FOUR CONVICTED FOR ROLES IN IDENTITY THEFT RING

The following excerpt is from the Department of Justice website:
Thursday, March 22, 2012
Armenian Power Member and Three Armenian Power Associates Convicted in Los Angeles for Roles in Identity Theft Ring
WASHINGTON – After a five week trial, four defendants have been convicted for their roles in one of the largest bank fraud and identity theft schemes in California history, with dozens of victims in four states and millions of dollars in losses.

The convictions were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Andre Birotte Jr. of the Central District of California, Assistant Director in Charge of the FBI’s Los Angeles Field Office Steven Martinez and Special Agent in Charge of the U.S. Secret Service (USSS) Joseph Beaty.

Arman Sharopetrosian, Karen Markosian, Artush Margaryan and Kristine Ogandzhanyan were found guilty of conspiring to commit bank fraud, attempted bank fraud and various counts of aggravated identity theft.  Sharopetrosian, Markosian and Ogandzhanyan waived a jury trial and consented to trial by the judge, and Margaryan proceeded with a jury trial.

Yesterday, U.S. District Judge David O. Carter found Ogandzhanyan, 28, of Burbank, Calif., guilty of one count of bank fraud conspiracy, two counts of attempted bank fraud and four counts of aggravated identity theft.  On March 16, 2012, the judge found Sharopetrosian, 33, of Burbank, guilty of one count of bank fraud conspiracy, four counts of bank fraud and seven counts of aggravated identify theft.  On March 16, 2012, the judge also found Markosian, 39, of Glendale, Calif., guilty of one count of bank fraud conspiracy, one count of attempted bank fraud and two counts of aggravated identity theft.  A jury convicted the fourth defendant, Artush Margaryan, 28, of Van Nuys, Calif., on March 16, 2012, of one count of bank fraud conspiracy, one count of attempted bank fraud and three counts of aggravated identity theft.

Evidence was presented at trial that Sharopetrosian is a member of the Armenian Power organized crime group, and Margaryan, Markosian and Ogandzhanyan are Armenian Power associates.

According to evidence presented at trial, Sharopetrosian directed the massive fraud scheme along with co-defendant Angus Brown, while the two were incarcerated at Avenal State Prison.  Using cellular telephones that were smuggled into the prison, Sharopetrosian and Brown worked from behind bars to coordinate with others, including Ogandzhanyn, Markosian and Margaryan, to obtain confidential bank profile information and steal money from victim account holders.  Often targeting high-value bank accounts, the defendants used account holders’ personal identifying information – including names, Social Security numbers and dates of birth – to impersonate victims in phone calls to the bank.  The defendants gathered account information, transferred funds between victims’ accounts and placed unauthorized check orders for the accounts.  They then stole the checks, obtained the victims’ signatures from public documents and paid conspirators to cash the forged checks.  Over the course of the six-year conspiracy, the defendants and their co-conspirators caused more than $10 million dollars in losses to victims in Southern California, Nevada, Arizona and Texas.

“These defendants, including two individuals who were operating from a prison cell, perpetrated a massive fraudulent scheme on behalf of a dangerous criminal enterprise,” said Assistant Attorney General Breuer.  “As members and associates of Armenian Power, they stole sensitive personal and financial information from innocent consumers and caused millions of dollars in losses.  Whether organized criminal groups traffic in drugs, commit financial fraud or wreak other havoc to keep themselves going, they must be stopped.  We are doing everything possible to shut down dangerous gangs like Armenian Power.”

“The safety and sanctity of confidential financial information is paramount in today’s society,” said U.S. Attorney Birotte.  “Identity theft is a fundamental invasion of consumer privacy that cannot be tolerated.  These convictions demonstrate that violators, whoever and wherever they may be, will be caught and will be prosecuted to the fullest extent of the federal law.”

“The defendants were convicted in a trial that uncovered a sophisticated and lengthy scheme that targeted victims in multiple states, and included disturbing details, such as orders made from within prison walls and assistance from bank insiders enlisted by the defendants,” said FBI Assistant Director Martinez.  “This case is also indicative of the growing trend of gang or organized crime-affiliated groups now engaging in identity theft and other financial crimes in furtherance of their enterprise.”  

These defendants are four of 20 defendants who were charged with operating the bank fraud and identity theft scheme in one of a series of federal indictments unsealed on Feb. 16, 2011.  The indictments allege various federal crimes against members and associates of the Armenian Power criminal organization.  To date, 19 of the 20 defendants charged in the bank fraud indictment have been convicted, including Brown.  One defendant, Faye Bell, was arrested earlier this year and is still awaiting trial.

Sharopetrosian, Margaryan, Markosian and Ogandzhanyan face maximum sentences of 30 years in federal prison for each count of bank fraud, 30 years for each count of conspiracy to commit bank fraud and additional mandatory two year sentences for each count of aggravated identity theft.

 Sentencing for all four defendants is scheduled for Aug. 6, 2012, before Judge Carter.

The case is being prosecuted by Assistant U.S. Attorneys Martin Estrada and Joseph McNally of the Central District of California and Trial Attorney Cristina Moreno of the Organized Crime and Gang Section in the Justice Department’s Criminal Division.  The case was investigated by the Eurasian Organized Crime Task Force, which includes the FBI, the USSS, the Los Angeles Police Department, the Glendale Police Department, the Burbank Police Department, the Internal Revenue Service and the U.S. Immigration and Customs Enforcement.

AG PEREZ SPEAKS ON MISSISSIPPI CONVICTIONS IN RACIALLY MOTIVATED MURDER CASE

The following excerpt is from the Department of Justice website:
Assistant Attorney General Thomas E. Perez Speaks at a Press Conference Regarding Guilty Pleas in Mississippi Jackson, Miss. ~ Thursday, March 22, 2012
As prepared for delivery
Today is an important day in the journey for justice for the family of James Craig Anderson, and other African American victims of senseless, racially motivated violence in Jackson.  Earlier today, the Department of Justice secured guilty pleas from three of the individuals responsible for the brutal, racially motivated murder of James Anderson.  This is the eighth case brought under the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, and the first involving the death of a victim.  The Shepard-Byrd Act was named in memory of James Byrd Jr., who died a horrific death in Jasper, Texas, after being dragged behind a pick-up truck on an asphalt road with his ankles bound by a chain.  Mr. Byrd’s death shocked the conscience of the nation.  Sadly, the facts surrounding the murder of Mr. Anderson are a shocking reminder of how hate fueled violence manifests itself in unthinkable ways.

This is a case about a group of racist thugs who made a sport of targeting vulnerable African Americans in Jackson, and attacking them without provocation, simply because of the color of their skin.  On a number of occasions, they drove around Jackson looking for African Americans to assault.  Jackson is a venerable community.  However, for these defendants, Jackson was “Jafrica”; African Americans were subhuman, and their mission was to drive around Jackson looking for African Americans to attack.  They used many different weapons in carrying out their sport.  Beer bottles and fists were typical tools of their trade.  They took great pleasure one evening in watching one victim plead for his life after they had brutally assaulted him.

Their sport took a deadly turn on the early morning of June 26, 2011.  On that fateful morning, defendants Deryl Dedmon, Dylan Wade Butler and John Aaron Rice and others were driving around Jackson looking for African Americans to attack when they spotted James Craig Anderson, a 47-year-old African American who was in the wrong place at the wrong time.   Defendants Rice and Butler spotted Mr. Anderson and concluded that he was an inviting target, and they corralled him while Dedmon and others arrived.  After Mr. Anderson got back to his feet, defendant Dedmon and others got into what became the murder weapon, a Ford F-250 pickup truck, which weighs over a ton, and proceeded to deliberately run over Mr. Anderson.  As they drove away, one of the participants placed a call on a cell phone bragging about their accomplishment.    

Following the murder of James Byrd Jr., I travelled to Texas as part of the Justice Department’s investigation and, among other things, toured the crime scene with the case investigators.  I remember vividly reflecting on how it was possible that such a depraved act could have occurred.  I hoped that such a crime would never occur again.  Sadly, I was mistaken.  Yesterday, defendant Dedmon pleaded guilty to a state charge of depraved heart murder.  That description is a spot on characterization of this hate crime.

We would like to think that horrific crimes such as these are in the history books, not today’s headlines.  Sadly, hate crimes remain a persistent problem in our nation .  We must and will remain ever vigilant in our common humanity to root out hate and violence when it rears its ugly face.  Hate crimes such as this simply have no place in Jackson, in Mississippi or anywhere in America.  No one in our nation should live in fear being attacked because of the color of their skin, their ethnicity, the God they choose to worship or whom they love.

The Justice Department will use every tool at its disposal to root out hate crimes.  The Civil Rights Division, in conjunction with its partners in the United States Attorneys’ Offices and the FBI, has aggressively focused on prosecuting hate crime cases, and our prosecutions are on the rise.  Last year, the department convicted the most defendants on hate crimes charges in over a decade.  And, over the past three fiscal years, the department has prosecuted 35 percent more hate crime cases than during the preceding three year period.  The Byrd-Shepard law is a critical new tool for combating hate crimes.  Already, 27 defendants have been charged in cases across the country.  There is an undeniable headwind of intolerance that rears its ugly head in different ways, whether it is today’s events or the arson of mosques, assaults on immigrants and brutal attacks of people who are lesbian, gay, bisexual or transgendered.

Our work is not finished, either here in Jackson or across America.  Let me be clear about this case.  Yesterday’s state court plea and today’s guilty pleas of the three defendants mark an important milestone in this investigation.  But our work is not finished, and our investigation continues, and I fully expect additional activity.  We will not rest until every responsible individual is brought to justice.

Last year, I had the privilege of traveling to Jackson to celebrate the 50th anniversary of the Freedom Riders historic and courageous journey for justice.  It was a memorable day here in Jackson.   Mississippi and indeed America have come a long way in the journey for equal opportunity.  Today’s guilty pleas should not obscure the progress we have made in Jackson and communities across America in ensuring equal justice under law.  At the same time, today’s guilty pleas and the horrific facts of this hate crime are another reminder that civil rights remains the unfinished business of America.

I had an opportunity to meet with some of the victim’s family members.  You have shown enormous patience and fortitude in the face of this tragedy.  Days like today are invariably bittersweet for loved ones.  Nothing we can do will bring Mr. Anderson back.  I am hopeful that yesterday’s and today’s guilty pleas bring some sense of justice for Mr. Anderson’s loving friends and family.  Again, I assure you that our work is not done.

We are grateful to our partners in this investigation and prosecution.  I’d like to personally thank United States Attorney John Dowdy and his office for their partnership; Special Agent in Charge Dan McMullen and the FBI for dedicating tremendous resources and countless man hours in this investigation, including conducting more than 200 interviews; District Attorney Robert Shuler Smith and his office for their work and cooperation in reaching global dispositions on these three defendants; and Chief Rebecca Coleman and the Jackson Police Department for their participation in the investigation.

SECRETARY OF STATE HILLARY RODHAM CLINTON ON PAKISTAN DAY

The following excerpt is from the U.S. State Department e-mail:
Pakistan Day
Press Statement Hillary Rodham Clinton
Secretary of State Washington, DC
March 23, 2012
On behalf of President Obama and the people of the United States, I am delighted to send best wishes to the people of Pakistan as you celebrate the 65th anniversary of the signing of the Lahore Resolution, which laid the foundation for the creation of Pakistan.

From the Tarbela Dam project that has helped light Pakistan’s growing cities and power its industries, to the founding of the Lahore University of Management Sciences and Karachi’s Institute for Business Administration that have educated so many of your leaders, to the thousands of Pakistanis who were helped by U.S. and Pakistani forces after the devastating earthquake of 2005 and during the floods of 2010 and 2011, Pakistan and the United States have a rich history of cooperation. We are committed to continuing this engagement and support as both of our nations work to build peace and prosperity in Pakistan and the region.

We appreciate the work that all of you – political leaders, teachers, bloggers, Muslim and minority religious leaders, gender activists, business leaders, and journalists – are doing to promote peace and tolerance. As you celebrate this special day with family, friends and loved ones, know that the people of the United States stand with you and we look forward to strengthening our friendship even more in the years to come.

LARGE OPIUM CACHE FOUND IN AFGHANISTAN

From an International Security Assistance Force Joint Command News Release 

Coalition Force Finds Opium Cache

KABUL, Afghanistan, March 22, 2012 - A coalition security force found 1,300 pounds of opium in the Nad-e Ali district of Afghanistan's Helmand province today, military officials reported.

The security force seized a small quantity of the opium for examination and destroyed the rest, officials said.

In Afghanistan operations yesterday:

-- In the Maiwand district of Kandahar province, an Afghan-led and coalition-supported force arrested an insurgent leader who directed insurgent fighters and planted roadside bombs. The security force detained several other suspected insurgents and found bomb-making materials in the operation.

-- An Afghan-led and coalition-supported force killed an insurgent leader who fired on them in the Deh Rawood district of Uruzgan province. The insurgent leader was an IED facilitator responsible for numerous attacks on Afghan and coalition forces in the area. During the operation the insurgent leader attempted to fire on the combined force. The security force detained several suspected insurgents.

PRESIDENT OBAMA'S REMARKS AT TRANSCANADA STILLWATER PIPE YARD

President Barack Obama delivers remarks on energy at the TransCanada Stillwater Pipe Yard near Cushing, Okla., March 22, 2012. The President highlighted the Administration’s commitment to expanding domestic oil and gas production. (Official White House Photo by Pete Souza)

Cushing, Oklahoma is an oil town. It’s a major hub for connecting our nation’s crude oil supply with refineries along the Gulf Coast, and the latest stop on President Obama’s cross-country tour to discuss American energy production.

Domestic oil and gas production is the highest it’s been in eight years. We’re actually producing so much that, even though we've added enough new oil and gas pipelines to circle the Earth in the last three years, we still don’t have enough pipeline to transport it all around the country quickly enough, particularly to our nation's refineries.
And, as President Obama explained when he spoke there today, the fact that production is outpacing pipeline capacity is causing bottlenecks in places like Cushing, slowing our ability to further increase oil supplies when gas prices are high and we need it the most.
Modernizing pipeline infrastructure and expanding its ability to deliver oil to refineries and consumers around the country is a vital piece of a strategy to reduce our reliance on foreign oil and expand production of American-made energy. That’s why President Obama directed his Administration to expedite the permitting and construction process of a new pipeline that will help crude oil make its way to Gulf Coast refineries more quickly, and doing so while protecting natural resources and the health of local communities along the pipeline’s proposed path.
The above excerpt and picture are from the White House website:

LOCKHEED MARTIN SETTLES WITH U.S. OVER ALLEGED INFLATED COSTS FOR AIRCRAFT TOOLS

The following excerpt is from the U.S. Department of Justice website:
Friday, March 23, 2012
Lockheed Martin Corporation Reaches $15.85 Million Settlement with U.S. to Resolve False Claims Act AllegationsU.S. Alleges Lockheed Subcontractor Inflated Costs for Military Aircraft Tools That Were Passed on to Government
WASHINGTON – Lockheed Martin Corporation has agreed to pay $15,850,000 to settle allegations that it mischarged perishable tools used on numerous government contracts, the Department of Justice announced today.  Lockheed Martin, headquartered in Bethesda, Md., is one of the world’s largest defense contractors.

Today’s settlement resolves allegations that the government was overcharged as a result
of a seven-year pricing scheme by Tools & Metals Inc. (TMI), a subcontractor that sold perishable tools to Lockheed Martin for use on military aircraft, including the F-22 and the F-35 fighter jets.  Specifically, the government alleged that TMI inflated the costs of these tools between 1998 and 2005, and that Lockheed Martin passed these costs on to the United States under its various contracts with the government.  On Dec. 8, 2005, Todd B. Loftis, a former president of TMI, pleaded guilty and was sentenced to seven years in prison in connection with his role in TMI’s scheme.

The United States subsequently brought civil claims against Lockheed Martin under the False Claims Act, alleging that Lockheed Martin contributed to the inflated amounts paid by the United States in connection with TMI’s pricing scheme.  Specifically, the government alleged that Lockheed Martin acted recklessly by failing to adequately oversee TMI’s charging practices and by mishandling information revealing these practices. These allegations are the subject of today’s settlement between the United States and Lockheed Martin.

“It is troubling that a large defense contractor with long-established contractual ties with the United States failed to undertake appropriate measures to ensure the integrity and validity of the costs it submitted to the United States,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.
“This settlement demonstrates the government’s commitment to devoting the necessary resources to protect taxpayer funds from the most complex mischarging schemes,” stated Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas.

Today’s settlement also settles two qui tam, or whistleblower, actions brought under the whistleblower  provisions of the False Claims Act and consolidated in the U.S. District Court in Dallas.  The case is captioned U.S. ex rel. Becker, et al. v. Tools & Metals, Inc., et al., Civil Action No. 3:05-CV-0627-L.

Under the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the recovery.  The whistleblowers in the two cases resolved by the settlement, Robert Spencer and John Becker, will split a $2 million share of the government’s recovery.

This matter was jointly handled by the Defense Criminal Investigative Service, the Air Force Office of Special Investigations, the Defense Contract Audit Agency, the Contract Integrity Offices of the Departments of the Air Force and the Navy, the Defense Contract Management Agency, the Department of Justice's Civil Division and the U.S. Attorney's Office for the Northern District of Texas.

STATE DEPARTMENT PRESS RELEASE ON VIOLENCE IN SUDAN

The following excerpt is from a U.S. State Department e-mail:
On Violence in Southern Kordofan and Negotiations Between Sudan and South Sudan
Press Statement Victoria Nuland
Department Spokesperson, Office of the Spokesperson Washington, DC
March 22, 2012
The United States is alarmed by the threat of greater violence between the Sudan Armed Forces (SAF) and the Sudan People’s Liberation Movement-Northern Sector (SPLM-N) in Southern Kordofan State. Any such fighting will only worsen the humanitarian crisis there and lead to more civilian casualties. The conflict in Southern Kordofan and neighboring Blue Nile is also fuelling mistrust between Sudan and South Sudan and the United States is deeply concerned about the potential for a resumption of direct conflict between the North and South. Rather than risk the potential for war, both countries should prepare in good faith for the summit planned for early April between President Salva Kiir of South Sudan and President Omar Al-Bashir of Sudan.

The United States urgently calls on the Government of Sudan and the SPLM-N to agree on a cessation of hostilities. We reiterate our demand that the SAF end aerial bombardments of civilian areas and immediately allow unhindered humanitarian access to civilians in Southern Kordofan and Blue Nile. We also demand that South Sudan end any military support for the SPLM-N and work with the Government of Sudan on ways jointly to bring peace to the border region. We hope that the upcoming summit will focus on this objective along with issues such as oil and nationalities. We strongly condemn all violations of international human rights law and international humanitarian law in Southern Kordofan and Blue Nile, and demand that those responsible be held accountable for their actions.

The renewed fighting in North Darfur among SAF, rebel groups, and paramilitary forces further deepens the crisis in that region and threatens the progress made since the signing of the Doha Document for Peace in Darfur in July 2011. We are deeply concerned about the displacement of civilians from their home areas. We urge the Government of Sudan, the African Union-United Nations Hybrid Mission in Darfur, and the newly established Darfur Regional Authority to address this situation urgently.

U.S. STATE DEPARTMENT PRESS BRIEFING

The following excerpt is from a U.S. Department of State e-mail:
Victoria Nuland
Spokesperson
Daily Press Briefing
Washington, DC
March 22, 2012
TRANSCRIPT:
1:00 p.m. EDT
MS. NULAND: All right, everybody, before we start today, a warm welcome to our journalists at the back of the room who are participating in the U.S.-Pakistan journalism exchange. Welcome. All right.
Let’s go to what’s on your minds.
QUESTION: Can we start with Mali?
MS. NULAND: We can.
QUESTION: What – first off, has the Department yet begun the process of making the legal determination of whether this is indeed a coup?
MS. NULAND: Well, first to say, as we said in our statement this morning, that the United States condemns the military seizure of power in Mali. We echo the statements of the African Union, of ECOWAS, and of other international partners in denouncing these actions. We’ve called for calm. We’ve called for restoration of the civilian government under constitutional rule without delay so that the elections can proceed as scheduled. And we stand with the legitimately elected government of President Amadou Toumani Toure. Mali has been a leading democracy in West Africa, and those institutions must be respected.
Arshad, in response to your question, I think our focus and our hope and expectation is that this military action can be quickly reversed and we can get back to the issue of democratic governance in Mali, which we can all support.
QUESTION: Why is it that your expectation that it can be quickly reversed?
MS. NULAND: Well, our hope is that ECOWAS and the African Union, who we understand are sending a senior delegation in the near future, are going to be able to resolve this, and we won’t get to this issue of whether we’ve had a formal coup, if you may.
QUESTION: But that’s a hope, not an expectation?
MS. NULAND: That is a hope. That is a hope and that is something that we are supporting and working towards.
QUESTION: And is there – I realize that it takes some time to make determinations about whether something is a coup, or at least it takes the State Department some time, but is there any immediate effect in terms of ceasing cooperation with the Government in Mali, particularly on counterterrorism work?
MS. NULAND: Well, I think you know that the United States provides significant security and economic and financial support to the Government of Mali every year, something along the order of $137- $140 million. We are meeting this afternoon. No decisions have been made to look at those assistance problems – programs and to determine what’s appropriate.
QUESTION: And particularly on counterterrorism, which – some of which I imagine is done with the military, do you think it’s possible to continue counterterrorism cooperation with the new authorities?
MS. NULAND: Well, again, our expectation and what we are supporting and working for with our ECOWAS and AU partners is that we can reverse this, that we can get back to good, solid democratic governance in Mali. And with regard to what one would do, could do, should do in this period with the assistance, we’re looking at it this afternoon. So we haven’t done any – made any decisions.
QUESTION: Why do you keep saying expectation when that was your hope? I mean, it makes me think you – there’s something you’re thinking or you know, that maybe this is in the process of being reversed. Is there anything that suggests that?
MS. NULAND: Well, again, there – our hope is that ECOWAS can get in there quickly, can negotiate a resolution of this and can get the president back in the capital and leading the country.
Please.
QUESTION: Victoria, do you have any information of the whereabouts of President Toure?
MS. NULAND: Well, there had been some misreporting that he was somehow in or near the U.S. Embassy. That is false. Our understanding is he is still in Mali, but I can’t give you any more detail than that.
QUESTION: In your statement, you did not insist on his physical safety. Does that mean that you don’t have any concern as far as his physical safety is concerned?
MS. NULAND: No, of course we do. Of course we do.
Matt – still on Mali?
QUESTION: I’m – obviously, I missed the beginning of this, so you have not made a determination under the law that you’re required to? Is that correct or --
MS. NULAND: We have not. Yeah.
QUESTION: So we’re looking at a Honduras situation here, where you guys just take your time and --
MS. NULAND: We’re looking at the whole range of issues this afternoon. This has been something that we all woke up to.
QUESTION: And when you say you’re hoping that ECOWAS is – you mean negotiators from ECOWAS; you’re not talking about Nigerian troops, are you?
MS. NULAND: No, no. Our expectation is that ECOWAS and the African Union will be sending some high-level folks in to try to negotiate this through.
QUESTION: And when you say that you’re going to be looking at this this afternoon, does that mean that you’re expecting or you think that there might be some good resolution to this --
MS. NULAND: No. What --
QUESTION: -- this afternoon?
MS. NULAND: No, no, no, no.
QUESTION: Or you’re looking at simply whether the – you have to, as you are legally bound to, apply the law?
MS. NULAND: No, the question was with regard to U.S. assistance, U.S. support for Mali. We are looking, interagency this afternoon, at the support programs that we have in Mali to make some decisions.
QUESTION: Were you asked the question of how much would be at stake?
MS. NULAND: I mentioned at the top that we annually have about $137- $140 million going to Mali.
QUESTION: Right. And that – some of that is exempted from --
MS. NULAND: Absolutely. Well, that is before you get to some of the humanitarian assistance, which is exacted. Okay?
QUESTION: Oh, okay. So the amount that would be at stake if such a determination were made would be that 130 --
MS. NULAND: About that. But again, there are a number of legal issues here, including how the different pots of money are apportioned.
QUESTION: And just to clarify, because now it’s not perfectly clear to me, is this afternoon’s meeting to discuss and make a decision on whether or not a military coup has occurred, therefore triggering the aid cutoff? Or rather, is it a – or you – are you not considering that for the time being, and it is simply to look at what you can continue to fund while you see if this can be reversed, and therefore it would not be a military coup and not trigger the cutoff?
MS. NULAND: Again, the meeting this afternoon is to look at the entire situation in Mali, what diplomatic initiatives there may be to resolve this quickly, which is what we would like to see happen, but also in the interim to look at the support that we give to Mali and what’s appropriate to give under various different scenarios.
QUESTION: Do you expect any decisions out of the meeting this afternoon?
MS. NULAND: Again, they need to sit down and have the meeting before I can predict, but I think there will be some – certainly some decisions about the kind of diplomacy that we will support and some preliminary thinking about what should be done in the short term with our assistance.
QUESTION: Can you get us a readout after the meeting, since you’ve mentioned it?
MS. NULAND: I think we’ll probably have more to say about this tomorrow because there’ll have to be some reporting up.
QUESTION: (Inaudible) personnel from UN, World Bank, and IMF, many personnel in Mali right now? Do you have any contingency plan to get them out of country, or have you received any kind of request?
MS. NULAND: You’re talking about American citizens, or you’re talking about internationals?
QUESTION: American citizens, yes. And --
MS. NULAND: We’ve done the usual alerts to official Americans, to U.S. citizens, to stay in place, to take precautionary security measures. And I think we issued a public warning to that effect.
Please.
QUESTION: Syria?
MS. NULAND: Yeah.
QUESTION: No, Mali.
MS. NULAND: Still on Mali, Scott? Yeah.
QUESTION: The primary flashpoint here appears to have been the military’s ability to deal with the Tuareg rebellion. Is it the view of the United States that that rebellion has been amplified, revived, by the fall of Qadhafi in Libya and the return of Tuareg fighters from Libya to both Mali and Niger?
MS. NULAND: Well, I think until we have a chance to analyze fully what has happened, I’m not going to be commenting on the causes for this. I think the Tuareg issue has been – is not a new one. Let’s put it that way, Scott. I think you’re – it’s certainly true that there has been increasing concern inside Mali about Tuareg activity over the last number of months, and particularly since the Tuaregs have had less to fight about in Libya and have moved on to Mali. But I don’t think we’re going to be analyzing the situation until we get a chance to look at it internally.
Please.
QUESTION: Syria?
MS. NULAND: Yeah.
QUESTION: Today it was announced that the new military council in Damascus that will allow defected soldiers to have more coordinated efforts. Is this a step in the right direction? Your reaction to that? Have you heard about it?
MS. NULAND: I hadn’t heard. This is an announcement of --
QUESTION: That it’s going to be a new military council in Damascus and in the rural area.
MS. NULAND: Of the opposition?
QUESTION: Of the opposition, of the Free Syrian Army, the (inaudible).
MS. NULAND: I just can’t speak to that. I haven’t seen what they have announced.
QUESTION: But I mean, if this is the case, do you think this is – because very often, you complain that the opposition is very unorganized. And the fact that they are getting their act together, at least militarily, is this a step in the right direction?
MS. NULAND: I think what we have been calling for is for the peaceful opposition to coordinate better and to make proposals that will be attractive to all Syrians who want change from all groups within the country about how a peaceful transition can go forward.
Said.
QUESTION: Yes, Victoria. The Secretary’s statement yesterday and another statement by you and others were interpreted as toning down of the rhetoric, the anti-Assad rhetoric. Should it be interpreted that way?
MS. NULAND: I don’t think that there should be any doubt in anyone’s mind what the Secretary was saying yesterday. She was calling on Assad to accept the Kofi plan, start pulling back the weapons from the cities, start cooperating in humanitarian assistance, and allow a political transition to go forward. There’s no change in our position, so I’m not sure where those sort of analyses came from.
QUESTION: Well, it – I guess it emanates from the sort of played-down rhetoric on calling for him to step aside and that they have not heard that so emphatically as it was in the beginning. And I guess that’s maybe the cause.
MS. NULAND: Well, there’s no change in our view that a democratic, peaceful Syria cannot be led by Assad, no change in our view that he has lost legitimacy with his people.
QUESTION: So finally, one last thing.
MS. NULAND: Yeah.
QUESTION: Do you see that this new closeness with Russia as an impetus, perhaps, to convince Assad that he must begin immediately with what has been required of him?
MS. NULAND: I think the point here, Said, is that there was concern that Assad and his regime were taking advantage of the apparent divisions on the Security Council not to do what needed to be done. So you now have the Security Council speaking very clearly with one voice in support of the kinds of change that we’ve been calling for for months and months and months and months.
Please.
QUESTION: You stated that you --
MS. NULAND: We missed you. Where you been? You’ve been home?
QUESTION: In Syria.
MS. NULAND: In Syria? That’s where we got the beard.
QUESTION: You stated that you continue to call on Assad to step down, but the Annan mission that you are endorsing does not call Assad to step down, neither it foresees any kind of time restraint or it proposes any kind of credible threat of force, right? I mean, how both reconciled? Could you elaborate on that?
MS. NULAND: We don’t see any irreconcilable elements here. The Assad[1] six points are focused on getting an immediate ceasefire and immediate humanitarian relief process underway and an immediate political transition dialogue ongoing. That doesn’t change the fact that we don’t think that Assad is the guy that can lead his country into a democratic future.
QUESTION: But it doesn’t call specifically Assad to step down or there is no timeframe for these dialogues.
MS. NULAND: Again, these are the kinds of things that the Kofi Annan technical team that’s in Damascus is working on. But we can’t get – we have to get this started and it has to start with an end to the violence and humanitarian relief for the people.
QUESTION: Today Turkish Foreign Minister Davutoglu said that in addition to common message, we also have to develop a joint plan of action. And also there are some commentaries today that Foreign Minister Davutoglu, when he was here having meeting with Secretary Clinton, U.S. position was to tell Turkey not to create buffer zone or any kind of humanitarian corridor. Can you tell us that – do you have the position to oppose Turkish Government to create any kind of action inside Syria?
MS. NULAND: First of all, I’m not going to discuss the Secretary’s private diplomacy with Foreign Minister Davutoglu, except to say that the way you’ve characterized that is not the way that conversation went.
Turkey is going to host the next Friends of the Syrian People meeting, which will be quite large again. It’ll be on April 1st. From our perspective, the first meeting laid out a very clear agenda, which the Annan six points also support, talking about the importance of ending the violence, getting humanitarian going, getting a political process underway.
So we look forward to the agenda that the Turkish Government will establish to deepen and broaden the consensus about the way forward, and we expect that the UN will also be represented in those meetings.
QUESTION: Will the Secretary be at that meeting for sure?
MS. NULAND: Yes.
QUESTION: You say that your position hasn’t changed, but some will argue that the Syrian Government position hasn’t changed either. What indication do you have that will lead you to believe that the Syrian Government will cooperate at least on humanitarian issues and stopping the ceasefire for whatever, two hours or --
MS. NULAND: Well, this was the challenge that the Secretary put to the regime yesterday, that now that we have a united Security Council, it is important that the regime take action. And if it doesn’t, it’s going to face increasing pressure and increasing isolation.
QUESTION: What’s the alternative sanction if such regime doesn’t comply with the mission? What’s your alternative plan?
MS. NULAND: Well, I’m not going to get into all kinds of hypotheticals going forward. You’ve seen over these months that the economic sanctions on the regime have grown tighter and tighter, more and more countries participating. There is plenty of support still flowing to the Assad regime that could be cut off. We will continue to, using the Friends of the Syrian People and other fora that we have, encourage as many countries as possible not to trade with them, not to trade weapons, not to support him economically, and to ensure that he and his supporters face very, very tough choices.
Please, in the back.
QUESTION: Can we go to Pakistan?
MS. NULAND: We can.
QUESTION: The foreign ministry in Islamabad today said that once the parliament completes its review and comes up with an advice on future cooperation with U.S. and agreements will be in writing, Pakistan and U.S. will be cooperating only after agreements in writing, not verbal. What are your comments on that?
MS. NULAND: Again, I’m going to say the same thing that we’ve been saying for weeks and months, which is that we are going to wait until the parliament has had a chance to look at all these recommendations, to debate them, and to see the outcome of that very democratic process, as the Secretary made clear yesterday. And when the Government of Pakistan is prepared to reengage with us on its conclusions as a result of that process, we stand ready to do it.
QUESTION: And also, as you quoted the Secretary yesterday, she said that it’s a good sign for Pakistan’s democratic development that a debate is taking place in the parliament, and you have counterterrorism concerns and interests there. How do you look forward? How do you look to banish those – your concerns in Pakistan’s democratic development after the review is complete?
MS. NULAND: Again, you’re asking me to preview where we’re going to go after a review is completed that is ongoing, so I think we will wait and see how our dialogue with Pakistan goes, but the Secretary, as you heard, really laid out the interests that we share yesterday.
Please.
QUESTION: Staying in the region?
MS. NULAND: Yeah, Lalit.
QUESTION: On Afghanistan, the president today said that U.S. would be giving Afghanistan four billion U.S. dollars every year for the next 10 years to support its army. Has (inaudible) engaged on this issue, or what?
MS. NULAND: Well, I think you know that in the context of the upcoming NATO Summit in Chicago, we are working with Afghanistan, we are working with all of the ISAF partners on a long-term program of support for the Afghan National Security Forces. Some of the money to support the Afghan security forces is going to come from Afghanistan. Afghanistan will support from its own budget its security forces. But I think we all expect that there will have to be sizable international contributions as well.
So Marc Grossman is in Europe now, as you know, talking to allies about what they might be able to do. We are looking, obviously, at what we might be able to do. There is money in our 2013 budget and onward budgets to look at this. But obviously, this is going to have to be a shared responsibility, which also includes Afghanistan.
QUESTION: But is the figure of $4 billion – is the U.S. contribution going to be for Afghan --
MS. NULAND: I’m not going to speak about overall numbers at the moment. It’s all being worked out.
Yeah.
QUESTION: And is Ambassador Grossman going to South Asia after the end of his visit?
MS. NULAND: He still has not made decisions about the back end of his trip. At the moment, he is focused on his European stops. He may have more to say about this tomorrow or on Saturday.
QUESTION: Can you stay in the region, Sri Lanka?
QUESTION: No, just stay on (inaudible).
MS. NULAND: Yeah.
QUESTION: And this – just yesterday, both the foreign minister and the Secretary were – expressed hope that the final elements of the (inaudible) on the strategic partnership deal could be done before or at the NATO Summit. And I’m just – because I can’t remember what it was with Iraq, but who actually signs those agreements? Is it heads of state or is it foreign ministers or is it – who?
MS. NULAND: On the SPD, I don’t know how we’re going to do this one. Traditionally, it would be either head of state or foreign minister, but I frankly haven’t looked into what the draft says at the moment.
Samir.
QUESTION: Last week, you said you expected the Secretary to decide this week about the aids to Egypt, to inform Congress. Any update on this?
MS. NULAND: We’re still expecting a decision this week but she hasn’t made it yet, so stay tuned.
Please.
QUESTION: On North Korea?
MS. NULAND: Yeah.
QUESTION: Evans Revere, a former State Department official, he posted an article on the Brookings Institution, and here he said he first became aware of the possibility of North Korea launching satellite on December 15th, three days – of last year, I mean – three days before the death of Kim Jong-il during his exchange with a North Korean official. And he also said, quote, that “Obama Administration had already heard similar statements from North Korean counterparts and had already delivered a strong warning” to them.
Is it true that the U.S. was told by North Korea even before Kim Jong-il’s death that they’re going to launch satellite?
MS. NULAND: Well, I’m not going to speak to the details of the discussion that we had in the three bilateral sessions from August onward with the North Koreans leading to the Leap Day deal, except to repeat what we’ve said last week, which was that the issue of whether we would consider a satellite launch a violation did come up in those talks. And we were extremely clear when that subject came up that we would consider the launch of anything using ballistic missile technology to be a violation of UN Security Council Resolution 1874. So the North Koreans should not have been in any doubt before or after the death of the leader of what our position was.
QUESTION: The only remaining point here is how soon did the United States warn North Korea of the (inaudible).
MS. NULAND: I’m not going to get into the details of who said what to whom when during these negotiations, except to tell you that at no time should there have been any expectation on the part of the North Koreans that a satellite launch using ballistic missile technology would be acceptable to us or anybody else in the international community.
Please.
QUESTION: Are you aware of the case of Walid Abu Al-Khair, who’s a Saudi human rights activist and a lawyer who was prevented from leaving Saudi Arabia to participate in a State Department-sponsored conference that’s supposed to take place in the next few days?
MS. NULAND: And he was prohibited in some manner by?
QUESTION: By the Saudi authority from coming to the U.S.
MS. NULAND: Is this – is he the – no, he’s not the – I think I don’t have this case, Nadia, so we will --
QUESTION: Can you look up – please look into it?
MS. NULAND: -- look into it, yeah, absolutely, if you can give our guys --
QUESTION: Sure.
MS. NULAND: -- the correct spelling of the name, yeah.
Tejinder.
QUESTION: Now that you have a list of countries who are exempted from sanctions for deals with Iran, what are the next steps you’re taking against India and other countries who are still dealing with Iran?
MS. NULAND: Well, we’ve talked about this a couple of times this week. As you know, Tejinder, our conversations continue with all the other countries that want to talk to us who continue to have issues with the amount of Iranian crude that they import. India is one of those countries. And we are working hard with India to see if we can help with regard to reducing India’s dependence and the dependence of any of the other countries on Iranian crude, and looking at alternative sources of supply as well.
QUESTION: As it stands today, you are not contemplating any action?
MS. NULAND: I don’t have anything to announce, and our bilateral consultations continue with a whole raft of countries that have not yet been exempted.
Please.
QUESTION: Just following on that, you said that you were in consultations with all the countries that want to talk to you about this. Are there countries among the 12 that don’t want to talk to you?
MS. NULAND: Actually, I should – the minute that formulation came out of my mouth, I thought I should check. I think we are talking to all, if not most, of the 12.
QUESTION: Can you check that?
MS. NULAND: We will.
QUESTION: Can you also tell us what those 12 countries are?
MS. NULAND: I think as we said when we – when Carlos was on the Hill and when we backgrounded on this issue, it’s pretty clearly readily available in public sources --
QUESTION: Well, actually – but it’s –
MS. NULAND: -- who has extensive Iranian crude imports.
QUESTION: It’s really not. And I don’t see why – I don’t see how difficult it is – why it would be so difficult for you all to say which countries, if you are in fact talking to all 12 of them, which ones they are.
And then my second question would be is that – do you consider them all to be countries? Because I believe Taiwan is one, and I hadn’t realized that you had changed your one China policy.
MS. NULAND: Why don’t I take the question, and we’ll get back to it with what we can.
QUESTION: I think it would be helpful to name the 12 because, as Matt suggests, there are in fact different – private-source data has different assessments of what countries imported Iranian crude oil in 2011, which I think is the benchmark that you guys are using. And it took a while to get to the bottom of this. And I think if it truly is publicly available, then I think you guys ought to be able to just say well yeah, these are the 12 even if you have to say if we learn new things, like somebody didn’t really import any or somebody else did and we find out later, that it might change. But I --
MS. NULAND: Well, why don’t I take the question. We’ll see what we can do for you.
QUESTION: Remind them – remind whoever it is you’re going to take it up with that these countries know who they are already. It’s not going to be any great breach of secrecy.
MS. NULAND: Said.
QUESTION: Yes, ma’am. On the occasion of World Water Day --
MS. NULAND: Sorry. Are we still on --
QUESTION: Can I do Iran?
MS. NULAND: Well, let’s do World Water Day and then come back. Yeah.
QUESTION: Okay.
QUESTION: Very quickly, I just wanted to give you a couple of figures and see your comment. Ninety-five percent of Gaza water is unfit for drinking. Twenty-six percent of all illnesses are caused by waterborne diseases. The Israelis – because of the siege, the Israelis continue to take the majority of water in the West Bank. Forty percent of water designated for farming in the West Bank go through sewage because Israel disallows the Palestinians from repairing or introducing new pipes, and so on. The farming for the settlement is heavily subsidized, which is used for farming and recreation, while the Palestinians are charged heavy fees, and so on.
And I wonder since it’s a basic human right issue – the access to water – I wonder if the United States would make a case that Palestinian farmers and residents be allowed at least the same allocation or the same allotment as the settlements?
MS. NULAND: Well, I think you know, Said, that water is one of the issues that the United States works with Palestinian Authority representatives on. We also work on regional issues with Israel. So it is certainly a subject that is on our minds and part of our regular efforts with the Palestinians.
QUESTION: I have two questions on Turkey, starting from 2012 Annual Report of the United States Commission on International Religious Freedom, which Turkey is cited as a Country of Particular Concern. But Turkey argues that one of the members of the commission actually did not vote for this classification. Do you have anything on this?
MS. NULAND: I had something on this on the day that it happened, which I think was on Monday.
QUESTION: Yes.
MS. NULAND: But I don’t think – I’ll have to take it and get back to you, okay?
QUESTION: Okay. On Iran, Turkey is not listed as one of the countries in the waiver list for the sanctions. And Turkish Energy Minister yesterday was saying Turkey is still hoping that it’s going to be one of the countries in the waiver list. Do you have anything on that?
MS. NULAND: Well, just to give you a version of the same answer that we had on India, that Turkey is one of the countries that we are working with to support their efforts to reduce their dependence on Iranian crude, to find alternative sources of supply, and we will continue those discussions.
QUESTION: And that’s (inaudible) exemption (inaudible) waiver (inaudible)?
MS. NULAND: This is about the overall effort to try to reduce Turkey’s dependence on Iranian crude.
Please.
QUESTION: On Sri Lanka?
MS. NULAND: Yeah.
QUESTION: Now after this passing of the resolution by UNSCR, what are the options Sri Lanka has? And if it doesn’t implement those recommendations, what it’s going to face now?
MS. NULAND: Well, this is pretty straightforward. It’s not any different than what we’ve been asking for since November, which is for the Government of Sri Lanka to communicate to its own people but also to the international community what it intends to do to implement the LLRC’s recommendations. Specifically, we want to see Sri Lanka take concrete action that brings accountability and reconciliation and to put forward a formal implementation plan on the recommendations.
QUESTION: So do they have any timeline for this? Have they informed you of anything?
MS. NULAND: As soon as possible. We’ve been proposing and urging this kind of action for many months now.
QUESTION: In her statement, Secretary also mentioned that she is looking forward to meet the Sri Lankan foreign minister. Do you know when this is expected – the meeting?
MS. NULAND: I don’t think it’s been scheduled yet.
All right? Thanks everybody.

FEDEX RESOLVES HIRING DISCRIMINATION CASE

The following excerpt is from the Department of Labor website:
Shipping giant FedEx to pay $3 million to settle charges of hiring discrimination brought by US Department of Labor
Company will pay back wages and interest to more than 21,000 applicants rejected for jobs at 23 facilities in 15 states; reform hiring practices
WASHINGTON — The U.S. Department of Labor's Office of Federal Contract Compliance Programs today announced that it has entered into a conciliation agreement to resolve allegations of hiring discrimination by federal contractors FedEx Ground Package System Inc. and FedEx SmartPost Inc., both subsidiaries of Memphis, Tenn.-based FedEx Corp. The agreement concludes compliance reviews that spanned seven years and numerous FedEx facilities in multiple states, and includes the largest single financial settlement negotiated by OFCCP since 2004.

"We are committed to building an economy that lasts — one in which every qualified worker gets a fair shot to compete for jobs, and every employer plays by the same set of rules," said Secretary of Labor Hilda L. Solis. "This settlement is proof that we will aggressively protect workers, promote workplace diversity and enforce the laws governing federal contractors."

During a series of regularly scheduled reviews, OFCCP compliance officers found evidence that FedEx's hiring processes and selection procedures violated Executive Order 11246 by discriminating on the bases of sex, race and/or national origin against specific groups identified at 23 facilities in 15 states. The affected workers include men and women as well as African-American, Caucasian and Native American job seekers, as well as job seekers of Hispanic and Asian descent. The reviews also uncovered extensive violations of the executive order's record-keeping requirements.

Under the terms of the conciliation agreement, the companies will pay a total of $3 million in back wages and interest to 21,635 applicants who were rejected for entry-level package handler and parcel assistant positions at 22 FedEx Ground facilities and one FedEx SmartPost facility. FedEx also has agreed to extend job offers to 1,703 of the affected workers as positions become available. The 21,635 rejected job seekers represent one of the largest classes of victims of any case in OFCCP's history.

"Being a federal contractor is a privilege and means you absolutely, positively cannot discriminate, not when you are profiting from taxpayer dollars," said OFCCP Director Patricia A. Shiu. "Under this agreement, FedEx will have to really examine and revamp its hiring practices across the entire company. The American people ought to have confidence that one of our nation's most trusted brands will not tolerate discrimination."

In addition to the financial remedies and job offers, FedEx Ground has committed to wide-ranging reforms. The company has promised to correct any discriminatory hiring practices, develop and implement equal employment opportunity training, and launch extensive self-monitoring measures to ensure that all hiring practices fully comply with the law. FedEx Ground also has agreed to engage an outside consultant to perform an extensive review of the company's hiring practices and provide recommendations to change and improve those practices, to train incumbent and future supervisors and employees, and to monitor compliance with the equal employment opportunity laws enforced by OFCCP. Finally, the company will take necessary steps to comply with all record-keeping requirements.
FedEx Ground is based in Coraopolis, Pa. The 22 FedEx Ground facilities where OFCCP found violations are located in Sun Valley and Sacramento, Calif.; Tampa, Fla.; Ellenwood, Ga.; Carol Stream and Chicago, Ill.; Indianapolis and Jeffersonville, Ind.; Lenexa, Kan.; Livonia, Mich.; St. Paul, Minn.; South Hackensack, N.J.; Albany and Brooklyn, N.Y.; Greenville, N.C.; Addyston and Grove City, Ohio; Lewisberry, Pa.; Fort Worth, Houston and South Houston, Texas; and North Salt Lake City, Utah. OFCCP also conducted compliance evaluations at two FedEx Ground facilities in Phoenix, Ariz., and San Antonio, Texas, but found no violations.

FedEx SmartPost is based in New Berlin, Wis. The FedEx SmartPost facility where OFCCP found violations is located in Charlotte, N.C.

U.S. FILES LAWSUIT AGAINST AT&T IN RELAY SERVICES FRAUD CASE

The following excerpt is from the U.S Department of Justice. 
Thursday, March 22, 2012
United States Files Lawsuit Against AT&T in Telecommunications Relay Services Fraud Case Government Alleges AT&T Improperly Billed the FCC for Reimbursement
The United States has filed a complaint against AT&T Corporation under the False Claims Act for conduct related to its provision of Internet Protocol (IP) Relay services, the Justice Department announced today.   AT&T is a global conglomerate that provides a wide variety of telecommunications services, including Telecommunications Relay Services (TRS) for the deaf and hard-of-hearing.

IP Relay is a text-based communications service designed to allow hearing-impaired individuals to place telephone calls to hearing persons by typing messages over the Internet that are relayed by communications assistants (CAs) employed by an IP Relay provider.   IP Relay is funded by fees assessed by telecommunications providers to telephone customers, and is provided at no cost to IP Relay users.   The FCC, through the TRS Fund, reimburses IP Relay providers at a rate of approximately $1.30 per minute.   In an effort to reduce the abuse of IP Relay by foreign scammers using the system to defraud American merchants with stolen credit cards and by other means, the FCC in 2009 required providers to verify the accuracy of each registered user’s name and mailing address.

The United States alleges that AT&T violated the False Claims Act by facilitating and seeking federal payment for IP Relay calls by international callers who were ineligible for the service and sought to use it for fraudulent purposes.   The complaint alleges that, out of fears that fraudulent call volume would drop after the registration deadline, AT&T knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States.   The complaint further contends that AT&T continued to employ this system even with the knowledge that it facilitated use of IP Relay by fraudulent foreign callers, which accounted for up to 95 percent of AT&T’s call volume.   The government’s complaint alleges that AT&T improperly billed the TRS Fund for reimbursement of these calls and received millions of dollars in federal payments as a result.

“Federal funding for Telecommunications Relay Services is intended to help the hearing- and speech-impaired in the United States,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice.   “We will pursue those who seek to gain by knowingly allowing others to abuse this program.”

“Taxpayers must not bear the cost of abuses of the Telecommunications Relay system,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania.  “Those who misuse funds intended to benefit the hearing- and speech-impaired must be held accountable.”

The claims in the United States’ complaint are allegations only; there has been no determination of liability.

The United States’ complaint was filed in a lawsuit originally brought under the qui tam, or whistleblower, provisions of the False Claims Act by Constance Lyttle, a former CA who worked in one of AT&T’s IP Relay call centers.   Under the act’s qui tam provisions, a private citizen, known as a “relator,” can sue for fraud on behalf of the United States, which has the option of taking over the case.   If the lawsuit is successful, the relator is entitled to a share of any recovery.

SECRETARY CLINTON TRIES TO AVERT WATER INSTABILITY ISSUES

The following excerpt is from the U.S. State Department:
Media Note Office of the Spokesperson Washington, DC
March 22, 2012
n a speech commemorating World Water Day, Secretary of State Hillary Rodham Clinton today launched a new partnership to improve water security. The U.S. Water Partnership (USWP) is a public-private partnership that seeks to mobilize U.S.-based knowledge, expertise and resources to improve water security around the world – particularly in those countries most in need.

Secretary Clinton also announced the release today of an Intelligence Community Assessment (ICA) on Global Water Security. The ICA is based on a National Intelligence Estimate requested by Secretary Clinton a year earlier to assess the impact of global water issues on U.S. national security interests. The report concludes that while wars over water are unlikely within the next ten years, water challenges – shortages, poor water quality, floods - will likely increase the risk of instability and state failure, exacerbate regional tensions, and distract countries from working with the United States on important policy objectives.

The ICA also notes that, as a consequence of water problems globally, the demand for U.S. assistance and expertise will increase. The U.S. Water Partnership launched today will help meet this need by creating a platform for fostering new partnerships among the U.S.-based private sector and the non-profit, academic, scientific, and expert communities. The Partnership will mobilize the “Best-of-America” to provide safe drinking water and sanitation and improve water resources management worldwide.

Secretary Clinton was joined by Representative Earl Blumenauer in welcoming representatives of eighteen USWP members today, including Africare, the Coca-Cola Company, Procter & Gamble, the Nature Conservancy, Rockefeller Foundation, Ford Motor Company, Skoll Global Threats Fund, the Water Institute at the University of North Carolina, World Resources Institute, Global Environment & Technology Foundation, Global Water Challenge, and Clean Water America Alliance. Representatives of U.S. Government partners participated from: U.S. International Boundary and Water Commission; National Aeronautics and Space Administration; U.S. Agency for International Development; U.S. Army Corps of Engineers; and U.S. Department of the Interior, in addition to the U.S. Department of State.

In her remarks today, the Secretary stated: “We believe this Water Partnership will help map out our route to a more water secure world: a world where no one dies from water-related diseases; where water does not impede social or economic development; and where no war is ever fought over water.”

VA REPORTS INCREASING NUMBERS OF HOMELESS WOMEN VETERANS

The following excerpt is from the Veterans Affairs website:
Homeless women Veteran on the rise; VA Improving Services
March 21, 2012 by Stacy Vasquez
A’s efforts to provide housing and health care support for women Veterans have never been more critical. The number of homeless women Veterans continues to rise.  As a result, VA is taking steps to improve and expand its services for women Veterans who are homeless or at risk of becoming homeless. While VA’s services are available to all Veterans, there are special programs available to women Veterans, including supportive services for Veteran families, HUD-VASH housing vouchers, Grant and Pier Diem program, and specialized health care and mental health services for women—all designed to better meet the needs of women Veterans.

VA understands that many women Veterans face great challenges when returning to civilian life that are different from those of male Veterans. These challenges, without intervention, can put women Veterans at greater risk of becoming homeless.
“Homelessness is really a symptom and the end step in a long stage of deterioration,” said W. Scott Gould, Assistant Secretary of the Department of Veterans Affairs, at the 25th National Disabled Veterans Winter Sports Clinic in Snowmass Village, Colorado.  “Once they are [at VA], we have the tools and capabilities to be able to help them,” he said.
According the 2010 Annual Homeless Assessment Report to Congress, women comprised 8 percent of the homeless Veteran population in 2010; however, they represented only 7 percent of the Veteran population.

A recent GAO report cites the special conditions or predispositions that make it hard for women to readjust after service. Two-thirds of homeless women Veterans were between 40 and 59 years old, the report said, and more than one-third had disabilities. In addition, many of these women live with young children. In addition to the demands that come with bearing and raising children, women are sometimes victims of traumatic events experienced during their service. The GAO emphasized the need for VA to provide reliable and expansive programs that specifically aim to help women Veterans get the benefits, housing, child care, transportation, and health care support they need.
All homeless Veterans and Veterans at risk of homelessness are encouraged to connect with VA services by calling the National Call Center for Homeless Veterans at 1-877-4AID-VET (1-877-424-3838), or online atwww.veteranscrisisline.net.

VA will continue to evaluate and ramp up its programs to meet the needs of all homeless and at-risk Veterans, men and women alike—a challenge VA embraces.
For more on VA’s initiative to end Veteran homelessness by 2015, and to access information and resources, visit: www.va.gov/homeless.

Stacy Vasquez is a U.S. Army Veteran (1991 – 2003). She currently serves as the Deputy Director for Homeless Veteran Initiatives at the U.S. Department of Veterans Affairs.

SCIENTIST GOES TO PRISON FOR ESPIONAGE AND OTHER CHARGES

The following excerpt is from the Department of Justice website:
Wednesday, March 21, 2012
Noted Scientist Sentenced to 13-Year Prison Term for Attempted Espionage, Fraud and Tax Charges
WASHINGTON – Stewart David Nozette, 54, a scientist who once worked for the Department of Energy, the Department of Defense, the National Aeronautics and Space Administration and the White House’s National Space Council, was sentenced today to 13 years in prison for attempted espionage, conspiracy to defraud the United States and tax evasion.

The sentence covered charges in two cases.   In one, Nozette pleaded guilty in September 2011 to attempted espionage for providing classified information to a person he believed to be an Israeli intelligence officer.   In the other, he pleaded guilty in January 2009 to fraud and tax charges stemming from more than $265,000 in false claims he submitted to the government.

The sentencing, which took place this morning in the U.S. District Court for the District of Columbia, was announced by Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; Lisa Monaco, Assistant Attorney General for National Security; and Principal Deputy Assistant Attorney General John A. DiCicco of the Tax Division.

Joining in the announcement were James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; Paul K. Martin, Inspector General for the National Aeronautics and Space Administration (NASA OIG); Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); and John Wagner, Special Agent in Charge of the Washington, D.C., Office of the Naval Criminal Investigative Service (NCIS).

In addition to the prison term, the Honorable Paul L. Friedman ordered that Nozette pay more than $217,000 in restitution to the government agencies he defrauded.

Nozette has been in custody since his arrest for attempted espionage on Oct. 19, 2009.   At the time, he was awaiting sentencing on the fraud and tax evasion charges.  FBI agents arrested Nozette following an undercover operation in which he provided classified materials on three occasions, including one that formed the basis for his guilty plea.   He was subsequently indicted by a federal grand jury.  The indictment does not allege that the government of Israel or anyone acting on its behalf committed any offense under U.S. laws in this case.

“Stewart Nozette's greed exceeded his loyalty to our country” said U.S. Attorney Machen.  “He wasted his talent and ruined his reputation by agreeing to sell national secrets to someone he believed was a foreign agent.  His time in prison will provide him ample opportunity to reflect on his decision to betray the United States.”

“Stewart Nozette betrayed his country and the trust that was placed in him by attempting to sell some of America’s most closely-guarded secrets for profit.   Today, he received the justice he deserves.  As this case demonstrates, we remain vigilant in protecting America’s secrets and in bringing to justice those who compromise them,” said Assistant Attorney General Monaco.  “I thank the many agents, analysts and prosecutors who worked on this important case.”        

“As this case demonstrates, those who attempt to evade their taxes by abusing the tax-exempt status of non-profit entities will be investigated, prosecuted and punished,” said Principal Deputy Assistant Attorney General DiCicco.

“Today’s sentencing demonstrates that espionage remains a serious threat to our national security,” said Assistant Director in Charge McJunkin. “The FBI and our partners in the defense and intelligence communities work every day to prevent sensitive information from getting into the wrong hands, and I commend the hard work of the dedicated agents, analysts and prosecutors who spent a significant amount of time bringing this case to resolution.”

“We are particularly proud that NASA OIG’s fraud investigation of Nozette, which began in 2006, served as the catalyst for further investigation and today's outcome,” said NASA Inspector General Martin.

“IRS-Criminal Investigation provides financial investigative expertise in our work with our law enforcement partners,” said Acting Special Agent in Charge Hylton. “Pooling the skills of each agency makes a formidable team as we investigate allegations of wrongdoing.  Mr. Nozette decided to betray his country to line his own pockets rather than play by the rules.  He now is being held accountable for his actions.”

“Federal agents take an oath to protect our nation ‘against all enemies, foreign and domestic.’  That would include ‘insider threats’ like Stewart Nozette,” said Special Agent in Charge Wagner.  “NCIS is committed to working with our law enforcement partners and prosecutors to find and hold accountable those like Nozette who put personal gain above national security.”

Nozette received a Ph.D. in Planetary Sciences from the Massachusetts Institute of Technology. Beginning in at least 1989, he held sensitive and high-profile positions within the U.S. government.  He worked in various capacities on behalf of the government in the development of state-of-the-art programs in defense and space.   During his career, for example, Nozette worked at the White House on the National Space Council, Executive Office of the President.  He also worked as a physicist for the U.S. Department of Energy’s Lawrence Livermore National Laboratory, where he designed highly advanced technology.
         
Nozette was the president, treasurer and director of the Alliance for Competitive Technology (ACT), a non-profit organization that he organized in March 1990.  Between January 2000 and February 2006, Nozette, through his company, ACT, entered into agreements with several government agencies to develop highly advanced technology. Nozette performed some of this research and development at the U.S. Naval Research Laboratory (NRL) in Washington, D.C., the Defense Advanced Research Projects Agency (DARPA) in Arlington, Va., and NASA’s Goddard Space Flight Center in Greenbelt, Md.
           
In connection with the fraud and tax case, Nozette admitted that, from 2000 through 2006, he used ACT to defraud the NRL, DARPA and NASA by making and presenting more than $265,000 in fraudulent reimbursement claims, most of which were paid.  He also admitted that, from 2001 through 2005, he willfully evaded more than $200,000 in federal taxes.  In addition, he admitted using ACT, an entity exempt from taxation because of its non-profit status, to receive income and to pay personal expenses, such as mortgages, automobile loans, sedan services and other items.
           
The investigation concerning ACT led investigators to suspect that Nozette had misused government information.  From 1989 through 2006, Nozette held security clearances as high as TOP SECRET and had regular, frequent access to classified information and documents related to the national defense of the United States.
         
On Sept. 3, 2009, Nozette was contacted via telephone by an individual purporting to be an Israeli intelligence officer from the Mossad, but who was, in fact, an undercover employee of the FBI.   That same day, Nozette informed the undercover employee that he had clearances “all the way to Top Secret SCI” and that anything “that the U.S. has done in space I’ve seen.”   He stated that he would provide classified information for money and a foreign passport to a country without extradition to the United States.
         
A series of contacts followed over the next several weeks, including meetings and exchanges in which Nozette took $10,000 in cash left by the FBI at pre-arranged drop-off sites. Nozette provided information classified as SECRET/SCI and TOP SECRET/SCI that related to the national defense. Some of this information directly concerned satellites, early warning systems, means of defense or retaliation against large-scale attack, communications intelligence information and major elements of defense strategy.
         
Nozette and the undercover employee met for the final time on Oct. 19, 2009, at the Mayflower Hotel.  During that meeting, Nozette pushed to receive larger payments for the secrets he was disclosing, declaring that, “I gave you even in this first run, some of the most classified information that there is. . . . I’ve sort of crossed the Rubicon.”
         
Nozette was arrested soon after he made these statements.

The investigation of the fraud and tax evasion case was conducted by NASA-OIG, NCIS, the Defense Criminal Investigative Service (DCIS), IRS-CI, the IRS Tax Exempt & Government Entities Group, the Naval Audit Service, the Defense Contract Audit Agency and the FBI’s Washington Field Office.
         
The prosecution of the fraud and tax evasion case was handled by Assistant U.S. Attorney Michael K. Atkinson from the Fraud and Public Corruption Section of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Kenneth C. Vert from the Department of Justice’s Tax Division.
         
The investigation of the attempted espionage case was conducted by the FBI’s Washington Field Office, with assistance from NCIS; Naval Audit Service; National Reconnaissance Office; Air Force Office of Special Investigations; Defense Computer Forensics Laboratory; Defense Advanced Research Projects Agency; DCIS; Defense Contract Audit Agency; U.S. Army 902ndMilitary Intelligence Group; NASA Office of Counterintelligence; NASA-OIG; Department of Energy Office of Intelligence and Counterintelligence; IRS-CI; IRS Tax Exempt & Government Entities group; U.S. Customs and Border Protection; and the U.S. Postal Inspection Service, as well as other partners in the U.S. intelligence community.

F-35 LIGHTING II JOINT STRIKE FIGHTER PROGRAM REPORT

The following excerpt is from a Department of Defense American Forces Press Service e-mail:

F-35 Reaches Critical Juncture After Strong Year, Official Says

By Army Sgt. 1st Class Tyrone C. Marshall Jr.
American Forces Press Service

WASHINGTON, March 20, 2012 - The F-35 Lightning II joint strike fighter program -- the centerpiece of future tactical aviation and a key to implementing new military strategic guidance -- made strong progress in its development last year, a defense official said today.

Frank Kendall, acting undersecretary of defense for acquisition, technology and logistics, told the House Armed Services Committee that the fighter aircraft is essential to the Defense Department, and that it made "strong progress" in 2011.

"Last fall, the department engaged in a strategy and budget review, where everything -- and I do mean everything -- was on the table," Kendall said. "After a careful look at the joint strike fighter program, the department determined that we do need the JSF [and] that we need all three variants of the fighter, and that we need the planned inventory of 2,443 jets."

That said, Kendall added, "you must recognize there is still a long way to go for JSF." The F-35 flight test program is only about 20 percent complete and "many of the more challenging elements of flight test are still ahead of us," he said.

Kendall noted the F-35 development has reached a crucial point in the conversion from being conceptualized to actual production.

"The JSF program is undergoing the critical transition from development to production," he said. "Historically, this is always a difficult phase for any program, but particularly so for a high-performance aircraft."

That transition has been even more difficult for the F-35, Kendall said, because the program began production very early, well before flight testing had begun.

That decision for early production resulted in an unprecedented level of concurrency, which drove the need for significant changes in the program, he said. "With this year's budget, I believe we are now set on a course for program stability," he added.

Navy Vice Adm. David Venlet, program manager for the F-35, also said the program now is on track. "The F-35 has schedule and budget realism now going forward," he said. "It is transparent in the discovery and correction of issues arising in test that are typical in all fighter aircraft development."

Venlet told the Congress members he believes the F-35 "is a critical presence in the combined force battle space. It makes many other systems and capabilities and effects better because of the presence of the F-35's sensors."

Venlet called the F-35 a "critical presence" to many nations, as well as being a bond of joint strength across all U.S. military services.

"It is a bond of capability and a bond economically across many nations that raises the level of technology benefit in our militaries and our industries," he said.

Venlet called the F-35 "the best possible growth platform to incorporate future advances in weapons, sensors and networks."

The F-35 also is an assurance to service members that "they will succeed in every mission and return home safely to their loved ones."
 

SEC COMMISSIONER AGUILAR ON THE FINANCIAL ABUSE OF SENIORS

The following excerpt is from the SEC website:
Speech by Commissioner:
Why Seniors Are More Vulnerable Now As Targets for Financial Abuse
by
Commissioner Luis A. Aguilar
U.S. Securities and Exchange Commission
The American Retirement Summit
Washington, D.C.
March 15, 2012
Delivered by Commissioner Aguilar’s Chief of Staff: Smeeta Ramarathnam
Thank you, Keith. It is my pleasure to be here today, on behalf of Commissioner Aguilar, to discuss serious concerns confronting investors when they are at their most vulnerable. Commissioner Aguilar asked me to convey his regrets that he is unable to be here in person, and he requested that I deliver this statement on his behalf. It is initiatives and dialogues like this one that are critical to highlighting the most vulnerable in need of help.
Commissioner Aguilar also would like to highlight Keith Green’s leadership and stellar efforts with the American Retirement Initiative. Commissioner Aguilar was honored to be the keynote speaker at the inaugural meeting of the Initiative, last November. We were so pleased that Keith served as the host and master of ceremonies at Commissioner Aguilar’s recent swearing-in ceremony, marking the start of his second term as an SEC Commissioner. It is a delight to be here to support this important work.
Before I continue, however, I need to say that the views I express today represent Commissioner Aguilar’s views, and do not necessarily reflect the views of the Securities and Exchange Commission, the other Commissioners, or members of the staff.
Last year, the actor Mickey Rooney testified before the Senate’s Special Committee on Aging regarding the abuse, neglect, and financial exploitation of seniors. He spoke from personal experience, and his words were heartfelt and tragic. He said
Elder abuse comes in many different forms – physical abuse, emotional abuse, or financial abuse. Each one is devastating in its own right. Many times, sadly, as with my situation, the elder abuse involves a family member. When that happens, you feel scared, disappointed, angry, and you can’t believe this is happening to you.1
He went on to say
I know because it happened to me. My money was taken and misused. When I asked for information, I was told I couldn’t have any of my own information. I was told it was “for my own good” and that it was none of my business.” I was literally left powerless.2
We all know that Mickey Rooney’s story of exploitation is one many investors experience. Commissioner Aguilar is growing increasingly concerned about issues arising from financial exploitation of the elderly. It is clearly on the rise. It has been estimated that at least one in five Americans over the age of 65 – that’s 7.3 million seniors – has been victimized by financial fraud.3 It is the responsibility of regulators to represent the vulnerable by writing and enforcing rules that reduce the opportunity for fraud to take place.
I am going to spend my time with you speaking about some current factors arising from the financial crisis that are exacerbating the vulnerability of seniors.
First, I would like to discuss a few factors fueling the vulnerability of seniors that deserve greater attention;

Second, I will talk about the need for greater federal leadership; and

Third, I will discuss mechanisms that could amplify investors’ voices at the SEC.

Factors Fueling the Vulnerability of Seniors
We all know that we are in the throes of an American retirement crisis. The factors fueling the vulnerability of seniors are many, but they include the following:
Continued volatility of the market;

Plummeting values of assets meant for retirement;

High unemployment and job loss making it impossible to meet day-to-day expenses – much less save for retirement;

The shift away from private sector employer-based defined benefit pensions to employee-controlled personal retirement accounts4 – individuals are increasingly being asked to be in control of their own retirement future;

The growth in the percentage of the population who are seniors; and

The cognitive declines that millions of seniors are facing.
Even with the Dow looking a bit more positive these days, a retirement crisis still looms on the horizon. Moreover, this retirement crisis is taking on a new urgency for reasons that are not receiving the attention they require. The reasons include significant wealth inequality between generations and the decimation of resources provided to state and local authorities.
Wealth Inequality
Demographically, seniors will soon be the largest percentage of the American population. Experts have been forecasting this for some time, as the baby boomer generation ages and retires. What has not been emphasized as clearly is the tremendous generational inequality of wealth between some seniors and everyone else. The good news is that in the aggregate, today’s senior population has been successful in accumulating assets. As noted by Andrew Roth, the Director of Fraud Education and Outreach for the California Department of Corporations, aging baby boomers have accumulated substantial assets, either through inheritance, home equity, or a lifetime of saving for retirement, that are ripe for abuse.5 The bad news is that this disparity between seniors and everyone else, including their own children, exponentially increases the vulnerability of seniors to being exploited.
Because, while baby boomers have accumulated significant assets, the generations that follow may fall into a severely lower income bracket. According to a Pew Research Center analysis, entitled “The Rising Age Gap in Economic Well-Being,” households headed by older adults have made dramatic gains relative to those headed by younger adults over the past quarter of a century.6 For example, in 2009, households headed by adults ages 65 and older possessed 42% more median net worth than households headed by their same-aged counterparts had in 1984. During this same period, the wealth of households headed by adults younger than 35 had 68% less wealth than households of their same-aged counterparts. There is no question that this wealth inequality between the old and young widened substantially with the housing collapse of 2006, the Great Recession of 2007-2009, and the ensuing jobless recovery.7

Take housing as just one example – older Americans have generally benefitted in the form of the long run-up in home values. Most of today’s older homeowners entered the housing market long ago – at pre-bubble prices. While, of course, some seniors have been hurt by the housing market collapse, in the aggregate, most have seen their home equity rise. Compare this to young adults, many of whom bought as the bubble was inflating. And, when the bubble burst, many were left with negative equity.
Seniors have always been a vulnerable population that is in need of more protection. However, this vulnerability is being exacerbated by the significant wealth inequality in American society that is leading to greater opportunities for deception and fraud.

Decimation of Resources to Local Authorities
At a time when vulnerabilities are being exacerbated, the law enforcement and government framework to handle elderly exploitation has been severely cut back. Thus, at a time when the need grows greater, there are far fewer to help.
As the General Accounting Office has explained, “[s]tates are primarily responsible for protecting older adults from abuse, neglect and exploitation.” In each state, an Adult Protective Services (APS) program aims to identify, investigate, resolve and prevent such abuse.8

In 2011, as the economic downturn continued to wreak havoc on government budgets, 181,000 local workers and 63,000 of their state peers were let go.9 In the aggregate, state and local workers have seen their numbers dwindle throughout the Great Recession. Some 656,000 employees have been laid off since mid-2008 as governments try to cope with plummeting tax revenues.10

State and local governments have been decimated of people and resources, and state securities regulators and state APS units have been impacted. A recent study by GAO found that state APS programs faced many challenges – including the nationwide growth in elder abuse caseloads and an increase in the complexity of those cases, which make them more difficult to resolve. Of course, resources are not keeping pace with the changes – as we know, quite the opposite. APS program officials are quick to point out that it is difficult to maintain staffing levels and training. The GAO found that 25 of the 38 states surveyed indicated that total APS funding received from all sources has stayed static or decreased over the past five years, and program officials also ranked insufficient funding for program operations as the most significant challenge they faced.11

On top of that, states indicate that they have limited access to information and may struggle to respond to abuse cases appropriately. Many of these programs also face challenges in collecting, maintaining, and reporting statewide case-level administrative data, thereby hampering their ability to track outcomes and assess the effectiveness of services provided.12
Given this landscape of a vulnerable population growing larger and more susceptible to exploitation, and the fewer resources devoted to enforcing the law and punishing those who commit fraud – one can see the serious opportunity for financial exploitation of older Americans. It is almost as if they are wearing targets on their backs.

Examples of Deception
Given that there is an opportunity to exploit this vulnerable population, we know there will be no shortage of those who will seek to do exactly that. Let me list out just a few examples from the SEC’s enforcement cases, in the last year.
In August 2011, the SEC charged two Florida men, one of whom has an extensive criminal history, with operating a Ponzi scheme disguised as a purported private equity fund that fraudulently raised approximately $22 million from more than 100 investors, many of whom were Florida teachers or retirees.13

In May 5, 2011, the SEC obtained emergency relief freezing the assets of a California resident for operating a fraudulent day trading scheme targeting senior citizens that raised approximately $3.3 million.14

In April 18, 2011, the SEC charged a financial services holding company, its CEO, and others for orchestrating a Ponzi scheme that raised at least $7.7 million from approximately 75 investors, many of whom were elderly and unsophisticated.15
I raise these examples as evidence that there will always be those who want to prey on the vulnerable and seek to exploit them. That is why we must have a strong securities law framework in place that limits the opportunities for fraud and deception, and a well-funded enforcement arm to enforce the law against those who attempt to break it.
However, we are now facing a world where the elderly are even more vulnerable, and their protectors have been undercut and underfunded. Thus, there needs to be a different public dialogue than the one occurring now. Currently, there is an acknowledgement that there is a retirement crisis on the horizon; but the vulnerabilities and harm to the elderly investor, and the lack of a clear safety net, have not been acknowledged enough. It is time to take action at the federal level to cope with this problem.

Need Greater Leadership from Federal Government Including SEC
When it comes to the rise of financial exploitation of the elderly, it is clear there is not federal leadership on this issue. The GAO, while not focused specifically on financial exploitation, found that greater federal leadership was needed in this area, and made several specific recommendations to ensure national data collection and response.16 For example, the report recommended, among other things, that:
The Secretary of Health and Human Services (“HHS”) determine the feasibility and cost of establishing a national resource center for APS-dedicated information that is comprehensive and easily accessible;

The Secretary of HHS, in conjunction with the Attorney General, convene a group of state APS representatives to help determine what APS administrative data on elder abuse cases would be most useful for all states and for the federal government to collect;

A pilot study be conducted to collect, compile, and disseminate uniform, reliable APS administrative data on elder abuse cases from each state.
If done properly and in an integrated way, these tools would be very valuable to federal and state securities regulators, and would help to battle financial exploitation.
However, more needs to be done specifically focused on the financial exploitation of the elderly.
As an independent agency, the SEC could play an important role in highlighting the issue and proposing some policy solutions. There are some fundamental building blocks required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”),17 which have yet to be put in place that would help with this.

Implement Dodd-Frank Act Requirements That Would Aid Seniors
First, Section 911 of the Dodd-Frank Act requires that the SEC establish and maintain an Investor Advisory Committee (IAC). The IAC could be one avenue by which seniors could communicate with the Commission. In fact, Congress realized the importance of ensuring that seniors were well-represented on the IAC, and added a requirement in the statute that one seat be held by a representative of senior investors.18 The goal of the IAC is to provide the Commission with the views of a broad spectrum of investors on their priorities concerning the Commission’s regulatory agenda. This Committee is of critical importance to ensuring that the SEC is focused on the needs and the practical realities facing investors.

Investors face an impossible challenge of representing themselves in front of the Commission, particularly retail investors. Investors do not have the money or the resources to write lengthy comments letters, or participate in meetings with SEC Commissioners and the staff. If the Commission is to be an effective advocate for investors, it will need a strong and effective IAC to ensure that reality. The IAC could be used to gather data about the vulnerabilities of senior investors, which would be invaluable to the public dialogue and an important catalyst to spur policy action.
Second, Section 915 of Dodd-Frank requires that the SEC establish an Office of the Investor Advocate.19 The Investor Advocate is tasked with assisting retail investors to resolve significant problems with the SEC or the self-regulatory organizations. In its report, the Senate Banking Committee explained that it was “necessary to create an office of the Investor Advocate within the SEC to strengthen the institution and ensure that the interests of retail investors are better represented.”20 The Committee was quite clear that this Office was intended to “ensure that the interests of retail investors are built into rulemaking proposals from the outset and that agency priorities reflect the issues that confront average investors.”21 Senator Akaka, who authored this provision stated,
The Investor Advocate is precisely the kind of external check, with independent reporting lines and independently determined compensation, that cannot be provided within the current structure of the SEC. It is not that the SEC does not advocate on behalf of investors, it is that it does not have a structure by which any meaningful self-evaluation can be conducted. This would be an entirely new function.22
Unfortunately as with the IAC, the Office of the Investor Advocate has not been established. It is in the interests of both investors and the SEC, to have this Office up and running as soon as possible.

Commissioner Aguilar encourages all of you to engage on these investor initiatives, and that you encourage that these requirements of the Dodd-Frank Act be implemented with all haste. The establishment of the IAC and the Office of the Investor Advocate will benefit investors, our markets, and the SEC. However, these are just the first steps of what would be needed to bring about sufficient attention and focus to this area.
There are, of course, other federal agencies that can play a role. For example, the new Consumer Financial Protection Bureau (CFPB) and its work related to senior-specific designations for brokers.

Financial professionals can earn a host of designations – such as Chartered Advisor for Senior Living and Chartered Senior Financial Planner – that make them seem well qualified to serve older people. It is deeply troubling that senior-specific designations can be obtained with very little effort. In 2008, the North American Securities Administrators Association (NASAA) issued a model rule on use of these designations. Some of the prohibitions in the rule include prohibiting the use of designations that are self-conferred or lack reasonable disciplinary procedures. To date, 27 states have adopted the rule, and it is pending in two others. However, despite the model rule, the Financial Industry Regulatory Authority (FINRA) issued a notice in November 2011 explaining that some widely-used senior designations don’t require “rigorous qualification standards” and some firms are “not particularly discerning regarding the quality of the designations” that their brokers are permitted to use.23 In fact, more than one-third of the firms that FINRA surveyed permit brokers to use senior designations without any verification of credentials.
Given this landscape, the Dodd-Frank Act charged the CFPB with reviewing the certifications of those who advise seniors.24 In fact, the CFPB has launched an Office of Older Americans – it is this office that is taking the lead on this initiative. Commissioner Aguilar is following this issue with a great deal of interest, and is hopeful that this initiative will lead to a better outcome for investors.

Conclusion
As seniors become the largest segment of the American population, and are faced with economic uncertainties and a growing predatory environment, there can be no delay in addressing the issues they face. Commissioner Aguilar and I commend the American Retirement Initiative and those of you here today for your efforts to find a way forward to improve how we treat our seniors.
Thank you for having me here today.