to give mutual consent to Assad to continue. And the Syrian Government has accepted to come to Geneva. So I hope that the Syrian Government and the Russians and Iranians and others who support the Syrian regime will make certain that the Syrian regime will live up to its obligation to come to Geneva to negotiate a peaceful resolution of the conflict in Syria.

And we and others have already indicated we are prepared to be there and the opposition is. The opposition received a very significant boost yesterday from the Arab League, which overwhelmingly stated a very strong resolution saying that the opposition must go to Geneva, Geneva is important, and Geneva will provide a way to have a negotiated solution here.

One thing is certain: There is no military solution to the conflict in Syria. It can only be resolved through political negotiation. And the framework for that negotiation has been accepted by the international community. It is Geneva 2 negotiation to implement Geneva 1 transition government. And we hope that the Assad regime will live up to its already stated promise to be there and to negotiate. And I think it speaks for itself.

FOREIGN MINISTER SIKORSKI: (Via interpreter) Poland has been supporting the destruction of Syrian chemical weapons when that seemed to be not very likely, and today it is reality. So we are also supporting political talks because we think that this is the last chance, the last resort for Syria and for its citizens. We need to negotiate the solution for nuclear ambitions of Iran.

I’d like to thank and congratulate John Kerry for everything that he does, he’s been doing and he does to support the peace process between Israel and Palestine. Thank you very much.

MODERATOR: (Via interpreter) Thank you, ministers. Thank you, guests.

SECRETARY KERRY: Thank you very, very much.

INVESTOR PLEADS GUILTY IN PUBLIC FORECLOSURE AUCTION BID RIGGING CASE

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, November 4, 2013
Northern California Real Estate Investor Pleads Guilty to Bid Rigging at Public Foreclosure Auctions
Investigations Have Yielded 37 Guilty Pleas to Date

A Northern California real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Kuo Hsuan “Chuck” Chang, of San Francisco, entered his guilty plea in U.S. District Court for the Northern District of California in San Francisco.  Felony charges were filed against Chang on Oct. 9, 2013.

Chang is the 37th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

According to court documents, Chang conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco County, Calif.   Chang was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert co-conspirators’ money that would have otherwise gone to mortgage holders and others.  Chang is charged with participating in these conspiracies beginning as early as October 2009 and continuing until about November 2010.

“The Antitrust Division will continue to vigorously prosecute anticompetitive schemes that compromise local markets and cause financial harm to consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Collusion at foreclosure auctions harmed both lenders and distressed homeowners in an already struggling real estate market, and the conspirators must be held accountable.”

As described in the charging document, the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“We urge anyone with information regarding fraudulent anticompetitive practices at foreclosure auctions to contact the FBI or our partners at the Antitrust Division,” said FBI San Francisco Special Agent in Charge David J. Johnson.  “The FBI will continue to work with our law enforcement partners and the community to root out and bring to justice those individuals who undermine the real estate market and victimize legitimate consumers.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine.

The charges against Chang are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Alameda and Contra Costa counties, Calif.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at 415-553-7400.

This case was brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.

ISRAEL TO BUY 6 V-22 OSPREY AIRCRAFT

FROM:  U.S. DEFENSE DEPARTMENT 
Israel Will Buy 6 Osprey Aircraft, Hagel Announces
By Karen Parrish
American Forces Press Service

WASHINGTON, Oct. 31, 2013 – Calling Israel’s self-defense capabilities and its qualitative military edge “central to both Israel and U.S. security interests,” Defense Secretary Chuck Hagel announced tonight that Israel will buy six V-22 Osprey tilt-rotor aircraft for its air force.

Hagel made the announcement during his keynote address at the 100th annual Anti-Defamation League meeting in New York.

“Israel will get six V-22s out of the next order to go on the assembly line, and they will be compatible with other [Israeli defense force] capabilities,” he said. “The Israeli and American defense relationship is stronger than ever.”

With Afghanistan -- the second of America’s two longest wars -- winding down, Hagel said, “we continue to face a complicated and volatile world. Nowhere is this more apparent than in the Middle East, where the United States and our allies are facing an unprecedented set of complex challenges.”

For Israel, the secretary noted, progress with one neighbor tends to bring new threats from other directions. “There are no margins for Israel,” he said.
One challenge that threatens U.S. and Israeli security interests is preventing Iran from obtaining a nuclear weapon, Hagel said.

“Iran is a state sponsor of terror, responsible for spreading hatred and extremism throughout the region,” the secretary said. “But foreign policy is not a zero-sum game. If we can find ways to resolve disputes peacefully, we are wise to explore them.”

Ridding the world of hatred takes more than just work, imagination and songs, Hagel told his audience; it also demands commitment, sacrifice, and courage.
“It demands that we must continue to march our armies of tolerance, equality, and justice around the globe.” Hagel said. “And it demands that we remember the timeless questions of Rabbi Hillel: ‘If I am not for myself, who will be for me? If I am only for myself, what am I? And if not now, when?’”

SECRETARY OF STATE KERRY MAKES REMARKS IN WARSAW TO MEMBERS OF AMERICAN CHAMBER OF COMMERCE

FROM:  U.S. STATE DEPARTMENT 
Remarks to American Chamber of Commerce Participants
Remarks
John Kerry
Secretary of State
Bristol Hotel
Warsaw, Poland
November 5, 2013

SECRETARY KERRY: Thank you. Thank you very much, Joseph. Thank you. Appreciate it. Let me see if I can make this Kerry-sized. (Laughter.) Anyway, there we go. Thank you. Good morning, everybody – or good afternoon. What is it? I don’t know anymore. (Laughter.)

PARTICIPANT: Afternoon.

SECRETARY KERRY: What?

PARTICIPANT: Afternoon.

SECRETARY KERRY: Afternoon. Good afternoon. And you haven’t eaten yet, right? (Laughter.) Anyway, and it’s very dangerous because I think I’m all that stands between you and your food. (Laughter.) Is it true you’re having a meal?

PARTICIPANT: (Inaudible.)

SECRETARY KERRY: Beg your pardon?

PARTICIPANT: Yes.

SECRETARY KERRY: Okay, once I let you sit down. (Laughter.)

Well, I will not keep you too, too long, but I want to tell you, first of all, what a great honor it is for me to be here in Warsaw, in Poland. Joseph just talked about the remarkable transformation taking place here. It really is extraordinary. And in fact, it’s encouraging and inspirational. I got to walk down the street, the main street this morning, heading towards the old city. And the Ambassador, our good Ambassador, was relating to me sort of the care that went into the rebuilding and the thought about replicating what was. And so you see the beauty even though it’s more modern, obviously, it is reflective of what was there originally and a great, great statement about the spirit of this country and the sort of stubborn refusal, if you will, to be beaten down by history.

So I think it’s a great statement. It’s a great metaphor for a lot of countries today for the possibilities of what can come out of great conflict and tragedy through the determination and the imagination of the human spirit. And that’s kind of part of what we’re here to talk about here a little bit today – the story of Poland, a story really of resistance in many ways to so many different conflicts and occupations and challenges.

And I was saying just a moment ago over at the Embassy that when you hear the name Warsaw you don’t just think of that abstractly, but you think of the Warsaw Pact, the Warsaw Convention, the Warsaw Uprising, the Warsaw Ghetto. I mean, there are great moments of defiance and of transformation affiliated with the name, and more particularly with the spirit and the history. And of course, we in Massachusetts, because of Casimir Pulaski and his historic letter to George Washington when he wrote of his willingness to be there to fight for our own independence, began a great tradition of our countries being unified in our depth of commitment and belief in the human spirit, demonstrated so much through democracy and through the commitment to the power of individuals to be able to make a difference. So we celebrate that, and I thank you because I’ve been in Cairo and Riyadh for two days, so you have given me weather much more accustomed to Massachusetts and my hometown – (laughter) – than 90 degrees at this time of year.

I’m going to try to – let me just talk for a bit about sort of what really brings all of you together, because I have great respect for the work that the Chamber has done. And the companies that have invested here and the relationship at a corporate level in business is really essential to what has helped Poland to be able to be the powerhouse economically that it is today.

When this organization, the Chamber, opened its doors not too long after Communism collapsed, the country –and indeed the continent and the world – were full of hope for what the future of free markets might be able to be able to bring. But I don’t think any of us could have predicted that it would have been as unbelievably successful and rapid as it has been here in Poland. The economic strength of this country now is truly nothing less than remarkable. And just as – I mean, if you think about it, one generation after the Gdansk shipyard strikes, Poland has become – as Joseph reminded us a moment ago – the sixth largest economy in Europe. It is one of the best places to invest in the world, and it is one of the economic powerhouses of the EU. It is also one of the few transatlantic economies to grow despite the global recession, which is a testament to the Polish people’s innovation and resilience.

And that’s why the United States made our bilateral trade such a priority, because trade has quadrupled here just over the last 10 years. So I just came downstairs from a meeting with a group of young people who represent young Polish innovators, a group that is part of this alumni program of young people chosen by the Ministry of Education. The Polish Government supports them to go and take part in a program at Berkeley and at Stanford. And they’re collaborating with American partners on creative solutions to today’s challenges. And it seems to me that they are a symbol of the way in which the aspirations of young people really unite us rather than divide us, as they do in some other parts of the world. Entrepreneurship, competition, open markets, these words were never associated with Poland’s economy 25 years ago, but today they define it.

That’s the measure of the transformation and that’s what the world means when it talks about an economic miracle which has taken place here. I’m Catholic; I happen to believe in miracles, but this is a different kind. (Laughter.) And it has been really nothing short of phenomenal. It’s taken hard work, and an awful lot of you here in this room really get credit for what is happening here. Several hundred – I think at least 100,000 jobs have been brought here through the companies that are here and represented.

The fast rise – but it’s symbolic of something else, if I can just spend a minute on this. I was recently in South Korea, in the Republic of Korea, and there it struck me how this country that 15 years ago we were giving aid to, is now a donor country giving aid to other countries in the world. We go back to the Marshall Plan, which obviously Poland, because of the occupation, didn’t take part in, but you look at the rest of Europe where it did take hold, and we see how investment and rules of the road and belief in the possibilities of that investment to turn a corner, in fact, produces transformation. And the same is true for Japan. Now all of those places are not just donor countries, but they’re vibrant democracies in places that are contributing to a set of values that the world really respects and admires.

I think that if you look in other places – I was privileged to lead the effort over 10 years to open up our new economic relationship with Vietnam. Back in 1990, when we began that effort, nobody believed it was possible. Now Vietnam is one of the economic powerhouses of the world. We have vibrant investment, and it is a vibrant marketplace, a capitalist marketplace, which is very different from the place it was envisioned to be when I was there in the late 1960s.

So right now, right here in Europe, we believe we’re on the doorstep of another great transformation that could actually make trade more open, make markets more free, make competition stronger, and create more opportunity for jobs. And it even can make a broader base of economic prosperity the hallmark of the next generation in the way that we want it to be.

And of course, I’m talking about the possibilities of TTIP, the Transatlantic Trade and Investment Partnership. Now, it’s ambitious, but its potential benefits are enormous. I talked this morning with the Prime Minister and the Foreign Minister about it. This market could integrate the world’s largest market, the EU, and the single largest economy, the United States, and create a consortium, if you will, of nations all adhering to the highest standards, not the lowest, creating a race to the top, not a race to the bottom.

And a market of that size can have a profound impact on the choices that other countries must begin to make with respect to transparency, accountability, corruption, all of the things that are really the key to attracting investment with the kind of confidence that money seeks, as it has many choices around this planet as to where to go and where to invest. TTIP will improve the rules that govern trade and it will level the playing field.

And by strengthening the rules-based trading and promoting greater transparency and regulations and standards that become more compatible, we will break some of the resistance to trade that exists and encourage this very, very important standardization, which is, in the end, I think, in the interest of everybody. If you know what the rules of the road are and you know the rules of the road are top level, you are much more prone to invest and locate and do business than you are at a place where you know you can’t get a decision from the government because they don’t have those rules or getting that decision from the government may require all kinds of hoops you have to jump through. And for our companies that adhere to the Foreign Corrupt Practices Act, that can be a particular challenge against countries where they don’t.

So this is a chance to really even the scale, and I’ll give you a few examples of why it’s important to try to do this, leaving out the question of corruption practices. One of Poland’s most successful retailers in the United States is a company called Inglot Cosmetics. And it has a successful brand of breathable nail polish, something I don’t know anything about, folks. (Laughter.) But I am told that while cosmetic regulations between the EU and the U.S. are similar, they’re still just different enough in order to raise production and administrative costs that make it more difficult for people to be able to sell or compete. In TTIP, we actually save this cosmetic company time and money so that it could focus on developing more innovative products and actually engage more in selling and sales, rather than reacting to a regulative marketplace.

You can take Poland’s famous hams, which are enjoyed at dinner tables all across the United States, or you can look at Massachusetts cranberries and California grapes, which have found a growing market here in this country. These foods could be traded much more easily and cheaply than they are today, and that’s if we ease the tariffs and ease the barriers that make it harder to be able to trade. TTIP will do exactly that.

So more compatible standards could also help auto manufacturers, like General Motors, which produces more than 2 million cars a year in the southern city of Gliwice. And these companies and others like them here in Poland would greatly benefit from an increased, two-way transatlantic capacity.

So bottom line, this really is an historic opportunity. And as you come here today and you break bread in a few minutes and have a chance to talk with each other and everything, think about what you can do to help us energize this process across Europe. For those of you who travel, and most of you do, those of you who engage in a daily basis here, get people excited about this possibility, because TTIP is a political and strategic bet that we’re willing to place on one another.

And more and more – I said this during my nomination hearings, and I believe it to the core, and I’ve watched this evolution over the years in terms of foreign policy – more and more foreign policy is economic policy. And more and more, as countries have less and less cash that they’re throwing around, we will need to partner with the private sector in order to leverage change in countries. And if we can help create the framework by which countries invite companies to come and invest and be involved and streamline decision making, and help with economic zones, qualified economic zones, tax incentive, whatever it takes to create fast decisions, effective availability of workforce, all those kinds of things, that will be the greatest development to policy that there will be.

In the absence of an age when hundreds of billions of dollars would be thrown into a Marshall Plan, the new plan is really the private sector and its investment as people are competing globally to create more middle class. And as more middle class are created, more people will travel, more people will share the purchasing of goods, and more people will, in the end, have a stake in their communities that will lower the threshold of terrorism and the option that people take to choose to be violent in the choices that they make with respect to how they can define their future.

I’m telling you folks, that food vendor in Tunisia who burned himself to death was not part of a religious extremist group. He was not part of any ideology. He wanted to be able to sell his fruit without corruption, without government interference. He wanted to touch his own sense of what the brass ring was. And the same thing in Tahrir Square. Those Egyptian kids, none of them were members of the Muslim Brotherhood, none of them came there with any ideology. They were texting each other and Googling, and using FaceTime and tweet and talking and trying to figure out how to really have part of the future. The same thing in Syria: It began as an effort by young people to be able to touch the future, and then it was co-opted by others with other intent.


So building these bridges of opportunity for people is going to define the future. And I believe that the private sector, business, chambers of commerce, and others are vital instruments of global policy, not American policy, that have ways in which we will reach global aspirations and be able to meet this growing demand by unbelievable numbers of young people bursting, a new baby boom generation, that are going to demand part of that future. Sixty five percent of many countries are under the age of 40, in some countries 60 percent under the age of 25. And if we don’t educate them and provide jobs for them and opportunities, we’re going to have great difficulties.

So I thank you for the privilege of being here with you today. We’ve come a long way in one generation. And for the sake of the next generation, we clearly cannot be satisfied. There’s a huge task ahead of us. Poland is really helping, and you – all of you in this Chamber – are helping to define that road ahead. And we look not just to lecture you or to talk at you, but to partner with you in the effort to make sure that we meet your needs, and through that together meet our needs as global citizens.


Thank you all for the privilege of being with you today. Thank you. (Applause.)

U.S. DOD CONTRACTS FOR NOVEMBER 5, 2013

FROM:  U.S. DEFENSE DEPARTMENT
CONTRACTS

NAVY

Bechtel Marine Propulsion Corp., San Francisco, Calif., is being awarded a $7,069,265,220 modification to previously awarded contract (N00024-08-C-2103) for naval nuclear propulsion work at the Bettis & Knolls Atomic Power Laboratories. Work will be performed in Schenectady, N.Y. (58 percent), Pittsburgh, Pa. (32 percent), and Idaho Falls, Idaho (10 percent). Fiscal 2014 operations and maintenance, Navy and fiscal 2014 other procurement, Navy contract funds in the amount of $82,893,000 will be obligated at time of award. If fully funded, contract funds in the amount of $484,680,000 will expire at the end of the fiscal year. No completion date or additional information is provided on naval nuclear propulsion program contracts. The Naval Sea Systems Command, Washington, D.C., is the contracting activity.

DRS C3 & Aviation Co., Gaithersburg, Md., is being awarded a $50,892,583 modification to a previously awarded firm-fixed-priced contract (N00019-11-C-0011) to exercise an option for logistics services in support of the E-6B Mercury program, including the procurement and repair of operational, depot and Military Standard Requisitioning and Issue Procedures spares and associated shipping and data. Work will be performed at Tinker Air Force Base (AFB), Okla. (70 percent); Offutt AFB, Neb. (10 percent); Travis AFB, Calif. (10 percent); and Patuxent River, Md. (10 percent); and is expected to be completed in November 2014. Fiscal 2014 operations and maintenance, Navy contract funds in the amount of $13,325,899 will be obligated at time of award, all of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md. is the contracting activity.

LPI Technical Services*, Chesapeake, Va. (N50054-14-D-1401); East Coast Repair & Fabrication LLC*, Norfolk, Va. (N50054-14-D-1402); Q.E.D. Systems Inc.*, Virginia Beach, Va. (N50054-14-D-1403); Epsilon Systems Solutions Inc.*, Portsmouth, Va. (N50054-14-D-1404); and Tecnico Corp.*, Chesapeake, Va. (N50054-14-D-1405), are each being awarded a $34,000,000 fixed-price, indefinite-delivery/indefinite-quantity multiple award contract for depot-level repairs to U.S. Navy ships and submarines. This contract will cover a full range of depot level repairs and alterations, troubleshooting, maintenance, installation and removal of main and auxiliary, hull, mechanical and electrical equipment and systems onboard U.S. Navy or other military vessels including submarines. Work will be primarily performed in the Hampton Roads area of Virginia and is expected to be completed by November 2014. Each contractor will receive $68,000 at time of award. Fiscal 2014 operations and maintenance, Navy contract funds in the amount of $340,000 will be obligated at the time of award, and will expire at the end of the current fiscal year. This contract was competitively procured via the Navy Electronic Commerce Online website, with eight offers received. The Norfolk Ship Support Activity, Norfolk, Va., is the contracting activity.

Phoenix Air Group Inc., Cartersville, Ga., is being awarded a $23,153,136 firm-fixed-price and cost-reimbursable indefinite-delivery/indefinite-quantity contract for contractor owned and operated aircraft for fleet training in support of the commander, Naval Air Forces, various Department of Defense (DoD) and non-DoD agencies, and foreign military sales customers, including fleet integrated training contracted air services and electronic warfare aircraft for training. These aircraft will be utilized for training shipboard, and aircraft weapon system operators and aircrew, tactics and procedures to counter potential enemy electronic warfare threats. Work will be performed in Cartersville, Ga., (40 percent) and various locations inside and outside the United States (60 percent), and is expected to be completed in November 2018. Fiscal 2014 operations and maintenance, Navy contract funds in the amount of $2,524,948 are being obligated on this award, all of which will expire at the end of the current fiscal year. This contract was not competitively procured pursuant to 10 U.S.C. 2304(c). The Naval Air Warfare Center Aircraft Division, Patuxent River, Md., is the contracting activity (N00421-14-D-0005).

Northrop Grumman Systems Corp., Herndon, Va., is being awarded an $18,533,888 modification to a previously awarded firm-fixed-price contract (N00019-12-C-0096) to exercise an option to build, install and test modifications to the Multi-Role Tactical Common Data Link Ku Line-of-Sight and Ka satellite communications systems for incorporation into the E6-B aircraft. In addition, this modification provides systems integration laboratory and aircraft development and operational test support. Work will be performed in Greenville, Texas, (50 percent), Patuxent River, Md. (35 percent), and San Diego, Calif. (15 percent), and is expected to be completed in November 2015. Fiscal 2014 aircraft procurement, Navy contract funds in the amount of $18,533,888 are being obligated on this award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

The Boeing Co., St. Louis, Mo., is being awarded a $13,740,115 modification to a previously awarded firm-fixed-price contract (N00019-09-C-0019) for the procurement of aircraft armament equipment for F/A-18E/F and EA-18G aircraft. This effort will procure 270 station control units, 13 aerial refueling stores (ARS) air probes, 13 ARS fuel probes, 26 ARS suspension lugs, 168 chaff dispenser cover, 26 ALE-50 dispenser, 26 ALE-50 protector, 26 ALE-50 chassis, 26 ALE-67 mounting bases, 26 mounting retainers, and 12 centerline feed-thru plates. Work will be performed in St. Louis, Mo., and is expected to be completed in August 2015. Fiscal 2013 aircraft procurement, Navy contract funds in the amount of $13,740,115 are being obligated on this award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

Lockheed Martin Corp., Owego, N.Y., is being awarded $10,458,900 for firm-fixed-price delivery order 4092 against a previously issued basic ordering agreement (N00019-09-G-0005) for non-recurring engineering efforts for development and testing of the system configuration 15 series modifications to the MH-60R VHF Omni-directional Range/Instrument Landing System, crash data recorder, and ABS-B Out for the Government of Australia under the Foreign Military Sales (FMS) Program. Work will be performed in Owego, N.Y., and is expected to be completed in February 2016. FMS funds in the amount of $10,458,900 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

Lockheed Martin Space Systems Co., Sunnyvale, Calif., is being awarded an $8,339,331 fixed-price-incentive, cost-plus-incentive-fee, and cost-plus-fixed-fee modification (PZ0001) to a previously awarded un-priced letter contract (N00030-13-C-0100) for new procurement of Trident II (D5) missile production, D5 life extension development and production, and D5 deployed systems support. This modification includes unexercised option items, which if exercised, will bring the contract value to $803,235,443. Work will be performed in Sunnyvale, Calif. (34.31 percent); Brigham City, Utah (21.55 percent); St. Mary's, Ga. (9.49 percent); Cape Canaveral, Fla. (5.59 percent); Silverdale, Wash. (5.25 percent); Pittsfield, Mass. (3.23 percent); Kingsport, Tenn. (2.81 percent); Gainesville, Va. (2.09 percent); El Segundo, Calif. (1.84 percent); Clearwater, Fla. (1.74 percent); Lancaster, Pa. (1.67 percent); Inglewood, Calif. (1.57 percent); Camarillo, Calif. (0.75 percent); Santa Fe Springs, Calif. (0.62 percent); Oakridge, Tenn. (0.57 percent); Arlington, Wash. (0.5 percent); St. Charles, Mo. (0.36 percent); Joplin, Mo. (0.36 percent); Defew, N.Y. (0.34 percent); Hollister, Calif. (0.33 percent); Diamond Springs, Calif. (0.33 percent); Santa Ana, Calif. (0.28 percent); Miamisburg, Ohio (0.27 percent); Bethel, Conn. (0.24 percent); Orlando, Fla. (0.24 percent); Colorado Springs, Colo. (0.22 percent); Torrance, Calif. (0.20 percent); Wenatchee, Wash. (0.19 percent); Santa Clara, Calif. (0.14 percent); Englewood, Colo. (0.14 percent); San Diego, Calif. (0.12 percent); San Jose, Calif. (0.12 percent); Santa Cruz, Calif. (0.12 percent); Simi Valley, Calif. (0.11 percent); Simsbury, Conn. (0.10 percent); and other various locations of less than 0.10 percent each (2.21 percent), and work is expected to be completed December 2014. If options are exercised, all work will continue to November 2018. No funds are being obligated on this award. Subject to availability of funds, fiscal 2014 weapons procurement, Navy contract funds in the amount of $673,355,582; fiscal 2014 operations and maintenance, Navy contract funds in the amount of $60,783,102; fiscal 2014 United Kingdom contract funds in the amount of $35,699,318; fiscal 2014 research, development, test and evaluation contract funds in the amount of $23,070,034; and fiscal 2014 other procurement, Navy contract funds in the amount of $6,491,243 will be used. Fiscal 2014 operations and maintenance, Navy contract funds in the amount of $60,783,102 will expire at the end of the fiscal year. Strategic Systems Programs, Washington, D.C., is the contracting activity.

AIR FORCE

Federal Networked Systems LLC., Ashburn, Va., (FA8732-14-D-0001); Dell Federal Systems L.P., Round Rock, Texas (FA8732-14-D-0002); Harris IT Services Corp., Dulles,Va. (FA8732-14-D-0003); Sterling Computers Corp., Norfolk Neb., (FA8732-14-D-0004); Force 3 Inc., Denver, Colo. (FA8732-14-D-0005); PCMall Inc., Chantilly, Va., (FA8732-14-D-0006); Insight Public Sector Inc., Chantilly Va., (FA8732-14-D-0007); Presidio Networked Solutions Inc., Greenbelt Md., (FA8732-14-D-0008);and FCN Inc., Rockville Md., (FA8732-14-D-0009) have all been awarded a firm-fixed-price, multiple-award, indefinite-delivery/indefinite-quantity (ID/IQ) contract with a maximum potential value of $6,900,000,000 for Network Centric Solutions-2 (NETCENTS-2) Netcentric Products. This contract vehicle is mandatory for the purchase of Netcentric products for Air Force customers. This contract vehicle will provide for commercially available off-the-shelf products to support the Internet Protocol Network and will include the following categories of Netcentric products and associated support worldwide: networking equipment, servers/storage, peripherals, multimedia, software (not included on other enterprise licenses), and identity management/biometric hardware and associated software. Because this is an ID/IQ, the location of performance is not known at this time and will be cited on individual delivery orders. Generally, work will be performed at Air Force facilities. The period of performance is six years. The ordering period is a three year basic period with three one-year option periods. This was a competitive acquisition. Offers were originally solicited electronically through Federal Business Oppotunities and 26 offers were received. An obligation of $2,500 will be issued to each of the awardees utilizing fiscal 2013 operations and maintenance funds. This is not a multiyear contract. The Air Force originally awarded eight ID/IQ contracts under NETCENTS-2 Netcentric products on April 19, 2013, and awarded eight additional contracts on Aug. 26, 2013. The Air Force received nine protests as a result of the August 26, 2013, awards. On Sept. 30, 2013, the Air Force advised the General Accountability Office that in response to the protests, the Air Force would take corrective action by awarding a contract to all offerors in the competitive range. The contract awards to the contractors listed above completes that action. This makes a total of 25 contract awards. The contract ceiling for NETCENTS-2 Netcentric products is the same at $6,900,000,000 for each of the 25 contracts. NETCENTS-2 Netcentric products is one of a set of five categories of contract capabilities spanning Netcentric products, network operations and infrastructure solutions, applications services, enterprise integration and service management, and information technology professional services all included under the broader NETCENTS-2 program. Air Force Life Cycle Management Center/HICK, Maxwell Air Force Base-Gunter Annex, Ala., is the contracting activity.

DEFENSE LOGISTICS AGENCY

Raytheon Company Space and Airborne Systems, El Segundo, Calif., has been awarded a maximum $42,765,853 firm-fixed-price contract against a basic ordering agreement for various radio parts and equipment. This contract is a sole source acquisition. Location of performance is California with a March 2016 performance completion date. Using military services are Navy and the Government of Australia. Type of appropriation is fiscal 2014 through fiscal 2016 Navy working capital funds. The contracting activity is the Defense Logistics Agency Aviation, Philadelphia, Pa., (SPRPA1-11-G-003X-5004).

ARMY

URS Group Inc., Mobile, Ala. was awarded a $13,000,000 firm-fixed-price, indefinite-delivery contract for architect-engineering services for the Army Corps of Engineers, Mobile District, to support the Air Force KC-46C aircraft beddown in the continental United States. Estimated completion date is Nov. 14, 2018. Work location and funding will be determined with each order. Bids were solicited via the internet with 57 received. Army Corps of Engineers, Mobile, Ala., is the contracting agency (W91278-14-D-003).

*Small Business

2 ARRESTED FOR ROLES IN INTERNATIONAL LOTTERY SCAM

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, November 4, 2013

Two Florida Residents Arrested in Connection with International Lottery Scam
Two individuals charged in connection with the operation of a fraudulent lottery scheme were arrested today in south Florida following their indictment by a federal grand jury in Miami on Oct. 31, 2013, the Justice Department, U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the U.S. Marshals Service announced.  Althea Angela Peart and Charmaine Anne King were arrested on charges that they and their co-conspirators, some of whom operated from outside of the U.S., participated in a fraudulent lottery scheme.  As alleged in the indictment, co-conspirators induced elderly victims in the U.S. to send thousands of dollars to Peart and King to cover fees for lottery winnings that victims had not won.  The indictment, unsealed with Peart’s and King’s arrests, is part of the government’s crackdown on fraudulent international lottery schemes.

“Operators of foreign lottery schemes often cannot succeed without the assistance of co-conspirators in the United States,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “These schemes can cause devastating financial harm to their victims, and the Department of Justice is committed to prosecuting those who engage in this criminal activity.”

From March 2012, Peart’s and King’s co-conspirators are alleged to have contacted victims in the U.S. and falsely informed them that they had won more than a million dollars in a lottery.  According to the indictment, the co-conspirators sent letters to the victims from a purported sweepstakes company in the U.S. and included false and fraudulent cashier’s checks made out to the victims for thousands of dollars.  As alleged in the indictment, these letters told victims to call “claims agents” who were actually co-conspirators, and when the victims called the purported claims agents, the agents informed the victims that they had to pay several thousand dollars in order to collect their purported lottery winnings.  The claims agents allegedly told the victims to deposit the cashier’s checks in the victims’ bank accounts in order to purportedly cover the money they had to pay.  The co-conspirators allegedly instructed the victims on how to send and wire this money to Peart and King.

The indictment charges that Peart and King each kept a percentage of the money they received from victims and sent the rest of the money to their co-conspirators.  According to the indictment, because the cashier’s checks were false and fraudulent and had no value, any payments the victims sent to Peart and King were funded by their own money, and victims never received any lottery winnings.

“As fraudsters from outside of the United States seek to take advantage of some of the most vulnerable in our community, they rely on co-conspirators in the United States for help,” said U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer.  “As I have previously stated, we will continue to vigorously pursue and prosecute those responsible for these illegal schemes.”

Peart is charged with conspiracy, eight counts of mail fraud and three counts of wire fraud and with committing these offenses via telemarketing.  King is charged with conspiracy, four counts of mail fraud and three counts of wire fraud and with committing these offenses via telemarketing.
         
“The U.S. Postal Inspection Service is committed to investigating fraudulent lottery schemes designed to defraud innocent victims,” said U.S. Postal Inspector in Charge in Miami Ronald Verrochio.  “Combating international lottery fraud is a priority of the Postal Inspection Service given that a significant amount of the money in these frauds is sent through the U.S. mail.  We are actively taking steps to educate Americans about the dangers of lottery frauds.”

“These arrests show that HSI is committed to stopping individuals who prey on our senior citizens,” said Special Agent in Charge of HSI Miami Alysa D. Erichs.  “We will continue to work with our international partners and other law enforcement agencies to put an end to these criminal organizations.”

“The U.S. Marshals Service is proud to be part of the team bringing scam artists such as these to justice,” said Acting U.S. Marshal Neil DeSousa.  “These international lottery scams that prey on our elderly cannot be allowed to continue.  The arrests of these two perpetrators are a testament to federal law enforcement’s dedication to protecting our citizens against all types of crimes.”

Assistant Attorney General Delery and U.S. Attorney Ferrer commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations and the U.S. Marshals Service.  The case is being prosecuted by Assistant Director Jeffrey Steger and Trial Attorney Kathryn Drenning with the Department of Justice’s Civil Division, Consumer Protection Branch.

An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

VIEW FROM SPACE OF THE RETREAT OF UPSALA GLACIER

Image Credit: NASA  Caption: M. Justin Wilkinson, Jacobs at NASA-Johnson Space Center

FROM:  NASA 
Upsala Glacier Retreat

This photograph by an astronaut on the International Space Station highlights the snout of the Upsala Glacier (49.88°S, 73.3°W) on the Argentine side of the North Patagonian Icefield. Ice flow in this glacier comes from the north (right in this rotated image). Dark lines of rocky debris (moraine) within the ice give a sense of the slow ice flow from right to left.

A smaller, side glacier joins Upsala at the present-day ice front -- the wall from which masses of ice periodically collapse into Lago (Lake) Argentino. In this image, the 2.7 kilometer-wide ice front casts a thin, dark shadow. The surface of Lago Argentino is whitened by a mass of debris from a recent collapse of the ice wall. Larger icebergs appear as white dots on the lake surface at image left.
Remotely sensed data, including astronaut images, have recorded the position of the ice front over the years. A comparison of this October 2013 image with older data (January 2004 and January 2001, as well as October 2009) indicates that the ice front has moved backwards -- upstream -- about 3 kilometers (2 miles). This retreat is believed by scientists to indicate climate warming in this part of South America. The warming not only causes the ice mass to retreat, but also to thin. A study of 63 glaciers by Rignot et al has shown that this is a general trend in Patagonia.

The water color in Lago Argentino is related to the glacier flow. The lake receives most of the ice from the glacier and thus receives most of the “rock flour” -- rocks ground to white powder by the ice scraping against the rock floor of the valley. Glacial flour turns the lake a gray-green hue in this image. The darker blue of the smaller lakes (image bottom) indicates that they are receiving much less rock flour.

This image was taken on Oct. 2, 2013, with a Nikon D3 digital camera using a 300 millimeter lens, and is provided by the ISS Crew Earth Observations experiment and Image Science & Analysis Laboratory, Johnson Space Center. It has been cropped and enhanced to improve contrast, and lens artifacts have been removed.

NEW VIRGINIA-CLASS ATTACK SUBMARINE TO BE COMMISSIONED IN EARLY 2014

FROM:  U.S. DEFENSE DEPARTMENT 

131102-N-SF554-009 GROTON, Conn (Nov. 2, 2013) Pre-Commissioning Unit North Dakota (SSN 784) sits moored at the graving dock of General Dynamics Electric Boat prior to its christening ceremony in Groton, Conn., Nov. 2. North Dakota is the 11th Virginia-class attack submarine and is scheduled to be commissioned in early 2014. (U.S. Navy Photo by Lt. j.g. Phillip Chitty/Released)

Submarine North Dakota Christened in Groton

Story Number: NNS131102-02Release Date: 11/2/2013 6:16:00 PM 
By Lt. Timothy Hawkins, Submarine Group 2 Public Affairs

GROTON, Conn. (NNS) -- The Navy's 11th Virginia-class attack submarine was christened in Groton, Conn., Nov. 2, during a late-morning ceremony at the General Dynamics Electric Boat (GDEB) shipyard.

The ceremony marked the official naming of Pre-Commissioning Unit (PCU) North Dakota (SSN 784). The ship is currently under construction by both GDEB and Newport News Shipbuilding, a division of Huntington Ingalls Industries, through a teaming arrangement.

Ship sponsor Katie Fowler, wife of retired Vice Adm. Jeff Fowler, was on hand to officially christen the submarine by breaking a bottle of sparkling wine against the back of the boat's sail.

"In the name of the United States, I christen thee North Dakota. May God bless her and all that sail in her," said Mrs. Fowler just before giving the bottle a brisk swing.

During keynote remarks, Commander Submarine Forces Vice Adm. Michael Connor told more than 4,500 dignitaries, Sailors, and shipyard personnel in attendance that the Navy needs the nuclear-powered attack submarine as soon as "practical."

"The Submarine Force eagerly awaits the day when USS North Dakota will assume the watch and establish a legendary reputation worthy of the name North Dakota," said Connor. "There's still much to be done, and there is not a moment to lose."

PCU North Dakota is the second Navy ship named after the 39th state. The first was a Delaware-class dreadnought battleship that served in World War II.

SSN 784's name was chosen in honor of North Dakota's proud military heritage. Seventeen North Dakotans have been awarded the Medal of Honor for actions in combat.

In future years, the attack submarine will deliver speed, agility, stealth, endurance and firepower to combatant commanders directing U.S. military operations around the globe.

Virginia-class subs have improved stealth and sophisticated surveillance capabilities. Their special warfare enhancements enable them to meet multiple mission requirements.

North Dakota will be able to attack targets ashore with highly accurate Tomahawk cruise missiles and conduct covert long-term surveillance of land areas, littoral waters or other sea-based forces. Its reactor plant is designed so that it will not require refueling during the planned life of the ship, reducing lifecycle costs while increasing time at sea.

North Dakota's construction will continue during the next few months as its 138 crewmembers prepare to evaluate the ship's seaworthiness and operational performance during sea trials.

"The Navy and the nation count on our submarine force to deliver relevant and powerful capabilities where and when it matters, and nothing is more important to meeting that commitment than building the most capable submarines in the world," said Rear Adm. Ken Perry, commander, Submarine Group 2.

In addition to surveillance missions, North Dakota will be able to perform anti-submarine and anti-ship warfare; deliver and support special forces; and conduct mine delivery and minefield mapping operations.

"Every phase of submarine construction requires world-class expertise and close partnership, and today's christening at Electric Boat signifies a key milestone in that partnership toward delivering North Dakota to the fleet," Perry added.

PCU North Dakota is scheduled officially join the Navy fleet once commissioned in early 2014.

The submarine measures 377 feet in length and has a beam of 34 feet. It will displace 7,800 tons and be capable of operating at more than 25 knots under water.

U.S. OFFICIAL'S REMARKS AT PUGWASH CONFERENCE ON SCIENCE AND WORLD SECURITY

FROM:  U.S. STATE DEPARTMENT 
Sixtieth Pugwash Conference on Science and World Security
Remarks
Frank A. Rose
Deputy Assistant Secretary, Bureau of Arms Control, Verification and Compliance
Istanbul, Turkey
November 1, 2013

Thank you for that kind introduction, Sergio. I am pleased to be here at 60th Pugwash Conference on Science and World Affairs and I want to thank Pugwash for organizing this conference.

Today, I would like to provide an update on our work, which the President laid out nearly four years ago in Prague, when he committed the United States to seek the peace and security of a world without nuclear weapons, a goal that he reaffirmed in his speech in Berlin this past June.

As President Obama noted in Prague and repeated in Berlin, this will not be easy. It will require persistence and patience, and may not happen in his lifetime. Still, over the last four years we have succeeded in moving closer to this goal.

In 2010, the Administration concluded a Nuclear Posture Review, or NPR, which outlines the President’s agenda for reducing nuclear dangers, as well as advancing the broader security interests of the United States and its allies. As the NPR states, the international security environment has changed dramatically since the end of the Cold War: the threat of global nuclear war has become remote, but the risk of nuclear attack has increased. The traditional concept of nuclear deterrence — the idea that a country would not initiate a nuclear war for fear of nuclear retaliation — does not apply to terrorists. While our nuclear arsenal has little relevance in deterring this threat, concerted action by all states to uphold their NPT obligations – including those related to disarmament – is important for building a sense of common purpose that helps maintain support from partners around the world to uphold and strengthen the nuclear nonproliferation regime. Securing sensitive nuclear materials worldwide will also make it harder for terrorists to acquire those materials.

For instance, the downblending of highly enriched uranium (HEU) to low enriched uranium (LEU) by Russia that was required by the 1993 U.S.-Russia HEU Purchase Agreement has now been completed. The final delivery of the resultant LEU to the United States is scheduled for early December. Upon the successful completion of the Agreement, 500 metric tons of HEU from dismantled Russian weapons will have been converted into LEU and delivered to the United States to fuel U.S. commercial nuclear power plants. The HEU that was converted by downblending was enough to produce approximately 20,000 nuclear warheads.

In the United States, 374 metric tons of U.S. HEU has been declared excess to nuclear weapons; most of which will be downblended or used as fuel in naval or research reactors. In 2011, the United States and Russia brought into force the Plutonium Management and Disposition Agreement and its 2006 and 2010 protocols, which require each side to dispose of 34 metric tons of weapons-grade plutonium – enough in total for about 17,000 nuclear weapons – and thus permanently remove this material from military programs. Russia has also been an essential partner in the U.S. Global Threat Reduction Initiative efforts to convert research reactors worldwide from HEU to LEU and repatriate those reactors’ HEU to the country of origin. These efforts have now converted or verified the shutdown of over 88 research and test reactors and isotope production facilities, and removed over 5,017 kg of HEU for secure storage, downblending and disposition.

In addition to working on the prevention of nuclear proliferation and nuclear terrorism, we have taken steps to reduce the role of nuclear weapons in U.S. national security strategy. We are not developing new nuclear weapons or pursuing new nuclear missions; we have committed not to use or threaten to use nuclear weapons against nonnuclear weapon states that are party to the NPT and in compliance with their nonproliferation obligations; and we have clearly stated that it is in the U.S. interest and that of all other nations that the 68-year record of nonuse of nuclear weapons be extended forever.

In June of 2013, in conjunction with his Berlin speech, President Obama issued new guidance that aligns U.S. nuclear policies to the 21st century security environment. This was the latest concrete step the President has taken to advance his Prague agenda and the long-term goal of achieving the peace and security of a world without nuclear weapons. After a comprehensive review, the President determined that we can ensure the security of the United States and our allies and maintain a strong and credible strategic deterrent while safely pursuing up to a one-third reduction in deployed strategic nuclear weapons from the level established in the New START Treaty.

Let me now address what we believe our next steps should be.

The United States and Russia still possess the vast majority of nuclear weapons in the world, and we have a shared responsibility to continue the process of reducing our nuclear arms. With that in mind, we have a great example in the New START Treaty. The implementation of New START, now in its third year, is going well. When New START is fully implemented, the United States and the Russian Federation will each have no more than 1,550 deployed strategic nuclear warheads – the lowest levels since the 1950s. Our overall nuclear stockpile is 85% below Cold War levels.

Going forward, the United States has made it clear that we are committed to continuing a step-by-step process to further reduce nuclear arsenals.

To this end, we are engaged in a bilateral dialogue with Russia to promote strategic stability and increase transparency on a reciprocal basis. We are hopeful our dialogue will lead to greater reciprocal transparency and negotiation of even further nuclear weapons reductions.

The President also said in Berlin, that we will work with our NATO Allies to seek bold reductions in U.S. and Russian nonstrategic nuclear weapons in Europe. The NPR underscores the U.S. position that decision on NATO’s nuclear posture should be made by consensus among Allies. The role of nuclear weapons in NATO was examined as part of the Deterrence and Defense Posture Review. As you may know, NATO has already dramatically reduced its holdings of, and reliance on, nuclear weapons since the end of the Cold War. Allies made clear in the DDPR that NATO is prepared to consider further reducing its requirement for nonstrategic nuclear weapons assigned to the Alliance in the context of reciprocal steps by Russia, taking into account the greater Russian stockpiles of nonstrategic nuclear weapons stationed in the Euro-Atlantic area. Allies have also affirmed their desire to work with Russia on reciprocal transparency steps regarding NSNW. While seeking to create the conditions for further nuclear reductions, NATO will continue to ensure that the Alliance’s nuclear deterrent remains safe, secure, and effective, as NATO is committed to remaining a nuclear alliance for as long as nuclear weapons exist.

There are still further initiatives that are part of this Administration’s nuclear agenda. In Berlin, President Obama called on all nations to begin negotiations on a treaty that ends the production of fissile materials for nuclear weapons. A Fissile Material Cutoff Treaty or FMCT would codify an end to the production of weapons-grade fissile material needed to create nuclear weapons, cap stockpiles worldwide, and provide the basis for further, deeper, reductions in nuclear arsenals.

Beginning multilateral negotiations on the FMCT is a priority objective for the United States and for the vast majority of states, and we have been working to initiate such negotiations at the Conference on Disarmament in Geneva. An overwhelming majority of nations support the immediate commencement of FMCT negotiations. The United States is consulting with China, France, Russia, and the United Kingdom, as well as others, including India and Pakistan, to find a way to commence negotiations of an FMCT.

In 2009, the five nuclear-weapon states, or “P5,” began to meet regularly for discussions on issues of transparency, mutual confidence, and verification. Since the 2010 NPT Review Conference, these discussions have expanded to address P5 implementation of our commitments under the NPT and the 2010 Review Conference Action Plan. Russia hosted the most recent P5 conference in Geneva, Switzerland in April 2013, where the P5 reviewed progress towards fulfilling the commitments made at the 2010 NPT Review Conference, and continued discussions on issues related to all three pillars of the NPT: nonproliferation, disarmament, and the peaceful uses of nuclear energy, including confidence-building, transparency, and verification experiences. We are looking forward to continued discussions at a fifth P5 conference in 2014.

In addition to providing a senior level policy forum for discussion and coordination among the P5, this process has spawned a series of discussions among policymakers and government experts on a variety of issues. China is leading a P5 working group on nuclear definitions and terminology. The P5 are discussing approaches to a common format for NPT reporting, and we are also beginning to engage at expert levels on some important verification and transparency issues. As we proceed, we would like the P5 conferences and intersessional meetings to develop further practical transparency measures that build confidence and predictability.

I should add at this point that when discussing areas to broaden and deepen our cooperation and to advance our common interests, it’s necessary to address the question of missile defense. Over the past twenty years, both Democratic and Republicans have seen the benefits of missile defense cooperation with Russia.

While we have our differences on this issue, the United States remains convinced that missile defense cooperation between the United States and Russia (and between NATO and Russia) is in the national security interests of all countries involved. For that reason, the United States remains open to missile defense cooperation with Russia. To be clear, U.S. missile defense efforts are focused on defending our homeland as well as our European, Middle Eastern, and Asian allies and partners against ballistic missile threats coming from regional actors. These are threats that are growing, and must be met.

In meeting those threats, it is important to note that U.S. missile defenses are not designed for, or capable of, undermining the Russian or Chinese strategic deterrents. For its part, Russia has been insistent on legally binding guarantees that our missile defenses will not threaten its strategic deterrent. Rather than legal guarantees, we believe that the best way for Russia to see that U.S. and NATO missile defenses in Europe do not undermine its strategic deterrent would be for it to cooperate with us and to engage in mutual transparency measures. In addition to making all of us safer, cooperation would send a strong message to proliferators that the United States, NATO, and Russia are working together to counter proliferation. With regard to China, the United States welcomes the opportunity to engage in a more robust dialogue about strategic stability, including missile defense.

As our work together with Russia over the past four years has shown, we can produce significant results that benefit both countries. As mentioned earlier, the New START Treaty is a great example of this.

None of this will be easy, but the policies the Administration is pursuing are suited for our security needs and tailored for the global security threats of the 21st century. By maintaining and supporting a safe, secure and effective stockpile — sufficient to deter any adversary and guarantee the defense of our allies — at the same time that we pursue responsible verifiable reductions through arms control, we will make this world a safer place.

Thank you and I look forward to your questions.

JOHNSON & JOHNSON TO PAY OVER $2.2 BILLION TO RESOLVE ALLEGATIONS RELATED TO DOCTOR KICKBACK SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, November 4, 2013
Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Criminal and Civil Investigations
Allegations Include Off-label Marketing and Kickbacks to Doctors and Pharmacists

WASHINGTON - Global health care giant Johnson & Johnson (J&J) and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to the nation’s largest long-term care pharmacy provider.  The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion.


“The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” said Attorney General Eric Holder.  “This multibillion-dollar resolution demonstrates the Justice Department’s firm commitment to preventing and combating all forms of health care fraud.  And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people.”


The resolution includes criminal fines and forfeiture for violations of the law and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries.


“When companies put profit over patients’ health and misuse taxpayer dollars, we demand accountability,” said Associate Attorney General Tony West.  “In addition to significant monetary sanctions, we will ensure that non-monetary measures are in place to facilitate change in corporate behavior and help ensure the playing field is level for all market participants.”


In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG).  This agreement is designed to increase accountability and transparency and prevent future fraud and abuse.


“As patients and consumers, we have a right to rely upon the claims drug companies make about their products,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “And, as taxpayers, we have a right to ensure that federal health care dollars are spent appropriately.  That is why this Administration has continued to pursue aggressively – with all of our available law enforcement tools -- those companies that corrupt our health care system.”


J&J Subsidiary Janssen Pleads Guilty to Misbranding Antipsychotic Drug


In a criminal information filed today in the Eastern District of Pennsylvania, the government charged that, from March 3, 2002, through Dec. 31, 2003, Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal into interstate commerce for an unapproved use, rendering the product misbranded.  For most of this time period, Risperdal was approved only to treat schizophrenia.  The information alleges that Janssen’s sales representatives promoted Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use Risperdal to treat symptoms such as anxiety, agitation, depression, hostility and confusion.  The information alleges that the company created written sales aids for use by Janssen’s ElderCare sales force that emphasized symptoms and minimized any mention of the FDA-approved use, treatment of schizophrenia.  The company also provided incentives for off-label promotion and intended use by basing sales representatives’ bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses.


In a plea agreement resolving these charges, Janssen admitted that it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated behavioral disturbances exhibited by elderly, non-schizophrenic dementia patients.  Under the terms of the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million.  Janssen’s guilty plea will not be final until accepted by the U.S. District Court.

The Federal Food, Drug, and Cosmetic Act (FDCA) protects the health and safety of the public by ensuring, among other things, that drugs intended for use in humans are safe and effective for their intended uses and that the labeling of such drugs bear true, complete and accurate information.  Under the FDCA, a pharmaceutical company must specify the intended uses of a drug in its new drug application to the FDA.  Before approval, the FDA must determine that the drug is safe and effective for those specified uses.  Once the drug is approved, if the company intends a different use and then introduces the drug into interstate commerce for that new, unapproved use, the drug becomes misbranded.  The unapproved use is also known as an “off-label” use because it is not included in the drug’s FDA-approved labeling.

“When pharmaceutical companies interfere with the FDA’s mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk,” said Director of the FDA’s Office of Criminal Investigations John Roth.  “Today’s settlement demonstrates the government’s continued focus on pharmaceutical companies that put profits ahead of the public’s health.  The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the drug approval process and recklessly promote drugs for uses that have not been proven to be safe and effective.”

J&J and Janssen Settle Civil Allegations of Targeting Vulnerable Patients  with the Drugs Risperdal and Invega for Off-Label Uses

In a related civil complaint filed today in the Eastern District of Pennsylvania, the United States alleges that Janssen marketed Risperdal to control the behaviors and conduct of the nation’s most vulnerable patients: elderly nursing home residents, children and individuals with mental disabilities.  The government alleges that J&J and Janssen caused false claims to be submitted to federal health care programs by promoting Risperdal for off-label uses that federal health care programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal and paying kickbacks to physicians to prescribe Risperdal.

“J&J’s promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society – children, the elderly and those with developmental disabilities,” said U.S. Attorney for the Eastern District of Pennsylvania Zane Memeger.  “This historic settlement sends the message that drug manufacturers who place profits over patient care will face severe criminal and civil penalties.”

In its complaint, the government alleges that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be “misleading.”  The FDA cautioned Janssen that behavioral disturbances in elderly dementia patients were not necessarily manifestations of psychotic disorders and might even be “appropriate responses to the deplorable conditions under which some demented patients are housed, thus raising an ethical question regarding the use of an antipsychotic medication for inappropriate behavioral control.”

The complaint further alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the companies downplayed these risks.  For example, when a J&J study of Risperdal showed a significant risk of strokes and other adverse events in elderly dementia patients, the complaint alleges that Janssen combined the study data with other studies to make it appear that there was a lower overall risk of adverse events.  A year after J&J had received the results of a second study confirming the increased safety risk for elderly patients taking Risperdal, but had not published the data, one physician who worked on the study cautioned Janssen that “[a]t this point, so long after [the study] has been completed … we must be concerned that this gives the strong appearance that Janssen is purposely withholding the findings.”

The complaint also alleges that Janssen knew that patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as “uncompromised by safety concerns (does not cause diabetes).”  When Janssen received the initial results of studies indicating that Risperdal posed the same diabetes risk as other antipsychotics, the complaint alleges that the company retained outside consultants to re-analyze the study results and ultimately published articles stating that Risperdal was actually associated with a lower risk of developing diabetes.

The complaint alleges that, despite the FDA warnings and increased health risks, from 1999 through 2005, Janssen aggressively marketed Risperdal to control behavioral disturbances in dementia patients through an “ElderCare sales force” designed to target nursing homes and doctors who treated the elderly.  In business plans, Janssen’s goal was to “[m]aximize and grow RISPERDAL’s market leadership in geriatrics and long term care.”  The company touted Risperdal as having “proven efficacy” and “an excellent safety and tolerability profile” in geriatric patients.

In addition to promoting Risperdal for elderly dementia patients, from 1999 through 2005, Janssen allegedly promoted the antipsychotic drug for use in children and individuals with mental disabilities.  The complaint alleges that J&J and Janssen knew that Risperdal posed certain health risks to children, including the risk of elevated levels of prolactin, a hormone that can stimulate breast development and milk production.  Nonetheless, one of Janssen’s Key Base Business Goals was to grow and protect the drug’s market share with child/adolescent patients.  Janssen instructed its sales representatives to call on child psychiatrists, as well as mental health facilities that primarily treated children, and to market Risperdal as safe and effective for symptoms of various childhood disorders, such as attention deficit hyperactivity disorder, oppositional defiant disorder, obsessive-compulsive disorder and autism.  Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children.

The government’s complaint also contains allegations that Janssen paid speaker fees to doctors to influence them to write prescriptions for Risperdal.  Sales representatives allegedly told these doctors that if they wanted to receive payments for speaking, they needed to increase their Risperdal prescriptions.

In addition to allegations relating to Risperdal, today’s settlement also resolves allegations relating to Invega, a newer antipsychotic drug also sold by Janssen.  Although Invega was approved only for the treatment of schizophrenia and schizoaffective disorder, the government alleges that, from 2006 through 2009, J&J and Janssen marketed the drug for off-label indications and made false and misleading statements about its safety and efficacy.

As part of the global resolution, J&J and Janssen have agreed to pay a total of $1.391 billion to resolve the false claims allegedly resulting from their off-label marketing and kickbacks for Risperdal and Invega.  This total includes $1.273 billion to be paid as part of the resolution announced today, as well as $118 million that J&J and Janssen paid to the state of Texas in March 2012 to resolve similar allegations relating to Risperdal.  Because Medicaid is a joint federal-state program, J&J’s conduct caused losses to both the federal and state governments.  The additional payment made by J&J as part of today’s settlement will be shared between the federal and state governments, with the federal government recovering $749 million, and the states recovering $524 million.  The federal government and Texas each received $59 million from the Texas settlement.

Kickbacks to Nursing Home Pharmacies

The civil settlement also resolves allegations that, in furtherance of their efforts to target elderly dementia patients in nursing homes, J&J and Janssen paid kickbacks to Omnicare Inc., the nation’s largest pharmacy specializing in dispensing drugs to nursing home patients.  In a complaint filed in the District of Massachusetts in January 2010, the United States alleged that J&J paid millions of dollars in kickbacks to Omnicare under the guise of market share rebate payments, data-purchase agreements, “grants” and “educational funding.”  These kickbacks were intended to induce Omnicare and its hundreds of consultant pharmacists to engage in “active intervention programs” to promote the use of Risperdal and other J&J drugs in nursing homes.  Omnicare’s consultant pharmacists regularly reviewed nursing home patients’ medical charts and made recommendations to physicians on what drugs should be prescribed for those patients.  Although consultant pharmacists purported to provide “independent” recommendations based on their clinical judgment, J&J viewed the pharmacists as an “extension of [J&J’s] sales force.”

J&J and Janssen have agreed to pay $149 million to resolve the government’s contention that these kickbacks caused Omnicare to submit false claims to federal health care programs.  The federal share of this settlement is $132 million, and the five participating states’ total share is $17 million.  In 2009, Omnicare paid $98 million to resolve its civil liability for claims that it accepted kickbacks from J&J and Janssen, along with certain other conduct.

“Consultant pharmacists can play an important role in protecting nursing home residents from the use of antipsychotic drugs as chemical restraints,” said U.S. Attorney for the District of Massachusetts Carmen Ortiz.  “This settlement is a reminder that the recommendations of consultant pharmacists should be based on their independent clinical judgment and should not be the product of money paid by drug companies.”

Off-Label Promotion of the Heart Failure Drug Natrecor

The civil settlement announced today also resolves allegations that J&J and another of its subsidiaries, Scios Inc., caused false and fraudulent claims to be submitted to federal health care programs for the heart failure drug Natrecor.  In August 2001, the FDA approved Natrecor to treat patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity.  This approval was based on a study involving hospitalized patients experiencing severe heart failure who received infusions of Natrecor over an average 36-hour period.

In a civil complaint filed in 2009 in the Northern District of California, the government alleged that, shortly after Natrecor was approved, Scios launched an aggressive campaign to market the drug for scheduled, serial outpatient infusions for patients with less severe heart failure – a use not included in the FDA-approved label and not covered by federal health care programs.  These infusions generally involved visits to an outpatient clinic or doctor’s office for four- to six-hour infusions one or two times per week for several weeks or months.

The government’s complaint alleged that Scios had no sound scientific evidence supporting the medical necessity of these outpatient infusions and misleadingly used a small pilot study to encourage the serial outpatient use of the drug.  Among other things, Scios sponsored an extensive speaker program through which doctors were paid to tout the purported benefits of serial outpatient use of Natrecor.  Scios also urged doctors and hospitals to set up outpatient clinics specifically to administer the serial outpatient infusions, in some cases providing funds to defray the costs of setting up the clinics, and supplied providers with extensive resources and support for billing Medicare for the outpatient infusions.

As part of today’s resolution, J&J and Scios have agreed to pay the federal government $184 million to resolve their civil liability for the alleged false claims to federal health care programs resulting from their off-label marketing of Natrecor.  In October 2011, Scios pleaded guilty to a misdemeanor FDCA violation and paid a criminal fine of $85 million for introducing Natrecor into interstate commerce for an off-label use.

“This case is an example of a drug company encouraging doctors to use a drug in a way that was unsupported by valid scientific evidence,” said First Assistant U.S. Attorney for the Northern District of California Brian Stretch.  “We are committed to ensuring that federal health care programs do not pay for such inappropriate uses, and that pharmaceutical companies market their drugs only for uses that have been proven safe and effective.”

Non-Monetary Provisions of the Global Resolution and Corporate Integrity Agreement

In addition to the criminal and civil resolutions, J&J has executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG).  The CIA includes provisions requiring J&J to implement major changes to the way its pharmaceutical affiliates do business.  Among other things, the CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct.  J&J may recoup monies from executives who are current employees and from those who have left the company.  The CIA also requires J&J’s pharmaceutical businesses to implement and maintain transparency regarding their research practices, publication policies and payments to physicians.  On an annual basis, management employees, including senior executives and certain members of J&J’s independent board of directors, must certify compliance with provisions of the CIA.  J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.

“OIG will work aggressively with our law enforcement partners to hold companies accountable for marketing and promotion that violate laws intended to protect the public,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson.  "Our compliance agreement with Johnson & Johnson increases individual accountability for board members, sales representatives, company executives and management.  The agreement also contains strong monitoring and reporting provisions to help ensure that the public is protected from future unlawful and potentially harmful off-label marketing."

Coordinated Investigative Effort Spans Federal and State Law Enforcement

This resolution marks the culmination of an extensive, coordinated investigation by federal and state law enforcement partners that is the hallmark of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which fosters government collaborations to fight fraud.  Announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius, the HEAT initiative has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.

The criminal cases against Janssen and Scios were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the Northern District of California and the Civil Division’s Consumer Protection Branch.  The civil settlements were handled by the U.S. Attorney’s Offices for the Eastern District of Pennsylvania, the Northern District of California and the District of Massachusetts and the Civil Division’s Commercial Litigation Branch.  Assistance was provided by the HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division, the FDA’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.

This matter was investigated by HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, the Office of Personnel Management’s Office of Inspector General, the Department of Veterans Affairs, the Department of Labor, TRICARE Program Integrity, the U.S. Postal Inspection Service’s Office of the Inspector General and the FBI.

One of the most powerful tools in the fight against Medicare and Medicaid financial fraud is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.

The department enforces the FDCA by prosecuting those who illegally distribute unapproved, misbranded and adulterated drugs and medical devices in violation of the Act.  Since 2009, fines, penalties and forfeitures that have been imposed in connection with such FDCA violations have totaled more than $6 billion.

The civil settlements described above resolve multiple lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery.  From the federal government’s share of the civil settlements announced today, the whistleblowers in the Eastern District of Pennsylvania will receive $112 million, the whistleblowers in the District of Massachusetts will receive $27.7 million and the whistleblower in the Northern District of California will receive $28 million.  Except to the extent that J&J subsidiaries have pleaded guilty or agreed to plead guilty to the criminal charges discussed above, the claims settled by the civil settlements are allegations only, and there has been no determination of liability.

U.S. DOD CONTRACTS FOR NOVEMBER 4, 2013

FROM:  U.S. DEPARTMENT OF DEFENSE 
CONTRACTS

DEFENSE LOGISTICS AGENCY

Pacific Unlimited Inc., Barrigada, Guam, has been awarded a maximum $262,500,000 fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for prime vendor subsistence support. This is a sixty-four month base contract with no option periods. This contract is a competitive acquisition, and three offers were received. Location of performance is Guam with a March 3, 2019 performance completion date. Using military services are Navy, Air Force, and federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPM300-14-D-3735).

Labatt Food Service, San Antonio, Texas, has been awarded a maximum $18,000,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for prime vendor full line food distribution. This is a one-year base contract. This contract is a sole-source acquisition. Location of performance is Texas with a Nov. 8, 2014, performance completion date. Using military services are Army, Air Force, and federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPM300-14-D-3715).

Government Services Corp.,* Moscow, Idaho, has been awarded a maximum $13,830,840 fixed-price with economic-price-adjustment contract for winter grade ultra-low sulfur diesel. This is a two-year base contract with no option periods. This contract is a competitive acquisition, and four offers were received. Location of performance is Idaho with an Oct., 31, 2016 performance completion date. Using military service is Army. Type of appropriation is fiscal year 2014 through fiscal year 2016 defense working capital funds. The contracting activity is the Defense Logistics Agency Energy, Fort Belvoir, Va., (SP0600-14-D-8501).

NAVY

BAE Systems Information and Electronic Systems Integration Inc. - Electronic Solutions, Wayne, N.J., is being awarded a $48,000,000 modification with cost-plus-incentive-fee pricing under a previously awarded indefinite-delivery/indefinite-quantity contract (N00039-10-D-0060) for systems engineering and integration of the Multifunctional Information Distribution System Low Volume Terminals (MIDS-LVTs). Corresponding delivery order 0015 shall procure MIDS-LVT Block Upgrade 2 software and test equipment on behalf of the United States, France, Italy, Germany and Spain. Work will be performed in Wayne, N.J., and is expected to be completed by March 2017. Fiscal 2013 research, development, test and evaluation contract funds in the amount of $1,651,000 will be obligated at the time of award, and will expire at the end of the current fiscal year. This contract was not competitively procured pursuant to FAR 6.302-4 International Agreement, 10 U.S.C. 2304(c)(4). The Space and Naval Warfare Systems Command, San Diego, Calif., is the contracting activity.

ViaSat, Carlsbad, Calif., is being awarded a $39,182,647 modification with cost-plus-incentive-fee pricing under a previously awarded indefinite-delivery/indefinite-quantity contract (N00039-10-D-0032) for Block Upgrade 2 (BU2) development and retrofits. The existing contract is for Multifunctional Information Distribution System-Low Volume Terminal (MIDS-LVT) production and engineering services. Corresponding delivery order 0035 shall procure MIDS-LVT BU2 design and development on behalf of the United States. Work will be performed in Carlsbad, Calif., and is expected to be completed by Dec. 31, 2016. Fiscal 2013 research, development, test and evaluation contract funds in the amount of $1,318,017 will be obligated at the time of award, and will expire at the end of the current fiscal year. This contract was not competitively procured pursuant to FAR 6.302-1 - only one responsible source and no other supplies or services will satisfy agency requirements and 10 U.S.C. 2304(c)(1). Space and Naval Warfare Systems Command, San Diego, Calif., is the contracting activity.

Data Link Solutions LLC, Cedar Rapids, Iowa, is being awarded a $32,874,867 contract modification with cost-plus-incentive-fee pricing under a previously indefinite-delivery/indefinite-quantity contract (N00039-10-D-0031) for Block Upgrade 2 (BU2) development and retrofits of Multifunctional Information Distribution System-Low Volume Terminal (MIDS-LVT) production and engineering services. Corresponding delivery order 0043 shall procure MIDS-LVT BU2 design and development on behalf of the United States. Work will be performed in Wayne, N.J. (50 percent), and Cedar Rapids, Iowa (50 percent), and is expected to be completed by Dec. 31, 2016. Fiscal 2013 research, development, test and evaluation contract funds in the amount of $1,500,000 will be obligated at the time of award, and these funds will expire at the end of the current fiscal year. This contract was not competitively procured pursuant to FAR 6.302-1 and 10 U.S.C. 2304(c)(1). The Space and Naval Warfare Systems Command, San Diego, Calif., is the contracting activity.

General Dynamics Electric Boat Corp., Groton, Conn., is being awarded an $18,195,519 cost-plus-fixed-fee modification to previously awarded contract (N00024-12-C-2100) for reactor plant planning yard services for nuclear-powered submarines and support yard services for the Navy’s moored training ships. The contractor will furnish, fabricate, or acquire such materials, supplies and services as may be necessary to perform the functions of the planning yard for reactor plants and associated portions of the propulsion plants for nuclear powered submarines. Work will be performed in Groton, Conn. (95 percent), and Charleston, S.C. (5 percent), and is expected to be completed by September 2014. Fiscal 2014 operations and maintenance, Navy funds in the amount of $17,964,812 will be obligated at time of award and will expire at the end of the current fiscal year. This contract was not competitively procured in accordance with 10 U.S.C. 2304(c)(1) - only one or limited number of sources and no other suppliers will satisfy the requirements. The Naval Sea Systems Command, Washington, D.C., is the contracting activity.

Thales Communication Inc., Clarksburg, Md., is being awarded $8,815,933 for firm-fixed-price delivery order 7002 against previously awarded contract (N00383-13-G-003F) for the repair of six items for the airborne low frequency sonar system for the H-60 helicopter. Work will be performed at Clarksburg, Md. (28 percent); Brest, France (54 percent); and Johnstown, Pa. (18 percent), and work is expected to be completed Nov. 1, 2015. Fiscal 2014 Navy working capital funds in the amount of $6,611,949 will be obligated at the time of award, and will not expire before the end of the current fiscal year. This contract was not competitively procured in accordance with 10 U.S.C. 2304(c)(1). NAVSUP Weapon Systems Support, Contracting Department, Philadelphia Office, Philadelphia, Pa., is the contracting activity.

Rockwell Collins Inc., Cedar Rapids, Iowa, is being awarded a $6,539,431 modification to a previously awarded firm-fixed-priced contract (N00019-09-C-0069) to exercise an option for the procurement of AN/ARC-210(V) electronic radios and ancillary equipment for a variety of aircraft. Equipment being procured includes 63 MT-6567/ARC, four RT-1990(C)/ARC, and 70 RT-1990(C)/ARC. Work will be performed in Cedar Rapids, Iowa, and is expected to be completed in October 2014. Fiscal 2013 aircraft procurement Navy contract funds in the amount of $6,539,431 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

ARMY

Navistar Defense LLC, Lisle, Ill., was awarded a $7,260,077 cost-plus-fixed-fee contract for engineering, logistic and travel support for the acquisition of the contract data requirements list and program and logistics support management for the Mine Resistant Ambush Protected MaxxPro M1235A3 Dash with MaxxPro Survivability Upgrade (MSU). The contractor shall include MSU content as well as variation in vehicle content for both the objective gunner protection kit and common remotely operated weapon system. Work will be performed in Lisle, Ill., with an expected completion date of December 2014. Fiscal 2013 procurement funds in the amount of $7,260,077 are being obligated at the time of the award. One bid was solicited and one received. Army Contracting Command, Tank and Automotive, Warren, Mich., is the contracting agency (W56HZV-10-C-0011).


*Small, In HubZone, Disadvantaged Business

Press Briefing | The White House

Press Briefing | The White House