CFTC ORDERS GOLDMAN SACHS EXECUTION & CLEARING L.P. TO PAY $7 MILLION FOR SUPERVISION FAILURES HANDLING ACCOUNTS IT CARRIED

The following excerpt is from the Commodity Futures Trading Commission website: 
March 13, 2012
CFTC Orders Goldman Sachs Execution & Clearing, L.P., a Registered Futures Commission Merchant, to Pay $7 Million for Supervision Failures in Handling Accounts it Carried

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Goldman Sachs Execution & Clearing, L.P. (GSEC), a registered futures commission merchant based in New York, N.Y., agreed to pay a $5.5 million civil monetary penalty and $1.5 million in disgorgement to settle CFTC charges that it failed to diligently supervise accounts that it carried from about May 2007 to December 2009. The CFTC order also requires GSEC to cease and desist from violating CFTC regulations requiring diligent supervision. Additionally, the order states that GSEC represented in its settlement offer that it has made changes in light of the events discussed in the order, including implementing enhanced supervision policies, procedures, and training.

GSEC provided back-office and other services to some clients who themselves are broker-dealers, according to the order. One such broker-dealer (Broker-Dealer) offered memberships to investors to trade commodities in subaccounts of the Broker-Dealer carried by GSEC, the order finds. GSEC failed to diligently supervise the handling of these subaccounts when it did not investigate signs of questionable conduct by the Broker-Dealer, according to the order. For example, in May 2007, at the beginning of GSEC’s relationship with the Broker-Dealer, the Broker-Dealer’s lawyer represented that the Broker-Dealer would not engage in commodity futures trading and therefore would not need to register as a commodity pool operator with the CFTC. However, the order further finds that the Broker-Dealer had already opened a commodity futures trading account with GSEC and, thereafter, traded commodity futures. Nevertheless, GSEC did not investigate the apparent contradiction between the lawyer’s representations and the Broker-Dealer’s actions, the order finds.

The order states, as another example, that in August 2009, GSEC learned that the Broker-Dealer distributed to at least one of its members a subaccount statement that falsely purported to have been issued by a non-existent GSEC affiliate. In addition to noting that no such GSEC affiliate existed, GSEC told the Broker-Dealer that the statement created an inaccurate picture of the Broker-Dealer’s overall performance. Yet, as the order further finds, despite these signals of questionable conduct, GSEC simply instructed the Broker-Dealer not to issue such an account statement and accepted the Broker-Dealer’s assurances that it had not done so before and would not do so again. In December 2009, the Broker-Dealer provided to GSEC a draft disclosure statement that disclosed that the Broker-Dealer had carried negative capital balances of approximately $6.8 million since October 2009, according to the order.

From May 2007 to December 2009, GSEC received approximately $1.5 million of gross fees and commissions for transactions it executed and/or cleared on behalf of the Broker-Dealer, the order finds.

According to CFTC Division of Enforcement Director David Meister: “The CFTC’s rules mandate that registrants diligently supervise their employees and agents. When registrants become aware of questionable activity, they must not simply rely on assurances from interested parties and their representatives, but instead must diligently investigate. As this case indicates, the Commission will hold registrants accountable if they fail in this regard.”

The CFTC appreciates the assistance of the National Futures Association, the Chicago Board Options Exchange, and the U.S. Securities and Exchange Commission.
CFTC staff members responsible for this case are Laura Martin, Janine Gargiulo, Candice Aloisi, Judith Slowly, David Acevedo, Manal Sultan, Lenel Hickson, Lisa Hazel, Annette Vitale, Ronald Carletta, Stephen Obie, and Vincent McGonagle.

SEC FILES SUBPOENA ENFORCEMENT ACTION AGAINST WELLS FARGO

The following excerpt is from the SEC website:
March 23, 2012
SEC Files Subpoena Enforcement Action Against Wells Fargo for Failure to Produce Documents in Mortgage-Backed Securities Investigation
The Securities and Exchange Commission announced today that it has filed a subpoena enforcement action in the U.S. District Court for the Northern District of California against Wells Fargo & Company. According to the filing, the Commission is investigating possible fraud in connection with Wells Fargo’s sale of nearly $60 billion in residential mortgage-backed securities to investors. Pursuant to subpoenas dating back to September 2011, the bank was obligated to produce (and agreed to produce) documents to the Commission, but has failed to do so. Accordingly, the Commission filed its Application for an Order Requiring Compliance with Administrative Subpoenas.

The Commission’s action relates to its investigation into whether Wells Fargo made material misrepresentations or omitted material facts in a series of offerings between September 2006 and early 2008. The Commission’s application explains that, in connection with the securitization of the loans, a due diligence review of a sample of the loans in each offering was performed. Certain loans within that sample would be dropped from the offering for failure to comply with Wells Fargo’s loan underwriting standards. However, according to the Commission, it does not appear that Wells Fargo took any steps to address similar deficiencies in the remainder of the loans in the pool, which were securitized and sold to investors. The Commission is investigating, among other things, whether Wells Fargo misrepresented to investors that the loans being securitized complied with the bank’s loan underwriting standards.

The staff in the Commission’s San Francisco Regional Office issued several subpoenas to Wells Fargo since September 2011 seeking, among other things, materials related to due diligence and to the bank’s underwriting guidelines. According to the Commission, Wells Fargo agreed to produce the documents, and set forth a timetable for doing so, yet has failed to produce many of the materials.

Pursuant to its Application, the Commission is seeking an order from the federal district court compelling Wells Fargo to comply with the Commission’s administrative subpoenas and to produce all responsive materials to the staff. The Commission notes that it is continuing to conduct a fact-finding inquiry and has not concluded that anyone has broken the law.

PRESIDENT OBAMA VISITS U.S. TROOPS IN SOUTH KOREA

The following excerpt is from the Department of Defense American Forces Press Service:

Obama Praises U.S. Troops' Legacy in South Korea

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

WASHINGTON, March 25, 2012 - Visiting with U.S. troops stationed in South Korea near the demilitarized zone yesterday, President Barack Obama lauded their historic security role that assisted South Korea as it transformed itself into a democratic and prosperous nation in the years following the Korean War.

"When you think about the transformation that has taken place in South Korea during my lifetime, it is directly attributable to this long line of soldiers, sailors, airmen, marines [and] coast guardsmen who were willing to create the space and the opportunity for freedom and prosperity," said Obama, who's in South Korea to attend a Nuclear Security Summit in the capital city of Seoul.

At Camp Bonifas, located near the demilitarized zone that has divided North and South Korea since the Korean War armistice was signed in 1953, Obama told the troops they're serving on "freedom's frontier." About 28,000 U.S. troops are stationed in South Korea today.

"And the contrast between South Korea and North Korea could not be clearer, could not be starker, both in terms of freedom, but also in terms of prosperity," Obama said.

The president attributed South Korea's success to the "incredible" resilience, talents and hard work of their people.

"But it also has to do with you guys," Obama told troops. "And so my main message is the same, obviously, to every base that I go to ... all around the world, which is, I could not be prouder of what you're doing. Everybody back home could not be prouder of what you guys do each and every day -- the dedication, the professionalism that you show.

"But there's something about this spot in particular," he continued, "where there's such a clear line and there's such an obvious impact that you have for the good each and every day that should make all of you proud."

The president shared an anecdote of a conversation he'd had with South Korean President Lee Myung-bak.

"Last time I was here, I was having lunch with the president of South Korea, President Lee," Obama said. "And he talked about how he was a small child when the Korean War was taking place, and its aftermath, and the brutal poverty, the fact that they had nothing.

"And he went on to be an auto executive, and ultimately, the president of his country, and watch it grow," Obama continued. "And he specifically said to me -- and this was a private moment; he didn't say this in front of the press, ... he said, 'The only reason that was able to happen -- and I still think back to all those American soldiers and the sacrifices that they made.'"

Obama expressed his pride in the job U.S. troops have done in South Korea and said he is grateful for the legacy they are carrying on.

"We're proud of you," Obama told the U.S. service members, "and I hope that all your family back home knows how proud your commander-in-chief is of you."
 

DEFENSE DEPARTMENT PROFILES A MARINE WORKING TO KEEP AFGHANS SAFE

This photo and excerpt are from a Department of Defense American Forces Press Service e-mail:
Marine Corps Sgt. Matthew Branch communicates with other Marines before a joint convoy with Afghan truck drivers, March 13, 2012. U.S. Marine Corps photo by Sgt. John Jackson

Face of Defense: Marine Works to Keep Afghans Safe
By Marine Corps Sgt. John Jackson
1st Marine Logistics Group
HELMAND PROVINCE, Afghanistan, March 23, 2012 - For the past six months, Marine Corps Sgt. Matthew Branch has provided security for Afghan truck drivers while they deliver fuel to forward operating bases here.
Branch is the assistant security team leader for 1st Marine Logistics Group's 2nd Platoon, General Support Motor Transport Company, Marine Air-Ground Task Force Support Battalion 11.2. He is a Marine Corps reservist attached to 4th Engineer Maintenance Company in Omaha, Neb.
Back home, the Kearney, Neb., native is accustomed to arriving at work at 6 a.m. and leaving around 3 p.m. Here, he must be sure the enemy does not affect his mission or harm Afghan drivers.
Branch is a maintenance technician at a clothing distribution center in civilian life. Fixing broken equipment is his specialty, but he has become proficient in his duties here as well, he said.
"This is my third deployment," said Branch, 29. "I love to deploy. I like to be engaged with what the Marine Corps is doing."
During his current deployment, Branch has been responsible for getting fuel and other supplies to Marines stationed throughout Helmand province.
"Our mission is to safely and expediently transport combat essential gear and fuel to the Marines and service members throughout the [area of operations]," he said. "Our platoon has completed more than a dozen missions, and we have been very successful at getting our job accomplished."
In addition to making sure fuel and equipment is delivered safely, Branch and his Marines also interact and work with local civilians.
"There is a language barrier, but it was definitely a unique experience," he said. "It gave us all a great insight and a great way to experience the local culture."
With his company's seven-month deployment nearing its end, Branch said, he is looking forward to getting back to Nebraska to be with his family, but believes his time in Afghanistan has been a worthy accomplishment.
"I am ready to get in some good quality time with my wife and daughter," he said. "My wife is a very proud Marine Corps wife, and she is very supportive.
"This deployment has been a success. Any mission that was asked of the Marines, they got done and excelled at," he added. "We kept our convoys safe, the local nationals safe, and got our missions completed."

NATIONAL SCIENCE FOUNDATION ARTICLE SAYS NOISE AFFECTS PLANTS

                                         CREDIT:  BUREAU OF LAND MANAGEMENT
Human Noise Has Ripple Effects on Plants
March 20, 2012
A growing body of research shows that birds and other animals change their behavior in response to human noise, such as the din of traffic or the hum of machinery.
But human clamor doesn't just affect animals.

Because many animals also pollinate plants or eat or disperse their seeds, human noise can have ripple effects on plants, too, finds a new study reported in the March 21, 2012, issue of the journal Proceedings of the Royal Society B.

In cases where noise has ripple effects on long-lived plants like trees, the consequences could last for decades, even after the source of the noise goes away, says lead author Clinton Francis of the National Science Foundation (NSF) National Evolutionary Synthesis Center in Durham, North Carolina.
In previous studies, Francis and colleagues found that some animals increase in numbers near noisy sites, while others decline.

But could animals' different responses to human noise have indirect effects on plants, too?
To find out, the researchers conducted a series of experiments from 2007 to 2010 in the Bureau of Land Management's Rattlesnake Canyon Wildlife Area in northwestern New Mexico.

The region is home to thousands of natural gas wells, many of which are coupled with noisy compressors for extracting the gas and transporting it through pipelines.
The compressors roar and rumble day and night, every day of the year.
The advantage of working in natural gas sites is they allow scientists to study noise and its effects on wildlife without the confounding factors in noisy areas like roadways or cities, such as pollution from artificial light and chemicals, or collisions with cars.
As part of their research, Francis and colleagues first conducted an experiment using patches of artificial plants designed to mimic a common red wildflower in the area called scarlet gilia.

Each patch consisted of five artificial plants with three "flowers" each--microcentrifuge tubes wrapped in red electrical tape--which were filled with a fixed amount of sugar water for nectar.

To help in estimating pollen transfer within and between the patches, the researchers also dusted the flowers of one plant per patch with artificial pollen, using a different color for each patch.

Din levels at noisy patches were similar to that of a highway heard from 500 meters away, Francis said.

When the researchers compared the number of pollinator visits at noisy and quiet sites, they found that one bird species in particular--the black-chinned hummingbird--made five times more visits to noisy sites than quiet ones.
"Black-chinned hummingbirds may prefer noisy sites because another bird species that preys on their nestlings, the western scrub jay, tends to avoid those areas," Francis said.
Pollen transfer was also more common in the noisy sites.

If more hummingbird visits and greater pollen transfer translate to higher seed production for the plants, the results suggest that "hummingbird-pollinated plants such as scarlet gilia may indirectly benefit from noise," Francis said.

Another set of experiments revealed that noise may indirectly benefit some plants, but is bad news for others.
In a second series of experiments at the same study site, the researchers set out to discover what noise might mean for tree seeds and seedlings, using one of the dominant trees in the area--the piñon pine.

Piñon pine seeds that aren't plucked from their cones fall to the ground and are eaten by birds and other animals.

To find out if noise affected the number of piñon pine seeds that animals ate, the researchers scattered piñon pine seeds beneath 120 piñon pine trees in noisy and quiet sites, using a motion-triggered camera to figure out what animals took the seeds.
After three days, several animals were spotted feeding on the seeds, including mice, chipmunks, squirrels, birds and rabbits.

But two animals in particular differed between quiet and noisy sites--mice, which preferred noisy sites, and western scrub jays, which avoided them altogether.

Piñon pine seeds that are eaten by mice don't survive the passage through the animal's gut, Francis said, so the boost in mouse populations near noisy sites could be bad news for pine seedlings in those areas.

In contrast, a single western scrub jay may take hundreds to thousands of seeds, only to hide them in the soil to eat later in the year.

The seeds they fail to relocate will eventually germinate, so the preference of western scrub jays for quiet areas means that piñon pines in those areas are likely to benefit.
In keeping with their seed results, the researchers counted the number of piñon pine seedlings and found that they were four times as abundant in quiet sites compared with noisy ones.

It may take decades for a piñon pine to grow from a seedling into a full-grown tree, Francis said, so the consequences of noise may last longer than scientists thought.
"Fewer seedlings in noisy areas might eventually mean fewer mature trees, but because piñon pines are so slow-growing the shift could have gone undetected for years," he said.
"Fewer piñon pine trees would mean less critical habitat for the hundreds of species that depend on them for survival."

Other authors of the study include Catherine Ortega, most recently of Fort Lewis College, and Alexander Cruz and Nathan Kleist of the University of Colorado, Boulder.
The above photo and excerpt are from the National Science Foundation website: 

NEW SOUTHERN AFRICAN CONSERVATION PROJECT LAUDED BY THE U.S.

The following excerpt is from a U.S. State Department e-mail:
Kavango Zambezi Transfrontier Conservation Area Launch
Media Note Office of the Spokesperson Washington, DC
March 21, 2012
The United States Government applauds the Governments of Angola, Botswana, Namibia, Zambia, and Zimbabwe on the March 15th launch of the Kavango Zambezi Transfrontier Conservation Area. This launch was the result of three years of technical and legal consultations and is a shining example of regional coordination in Southern Africa. The United States would also like to congratulate the Southern African Development Community (SADC) for its guiding role in this conservation project.
The Kavango Zambezi Transfrontier Conservation Area will allow fragmented wildlife populations from all five countries to reconnect and roam across borders in an area spanning over 170,000 square miles (440,000 square kilometers). This project is a noteworthy step towards protecting the region’s unique wildlife and vital ecosystems as well as enhancing regional economic development.

INSIDE TRADER SETTLES CHARGES REGARDING 3 COM ACQUISITION KNOWLEDGE

The following excerpt is from the SEC website:
March 20, 2012
Defendant Michael Kimelman Settles SEC Insider Trading Charges
The U.S. Securities and Exchange Commission announced today that on March 16, 2012, The Honorable Richard J. Sullivan of the United States District Court for the Southern District of New York, entered a final judgment against Michael Kimelman in SEC v. Cutillo et al., 09-CV-9208, an insider trading case the SEC filed on November 5, 2009. See Lit. Rel. No. 21283 (Nov. 5, 2009). The SEC charged Kimelman, who was a trader at Lighthouse Financial Group, LLC, with trading on inside information regarding the announced acquisition of 3Com Corp. in September 2007.

In its complaint, the SEC alleged that Arthur Cutillo, a former attorney with the law firm Ropes & Gray LLP, misappropriated from his law firm material nonpublic information concerning, among other things, the potential acquisition of 3Com, and tipped the inside information, through another attorney, to Zvi Goffer, in exchange for kickbacks. The SEC further alleged that Goffer tipped the inside information to a number of individuals, including Kimelman, who traded based on the information, realizing illicit profits of approximately $270,000 in two personal trading accounts.

To settle the SEC’s charges, Kimelman consented to the entry of a final judgment that: (i) permanently enjoins him from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement of $273,255, plus prejudgment interest of $54,582. In a related SEC administrative proceeding, Kimelman consented to the entry of an SEC order barring him from association with any broker or dealer, investment adviser, municipal securities dealer or transfer agent, and barring him from participating in any offering of a penny stock. Kimelman previously was found guilty of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. Michael Kimelman, 10-CR-0056 (S.D.N.Y.), and was sentenced to 30 months in prison and ordered to pay a criminal forfeiture of $289,079.

NEW U.S. EMBASSY OPENS IN BUCHAREST, ROMANIA

The following excerpt is from a U.S. State Department e-mail:
United States Dedicates New Embassy Compound in Bucharest, Romania
Media NoteOffice of the SpokespersonWashington, DC
March 22, 2012
Celebrating over 130 years of U.S.-Romanian diplomatic relations, U.S. Ambassador to Romania, Mark H. Gitenstein dedicated the new Embassy facility in Bucharest today. Romanian Senate President Vasile Blaga, Prime Minister Mihai-Razvan Ungureanu, and Managing Director of Operations at the Bureau of Overseas Buildings Operations (OBO) Leo Hession, participated in the ribbon-cutting ceremony, with Joseph R. “Beau” Biden, III, Attorney General of the State of Delaware, delivering the keynote address.
The new facility is located in the Baneasa commercial district, adjacent to the Tunari Forest, and consolidates Embassy staff to improve coordination and communication among the various embassy sections.

The Embassy’s permanent art collection curated by OBO’s Office of Art in Embassies, celebrates the exchange of artistic expression between the United States and Romania through paintings, photography, and sculpture by Romanian and American artists.
The new Embassy incorporates numerous sustainable features, most notably energy efficient building systems, high efficiency lighting, and the use of recycled and regional materials. A majority of the eleven-acre site is green space planted with drought tolerant species to reduce water consumption. The compound is registered with the Green Building Certification Institute and is entering the formal review process; it is the first LEED® registered government project in Romania.

American International Contractors (Special Projects), Inc., of Arlington, Virginia constructed the project, which was designed by Karn Charuhas Chapman & Twohey of Washington, D.C. The $153 million project generated hundreds of jobs in both the United States and Romania.

Since the 1999, as part of the Department’s Capital Security Construction Program, OBO has completed 88 new diplomatic facilities and has moved more than 27,000 people into safe, secure, and functional facilities. OBO has an additional 41 projects in design or construction.

BIG FLARE FROM AN OLD SOL

The photo and excerpt are from the NASA website:
NASA's Solar Dynamics Observatory (SDO) captured this image of an M7.9 class flare on March 13, 2012 at 1:29 p.m. EDT. It is shown here in the 131 Angstrom wavelength, a wavelength particularly good for seeing solar flares and a wavelength that is typically colorized in teal. The flare peaked at 1:41 p.m. EDT. It was from the same active region, No. 1429, that produced flares and coronal mass ejections the entire week. The region has been moving across the face of the sun since March 2, and will soon rotate out of Earth view. A solar flare is an intense burst of radiation coming from the release of magnetic energy associated with sunspots. Flares are our solar system’s largest explosive events. They are seen as bright areas on the sun and last from mere minutes to several hours. Scientists classify solar flares according to their x-ray brightness. There are 3 categories: X-, M- and C-class. X-class flares are the largest of these events. M-class flares are medium-sized; they can cause brief radio blackouts that affect Earth's polar regions. Compared to X- and M-class, C-class flares are small with few noticeable consequences on Earth. Image Credit: NASA/SDO

SECRETARY OF DEFENSE LEON PANETTA MEETS WITH NSA CYBER COMMAND

The following excerpt is from a U.S. Department of Defense e-mail:  

Panetta Visits NSA, Cyber Command Leadership

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

WASHINGTON, March 24, 2012 - Defense Secretary Leon E. Panetta met today with the leader of the National Security Agency and U.S. Cyber Command, said Pentagon Press Secretary George Little.

"Today Secretary Panetta visited the National Security Agency and U.S. Cyber Command at Fort Meade, Maryland, where he met with General Keith Alexander, commander, U.S. Cyber Command, and director, National Security Agency, Central Security Service, and the organizations' leadership," Little said.

Little said Panetta observed technology demonstrations and received briefings about key issues in the cyber arena.

Panetta's "discussions focused on efforts to enhance information sharing across the Defense Department and the intelligence community," Little said.

According to Little, Panetta said he was deeply impressed by team efforts to defend America against cyber attack.

"The secretary acknowledged the critical and important work that the Cyber Command and NSA team are accomplishing, and continues to stress the importance of developing cyber capabilities to meet emerging cyber threats," Little said.

FORMER OWNER AND CEO SCOTT SALYER OF SK FOODS PLEADS GUILTY TO RACKETEERING AND PRICE FIXING IN CALIFORNIA

The following excerpt is from the Department of Justice Antitrust website: 
SACRAMENTO, Calif. — Frederick Scott Salyer, 56, of Pebble Beach, Calif., pleaded guilty today to racketeering and price fixing, U.S. Attorney Benjamin B. Wagner announced. Salyer entered his plea before U.S. District Judge Lawrence K. Karlton.

Between 1990 and 2009, Salyer was the CEO and owner of SK Foods LP, a grower, processor and international seller of tomato paste and other processed agricultural products with facilities in Monterey, Lemoore, Williams and Ripon, Calif. In his plea, Salyer admitted that he operated SK Foods as a racketeering organization. According to the plea agreement, from January 2004 to April 2008, Salyer encouraged food broker Randall Rahal to pay bribes and kickbacks to purchasing officers employed by SK Foods’s customers Kraft Foods, Frito-Lay and B&G Foods. The intent was to induce Kraft’s Robert Watson, Frito-Lay’s Richard Wahl and B&G’s Robert Turner to promote the interests of SK Foods over their employers’ interests. Salyer also admitted that at his direction, SK Foods routinely falsified the lab test results for its tomato paste. Salyer ordered former employees Alan Huey and Jennifer Dahlman to falsify tomato paste grading factors, and SK Foods lied about its product’s percentage of natural tomato soluble solids, mold count, production date and whether the tomato paste qualified as “organic.” Finally, Salyer admitted that he had discussed an illegal target price agreement with other sellers of tomato paste and, when another co-conspirator offered a lower price, Salyer got the co-conspirator to agree to withdraw that offer to a customer.

U.S. Attorney Benjamin B. Wagner said: “Food grown in California’s Central Valley feeds people all over the United States; agriculture and food processing are critical to this region’s economy. This case of corporate corruption was met with the government’s full arsenal of law enforcement tools, which included grand jury process, an informant operation, wiretaps, search warrants, computer forensics and arrests. This office and its partners will continue to use these tools to attack fraud and corruption wherever it is detected in this district.”

“The Antitrust Division has made antitrust enforcement in the agriculture sector a priority,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “The division is committed to continuing to work with its law enforcement partners to crack down on illegal price fixing conspiracies that affect products used by consumers in their everyday lives.”

“Corruption in any form is despicable, but when such occurs within the food industry, it erodes public trust in products and threatens the industry as a whole,” said Herbert M. Brown, Special Agent in Charge of the FBI’s Sacramento Field Office. “The FBI continues to tirelessly combat white collar crime that is motivated by unscrupulous greed.”

“Today’s guilty plea is the result of a combined law enforcement effort against a corrupt organization motivated by greed and profit,” said Internal Revenue Service-Criminal Investigation (IRS-CI) Assistant Special Agent in Charge Rick Goss. “These crimes touched the lives of many unsuspecting citizens and the public should know that we will hold accountable those individuals who put personal financial gain above the safety and well-being of the general public.”

“The Food and Drug Administration-Office of Criminal Investigations is fully committed to investigating and supporting the prosecution of those who defraud consumers by manufacturing and selling adulterated foods to an unsuspecting public for economic gain. We continue to look forward to working with our law enforcement partners and commend the U.S. Attorney’s Office for their diligence,” said Thomas Emerick, Special Agent in Charge, Food and Drug Administration (FDA)-Office of Criminal Investigations, Los Angeles Field Office.

Salyer’s plea caps an investigative effort that began in August 2006, when federal agents executed a search warrant at the home of Anthony Manuel, an SK Foods employee who had embezzled approximately $1 million from his former employer, a competitor of SK Foods. Manuel promptly confessed to the embezzlement and later told agents about the crimes to which Salyer and others have now pleaded guilty. In 2007 and 2008, Manuel recorded conversations with SK Foods executives, including Salyer, and provided documents corroborating his account of the crimes being committed at SK Foods.  Wiretaps of Rahal telephones revealed that Rahal was discussing bribery and food mislabeling with Salyer and other senior officers of SK Foods. The wiretap also confirmed that Rahal was bribing Watson, Wahl, Turner and Safeway Inc. employee Michael Chavez. On April 18, 2008, agents of the FBI, IRS-CI and FDA Office of Criminal Investigations executed search warrants at the offices of SK Foods and at Salyer’s residence in Pebble Beach, seizing documents and copying SK Foods’s computer servers.

In 2009, the bribe recipients and many of Salyer’s subordinates at SK Foods pleaded guilty before Judge Karlton. Also that year, creditors forced SK Foods into bankruptcy. According to court documents, in late 2009, Salyer moved more than $3 million to Andorra and made a $50,000 deposit on a condominium there. Andorra is a small principality in the Pyrenees Mountains between France and Spain and has no extradition treaty with the United States. When agents learned of Salyer’s plans, they obtained an arrest warrant for him, which was executed on Feb. 4, 2010, when Salyer made what was to have been a short visit back to the United States. Salyer was jailed as a flight risk until Sept. 3, 2010, when he was released to house arrest after posting a $6 million bond.

Salyer was indicted by a federal grand jury on Feb. 18, 2010, with a superseding indictment brought against him on April 29, 2010. According to court documents, several issues have been litigated, such as whether the evidence against Salyer had been obtained lawfully. Judge Karlton ultimately rejected Salyer’s efforts to suppress the evidence gathered by Manuel. Judge Karlton also upheld the wiretap and search warrant applications.

Salyer is scheduled to be sentenced by Judge Karlton on July 10, 2012, at 9:15 a.m EDT. The maximum statutory penalty for a Racketeer Influenced and Corrupt Organizations (RICO) violation is 20 years in prison and a $250,000 fine. The maximum statutory penalty for price fixing is 10 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. In the plea agreement, Salyer may argue for a sentence as low as four years and the government may argue for a sentence up to seven years. Salyer also agrees to forfeit to the United States all of his interest in the $3 million that he transferred to Andorra.

This is the 11th guilty plea in an extensive investigation by the FBI, IRS-CI, FDA Office of Criminal Investigations and the Antitrust Division of the U.S. Department of Justice. The case is currently being prosecuted by Assistant U.S. Attorneys Matthew D. Segal, R. Steven Lapham and Jared C. Dolan, and Antitrust Division Trial Attorneys Anna T. Pletcher and Tai Milder.

TWO YEAR ANNIVERSARY OF HEALTH CARE REFORM BILL SIGNING

President Barack Obama reaches for a pen as he signs the health insurance reform bill in the East Room of the White House, March 23, 2010. (Official White House Photo by Lawrence Jackson).

Two years ago today
Two years ago today, President Obama signed the Affordable Care Act, giving hardworking, middle-class families the health care security they deserve. Health reform requires that insurance plans cover preventive services to help people stay healthy, prohibits insurance companies from dropping your coverage if you get sick, billing you into bankruptcy because of annual or lifetime limits placed on care, and discriminating against children with pre-existing conditions.

By 2014 when the law is fully implemented, people will be able to purchase private insurance coverage through new state-based markets called exchanges, which will offer a way to get insurance that isn’t provided by—or tied to—an employer. Americans will have the security of knowing they don't have to worry about losing or finding coverage if they're laid off, change jobs, or are self-employed. And further patient protections will take effect: insurers won’t be able to deny care to anyone based on a pre-existing condition, or limit the amount of care they’ll cover over a person’s lifetime.
Over the last week, we’ve looked at many of the ways the new health care law is making a real difference in many people's lives:
New tax credits are helping small business owners like Mark with the cost of providing health insurance for employees
Because young adults can now stay on their parents' insurance until age 26, people like Steven, a  23-year-old, two-time cancer survivor, can continue getting the care they need, even if they are no longer in school
Parents like Vanessa, whose son was born with birth defects, and Nathan, whose sonhas hemophilia, won’t have to fight to keep their kids healthy because insurance companies are now prohibited from denying coverage for children with pre-existing conditions or placing lifetime limits on care,
Seniors like Helen are getting help with the cost of their medications, giving them peace of mind and putting more money in their pockets

Looking at the big picture also helps tell the story of how the Affordable Care Act is benefitting people around the country.

An additional 2.5 million young adults have gained coverage since September 2010 (More on the health care law and young adults)

Nearly 54 million Americans with private health insurance, including approximately20.4 million women have received preventive health services such as cancer screenings and immunizations at no additional cost (learn more about the health care law and preventive services and health care law and women)
The average senior on Medicare will save $4,200 on their health care by 2021, and more than 5.1 million people on Medicare have already saved an average of $635 each on prescription drug costs (read more on the health care law, seniors, and Medicare)

Families and small business are saving money on health care, and families who purchase private health insurance through exchanges that begin in 2014 could save up to $2,300 on their health care each year (learn more on the health care law and cost control)
The above photo and excerpt are from the White House website:

SENIOR OFFICIALS TAKE QUESTIONS ON AFGHANISTAN BEFORE SENATE ARMED SERVICES COMMITTEE

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

Officials Discuss Troop Numbers, Partnership With Afghanistan

By Jim Garamone
American Forces Press Service

WASHINGTON, March 22, 2012 - Troop numbers -- both Afghan and coalition -- were among the questions posed to senior officials during testimony before the Senate Armed Services Committee today.

Marine Corps Gen. John R. Allen, the commander of the NATO-led International Security Assistance Force, and James N. Miller, acting undersecretary of defense for policy, told senators that training Afghan soldiers and police is going well, but it will require patience to ensure the job is done correctly.

The Afghan national security forces will surge to 352,000 later this year. But the Afghan government cannot afford to keep that many people in the security forces long-term, so that number will come down in the future, Allen said.

One study, the general said, points to a long-term force in the vicinity of 230,000.

"But there are a number of different options," he added, "and we're continuing to evaluate what those options might be, all the way from the current force, ... which will continue to exist for several years once we have fielded it, down to a force that was smaller than [230,000], which probably doesn't have the right ... combination of capabilities."

Any decision on the size of the force will be made in the future by Afghan leaders working with coalition personnel, Allen said. What's more, any reduction must be made only after a careful study of conditions on the ground. "That security environment will be ultimately the key indicator of whether that drawdown should ultimately occur, so it'll be conditions-based," the general said.

Allen submits the metrics involved with these studies every six months. The next set of statistics will include an evaluation of scenarios after December 2014.

The United States has 89,000 troops in Afghanistan today. That number will go down by 23,000 by the end of the summer fighting season. Allen told the Senate panel that once that is done he will examine the size of the force and the likely threat it will face in 2013. "My opinion is that we will need significant combat power in 2013," he said.

Allen said 68,000 U.S. troops "is a good going-in number," but he told the senators he owes the president further analysis on that issue.

Miller stressed the need for a strategic partnership with Afghanistan that will last long after Afghans take full security control of their nation by the end of 2014.

"The president has stated clearly that we have an enduring commitment to Afghanistan, and the strategic partnership will be a concrete instantiation of that," he said. "There will be a lot of work to do after that, but it's a critical milestone."

Despite the past tumultuous months, Miller said, he is encouraged by progress made in negotiating the strategic partnership.

Senators also asked the men about corruption and Pakistan. A number of programs aimed at curbing government corruption appear to be making progress, Allen said. He praised Afghan President Hamid Karzai for his "good work" on the issue.

"He has appointed a presidential executive commission, headed by Minister of Finance [Omar] Zakhilwal, to partner with ISAF and with the international community on the issues of reclaiming borders, inland customs depots, and airports," he said. "That's an important move."

The general told the senators he has not seen any change in the relationship between Pakistan's Inter-Services Intelligence agency and the Haqqani network, an issue that has contributed to strained relations between the United States and Pakistan.

Iran also is a neighbor of Afghanistan, and Iranian influence has to be taken into account as Afghan national security forces take control, the general said.

"Just as nature abhors a vacuum, so do geopolitics," he said. "And should the United States leave Afghanistan -- should ISAF, should NATO leave Afghanistan -- that would create, in my mind, for all intents and purposes, a geopolitical vacuum, ahead, however, of the [Afghan forces] being ready to take full security."

Miller stressed that a stable Afghanistan is in the interests of all nations in the region.

"While the Iranians may not be happy about an American presence there, ... nonetheless, the Afghan people desire it," he said. "And that presence ultimately works to Iran's benefit as well, because it will affect the cross-border flow of narcotics, the cross-border flow of weapons and human trafficking."

About 1.5 million Afghan refugees are in Iran, Miller noted. "They might be able to go home in a stable Afghanistan," he said.

Miller reiterated the importance of the strategic partnership. It is essential for security and also affects perceptions of the Taliban and others, including Iran, he said.

Iranian leaders have played both sides of the fence in Afghanistan, Miller said.

"They have provided some support to the Afghan government and they've provided some support to the Taliban," he told the panel. "If they see it in their interest to stir the pot and so forth, I think that ... the strategic partnership, the advancement of the [Afghan forces] and the clear expression of commitment by the United States and the coalition is going to have to cause them to recalculate. And that's essential."

U.S. PRESS STATEMENT ON UNITED NATIONS HUMAN RIGHTS COUNCIL REGULAR SESSION

The following excerpt is from a U.S. State Department e-mail:
United Nations Human Rights Council 19th Regular Session
Press Statement Victoria Nuland
Department Spokesperson, Office of the Spokesperson Washington, DC
March 23, 2012
The United Nations Human Rights Council’s 19th Regular Session helped spur action on a series of important human rights situations around the world, in part due to vigorous U.S. engagement. The Council took robust action to address the ongoing carnage in Syria, beginning with a high-level urgent debate during the Council’s opening week, followed by the adoption of two resolutions on Syria – one focused on humanitarian access and the second extending the international Commission of Inquiry on Syria.

Other actions included the adoption of a resolution on post-conflict reconciliation and accountability in Sri Lanka, and mandate renewals for the special rapporteurs on Iran, North Korea, and Burma. Council members also worked cooperatively with Libya and Yemen on resolutions to enshrine their commitments to protect and promote human rights.

The United States also reaffirmed its strong opposition to a series of anti-Israel measures that continue unnecessarily to politicize the Council’s human rights agenda. Our persistence in combating the Council’s enduring anti-Israel bias, coupled with our successful efforts to confront human rights violations around the world, underscores the importance of United States leadership and engagement at the Human Rights Council and across the UN system.

U.S. SETTLES ALLEGED MEDICARE FRAUD AND WHISTLEBLOWER CASE WITH CHICAGO COMPANY

The following excerpt is from the U.S. Department of Justice website:
Friday, March 23, 2012
United States Settles False Claims Act Allegations Against Illinois-Based Lifewatch Services Chicago-Area Firm Allegedly Improperly Billed Medicare for Ambulatory Cardiac Telemetry Services
WASHINGTON - LifeWatch Services Inc., a Rosemont, Ill.-based company, has agreed to pay the United States $18.5 million to resolve allegations that the company submitted false claims to federal health care programs, the Justice Department announced today.   The settlement resolves two lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act.

The two complaints allege that LifeWatch improperly billed Medicare for ambulatory cardiac telemetry (ACT) services.  ACT services are a form of cardiac event monitoring that use cell phone technology to record cardiac events in real time without patient intervention.   Traditional event monitoring requires the patient to press a button when he or she notices a cardiac event to record the cardiac rhythms.   Medicare reimbursed ACT services at between $750 and $1200 and traditional event monitoring services at roughly $250 during the relevant time period.        

According to the complaints, LifeWatch was aware that ACT services were not eligible for Medicare reimbursement for patients who had experienced only mild or moderate palpitations.  The complaints allege that LifeWatch nonetheless submitted claims to Medicare for ACT services for such patients using a false diagnostic code in order to have the claims paid.   In addition, according to the complaints, LifeWatch improperly induced Medicare claims for monitoring services by providing valuable services in the form of full-time employees to several
hospitals and medical practices, without charge.  The relators (whistleblowers) in their lawsuits alleged that these services amounted to kickbacks.

“False claims on federal health care programs drive up the costs of health care for all of us,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice.   “Today’s settlement furthers the Department of Justice’s commitment to making sure that those who benefit from Medicare play by the rules.”

Ryan Sims, a former LifeWatch sales representative, filed a lawsuit in the U.S. District Court for the Western District of Washington in December 2009.   In May 2011, Sara Collins, another former LifeWatch sales representative, filed a complaint in the U.S. District Court for the Southern District of Ohio.

Under provisions of the False Claims Act, individuals can bring a lawsuit on behalf of the government and receive a portion of the proceeds of any settlement or judgment that may result.     Sims and Collins together will receive approximately $3.4 million plus interest as their share of the settlement proceeds.

“The False Claims Act is a critical tool for weeding out fraud and protecting the taxpayers,” said U.S. Attorney Jenny A. Durkan, of the Western District of Washington.  “We must ensure tax dollars go to intended programs, not to line the pockets of those who seek to cheat the programs.”

“The settlement underscores the need for physicians to be able to make care decisions without undue influence,” said Carter M. Stewart, U.S. Attorney for the Southern District of Ohio.  “The settlement is also the result of close cooperation between our office, the Justice Department’s Civil Division and U.S. Attorney Durkan’s office.”

In addition to the monetary settlement, LifeWatch has entered into a comprehensive Corporate Integrity Agreement (CIA) with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure its continued compliance with federal health care benefit program requirements.

“The chief executive officer at LifeWatch as well as other corporate executives will be required to personally certify compliance with our five-year CIA, which includes provisions to monitor LifeWatch’s claim submission process, sales force activities and relationships with some types of business referrals,” said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services.  “LifeWatch allegedly tried to boost profits at taxpayer expense, and, ultimately, paid $18.5 million back to the government.”

The claims resolved by the settlement are only alleg ations and do not constitute a determination of liability.

In addition to the efforts of attorneys from the U.S. Attorney’s Offices for the Western District of Washington and Southern District of Ohio and the Commercial Litigation Branch of the Civil Division of the Department of Justice in Washington, D.C., investigators from the Office of Inspector General of the Department of Health and Human Services, Defense Criminal Investigative Service and Office of Inspector General for the Office of Personnel Management assisted the government’s investigation of the whistleblowers’ allegations.

This resolution is part of the government's emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009.   The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.   One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $6.7 billion since January 2009 in cases involving fraud against federal health care programs.   The Justice Department's total recoveries in False Claims Act cases since January 2009 are over $8.9 billion.

SEC CHARGES BAY AREA INVESTMENT ADVISER FOR DEFRAUDING INVESTORS WITH BOGUS AUDIT REPORT

The following excerpt is from the U.S. Securities and Exchange Commission website:
March 21, 2012
On March 15, 2012, the Securities and Exchange Commission charged a San Francisco-area investment adviser with defrauding investors by giving them a bogus audit report that embellished the financial performance of the fund in which they were investing.
The SEC alleges that James Michael Murray raised more than $4.5 million from investors in his various funds including Market Neutral Trading LLC (MNT), a purported hedge fund that claimed to invest primarily in domestic equities. Murray provided MNT investors with a report purportedly prepared by independent auditor Jones, Moore & Associates (JMA). However, JMA is not a legitimate accounting firm but rather a shell company that Murray secretly created and controlled. The phony audit report misstated the financial condition and performance of MNT to investors.

The U.S. Attorney’s Office for the Northern District of California also has filed criminal charges against Murray in a complaint unsealed yesterday.

According to the SEC’s complaint filed in federal court in San Francisco, Murray began raising the funds from investors in 2008. The following year, MNT distributed the phony audit report to investors claiming the audit was conducted by a legitimate third-party accounting firm. However, JMA is not registered or licensed as an accounting firm in Delaware, where it purports to do business. JMA’s website was paid for by a Murray-controlled entity and listed 12 professionals with specific degrees and licenses who supposedly work for JMA. However, at least five of these professionals do not exist, including the two named principals of the firm: “Richard Jones” and “Joseph Moore.” Murray has attempted to open brokerage accounts in the name of JMA, identified himself as JMA’s chief financial officer, and called brokerage firms falsely claiming to be the principal identified on most JMA documents.

The SEC alleges that the bogus audit report provided to investors understated the costs of MNT’s investments and thus overstated the fund’s investment gains by approximately 90 percent. The JMA audit report also overstated MNT’s income by approximately 35 percent, its member capital by approximately 18 percent, and its total assets by approximately 10 percent.

The SEC’s complaint charges Murray with violating Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, which prohibits fraud by investment advisers on investors in a pooled investment vehicle. The complaint seeks injunctive relief and financial penalties from Murray.

The SEC’s investigation was conducted by Karen Kreuzkamp and Robert S. Leach of the San Francisco Regional Office following an examination of MNT conducted by Yvette Panetta and Doreen Piccirillo of the New York Regional Office’s broker-dealer examination program. The SEC’s litigation will be led by Robert L. Mitchell of the San Francisco Regional Office. The SEC thanks the U.S. Attorney’s Office for the Northern District of California and the U.S. Secret Service for their assistance in this matter.

MARS EXPLORATION ROVER OPPORTUNITY TAKES SELF-PORTRAIT

This self portrait from NASA's Mars Exploration Rover Opportunity shows dust accumulation on the rover's solar panels as the mission approached its fifth Martian winter. The dust reduces the rover's power supply, and the rover's mobility is limited until the winter is over or wind cleans the panels. This is a mosaic of images taken by Opportunity's panoramic camera (Pancam) during the 2,111th to 2,814th Martian days, or sols, of the rover's mission (Dec. 21 to Dec. 24, 2011). The downward-looking view omits the mast on which the camera is mounted. The portrait is presented in approximate true color, the camera team's best estimate of what the scene would look like if humans were there and able to see it with their own eyes. Opportunity has worked through four Martian southern hemisphere winters since it landed in in January 2004 about 14 miles (23 kilometers) northwest of its current location. Closer to the equator than its twin rover, Spirit, Opportunity has not needed to stay on a sun-facing slope during the previous winters. Now, however, Opportunity's solar panels carry a thicker coating of dust, and the team is using a strategy employed for three winters with Spirit: staying on a sun-facing slope. The sun will pass relatively low in the northern sky from the rover's perspective for several months of shortened daylight before and after the southern Mars winter solstice on March 30, 2012. Opportunity is conducting research while located on the north-facing slope of a site called "Greeley Haven." Image Credit: NASA/JPL-Caltech/Cornell/Arizona State Univ.

U.S. FORCES PREFERS CRIMINAL CHARGES AGAINST SGT. ROBERT BALES

The following excerpt is from the U.S. Department of Defense American Forces Press Service:

U.S. Forces Afghanistan Prefers Criminal Charges Against Bales

By Cheryl Pellerin
American Forces Press Service

WASHINGTON, March 23, 2012 - U.S. Forces Afghanistan formally preferred criminal charges under the Uniform Code of Military Justice today against Army Staff Sgt. Robert Bales.

The charges, described in a statement from the command's headquarters in the Afghan capital of Kabul, allege that on March 11 Bales acted with premeditation to murder 17 Afghan civilians and assaulted and tried to murder six other civilians near Belambey in the Panjwai district of Afghanistan's Kandahar province.

"It's the first step in this process," Pentagon spokesman Navy Capt. John Kirby told reporters this morning.

Bales, who is in pretrial confinement at the Midwest Joint Regional Correctional Facility in Fort Leavenworth, Kan., is assigned to the 2nd Battalion, 3rd Infantry Regiment, at Joint Base Lewis-McChord, Wash.

The infantryman, who Army officials say completed sniper training and held three good conduct medals, was flown from Afghanistan on March 14 to a military detention facility in Kuwait. From there, he was transferred to Kansas.

The next step in the military justice process is for the special court-martial convening authority at Joint Base Lewis-McChord to decide whether to direct an investigation of the charges under the UCMJ's Article 32. An Article 32 hearing is similar to a preliminary hearing in civilian law. No case can proceed to a general court-martial unless a command first conducts an Article 32 investigation. The investigating officer submits to the command a written report with nonbinding recommendations about the sufficiency of the charges and evidence.

The report helps the command determine an appropriate disposition of the charges.

Under the UCMJ, the maximum possible punishment for a premeditated murder conviction is a dishonorable discharge from the armed forces, reduction to the lowest enlisted grade, forfeiture of pay and allowances, and death. The minimum sentence is life imprisonment with eligibility for parole.

No disposition decision has been made yet about the preferred charges.

Preferral of charges represents an accusation of criminal misconduct only. As in U.S. civilian law, a military member accused of criminal misconduct is presumed innocent until proven guilty at a trial by court-martial.

"The investigation is ongoing," Kirby said, "and it is possible that more charges could come until the investigation is closed."

STATE DEPARTMENT REPORTS ON EGYPT TO CONGRESS

The following excerpt is from the U.S. State Department website:
U.S. Support for Egypt
Press Statement Victoria Nuland
Department Spokesperson, Office of the Spokesperson Washington, DC
March 23, 2012
Today, Secretary Clinton has certified to Congress that Egypt is meeting its obligations under its Peace Treaty with Israel. The Secretary has also waived legislative conditions related to Egypt’s democratic transition, on the basis of America’s national security interests, allowing for the continued flow of Foreign Military Financing to Egypt. These decisions reflect America’s over-arching goal: to maintain our strategic partnership with an Egypt made stronger and more stable by a successful transition to democracy.
Egypt has made significant progress toward democracy in the last 15 months, including: free and fair parliamentary elections and the transfer of legislative authority to the new People’s Assembly, and a date announced for complete transition to civilian leadership. However, Egypt’s transition to democracy is not yet complete, and more work remains to protect universal rights and freedoms. The Egyptian people themselves have made this clear to their own leaders.

The Secretary’s decision to waive is also designed to demonstrate our strong support for Egypt’s enduring role as a security partner and leader in promoting regional stability and peace. Egypt has maintained thirty-plus years of peace with Israel. It contributes to efforts to stop proliferation and arms smuggling and facilitates missions from Afghanistan to counterterrorism in the Horn of Africa.

We are committed to supporting the Egyptian people as they strive for the dignity, opportunity, rights and freedoms for which they have already sacrificed so much. That includes protection for civil society and NGOs, which have a critical role to play in building Egypt’s democracy. We remain deeply concerned regarding the trials of civil society activists—non-Egyptians and Egyptians alike—and have raised these concerns at the highest levels, urging an end to harassment.

The political transition underway is bringing about a new, more democratic Egypt. As this process continues, we look forward to engaging with Egyptians on how we can best support and advance the interests we share. We will, of course, consult closely with the Congress about these issues.

Egyptians are living through one of the most remarkable periods of their thousands of years of history. Today we reaffirm our support for Egypt, for its historic accomplishments to date, for the democratic journey it is on and for our enduring partnership.

U.S. OFFICIAL SAYS SCIENCE DIPLOMACY IS IMPORTANT COMPONENT OF STATECRAFT

The following excerpt is from the U.S. State Department
Science Diplomacy and Twenty-First Century Statecraft
Article Robert D. Hormats
Under Secretary for Economic, Energy and Agricultural Affairs Science & Diplomacy
Washington, DC
March 1, 2012
Science diplomacy is a central component of America’s twenty-first century statecraft agenda. The United States must increasingly recognize the vital role science and technology can play in addressing major challenges, such as making our economy more competitive, tackling global health issues, and dealing with climate change. American leadership in global technological advances and scientific research, and the dynamism of our companies and universities in these areas, is a major source of our economic, foreign policy, and national security strength. Additionally, it is a hallmark of the success of the American system. While some seek to delegitimize scientific ideas, we believe the United States should celebrate science and see it—as was the case since the time of Benjamin Franklin—as an opportunity to advance the prosperity, health, and overall well-being of Americans and the global community.

Innovation policy is part of our science diplomacy engagement. More than ever before, modern economies are rooted in science and technology. It is estimated that America’s knowledge-based industries represent 40 percent of our economic growth and 60 percent of our exports. Sustaining a vibrant knowledge-based economy, as well as a strong commitment to educational excellence and advanced research, provides an opportunity for our citizens to prosper and enjoy upward mobility. America attracts people from all over the world—scientists, engineers, inventors, and entrepreneurs—who want the opportunity to participate in, and contribute to, our innovation economy.

At the same time, our bilateral and multilateral dialogues support science, technology, and innovation abroad by promoting improved education; research and development funding; good governance and transparent regulatory policies; markets that are open and competitive; and policies that allow researchers and companies to succeed, and, if they fail, to have the opportunity to try again. We advocate for governments to embrace and enforce an intellectual property system that allows innovators to reap the benefits of their ideas and also rewards their risk taking. Abraham Lincoln himself held a patent on an invention, a device for preventing ships from being grounded on shoals. He said in his "Second Lecture on Discoveries and Inventions" in 1859 that patents "added the fuel of interest to the fire of genius, in the discovery and production of new and useful things."

The practice of science is increasingly expanding from individuals to groups, from single disciplines to interdisciplinary, and from a national to an international scope. The Organisation for Economic Co-operation and Development reported that from 1985 to 2007, the number of scientific articles published by a single author decreased by 45 percent. During that same period, the number of scientific articles published with domestic co-authorship increased by 136 percent, and those with international co-authorship increased by 409 percent. The same trend holds for patents. Science collaboration is exciting because it takes advantage of expertise that exists around the country and around the globe. American researchers, innovators, and institutions, as well as their foreign counterparts, benefit through these international collaborations. Governments that restrict the flow of scientific expertise and data will find themselves isolated, cut off from the global networks that drive scientific and economic innovation.

While the scientific partnerships that the United States builds with other nations, and international ties among universities and research labs, are a means to address shared challenges, they also contribute to broadening and strengthening our diplomatic relationships. Scientific partnerships are based on disciplines and values that transcend politics, languages, borders, and cultures. Processes that define the scientific community—such as merit review, critical thinking, diversity of thought, and transparency—are fundamental values from which the global community can reap benefits.

History provides many examples of how scientific cooperation can bolster diplomatic ties and cultural exchange. American scientists collaborated with Russian and Chinese counterparts for decades, even as other aspects of our relationship proved more challenging. Similarly, the science and technology behind the agricultural "Green Revolution" of the 1960s and ‘70s was the product of American, Mexican, and Indian researchers working toward a common goal. Today, the United States has formal science and technology agreements with over fifty countries. We are committed to finding new ways to work with other countries in science and technology, to conduct mutually beneficial joint research activities, and to advance the interests of the U.S. science and technology community.

Twenty-first century statecraft also requires that we build greater people-to-people relationships. Science and technology cooperation makes that possible. For example, through the Science Envoy program, announced by President Obama in 2009 in Cairo, Egypt, eminent U.S. scientists have met with counterparts throughout Asia, Africa, and the Middle East to build relationships and identify opportunities for sustained cooperation. With over half of the world’s population under the age of thirty, we are developing new ways to inspire the next generation of science and technology leaders. Over the past five years, the Department of State’s International Fulbright Science & Technology Award has brought more than two hundred exceptional students from seventy-three different countries to the United States to pursue graduate studies. Through the Global Innovation through Science and Technology Initiative, the United States recently invited young innovators from North Africa, the Middle East, and Asia to post YouTube videos describing solutions to problems they face at home. The top submissions will receive financial support, business mentorship, and networking opportunities.

Advancing the rights of women and girls is a central focus of U.S. foreign policy and science diplomacy. As we work to empower women and girls worldwide, we must ensure that they have access to science education and are able to participate and contribute fully during every stage of their lives. Recently, we partnered with Google, Intel, Microsoft, and many other high-tech businesses to launch TechWomen, a program that brings promising women leaders from the Middle East to Silicon Valley to meet industry thought-leaders, share knowledge and experiences, and bolster cultural understanding.
Science diplomacy is not new. It is, however, broader, deeper, and more visible than ever before and its importance will continue to grow. The Department of State’s first Quadrennial Diplomacy and Development Review highlights that "science, engineering, technology, and innovation are the engines of modern society and a dominant force in globalization and international economic development." These interrelated issues are priorities for the United States and, increasingly, the world.

The Department of State is committed to utilizing our capabilities in Washington, D.C. and throughout the world to connect with scientists, entrepreneurs, and innovators for the mutual benefit of all of our people. In addition to Environment, Science and Technology, and Health Officers stationed at U.S. embassies, almost fifty doctoral-level scientists and engineers work at the Department of State through the AAAS Diplomacy Fellows program and the Jefferson Science Fellows program. Through this cadre of science and foreign policy experts, the Department of State will continue to advance policies that bolster the global repertoire of scientific knowledge and further enable technological innovation.