Thursday, April 19, 2012
FORMER EXECUTIVE PLEADS GUILTY TO BID RIGGING MUNICIPAL TAX LIEN AUCTIONS IN NEW JERSEY
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, April 17, 2012
Former Executive of New York-Based Tax Liens Company Pleads Guilty to Bid Rigging at Municipal Tax Lien Auctions in New Jersey
WASHINGTON – A former executive of a New York-based tax liens company who supervised the purchasing of municipal tax liens at auctions in New Jersey pleaded guilty today for his role in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities throughout the state, the Department of Justice announced.
A felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, N.J., against former Vice President Stephen E. Hruby, of Hainesport, N.J. Under the plea agreement, which is subject to court approval, Hruby has agreed to cooperate with the department’s ongoing investigation.
According to the felony charge, from at least as early as December 2002 until approximately February 2009, Hruby participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to, and directing others to, allocate among certain bidders which liens each would bid on. Hruby, and those under his supervision, proceeded to submit bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.
“Today’s guilty plea demonstrates that the Antitrust Division will not tolerate illegal conduct that harms distressed homeowners,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to prosecute the perpetrators of anticompetitive bid rigging schemes at municipal tax lien auctions in New Jersey and elsewhere.”
The department said that the primary purpose of the conspiracy was to suppress and restrain competition, in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent homeowners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.
According to the court documents, Hruby conspired with others not to bid against one another at municipal tax lien auctions in New Jersey. Because the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum.
Today’s plea is the seventh guilty plea resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. On Aug. 24, 2011, Isadore H. May, Richard J. Pisciotta Jr. and William A. Collins each pleaded guilty to one count of bid rigging in connection with their participation in a conspiracy to allocate liens at New Jersey auctions. On Feb. 23, 2012, Robert W. Stein and David M. Farber each pleaded guilty to one count of bid rigging. On March 27, 2012, Robert E. Rothman pleaded guilty to one count of bid rigging in connection with his participation in this conspiracy.
PHARMA COMPANY SENTENCED TO PAY $322 MILLION FOR UNLAWFUL PROMOTION OF VIOX
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, April 19, 2012
U.S. Pharmaceutical Company Merck Sharp & Dohme Sentenced in Connection with Unlawful Promotion of Vioxx. Judge Imposes Nearly $322 Million Fine For Illegal Marketing
American pharmaceutical company Merck, Sharp & Dohme was sentenced by U.S. District Court Judge Patti B. Saris in Boston to pay a criminal fine in the amount of $321,636,000 in connection with its guilty plea related to its promotion and marketing of the painkiller Vioxx (rofecoxib), the Justice Department announced today. In December 2011, Merck pleaded guilty to violating the Food, Drug and Cosmetic Act (FDCA) for introducing a misbranded drug, Vioxx, into interstate commerce.
Merck’s guilty plea was part of a global resolution involving its illegal promotional activity. In November 2011, Merck entered into a civil settlement agreement under which it will pay $628,364,000 to resolve additional allegations regarding off-label marketing of Vioxx and false statements about the drug’s cardiovascular safety. Of the total civil settlement, $426,389,000 will be recovered by the United States, and the remaining share of $201,975,000 will be distributed to the participating Medicaid states. The settlement and today’s sentencing conclude a long-running investigation of Merck’s promotion of Vioxx, which was withdrawn from the marketplace in September 2004.
Merck’s criminal plea related to the misbranding of Vioxx by promoting the drug for treating rheumatoid arthritis, before that use was approved by the Food and Drug Administration (FDA). Under the provisions of the FDCA, a company is required to specify the intended uses of a product in its new drug application to FDA. Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – any use not specified in an application and approved by FDA – unless the company applies to the FDA for approval of the additional use. The FDA approved Vioxx for three indications in May 1999, but did not approve its use for rheumatoid arthritis until April 2002. In the interim, for nearly three years, Merck promoted Vioxx for rheumatoid arthritis, conduct for which it was admonished in an FDA warning letter issued in September 2001.
At today’s sentencing, Judge Saris said in substance that off label promotion has been a big problem, she has seen a barrage of off-label marketing cases, and that she hoped that the size of today’s settlement and the fact that the government continues to press these cases will send a signal to the industry that this is not acceptable conduct.
The parallel civil settlement covered a broader range of allegedly illegal conduct by Merck. The settlement resolved allegations that Merck representatives made inaccurate, unsupported, or misleading statements about Vioxx’s cardiovascular safety in order to increase sales of the drug, resulting in payments by the federal government. It also resolved allegations that Merck made false statements to state Medicaid agencies about the cardiovascular safety of Vioxx, and that those agencies relied on Merck’s false claims in making payment decisions about the drug. Finally, like the criminal plea, the civil settlement also recovered damages for allegedly false claims caused by Merck’s unlawful promotion of Vioxx for rheumatoid arthritis.
"The United States will not tolerate unlawful conduct by pharmaceutical companies," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department's Civil Division. "As the court's sentence makes clear, those who put profits before patient safety by promoting their products for unapproved uses will be prosecuted and held accountable."
“We are pleased to see this case brought to a conclusion with the recovery of over three hundred million dollars in criminal fines, and a total of almost a billion dollars in combined civil and criminal penalties. The severity of these criminal and civil sanctions should serve as a reminder of this Office, and this department’s unwavering commitment to holding drug companies fully accountable for failures to comply with their public safety and marketing obligations, and to recovering taxpayer funds that have gone towards the purchase of illegally marketed products,” announced Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts. “Any marketing activity that ignores the importance of FDA approval, or that makes unsupported safety claims about a drug is unacceptable, and will be pursued vigorously in both the criminal and civil arena.”
As part of the settlement, Merck also agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and
Human Services (HHS-OIG), which will strengthen the system of reviews and oversight procedures imposed on the company. Although Vioxx is no longer on the market, this ongoing monitoring of Merck’s conduct is aimed to deter and detect similar conduct in the future.
“If all pharmaceutical manufacturers complied with the law, there would be no need for law enforcement actions,” said Susan Waddell, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “But until they stop abusing the health care system and putting profits ahead of patient safety, OIG will continue to vigorously pursue corporations that flout the law.”
“Today’s announcement demonstrates the commitment of FDA's Office of Criminal Investigations to pursue investigations of companies that disregard their regulatory obligations and place profits over the public’s health,” said Mark Dragonetti, Special Agent in Charge for the New York Field Office. “We commend the hard work of the U.S. Attorney's Office and our law enforcement counterparts in bringing about this result.”
“In 2004, the FBI began participating in a seven year investigation that led to Merck's decision to plead guilty to a criminal violation of federal law related to its promotion and marketing of Vioxx and to pay nearly a billion dollars in a criminal fine and civil damages,” said Richard DesLauriers, Special Agent in Charge of the FBI in Boston. “Merck now knows that no corporation is immune from being held accountable for criminal and civil violations of law and also knows why the FBI, its federal law enforcement partners, and the U.S. Attorney's Office have earned a national reputation for leading the government’s effort to detect, deter and prevent health care fraud.”
This case was handled by the Justice Department’s Civil Division and the U.S. Attorney’s Office for the District of Massachusetts. The investigation was conducted by Office of Inspector General of the Deapartment of Health and Human Services, the FBI, the Office of Criminal Investigations for the FDA, the Veterans Administration’s Office of Criminal Investigations, the Office of the Inspector General for the Office of Personnel Management, the National Association of Medicaid Fraud Control Units, and the offices of various state attorneys general.
SECRETARY OF DEFENSE PANETTA SPEAKS BEFORE HOUSE ARMED SERVICES COMMITTEE
Statement on Syria before the House Armed Services Committee
As Delivered by Secretary of Defense Leon E. Panetta, Washington D.C., Thursday, April 19, 2012
Chairman McKeon and Representative Smith, thank you for the opportunity to discuss the tense and fluid situation in Syria.
Widespread demands for political change in Syria started more than a year ago. Rather than meeting these legitimate demands, the regime of Bashar al-Assad turned instead to violence against its own people. That violence has been brutal and devastating. It has put the Syrian people in a desperate and difficult situation. It has outraged the conscience of all good people. And it has threatened stability in a very important part of the world.
The United States has made clear that the Assad regime has lost its legitimacy and that this crisis has no effective solution without Assad's departure. As the President has stated, Assad must go.
Recent days are testing whether the Assad regime will live up to all of its responsibilities to the Syrian people and to the international community. Restoring calm to cities and towns across Syria is just one test for Assad in the days ahead. Assad is responsible for fully abiding by the transition plan outlined by Joint Special Envoy Kofi Annan. He also faces deep skepticism about his motives, a skepticism based on a long train of Assad's deceitful actions to date, including broken promises to his own people and to the international community.
The United States is committed to holding the Syrian regime to these obligations. We are leading international efforts to help stop the violence and support a peaceful political transition in Syria.
We know achieving that end is a tough task. From every angle the situation in Syria is enormously complex. There is no silver bullet. At the same time, the situation is of grave consequence to the Syrian people. There are many others who are affected by what happens in Syria, including Syria's neighbors – Turkey, Lebanon, Iraq, Israel, and Jordan – and all nations with a vital interest in the Middle East. Meanwhile, Iran is Syria's only ally in the region. No other country stands to lose more than Iran from the eventual fall of the Assad regime, which is why Iran is supporting the regime with material, financial and technical assistance.
We also know that the complex problems in Syria cannot all be solved through the unilateral actions of the United States or any other country. They demand a coordinated international response that is uniquely tailored to the situation.
There are, however, certain principles that have guided the Administration's response to unrest across the Middle East. These basic principles have shaped our responses in Tunisia, Egypt, Libya, and now Syria: first, we oppose the use of violence and repression by regimes against their own people; second, we support the exercise of universal human rights; and third, we support political and economic reforms that can meet the legitimate aspirations of ordinary people throughout the region.
Our policy toward Syria is clear: we support a political and democratic transition that fulfills the Syrian people's aspirations. To support that objective, the United States is leading international efforts along five tracks:
First, we are supporting efforts to maintain international pressure and advance transition in Syria. We join with our partners in the United Nations Security Council, including Russia and China, in calling for the urgent, comprehensive, and immediate implementation of all aspects of the Annan plan.
Second, we are further isolating the Assad regime. We are encouraging other countries to join the United States, the European Union, and the Arab League in imposing strong sanctions against it. These sanctions are putting Assad under greater pressure than ever before;
Third, we are strengthening and unifying the non-violent political opposition in Syria. The United States is in the process of providing direct non-lethal support, including communications and medical equipment, to the civilian-led opposition. We are taking these actions in concert with similar steps taken by the Friends of Syria and other international partners to assist the opposition;
Fourth, we are providing emergency humanitarian assistance to the Syrian people, and we are working to broaden our efforts at relief, with a total commitment so far of $25 million; and
Fifth, we are reviewing and planning for a range of additional measures that may be necessary to protect the Syrian people.
By acting along these lines, we are increasing pressure on the Assad regime every day. Make no mistake – one way or another, this regime ultimately will meet its end.
There are legitimate questions about what steps are necessary to achieve this end, with some arguing for an approach similar to the one we took in Libya.
The fact is that our recent experience in Libya is helping to inform the approach of the United States to Syria:
First, our efforts are strengthened by multi-lateral, international consensus;
Second, we should maintain clear regional support from the Arab world;
Third, we should offer substantial U.S. contributions where we can bring unique resources to bear;
Fourth, we should have a clear legal basis for our approach;
Fifth, and finally, our approach must keep all options on the table, while recognizing the limitations of military force.
But the situation in Syria is different from the one in Libya in important ways:
In Libya, there was widespread international support in the Arab world and elsewhere, and clear Security Council authorization, for military intervention. No such consensus currently exists regarding Syria;
The opposition is not as well organized and does not control territory;
We must also be mindful, as Secretary Clinton has noted, of the possibility that outside military intervention will make a volatile situation even worse, and place even more innocent civilians at risk.
The United States has made clear that we are on the side of the Syrian people. They must know that the international community has not underestimated either their suffering or their impatience. The Defense Department has reviewed and is continuing to plan for a variety of possible scenarios should the President determine that further steps are necessary. In the meantime, our only clear path is to keep moving diplomatically in a resolute and deliberate manner with the international community to find a way to return Syria to the Syrian people.
Thank you.
U.S.-AZERBAIJAN ECONOMIC PARTNERSHIP
FROM: U.S. STATE DEPARTMENT
U.S.-Azerbaijan Economic Partnership Commission
Media Note Office of the Spokesperson Washington, DC
April 19, 2012
The U.S. Department of State welcomed the Minister of Finance Samir Sharifov of Azerbaijan and his delegation for the third meeting of the U.S.-Azerbaijan Economic Partnership Commission (EPC), which met yesterday in Washington. Participating U.S. Government agencies included the Departments of State, Energy, Justice, and Treasury; Office of the United States Trade Representative; United States Agency for International Development (USAID); Export-Import Bank of the United States; and United States Trade and Development Agency.
This strategic dialogue, co-chaired by Under Secretary of State for Economic Growth, Energy, and the Environment Robert D. Hormats and Minister Sharifov, explored opportunities for further economic and commercial cooperation between the United States and Azerbaijan. This high-level meeting included sessions led by Assistant Secretary of State for Economic and Business Affairs Jose W. Fernandez, USAID Assistant Administrator for Europe and Eurasia Paige Alexander, Assistant Secretary of State for South and Central Asian Affairs Robert Blake, Assistant Secretary of Energy for Electricity Delivery and Energy Reliability Patricia A. Hoffman, and Special Envoy for Eurasian Energy Ambassador Richard Morningstar. The delegations discussed economic diversification, financial services, energy, trade and investment, and new, cooperative initiatives. Participants also discussed expanding the agreement under which the Government of Azerbaijan co-finances development projects implemented by USAID in Azerbaijan.
U.S. GOVERNMENT OFFICIALS URGE CONGRESS TO REMOVE SOME SATELLITE TECH FROM EXPORT CONTROLS
FROM: AMERICAN FORCES PRESS SERVICE
Report Urges Lifting Some Satellite Export Controls
By Cheryl Pellerin
American Forces Press Service
American Forces Press Service
WASHINGTON, April 18, 2012 - Officials from the Defense and State departments released a report today that urges Congress to move communications and some remote-sensing satellites off the tightly controlled U.S. Munitions List and into the commercial enterprise.
The report, conducted in accordance with section 1248 of the National Defense Authorization Act for fiscal 2010, was prepared by technical and space policy experts from DOD and State, with support from the intelligence community and NASA.
In a briefing today from the National Space Symposium in Colorado Springs, Colo., Gregory L. Schulte, deputy assistant secretary defense for space policy, said the report "reflects a very thorough review ... that looked item by item, technology by technology, to assess the risk in moving specific items from the U.S. Munitions List to the Commerce Control List."
Schulte was joined by Lou Ann McFadden, chief of the Defense Technology Security Administration's strategic issues division.
The report summarizes a risk assessment of U.S. space export control policy, concluding that most commercial communications and remote sensing satellites and their components can be moved from the USML to the CCL without harming national security. The items include communications satellites that contain no classified components, and remote-sensing satellites with performance parameters below certain thresholds.
The satellites and their associated systems, subsystems, parts and components make up what Schulte described as "hundreds of thousands of items" that already are being sold commercially by companies around the world.
U.S. companies couldn't sell the same satellites and components because of restrictions imposed by the items' listing on the USML or control under the International Traffic in Arms Regulations, called ITAR, administered by the State Department.
"We believe that, if Congress is willing, the approach laid out in this report does two things," Schulte said.
"It can strengthen our national security by energizing the industrial base that is so important to us," he added, "and by allowing our industry to compete on the global market for satellites."
In a March 8 hearing before the House Armed Services Committee, Schulte called the approach one of "higher fences around fewer items," and noted that no such changes could be made without legislation.
According to the report, in the interests of national and economic security, the president, and not Congress, should have the authority to determine the export-control status of satellites and space-related items.
As part of that recommendation, the report said DOD should have the authority to apply appropriate monitoring and other export-control measures to individual cases to most effectively reduce national security risks.
A fact sheet released by the White House today noted that the recommended items are controlled on the [USML] by statute, based on the requirements of the National Defense Authorization Act for fiscal 1999.
This makes them "the sole USML items for which the president does not have the legal authority to appropriately adjust the controls to ensure they meet current and anticipated U.S. national security requirements," the fact sheet said, "and to ensure they do not unintentionally harm the U.S. satellite industry and its supplier base."
Congress and the Obama administration "recognize the importance of this critical sector to the nation's national and economic security," the fact sheet said.
"This in-depth report shows that the United States can safely modify the export controls placed on satellites and related component technology that are widely available, while maintaining firm control on systems and technologies deemed truly critical to national security," Jim Miller, acting undersecretary of defense for policy, said today in a statement.
The report confirmed the need for some space-related items to remain on the list -- those that contain critical components, technologies and implicit expertise that give the nation a military or intelligence advantage in space.
The items include satellites that perform purely military or intelligence missions, high-performance remote-sensing satellites, services in support of foreign launch operations for USML- and CCL-designated satellites, and others.
"Implementing the recommendations in this report will facilitate cooperation with U.S. allies and export-control-regime partners," Miller said.
USS LYNDON B. JOHNSON WILL BE THE NAVY'S NEXT DESTROYER
FROM: U.S. NAVY
ATTORNEY GENERAL HOLDER'S SPEECH AT POLICE CHIEF MICHAEL MALONEY HAMPTON'S MEMORIAL SERVICE
FROM: U.S. DEPARTMENT OF JUSTICE
Attorney General Eric Holder Speaks at the Memorial Service for Police Chief Michael Maloney Hampton, N.H. ~ Thursday, April 19, 2012
I am honored to be with you today. And I am grateful for the opportunity to pay tribute – on behalf of our nation’s Department of Justice, and America’s law enforcement community – to the enduring contributions, and extraordinary courage, that defined and distinguished the life of Chief Michael Maloney.
I want to thank the entire Maloney family, especially Chief Maloney’s wife, Peg – and his children, parents, and stepparents – for affording me the privilege of standing with you, and with the members of the Greenland Police Department – including Chief Tara Laurent, whose steady leadership has been a comfort to us all during this difficult time. It’s also a special honor to salute four outstanding members of the New Hampshire Attorney General’s Drug Task Force, whose actions in the face of grave danger – and whose ongoing recoveries – are an inspiration to us all. Detectives Turner, Kulberg, Kukesh, and Murphy, I know how hard each of you has worked to be here today – and we’re so very grateful that you’re with us. Please know that you, and your families, will remain in our thoughts and prayers as you continue to heal – and to mourn this heartbreaking, and tragic, loss. You four are true heroes.
Here at Michael Maloney’s beloved alma mater, on the field where he once played football, and among his closest colleagues and oldest friends – we bid farewell to a proud native son, a dedicated public servant, a loving husband, father, and grandfather – and also a hero in every sense of the word.
From the time he walked this gridiron, Michael Maloney was a leader. Shortly after he graduated from high school, he discovered a passion for public service that came to shape his life – and improved so many others. Although he could have chosen an easier path – or a safer one – he wanted to use his skills and many talents to help people and communities in need. He wanted to make a difference. And, by any measure, he succeeded.
There’s no question that the pain we feel – and the shock and sorrow that have gripped this community – are all the more acute because this was supposed to be a time of celebration. After a distinguished law enforcement career spanning more than a quarter century – including several years as Chief of the North Hampton Police Department and a dozen as Greenland’s Police Chief – Michael Maloney was just days away from a well-deserved retirement. He was looking forward to new opportunities, and was eager to spend more time with his beloved family – especially its newest addition, his grandson “MJ.”
But just as surely as Chief Maloney was devoted to his family, he also was deeply committed to the citizens he served – and deeply proud to be a part of this community.
Over the past week, Chief Maloney has been hailed, throughout our great country, as a “true patriot,” a “cop’s cop,” and a “working police chief” – who would never ask anything of his fellow officers that he wouldn’t do himself. To those who served with Chief Maloney – and for his law enforcement colleagues nationwide – he is a role model. And his fearlessness, selflessness, and willingness to put his own life on the line to protect those around him will never be forgotten.
Throughout his career, these qualities were evident – but perhaps never more so than on his last day of service.
That evening, not far from here – in the jurisdiction Chief Maloney had sworn to protect – he and his colleagues were preparing to confront a dangerous criminal with a history of violence. Despite the risks, Chief Maloney chose not only to be involved – but to help lead this operation. Tragically, when he and his team moved in, these five brave officers were met with gunfire.
But even when his comrades were wounded, Chief Maloney did not fall back. He stood his ground and stayed with his team – working to help the others to safety.
This act of valor – this ultimate sacrifice, made so that others might survive – exemplified the life that Michael Maloney led, and the career of service that he built. Today, let us remember not only how he died but, more importantly, how he lived.
Although we can never hope to repay the debt that we owe him – or to understand his senseless murder – let it never be said that he died in vain.
In the efforts of every law enforcement officer in – and far beyond – this crowd, Chief Maloney’s work will go on. In the thanks of a grateful nation – and the embrace of the community he gave his life to protect – his legacy will live on. And in each one of us – and all those who have been inspired by his example – his work to make a difference, and to help those in need, will continue.
So this afternoon, and in the days ahead, let us honor his memory – and profound sacrifice – with our own deeds. Let us rally around the family he loved so dearly – as well as the department, and community, he served so well. And let us take comfort in the fact that – although Michael Maloney left this world far too suddenly and far too soon – there can never be any doubt that – through all he contributed, achieved, and inspired in his life – he left it a better place.
GSA'S ACTING HEAD ADMINISTRATOR ADDRESSES "GSA'S CULTURE OF WASTEFUL SPENDING"
FROM: GENERAL SERVICES ADMINISTRATION
Hearing on “Addressing GSA's Culture of Wasteful Spending”
DANIEL TANGHERLINI
ACTING ADMINISTRATOR
U.S. GENERAL SERVICES ADMINISTRATION
BEFORE THE COMMITTEE ON
OVERSIGHT AND GOVERNMENT REFORM
"ADDRESSING GSA'S CULTURE OF WASTEFUL SPENDING"
April 16, 2012
Good afternoon Chairman Issa, Ranking Member Cummings, and Members of the Committee. My name is Daniel Tangherlini, and I am the Acting Administrator of the U.S. General Services Administration (GSA).
I appreciate the opportunity to come before the committee today. First and foremost, I want to state my agreement with the President that the waste and abuse outlined in the Inspector General’s (IG) report is an outrage and completely antithetical to the goals and directives of this Administration. We have taken strong action against those officials who are responsible and will continue to do so where appropriate. We are taking steps to improve internal controls and oversight to ensure this never happens again. I look forward to working in partnership with this Committee to ensure there is full accountability for these activities so that we can begin to restore the trust of the American people.
At the same time I am committed to renewing GSA’s focus on its core mission: saving taxpayers’ money by efficiently procuring supplies, services, and real estate, and effectively disposing of unneeded government property. There is a powerful value proposition to a single agency dedicated to this work, especially in these fiscal times, and we need to ensure we get back to basics and conduct this work better than ever.
Promoting Efficiency and Reducing Costs –
The shocking activities and violations outlined in the IG report run counter to every goal of this Administration. The Administration makes cutting costs and improving the efficiency of the Federal government a top priority. On June 13, 2011, the President issued Executive Order (E.O.) 13576, “Delivering an Efficient, Effective, and Accountable Government.” This EO emphasized the importance of eliminating waste and improving efficiency, establishing the Government Accountability and Transparency Board to enhance transparency of Federal spending and advance efforts to detect and remediate fraud, waste, and abuse.
The President further established the goals of this Administration in E.O. 13589, “Promoting Efficient Spending,” which set clear reduction targets for travel, employee information technology devices, printing, executive fleets, promotional items, and other areas. The President’s FY 2013 budget request for GSA would achieve $49 million in savings under this EO, including $9.7 million in travel.
Holding Officials Responsible –
It is important that those responsible for the abuses outlined in the IG’s report be held accountable. We are taking aggressive action to address this issue and to ensure that such egregious actions will never occur again. We have taken a series of personnel actions, including the removal of two senior political appointees. We have also placed ten career employees on administrative leave, including five senior officials.
I intend to uphold the highest ethical standards at this agency and take any action that is necessary and appropriate. If we find any irregularities, I will immediately engage the Inspector General. As I indicated in my joint letter with GSA’s Inspector General, I intend to set a standard that complacency will not be tolerated, and waste, fraud, or abuse must be reported.
I believe this commitment is critical, not only because we owe it to the American taxpayers, but also because we owe it to the many GSA employees who conform to the highest ethical standards and deserve to be proud of the agency for which they work.
Taking Action –
I have taken a number of steps since I began my tenure on April 3, 2012 to ensure this never happens again. GSA has consolidated conference oversight in the new Office of
Administrative Services, which is now responsible for:
Oversight of contracting for conference space, related activities, and amenities;
Review and approval of proposed conferences for relation to GSA mission;
Review and approval of any awards ceremonies where food is provided by the Federal government;
Review and approval of conference budgets as well as changes to those budgets;
Oversight and coordination with GSA conference/event planners and contracting officers on conference planning;
Review of travel and accommodations related to conference planning and execution;
Handling of procurement for all internal GSA conferences; and
Development of mandatory annual training for all employees regarding conference planning and attendance.
Additionally, we have cancelled the 2012 Western Regions Conference as well as a number of other conferences that only or primarily involved internal staff. To date, I have cancelled 35 conferences,1 saving taxpayers $995,686. As we put in place greater controls and oversight, we are reviewing each event to make sure that any travel is justified by a mission requirement.
We have also begun review of employee relocations at government expense, and will require all future relocations to be approved centrally by both the Chief People Officer and the Chief Financial Officer.
To strengthen internal controls, we are bringing in all Public Buildings Service regional budgets under the direct authority of GSA’s Chief Financial Officer. The autonomy of regional budget allocations is, in part, what led to this gross misuse of taxpayer funds on both the regional conference and the employee rewards program known as “Hats Off.” The additional approvals and centralized oversight are intended to mitigate the risk of these problems.
In response to concerns over spending on employee rewards programs, I have eliminated the “Hats Off” store that was operating in the Pacific Rim Region, as well as all similar GSA programs.
I am moving aggressively to recapture wasted taxpayer funds. As a first step, on April 13th, I directed that letters be sent to Bob Peck, Jeff Neely, and Robert Shepard demanding reimbursement for private, in-room receptions at the Western Regions Conference. I will pursue other fund recovery opportunities.
I am engaged in a top to bottom review of this agency. I will continue to pursue every initiative necessary to ensure this never happens again and to restore the trust of American taxpayers.
Conclusion –
The unacceptable and inappropriate activities at the Western Regions Conference stand in direct contradiction to the express goals of this agency and the Administration, and I am committed to ensuring that we take whatever steps are necessary to hold those responsible accountable and to make sure that this never happens again. At the same time, I believe that the need for a high quality GSA is more acute today than in any time in its history. We need to refocus this agency and get back to the basics: streamlining the administrative work of the Federal government to save taxpayers money.
I look forward to working with this Committee moving forward and I welcome the opportunity to answer any questions. Thank you.
_______________________________________
FUNDING OF INTERNATIONAL PROGRAMS ON INTELLECTUAL PROPERTY TRAINING
FROM: U.S. STATE DEPARTMENT
Intellectual Property Training Programs Funded
Media Note Office of the Spokesperson Washington, DC
April 19, 2012
As part of U.S. efforts to combat transnational crime and promote the protection of intellectual property rights (IPR) worldwide, the U.S. Department of State has approved twelve projects totaling $2.6 million in Fiscal Year 2011 anticrime funds. These projects will enable U.S. law enforcement agencies and diplomatic missions to collaborate on the delivery of IPR protection criminal enforcement training and technical assistance programs for foreign law enforcement partners.
Training and technical assistance in the investigation and prosecution of IPR crime will be provided to foreign law enforcement partners in nations across the Pacific Rim, Latin America, and sub-Saharan Africa. The Bureau of International Narcotics and Law Enforcement Affairs and the Bureau of Economic and Business Affairs selected the projects after considering input from the U.S. Intellectual Property Enforcement Coordinator, other federal agencies, our overseas missions, Congress, and industry representatives.
The twelve projects are:
1) Africa - Western Regional Workshops $182,000
Training for West African customs authorities on methods to identify and seize infringing goods.
2) Africa - Sub-Saharan Regional Workshops $525,920
Workshops for Sub-Saharan African law enforcement partners focusing on border enforcement, following the money trail, organized crime involvement in trafficking of counterfeit medicines, and gathering electronic evidence.
3) Africa - East Central Regional Workshops $255,936
Regional training for East African law enforcement authorities in combating counterfeit medicines which threaten human health and safety.
4) ASEAN $242,329
A series of workshops for Association of Southeast Asian Nation (ASEAN) member state judges and prosecutors focused on judicial and prosecutorial management of IPR cases, especially those that involve transnational organized crime.
5) Brazil $150,644
Training seminars through the U.S. Embassy partnership with the Brazilian Government focusing on “notorious markets” identified in the United States Trade Representative (USTR) Special 301 Out-Of-Cycle reviews.
6) Chile $100,000
Training for Chilean judges on handling IPR crimes cases, including development of a judicial bench book and follow up monitoring by the U.S. Mission.
7) Colombia $70,000
Training for the Colombia National Police on combating IPR crime.
8) South Asia Regional $210,185
Joint workshops with Indian, People’s Republic of China, and ASEAN IPR enforcement officials to strengthen and build stronger cross-border partnerships.
9) Mexico $438,814
Training for Mexican enforcement partners on following the money trail, digital evidence in online piracy cases, and border and customs enforcement.
(10) Philippines $175,171
Seminars for Philippine judges and prosecutors on courtroom and case management procedures in IPR cases.
(11) Thailand $184,000
Training for Thai judges, customs officials, and prosecutors to strengthen skills needed to carry out Thai IPR reforms.
(12) Turkey $106,375
Training for Turkish judges and law enforcement officials involved in new special IPR courts.
STATE DEPARTMENT ON USE OF SANCTIONS
FROM: U.S. STATE DEPARTMENT
Remarks to the ACIEP Sanctions Subcommittee
Remarks Jose W. Fernandez
Assistant Secretary, Bureau of Economic and Business Affairs Washington, DC
April 11, 2012
INTRODUCTION
You know, I spend a lot of time doing very positive work in a number of areas at the State Department. One area we focus on in the Bureau of Economic and Business affairs is economic sanctions, which I know can sometimes be viewed as “the dark side” of our work. We have many carrots at our disposal, but sanctions work is our big stick. But the message that I want all of you to walk away with today is that sanctions regimes can be an effective way to promote some very positive changes around the world.
I will begin my remarks with a brief description of some of the goals and work of our sanctions team, some of whom are here to help answer your more difficult questions, before I present you with a few case studies on sanctions, and I will conclude with how we see our work going forward.
However, I am particularly interested in hearing from you. I’d like to hear your thoughts on the role you envision for U.S. sanctions regimes in our overall economic tradecraft and our message to the business community, so I encourage you to present any ideas or questions you may have at the end of my comments.
THE WORK OF THE SANCTIONS TEAM AT STATE
Sanctions are a foreign policy tool somewhere between hard and soft power, which can play a significant role in encouraging bad actors to change their behavior. Under the Obama Administration, sanctions have proven to be one of our most effective means of increasing pressure on rogue actors and regimes without resorting to force.
Secretary Clinton has noted that one of our country’s great challenges is advancing our global leadership at a time when power is often measured and exercised in economic terms. Our sanctions regimes are a critical part of our economic outreach, and we envision an economic foreign policy in which promotion of business development meshes seamlessly with sanctions that simultaneously encourage our global partners to focus on responsible, innovative markets and isolate the world’s worst human rights abusers and weapons proliferators.
Additionally, the Department has been ramping up its focus on making our sanctions regimes as strong and effective as possible. Given the horrific events occurring in Iran and Syria over the past couple years, these improvements to our sanctions protocol are timely, and in sync with the Administration’s commitment to using sanctions in the most effective manner possible.
In light of this new focus, we have been expanding our sanctions team, adding six more people and bringing in a new Deputy assistant Secretary to focus wholly on our sanctions programs. We are aiming for a re-vamped sanctions Deputate by mid-summer.
Already, our economic sanctions experts are in constant contact with others at the State Department who also play a key role in sanctions policy, including our colleagues focused on non-proliferation, counter-terrorism, and human rights, and those on our country desks who coordinate our overall relationship with a country. Through this interaction, we ensure that our sanctions policies are focused in the right way so as to maximize their impact.
We hope that these changes will allow the State Department to coordinate more effectively with other agencies to wield targeted sanctions and other economic pressure against our adversaries.
Wherever possible, we have attempted to target our sanctions on individuals and entities within a country directly engaged in the activities that we seek to change. These targeted sanctions are sometimes referred to as “smart sanctions.” In doing so, we seek to make it clear that we are not targeting the population of a country but rather those in control who can stop the bad behavior of a particular regime.
CASE STUDY: LIBYA
Libya is an example of when sanctions can be most effective: in environments of international cooperation. When the international community cooperates on sanctions, targeted entities have a harder time avoiding them and the likelihood of success in effecting desired changes increases. These sanctions, in combination with an effective military pressure and support for Libyan rebel forces provided by the international coalition, helped isolate the Qadhafi regime, resulting in the regime’s ultimate downfall.
I will be traveling to Libya in a week’s time, and I will get a better sense of lessons learned from our sanctions regime while I am there.
As you all know, both the Administration and the international community have now passed measures that significantly ease sanctions on Libya. Though final winding down of the Libyan sanctions programs may take some additional time, this is a good example of how sanctions regimes can change over time based on the goals of each sanctions program and the situation on the ground.
CASE STUDY: BURMA
Although challenges remain, the Burmese Government has taken some positive steps toward democratization and civic openness since Than Sein became President in 2011. During her trip to Burma in December 2011, Secretary Clinton announced an “action-for-action” strategy to encourage reformers to take further steps.
As a result of Burma’s successful by-elections on April 1, Secretary Clinton announced on April 4 a series of steps that the United States is prepared to take as part of our action-for-action strategy.
Among steps on the sanctions front, these include a broad exemption from our Burma sanctions for a wide spectrum of non-profit activities. This will make it much easier for U.S
. entities and individuals to build schools, clinics, libraries, and other institutions in Burma. U.S. citizens will also be authorized to set up university exchange programs, public health initiatives, conservation projects and a host of other activities that will benefit the Burmese people.
This step is in line with the Secretary’s commitment during her visit to Burma to increase exchanges with the people, civil society organizations, and government.
We will also begin the process of a targeted easing of our ban on the export of U.S. financial services and investment, as part of a broader effort to help accelerate economic and political reform.
Our aim will be to recognize the reforms underway and take actions that assist the country's development and reform process. We will work closely with our allies and counterparts, including within our own government, to coordinate these changes.
CASE STUDY: SYRIA
Syria presents another example of international coordination. As it became clear that President Assad was not going to lead a democratic transition, and as the violence against the Syrian people increased, we felt it necessary to coordinate a strong international response.
We have worked systematically to increase our own pressures, including tough targeted sanctions against the Assad regime. At the same time, in literally hundreds of meetings and conversations, President Obama, Secretary Clinton, senior officials, our ambassadors, and others have steadily and systematically worked to build concerted international pressure.
Our aim was to build a strong international effort in support of the universal rights of the Syrian people, and to condemn and isolate the Assad regime. We recognized from the start that American leadership was crucial to this effort, but to have maximum impact in Syria, we wanted to lead the chorus of voices and pressures, not just make this a solo act.
This coordination led to similar actions by our partners and allies around the world, such as the EU and Canada, to isolate the Government of Syria from the international financial system and deprive it access to significant revenue streams that are generated by its petroleum sector.
Syria continues to pose challenges, and we continue to look at ways in coordination with our international partners to increase pressure on the Syrian regime. Again, this dire situation requires a chorus, not a solo.
CASE STUDY: IRAN
Iran remains one of our greatest foreign policy challenges, and our Iran sanctions regimes are one of our greatest tools in pressuring Iran to comply with its international obligations.
The United States and our international partners are determined to prevent Iran from acquiring a nuclear weapon. We remain committed to a dual-track policy that combines the use of pressure with engagement.
In response to Iran’s actions, which point to an Iranian nuclear weapons program, as well as to last fall’s Iranian plot to assassinate the Saudi ambassador to the United States, the United States and its international partners have continued a steady drumbeat of new sanctions measures. Let me review a few of the most recent developments.
First is Executive Order (E.O.) 13590, which President Obama issued in November. This Order targets the provision of goods and services to Iran’s upstream oil and gas industry and to Iran’s petrochemical sector. This order expands on existing sanctions, and authorizes sanctions on persons who knowingly support Iran in a way that could directly and significantly contribute to Iran’s ability to develop its petroleum and petrochemical sector.
These new measures will make it more difficult for Iran to circumvent existing sanctions by obtaining foreign expertise to assist in the development of its petroleum resources or dual-use items to refine petroleum in its petrochemical facilities. They will also help accelerate the decline of Iran’s already-deteriorating crude oil production.
In December, President Obama signed into law the National Defense authorization act (NDAA) for fiscal year 2012. This law provides for sanctions on foreign financial institutions for significant transactions, both petroleum and non-petroleum related, with the Central Bank of Iran (CBI) and designated Iranian financial institutions. These new sanctions are designed to target both the CBI and Iran’s crude oil revenues, while avoiding disruptions to international oil markets. We are reaching out to oil-consuming countries to help them respond to the new legislation and find alternatives to energy supplies from Iran.
These efforts have been successful. Most recently, the Secretary announced that 11 countries have qualified for an exception under the NDAA because they significantly reduced their imports of Iranian crude oil. These actions will reduce demand for Iranian crude and the revenues it needs to continue pursuing its nuclear aspirations.
In January, the European Union followed our lead and imposed strong sanctions of its own, imposing an embargo on Iranian crude and sanctioning the CBI. This multilateral approach has brought an unprecedented amount of pressure on Iran.
We also continue to enforce existing laws. For example, in January we imposed sanctions under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) on three companies for conducting business with Iran’s energy sector, specifically the provision of refined petroleum products to Iran. The firms are Zhuhai Zhenrong Corporation (China), Kuo Oil Pte. Ltd. (Singapore), and Fal Oil Company Ltd (UAE). These firms were among the biggest remaining suppliers of refined petroleum to Iran.
Ironically, though, we have been most effective when we haven’t imposed sanctions under these laws. In many cases, we have used the law as leverage to convince firms to discontinue their business with Iran. The Department does extensive outreach to foreign companies at risk of violating these regulations, and works with them and their governments to deter sanctionable activity in Iran. In this manner, we have prevented many companies across the world from doing business in Iran’s energy sector, and have cut off billions of dollars in potential investments in Iran.
These efforts, combined with our demonstrated resolve to impose sanctions when necessary, sends a clear message to our international partners in the business community: Although we are eager and enthusiastic to work with you to find alternate sources of energy, businesses that continue to support Iran’s energy sector and help facilitate Iran’s continued unwillingness to comply with its international nuclear obligations will face serious consequences.
We are committed to engagement, and we are hopeful that Iran's recent willingness to meet in the P5+1 Framework will lead to serious negotiations about its nuclear program. We believe that the united international front and increasing global pressure have been critical in getting Iran to return to the negotiating table. For that reason, we must continue to impose pressure through sanctions and other means until Iran addresses the international community's concerns over its nuclear program.
LOOKING FORWARD
We and others in the Administration and in Congress are always looking at new ways to further increase pressure on the worst regimes. We are especially focused now on additional measures to take against Iran and Syria. In any deliberations, we look to leverage the best possible outcome in line with U.S. foreign policy goals.
Our multifaceted approach to Economic Statecraft presents many opportunities for businesses around the world to grow and prosper working with the United States, while simultaneously staking a strong position, along with our global partners, that it cannot be business-as-usual with states that ignore the international community, flaunt illicit nuclear development, and commit terrible abuses on their own people. On sanctions, the United States is dedicated to a leadership role in developing a responsible and innovative global economic policy.
I welcome any questions or comments you may have, and my team is here to assist when things get very technical.
ISAF KILLED 13 INSURGENTS AND CAPTURED SIX SUSPECTS IN EASTERN AFGHANISTAN
FROM: AMERICAN FORCES PRESS SERVICE
Afghan, Coalition Forces Kill 13 Insurgents, Detain 6 Others
From an International Security Assistance Force Joint Command News Release
BAGRAM, Afghanistan, April 19, 2012 - Afghan and coalition forces killed 13 insurgents and captured six suspects during operations in eastern Afghanistan yesterday, military officials reported.
-- A coalition airstrike killed 10 armed insurgents posing an immediate threat to nearby ground troops in the Sherzad district of Nangarhar province.
-- Another coalition airstrike killed three insurgents after ground troops received small-arms fire in Nangarhar province's Khugyani district.
-- Afghan soldiers detained six suspected insurgents in Dand Patan.
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