GSA SELLING EXCESS PROPERTIES VALUED AT $82 MILLION

U.S. GENERAL SERVICES ADMINISTRATION

(Right) The Georgetown Heating Plant is one of the excess properties that GSA will auction this year.

GSA to Dispose of Excess Property, Save Taxpayer DollarsOnline public auction for Moscow Federal Building begins August 7, 2012July 24, 2012
Contact: Stephanie Kenitzer, 253-931-7873
Stephanie.Kenitzer@gsa.gov

MOSCOW, IDAHO -- Today, the U.S. General Services Administration (GSA) announced
 it will begin an online auction to sell the Moscow (Idaho) Federal Building on August, 7th. Auctioning this property is part of GSA’s ongoing efforts to dispose of excess properties to save taxpayer dollars and make more efficient use of the government’s real estate assets. In the past year alone, the federal government has sold or transferred 97 excess properties valued at $82 million.

"As the federal government’s landlord, our mission includes making government more efficient and saving money by disposing of buildings and facilities that are no longer needed," said George Northcroft, Regional Administrator of GSA’s Northwest and Arctic Region. "We are working to get the best deal for the taxpayers."

The Moscow Federal Building is no longer used to its full potential and has been deemed an excess federal property. The five story office building with 107 parking spaces is located at 220 East 5th Street in Moscow, Idaho. Built in 1973, the property is located downtown near government and private offices and retail space buildings. The building also contains a U.S. Post Office. The current federal tenants will have the opportunity to remain in the building for at least two years.

The auction will begin on August 7, 2012 with a minimum bid of $300,000. Bids may be submitted at GSA's auction website at RealEstateSales.gov. GSA will host open houses on August 2nd and 9th with hourly tours at 12:00, 1:00 and 2:00 PM from the building entrance.

The starting bid amount does not represent the value of the property, but rather provides a reasonable starting point for the online auction. The government seeks to obtain fair market value for the property and reserves the right to reject any and all bids.

The Georgetown Heating Plant is one of the excess properties that GSA will auction this year.

U.S. SENATOR CARL LEVIN'S STATEMENT ON CITIZENS UNITED RULING

FROM: SENATOR CARL LEVIN'S ONLINE NEWSLETTER
Levin Floor Statement on DISCLOSE ActMonday, July 16, 2012

Mr. President, the genius of our Founding Fathers was to establish a system of government in which the governed determine who represents them. It’s easy for us, more than two centuries removed from their achievement, to lose sight of just how remarkable that achievement was. They overturned untold centuries of human history during which those with wealth and power made the decisions, and everyone else had little or no chance to influence how they were governed.

The remarkable system the Founders created has endured through war, crisis, depression and doubt. But we should not mistake that endurance for automatic permanence. Democracy requires that we maintain the vital connection between the people and their elected representatives. It must be the voters, and not the influential few, who choose our nation’s leaders. If the people begin to doubt their central role in our government, it will be corrosive to democracy.

In recent months, there has been reason for just such doubt. A Supreme Court ruling has opened our system to a flood of unlimited and secret special-interest money. Inexplicably, a one-justice majority of the Court decided in the Citizens United case that such unlimited donations "do not give rise to corruption or the appearance of corruption."

Now, many of us believed from the moment that decision was handed down that the Court’s majority was badly mistaken. But events since that day have left little doubt. We have in recent months seen the dangerous consequences of the Court’s ruling: a deluge of unregulated funds that has threatened to upend the election campaign for our nation’s highest office, a flood whose organizers vow will upend congressional campaigns across the nation this summer and fall. Through "Super PACs" and through supposedly regulated, but in fact, actually unregulated nonprofit organizations, the conduits through which this flood of secret money flows, millionaires and billionaires already have made massive donations to fund a barrage of attack ads drenching, smothering the voices of those who are to make the decisions in our democracy – the people.

According to the Center for Responsive Politics, an independent watchdog group, as of mid-July these Super PACs have raised more than $244 million to influence elections. Individuals and corporations can make unlimited donations to these Super PACs, whose donations are supposed to be disclosed. But the Court’s decision opened the door not just to individuals and corporations seeking to influence elections with unlimited contributions. This ruling, combined with the IRS’s failure to strictly enforce our laws on the operation of nonprofit groups organized as social welfare organizations under Section 501(c)(4) of the Internal Revenue Code, allows them to seek this influence with spending that is not only unlimited, but also secret, because there is no requirement that donations to those 501(c)(4) organizations be disclosed to the public. Donors can seek to influence an election with huge sums of money and can do so without even having to disclose their involvement. They do so covered by a fig leaf that the nonprofit groups to which they donate are dedicated to "social welfare," rather than partisan politics. That fiction dissolves the moment one looks at these "social welfare" attack ads that the IRS is so far blind to. According to an analysis of TV ad spending data by the Campaign Media Analysis Group, two thirds of all ad spending by outside groups so far during this election cycle has come from nonprofits subject to no federal public disclosure rules. More, much more, is on the way as Election Day approaches this fall.

The organizations now spending millions of dollars to influence elections were set up for that explicit purpose – to campaign for candidates they favor and against candidates they oppose. And yet they preserve their nonprofit status, and their secrecy, by relying on a contradictory regulation and guidance from the IRS.

Now this is how it works. In order to keep their tax-exempt status, and keep donor names and donation amounts secret, organizations are set up as "social welfare" organizations under section 501(c) of the Internal Revenue Code. For example, Section 501(c)(4), which is a very popular section of the code for these organizations to claim, requires that an organization be "operated exclusively," I repeat, "exclusively for the promotion of social welfare." Yet in the regulation implementing this statute, the IRS says, "An organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare." Under this regulation, according to the IRS, to qualify as "exclusively" dedicated to social welfare, you need only be "primarily" interested in social welfare. That doesn’t fit any reasonable definition of "exclusively" that I know of.

I have expressed my concern to the IRS about this. I pointed out to the IRS that the IRS took a stand on this issue before. In 1997, it denied nonprofit status to an organization called the National Policy Forum. The IRS position then was that "partisan political activity does not promote social welfare."
Yet the IRS determination of a group’s tax exempt status can take a year. Therefore, even if the IRS determines that these organizations are not legitimately "social welfare" organizations, it will likely be too late. The secret money will already have been donated, and spent, and the elections will be over.

The contradiction in the IRS regulation is reflected in IRS literature designed to guide the operations of nonprofits. IRS officials pointed me to information on the agency’s Internet site that states flatly, "The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate." But in the very next sentence on that same website, the guidance says, "a social welfare organization may engage in some political activities, so long as that is not its primary activity." That contradicts the plain assertion in the previous sentence that "social welfare" advocacy does not include campaigning.
It also then leaves open the question of the definition of "primary activity."

An IRS publication on nonprofit organizations contains the same contradiction. It says: "Promoting social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. However," it goes on to say, "if you submit proof that your organization is organized exclusively to promote social welfare, it can obtain an exemption [from taxes] even if it participates legally in some political activity on behalf of or in opposition to candidates for public office." Now that makes no sense. If partisan activity does not meet the IRS definition of "promoting social welfare," how can an organization that participates in partisan activity possibly be "organized exclusively to promote social welfare?" So, rather than providing clarity, the IRS is perpetuating ambiguity. It should promptly end this ambiguity.

But Mr. President, we also have a responsibility to act. The Senate and the Congress should act to prevent these organizations from continuing to benefit from their tax-exempt status and hide their donor information. They should be required to disclose the donor and contribution information, and stop hiding behind their nonprofit status. The facade of these TV ads not being partisan politics needs to be swept away. It’s that simple.

We have seen repeatedly the corrosive effects of secret money on the political process. We need to look to history. The Watergate scandal, the single incident in modern U.S. history that most damaged public confidence in honest government, involved burglaries and dirty tricks that were paid for using secret campaign donations. Even by the weak standards of the time, much of this secret money was illegal; more than 20 corporations and organizations were fined, and some executives went to jail, because their secret payments to the Nixon campaign violated the law. Now, a donor can make such secret donations, dedicated to who-knows-what nefarious purpose, and spend unlimited amounts in secret, with what has to this point been the acquiescence of the IRS.

Post-Watergate history warns us as well. We’re all familiar with the revelations about former Senator John Edwards. His personal failings got most of the media attention, but let’s not forget the financial heart of his problem: While running for president, he sought and received secret amounts of cash from a major campaign donor in order to conceal embarrassing facts that might damage the campaign. Yet huge secret payments to campaigns at this moment in our history are rife.

We need look no further this capital city in which we work to see the dangers of secret money. Residents of Washington, D.C., have learned in recent weeks that the current mayor benefitted from what federal prosecutors have called a "shadow campaign" of huge secret donations from a major city contractor. The chief federal prosecutor has said, "the 2010 mayoral election was corrupted by a massive infusion of cash that was illegally concealed from the voters of the District." If true, these charges mean that a campaign donor with a major financial interest in city government decisions sought to influence the election of the city’s mayor using huge secret payments that concealed his involvement.

Mr. President, do any of us doubt that individuals and corporations with a vested interest in federal government outcomes are spending huge sums of money to influence those outcomes, without ever having to disclose their involvement to the public? People may go to jail for such spending in the Washington, D.C., election, and yet secret spending is common practice in campaigns for the highest offices in our country.

This is not the democracy that men and women have fought to protect throughout our history. It’s not the democracy the Founders adopted in our Constitution. As Adlai Stevenson, once put it: "Every man has a right to be heard; but no man has the right to strangle democracy with a single set of vocal chords." Yet this torrent of unregulated money threatens to strangle the voice of the people.

Mistaken though it may have been, the Supreme Court’s decision stands until it is reversed. We are committed to uphold the rule of law even when we disagree with the Supreme Court’s interpretation of the law. But we must be equally committed to the fight for a vibrant, open, representative democracy, one in which elections are determined not by the secret spending of billionaires, but by the will of the people.

The bill we seek to vote on would take an important step toward mitigating the damage of the Citizens United decision. The DISCLOSE Act of 2012 would help shine the light of day on what has been, since the Court’s ruling, an underground sewer flow of hundreds of millions of dollars. It would require nonprofits engaged in partisan political activities to disclose their major donors and their expenditures. It would not stop the flow of unlimited money, because we cannot under the Citizens United ruling, but it would at least ensure that the people know who is trying to influence elections.
The Supreme Court has consistently maintained that requiring disclosure is constitutional. Even in the Citizens United case, the Court’s majority said, "Disclosure permits citizens and shareholders to react to the speech of corporate entities in the proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages." Indeed, the majority’s reliance on disclosure is key to their argument that unlimited spending from corporations would not create corruption or its appearance. The same Supreme Court that has allowed this flood of money has said Congress can require it to be disclosed. We should do so, and so so promptly.

Mr. President, it is difficult to understand why members of the Senate could oppose these simple, straightforward disclosure requirements. It is difficult to imagine that we would be comfortable telling our constituents that we voted to uphold the veil of secrecy that now shields this flood of money from public view. And it is even more remarkable that some of us would vote, not just to maintain that secrecy, but to prevent the Senate even from debating it. The filibuster of this legislation, if successful, will signal shocking acquiescence to a system in which the wealthy, fortunate few can seek to shape the outcome of elections in secret, without the Senate even voting on whether to continue that secret system.

There are those in this body who defend the flood of secret cash in our politics. It is hard for this senator to understand how those senators explain to their constituents that they do not deserve to know who is spending millions to influence elections. But it is doubly difficult to accept the refusal of my colleagues to allow us to vote on this bill by filibustering the motion intended to let us proceed to that vote.

NEWS FROM AFGHANISTAN JULY 24, 2012

FROM:  U.S. DEPARTMENT OF DEFENSE

Afghans children look on as U.S. Army Pfc. Loren Gaboni and other soldiers interact with the village leaders during a joint combined patrol with Afghan police in Baghoulmast village, Afghanistan, April 29, 2011. Gaboni is assigned to the 1st Battalion, 84th Field Artillery Regiment, 170th Infantry Brigade Combat Team. U.S. Navy photo by Ensign Peter Lee 　　

Combined Force Detains 2 Suspected InsurgentsCompiled from International Security Assistance Force Joint Command News Releases

WASHINGTON, July 24, 2012 - An Afghan and coalition security force detained two suspected insurgents during an operation to arrest a Taliban leader in the Baraki Barak district of Afghanistan's Logar province today, military officials reported.

The sought-after Taliban leader transports insurgents throughout the region and directs improvised explosive device and direct-fire attacks against Afghan and coalition forces in the district, officials said.

Also in Logar today, a combined force detained several suspects during an operation to arrest a Taliban financier in the Muhammad Aghah district. The Taliban financier provides money and explosives to insurgents for use in attacks against Afghan and coalition forces in the region.

In operations yesterday:

-- A combined force killed Khadim, also known as Qari Hamza, an Islamic Movement of Uzbekistan senior leader, in the Chahar Darah district of Kunduz province. Khadim was an explosives expert responsible for recruiting and training insurgents for suicide attacks. He also planned and led attacks against Afghan and coalition forces throughout the region.

-- A combined force found and cleared two IEDs in Ghazni province's Ab Band district.

-- A combined force discovered a weapons cache containing homemade explosives and other items used to make IEDs in the Sarobi district of Kapisa province.

-- In Khost province's Sabari district, a combined force detained one insurgent and one other suspect.

-- A combined force found and cleared an IED in Laghman province's Mehtar Lam district.

-- In Logar province's Pul-e Alam district, a combined force discovered an insurgent cache containing military personnel items.

-- A combined force found and cleared two IEDs in Nangarhar province -- one in the Jalalabad district and another in the Bati Kot district.

SEC CHARGES STOCK PROMOTER IN INTERNET-BASED SCALPING SCHEME

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission announced today that on July 20, 2012, it filed a civil fraud action against former Connecticut resident Jerry S. Williams, a stock promoter, and two companies that he controlled, Monk’s Den, LLC and First In Awareness, LLC. The Commission charged Williams with running a scalping scheme from which he made over $2.4 million. Scalping is a type of fraud in which the owner of shares of a security recommends that security for investment and then immediately sells it at a profit upon the rise in market price which follows the recommendation.
The Commission’s Complaint alleges that from at least early 2009 through at least the end of 2010, Williams recommended two stocks, Cascadia Investments, Inc. and Green Oasis Environmental, Inc., to a large group of potential investors who followed his trading recommendations and strategies. According to the Complaint, Williams, who was known to his followers as “Monk,” used his internet-based message board (called “Monk’s Den”), in-person seminars (called “Monkinars”), and other means to encourage people to buy, hold, and accumulate Cascadia and Green Oasis stock. In particular, the Complaint alleges that Williams told potential investors that by buying up the outstanding shares, or float, of these companies, they could collectively trigger a “short squeeze” that would allow them to sell their stock to “market makers” that had shorted the stock. The Commission’s Complaint alleges that Williams falsely stated that he had previously used this strategy to make himself and others enormous profits. The Complaint alleges that in fact, unknown to potential investors, Williams had been hired by Cascadia and Green Oasis to promote their stock and had been compensated with millions of free and discounted shares of these stocks. According to the Complaint, Williams secretly sold millions of Cascadia and Green Oasis shares at the same time he was encouraging potential investors to buy, hold and accumulate these stocks. Through this scheme, the Complaint alleges, Williams made over $2.4 million.

The Commission’s Complaint charged Williams, First In Awareness, LLC and Monk’s Den, LLC with violating Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a), (b), and (c) thereunder. The Commission also charged Williams with violating Sections 17(a)(1), 17(a)(2), 17(a)(3) and 17(b) of the Securities Act of 1933 and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The Commission is seeking permanent injunctions, disgorgement, prejudgment interest, and civil penalties against each defendant and, as to Williams only, a penny stock bar.

The Commission’s investigation is continuing.

A COMET STORM

FROM: NASA
This artist's conception illustrates a storm of comets around a star near our own, called Eta Corvi. Evidence for this barrage comes from NASA's Spitzer Space Telescope, whose infrared detectors picked up indications that comets were recently torn to shreds after colliding with a rocky body. In this artist's conception, one such giant comet is shown smashing into a rocky planet, flinging ice- and carbon-rich dust into space, while also smashing water and organics into the surface of the planet. A glowing red flash captures the moment of impact on the planet. Yellow-white Eta Corvi is shown to the left, with still more comets streaming toward it. Spitzer detected spectral signatures of water ice, organics and rock around Eta Corvi -- key ingredients of comets. This is the first time that evidence for such a comet storm has been seen around another star. Eta Corvi is the right age, about one billion years old, to experience a bombardment of comets akin to what occurred in our own solar system at 600 to 800 millions years of age, termed the Late Heavy Bombardment. Scientists say the Late Heavy Bombardment was triggered in our solar system by the migration of our outer planets, which jostled icy comets about, sending some of them flying inward. The incoming comets scarred our moon and pummeled our inner planets. They may have even brought materials to Earth that helped kick start life. Image Credit: NASA/JPL-Caltech

WWII DRAGON VETS HONORED

FROM: U.S. DEPARTMENT OF DEFENSEU.S. Army World War II veterans of Operation Dragood and Members of the Military District of Washington's Sgt. Audie L. Murphy Club, the Society of the 3rd Infantry Division, and the military attaché to the French Embassy pose following a remembrance ceremony honoring the success of Operation "Dragoon" held Arlington, Va., July 21, 2012. DOD photo by U.S. Army Sgt. 1st Class Tyrone C. Marshall Jr.
World War II Veterans Honored for Their Part in Operation Dragoon
By Army Sgt. 1st Class Tyrone C. Marshall Jr.
American Forces Press ServiceWASHINGTON, July 22, 2012 - A group of World War II veterans received recognized yesterday in a ceremony held here for their gallantry during a 1944 combat operation in southern France.

Operation Dragoon lasted from Aug. 15 until Sept. 14, 1944. It was the second largest amphibious invasion of World War II, with over 1,000 ships delivering three divisions of troops to the beaches of France. Additionally, an airborne division parachuted into the country to help secure beach heads along with Greek, Polish and Dutch forces, according to retired U.S. Army Lt. Col. Timothy Stoy, historian for the Society of the 3rd Infantry Division.

The Society of the 3rd Infantry Division hosted the ceremony honoring veterans who fought during the operation. French Army Col. Brice Houdet, military attaché from the French Embassy, presented the French Legion of Honor during the ceremony to retired U.S. soldiers John Singlaub, Paul Donlon, Darryl Egner, Elias Hernandez, Michael Halik and the son of Stanley Siemrzuch.

Before presenting the French awards, Houdet thanked the group of veterans on behalf of the people of France.

"I would like to salute all of the American allied veterans who took part in that momentous operation 68 years ago," he said. "We are deeply honored to have some of you with us today."

"I will have the distinct honor to present six of these highly deserving former service members with the Legion of Honor, France's highest national honor and distinction, for their outstanding services during World War II," Houdet said.

The six award recipients were all accompanied by members of the Military District of Washington's Sgt. Audie L. Murphy Club, representing the connection to Murphy and the 3rd Infantry Division in which he served.

During the ceremony, U.S. Army Command Sgt. Maj. Edd Watson, currently the command sergeant major of the 3rd Infantry Division, narrated a Missing in Action presentation, and explained the items on a table displayed to honor fallen soldiers.

U.S. Army Maj. Gen. Randy E. Manner, Joint Staff director for the chief of the National Guard Bureau, said Operation Dragoon may not be as well known as some other World War II operations, but it should be remembered for its strategic importance.

"Sometimes, the voice of history does not speak as loudly about some events such as Operation Dragoon," Manner said.

"So that's our job today ... to be that voice and to speak loudly about those great successes all those many years ago," he said. "Those gathered here ... know the strategic value of Operation Dragoon."

Manner, whose father served under Singlaub, a retired Army major general, noted Operation Dragoon was critical because it opened a much-needed supply line into France for the allies to "continue to smash the Nazis."

"History records that over 90,000 soldiers and over 11,000 vehicles were on the beach, on the ground, within days," he said. "The bottom line is the operation significantly contributed to the shortening of the war in Europe, which meant, of course, the shortening and the lessening of the number of lives that were lost and the number of the families that were affected."

U.S. Army Maj. Gen. Thomas S. Vandal, director of operations, readiness and mobilization for the Department of the Army, thanked all of the veterans present for their sacrifice and "tremendous" service to the country.

"Although not as well known as Operation Overlord, Operation Dragoon was a highlight of the second World War for many in our military," he said. "[It was] one of the most successful combined joint operations in the European theater.

"Today, we take fighting as a joint team, alongside our sister services, for granted, just as we've come to count on our multi-national allies to be there in operations around the world today," Vandal said. "But on Aug. 15, 1944, in the early days of the liberation of Europe, such a level of cooperation was far from commonplace."

Vandal called the allied forces a "vanguard" of history who forged a path "for all of us to follow."

"Some historians have mistakenly called Operation Dragoon the 'forgotten D-Day,' particularly in comparison to the larger and more famous invasions of Normandy," he said. "In fact, some have even gone so far as to imply that the operation was easy – merely a cakewalk.

"Sgt. Audie Murphy, from the 3rd Infantry Division, might disagree with this characterization," Vandal said. "Given that he earned a Distinguished Service Cross during Operation Dragoon, I think it speaks for itself [and what troops] did."

Vandal noted allied forces of Operation Dragoon advanced more than 500 miles in less than a month and took more than 100,000 Germans prisoner.

"Overlooked by history or not, Operation Dragoon was a pivotal moment in the history of France, a fact well understood by all of you veterans sitting here today," he said.

Vandal, a former member of 3rd Infantry Division himself, expressed his appreciate for all World War II veterans.

RECENT U.S. AIR FORCE PHOTOS

FROM: U.S. AIR FORCE
Farnborough 2012 wraps up part 1

The Royal Air Force Aerobatic Team 'Red Arrows' amaze thousands of spectators with an aerial demonstration, July 15, 2012, during the Farnborough International Air Show in Farnborough, England. More than 250,000 trade and public visitors attend the bi-annual event which concluded today.

In the Ranks of an Ally
PARIS -- People flood the streets after the 2012, 14th of July parade in Paris. The 14th of July, known in English by Bastille Day, is the French equivalent of the American 4th of July. It commemorates the attack on the Bastille on July 14, 1989, which preceded the French revolution. (U.S. Air Force photo/Staff Sgt. Benjamin Wilson)

In the Ranks of an Ally
PARIS -- U.S. Air Force Maj. James Gingras, French Air Force Academy exchange officer, left, speaks with his cadets before marching in the 2012, 14th of July parade in Paris. (U.S. Air Force photo/Staff Sgt. Benjamin Wilson)
　

In the Ranks of an Ally
PARIS -- Camps del Elysee during the 2012, 14th of July parade in Paris. (U.S. Air Force photo/Staff Sgt. Benjamin Wilson)

　

THE SPACE SHUTTLE ENTERPRISE HAS JOURNEYED HOME

Enterprise Joins New York's Attractions

The space shuttle Enterprise is seen shortly after the grand opening of the Space Shuttle Pavilion at the Intrepid Sea, Air & Space Museum on Thursday, July 19, 2012 in New York.

F-22 RAPTOR FLIGHT RESTRICTIONS LIFTED

FROM: U.S. DEPARTMENT OF DEFENSE
Photo Credit: U.S. Air Force
Panetta Lifts F-22 Raptor Flight RestrictionsBy Jim Garamone
American Forces Press Service

WASHINGTON, July 24, 2012 - Defense Secretary Leon E. Panetta is satisfied the Air Force has identified the cause of hypoxia-like symptoms 12 F-22 pilots suffered, and restrictions he placed on use of the fifth-generation fighter will be lifted gradually.

Air Force Secretary Michael B. Donley, Air Force Chief of Staff Gen. Norton A. Schwartz and other Air Force leaders told Panetta on July 20 that they are confident the root cause of the symptoms is the supply of oxygen to pilots and not the quality of oxygen, Pentagon Press Secretary George Little said today at a news conference.

Reporters asked why these shortcomings weren't picked up earlier. "I can't go back in time and conduct technical archeology on this type of aircraft," Little said. "I would say the Air Force has taken very prudent measures ... over the past year and a half or so with respect to the F-22. And they have come to the conclusion as to what is causing these hypoxia events.

"With any aircraft -- be it the F-22 or the F-16, [or] with a helicopter or a ground vehicle -- we can never take the risk to zero," he said. "But we have an obligation to our troops and our airmen to make whatever equipment they are using as safe as possible, and that's what we think we're doing here."

In May, Panetta directed the Air Force to limit all F-22 flights to remain near potential landing locations to enable quick recovery and landing should a pilot encounter oxygen deprivation. The secretary also directed the Air Force to expedite the installation of an automatic backup oxygen system in all of the planes, and he asked for monthly progress reports as the service continued the search for the root cause of the problem.

These actions were in addition to steps the Air Force already was taking to determine the root causes of the hypoxia-like symptoms pilots have experienced. Panetta made this decision, in part, due to the reluctance of some pilots to fly the aircraft, Little said at the time.

The Air Force has made two changes that appear to have solved the hypoxia problem. The first was to order pilots not to wear the pressure garment vest during high-altitude missions. Pilots use the vest to combat G-forces generated flying a high-performance aircraft. The vest inflates to stop blood from pooling, which would cause pilots to black out during high-speed turns.

The Air Force found that a faulty valve "caused the vest to inflate and remain inflated under conditions where it was not designed to inflate, thereby causing breathing problems for some pilots," Little said. "The garment has been suspended from flight since June."

This problem was not identified during initial F-22 testing.

Second, the Air Force removed a canister filter from the oxygen delivery system, and that has increased the volume of air flowing to pilots. The service also is looking at improving the oxygen delivery hose and its connections.

Following the Air Force briefing last week, Panetta decided to lift restrictions on the aircraft gradually. Beginning today, F-22s may resume long-duration flights for deployments, aircraft deliveries and repositioning of aircraft.

"Secretary Panetta has authorized deployment of a squadron of F-22 aircraft to Kadena Air Base, Japan," Little said. "The aircraft will fly to Japan under altitude restrictions using the northern Pacific transit route." Following completion of the flight to Japan, the Air Force likely will approve most long-duration flights, officials said.

Still, initial long-duration flight routes will be designed to pass near airfields. The Air Force also has imposed an altitude restriction on the aircraft so pilots will not need to wear the pressure vest.

Training sorties will remain near runways until completion of the Air Force Scientific Advisory Board-recommended corrective actions. This is expected by the end of the summer.

The Air Force will notify Panetta when fixes are finished with the pressure vest and related cockpit life support components. Pending successful completion of associated testing and NASA's independent analysis, Panetta can decide to return the F-22 fleet status to normal operations.

DEPUTY DEFENSE SECRETARY CARTER SPEAKS TO CONFEDERATION OF INDIAN INDUSTRY

FROM: U.S. DEPARTMENT OF DEFENSE

Presenter: Deputy Secretary of Defense Ashton B. Carter; Director General of the Confederation of Indian Industry Chandrajit Banerjee; and Chairman of the CII Defence Council Dr. V Sumantran July 23, 2012

Remarks by Deputy Secretary of Defense Carter to the Confederation of Indian Industry, New Delhi, India

DIRECTOR GENERAL CHANDRAJIT BANERJEE: Doctor Ash Carter, Deputy Secretary, Department of Defense, United States, Her Excellency, Nancy Powell, United States Ambassador to India, -- Dr V Sumantran -- distinguished ladies and gentleman, on behalf of CII, a very, very warm welcome to Dr. Ash Carter, deputy secretary, Department of Defense, United States.

Your presence is of significant importance to each one of us in India and particularly to CII. We're indeed very happy that you could make time to address this very important session on U.S.-India defense cooperation, the way forward. It shows the type of importance that you and your government attaches to this very important and -- important and emerging sector for India.

Also, a very warm welcome to excellency the Ambassador. Thank you very much for being here. A warm welcome to you from CII.

Also like to welcome all of the dignitaries present here at this session and for everyone who conveniently made it here with us today.

CII has 7,500 corporate members, has a very strong defense set up -- defense sector set up within the system, defense, aerospace and the entire gamut. And we see the type of opportunity and interest that this sector really has, especially when we work with together with the United States. A country where -- with CII, that is again predominantly addressed with one of our oldest offices we've been fortunate to have -- since quite some time and this sector will always be -- merged on the top in our discussions and in our -- as we have moved forward given our relationship with the United States.

Ladies and gentleman, we've transformed the international, geopolitical fabric in the post-Cold War era. It's interwoven by changes -- changed priorities and realigned -- possibilities. The foundations of -- (inaudible) -- converted -- (inaudible) -- between the United States and India in the last one and one half decades by -- within the opportunities for cooperation that this -- (inaudible) -- has offered. Both the nations are working toward enhancing and strengthening the engagement. India is viewed upon by the global community as a very strong, emerging power. And India's strategic relevance in the region have increased manyfold in keeping with its expanding strategic reach and depth.

India will be expected to discharge its responsibility as a regional power. The Indian armed forces are making efforts to enhance their military capability and preparedness.

It is the violence of defense weapons and they are huge all of us know that -- making an effort to diversify the sourcing of weapon systems. It is estimated that India will be procuring anything between $80 billion to $100 billion of defense equipment in the next five years.

It's a huge market and the potential to attract the U.S. defense industry and also a great opportunity for building a long term relationship with the defense industry. India will no longer be satisfied with a buyer/seller or patron/client type of arrangement. It is expected that the future of defense acquisitions will emphasize on transfer of technology as well as joint research and development of weapon systems. We understand that the U.S. has begun to move towards India beyond just sales of defense equipment.

Keeping in view the opportunity of cooperation arising out of the defense offset, there is a need to enhance the interaction between the tier one and tier two companies of both countries. We at CII are working towards it. We have been facilitating the interaction between the U.S. aerospace supply mission interactions with the Indian companies in different parts of the country. CII also has mounted several missions. But I must mention of a mission to Maryland and Virginia in June 2011 with the aim to enhance such interactions. We suggested an --inaudible-- and institutional arrangement for these -- for -- for such missions and such exchanges.

CII has been actively participating in the institutional arrangements that we have, which is the DDDG and the ACCD to discuss issues of mutual concern. The efforts being put in by the governments on both sides towards resolving the issues affecting the transformation is indeed very encouraging. The recent visit of the U.S. Defense Secretary Panetta to New Delhi signifies the interest and intent of cooperation.

During the last -- (inaudible) -- meeting in 2011, it was commented that the U.S. should publish a list of technologies for which there would be no requirement of export licenses. We in CII believe that such positive steps will definitely go a long way in taking the U.S. defense industry -- U.S. -- India-U.S. defense industry cooperation to a different plane.

Ladies and gentleman continuing the ongoing momentum, India and U.S. need to identify the new ideas of cooperation. Currently industrial cooperation in defense can be ensured as India's skilled labor force -- skilled labor force can be a lot of advantage to the United States.

Joint research and development can be undertaken. In the future this offset --(inaudible)-- that are part of the cost of developing of defense equipment and India can play a major role in this respect. It is evident from the fact that today all known defense industries of -- of the U.S. have established their offices in India and are engaged in dialogue with Indian industry.

There are several MOUs that have been signed between the United States and the Indian industry for joint partnership and cooperation. CII would wish to facilitate their engagement with Indian industry and other stakeholders in a much larger way than what has been the trend in the past. CII can play a significant role in facilitating offsets.

The Indian industry respects and understands the internal processes of export control and technology sharing of the U.S. Of military indutries we have, CII comments that India should be a special status as a country for defense cooperation. This will go a long way in giving a tremendous boost to the industry in defense cooperation. This will help the industry from both the countries to focus more on substantial -- substantial cooperation issues and will take a lot of precious time to understand the procedural gaps in both our countries.

Ladies and gentlemen, I just wanted to highlight some of these points before requesting Dr. Sumantran to give his remarks and thereafter listen to Dr. Ash Carter for his views and for his comments.

With that ladies and gentleman, once again a very warm welcome to each one of you for participating in this afternoon's session. Thank you very much. (Applause.)

CHAIRMAN V. SUMANTRAN: Doctor Carter, Deputy Secretary, Department of Defense, United States; Excellency Nancy Powell, U.S. Ambassador to India, Chandrajit Banerjee; visiting dignitaries from the U.S , colleagues from India and other defense industries, friends from the strategic community and friends from the media, good afternoon and welcome. It is indeed for me a privilege to address this very august gathering, a gathering of eminent policymakers, strategic thinkers and even businessmen from India and the U.S.

I have been given the honor of introducing a person who actually doesn't need much introduction. But, indeed, for those of you who are not familiar with Dr. Ashton Carter, allow me to very briefly introduce him.

That he would have a long biography would be no surprise. That he would have an industrious biography would also be no surprise. But he also has an exotic biography. (Laughter.)

Dr. Ashton Carter is the Deputy Secretary Of Defense with the United States. Previously, Dr. Carter served as Undersecretary of Defense for Acquisition, Technology and Logistics from 2009 until 2011. Over the course of his career in public service, Dr. Carter has three times been awarded the Department of Defense's Distinguished Service Medal. He earned a bachelor's degree in physics and Medieval history. Now that a very --(inaudiable)-- combination. (inaudible) -- of course and went on to get his doctorate at Oxford where he was a Rhodes scholar and he graduated summa cum laude.

Prior to his most recent government service, Dr. Carter was chair of the very well known -- (inaudible) -- global affairs faculty at the Harvard University's John F. Kennedy School of Government. During the Clinton administration, Dr. Carter was Assistant Secretary of Defense for International Security Policy.

He is a member of President Obama's Government Accountability and Transparency Board. He is a member of the Council on Foreign Relations and indeed many, many other prestigious -- memberships.

Welcome. It's a pleasure to have you with us here.

Before I invite him to the podium to share his views, let me also take a few minutes to share a few perspectives that I hope will advance the cause of India-U.S. relationship, and that is basic to this industry.

To state the obvious, our relationship has evolved to avery advanced level, particularly post-9/11, where, with no surprise, we found we had common values. We shared a common beliefs, conditioned on the value of democracy, respect for human rights, rule of law, and so on. Our goals are similar -- international peace and security. The tasks we face are similar: international terrorism, piracy, destabilizing global and regional forces.

In this global context it is no surprise that as for the 13th Finance Commission, India's defense capital expenditure budget is growing at at least 10 percent. And while we talk about the economic impact of this journey, during the next five years this industry must also lead to the creation of almost directly or indirectly a million jobs. So there is a great deal of expectation both from this industry, both the perspective of preparing for national security and advancing the state of development of industry.

The bilateral defense trade between U.S. and India, under the state department framework has strengthened our bilateral relationship. CII has remained in the forefront of highlighting industry's issues, concerns-- (inaudible) -- and in the many business-to-business and business-to-government dialogues.

We've put in a lot of effort in this regard, and hopefully has played some small role in the fact that today many American companies are increasing their footprint in India.

The India-U.S. defense trade has also increased manifold over the last one decade. Today, we've crossed the $10 billion mark, and it looks like to reach the $25 billion threshold, we must take many more years.

In India, our defense sector has also changed gears. We request our American counterparts to use this point of inflection, and to set up their operations in India with emphasis on manufacturing, R&D, and value creation.

If we can have co-development and co-manufacturing with other nations, including Russia, why not have a similar, and an even more promising relationship with the U.S.? Together, we should promote India as a global defense manufacturing hub. We have seen it in other sectors, including my own -- in manufacturing. I truly believe that this is a potential to draw from.

The idea must be to create win-win situations for both India and American companies. We therefore sincerely ask that the U.S. accord special status to India as far as defense status is concerned. Every year on average, India procures over $1 billion in equipment from the U.S.

Understandably, we would like defense systems, equipment, weapons, and their subsystems to flow in both directions. This can be achieved by opening the private sector, where companies are both eager and better prepared today to assist U.S. integrators in the development of supply systems not only in India, but also in several parts of the world globally.

Transfer technology is another concern. We need to ease the restrictions around transfer technology, recognizing that India indeed has an impeccable record of non-proliferation in weapons. The bilateral relationship, which has been built on trust, will ultimately be fortified as issues like DoD get resolved.

For this, we would urge the creation of dedicated forums as we do indeed have with some of the other (inaudible) partners; facilitate the fast-track of this area.

As far as foreign direct investment is concerned, we in CII have been able to convince Indian industry, that FDI cap should really move from the present level of 26 percent to 49 percent on a case-by-case basis. We do not believe FDIC will remain an issue for long, but we need some flexibility and support from the U.S. side as well.

If we are getting access to critical technologies that demonstrate capability to create multiplier effects on the economy and the -- (inaudible) -- generation potential in India, we can together -- and this comes from both sides -- move forward with speed.

As far as the United States is concerned, we indeed urge the U.S. government to encourage U.S. companies to participate in competitive bidding and to indeed make the final product economically and from performance even more competitive.

The buy and make and the making here programs have been a part of a carefully crafted policy so that the infrastructure capabilities of this nation are improved. India defense industry is keen to play a leading role in many strategic projects, and in this arena as well we look forward to support from U.S. defense industry -- (inaudible).

For defense offsets, we in India understand that we view defense offsets as an enabler rather than a restricter on trade. We can have, from CII, U.S. -- (inaudible) -- to identify appropriate offset partners in India. We would urge that most of these offsets be directed towards the manufacturing sector and indeed to make sure that, as we all recognize, sustainable defense cooperation can only be based on the foundation of capability creation and capacity creation.

As far as long-term investments are concerned, the ongoing Indian military modernization program, the state of which challenges -- (inaudible) -- is one of the largest military modernization exercises undertaken in recent times. India's defense industry is poised for long-term investment, growth and capability -- (inaudible).

It is timely for the U.S. defense companies to establish themselves in India with a long-term perspective. (inaudible) -- relationships is not sustainable in the long term.

Indian industry is not shying away from these issues --(inaudible)-- finding shortcomings and gaps and we're truly addressing them. The U.S. defense industry and U.S. defense trade is indispensable as far as India is concerned. However, we should not miss out on the point that the rest of the world is also observing these developments in India and the -- (inaudible).

In some cases it has been observed by some parts of -- (inaudible) -- industry that doing defense trade with European countries is sometimes easier than that with the U.S.

Yet, the conviction that the shared values between U.S. and India must lead to a special, sustainable and mutually beneficial relationship remains unshakable. And it is with this optimism that I would now like to invite Dr. Carter to address this august gathering.

Dr. Carter?

DEPUTY SECRETARY ASHTON B. CARTER: Thank you, Dr. Sumantran, for that wonderful introduction.

Mr. Banerjee, thank you for hosting us today, for your welcoming remarks.

And ladies and gentlemen, distinguished guests, thanks for being here today.

And congratulations to CII on your success. You play a critical role in India's foreign trade and global engagement. You help the world to get to know India, and work with India, and vice versa.

You know, I became familiar with CII through my association with the Aspen Strategy Group about 14 years ago, working with the great Tarun Das and Kiran Pasricha, all of whom have done such exceptional things for the U.S.-Indian relationship, dating back to those early days. I then was an early and strong supporter of the U.S.-Indian relationship also. So for me this is a long, long awaited opportunity, which makes it doubly wonderful to be here today with all of you. I'm familiar with India's charms and culture, a place very close to my heart.

I had a great morning today, a very productive meeting with Ministry of Defense Antony and the senior leadership. This afternoon I'll meet with the Foreign Secretary and the National Security Adviser. Excellent discussions all the way around.

And we know that the U.S.-India relationship is global in scope, like the reach and influence of each of our countries. And our security interests converge. Maritime security across the Indian Ocean region; in Afghanistan, where India's done so much for economic development and the Afghan security forces; and on broader regional issues where we share long-term interests, if not always common approaches, like Syria and Iran.

I like to think of India and the United States as kindred souls, sharing common values, as well as common interests and strong bonds in trade and technology, as well as security.

President Obama has called the U.S.-India bilateral relationship one of the defining partnerships of the 21st century. And our defense cooperation, the topic of my remarks, is an essential part of our partnership.

I can tell you much more about the importance of our relationship, but today I want to speak with you about the practical steps we can take to improve our defense cooperation. We want to develop a joint vision for U.S.-India defense cooperation. That's why I'm here at the request of Secretary of Defense Panetta.

We want to get to a place where we discover new opportunities continuously, making new and innovative investments that benefit both countries for generations. The only limit to our cooperation should be our independent strategic decisions, as any two states can differ, not bureaucratic obstacles or inefficient procedures.

The relationship has come a long way in the past decade. Our goal is to make it even stronger. We need to define where we want to go and then make it possible to get there.

We on the U.S. side have no preconceived model for this relationship or for India's role in this region of the world. We respect that you will follow your strategic interests. Our relationship will therefore be a unique one based on trust, sharing, and reliability. It will be shaped by our own respective strategic decisions and, I hope, by deep strategic dialogue such as that which Secretary Panetta engaged in when he was here in June and which I am happy to continue here today.

Map Credit:  U.S. State Department
Before moving into the specifics of our cooperation, I'd like to start with some strategic concepts, the backdrop for our cooperation. The last 10 years have had a profound impact on world affairs, affecting the United States, but also countries across the Asia-Pacific and around the world. The last 10 years -- excuse me -- we now find ourselves at a strategic inflection point, we in the United States, with two forces impinging upon us.

After a decade of conflict, one war has ended, in Iraq. The other, in Afghanistan, has not ended. We'll transition soon to Afghan lead, thanks to the superb effort of the men and women of the U.S. and coalition forces. We've done exceptionally well. But while we've been fighting insurgencies and terror there, the world has not stood still. Our friends and enemies have not stood still. And technology has not stood still.

The successes we've had in Afghanistan and in counterterrorism mean that we can now focus our attention on other opportunities and challenges. The time has come for us in the United States to look up, look out, to what the world needs next and to the security challenges that will define our future after Iraq and Afghanistan.

We would need to make this transition no matter what, but a second force rises as well. That is we need to keep the United States' fiscal house in order as outlined in the Budget Control Act passed last year by Congress. While the U.S. base defense budget will not go down under this plan, neither will it continue to rise as we had earlier planned. But the wind-down of Iraq and Afghanistan gives us capacity to turn the strategic corner without an ever-rising budget.

These two forces, of strategic history and fiscal responsibility, led us to design the new defense strategy for the 21st century in a remarkable process this past winter steered by President Obama and Secretary Panetta.

We're building a force for the future, what Chairman Dempsey calls the joint force of 2020. And as Secretary Panetta has said, it's going to be agile, lean, ready, technologically advanced, and able to conduct full spectrum operations and defeat any adversary, anywhere, any time.

A central tenet of our new strategy is our rebalance to the Asia-Pacific region, one of the major strategic changes we are making as we come out of the era of Iraq and Afghanistan.

The rebalance is reflected in force structure decisions we make (that is, what we keep and what we cut), in our posture and presence (that is, where we put things), in new investments we're making in technology, weapon systems, in innovative operational plans and tactics, and in alliances and partnerships in the region.

Importantly, here in India, our rebalance extends to Southeast Asia and South Asia.

The logic of the rebalance is simple. The Asia-Pacific has enjoyed an environment of general peace and stability for more than 60 years, allowing Japan to rise and prosper, then Korea to rise and prosper, next Southeast Asia to rise and prosper, and now China, and in a very different way India, to rise and prosper.

The wellsprings of that security have not been found in the region itself. There's no NATO here. In the absence of an overarching security structure, the United States military presence has played a pivotal role in ensuring regional stability.

We intend to continue to play that role. It's good for us and good for everyone in the region.

Our rebalance is not about China, or the United States, or India, or any other single country or group of countries. It's about a peaceful Asia-Pacific where sovereign states can enjoy the benefit of security and continue to prosper.

In the future, therefore, our Asia-Pacific posture will increase relative to other theaters. We intend to have 60 percent of our naval assets in the Pacific by 2020, a very different thing.

We're developing new concepts of rotational presence, as opposed to traditional bases. We have Marines in Australia, Littoral Combat Ships in Singapore and forward stationing in Guam.

We're investing in new platforms and technology relevant to the region, like the new bomber, new submarine-launched conventional weapon, cyber capabilities, and a host of upgrades in radars, electronic detection, space and electronic warfare.

These and other future focused investments are another central tenet of our new strategy.

To those who doubt we have the resources to accomplish all of this, I would to the contrary point out two factors that make it eminently possible.

First, with Iraq behind us and Afghanistan -- Afghanistan slated to wind down, capacity will be released that can be allocated to the Asia-Pacific region.

Second, within our budget, we can and are prioritizing investments relative to the Asia-Pacific theater, rather than, for example, counterinsurgency, where we've put so much effort over the past decade.

So the rebalancing is entirely practical.

Finally, central in our new strategy is, in our decades-long historical commitment to the region we seek to build partnerships that leverage the unique strengths of our allies and partners to confront critical challenges and meet emerging opportunities.

So, we're taking a strategic and comprehensive approach to security cooperation, as well as to our posture.

As I'll say in a moment, we're streamlining our internal processes and security cooperation programs to share and cooperate with our partners better.

Our partnership with India is a key part of our rebalance to the Asia-Pacific and, we believe, to the broader security and prosperity of the 21st century.

You are an economic power with an increasing military capability. Your leadership and civil discourse and democracy is critical to the political stability of South Asia and beacon to the world.

Our military-to-military engagement has increased steadily over the years to include a robust set of dialogues, exercises, defense trade, and research cooperation. Our shared challenge in the next year is to find concrete areas to step up our defense cooperation so that only our imagination and strategic logic--and not administrative barriers--set the pace.

That's why I came with a team of officials who are responsible to me and Secretary Panetta for executing this vision. We need to reinvigorate and commit to maintain a robust set of linkages and working principles and practices -- many of which are in place -- that will work every day to enable our cooperation and develop mutually beneficial policies in the future.

We want to knock down any remaining bureaucratic barriers in our defense relationship and strip away the impediments. And we want to set big goals to achieve.

Today I want to outline some of the steps the U.S. is taking in this direction and, if I may, some areas where we hope India will improve, too.

To begin with, as a country committed to enduring peace and security of the Asia-Pacific region, India deserves the best military equipment available. And we're prepared to help. Practically, we want to be India's highest-quality and most trusted long-term supplier of technology, not a simple seller of goods, in such fields as maritime domain awareness, counterterrorism, and many others.

We're committed to India's military modernization. We know that India has security challenges that are very real. India is a top priority in our export considerations. We trust India and know that India's not a re-exporter or exploiter of our technologies. We have an export control system to prevent high-end technology from getting to states that shouldn't have it, but our system can be confusing, rigid, and controls too many items for the wrong reasons. We know we need to improve it.

We are improving our government's overall export control system under President Obama's 2010 Export Control Reform Initiative. And at the same time, Secretary Panetta and I are committed to reforming the Department of Defense's internal processes. These reforms should make it easier for you to work with us and should benefit you, as well as our other partners. India's been very frank in expressing its concern with U.S. export controls and technology security policies, and we're taking real steps to address India's concern.

For example, we moved DRDO and ISRO off the Commerce Department Entity List. We can therefore conduct research and co-develop technologies together -- batteries and micro-UAVs -- good initial steps, with much more to come. An overwhelming and increasing majority of munitions license requests have been approved more quickly under direct commercial sales, and this will continue. But in addition to increasing sheer bureaucratic speed, we're trying to be more strategic about export decisions. We're making decisions more anticipatory, looking at what partners are likely to want in the future and beginning our thinking and processes earlier.

In a terrific new initiative, we're building exportability into our systems from the start so it doesn't consume time and money to do it later. Next, we're putting priority cooperation sales on a special fast track. All these steps will be felt here in New Delhi.

The combination of these and other efforts will help us respond more rapidly to India's requests for U.S. equipment and systems, particularly for more advanced technologies. At the same time, we want to maintain confidence that our technology will be protected. India's concerned about protecting technology, too. We know that. We have a U.S.-India Senior Technology Security Group to address the genuine security issues that exist in our world, but it needs to be more active.

I just spoke to export control reform. And, secondly, I want to report to you what we in the U.S. are taking steps to do to improve our foreign military sales, or FMS, system, also. This is in both of our countries' interests. India was our second-largest FMS customer in 2011, with $4.5 billion in total FMS transactions, and we delivered six C-130Js on time.

We think our defense technology is the best quality on the market. Some partners choose price over value. Buying American, whether through direct commercial sale or foreign military sales, will get India exceptionally high-quality technology, a high degree of transparency, and no corruption, which is mandated by our legal system.

Sometimes it appears that India favors direct commercial sales. And this is fine, but might overlook some advantages of FMS. The government-to-government agreement through foreign military sales offers competitive pricing, only slightly more than DCS. These costs go to DoD, which affords protections you cannot get from industry alone, and addresses sustainment needs over the long term.

As I said many times when I was acquisition executive of DoD, lifecycle costs are frequently hidden and ignored in acquisition decisions. So to sum up on FMS, we are making our foreign military sales system as easy to work with as possible. But for each sale, India should choose which group is in its interests, commercial or governmental. We will continue to improve both.

Next, and importantly, we're prepared to adapt our system to the unique needs of India and its Defence Procurement Procedure, or DPP. We aim to clarify our acquisition system, which isn't always easy to interpret.

I used to be Undersecretary of Defense for Acquisition, Technology, and Logistics, as has been mentioned. There was a chart on my wall outlining the 250 -- or whatever -- steps it takes to move a program from development to delivery. It read like hieroglyphics. I brought it along today to show you. [Laughter] This is what I had on my wall. [Laughter] This described the steps that you needed to go through to acquire something. And I dare say there's a similar chart over in the Indian Ministry of Defense.

I had trouble remembering all of this, so my staff was kind enough to make me this handy little wallet-sized card -- [Laughter] -- I can refer to when I needed to. Well we're going to try to make this system -- which is hard enough for us to understand and we can't expect anybody from anywhere else to understand it -- more export-friendly.

We have a new fund that allows us to procure long-lead, high demand items so it'll have them on hand in anticipation of partner requests. We now have a cadre of acquisition experts to send to other countries to define their requests through cooperation and streamline our response. That should help India significantly.

Finally, and most importantly, we want to move beyond defense and trade -- this is the important part -- towards cooperative research and development and co-production with India. I'm a scientist; I know this is the central part.

I'm going to Hyderabad tomorrow, where Tata Advanced Systems, Limited, and Lockheed will begin producing parts for the C-130J. From now on, every C-130J around the world will contain parts made in Hyderabad. That's an example of the kind of co-production that is the future.

It highlights what can be achieved when we unleash the potential of our private industries. It shows what's possible when there's a common strategic view, when the bureaucratic barriers are down, and, importantly, when our strategic interests and genuine economic and business interests are aligned. You have to have all three of them to have a successful project.

This is just the beginning. Our horizons can and should expand further. That's what our leadership has directed us to give them.

And the only question for us is where does India want to expand and grow? That's a decision only India can make, then we can help.

Indian bureaucracies, like ours, are changing to adapt to the future. Our bureaucracies, however -- both bureaucracies were built during the Cold War. More recently, Indian introduced the Defense Procurement Procedure which is designed to protect against corruption by reducing prices and complexity. Now, however, a higher-end technology India seeks to develop a higher-end defense industry. That's a different environment.

Likewise in the Cold War, the U.S. bureaucracy is designed to protect a wide swath of technology. With the commercialization of the global marketplace, we now recognize that defense technology controls should be more focused. We want to cooperate with you on high-value technology. To get where we both want to be, India can make some changes, too, to increase U.S. investment. If India raises its foreign direct investment ceiling to international standards, that would increase commercial incentives to invest here.

Second, offsets can be tremendously helpful in growing industry capability if you have the right companies and the right absorptive capacity. If offsets are calibrated correctly, it works. But if offset requirements are too onerous or too narrow, they deter companies' interest and you lose that alignment of economic interest and strategic intent. For companies to participate, our arrangements must make good economic sense as well as good strategic sense.

Third, projects that integrate technology development, production and acquisition will require administrative structures that can do exactly that kind of integration.

So these are just three points where change could be a real help in Indian-American cooperation. Look, the point is that on both sides, we need to change, reform, and push ourselves to get to a place where U.S.-India defense relations are only limited by our thinking not by our capacity to cooperate. That's what Secretary Panetta and National Security Adviser Menon charged when they met in June.

I'm looking forward to visiting India's technology corridor tomorrow. There, we'll all be reminded what is happening in the overall world of technology and industry. There, cooperation is the norm. Leaders of industry globally, such as those in this room, know that. Sometimes, we in the security community lag behind them in our ability to cooperate and advance technology. But the wisest of our industry leaders, including CII, also understand that without security, none of the other good things in life are possible -- family, prosperity, progress -- let alone business

So in gatherings like this and in practical ways like those I have come to India to advance, they help show us the way. For that, Secretary Panetta and I are grateful.

Thank you. (Applause.)

DR. SUMANTRAN: Thank you very much, Doctor Carter.

Doctor Carter has agree to take a few questions. He has a limited amount of time, but he's willing to take a few questions from the audience. So if you have a question, please sir.

Yes ?

Q: Secretary Panetta, when he came here in June, had mentioned that he was appointing you a point person to unlock the potential defense trade between two countries. Now I noticed defense trade -- (inaudible) -- defensive cooperation Does this -- does this involve some kind of evolution in thinking or a re-think of the relationship? Could you just talk us through where is -- is coming from and if I could add on a quick second question to that. There's -- there's been no sign of an Indian counterpart -- (inaudible) -- is that an actual concern to you? Have you asked the Indian (off mic)

DEP. SEC. CARTER: OK, both good questions.

With respect to the trade versus cooperation, I think that shows that evolution in our understanding of what the point is here. And I tried to make this point in my remarks.

Trade suggests buyer-seller relationship and transactions. And I think one of the things that I have learned just in being here so far, and that Secretary Panetta and I learned as we thought about this issue and talked to our Indian colleagues about this issue, was that what India wants and what we want in the long term is more than just buying and selling. We want to do things together. We want to develop products together and produce technology together.

But there is a little bit of a difference between trade and cooperation. And as between the two, we're really looking for cooperation.

With respect to how my Indian colleagues choose to work with me and with the U.S. government, that's really for the Indian side to decide. I'm focused on the results, not the mechanism. And I think we'll get the results whatever is decided on the -- on -- on the Indian side. So I'm -- I'm -- I'm fine whatever -- with whatever is decided.

Q: I work for Times Now. It's a TV channel. I'm taking you back to Dubai, the incident in which an Indian sailor was killed. The Dubai government says that no warnings were issued. The fisherman who survived said no warnings were issued. What is your investigation finally saying? And if warnings were issued, what were the warnings? Could you just share them with us?

DEP. SEC. CARTER: Sure. Sure. I mean, we don't know -- the -- the investigation's not complete. As you probably know, there are two parallel investigations. They'll be thorough. We'll be transparent about the results, but I just don't know what the results are yet. So we don't know exactly what happened.

And obviously, we very much regret the loss of life and injury. Obviously, it's a dangerous part of the world. We had real security concerns. But we're very regretful for any -- any loss of life. And that's extremely tragic.

But the honest truth is, we don't know what happened. We won't know until the investigation is complete. So I don't even want to say what it is that -- our -- what I understand or we understand at the moment happened until the investigation's done, we just don't know what happened. And then we'll be completely transparent about it, and -- and there'll be full responsibility. And -- and certainly for the families and so forth, the -- the greatest condolences.

Q: Yes I'm -- (inaudible) -- walking us through the relationship between our two great countries. And the focus that you have my question is very simple. Up until now, we've been talking about -- (inaudible) -- platforms -- (inaudible) -- but if this relationship has really transformed to the next level, then it is more about the building up national capability, by which I mean manufacturing capacity, design and engineering services, and so forth. And in the very near term there are a vast number of sectors -- (inaudible) -- thank you.

DEP. SEC. CARTER: Also a very good question. And building capacity is why the word "cooperation," rather than "trade," is the appropriate one for where we're trying to get. You mentioned robotics and automation. That is one of the areas where we recognize -- and, in fact, we're recognizing earlier today -- is one where we both have aspirations and innovative potential. So I think it is a very good candidate for exactly that kind of cooperation.

Q: Thank you Dr. Carter. My question to you is what high end technologies India should be expecting near future? And is there any potential of the F-35 as well, in the country and also, while the U.S. seems to be coming very closer to Indian interests the concerns from India always has been that the United States is unable to offer the first line technologies. How do you answer to these concerns?

DEP. SEC. CARTER: Well, to the last part --

Q: Thank you.

DEP. SEC. CARTER: -- that may have been true in the past, but that's what we're trying not to have be true in the in the future. India is, from our point of view, one of the most trusted destinations in the world. We think we can share with India to the greatest possible extent. And just making sure that that relationship of trust is reflected in how we actually administer our defense cooperation is, in one sentence, the principal purpose of my visit here today, the assignment that I've been given by Secretary Panetta and -- and Mr. Menon.

You say what kinds of technology? All kinds of technology. You asked about the Joint Strike Fighter. I've been asked this before. The Indian government has not asked us for information about the Joint Strike Fighter, but I'll say the same thing I said a year ago or something. Of course, if they ever do, we'll talk to them -- talk to them about anything. That's not -- just to be clear, the Indian government has not asked us about the Joint Strike Fighter.

DR.SUMANTRAN: I think we have time for one last question. Yes, sir. Please.

Q: Thank you -- (inaudible) -- take the defense cooperation strategy to the next plane or next higher level, I think we need a showpiece project at the strategic level. I have one in mind for example ballistic missile defense, a joint project. Would the U.S. be willing to make such an offer to India? Thank you.

DEP. SEC. CARTER: Two comments on that. If you couldn't hear that, the question was about ballistic missile defense. That's an important potential area for our cooperation in the future. I do think that ballistic missile defense has a very strategic importance. And therefore, the two governments should discuss that strategically before they discuss it technically. And I think that they intend to. Those strategic decisions on a topic like that precede a technical discussion.

I'll make another sort of parenthetical comment. I'm wary of showcases -- to use your phrase -- only because I want to be doing things that make real strategic and economic sense. It's fine if they make symbolic sense, as well, but, first and foremost, I'd like it to make strategic -- it's not to say they won't occur sometime in the future, but showcases is not -- I prefer things that make hard economic and strategic sense.

DR. SUMANTRAN: I'm sorry. There's a very tight demand on the deputy secretary's time, so if you'll allow me, I would just like to close with a word of thanks. Ladies and gentlemen, of course, in all our years since independence our economy has witnessed many challenges -- and indeed our democracy. -- (inaudible) -- development -- (inaudible). -- (inaudible) -- India's concerns and its needs to build up its military capabilities and security -- (inaudible) -- is understandable .

I would like to thank Dr. Carter for his very valuable comments and his indeed candid comments on several topics: the whole topic of rebalance, the importance he accords this region. I lost count the number of times he talked about removing bureaucratic hurdles and obstacles.

We'd like to thank him indeed for not only taking the time, but indeed for his very practical and useful approach here.

I would take this opportunity to request the U.S. industry to come forward, make best use of these opportunities of -- (inaudible) -- covering the entire gamut of high-tech component, as indeed we have discussed.

And may I say, CII is always there to help you out. As an organization, we are committed to creating indigenous defense industrial base. However, without the support of friendly foreign countries, this would be a very difficult task. Regarding our relationship with the U.S. government and industry, and on behalf of the Indian industry and CII, we commit full support to you.

So once again, let me express my sincere gratitude to Dr. Ashton Carter. We thank you -- sir for sharing your candid views. We are hopeful that with your guidance, defense industries from both sides will benefit and together we can explore a lot of new avenues for cooperation -- (inaudible). Thank you very much, Sir.

And I would also thank excellency, Ambassador Nancy Powell and all of the visiting

Thank you very much.

(Applause.)

DOD SECRETARY PANETTA URGES HONORING AUROA VICTIMS

FROM:  U.S. DEPARTMENT OF DEFENSE

Panetta Urges Work, Sacrifice to Honor Aurora Victims

American Forces Press Service

WASHINGTON, July 24, 2012 - In a message issued last night, Defense Secretary Leon E. Panetta paid tribute to the military victims of the July 20 shooting spree in Aurora, Colo., and urged Defense Department personnel to honor the victims' memory through hard work and sacrifice.

Here is the text of the message:
To all Department of Defense personnel:
Flags at Department of Defense installations across the world are being flown at half-staff to honor the victims of last week's tragedy in Aurora, Colorado. All of us in the Department of Defense community are deeply saddened by this senseless act of violence, which has hit our military family especially hard.

Four of the victims served in the military -- including Air Force Staff Sergeant Jesse Childress, Navy Petty Officer 3rd Class John Larimer, Jonathan Blunk, a former Sailor, and Rebecca Wingo, a former Airman. Other DoD personnel and family members were also injured in this cruel attack.

I know that many are struggling to understand why these innocent lives were taken from us, and how such a tragedy could occur in this country. Even as we try to make sense of this evil act, we are also moved to learn more about the actions of men and women like SSgt. Childress, who threw himself in front of his friend in the movie theater to shield her from the gunman. His selflessness saved her life, at the cost of his own.

These acts of heroism and sacrifice are the essence of what military service is about -- putting your life on the line to defend those who are part of the American family.

Let us all honor the victims of this tragedy by committing ourselves to the hard work and sacrifice of protecting this country. Bravery, courage, and dedication are the hallmarks of our men and women in uniform -- our heroes.

May God bless each and every one of you, and the United States of America.

U.S. EXPORT IMPORT BANK APPROVES $1.2 BILLION FOR TELECOM SATELLITE EXPORTS

FROM:  U.S. EXPORT-IMPORT BANK
WASHINGTON, D.C. – The Export-Import Bank of the United States (Ex-Im Bank) approved two separate transactions totaling more than $1.2 billion to finance the export of American-made telecommunications satellites to Mexico and Australia.

Approximately 750 U.S. aerospace jobs will be directly supported in Washington State, California, Pennsylvania and Virginia. In addition, the exports will indirectly support more than 1,000 additional jobs at suppliers throughout the United States.

Ex-Im Bank is providing a $922 million loan guarantee to support the export of three satellites and related equipment to the Mexican government for the MEXSAT regional mobile satellite system. Mexico’s Secretariat of Communications and Transportation will purchase the satellites from Boeing Space and Intelligence Systems in El Segundo, Calif. Boeing will produce two satellites with mobile service satellite (MSS) capacity and will subcontract a third satellite with fixed service satellite (FSS) capacity from Orbital Sciences Corporation in Dulles, Va.

The Bank is also providing a $281 million direct loan to Jabiru Satellite Ltd. (a subsidiary of NewSat Ltd.) in Southbank, Australia, for the purchase of satellite and ground equipment from Lockheed Martin Space Systems Co. in Bethesda, Md.

In FY 2012 to date, Ex-Im Bank has authorized a total of almost $1.3 billion to support U.S. satellite exports, matching its financing for this industry in all of FY 2011.

"American workers produce the best technology in the world, and that is why our satellites are being used from Mexico to Australia," said Fred P. Hochberg, the chairman and president of Ex-Im Bank. "These transactions help sustain and grow high-quality jobs across the country and put us one step closer to meeting President Obama’s National Export Initiative goal of doubling U.S. exports by 2015."

Map Credit:  U.S. State Department Boeing Exports Satellites to Mexican Government
Ex-Im Bank is guaranteeing a $922 million loan from Morgan Chase & Co. of New York to Mexico’s Secretariat of Communications and Transportation for the purchase of two MSS satellites made by Boeing and one FSS satellite made by Orbital Sciences Corporation, and related equipment and services.

The three satellites will be used to deploy the MEXSAT system, a next-generation, space-based communications platform that will help support social and economic development within Mexico. Various sectors will benefit from MEXSAT, including programs focusing on education, health care, disaster relief and rural telephonic service.

Boeing will design and deliver an end-to-end L-band MSS system consisting of two Boeing 702HP geomobile satellites, a spacecraft operations center and related ground infrastructure. Boeing will subcontract with Orbital Sciences Corporation for a FSS satellite for C-band and Ku-band communications and a spacecraft operations center.

Approximately 400 Boeing employees will work directly on the MEXSAT program. The transaction also will support an estimated 80 jobs at Orbital Sciences Corporation. Hundreds of additional jobs will be indirectly supported at related vendors throughout the United States.

"Boeing’s Geo-Mobile (GEM) product line is the most capable mobile satellite available in the global market. Ex-Im’s support for this transaction makes it possible to provide this capability to a valued international customer that shares our border, and, in the process, support U.S. high-technology jobs and American technology excellence in this arena," said Craig Cooning, vice president and general manager of Boeing Space and Intelligence Systems.

Mexico is one of Ex-Im Bank’s nine key markets and accounted for $8.3 billion of the Bank’s worldwide credit exposure at the end of FY 2011. In FY 2012 to date, the Bank has authorized approximately $1.8 billion in financing for U.S. exports to Mexico.


Map Credit:  U.S. State Department.
Lockheed Martin Satellite Export to Jabiru Satellite Ltd. in AustraliaEx-Im Bank’s $281 million direct loan to Jabiru Satellite Ltd. is the Bank’s first satellite transaction in Australia and its first satellite transaction involving Lockheed Martin as the exporter. The transaction will directly support 250 aerospace-based jobs at Lockheed’s manufacturing facilities in Sunnyvale, Calif., and Newtown, Pa. It will indirectly support more than 650 jobs at related suppliers across the country.

"The Ex-Im Bank loan is critical in solidifying a U.S-based satellite procurement that will protect and secure U.S. jobs in the aerospace industry," said Linda Reiners, vice president of Lockheed Martin Space Systems Commercial Ventures. "We congratulate NewSat and look forward to this exciting opportunity to deliver the high-quality Jabiru-1 satellite."

Jabiru Satellite Ltd. will contract the operation of the satellite to MEASAT Satellite Systems Sdn. Bhd. of Malaysia, which operates a fleet of five satellites reaching 145 countries in Asia, Africa and Europe.

Jabiru-1 will be Australia’s first privately-owned commercial satellite. It will rely upon 8.1 gigahertz of capacity to provide Ka-band and Ku-band coverage to government, corporate and industrial sectors in the high-growth regions of the Middle East and Africa during its 15 years of useful life. The satellite’s launch date is scheduled for 2014.

In FY 2011, Ex-Im Bank’s credit exposure in Australia represented $1.7 billion of the Bank’s portfolio. In FY 2012 to date, the Bank has authorized more than $3.1 billion in financing for U.S. exports to Australia.

Ex-Im Bank Chairman Hochberg will meet with government and business leaders in Australia from August 13-17.