PRESIDENT ANNOUNCES INITIATIVES TO BOOST ADVANCED MANUFACTURING, DEFENSE, HIGH-QUALITY JOBS

President Obama.  White House Photo

FROM:  THE WHITE HOUSE 
President Obama Announces Two New Public-Private Manufacturing Innovation Institutes and Launches the First of Four New Manufacturing Innovation Institute Competitions

A Detroit-area based consortium of 60 companies, nonprofits, and universities and a Chicago based consortium of 73 companies, nonprofits, and universities are partnering with the federal government to launch two new manufacturing innovation hubs. The first new manufacturing innovation institute competition this year is launching today, one of four the Administration has committed to launching this year.

WASHINGTON, DC – The President today will announce new steps in partnership with the private sector to boost advanced manufacturing, strengthen our capabilities for defense, and attract the types of high-quality jobs that a growing middle class requires. First, the President will announce two new manufacturing innovation institutes led by the Department of Defense supported by a $140 million Federal commitment combined with more than $140 million in non-federal resources: (1) Detroit-area headquartered consortium of businesses and universities, with a focus on lightweight and modern metals manufacturing; (2) Chicago headquartered consortium of businesses and universities that will concentrate on digital manufacturing and design technologies.

Second, the President will also launch a competition for a new manufacturing innovation institute to build U.S. strength in manufacturing advanced composites, the first of four new competitions to be launched this year.

President Obama has declared 2014 a year of action, and while he will continue to work with Congress on new measures to create jobs and grow the economy, he will also use his executive authority to get things done. After shedding jobs for a decade, our manufacturers have added 622,000 jobs since early 2010, including more than 80,000 over the past four months.   Manufacturing production is growing at its fastest pace in over a decade, and the President is committed to building on that progress.

Today’s announcement of two new DOD-led manufacturing institutes fulfills the President’s pledge in his 2013 State of the Union to establish three new manufacturing innovation institutes from existing resources.  In May 2013, the Administration launched competitions for the three institutes with a Federal commitment of $200 million across five agencies – the Departments of Defense, Energy, Commerce, NASA, and the National Science Foundation, building off the success of a pilot institute headquartered in Youngstown, Ohio.  In January 2014, the first of these three institutes was announced, the new Department of Energy-led Next Generation Power Electronics Manufacturing Innovation Institute in Raleigh, N.C.

And with the opening of the competition for the next manufacturing innovation institute on advanced composites, the President is moving forward on his new pledge in the State of the Union to launch four institutes this year, totaling eight institutes supported by the Administration.  

Each institute serves as a regional hub, bridging the gap between applied research and product development by bringing together companies, universities and other academic and training institutions, and Federal agencies to co-invest in key technology areas that encourage investment and production in the U.S.  This type of “teaching factory” provides a unique opportunity for education and training of students and workers at all levels, while providing the shared assets to help companies, most importantly small manufacturers, access the cutting-edge capabilities and equipment to design, test, and pilot new products and manufacturing processes.

Today’s announcement is another step forward toward fulfilling the president’s vision for a full national network of up to 45 manufacturing innovation institutes, which will also require legislation from Congress. In July 2013, Senators Brown (D-OH) and Blunt (R-MO) and Congressmen Reed (R-NY) and Kennedy (D-MA) co-sponsored bipartisan legislation in both the Senate and House that would create a network for manufacturing innovation led by the Department of Commerce consistent with the president’s vision, helping the United States to take advantage of this unique opportunity to accelerate growth and innovation in domestic production and create the foundation for well-paying jobs that strengthen the middle class.  The President will continue to work with Congress to get legislation passed while continuing to make progress where he can to boost these partnerships that are important to revitalizing our manufacturing sector.

LIGHTWEIGHT AND MODERN METALS MANUFACTURING

The winning Lightweight and Modern Metals Manufacturing Innovation – or LM3I – Institute team, headquartered in the Detroit area and led by EWI, brings together a 60-member consortium that pairs the world’s leading aluminum, titanium, and high strength steel manufacturers with universities and laboratories pioneering new technology development and research.  The long-term goal of the LM3I Institute will be to expand the market for and create new consumers of products and systems that utilize new, lightweight, high‑performing metals and alloys by removing technological barriers to their manufacture.  The Institute will achieve this through leadership in pre-competitive advanced research and partnerships across defense, aerospace, automotive, energy, and consumer products industries.

DIGITAL MANUFACTURING AND DESIGN INNOVATION

The winning Digital Manufacturing and Design Innovation – or DMDI – Institute team headquartered in Chicago, Illinois and led by UI Labs, spearheads a consortium of 73 companies, universities, nonprofits, and research labs – creating a novel partnership between world-leading manufacturing experts and cutting-edge software companies to enable interoperability across the supply chain, develop enhanced digital capabilities to design and test new products, and reduce costs in manufacturing processes across multiple industries.

NEW COMPETITION

The new competition for an Advanced Composites Manufacturing Innovation Institute, led by the Department of Energy, will award $70 million over five years to improve our ability to manufacture advanced fiber-reinforced polymer composites at the production speed, cost and performance needed for widespread use in clean energy products including fuel-efficient and electric vehicles, wind turbines and hydrogen and natural gas storage tanks. This new competition will be the fifth institute launched by the President to date and the first of four new Institute competitions he will launch this year, building on his pledge in this year’s State of the Union.

The Lightweight and Modern Metals Innovation Institute:

Lightweight and modern metals are utilized in a vast array of commercial products, from automobiles, to machinery and equipment, to marine craft and aircraft. These ultra-light and ultra-strong materials improve the performance, enhance the safety, and boost the energy and fuel efficiency of vehicles and machines. For example, lightweight steels are helping American automakers produce cars more fuel efficient than ever before – with some cars today already up to 39% lighter and just as strong.  For the Department of Defense, lightweight and modern metals will strengthen our defense capabilities, like enabling the creation of armored vehicles strong enough to withstand a roadside bomb but light enough for helicopter-transport.

There are significant challenges for new lightweight and modern metals to reach widespread commercial production. To aid in overcoming these challenges, in June 2011, the President announced the Advanced Manufacturing Partnership and the Materials Genome Initiative for Economic Competitiveness, recognizing the critical role of materials technologies in the products we produce and the need for a better, faster, more economical way to bring these technologies to market.

Today, the Administration is launching the Lightweight and Modern Metals Manufacturing Innovation Institute to develop and expand the use of technologies at the important intersection of materials, manufacturing, and design.  By strengthening emerging capabilities in both advanced metals manufacturing schemes and the design of their end-use components, we will accelerate innovations from lab to market and deliver products to the defense and the commercial sector at significantly reduced weight, time and cost.  For example, a large commercial light truck manufacturer recently eliminated 700 lbs by moving to an aluminum body, made possible by these technologies, in their 2015 model. This national institute will make the U.S. more competitive by expanding domestic markets for products made with lightweight and modern metals such as automobiles, wind turbines, medical devices, engines, commercial aircraft, and Department of Defense systems and vehicles. It will also lead to significant reductions in manufacturing and energy costs.

The long-term goal of the LM3I Institute will be to expand the market for and create new consumers of products and systems that utilize new, lightweight high‑performing metals and alloys by removing technological barriers to their manufacture.  The Institute will achieve this through leadership in pre-competitive advanced research and partnerships across defense, aerospace, automotive, energy, and consumer products industries.

The winning consortium, led by EWI and headquartered in the Detroit-area includes the following members:

34 Companies: ABS, AEM, ALCOA Technology, Boeing, Comau, Easom Automation, EWI, Fabrisonic, Flash Bainite Steel, GE, Honda North American Services, Huys, Infinium, Inc., Innovative Weld Solutions, ITW, Lockheed Martin, Luvata, Materion, MesoCoat, MTI, NanoSteel Company, Optomec, Phoenix Integration, PowderMet, RealWeld, RTI International Metals, SaCell, Southwest Research Institute (SWRI), Steel Warehouse Co., ThermoCalc, TIMET, Trumpf, Inc., UTRC, Wolf Robotics

9 Universities and Labs: Colorado School of Mines, Michigan State University, Michigan Tech University, The Ohio State University, University of Kentucky, University of Michigan, University of Notre Dame, University of Tennessee, Wayne State University

17 Other Organizations: American Foundry Society, American Welding Society, ASM International, CAR, Columbus State Community College, Conexus Indiana, DET NORSKE VERITAS™, Focus Hope, International Association of Machinists & Aerospace Workers, Ivy Tech, Macomb Community College, MAGNET, Pellissippi State Community College, State of Kentucky, State of Michigan, State of Ohio, Southeast Michigan Workforce Intelligence Network

The Digital Manufacturing and Design Innovation Institute

The U.S. stands on the edge of a new frontier in manufacturing, where high-tech products are designed and tested largely within a virtual environment and individually tailored for performance.  Much like the internet has transformed the way we engage in commerce, manufacturing is being transformed by digital design.  Product development no longer begins on a draftsman's table, where sketches are turned into physical prototypes and tested again and again to get it right.  As a result of increasing complexity of manufactured systems, increasing diversity across the supply chain, and the increasing requirement for low-volume production to meet highly customized needs, there is a growing opportunity to expand our capabilities in digital manufacturing and design to drive U.S. manufacturing leadership.  We already have a long-standing leadership in software development, with 80% of the world’s software produced in the U.S.  The integrated design, development, and production of highly complex systems, leveraging our existing strength in software, can speed ideas from the lab into commercial production, reduce costs, and shorten production lifecycles.  

There are significant challenges to integrate this ‘digital thread’ across different manufactured technologies and across the supply chain.  These challenges include establishing true interoperability, the effective and balanced management of intellectual property interests, maintaining network technology and security, workforce skills, and new organizational cultures that embrace and leverage the digital thread.  Collaboration across industry, academia and government provides an opportunity to directly address these challenges in a pre-competitive way.

The Digital Manufacturing and Design Innovation Institute awardee has assembled a world-class team of more than seventy organizations from across industry, including leading manufacturers and software developers, government and academia, with both broad and deep experience in all aspects of the product development process from design and prototyping to manufacturing at scale. The combined resources and expertise of the consortium partners will provide a leap forward in digital design and manufacturing.

The winning consortium, led by UI Labs and headquartered in Chicago, Illinois includes the following members:

41 Companies: 3D Systems, ANSYS, Autodesk, Big Kaiser Precision Tooling Inc., Boeing, Caron Engineering Inc., Caterpillar, CG Tech, Cincinnati Inc., Colorado Association for Manufacturing & Technology, Cray, Dassault Systems, Deere & Company, DMG Mori, Evolved Analytics LLC, General Dynamics - Ordnance & Tactical Systems, General Electric, Haas Automation, Honeywell, Illinois Tool Works, Imagecom Inc. (Aspire 3D), International TechneGroup Inc., Kennametal, Lockheed Martin, Microsoft, MSC Software, North American Die Casting Association, National Instruments, Nimbis Services Inc., Okuma, Palo Alto Research Center, Parlec, Procter & Gamble, Product Development & Analysis, PTC, Inc., Rockwell Collins, Rolls-Royce, Siemens, System Insights, The Dow Chemical Company, UPS.

23 Universities and Labs: Colorado University – Boulder, Illinois Institute of Technology, Indiana University, Iowa State University, Missouri University of Science and Technology, Northern Illinois University, Northwestern University, Notre Dame, Oregon State, Purdue University, Rochester Institute of Technology, Southern Illinois University, University of Chicago, University of Illinois at Chicago, University of Illinois at Urbana - Champaign, University of Iowa, University of Louisville, University of Michigan, University of Nebraska- Lincoln, University of Northern Iowa, University of Texas – Austin, University of Wisconsin – Madison, Western Illinois University.

9 Other Organizations: American Foundry Society, City of Chicago – Department of Housing & Economic Opportunity, Colorado OEDIT, Commonwealth of Kentucky, Illinois Department of Commerce & Economic Opportunity, Illinois Science & Technology Coalition, MT Connect Institute, Reshoring Initiative, UI Labs

Advanced Composites Manufacturing Innovation Institute Competition

Today, the President announced a new competition, sponsored by the Department of Energy, to provide $70 million to launch a new Advanced Composites Manufacturing Innovation Institute focused on advanced fiber-reinforced polymer composites, which combine strong fibers with tough plastics to cost-effectively manufacture materials that are lighter and stronger than steel. This new competition is the first of the four the President will launch this year, building on his pledge in this year’s State of the Union and hitting the halfway point on his initial goal of creating 15 Manufacturing Innovation Institutes.

While advanced composites are used in selective industries such as aircraft, military vehicles, satellites and luxury cars, these materials remain expensive, require large amounts of energy to manufacture and are difficult to recycle. The Energy Department’s Manufacturing Innovation Institute for advanced composites will be aimed at overcoming these barriers to widespread use by developing low-cost, high-speed, and energy-efficient manufacturing and recycling processes. Through this work, the Institute will focus on lowering the cost of advanced composites by 50 percent, reducing the energy used to make composites by 75 percent and increasing the recyclability of composites to over 95 percent within 10 years.

Advanced composites could help manufacturers deliver clean energy products with better performance and lower costs such as lightweight vehicles with record-breaking fuel economy; lighter and longer wind turbines blades; high pressure tanks for natural gas-fueled cars; and lighter, highly energy-efficient industrial equipment.

For example, advanced composites could reduce passenger car weight by 50 percent and improve fuel efficiency by about 35 percent without compromising performance or safety – helping to save more than $5,000 in fuel over the lifetime of an average car at today’s gasoline prices. In the wind energy industry, doubling the length of a turbine blade can quadruple the amount of electricity generated. Advances in low-cost composite materials will help manufacturers build longer, lighter and stronger blades to capture the maximum levels of wind energy and support a cost-competitive U.S. offshore wind industry. Low-cost advanced composites are also needed to make the storage tanks for vehicles that run on hydrogen and natural gas – helping to give drivers more fuel and transportation options that save money and cut carbon pollution.

The Energy Department seeks proposals from teams of nonprofit organizations, universities, national laboratories and private industry and will make up to $70 million available over five years, subject to congressional appropriations, that must be matched by at least $70 million in non-federal commitments.

RECENT U.S. DEFENSE DEPARTMENT PHOTOS

FROM:  U.S. DEFENSE DEPARTMENT 

A U.S. Marine throws a training grenade during a live-fire exercise at Arta Range, Djibouti, Feb. 18, 2014. The Marine is assigned to 13th Marine Expeditionary Unit, Battalion Landing Team, Alpha Company, 1st Battalion, 4th Marine Regiment. The unit is deployed with the Boxer Amphibious Ready Group as a theater reserve and crisis response force throughout the U.S. 5th Fleet area of responsibility. U.S. Air Force photo by Staff Sgt. Staci Miller.

A grenade explodes near its targets after being thrown by a U.S. Marine during a live-fire exercise at Arta Range, Djibouti, Feb. 18, 2014. U.S. Air Force photo by Staff Sgt. Staci Miller.

JUSTICE ANNOUNCES RESULTS OF ANTI-TAX REFUND FRAUD EFFORTS

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, February 24, 2014

Justice Department Highlights Efforts to Combat Stolen Identity Tax Refund Fraud
Today, the Justice Department announced the results of its ongoing efforts to combat tax refund fraud that involves identity theft.  The Tax Division, in conjunction with the Internal Revenue Service (IRS) and U.S. Attorneys’ Offices (USAOs) nationwide, has prioritized the investigation and prosecution of individuals who engage in stolen identity refund fraud (SIRF).  According to the IRS, from 2008 through May 2012, the IRS identified more than 550,000 taxpayers who have had their identities stolen for the purpose of claiming false refunds in their names.  In fiscal year 2013, the department filed more than 580 indictments or informations charging more than 880 defendants with SIRF-related crimes.

SIRF is the use of stolen or otherwise wrongfully acquired personal identification information to file a fraudulent claim with the IRS for a tax refund.  These crimes occur when a social security number, or list of numbers, is stolen or bought; a false tax return showing a refund due is filed electronically, usually at the beginning of filing season before the legitimate taxpayer has filed for the year; and the refund is loaded to a prepaid card, sent to a bank account or mailed to an address accessible by those involved in the scheme.

The actual implementation of SIRF schemes is often complex to carry out.  In an increasing number of cases, the identities are stolen or bought in one place; the returns are electronically filed from another location, often through difficult to trace Wi-Fi connections; refunds are directed to a distant location; checks are cashed in yet another location; and the currency then moves again.

“The Department of Justice is committed to constant vigilance in investigating and prosecuting SIRF crimes,” said Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division.  “Too often the victims of identity theft are the most vulnerable in our communities – those whose identities are stolen from medical services or nursing homes, or grieving families who learn that the identities of deceased loved ones have been fraudulently used – and all honest taxpayers are victims when wrongful refund claims are paid out.  We are determined to work with the IRS to stop this crime at the door, and to seek the conviction and punishment of these criminals.”

Some of the prosecutions from 2013 that resulted in significant prison sentences for SIRF crimes include:

• Vernon Harrison , a corrupt U.S. Postal Service mail carrier, was sentenced to serve 111 months in prison in October 2013.  According to court documents, tax refunds were placed on debit cards and mailed to addresses on Harrison’s postal route in Montgomery, Ala., which he then stole from the mail and provided to a co-conspirator in exchange for cash.

• Lea’Tice Phillips worked for an Alabama state agency and had access to databases that contained personal identifying information.  As alleged in court documents, Phillips conspired with Antoinette Djonret and others to file false tax returns using identities stolen from the database.  In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds.  Djonret was sentenced in February 2013 to serve 12 years in prison, and Phillips was sentenced in September 2013 to serve 94 months in prison.

• Angela Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge, La.  According to court documents, Myers electronically filed false claims for refunds using the names and social security numbers of identity theft victims, many of whom were nursing home patients.  Myers was sentenced to serve 132 months in prison in July 2013.

• Leslie Brewster , a tax return preparer from Durham, N.C., was sentenced to serve 70 months in prison.  According to court documents, Brewster was the manager of a branch office of a tax preparation franchise called Nothing But Taxes, and purchased personal identifying information to claim false dependents on tax returns she prepared for clients.

• Quentin Collick and Deatrice Williams were sentenced in November 2013 to serve 85 and 51 months in prison, respectively.  Corey Thompson, a co-conspirator, was sentenced to serve 30 months in jail.  Williams worked for a debt collection company and stole the identities of a number of individuals, then provided the stolen information to Collick, her son-in-law.  Thompson worked as an independent contractor for a cable company installing cable and internet access for customers.  To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers' internet service, and, along with Collick, filed false tax returns using the customers' internet access.  Thompson and Collick then directed the fraudulent tax refunds to be placed on pre-paid debit cards.

In 2014, the department has continued to pursue numerous prosecutions against SIRF criminals.  On Jan. 24, 2014, a jury convicted current and former corrections officers of identity theft and tax fraud; according to court documents and evidence presented at trial, the pair accessed a state prison database and used the stolen identity information to file false tax returns.  A check casher was sentenced to 37 months in prison on Jan. 16, 2014, for cashing refund checks in the names of individuals who did not authorize him to cash the checks, according to court documents.  A nursing home employee was convicted by a jury on Jan. 14, 2014, of conspiracy, aggravated identity theft and other SIRF-related crimes; according to court documents and the evidence presented at trial, she stole the identity information of nursing home patients and used that information to create false tax returns.  An Alabama man pleaded guilty on Jan. 13, 2014, for his role in a SIRF fraud.  According to court documents, he obtained stolen identities from an Alabama state employee, used those identities to file false tax returns, and recruited a bank employee to assist him in having the false tax refunds deposited into various bank accounts.  A social worker pleaded guilty on Jan. 10, 2014, to identity theft and tax fraud charges.  According to court documents, she illegally obtained the identifying information of her clients – minors and disabled adults who may have been abused or neglected – and sold that information to others who used the stolen identities to claim as false dependents on fraudulent tax returns they prepared.

"We're fighting identity theft head-on at the IRS and making substantial progress with the help of the Justice Department and local law enforcement," said Commissioner John Koskinen for the IRS.  "We're stopping more identity theft before these fraudulent refunds go out the door.  The IRS initiated nearly 1,500 identity theft related criminal investigations last year, an increase of 66 percent over 2012.  Fighting fraud is an ongoing battle as identity thieves continue to create new ways of stealing personal information.  The IRS is continually reviewing our policies to strengthen our systems, minimize the incidence of identity theft and help victims.

The sentences imposed against those committing SIRF crimes are significant and reflect the seriousness of these crimes.  The Justice Department is committed to investigating and prosecuting tax refund fraud that involves identity theft, and will continue to work with the IRS, FBI, U.S. Secret Service, U.S. Postal Inspection Service, other federal law enforcement agencies as well as state and local law enforcement agencies to combat SIRF-related crimes.  Each U.S. Attorney’s Office has a point of contact to coordinate SIRF matters for its district.

The IRS has taken steps to detect and prevent the fraud before it occurs.  For example, the IRS has designed new software filters to spot false returns before they are processed and before a refund is issued.  The IRS has also expanded efforts to place identity-theft indicators on taxpayer accounts to track and manage identity-theft incidents.

PLASTIC LUMBER MAKER ORDERED TO TAKE DOWN RECYCLING CLAIMS

FROM:  FEDERAL TRADE COMMISSION 
Company’s Green Claims for Plastic Lumber Misleading
FTC Order Requires Firm to Have Distributors Take Down Ads With Unsupported Claims

A Wisconsin-based manufacturer of plastic lumber products has agreed to stop making allegedly unsubstantiated claims about the recycled content and recyclability of two of its brands of plastic lumber.

Under the FTC settlement, the company, N.E.W. Plastics Corp., must have credible evidence to support any recycling-related claims it makes, and is required to tell its distributors to remove any marketing material for the two products provided by the company before December 2013.

“Consumers deserve to know the truth about the products they are buying,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “Many of them want to buy products that are environmentally friendly, but they can’t do that if they get information that’s wrong or unsupported.”

N.E.W. Plastics Corp., which also does business as Renew Plastics, is based in Luxemburg, Wisconsin, and makes plastic lumber products, including the Evolve and Trimax brands, which are used to make items such as outdoor decking and furniture. It sells the products to consumers through distributors.

In its administrative complaint, the FTC alleges that between September 2012 and March 2013, N.E.W. made false and misleading claims while promoting Evolve and Trimax. Specifically, the company claimed:

that Evolve products are made from 90 percent or more recycled content;
that Trimax products are made from mostly post-consumer recycled content; and
that both Evolve and Trimax are recyclable.
The proposed consent order prohibits N.E.W. from making any statements about the recycled content, post-consumer recycled content, or environmental benefits of any product or package unless they are true, not misleading, and are substantiated by competent and reliable evidence, which for some claims must be scientific evidence.

The proposed order also bars N.E.W. from making unqualified recyclable claims about any product or package, unless the product or package can be recycled in an established recycling program, and such facilities are available to at least 60 percent of consumers or communities where the product or package is sold. If N.E.W. can’t meet these requirements, it must qualify the claim regarding the availability of recycling centers. If only part of a product or package is recyclable, N.E.W. must disclose to consumers which part or portion of the product or package is recyclable.

Finally, the proposed order bars N.E.W. from providing anyone else with the means of making false, misleading, or unsubstantiated claims. The order will end in 20 years.

Information for Consumers

The FTC has new information for consumers in a blog post on its website.  Also the FTC provides detailed guidance to businesses on environmental claims in its Green Guides.

The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through March 24, 2014, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113, and 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments can also be submitted electronically.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.

4 COMPANIES, 6 INDIVIDUALS TARGETED FOR ALLEGEDLY IMPORTING DANGEROUS CHILDREN'S PRODUCTS

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, February 24, 2014
Government Files Enforcement Action Against Four California Companies and Six Individuals to Stop the Importation of Dangerous Children’s Products

The government has asked a federal court in California to issue an injunction shutting down the importation and sales activities of four California companies and six individuals in connection with their imports of illegal children’s products containing, among other things, lead, phthalates and small parts inappropriate for children under age three.  Phthalates are a chemical plasticizer that make certain products flexible, and certain types of phthalates are banned from use in children’s toys and other child care products.  The Justice Department filed the injunction action in the Central District of California at the request of the Consumer Product Safety Commission (CPSC).

The defendant companies in the case are Toys Distribution Inc. dba TDI International, S&J Merchandise Inc., BLJ Apparel Inc. and All Season Sales Inc.  The defendant individuals are Loan Tuyet Thai, Lan My Lam, Paul Phuong, Cuc T. Thai, Tom Liu and Luan Luu.

“Companies cannot be allowed to import hazardous toys into the United States,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Parents have a right to feel confident that the toys their children play with are safe.”      

The CPSC determined through an investigation that the defendants imported various items into the United States in violation of the Consumer Product Safety Act (CPSA) and the Federal Hazardous Substances Act (FHSA).  The violative products that Toys Distribution Inc. imported included: motorized and “pull-back” toy cars with impermissible lead content and small parts hazards, numerous toy musical instruments with small parts hazards, dolls containing impermissible levels of lead and phthalates and rattles that failed to meet the infant rattle standards.  S & J Merchandise’s imports of violative products included numerous models of toy cars with impermissible lead content or small parts hazards, a toy telephone with small parts hazards and numerous different plastic dolls with impermissible phthalate levels.  The violative products imported by BLJ Apparel included children’s products and toys with illegal levels of total lead content, toys intended for children under three years of age that contained small parts and infant rattles that may cause choking or suffocation.  All Season Sales’ violative imports included a children’s kitchen set and police set that both exceeded the lead content limit.

The government also alleged that the defendants’ operations were associated with each other and that the companies share various personal or professional ties that make joining all the conduct into one lawsuit appropriate.

“CPSC and our federal law enforcement partners are committed to keeping dangerous toys out of the marketplace all year long,” said CPSC Acting Chairman Robert Adler.  “Manufacturers, importers and retailers need to know that CPSC and the Justice Department are actively enforcing the Consumer Product Safety Improvement Act, a law that has strengthened the nation’s product safety net.”

Defendant companies S&J Merchandise Inc., BLJ Apparel Inc. and All Season Sales Inc., as well as defendant individuals Tom Liu and Luan Luu have agreed to settle the litigation and be bound by a Consent Decree of Permanent Injunction that enjoins them from committing violations of the CPSA and FHSA.  The proposed consent decree will be filed shortly with the court for judicial approval.  The lawsuit continues against the remaining defendants.

The case is being handled by Patrick Runkle, trial attorney with the Department of Justice’s Consumer Protection Branch, and the U.S. Attorney’s Office for the Central District of California on behalf of the Consumer Product Safety Commission.

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

FACT SHEET: GLOBAL FUND FOR COMMUNITY ENGAGEMENT AND RESILIENCE

FROM:  U.S. STATE DEPARTMENT
Co-Chairs' Fact Sheet: Creating a Global Fund for Community Engagement and Resilience
Fact Sheet
Bureau of Public Affairs, Office of the Spokesperson
Washington, DC
February 21, 2014

Creating a Global Community Engagement and Resilience Fund:

On September 27, 2013, at the Ministerial Plenary meeting of the Global Counterterrorism Forum in New York, the intent to establish a Global Community Engagement and Resilience Fund (GCERF) was announced. GCERF will be the first global effort to harness the skills, capabilities and resources of both the public and private sectors to support local, community-based projects on education, vocational training, civic engagement, media, and women’s advocacy aimed at strengthening resilience against violent extremist agendas, which can create significant barriers to political and economic development. It is anticipated that GCERF will raise more than $200 million over the next ten years for this purpose.

THE CHALLENGE: Terrorism is Global but Starts Local

Terrorism is a transnational and global problem frequently driven by local forces. While military, intelligence and law enforcement operations can help address the threat that terrorists pose, to succeed in the long-term, we must reduce their ability to recruit at the community level by addressing local drivers of radicalization to violence.

THE GAP: Lack of Funding Opportunities for Local Organizations

Many local organizations with innovative project ideas have been unable to get off the ground because of the difficulty of attracting the necessary seed funding. Even where they have grown and had impact, they have faced challenges in securing sufficient funding to sustain their work beyond a single six-month or one-year project cycle. Local entities also often have difficulty navigating the application processes that foundations and large donors have in place. Many donors also prefer recipients from larger organizations, often international NGOs, with proven track records, and lack the broad networks and contacts to find trusted community-based partners in priority locations. As a result, small local organizations, which could have the greatest impact at the community level, struggle to find funding.

THE SOLUTION: A Global Partnership to Bolster Community-Based Efforts

GCERF will be a public-private global partnership offering a unique and practical model to enable the international community to bolster grass-roots efforts where radicalization and recruitment are occurring. It will be an independent institution governed by a mix of government and non-government stakeholders that will fund locally driven projects and thus help close the gap between the needs of local organizations (whether civil society, NGO or local government) and the resources available to support their work. GCERF will include a robust vetting process and monitoring and evaluation mechanism, providing donors with confidence that the projects supported advance the goals that led them to contribute to this fund.

Why is GCERF Different?

What distinguishes GCERF’s objectives from broader development efforts is its emphasis on youth engagement, education, vocational training, and women’s advocacy to promote resilience among at-risk populations. Such initiatives can contribute to economic growth and development in countries where international businesses are active, and provide opportunities to those susceptible to violent extremists’ messages.

Where does the Private Sector Fit In?

Terrorism, and the violent extremism that underpins it, not only destroys innocent lives around the world, it also affects businesses globally. Terrorism disrupts the markets where businesses work, the supply chains that businesses depend on, and the communities that comprise the local labor market. GCERF represents an opportunity for both private sector and government entities to jointly advance the political and economic stability of many of these local, at-risk communities by promoting resilience through positive programs that provide an alternative to violent extremism. GCERF also offers an opportunity to encourage social entrepreneurship and other innovative approaches to local investment.

GCERF Framework

Partners involved in developing GCERF will continue to refine the following principles, scope, and approach over the next several months until GCERF is operational in mid-2014.

• Principles: GCERF would be guided by a series of principles and activities which might include:

Serving as mechanism to raise, disburse, and monitor funds for valuable CVE projects
Ensuring that projects have the requisite political support from national governments as well as contribute to the implementation of the UN Global Counter-Terrorism Strategy
Evaluating proposals through an independent and transparent review process
Complementing and advancing ongoing national, regional, and international efforts
Performing evaluations of projects to ensure funds are being spent effectively and wisely
Encouraging social entrepreneurship and other innovative approaches to investment in grassroots programming
Operating with transparency and accountability
Emphasizing country-led, bottom-up approaches to programming and activities
Supporting projects – particularly at the sub-national level – that offer positive alternative to violent extremism
• Scope: Support from GCERF would complement ongoing efforts of governments and community-based organizations to address violent extremism and build resilience to violent extremist agendas. GCERF will emphasize multi-sectoral participation and results-driven approach to develop solutions to the local drivers of radicalization and recruitment to terrorism. It will allow non-government and municipal government organizations to apply for grants in a range of areas depending upon local requirements/needs. These might include:

Providing life-skills, vocational training, and other alternatives to youth at risk of recruitment and radicalization to extremist violence
Supporting victims and survivors of terrorism, highlighting terrorism’s impact on families, communities, and countries
Providing platforms for community leaders and activities to promote and provide positive alternatives to violent extremism.
Designing education campaigns around messages of pluralism, diversity, and tolerance
Designing and implementing mentorship programs and exchange programs for at-risk youth

• Approach: GCERF will be established as a non-profit foundation in Geneva, Swtizerland. It would be composed of a Secretariat with oversight from a multi-stakeholder governing board that includes a geographically diverse group with representatives of governments, the private sector, foundations, and non-government organizations. The GCERF will engage locally through Country Committee Mechanisms composed of public and private representatives, to help better direct funds to local priorities coordinate transparent proposal reviews.

Support for the GCERF

Meetings on GCERF’s mandate, structure, and legal foundation took place in Lucerne and Geneva, Switzerland in late 2013 and culminated with a final Steering Group meeting in Washington, DC, on February 20, 2014. Carol Bellamy, former UNICEF Executive Director and former Chair of the Global Education Partnership, facilitated the process. In this final meeting, over 35 governments, the United Nations, the World Bank, NGOs, the private sector, and foundation representatives reviewed and refined the mandate and organizational architecture of the GCERF which will be established in Geneva, Switzerland by mid-2014.

Several countries already pledged financial contributions, and a number of others have expressed strong support with contributions expected to follow. Several recipient countries have also indicated an interest in serving as GCERF “pilot” countries whereby local organizations in their countries would benefit from GCERF grants. In addition, several multinational companies and foundations have shown strong interest in contributing expertise and resources to the GCERF.

AG HOLDER WANTS NATIONAL STANDARD FOR REPORTING CYBERATTACKS

FROM:  U.S. JUSTICE DEPARTMENT  
Monday, February 24, 2014
Attorney General Holder Urges Congress to Create National Standard for Reporting Cyberattacks

In a video message released today, Attorney General Eric Holder called on Congress to create a strong, national standard for quickly alerting consumers whose information may be compromised by cyberattacks. This legislation would strengthen the Justice Department's ability to combat crime, ensure individual privacy, and prevent identity theft, while also helping to bring cybercriminals to justice.

The complete text of the Attorney General’s weekly address is available below:

“Late last year, Target – the second-largest discount retailer in the United States – suffered a massive data breach that may have compromised the personal information of as many as 70 million people, in addition to credit and debit card information of up to 40 million customers.  The Department of Justice is currently investigating this breach, in close coordination with the U.S. Secret Service.  And we are moving aggressively to respond to hacking, cyberattacks, and other crimes that harm American consumers – and expose personal or financial information to those who would take advantage of their fellow citizens.

"As we’ve seen – especially in recent years – these crimes are becoming all too common.  And they have the potential to impact millions of Americans every year.  Just days after the Target breach was made public, another major retailer – Neiman Marcus – reported that it also suffered a suspected cyberattack during the holiday season.  And although Justice Department officials are working closely with the FBI and prosecutors across the country to bring cyber criminals to justice, it’s time for leaders in Washington to provide the tools we need to do even more: by requiring businesses to notify American consumers and law enforcement in the wake of significant data breaches.
             
“Today, I’m calling on Congress to create a strong, national standard for quickly alerting consumers whose information may be compromised.  This would empower the American people to protect themselves if they are at risk of identity theft.  It would enable law enforcement to better investigate these crimes – and hold compromised entities accountable when they fail to keep sensitive information safe.  And it would provide reasonable exemptions for harmless breaches, to avoid placing unnecessary burdens on businesses that do act responsibly.

“This legislation would strengthen the Justice Department’s ability to combat crime and ensure individual privacy – while bringing cybercriminals to justice.  My colleagues and I are eager to work with Members of Congress to refine and pass this important proposal.  And we will never stop working to protect the American people – using every tool and resource we can bring to bear.”

PRESIDENT OBAMA, V.P. BIDEN ADDRESS NATIONAL GOVERNORS ASSOCIATION

FROM:  THE WHITE HOUSE 

Remarks by the President and Vice President at NGA Meeting

State Dining Room

11:15 A.M. EST

THE VICE PRESIDENT:  Thank you very much.  Thanks for making the Cabinet stand up for me.  (Laughter.)  I appreciate it.

It’s great to see you all.  And I don't know about you all, I had a great time last night and got a chance to actually do what we should be doing more of -- talking without thinking about politics and figuring how we can solve problems.

You’ve observed by now the reason the President and I like doing this every year is it’s nice dealing with people who know they got to get a job done, and they get a job done.  And I’ve gotten a chance to work directly with an awful lot of you in the days of the Recovery Act, and even when we were working on the gun violence; rebuilding from that super storm Sandy, which hit my state as well, and tornadoes and floods in a number of your states. 

But it never ceases to amaze me how you all mobilize.  You just mobilize.  When crises hit your states, you mobilize and you rebuild.  And you rebuild your infrastructure not to the standards that existed before, but to 21st century standards.  You balance your budgets, you save neighborhoods, and you bring back jobs to your communities.

And the other thing I pick up -- and I may be wrong.  I’m always labeled as the White House optimist, like I’m the kid who fell off the turnip truck yesterday, but I am the youngest here -- (laughter) -- and new.  But it always amazes me your sense of optimism.  You’re the one group of folks you go to with all the problems you have that you’re optimistic.  You're optimistic about it being able to be done, getting things done.  That is not always the mood up in the place where I spent a large portion of my career.

And last night I got to speak to a bunch of you, particularly about the job skills initiative the President asked me to lead, and I had a chance to speak with some of you specifically, and I’m going to ask to -- I’m going to get a chance to see more of you this afternoon.  But this is more than just -- at least from the President’s perspective and mine -- more than just a job skills initiative.  It’s about literally opening the aperture to the middle class.  The middle class has actually shrunk. 

And we always have these debates with our economists -- is the middle class $49,820 or $52,000.  The middle class to me, and I think to most of you, it’s really a state of mind.  It’s about being able to own your home and not have to rent it.  It’s about being able to send your kid to a park where you know you can send them out, and they’ll come home safely.  It’s about being able to send them to school, that if they do well in the school, they're going to be able to get to something beyond high school if they want to do that.  And you’re going to be able to pay for it.  And in the meantime, you may be able to take care of your mom and dad who are in tough shape and hope that your kids never have to take care of you.  That's the middle class.

And before the Great Recession, it was already beginning to shrink.  So together, we got to open -- Mary, you and I have talked about this -- about opening the aperture here for access to the middle class.  But we’ll be speaking a lot more about that in the next several months.  A couple of you invited me to come out your way, including some of my Republican friends.  And I’m going to be working with all of you. 

But today I just want to say thank you.  Thank you for what you always do.  You come to town; you come to town with answers.  You come to town with suggestions.  You come to town to get things done.  And believe me, we need that and the American people are looking for it.

And I want to welcome you back to the White House, and introduce you now to my friend, your President, Barack Obama.  (Applause.)

THE PRESIDENT:  Thank you, everybody.  Thank you.  Please, have a seat.  Thank you so much. 

Welcome to the White House.  I know that you’ve already been doing a lot of work, and I’m glad to be able to come here and engage in a dialogue with all of you.  I want to thank Mary and John for their leadership at the NGA.  I want to thank my outstanding Vice President, Joe Biden, who is very excited I think about the jobs initiative, and is going to be -- the job training initiative, and I think is going to be doing a great job on that.

Michelle and I had a wonderful time hosting you guys last night, and I hope all the spouses enjoyed it.  And I know Alex enjoyed it.  (Laughter.)  One good thing about living here is that you can make all the noise you want and nobody is going to complain.  (Laughter.)  And I enjoyed watching some of you with your eyes on higher office size up the drapes -- (laughter) --and each other.

We don’t have a lot of time today, so I want to be very brief, go straight to Q&A and discussion.  We’re at a moment when our economy is growing; our businesses have now created over 8.5 million new jobs over the past four years.  But, as I’ve said several times, the trends that have battered the middle class for a couple of decades now are still there and still have to be addressed.  Those at the top are doing very well.  Ordinary families still feeling squeezed.  Too many Americans are working harder than ever, and just barely getting by. 

And reversing these trends are going to require us to work together around what I’m calling an opportunity agenda based on four things.  Number one, more good jobs that pay good wages.  Number two, training more Americans to be able to take the jobs that are out there right now and the jobs that are created.  Number three, guaranteeing access to a world-class education for every American child all across our 50 states and our territories.  And making sure that hard work pays off -- with wages that you can live on, savings that you can retire on, health insurance that you can count on.

And all of this is going to take some action.  So far, just in the past few weeks, I’ve acted to lift the wages of workers who work for federal contractors to pay their -- make sure their employees are getting paid at least $10.10 an hour.  We’ve ordered an across-the-board reform of our job training programs, much of it aligned with some of the work that Mary has done during her tenure as head of the NGA.  We directed our Treasury to create a new way for Americans to start saving for retirement.  We’ve been able to rally America’s business leaders to help more of the long-term unemployed find work, and to help us make sure that all of our kids have access to high-speed Internet and high-tech learning tools in the classroom.

The point is, this has to be a year of action.  And I’m eager to work with Congress wherever I can.  My hope is, is that despite this being an election year, that there will be occasions where both parties determine that it makes sense to actually get some things done in this town.  But wherever I can work on my own to expand opportunity for more Americans, I’m going to do that.  And I am absolutely convinced that the time is right to partner with the states and governors all across the country on these agendas, because I know that you guys are doing some terrific work in your own states.

There may not be much of an appetite in Congress for doing big jobs bills, but we can still grow SelectUSA.  Secretary Pritzker’s team has put together a terrific formula where we’re attracting investors from all around the world to see America as an outstanding place to invest.  And I mentioned this at the State of the Union:  For the first time last year, what we’re seeing is, is that world investors now see America as the number-one place to do business rather than China.  And it’s a sign of a lot of things converging, both on the energy front, worker productivity, our innovation, our research, ease of doing business.  And a lot of that work is as a consequence of steps we’ve taken not just at the federal level, but also at the state level.  So we’ve got to take advantage of that.

Secretary Pritzker has been helping a Belgian company create jobs in Stillwater, Oklahoma; helping an Austrian company create jobs in Cartersville, Georgia.  So we can do more of this, and we really want to engage with you over the next several months to find ways that we can help market America and your states to businesses all around the world and bring jobs back.

Since I called on Congress to raise the minimum wage last year, six states have gone ahead and done it on their own.  Last month, I asked more business leaders to raise their workers’ wages.  Last week, GAP said it would lift wages for about 65,000 of its employees.  Several of you are trying to boost wages for your workers.  I’m going to do everything I can to support those efforts. 

While Congress decides what it’s going to do on making high-quality pre-K available to more kids, there is bipartisan work being done among the folks in this room.  You’ve got governors like Robert Bentley and Jack Markell, Susana Martinez, Deval Patrick -- all expanding funding or dedicating funds to make that happen in their states.  And we want to partner with you.  This year, I’ll pull together a coalition of philanthropists, elected officials and business leaders, all of whom are excited and interested in working with you to help more kids access the high-quality pre-K that they need.

And while Congress talks about repealing the Affordable Care Act or doing this or doing that to it, places like California and Kentucky are going gangbusters and enrolling more Americans in quality, affordable health care plans.  You’ve got Republican governors here -- I won’t name them in front of the press, because I don’t want to get you all in trouble -- who have chosen to cover more people through new options under Medicaid.  And as a result, millions of people are going to get help.

States that don’t expand Medicaid are going to be leaving up to 5.4 million Americans uninsured.  And that doesn’t have to happen.  Work with us to get this done.  We can provide a lot of flexibility.  Folks like Mike Beebe in Arkansas have done some terrific work designing programs that are right for their states but also provide access to care for people who need it.  And I think Kathleen Sebelius, a former governor herself, has shown herself willing to work with all of you to try to find ways to get that done.

On the West Coast, you’ve got Governors Brown, Inslee, Kitzhaber who are working together to combat the effects of climate change on their states.  We’ve set up a taskforce of governors and mayors and tribal leaders to help communities prepare for what we anticipate are going to be intensifying impacts of climate change.  And we’re setting up climate hubs in seven states across the country to help farmers and ranchers adapt their operations to a changing environment. 

In the budget that I’ll send to Congress next week, I’m going to propose fundamentally reforming the way federal governments fund wildfire suppression and prevention to make it more stable and secure, and this is an idea that’s supported by both Democrats and Republicans.

And finally, I want to thank those of you who have worked with Michelle and Jill Biden on their Joining Forces initiative to support our military families.  At your meeting here two years ago, they asked for your help to make it easier for servicemembers and their spouses to carry licenses for professions like teaching or nursing from state to state, rather than have to get a new one every time they were reassigned.  At the time, only 12 states had acted to make this easier for spouses; only nine had acted to make it easier for servicemembers.  Today, 42 states have passed legislation to help spouses; 45 states have made it easier for servicemembers.  We’ve got a few states remaining.  Let’s get it done for everybody, because it’s the right thing to do for those men and women who are working every day to make sure we stay free and secure. 

The point is, even when there is little appetite in Congress to move on some of these priorities, at the state level you guys are governed by practical considerations.  You want to do right by your people and you see how good policy impacts your citizens, and you see how bad policy impacts your citizens, and that means that there’s less room for posturing and politics, and more room for getting stuff done. 

We want to work with you.  And I’m committed to making sure that every single member of my Cabinet, every single person in the White House, every single member of my team will be responsive to you.  We won’t agree on every single issue every single time, but I guarantee you that we will work as hard as we can to make sure that you succeed -- because when you succeed, the people in your states succeed and America succeeds, and that’s our goal. 

So thank you very much, and I look forward to having a great discussion.  Thank you, everybody.  (Applause.)

END
11:27 A.M. EST

DEFENSE SECRETARY HAGEL DISCUSSED AFFECTS OF BUDGET

FROM:  U.S. DEFENSE DEPARTMENT 
Hagel Outlines Budget Reducing Troop Strength, Force Structure
By Nick Simeone
American Forces Press Service

WASHINGTON, Feb. 24, 2014 – Defense Secretary Chuck Hagel has proposed cuts in military spending that include further reductions in troop strength and force structure in every military service in the coming year as part of an effort to prioritize U.S. strategic interests in the face of reduced resources after more than a decade of war.

At a Pentagon news conference today detailing President Barack Obama’s proposed Pentagon budget for fiscal year 2015, Hagel called the reductions -- including shrinking the Army to its smallest size since before World War II and eliminating an entire fleet of Air Force fighter planes -- “difficult choices” that will change defense institutions for years to come, but designed to leave the military capable of fulfilling U.S. defense strategy and defending the homeland against strategic threats.

Under a Pentagon budget that will shrink by more than $75 billion over the next two years -- with deeper cuts expected if sequestration returns in fiscal year 2016 -- Hagel and other senior defense and military officials acknowledged that some of the budget choices will create additional risks in certain areas.

Some of that risk, Hagel said, is associated with a sharp drawdown in the size of the Army, which the proposed budget calls for reducing to as low as 440,000 active duty soldiers from the current size of 520,000, while ensuring the force remains well trained and equipped.

The cuts assume the United States no longer becomes involved in large, prolonged stability operations overseas on the scale of Iraq and Afghanistan. “An Army of this size is larger than required to meet the demands of our defense strategy,” Hagel said. “It is also larger than we can afford to modernize and keep ready.” But he said the smaller force still would be capable of decisively defeating aggression in one major war “while also defending the homeland and supporting air and naval forces engaged in another theater against an adversary.”

The budget request calls for special operations forces to grow by nearly 4,000 personnel, bringing the total to 69,700, a reflection of the asymmetrical threats the nation is likely to face in the future, Hagel said.

The restructuring and downsizing are in line with a two-year budget agreement that the president and Congress worked out in December, which limits defense spending to $496 billion. But Hagel warned today that if the budget for fiscal year 2016 returns to the steep, automatic spending cuts imposed by sequestration, “we would be gambling that our military will not be required to respond to multiple major contingencies at the same time.”

Asked to define that increased risk, a senior Defense Department official expressed it simply. “If the force is smaller, there’s less margin for error,” the official said. “Let’s face it -- things are pretty uncertain out there.”

The proposed budget also envisions a 5-percent reduction in the Army National Guard and Army Reserve. “While it is true that reserve units are less expensive when they are not mobilized, our analysis shows that a reserve unit is roughly the same cost as an active duty unit when mobilized and deployed,” Hagel said.
In addition, the Army Guard’s Apache attack helicopters would be transferred to the active force, while Black Hawk helicopters would be transferred to the National Guard, part of a broader realignment of Army aviation designed to modernize the fleet and increase capability.

Within the Air Force, the defense budget calls for saving $3.5 billion by retiring the A-10 fleet and replacing it with the F-35 by the early 2020s.

“The A-10 is a 40-year old, single-purpose airplane originally designed to kill enemy tanks on a Cold War battlefield,” Hagel said. “It cannot survive or operate effectively where there are more advanced aircraft or air defenses.” In addition, the service also will retire the 50 year-old U-2 surveillance plane in favor of the unmanned Global Hawk.

Hagel warned that much deeper cuts in Air Force structure and modernization will be necessary if sequestration is not avoided in 2016.
Among other proposals in the budget request:

-- The Army will cancel the Ground Combat Vehicle program;

-- The Navy would be able to maintain 11 carrier strike groups, but any steep future cuts could require mothballing the aircraft carrier USS George Washington;

-- Half of the Navy’s cruiser fleet, 11 ships, will be placed in reduced operating status while they are modernized and given a longer lifespan;

-- The Navy will continue buying two destroyers and attack submarines per year;
-- The Marine Corps will draw down from about 190,000 to 182,000, but would have to shrink further if sequestration returns;

-- An additional 900 Marines will be devoted to securing U.S. embassies;
and
-- The Defense Department is asking Congress for another round of base closings and realignments in 2017.

Hagel said most of the recommendations in the budget were accepted by senior military officers. Addressing reporters alongside him, Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, said the spending plan reflects a balancing of the military while ensuring it remains the world’s finest.

“It reflects in real terms how we’re reducing our cost and making sure the force is in the right balance,” Dempsey said.

Dempsey and Hagel will testify on the budget before Congress next week. Lawmakers will have the final say on spending decisions.

“This is the first time in 13 years we will be presenting a budget to Congress that is not a war footing budget,” Hagel noted.

U.S. DEFENSE DEPARTMENT CONTRACTS FOR FEBRUARY 24, 2014

FROM:  THE DEFENSE DEPARTMENT 
CONTRACTS

NAVY

General Dynamics Electric Boat Corp., Groton, Conn., is being awarded a $36,137,340 cost-plus-fixed-fee modification to previously awarded contract (N00024-13-C-4311) to provide a Nuclear Regional Maintenance Department (NRMD).  Under the terms of the contract, Electric Boat will provide NRMD tasks in support of operational nuclear submarines at the Naval Submarine Support Facility, Naval Submarine Base, New London, Conn.  The contract will require project management, technical analysis, engineering and planning, training, inspection and nuclear services to accomplish intermediate-level nuclear submarine maintenance, modernization, and repairs in support of operational nuclear submarines, including maintaining and modernizing Government-owned facilities and equipment and providing off-hull support of submarine maintenance.  Work will be performed in New London, Conn., and is expected to be completed by March 2015.  Fiscal 2014 operations & maintenance, Navy contract funds in the amount of $25,000,000 will be obligated at time of award and will expire at the end of the current fiscal year.  The Naval Sea Systems Command, Washington, D.C., is the contracting activity.

NRG Energy, Inc.*, Princeton, N.J. (N62583-10-D-0326); Chevron Energy Solutions Co., San Francisco, Calif. (N62583-10-D-0327); Solarstar California XV, LLC, Richmond, Calif. (N62583-10-D-0328); Sun Edison LLC*, Beltsville, Md. (N62583-10-D-0329); and SunDurance Energy, LLC*, Edison, N.J. (N62583-10-D-0330), are each being awarded option year four under a previously awarded indefinite-quantity/indefinite-delivery, firm-fixed-price multiple award contract for the purchase of renewable electrical power through power purchase agreements at Naval and Marine Corps installations in the Naval Facilities Engineering Command (NAVFAC) Southwest area of responsibility (AOR).  The combined total value for all five contractors is $25,000,000.  No task orders are being awarded at this time.  The work to be performed provides the generation of electric power from renewable power systems that are constructed, owned, operated, and maintained by the contractor on Government property located within the installation boundaries.  The government will procure the power through Power Purchase Agreements.  The contract value amount after exercise of this option will be $200,000,000.  Work will be performed at various federal sites within the NAVFAC Southwest AOR including but not limited to California (80 percent) and Arizona (20 percent), and work is expected to be completed February 2015.  No funds will be obligated with this award.  Contract funds will not expire at the end of the current fiscal year.  The Naval Facilities Engineering and Expeditionary Warfare Center, Port Hueneme, Calif., is the contracting activity.

Raytheon Co., McKinney, Texas, is being awarded $14,304,303 for firm-fixed-price delivery order 7008 under a previously awarded Basic Ordering Agreement (N00383-11-G-003D) for various quantities of repair parts to support the H-53and V-22 aircraft.  Work will be performed in Jacksonville, Fla., and work is expected to be completed by Feb. 28, 2016.  Fiscal 2014 Navy working capital funds in the amount of $14,304,303 will be obligated at the time of award and will not expire at the end of the current fiscal year.  The contract was not competitively procured in accordance with FAR 6.302-1.   The NAVSUP Weapon Systems Support, Philadelphia, Pa., is the contracting activity.

Raytheon Co., McKinney, Texas, is being awarded $9,430,218 for ceiling priced delivery order 7009 under a previously awarded basic ordering agreement (N00383-10-G-003D) for the repair of one weapon repairable assembly and four shop replaceable assemblies of the Advanced Targeting Forward Looking Infrared system used in support of the F/A-18 aircraft.  Work will be performed in McKinney, Texas, and work is expected to be completed by February 2016.  Fiscal 2014 Navy working capital funds in amount of $4,620,806 will be obligated at the time of award, and will not expire at the end of the current fiscal year. The contract was not competitively procured in accordance with 10 U.S.C. 2304(c)(1).   The NAVSUP Weapon Systems Support, Philadelphia, Pa., is the contracting activity.

RWT, LLC*, Provo, Utah, is being awarded $7,404,262 for firm-fixed-price task order 00120 under a previously multiple award construction contract (N62478-13-D-4004) to construct a new low pressure air compressor plant at Facility S1161 and install new low pressure air compressors at Building 641, Joint Base Pearl Harbor - Hickam.  Work will be performed in Oahu, Hawaii, and is expected to be completed by July 2015.  Fiscal 2013 military construction, Defense Agencies contract funds in the amount of $7,404,262 are being obligated on this award and will not expire at the end of the current fiscal year.  Seven proposals were received for this task order.  The Naval Facilities Engineering Command, Hawaii, Joint Base Pearl Harbor-Hickam, Hawaii, is the contracting activity.

DEFENSE LOGISTICS AGENCY

Alcon Laboratories, Inc., Fort Worth, Texas, has been awarded a maximum $23,485,218 modification (P00005) exercising the first option year on a one-year base contract (SPM2D0-13-D-0004) with seven one-year option periods for various pharmaceutical products.  This is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract.  Location of performance is Texas with a Feb. 26, 2015 performance completion date.  Using military services are Army, Navy, Air Force and Marine Corps.  Type of appropriation is fiscal 2014 war-stopper funds.  The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.

Hitachi Aloka Medical, Ltd., Wallingford, Conn., has been awarded a maximum $14,420,708 modification (P00001) exercising the fifth option year on a one-year base contract (SPM2D1-09-D-8329) with seven one-year option periods for radiology systems, subsystems, accessories, service, manual and repair parts.  This is a fixed-price with economic-price adjustment, indefinite-delivery/indefinite-quantity contract.  Location of performance is Connecticut with a Feb. 26, 2015 performance completion date.  Using military services are Army, Navy, Air Force, Marine Corps 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.

Omega Medical Imaging., Inc.* Sanford, Fla., has been awarded a maximum $14,014,205 modification (P00101) exercising the fifth option year on a one-year base contract (SPM2D1-09-D-8336) with seven one-year option periods for radiology systems, subsystems and components. This is a fixed-price with economic adjustment contract.  Location of performance is Florida with a Feb. 24, 2015 performance completion date.  Using military services are Army, Navy, Air Force, Marine Corps 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.

FN Manufacturing, Columbia, S.C., has been awarded a maximum $7,620,000 firm-fixed price, indefinite-delivery/indefinite-quantity contract for cartridge receivers for the MK19 grenade launcher.  This contract is a competitive acquisition, and four offers were received.  This is a three-year base contract.  Location of performance is S.C., with a Feb. 24, 2017 performance completion date.  Using military service is Army.  Type of appropriation is fiscal 2014 Army working capital funds.  The contracting activity is the Defense Logistics Agency Land – Warren, Warren, Mich., (SPRDL1-14-D-0022).

M&M Manufacturing, LLC,* Lajas, Puerto Rico., has been awarded a maximum $7,039,102 firm-fixed-price, total set-aside contract for men’s and women’s rip-stop airmen battle uniform coats, trousers, maternity coats and slacks. This is a one-year base contract with four one-year option periods.  Location of performance is Puerto Rico with a Feb. 23, 2015 performance completion date.  Using military service is Air Force.  Type of appropriation is fiscal 2014 through fiscal 2015 defense working capital funds.  The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPE1C1-14-D-1015).

AIR FORCE

Raytheon Company Missile Systems, Tucson Ariz., has been awarded a $20,000,000 indefinite-delivery/indefinite-quantity contract for support of requirements associated with performance of the AMRAAM Aircraft Integration, aircraft operational testing related activities and flight test support.  The primary objective of this effort is to provide the necessary aircraft lab, flight test, flight clearance and simulation support during all aircraft integration efforts.  Additionally, it covers the required effort to maintain or repair assets or support equipment needed for direct support to aircraft integration related efforts.  This effort includes all necessary troubleshooting, failure analysis or other activities required to understand anomalies or failures that occur during aircraft or AMRAAM missile OT related activities as well as provide needed support during these OT related activities.  Work will be performed at Fort Worth, Texas; Eglin Air Force Base, Fla.,; Hill AFB, Utah; Edwards AFB, Calif.;  Nellis AFB, Nev.; White Sands Missile Range, N.M.: China Lake/Point Mugu, Calif.; St. Louis, Mo.; Seattle, Wash.: Baltimore, Md., and Tucson, Ariz., and is expected to be completed by September 2019.  Fiscal 2013 and 2014 research and development funds totaling $3,062,736 will be obligated for five task orders (TO 0001 Simulation Support, TO 0002 Integration Support, TO 0003 Flight Clearances, TO 0004 Tech Support and TO 0005 Management/Financial Support) at time of award.  This award is the result of a sole-source acquisition.  Air Force Life Cycle Management Center/EBA, Eglin AFB, Fla., is the contracting activity (FA8675-14-D-0009).

Alliant TechSystems Operations, LLC Defense Electronic Systems Division, Clearwater, Fla., has been awarded an $8,021,810 modification (P00062) on an existing firm-fixed-price contract (FA8626-06-C-2060) for the procurement of various Common Munition Built-in-Test (BIT) Reprogramming Equipment (CMBRE) system components. The contract modification provides for the exercise of an option for the purchase of additional W-17 cables (200 each), ADU 891 V/1E's (34 each), CMBRE Plus' (24 each), and initial spares kits (ten each) under the basic contract in support of U.S. Air Force, Navy and foreign military sales users.  Work will be performed at Clearwater, Fla., and is expected to be completed by Feb. 23, 2015.  This action relates to unclassified U.S. Air Force and U.S. Navy (20 percent) support as well as unclassified FMS (80 percent) in Australia, Belgium, Canada, Finland, India, Israel, Korea, Netherlands, Oman, Poland, Singapore, and Turkey.  Air Force Life Cycle Management Center/WNKBBA, Robins Air Force Base, Ga., is the contracting activity.

ARMY

ATK Tactical Propulsion & Ordinance, Rocket Center, W. Va., was awarded a $10,700,000 firm-fixed-price contract for 60mm high explosive enhanced fragmentation M1061 cartridges. Fiscal 2014 other procurement funds in the amount of $4,300,014 and Fiscal 2013 other procurement funds in the amount of $6,399,986 were obligated at the time of the award. Estimated completion date is Sept. 30, 2015.  One bid was solicited and one received.  Work will be performed in Rocket Center, W.Va. Army Contracting Command, Picatinny Arsenal, N.J. is the contracting activity (W15QKN-14-C-0035).

Fidelity Technologies Corporation, Reading, Pa., was awarded an $84,400,000 firm-fixed-price contract for the purchase of power distribution illumination system electrical units.  Funding and performance location will be determined with each order.  Estimated completion date is Feb. 23, 2019.  Bids were solicited via the Internet with nine received.  Army Contracting Command, Alexandria, Va. is the contracting activity (W909MY-14-D-0005).

U.S. STATEMENT ON NEW LGBT LAW

FROM:   THE WHITE HOUSE 

Statement by the Press Secretary on Uganda

Instead of standing on the side of freedom, justice, and equal rights for its people, today, regrettably, Ugandan President Museveni took Uganda a step backward by signing into law legislation criminalizing homosexuality.  As President Obama has said, this law is more than an affront and a danger to the gay community in Uganda, it reflects poorly on the country's commitment to protecting the human rights of its people and will undermine public health, including efforts to fight HIV/AIDS.  We will continue to urge the Ugandan government to repeal this abhorrent law and to advocate for the protection of the universal human rights of LGBT persons in Uganda and around the world.

RECENT DEFENSE DEPARTMENT PHOTOS

FROM:  U.S. DEFENSE DEPARTMENT 
Navy Petty Officer 2nd Class Daniel Russell, left, watches as Navy Petty Officer 1st Class Nicholas Casamassa jumps from a C2-A Greyhound aircraft during jump requalification in San Diego, Feb. 11, 2014. Requalification included static line and free fall parachute jumps conducted by Explosive Ordinance Disposal Training and Evaluation Unit 1. U.S. Navy photo by Seaman Eric Coffer.

A U.S. Air Force F-16 Fighting Falcon aircraft takes off on a mission at dawn from Bagram Airfield, Afghanistan, Feb. 11, 2014. U.S. Air Force photo by Senior Master Sgt. Gary J. Rihn.

FACT SHEET ON CREATING GLOBAL COMMUNITY ENGAGEMENT AND RESILIENCE FUND (GCERF)

FROM:  U.S. STATE DEPARTMENT 
Co-Chairs' Fact Sheet: Creating a Global Fund for Community Engagement and Resilience

Fact Sheet
Bureau of Public Affairs, Office of the Spokesperson
Washington, DC
February 21, 2014

Creating a Global Community Engagement and Resilience Fund:

On September 27, 2013, at the Ministerial Plenary meeting of the Global Counterterrorism Forum in New York, the intent to establish a Global Community Engagement and Resilience Fund (GCERF) was announced. GCERF will be the first global effort to harness the skills, capabilities and resources of both the public and private sectors to support local, community-based projects on education, vocational training, civic engagement, media, and women’s advocacy aimed at strengthening resilience against violent extremist agendas, which can create significant barriers to political and economic development. It is anticipated that GCERF will raise more than $200 million over the next ten years for this purpose.

THE CHALLENGE: Terrorism is Global but Starts Local

Terrorism is a transnational and global problem frequently driven by local forces. While military, intelligence and law enforcement operations can help address the threat that terrorists pose, to succeed in the long-term, we must reduce their ability to recruit at the community level by addressing local drivers of radicalization to violence.

THE GAP: Lack of Funding Opportunities for Local Organizations

Many local organizations with innovative project ideas have been unable to get off the ground because of the difficulty of attracting the necessary seed funding. Even where they have grown and had impact, they have faced challenges in securing sufficient funding to sustain their work beyond a single six-month or one-year project cycle. Local entities also often have difficulty navigating the application processes that foundations and large donors have in place. Many donors also prefer recipients from larger organizations, often international NGOs, with proven track records, and lack the broad networks and contacts to find trusted community-based partners in priority locations. As a result, small local organizations, which could have the greatest impact at the community level, struggle to find funding.

THE SOLUTION: A Global Partnership to Bolster Community-Based Efforts

GCERF will be a public-private global partnership offering a unique and practical model to enable the international community to bolster grass-roots efforts where radicalization and recruitment are occurring. It will be an independent institution governed by a mix of government and non-government stakeholders that will fund locally driven projects and thus help close the gap between the needs of local organizations (whether civil society, NGO or local government) and the resources available to support their work. GCERF will include a robust vetting process and monitoring and evaluation mechanism, providing donors with confidence that the projects supported advance the goals that led them to contribute to this fund.

Why is GCERF Different?

What distinguishes GCERF’s objectives from broader development efforts is its emphasis on youth engagement, education, vocational training, and women’s advocacy to promote resilience among at-risk populations. Such initiatives can contribute to economic growth and development in countries where international businesses are active, and provide opportunities to those susceptible to violent extremists’ messages.

Where does the Private Sector Fit In?

Terrorism, and the violent extremism that underpins it, not only destroys innocent lives around the world, it also affects businesses globally. Terrorism disrupts the markets where businesses work, the supply chains that businesses depend on, and the communities that comprise the local labor market. GCERF represents an opportunity for both private sector and government entities to jointly advance the political and economic stability of many of these local, at-risk communities by promoting resilience through positive programs that provide an alternative to violent extremism. GCERF also offers an opportunity to encourage social entrepreneurship and other innovative approaches to local investment.

GCERF Framework

Partners involved in developing GCERF will continue to refine the following principles, scope, and approach over the next several months until GCERF is operational in mid-2014.

• Principles: GCERF would be guided by a series of principles and activities which might include:

Serving as mechanism to raise, disburse, and monitor funds for valuable CVE projects
Ensuring that projects have the requisite political support from national governments as well as contribute to the implementation of the UN Global Counter-Terrorism Strategy
Evaluating proposals through an independent and transparent review process
Complementing and advancing ongoing national, regional, and international efforts
Performing evaluations of projects to ensure funds are being spent effectively and wisely
Encouraging social entrepreneurship and other innovative approaches to investment in grassroots programming
Operating with transparency and accountability
Emphasizing country-led, bottom-up approaches to programming and activities
Supporting projects – particularly at the sub-national level – that offer positive alternative to violent extremism
• Scope: Support from GCERF would complement ongoing efforts of governments and community-based organizations to address violent extremism and build resilience to violent extremist agendas. GCERF will emphasize multi-sectoral participation and results-driven approach to develop solutions to the local drivers of radicalization and recruitment to terrorism. It will allow non-government and municipal government organizations to apply for grants in a range of areas depending upon local requirements/needs. These might include:

Providing life-skills, vocational training, and other alternatives to youth at risk of recruitment and radicalization to extremist violence
Supporting victims and survivors of terrorism, highlighting terrorism’s impact on families, communities, and countries
Providing platforms for community leaders and activities to promote and provide positive alternatives to violent extremism.
Designing education campaigns around messages of pluralism, diversity, and tolerance
Designing and implementing mentorship programs and exchange programs for at-risk youth

• Approach: GCERF will be established as a non-profit foundation in Geneva, Swtizerland. It would be composed of a Secretariat with oversight from a multi-stakeholder governing board that includes a geographically diverse group with representatives of governments, the private sector, foundations, and non-government organizations. The GCERF will engage locally through Country Committee Mechanisms composed of public and private representatives, to help better direct funds to local priorities coordinate transparent proposal reviews.

Support for the GCERF

Meetings on GCERF’s mandate, structure, and legal foundation took place in Lucerne and Geneva, Switzerland in late 2013 and culminated with a final Steering Group meeting in Washington, DC, on February 20, 2014. Carol Bellamy, former UNICEF Executive Director and former Chair of the Global Education Partnership, facilitated the process. In this final meeting, over 35 governments, the United Nations, the World Bank, NGOs, the private sector, and foundation representatives reviewed and refined the mandate and organizational architecture of the GCERF which will be established in Geneva, Switzerland by mid-2014.

Several countries already pledged financial contributions, and a number of others have expressed strong support with contributions expected to follow. Several recipient countries have also indicated an interest in serving as GCERF “pilot” countries whereby local organizations in their countries would benefit from GCERF grants. In addition, several multinational companies and foundations have shown strong interest in contributing expertise and resources to the GCERF.

JUDGE ORDERS ARREST OF 'CASH GRANT INSTITUTE' ROBOCALLER

FROM:  FEDERAL TRADE COMMISSION
FTC Action Leads to Arrest Warrant for ‘Cash Grant Institute’ Robocaller Who Ignored Court Order to Pay More Than $20 Million in Penalties

In a case brought by the Federal Trade Commission, a federal judge ordered the arrest and incarceration of Paul Navestad, known legally as Paul Richard Jones, for violating a court order requiring him to pay more than $20 million for his role in a phony government grant scheme.

The court had ordered Navestad to pay $20 million in civil penalties – the largest civil penalty against a defendant in an FTC case – and give up more than $1.1 million in ill-gotten gains, for making millions of robocalls falsely claiming consumers could get grants from federal, state, and local governments, private foundations, and individuals. At the FTC’s request, the court subsequently found him in contempt for ignoring the order.

Navestad is believed to be residing overseas. The court has ordered his arrest upon his return to the United States and his incarceration until he pays the money due.

The U.S. District Court for the Western District of New York issued the arrest warrant on December 2, 2013.

SPA DOCTOR PLEADS GUILTY IN MEDICARE FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, February 21, 2014
New Jersey Doctor Who Provided Spa Services Pleads Guilty in Medicare Fraud Scheme

Dr. Chang Ho Lee, 68, of Palisades Park, N.J., pleaded guilty today to health care fraud and agreed to forfeit more than $3.4 million in fraud proceeds.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

According to court documents, Lee, who is a medical doctor, and two others recruited patients by offering free lunches and recreational classes and provided them with spa services, such as massages and facials, then falsely billed Medicare for more than $13 million using those patients’ Medicare numbers.   Lee and the others billed Medicare for physical therapy, lesion removals and other services that were neither medically necessary nor provided.   The scheme took place at three clinics: URI Medical Center and Sarang Medical PC in Flushing, N.Y., and 999 Medical Clinic in Brooklyn, N.Y.   Lee received more than $3.4 million through the submission of the fraudulent claims.

Lee is scheduled to be sentenced by United States District Judge Raymond J. Dearie of the Eastern District of New York on June 13, 2014.   At sentencing, he faces a maximum sentence of 10 years in prison and approximately $3.4 million in mandatory restitution.

The case was investigated by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.   The case is being prosecuted by Senior Trial Attorney Nicholas Acker and Trial Attorney Bryan D. Fields from the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

SEC CHARGES INVESTMENT BANKER WITH INSIDER TRADING FOR ALMOST $1 MILLION IN PROFITS

FROM:  SECURITIES AND EXCHANGE COMMISSION 
The Securities and Exchange Commission today announced an emergency action against a New York City-based investment banker charged with insider trading for nearly $1 million in illicit profits.

The SEC alleges that while working on Wall Street, Frank “Perk” Hixon Jr. regularly logged into the brokerage account of Destiny “Nicole” Robinson, the mother of his young child.  He executed trades based on confidential information he obtained on the job, sometimes within minutes of learning it.  Illegal trades also were made in his father’s brokerage account.  When his firm confronted him about the trading conducted in these accounts, Hixon Jr. pretended not to recognize the names of his father or his child’s mother.  However, text messages between Hixon Jr. and Robinson suggest he was generating the illegal proceeds in lieu of formal child support payments.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Hixon Jr.

“Hixon Jr. violated the trust of his employer and clients by abusing his special access to nonpublic market-moving information,” said David Woodcock, director of the SEC’s Fort Worth Regional Office.  “Hixon Jr. went to great lengths to hide his wrongdoing and even denied knowing his father or the mother of his child.”

A federal judge has granted the SEC’s request and issued an emergency order freezing Robinson’s brokerage account, which the SEC alleges contains the majority of proceeds from Hixon Jr.’s illegal trading with a balance of approximately $1.2 million.

According to the SEC’s complaint unsealed today in federal court in Austin, Texas, Hixon Jr. illegally tipped or traded in the securities of three public companies.  He traded ahead of several major announcements by his client Westway Group in 2011 and 2012.  He traded based on nonpublic information he learned about potential client Titanium Metals Corporation ahead of its merger announcement in November 2012.  And Hixon even illegally traded in the securities of his own firm Evercore Partners prior to its announcement of record earnings in January 2013.  Hixon Jr. generated illegal insider trading profits of at least $950,000.

According to the SEC’s complaint, when Hixon Jr.’s employer asked him in 2013 whether he knew anything about suspicious trading in accounts belonging to Destiny Robinson and his father Frank P. Hixon Sr., who lives in suburban Atlanta, Hixon Jr. denied recognizing either name.  When later confronted with information that he did in fact know these individuals, Hixon Jr. continued his false claims, saying he didn’t know Robinson as “Destiny” and asserting in a sworn declaration that when approached he didn’t recognize the name of the city where his father lived for more than 25 years.  Hixon Jr. was subsequently terminated by his employer.

The SEC’s complaint alleges that Hixon Jr. violated the antifraud provisions of the Securities Exchange Act of 1934.  In addition to the asset freeze, the complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties.  Hixon Sr. and Robinson have been named as relief defendants for the purposes of recovering the illegal trading profits held in their accounts.

The SEC’s investigation has been conducted by Tamara McCreary, Ty Martinez, and Jonathan Scott of the Fort Worth Regional Office.  The SEC's litigation will be led by Timothy Evans and David Reece.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, Federal Bureau of Investigation, and Financial Industry Regulatory Authority.

DOJ STATEMENT ON JOAQUIN GUZMAN LOERA CAPTURE

FROM:  U.S. JUSTICE DEPARTMENT 
Saturday, February 22, 2014
Statement on the Apprehension of Joaquin "Chapo" Guzman Loera

Today Mexican authorities announced the capture of Joaquin "Chapo" Guzman Loera, the alleged leader of the Sinaloa Cartel. The Sinaloa Cartel is designated a Significant Foreign Narcotics Trafficker by the U.S. Government.

Attorney General Holder stated:  "Today's apprehension of Joaquin "Chapo" Guzman Loera by Mexican authorities is a landmark achievement, and a victory for the citizens of both Mexico and the United States.  Guzman was one of the world's most wanted men and the alleged head of a drug-running empire that spans continents.  The criminal activity Guzman allegedly directed contributed to the death and destruction of millions of lives across the globe through drug addiction, violence, and corruption. We salute the Government of Mexico, and the professionalism and courage of the Mexican authorities, for this arrest.  We are pleased that we were able to work effectively with Mexico through the cooperative relationship that U.S. law enforcement agencies have with their Mexican counterparts.  We look forward to ongoing cooperation, and future successes."

Secretary of Homeland Security Johnson stated: "The operation led by the Mexican government overnight to capture Joaquin "Chapo" Guzman Loera is a significant victory and milestone in our common interest of combating drug trafficking, violence and illicit activity along our shared border. We congratulate our Mexican partners in this achievement and we will continue to work collaboratively with them to ensure a border region that is safe and secure, for the communities and citizens of both our nations."

STATEMENT ON ATTACKS BY BOKO HARAM IN NORTHERN NIGERIA

FROM:  U.S. STATE DEPARTMENT 

Recent Attacks by Boko Haram

Press Statement

John Kerry
Secretary of State

Washington, DC

February 23, 2014

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Unspeakable violence and acts of terror like the ones committed by Boko Haram last week in northern Nigeria are horrific, wrong, and have no place in our world. Last Saturday, a brazen attack on the village of Izge, Nigeria, near the border with Cameroon took the lives of more than one hundred innocent people. Not less than a week had passed before Boko mounted another attack in Bama, setting 1,500 buildings ablaze, killing more than 115 people and leaving many others injured. We support Nigerian authorities' efforts to investigate these cowardly acts and to bring the perpetrators to justice.The people of northern Nigeria deserve to live free from violence and from terror. That’s why the United States is providing counterterrorism assistance to help Nigerian authorities develop a comprehensive approach to combat the threat posed by Boko Haram while protecting civilians and ensuring respect for human rights. We stand with the people of Northern Nigeria in their struggle against violent extremism, and remain a committed partner of the Government of Nigeria as it works to root out Boko Haram and associated groups.