NEWS FROM AFGHANISTAN FOR FEBRUARY 22, 2013

U.S. Army Lt. Col. Thomas M. Feltey, second left, meets with an Afghan uniform police commander and other district leaders after the first district leaders' shura in Spin Boldak in Kandahar province, Afghanistan, Feb. 11, 2013. Feltry commands the 2nd Battalion, 23rd Infantry Regiment. U.S. Army photo by Staff Sgt. Shane Hamann

FROM: U.S. DEPARTMENT OF DEFENSE
Precision Strike Kills Taliban IED Expert
From an International Security Assistance Force Joint Command News Release
KABUL, Afghanistan, Feb. 22, 2013 - A precision strike killed Zekaria, a Taliban improvised explosive device expert, in the Chahar Darah district of Afghanistan's Kunduz province yesterday, military officials reported.  The strike will significantly degrade the ability of insurgents to conduct attacks in the Charhar Darah district, International Security Assistance Force Joint Command officials said.

In other news, ISAF Joint Command officials confirmed today that Habib, a Taliban leader, was killed by a precision strike yesterday in Logar province's Charkh district. He obtained weapons for insurgents and helped to plan attacks against Afghan and coalition forces, officials said.

ESA chooses instruments for its Jupiter icy moons explorer

ESA chooses instruments for its Jupiter icy moons explorer

FEMA ARCHAEOLOGISTS FIND ANCIENT NATIVE AMERICAN ARTIFACTS NEAR LAKE PONTCHARTRAIN

Lake Pontchartrain. Jocelyn Augustino-FEMA

FROM: FEDERAL EMERGENCY MANAGEMENT AGENCY
FEMA
Archaeologists Discover One of the Oldest Native American Artifacts South of Lake Pontchartrain

NEW ORLEANS – Pottery sherds, animal bones and pieces of clay tobacco pipes are among the items recently discovered by a team of archaeologists under contract to the Federal Emergency Management Agency surveying land near Bayou St. John in New Orleans.

"It was a bit of a surprise to find this," said FEMA Louisiana Recovery Office Deputy Director of Programs Andre Cadogan, referencing a small, broken pottery fragment. "We clearly discovered pottery from the late Marksville period, which dates to 300-400 A.D. The pottery was nice, easily dateable, and much earlier than we expected. This is exciting news for historians and Tribal communities as it represents some of the only intact prehistoric remains of its kind south of Lake Pontchartrain."

The Bayou St. John spot holds a prominence in New Orleans’ history, throughout the years serving as the location of a Native American occupation, a French fort, a Spanish fort, an American fort, a resort hotel and then an amusement park. Through a series of shovel tests and methodological excavation, the archaeologists discovered evidence of the early Native Americans, the colonial period and the hotel.

"The historical record tells us that the shell midden (or mound) created by the Native American occupation was destroyed by the French when they built their fort here," said Cadogan. "However, we’ve discovered, through archaeology, that rather than destroy the midden, the French cut off the top of it and used it as a foundation for their fort."

FEMA’s work near Bayou St. John is part of an agreement with the State Historic Preservation Office, Indian Tribes and the state to perform archaeological surveys of parks and public land in the city of New Orleans. It falls under FEMA’s Environmental and Historic Preservation program, which evaluates historical and environmental concerns that may arise from projects funded by federal dollars.

FEMA hazard mitigation funding was used for thousands of home elevations and reconstructions throughout Louisiana. Rather than evaluate every property for archaeological remains—a nearly impossible task—FEMA, the State Historic Preservation Office and various consulting parties signed an agreement, which allowed FEMA to conduct alternate studies such as the archaeological surveys.

"The surveys not only offset potential destruction of archaeological resources on private property from the home mitigations but also give us a leg up on any future storms. We are helping the state of Louisiana learn about its history as well as provide information that leads to preparedness for the next event," said Cadogan.

FEMA, in coordination with the State Historic Preservation Office and Indian Tribes, identified the areas to be surveyed. Once the field studies are completed and all of the artifacts are analyzed and recorded, the State Historic Preservation Office will become stewards of the information.

INVESTMENT ADVISER LOCATED IN VIRGIN ISLANDS CHARGED WITH DEFRAUDING CLIENTS

Off The Island Of St. Thomas.  Credit:  CIA World Factbook.

FROM: U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., Feb. 21, 2013 — The Securities and Exchange Commission today charged an investment adviser located in the U.S. Virgin Islands with defrauding clients from whom he withheld the fact that he was receiving kickbacks for investing their money in thinly-traded companies. When he faced pressure to pay clients their returns on those investments, he allegedly used money from other clients in a Ponzi-like fashion to make payments.

The SEC’s Enforcement Division alleges that James S. Tagliaferri, through his St. Thomas-based firm TAG Virgin Islands, routinely used his discretionary authority over the accounts of his clients to purchase promissory notes issued by particular private companies. In exchange for financing those companies, TAG received millions of dollars in cash and other compensation — a conflict of interest that was never disclosed to investors. The Enforcement Division further alleges that when the promissory notes neared or passed maturity and his clients demanded payment, Tagliaferri misused assets of other clients to meet those demands.

"Tagliaferri was anything but forthcoming with his clients and he repeatedly failed to act in their best interests," said Andrew M. Calamari, Director of the SEC’s New York Regional Office. "He didn’t tell them about the compensation he received from the companies they were financing, and then compounded his fraud by using client assets to pay other clients when the conflicted investments came due."

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

According to the SEC’s order instituting administrative proceedings, Tagliaferri invested TAG clients primarily in conservative and liquid investments such as municipal bonds and blue-chip stocks until around 2007, when he began investing clients in highly illiquid securities. These investments included promissory notes issued by various closely-held private companies that were nothing more than holding companies through which an individual and his family effected personal and business transactions. He also invested at least $40 million of clients’ money in notes of a private horse-racing company, International Equine Acquisitions Holdings, Inc.

According to the SEC’s order, TAG received more than $3.35 million and approximately 500,000 shares of stock of a microcap company in return for placing various investments with these companies. The compensation that TAG received from the companies for the investments that Tagliaferri made on behalf of his clients created a conflict of interest that he was required to disclose to investors.

The SEC’s Enforcement Division alleges that Tagliaferri then further defrauded clients by investing their funds in microcap and other thinly-traded public companies in order to raise at least $80 million to pay the interest or principal due to other clients on certain of the promissory notes. Tagliaferri explained in e-mails he sent in April 2010 to the individual behind the companies that the real motivation for investing TAG clients in one of his microcap companies was to use the proceeds to pay off other clients invested in the initial series of promissory notes. "Where is the $125MM. As you are aware, this money was earmarked to clear all of the notes and other issues facing us both," Tagliaferri wrote. He later added, the "shares you transferred are being sold to clients. With those proceeds, you’re buying back your own notes." TAG clients were unaware, however, that Tagliaferri’s true motivation for having them buy these stocks was to repay other TAG clients on other conflicted investments he had made for them.

According to the SEC’s order, Tagliaferri willfully violated Sections 17(a)(1) and (3) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rules 10b-5 thereunder, and Sections 206(1), 206(2) and 206(3) of the Investment Advisers Act of 1940.

The SEC’s investigation, which is continuing.

PENTAGON'S NEW APPROACH TO THE INDUSTRIAL BASE

Atlas V Rocket.  Credit:  U.S. Air Froce.

FROM: U.S. DEPARTMENT OF DEFENSE
Pentagon Revamps Approach to Industrial Base, Official Says
By Army Sgt. 1st Class Tyrone C. Marshall Jr.
American Forces Press Service

WASHINGTON, Feb. 20, 2013 - The Defense Department has revamped its approach to communicating and interacting with the defense industrial base after applying lessons learned from previous economic downturns, a senior defense official said here today.

Brett B. Lambert, deputy assistant secretary of defense for manufacturing and industrial base, spoke during an Atlantic Council panel session.

Lambert said he was asked in 2009 to figure out a perception that DOD's communication with the defense industry was lacking.

A lot of people thought it was political, he said, but that proved not to be the case.

"It became obvious to me very, very quickly it had nothing to do with politics or parties," he said. "It had everything to do with 10 years of double-digit, year-over-year growth. There was no need to talk to each other. Everyone was happy. When we had a program that was bleeding, we cauterized the wound with money, because we had it. Expediency was the most important thing."

Lambert said the defense industry delivered what was asked of it, but that over time, the interaction between DOD and the industrial base broke down.

"So we came in with strategic guidance to try to re-establish, if you will, communications -- specifically with industry," he said. "But I came in with another specific task."

The deputy assistant secretary said then-Defense Secretary Robert M. Gates was aware of the coming downturn. "He knew well the times of double digit growth were over," Lambert said. "And so we knew we were entering a time of downturn."

With that in mind, Lambert said, officials reviewed the four previous downturns' effects on the industrial base.

"Basically we were 0-4," he said. "We got it wrong in every case. We got it wrong for a variety of different reasons, so we went back to look at what we could do better."

That effort made clear the need to engage industry up front, Lambert said. "And we needed to understand how dramatically the industry has changed since the last downturn -- the post-Cold War downturn," he added.

Lambert said the department reviewed lessons learned and crafted a plan, agreed to by Deputy Defense Secretary Ashton B. Carter, and Frank Kendall, undersecretary of defense for acquisition, technology and logistics, to act on those lessons.

"One: better communications," he said. "We're doing that through outreach -- through working with organizations like the Atlantic Council to communicate, to get our ideas out, and to get feedback."

The Defense Department received more than 500 inputs from industry from the "Better Buying Power 1.0" initiative, Lambert said.

"Many were implemented," he added. "We have even more industry inputs for Better Buying Power 2.0. And they are being reviewed, and many of our changes you'll see coming out in the final document will reflect the industry's comments."

The second element, he said, places more emphasis on internal mechanisms and what the Defense Department could do better in working with industry partners, such as educating the DOD workforce on what those partners are all about.

"The third thing I was asked to take on was policies that were both enduring and flexible," Lambert said, noting that a new Defense Department acquisition instruction will be issued in the coming weeks. Lambert said the new instruction represents a new way to look at industrial base analysis and policy, and that every major program will be affected.

"Instead of thinking about industrial base as an afterthought once program decisions are made," he added, "industrial base will now be ... part of major decisions."

Lambert said he believes the department now is well prepared, despite changes in the defense industrial base over the past decade.

"Moving forward, I feel comfortable that we have the tools to deal with some of the more complicated industrial base issues, including the transaction issues we're going to see," Lambert said.

"At the same time," he added, "cuts are coming across the board, or likely to come across the board to the whole department," referring to a mechanism in budget law that will take effect March 1 unless Congress comes up with an alternative plan.

"Those cuts will also come to the very institutions we're trying to set up to mitigate the effects of those cuts," Lambert said, "so on that regard, I'm not terribly optimistic right now."

GROWING FOOD IN SPACE

FROM: NASA
Learning About 'Veggie' at the NASA Social


Marshall Porterfield, Life and Physical Sciences Division Director at NASA Headquarters, talks about the human body in microgravity and other life sciences at a NASA Social exploring science on the International Space Station at NASA Headquarters, Wednesday, Feb. 20, 2013 in Washington.

The Vegetable Production System ("Veggie"), a container used for growing plants on the ISS, is pictured in the foreground. Veggie is a deployable plant growth unit capable of producing salad-type crops to provide the crew with a palatable, nutritious, and safe source of fresh food and a tool to support relaxation and recreation. Veggie provides lighting and nutrient delivery, but utilizes the cabin environment for temperature control and as a source of carbon dioxide to promote growth. Image Credit-NASA-Carla Cioffi

MAJOR GEN. GURGANUS SAYS THERE IS PROGRESS IN SW AFGHANISTAN

Major General Charles Gurganus

FROM:  U.S. DEPARTMENT OF DEFENSE
Outgoing Commander Cites Progress in Southwestern Afghanistan
By Donna Miles
American Forces Press Service

WASHINGTON, Feb. 21, 2013 - As he prepares to conclude a year of command in one of the most challenging regions of Afghanistan, Marine Corps Maj. Gen. Charles "Mark" Gurganus said he's optimistic about the progress his forces have helped to bring about as they overcame challenging circumstances and an evolving mission.

Gurganus is scheduled to transfer command of the International Security Assistance Force's Regional Command Southwest next week to Marine Corps Maj. Gen. Walter Miller Jr., wrapping up a year overseeing operations in Helmand and Nimroz provinces.

Talking by phone with American Forces Press Service from his headquarters in Helmand province today, Gurganus reflected on the challenges he and his 15,000 U.S. and coalition forces faced during a transitional year.

"We came over here and were clearly still leading the counterinsurgency fight," he said. But the mission evolved over the course of the deployment, with Gurganus' forces conducting more joint operations with their Afghan national security counterparts, then moving into advisory and mentoring roles as the Afghans took on more security responsibility.

Now, a new step in the evolution is under way – a process focus on developing the logistics systems, training programs and other institutions. "That is really a key part of the evolution, because I think that is where we leave behind capabilities that are sustainable," Gurganus said, posturing the Afghans for future challenges.

"This will not always be a counterinsurgency fight they are in, and they will have to shift more and more to being able to defend their country against external aggression," he said. "So I think this next evolution is pretty important."

Recognizing that "Marines still love a good fight, there is no doubt about that," Gurganus credited his Marines with embracing every phase of the transition. "They have shown a tremendous deal of flexibility in what they bring to the nation's defense and whatever is asked of them," he said.

In doing so, "they have really seen the power of their assistance to the Afghans," he said. "They have seen what that really means in terms of advising, assisting, training and helping them to integrate new capabilities. It has become something that the Marines and our coalition soldiers have taken a lot of pride in, being able to watch these guys step up more and more and take the lead responsibility for security."

Meanwhile, coalition troops have juggled other challenges, including the drawdown of more than 10,000 Marines and other ISAF forces and their equipment in the midst of the fighting season. As part of the surge recovery, two Marine regimental combat teams were reduced to one, six battalions were reduced to two, and 143 bases were closed or transferred.

"That made the mission more difficult," Gurganus conceded. "But once we laid out what needed to be done, the commanders got after it and the Marines just got on with doing it."

These experiences have enabled the Marines to develop skills Gurganus said will easily transfer to security cooperation missions they could be called on to support anywhere in the world. "I think these experiences are going to be key to being able to execute those missions with a great amount of professionalism." he said. "I don't think we will ever run out of a needing the skills that we developed here -- at least not in the foreseeable future, anyway."

Gurganus reported "a laundry list" of progress during the past year. The Afghan army and police have demonstrated that they're up to the task of increasingly challenging roles. "They're certainly not perfect yet," Gurganus said, "but they have developed, and their capabilities have gotten stronger."

He cited particular progress within the police force, which is putting the concepts of community policing and evidence-based criminal processes into action. "That's been a huge step in a province where 85 to 90 percent of the people are illiterate," Gurganus said.

But the most promising development, he said, is the growing – albeit it slow – support of the Afghan people for their government. Sustainable development projects are benefiting the population, and people have a voice that simply didn't exist a decade ago, he noted.

"I won't tell you it is wholesale yet, that everybody thinks the government is great," Gurganus said. "But I think probably that is the part that is most heartening."

Despite "a lot of good-news stories," Gurganus recognized that many challenges remain. "I told Lee Miller I think he will have plenty of work to do over the course of the next year or so, but I think we have some good progress," he said.

Among those challenges is the expectation that the Taliban will attempt to resurge as coalition forces draw down – just as they did during the past year's drawdowns. But based on Afghans' response, Gurganus said, he's confident they're prepared to take the Taliban on.

"We saw the Taliban actively target and take on the police and Afghan National Army and have seen them, quite frankly, step up to the plate and handle the threat," he said. "It was not without casualties and not without trouble. But at the end of the day, they took the day. And it is really troublesome, I think, for the Taliban."

Afghans are leading all operations, from planning to resourcing their activities, he said. Coalition forces provide support only when the Afghans absolutely need it, such as medical evacuation capabilities they have not yet developed.

As his Marines prepare to return to Camp Pendleton, Calif., Gurganus credits them for the role they have played in Afghanistan's future. Gains made haven't come without sacrifice, he recognized. So even before he leaves Afghanistan, Gurganus already is planning a memorial service to be held April 11 at Camp Pendleton to honor the 75 Marines, sailors and coalition soldiers in Regional Command Southwest killed during the past year.

The ceremony not only will honor them and recognize the magnitude of their sacrifice, he said, but also will help to give closure to the Marines who served and sacrificed alongside them.

Gurganus recognized the U.S. and coalition forces who sacrificed before them in Helmand province and helped set the conditions for his forces to build on.

"It goes back not only to the things we have done. It goes back to every soldier, sailor, airman and Marine who has served out here," he said. "The conditions were well set for us to pick up this mission. And hopefully, we will have taken it to another level, where now General Miller just picks it up and goes right on from here."

What that future will look like remains unclear, he acknowledged. But the way Garganus defines success – and encourages his Marines and coalition forces to define it – is through the opportunity they have given the Afghans.

"Ten years ago, the Afghan people had no opportunity. They had nothing resembling a chance to have a better future," he said. "Our job is to help create that opportunity. And what they decide to do with it is ultimately going to be their decision."

By this measure, Garganus declared the current deployment and previous ones it has built on a success.

"I really do believe that the work that has been done over the course of the last 10 years by all of the coalition has given the Afghans the opportunity now to really step up and be a country for which they determine its future," he said.

West Wing Week: 02/22/13 or “A Single Sacred Word: Citizen” | The White House

West Wing Week: 02/22/13 or “A Single Sacred Word: Citizen” | The White House

FACE OF DEFENSE

Marine Corps Sgt. Bradley A. Hoover, a fixed-wing aircraft power plant mechanics instructor at the Center for Naval Aviation Technical Training, Marine Corps Air Station Cherry Point, N.C., stresses communication when training fellow Marines. U.S. Marine Corps photo by Lance Cpl. Glen Santy

FROM: U.S. DEPARTMENT OF DEFENSE
Face of Defense: Sergeant Takes Responsibility for His Marines

By Marine Corps Lance Cpl. Glen Santy 2nd Marine Aircraft Wing

MARINE CORPS AIR STATION CHERRY POINT, N.C., Feb. 21, 2013 - Because they are the future of his craft, and each one is a direct reflection of himself, Marine Corps Sgt. Bradley A. Hoover said, he takes personal responsibility for each Marine he is charged with leading.

Hoover, a fixed-wing aircraft power plant mechanics instructor with the Center for Naval Aviation Technical Training here, guides new Marines through a three-month training period, which includes daily physical training and Marine Corps martial arts courses.

The job gives him a high level of personal satisfaction in sending highly-trained Marines to the fleet, Hoover said.

"One thing I want these Marines to remember is to never stop excelling and to try their best at everything they do," he added. "I want these students to absorb this knowledge."

In the engine technician field, the sergeant said, communication sustains a productive workflow, so he stresses that aspect of the job.

"I want to get them to speak out loud and think out loud and get them to work together," Hoover said. "The more they learn here, the less they have to learn in the fleet."

ESA-Studierendensatellit macht bedeutende Fortschritte

ESA-Studierendensatellit macht bedeutende Fortschritte

Will eating Southern cooking hurt?

Will eating Southern cooking hurt?

THE U.S. FUTURE IN IRAQ

Senior Airman Stephen Hanks and Geri, a patrol and explosive detector dog, both with the 447th Expeditionary Security Forces Squadron, patrol the perimeter of Sather Air Base on Dec. 11, 2011, in Baghdad, Iraq. (U.S. Air Force photo-Master Sgt. Cecilio Ricardo)

FROM: U.S. STATE DEPARTMENT
Rightsizing U.S. Mission Iraq
Special Briefing
Thomas Nides
Deputy Secretary for Management and Resources
Via Teleconference
Washington, DC
February 8, 2012
　

MS. NULAND: Thank you, Operator, and thanks to all of you for joining us. We are pleased today to have with us Deputy Secretary of State Tom Nides to talk on the record about a review that he is conducting for the Secretary on rightsizing the U.S. mission in Iraq.

Let me, without further ado, turn it over to the Deputy, and then we’ll take about three or four questions. Unfortunately, his time is a little compressed. Go ahead, Mr. Deputy Secretary.

DEPUTY SECRETARY NIDES: Hi. Thank you all very much. I just wanted to touch on a couple of facts as it regards to Iraq and what we’re planning to do and what we planned to do when we started the mission. As you know, we had the largest transition since the Marshall Plan taking place as of January 1st, and I think many folks thought that it was a difficult mission set and we – I think arguably – could suggest we’ve had a very successful mission.

We – the military is now gone. We have a robust diplomatic presence. We have a diplomatic presence both in up north and down south and in Baghdad. We have been fully and completely engaged on the – all of the political aspects, which you all have been covering quite clearly. And Jim Jeffrey, in particular, I want to give enormous credit to of being fully engaged at all levels of the Iraqi political situation. We have stood up a robust police-training program, which is doing a terrific job working with the local police in training and developing a program, which I think will pay enormous dividends, too. We’re working on economic development, because as you know, they’re producing almost a million two barrels a day out of Basrah. And we’re working with the IO community to make sure that that, as well as all the other economic development all over the country – we have economic officers accomplishing that.

We have, the probably the most sophisticated OSC-I site, which we’re working with – or OSC-I sites – which we’re working with the military. As you know, the Iraqis have been purchasing tens of millions of dollars of equipment from us, and they will be continuing to do that. We’re training the Iraqis on that equipment, and that is U.S. equipment which they’re purchasing.

And as I’ve pointed out at the beginning is, we’re fully and completely engaged on the political deployment. And with that – knock on wood – we’re doing this, with the first and foremost, the security of our people. It’s certainly still a complicated situation there, but to the credit of our security and our diplomats and our locally engaged employees – knock on wood – we’re doing a better than fine job at accomplishing the goals that we set out.

That said, when we put this mission set up, it was very clear to us that we were going to make sure that over time – and what I mean by over time meaning over this year – we begin to try to right size the Embassy to look at – like so – there’s never such a thing as a normal embassy, but a more normalized embassy presence. And principally, our goal has been to shift our reliance on contractors to basically hiring local Iraqis. This is what the Iraqis want, and quite frankly, that’s what we want because it’s cheaper, it’s more important to be part of the community. And so first and foremost, our goal has always been to, over this year, is to shift more and more of our purchasing, and quite frankly, just our whole operations more to local – locally hired individuals. So that is our first priority, with the understanding that our main priority is making sure our people are secure.

So number one, we’re going to be looking at how we can do that over the next year. We’ll continue to look at our footprint, which is something we’ll always do. And we’re meeting with folks on a daily basis, along with my colleague Pat Kennedy and his team, to make sure that our footprint is appropriate for the period of time as we proceed. We’ll be looking at the – as we look at the programs that we’re offering, most of the programs that we’re offering will continue to be offered. But we’ll continue to look at how we can hire like we do in many countries around the world, that we hire Iraqis to help us with the programs that we’re executing. So I am – we’re doing exactly what we said we were going to do when we set up this mission set, which is we’re going to constantly continue to look to ways to shift more of the cost structure to

locally, which is going to be, obviously, substantially cheaper for us, but most importantly, to continue evaluating it as this mission set is accomplished and is being accomplished.

So I am – feel quite good about where we are. I will tell you, contrary to some of the news reports, we are not reducing our operations by 50 percent. But I will hope – quite frankly, I am hopeful that over the next few months that we’ll be able to reduce our size by, again, reducing the dependency on contractors, by focusing on the things that we said we were going to focus on. But that is – quite frankly, I think we owe it to our – the taxpayers. We owe it to the men and women who are working there. We owe it to all the men and women who have spent time there. And quite frankly, that’s what a good bilateral relationship will do.

So I am quite pleased as we are proceeding here, and I think we’ll have more opportunity in the next few weeks to continue to brief you about how our planning is going. But I should tell you, it’s going to be a process that we’ll go through over the next few months about how we do this plan and continue to do the planning in Iraq.

So why don’t I pause and take a couple questions.

MS. NULAND: Thanks, Operator. We’re ready to go to questions.

OPERATOR: Thank you. And at this time, if you do have questions, please press * followed by 1 on your touchtone phone. If you would like to remove your question, that is *2. Again, *1 for any questions or comments. One moment for that, please.

I am currently showing no questions. Again, that is *1 on your touchtone phone for any questions or comments.

DEPUTY SECRETARY NIDES: Boy, I must have been really good.

OPERATOR: I do have a question from Karen DeYoung. Ma’am.

QUESTION: Hi, Tom.

DEPUTY SECRETARY NIDES: Hi.

QUESTION: You said it won’t be 50 percent, but have you come up with any sense of what it would be? And do you see Iraqis actually taking over security functions, whether static or movement security or any kind of security?

DEPUTY SECRETARY NIDES: I would – to be honest with you, I don’t know where the 50 percent number came from. But I am – it is what it is. But I think that the – I don’t know what the number is. What I – here’s the direction I gave people, okay? We made a commitment to try to reduce the dependency on contractors. There’s been a lot of press written about how many contractors we had. Much of that is security, but its food service, right? If I can get food purchasing – more food purchasing done in Iraq and not have to bring it in, that will dramatically decrease our dependency on contractors to do food service. And that goes through a lot of the service that we are providing now.

So my view of this is we will also look aggressively on perimeter security and how we manage that. But I should be honest with you, Karen. My – the only thing I worry about – the only thing I worry about is the security of our people. Okay? We have a diplomatic mission. We owe it to make sure that we fulfill the diplomatic mission that we set out to do when we made this transition. But the most important thing to do is to make sure that we are making sure that we have – our people are secure. And so I – as much as I would love to reduce – continue to reduce the numbers of people and the cost, I will not sacrifice the security of our people.

That said, I think as we go through this year, we’re going to see many, many opportunities to allow us to have a – the footprint that we can accomplish the goals around economic development and the OSC-I and the police training, the political engagement, with hopefully some fewer people and then also a lesser dependency on the contractors, which I think we all want to do. And we’ll do that. And it will take – it’s going to take time.

And what we’re not going to do is make kind of knee-jerk decisions. This has to be – there was several years of planning goes into these as the Embassy was stood up, and we will be very thoughtful as we begin moving – transitioning this is into a more – what I refer to as a normal-looking embassy. But that will take time, and so we’re going to be doing this very thoughtfully, and in consultation with the Congress, I mind you. I will have many conversations with the Congress, which we’re doing. And they get it. I mean, they totally understand what we’re trying to do.

MS. NULAND: Operator, next question.

OPERATOR: Thank you. Our next question comes from Steven Myers of The New York Times. Your line is open.

QUESTION: Hi, Tom and Victoria.

DEPUTY SECRETARY NIDES: Hey, buddy.

QUESTION: The – two questions, which are related: Why is this review happening now as opposed to over the last year when you knew this was coming? Even on the question of buying local food, for example, that could have been done years ago, but it wasn’t. And now you’re looking at it, so I wonder why.

DEPUTY SECRETARY NIDES: Well, I mean --

QUESTION: If I can just ask my second, because it’s related: The Iraqis have put up a lot of obstacles, some small but some rather significant, on movements, on visas. They’ve complained about the size of the security footprint. How much of the Iraqi obstructionism is causing you to rethink the number of people that you have there as well?

DEPUTY SECRETARY NIDES: Okay. Well, let me answer the first question. The first one’s a good question. I mean – and I should say let’s just step back and remind us where we were, okay? A year ago, we had almost 40-50,000 American troops there, okay? The military was the – was predominately the way we got around. It was certainly a major part of our presence, if not the greater preponderance of our presence, and all of our – much of our diplomatic presence was dependent upon everything from how we were fed and our medical care and all those activities, right?

So as we made the largest transition – again, I hate to use this line, but I’ll use it anyways again – since the Marshall Plan, our decision was – which was rightly so – is that we’re going to have to stand this mission set up. Because remember, we set a hard deadline to have those troops gone. So we knew that – starting January 1st – that we were going to have to have a mission set up to basically allow us to do exactly what our mission was, which is the diplomacy, the political engagement, the police training. And so our goal was – at that point was to make sure we had a mission that’s set up.

We always said – if you go and talk to Senator Leahy or you talk to Kay Granger, I was very clear that this was going to be – we’re going to do this in stages. You and I had this conversation. We were going to basically have a glide path, which was we would do – like on police training, our original police training program had us this year – our original plan was to do a billion dollar police training, and we started the plan – the training with a half a billion dollar program, because we want to see how these programs work. And as I said to everyone on the Hill, we are going to stand this mission set up because it’s critically important as we get those – we get the military out that we have a very strong diplomatic presence and we don’t have any gaps between the military and our diplomatic presence.

But that said, I – we have been totally upfront and straight about this, that over time we want to have a more normalized embassy, and that will mean making a decision over time about contractors, the numbers of contractors, the size of some of our mission sets, without losing sight of our core mission, which is, number one, political engagement, economic development, kind of the – and then this – and then the OSC-I piece of this, which is very, very important as they purchase U.S. equipment.

So I – again, I’m – one thing about what we have said and certainly what I’ve said and I think our team has said is we were very clear with everyone what we were planning to do and how we will execute this over. And this is not going to happen overnight. I mean, we’re not going to have – tomorrow, we’re not going to be able to sit here and say okay, X numbers of – hundreds of thousands of people have departed. We’re going to be doing this over a period of time as we think about how this mission set should look like, and quite frankly, as we procure more goods and as we operate more.

Now, on your second question, I – we’ve had an unbelievable cooperation from the Iraqis, okay? Listen, is it always perfect? No. I’m sure it’s not always perfect. It’s not always perfect. And I’m sure they don’t think we’re always perfect. But the reality is, is they’ve given us the visas that we’ve needed. It hasn’t been always smooth, but we’ve been given the visas. We’ve set up an operation in Iraq which allows our diplomats to be safe, allows us to do political engagement, it allows us to have an OSC-I site that are training people on military equipment which they’re purchasing from us.

So I’d have to say, as cynical as all of us are – and I think most of us are pretty cynical – pretty darn good, I mean, if you ask us come January 30 – January or February 6th where we are today. So I think you all would be questioning us if you weren’t asking us a question, "Well, what are you guys going to do over the long term? What is your long-term view of how big your footprint should be? How much should you be relying up on local contractors?" So we’re asking the tough questions. We’re going to continue asking the tough questions. And we’re going to, over time, allow ourselves to have this Embassy look like – more like a normal embassy, but it will take time without compromising our core missions.

MS. NULAND: And for those of you who aren’t wonked up on Iraq, Office of Security Cooperation is what OSC-I is.

We have time for one last question, Operator. Thank you.

OPERATOR: Thank you. And I have a question from Matthew Lee from the Associated Press. Your line is open.

QUESTION: Yeah. Hi.

DEPUTY SECRETARY NIDES: Hi.

QUESTION: Thanks. You say that you’ve been very clear about this with everybody, but apparently not, because that’s why this 50 percent number is floating around – I presume – that’s floating around in Baghdad. And whether or not it’s true or not, I’m wondering if it isn’t, in fact, the case if you are simply getting rid of the expensive contractors and replacing them with local contractors. While I see a reduction in cost, I don’t see a net reduction in contractors.

DEPUTY SECRETARY NIDES: Oh, well that – yeah. Listen, we’re not there to make – I mean, listen. We will go – we’ll go contractor by contractor, we’ll try to figure out over time what goods we can purchase locally in which we will not rely upon goods that are coming in over the border.

But I think the more – which – and I certainly appreciate the question – I think you also should recognize the fact we were spending last year almost $50 billion through DOD, and we’re now spending approximately $5.5 billion or – I mean, correct my numbers, but in that ballpark, right? For the taxpayers, okay, they’ve had a very positive gain. Okay? That said, I think most of us would agree that the – if you look at what’s happened in Iraq over the last month and a half, our political engagement there has been at the top end of the scale. The engagement of Jim Jeffrey and Hillary Clinton and Joe Biden and Barack – President Obama and all the players have been very strong and has been really done by the strength of our diplomatic presence there.

But listen, I think the reality is, as I said at the onset, my hope is that as we go through this next year, I’ll be having conversations which you’ll say, listen, we had X thousands of contractors. We have Y now because we are procuring more of our goods in Iraq, or we have concluded that we – the footprint that we currently have, we can have a smaller footprint. We don’t need as big a footprint. So consequently, we don’t need as many, quote, "static guards." I mean, that’s what every good operation does. We should be – you – people should be pushing us all the time to continue to evaluate over the next couple years, which we will be doing.

Our goal has been, quite frankly, upfront, which is we will continue to look at this – the mission set to make sure that we do not compromise on our core responsibilities, which is, number one, the security of our people. So regardless of what the size is, we are going to make sure that the people there – our diplomats and our – and the people that we have hired there are secure, number one, and two, that the ability for us to be involved in the political engagement of Iraq is at the highest possible level because there’s – clearly, as you all know, there’s – this is as important a diplomatic mission that we have anywhere in the world. The stakes are high, and we plan to be engaged. So --

QUESTION: I understand that, but what I’m getting at is that barring – or unless – until there is development, until the circumstances allow for a dramatic reduction in, say, security guards, the security footprint, if you are just getting rid of the expensive contractors and hiring local people at less cost, isn’t it possible that there won’t be that significant a reduction in the number of personnel at all, at least until we get to the point where there doesn’t have to be that many – where there doesn’t --

DEPUTY SECRETARY NIDES: I mean, Matt, my – the way I’d answer the question is: I mean, having spent a lot of time in the business world as well, so I guess I’m somewhat uniquely qualified since I’ve had – I’ve done this a few times – there’s a variety of ways to do this, right? One is, obviously, the numbers of people that are working on different programs. And again, I go back to this notion that we want to make sure we have enough people to do the programs that we believe are critically important. The second way to make sure that you are smart about it is the numbers of locations you have, right? The amount of space you have, because obviously, the number of, quote, "security guards" you’re talking about is a total derivative of how many square feet we have, right? I mean, how many locations you have, because you have to obviously protect the perimeters of those.

So as we proceed over the next year, and as we look at our mission set and look at what we’re trying to achieve on the diplomatic side, my hope is, is that we’ll conclude over – in the period of time that we can consolidate some of the locations and space, and that will allow us to rely more upon local Iraqi contractors. But the most important thing is what we’re going to do is we’re going to be studying it, we’re working on it, we’re going to work very closely with our staff at our – in Baghdad and around the country, and we’re going to work with the Iraqis. They – we are a team working closely with them as we look at this diplomatic mission now and into the future.

So guys, I’ve got to run. But thank you all. And if I can be of any other help, I’m sure you’ll let us know.

MS. NULAND: Thank you all very much for joining us.

NEW MILESTONE FOR AFGHAN AIR FORCE

Credit:  U.S. Navy.

FROM: U.S. AIR FORCE
First Afghan Air Force C-208 CASEVAC a success
by Capt. Anastasia Burgess
438th Air Expeditionary Advisory Wing Public Affairs

2/18/2013 - KABUL, AFGHANISTAN (AFNS) -- In another historic step for the Afghan Air Force, an AAF Cessna 208 configured for battlefield casualty evacuation successfully transported a seriously injured soldier and three minor casualties from Kandahar, Afghanistan to Kabul International Airport Feb. 11.

The Afghan-tasked, planned and led mission validated the recently-signed CASEVAC Concept of Operations between AAF Commander Maj. Gen. Abdul Wahab Wardak, and NATO Air Training Command-Afghanistan Commander Brig. Gen. Steve Shepro. AAF and NATC-A staffs, with inputs from field units and advisors, were behind both the CONOPS and the AAF C-208 configuration to improve air support to Afghan National Security Forces in the field.

"We achieved an important milestone in our AAF/NATC-A strategic flightplan," stated Wahab, referring to the combined strategy signed last October designed to assure AAF impact on battlefield success in 2013 and independent operations by 2017.

"This was yet another win for the AAF," agreed Shepro, "which continues to advance and impact campaign successes."

"CASEVAC is the heartbeat of battlefield medical airlift support and this is the first time ever that the Afghan Air Force has been able to transport a litter patient on a C-208," Col. Michael Paston, 438th Air Expeditionary Advisory Wing surgeon general, stated when asked of the importance of this event. "This is adding a capability that will increase the morale, not only in the Afghan air force, but in the entire Afghan National Security Forces. It provides Afghans with a sense of security to know that if hurt on the battlefield, they will be taken care of quickly."

The mission was executed by a mixed NATC-A and AAF aircrew, including a trained Afghan flight medic who helped design the CONOPS. The AAF medic provided basic medical care to the patients during the two-hour C-208 sortie, including assessing the patients, providing oxygen, readjusting the patients and ensuring they were strapped in properly.

"The Afghans that I work with take every opportunity to train that they can," said Canadian Forces Maj. Cathy Mountford, 438th AEW flight surgeon advisor. "The Afghan medics have been training weekly in order to accomplish this mission and are some of the most motivated medics I have ever had the privilege to work with."

"This is an evolving operation with areas for improvement, but overall the transportation and mission was a huge success," Paston summed up. "It was inspiring to see our Afghan counterparts that we work with and advise every day rush out to the plane and conduct the medical treatments on patients they were trained to do. This truly was a historic and impressive day for the Afghan air force."

U.S. SECRETARY OF DEFENSE PANNETTA NOTIFIES CONGRESS OF CIVILIAN FURLOUGHS

FROM: U.S. DEPARTMENT OF DEFENSE
Panetta Notifies Congress DOD Preparing for Furloughs
By Jim Garamone
American Forces Press Service

WASHINGTON, Feb. 20, 2013 - Defense Secretary Leon E. Panetta has notified Congress that the Defense Department is prepared to implement furloughs for civilian personnel in response to the threat of sequestration.

In a memo to all employees, Panetta vowed to continue working with Congress to avoid sequestration, which would add $470 billion to the $487 billion in defense spending cuts the department already is making over the next 10 years. If Congress cannot agree on an alternative deficit reduction plan, the cuts go into effect March 1.

Panetta and every other defense leader have called the cuts dangerous. They would come on top of cuts imposed by operating under a continuing resolution. For fiscal year 2013, the effect will be further magnified, because the cuts must be done in the final six months of the fiscal year, which ends Sept. 30.

"In the event of sequestration, we will do everything we can to be able to continue to perform our core mission of providing for the security of the United States," Panetta wrote in the memo, "but there is no mistaking that the rigid nature of the cuts forced upon this department, and their scale, will result in a serious erosion of readiness across the force."

Panetta and DOD leaders long have expressed deep concern about the direct impact sequestration will have on military personnel, civilian employees and families. Flexibility in sequestration is limited, the secretary said in his memo, noting that while military personnel are exempt from direct impact, services on bases will deteriorate, and families may feel the pinch in other ways.

Civilian employees will be furloughed if sequestration is triggered. Deputy Defense Secretary Ashton B. Carter said last week that civilian employees could lose 20 percent of their normal income through September.

"I can assure you that, if we have to implement furloughs, all affected employees will be provided at least 30 days' notice prior to executing a furlough, and your benefits will be protected to the maximum extent possible," Panetta wrote.

DOD will work to ensure furloughs are executed in a consistent and appropriate manner, the secretary said, and Pentagon officials also will continue work with employee unions.

"Our most important asset at the department is our world-class personnel," Panetta wrote. "You are fighting every day to keep our country strong and secure, and rest assured that the leaders of this department will continue to fight with you and for you."

QUANTUM CRYPTOGRAPHY AND ELECTRIC GRID CYBERSECURITY

Photo caption: The miniature transmitter communicates with a trusted authority to generate random cryptographic keys to encode and decode information. Photo Credit: Los Alamos National Laboratory.

FROM: LOS ALAMOS NATIONAL LABORATORY
Quantum Cryptography Put to Work for Electric Grid Security
LOS ALAMOS, N.M., Feb. 14, 2013—Recently a Los Alamos National Laboratory quantum cryptography (QC) team successfully completed the first-ever demonstration of securing control data for electric grids using quantum cryptography.

The demonstration was performed in the electric grid test bed that is part of the Trustworthy Cyber Infrastructure for the Power Grid (TCIPG) project at the University of Illinois Urbana-Champaign (UIUC) that was set up under the Department of Energy’s Cyber Security for Energy Delivery Systems program in the Office of Electricity Delivery and Energy Reliability.

Novel methods for controlling the electric grid are needed to accommodate new energy sources such as renewables whose availability can fluctuate on short time scales. This requires transmission of data to and from control centers; but for grid-control use, data must be both trustworthy and delivered without delays. The simultaneous requirements of strong authentication and low latency are difficult to meet with standard cryptographic techniques. New technologies that further strengthen existing cybersecurity protections are needed.

Quantum cryptography provides a means of detecting and defeating an adversary who might try to intercept or attack the communications. Single photons are used to produce secure random numbers between users, and these random numbers are then used to authenticate and encrypt the grid control data and commands. Because the random numbers are produced securely, they act as cryptographic key material for data authentication and encryption algorithms.

At the heart of the quantum-secured communications system is a unique, miniaturized QC transmitter invention, known as a QKarD, that is five orders of magnitude smaller than any competing QC device. Jane Nordholt, the Los Alamos principal investigator, put it this way: "This project shows that quantum cryptography is compatible with electric-grid control communications, providing strong security assurances rooted in the laws of physics, without introducing excessive delays in data delivery."

A late-2012 demonstration at UIUC showed that quantum cryptography provides the necessary strong security assurances with latencies (typically 250 microseconds, including 120 microseconds to traverse the 25 kilometers of optical fiber connecting the two nodes) that are at least two orders of magnitude smaller than requirements. Further, the team’s quantum-secured communications system demonstrated that this capability could be deployed with only a single optical fiber to carry the quantum, single-photon communications signals; data packets; and commands. "Moreover, our system is scalable to multiple monitors and several control centers," said Richard Hughes, the co-principal investigator from Los Alamos.

The TCIPG cyber-physical test bed provides a realistic environment to explore cutting-edge research and prove emerging smart grid technology in a fully customizable environment. In this demonstration, high-fidelity power simulation was leveraged using the real-time digital simulator to enable hardware in the loop power simulation to drive real phasor measurement units (PMUs), devices, deployed on today's electric grid that monitor its operation.

"The simulator provides a mechanism for proving technology in real-world scenarios," said Tim Yardley, assistant director of test bed services. "We're not just using perfect or simulated data, so the results demonstrate true feasibility."

The power simulation was running a well-known power-bus model that was perturbed by introducing faults, which drove the analog inputs on the connected hardware PMU. The PMU then communicated via the standard protocol to the quantum cryptography equipment, which handled the key generation, communication and encryption/decryption of the connection traversing 25 kilometers of fiber. A phasor data concentrator then collected and visualized the data.

"This demonstration represents not only a realistic power model, but also leveraged hardware, software and standard communication protocols that are already widely deployed in the energy sector," said William H. Sanders, the Donald Biggar Willett Professor of Engineering at UIUC and principal investigator for TCIPG. "The success of the demonstration emphasizes the power of the TCIPG cyber-physical test bed and the strength of the quantum cryptography technology developed by Los Alamos."

The Los Alamos team submitted 23 U. S. and foreign patent applications for the inventions that make quantum-secured communications possible. The Los Alamos Technology Transfer Division has already received two licensing inquiries from companies in the electric grid control sector, and the office plans an industry workshop for early 2013 when the team’s patents will be made available for licensing.

The Los Alamos team is seeking funding to develop a next-generation QKarD using integrated electro-photonics methods, which would be even smaller, more highly integrated, and open the door to a manufacturing process that would result in much lower unit costs.

NEWS FROM AFGHANISTAN FOR FEBRUARY 20, 2013

U.S. Army 1st Lt. Ryan Schulte, left, and U.S. Navy Lt. j.g. Matthew Stroup, right, arrive at the Directorate of Information and Culture building to teach photojournalism to students in Farah City, Afghanistan, Feb. 10, 2013. Schulte, a platoon leader, and Stroup, a public affairs officer, are assigned to the Provincial Reconstruction Team Farah. The session is part of a 15-day media training course offered to both male and female journalists. U.S. Navy photo by Chief Petty Officer Josh Ives

FROM U.S DEFENSE DEPARTMENT
Afghan, Coalition Forces Kill Insurgents in Logar ProvinceFrom an International Security Assistance Force Joint Command News Release

KABUL, Afghanistan, Feb. 20, 2013 – A combined Afghan and coalition security force killed three insurgents and detained one other during an operation in search of a Taliban leader in the Charkh district of Afghanistan’s Logar province today, military officials reported.

As the security force approached the Taliban leader’s suspected location, insurgents maneuvered toward the Afghan and coalition troops. After positively identifying the lethal threat, the security force engaged the insurgents, killing three.

The Taliban leader is believed to be responsible for distributing weapons to insurgent forces and for planning and executing attacks against Afghan and coalition forces.

The security force also seized a rocket-propelled grenade launcher, RPG rounds, assault rifles and a machine gun in the operation.

In other Afghanistan operations today:

-- A combined force in the city of Kandahar in Kandahar province arrested a Haqqani network facilitator who managed supply routes from the city to other provinces. He also is believed to have been instrumental in the acquisition and distribution of lethal aid to Haqqani fighters for attacks against Afghan and coalition forces.

-- In Khost province’s Terayzai district, a combined force arrested three insurgents during a search for a Haqqani network leader believed to responsible for improvised explosive device attacks. The security force also seized an assault rifle and two bolt-action rifles.

In operations yesterday:

-- A precision strike in Helmand province’s Nahr-e Saraj district killed a Taliban leader and another insurgent. The Taliban leader directed attacks against Afghan and coalition forces and coordinated the production and planting of IEDs.

-- In Ghazni province’s Andar district, a precision strike killed five insurgents after a combined security force observed them engaging in nefarious activity.

RECENT U.S. NAVY PHOTOS

FROM: U.S. NAVY
MH-60S Sea Hawk helicopters assigned to the Eightballers of Helicopter Sea Combat Squadron (HSC) 8 move pallets of food and supplies to the Nimitz-class aircraft carrier USS John C. Stennis (CVN 74) during a vertical replenishment with the Military Sealift Command fast combat support ship USNS Bridge (T-AOE 10). John C. Stennis is deployed to the U.S. 5th Fleet area of responsibility conducting maritime security operations, theater security cooperation efforts and support missions for Operation Enduring Freedom. U.S. Navy photo.

An aviation boatswain's mate directs the landing of a CH-53E Super Stallion from Marine Medium Tiltrotor Squadron (VMM) 266 (Rein) on the flight deck of the amphibious assault ship USS Kearsarge (LHD 3). Kearsarge is participating in Composite Training Unit Exercise (COMPTUEX) off the East Coast of the United States in preparation for an upcoming deployment this spring U.S. Navy photo by Chief Mass Communication Specialist Tommy Lamkin (Released) 130216-N-UM734-681

U.S. REPRESENTATIVE'S RENARKS AT APCAC U.S.-ASIA BUSINESS SUMMIT

After The Tsunami.  Credit:  U.S. Navy.

FROM: U.S. DEPARTMENT OF STATE
The APCAC U.S.-Asia Business Summit
Remarks
Thomas Nides
Deputy Secretary for Management and Resources
Tokyo, Japan
March 1, 2012

Good morning everyone – what a pleasure to be among so many friends and distinguished colleagues today.

Now, some of you might have heard me say before that I wear two hats. I’m here as a diplomat and as a recovering businessman. I am also fast becoming an expert Japan traveler. This is my third trip to Tokyo in the last year, and I am thrilled to be back. I'd like to thank the ACCJ President Michael Alfant, the ACCJ Board of Governors, and the entire APCAC Board for inviting me to speak to you.

We are meeting just days before the one-year anniversary of the terrible earthquake and tsunami that forever changed the lives of millions of people. Japan’s recovery over the last year is an inspiration to the world. What could have been a crippling disaster instead became a remarkable testament to the spirit and resilience of the Japanese people.

The world pulled together to support Japan in those days and months after March 11. Many of you contributed -- American corporations donated nearly $300 million for relief and recovery efforts. American and Japanese rescue and relief forces worked side-by-side, starting within hours of the tsunami.

Of course, Japan has done the same for us. In the wake of Hurricanes Katrina and Rita, the Japanese people were among the first to respond. In the terrible days following 9/11, Japanese volunteers worked at Ground Zero day-in and day-out. When it matters most, our countries step up for each other. That’s what friends do for each other.

Now, last week, Secretary Clinton hosted the first-ever Global Business Conference at the State Department in Washington. We brought together senior U.S. officials with more than 160 business leaders from over 120 countries. My friend and yours Charles Lake was one of the participants, and I’m glad that he’s here today as well.

The Global Business Conference had one goal: to figure out how the United States can make it easier for companies to do business internationally and create American jobs. Today we want to continue that discussion with you. I am joined by a panel of my colleagues -- our chief diplomats from all across the Asia-Pacific. They made the trip because they know how important economics is to our relationship with Asia, and how important the economic relationship between Asia and the United States is to the world.

So as we begin this discussion, I’d like to make four key points. First, how the United States is sharpening our focus on economics as a foreign policy tool. Second, how business and economics are particularly important to our foreign policy in the Asia-Pacific region. Third, how the United States is doing a great deal to deepen our economic cooperation with the region. And finally, how we can and must do more, and how we need businesses to be part of that effort.

So let’s take these points one by one. First, our focus on business and economics as a tool for diplomacy – a policy we call economic statecraft. America's global leadership and our economic strength are fundamentally a package deal. We must do more to build up both.

We live in an era when the size of a country’s economy is every bit as important to exercising global leadership as the size of its military. Our corporations often reach more people in foreign countries than our embassies. Meanwhile, the American people are hungry for jobs that depend on finding new customers and opening new markets beyond our borders.

So we have made economic statecraft a priority for every one of our missions around the globe. And I’ll tell you, we will use every tool we have – including diplomacy – to promote global prosperity and create American jobs.

Which leads me to my second point: economic statecraft is particularly important in here Asia. That is one reason why, as you can see, we have such a strong showing on this panel.

Many Asian countries have long recognized the links between economics and foreign policy. In many ways, the business of Asia is business. Asian economies and populations are growing rapidly. I don’t need to tell you that much of future global economic growth will be centered in the Asia-Pacific. So it is imperative that we do this right. The decisions Asia’s emerging economies make together with the United States will help govern a rules-based system that will guide us through the 21st century. If we get the rules right, all of our countries will prosper together.

Economics is at the heart of America’s strategy in Asia. We are committed to exercising our role as a resident Pacific power—not just militarily and diplomatically but economically.

No one knows this better than the Asia-Pacific Council of American Chambers of Commerce. You have helped tend American business in Asia for more than 40 years. And your work has paid off. American Chambers of Commerce in Asia today oversee more than $400 billion dollars in trade volume and more than $200 billion in foreign direct investment. And yet, we can and we should be trading more.

The futures of the United States and Asia are linked. We are proud of the role the United States has played in helping fuel Asia's growing prosperity. In 2011, the United States exported nearly $900 billion in goods to APEC countries. That’s more exports than we sent to any other group of regional economies.

But there is no guarantee that the future will continue to be marked by success and growth. Our relationships need constant tending.

So, the third area I want to discuss is how we are enhancing our economic cooperation with the region. We have made some key gains, and we are committed to doing even more to get this right. Last year the President signed the landmark Korea-U.S. Free Trade Agreement. This deal will eliminate tariffs on 95 percent of American exports to the Republic of Korea. It will add more than $10 billion to the U.S. economy and grow Korea’s economy by 6 percent.

We want to bring these sorts of benefits to the broader region as well. So, we are working with our partners to build a high quality Trans-Pacific Partnership agreement. Done right, the TPP could set the stage for decades of higher living standards and deeper friendships across the region. That’s the world we want. And that’s the world I think you want too.

As we build this future, we should be clear. We are not just fighting for American businesses – although that is certainly a priority. America’s economic renewal depends on the strength of the global economy. And the global economy depends on the strength of the American economy. And both—let me add—depend on a strong, vibrant Japanese economy and a full recovery. So, we are striving to build a global, rules-based system in which all businesses stand a chance to succeed. Secretary Clinton laid out our vision at the APEC meetings in Washington almost a year ago. Economic competition should be open, free, transparent, and fair.

What do we mean by open? We mean a system where any person, in any part of the world, can access markets. If you have a good idea for a new product or service, nothing should prevent you from sharing it with the world.

What do we mean by free? We mean that every company can move their goods, money, and ideas around the globe without facing unnecessary roadblocks.

By transparent, we mean that regulations are developed in the open, with everyone’s input, and everyone knows what the rules are.

And, by fair, we mean that those rules apply equally to everyone. Fairness makes sure that people are willing to compete in the first place.

These four simple words cover an incredibly complex economic agenda. And in some of these areas, we face great challenges. For example, we must do a better job of protecting intellectual property. We can disagree about how to best enforce intellectual property laws, but we cannot afford to ignore them. Our 21st century economies rely on innovation and invention to drive economic growth and job creation. We must do all we can to protect that.

So, to my last point: we can and must do much more in the coming years to advance this economic statecraft agenda, and we need the business community to be our full partner. We need to sit down together, in forums like this one and the State Department Global Business Conference, or at gatherings like APEC. Building sustainable global growth and creating jobs at home is a joint venture. The private sector innovates and allocates capital, and the government opens doors to new markets and ensures that the system is fair. Given the economic hardship Americans and our international friends are suffering today, we must bring the partnership between business and government to the next level.

We are relying on you to think big, to generate new ideas, to open doors with jobs and capital. And the government will be right beside you – knocking down barriers, connecting partners, protecting everyone’s interests. Together, we can build a system of healthy economic competition that will be sustainable and profitable for many years to come.

I hope that we come away from these next two days with a newfound sense of purpose and possibility. Starting now, we should all be asking: What can the government and the State Department do to improve opportunities for business in the Asia-Pacific region? How can we do better? How can businesses support our national interests in tying the United States and Asia closer together?

If we are successful in finding more ways to work together to build an open, free, transparent, and fair economic system, the future of U.S.-Asia cooperation is unlimited. The impact on our global economic output will be enormous. And the benefit to people’s lives and opportunities will see no limits.

Thank you.

IRREGULAR OPTIONS TRADING IN FRONT OF H.J. HEINZ CO. ACQUSITION LEADS TO ASSET FREEZE

FROM: U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., Feb. 15, 2013 — The Securities and Exchange Commission today obtained an emergency court order to freeze assets in a Zurich, Switzerland-based trading account that was used to reap more than $1.7 million from trading in advance of yesterday’s public announcement about the acquisition of H.J. Heinz Company.

The SEC’s immediate action ensures that potentially illegal profits cannot be siphoned out of this account while the agency’s investigation of the suspicious trading continues.

In a complaint filed in federal court in Manhattan, the SEC alleges that prior to any public awareness that Berkshire Hathaway and 3G Capital had agreed to acquire H.J. Heinz Company in a deal valued at $28 billion, unknown traders took risky bets that Heinz’s stock price would increase. The traders purchased call options the very day before the public announcement. After the announcement, Heinz’s stock rose nearly 20 percent and trading volume increased more than 1,700 percent from the prior day, placing these traders in a position to profit substantially.

"Irregular and highly suspicious options trading immediately in front of a merger or acquisition announcement is a serious red flag that traders may be improperly acting on confidential nonpublic information," said Daniel M. Hawke, Chief of the Division of Enforcement’s Market Abuse Unit.

Sanjay Wadhwa, Senior Associate Director of the SEC’s New York Regional Office, added, "Despite the obvious logistical challenges of investigating trades involving offshore accounts, we moved swiftly to locate and freeze the assets of these suspicious traders, who now have to make an appearance in court to explain their trading if they want their assets unfrozen."

The SEC alleges that the unknown traders were in possession of material nonpublic information about the impending acquisition when they purchased out-of-the-money Heinz call options the day before the announcement. The timing and size of the trades were highly suspicious because the account through which the traders purchased the options had no history of trading Heinz securities in the last six months. Overall trading activity in Heinz call options several days before the announcement had been minimal.

The emergency court order obtained by the SEC freezes the traders’ assets and prohibits them from destroying any evidence. The SEC’s complaint charges the unknown traders with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. In addition to the emergency relief, the SEC is seeking a final judgment ordering the traders to disgorge their ill-gotten gains with interest, pay financial penalties, and be permanently barred from future violations.

The SEC’s expedited investigation is being conducted by Market Abuse Unit members Megan Bergstrom, David S. Brown, and Diana Tani in the Los Angeles Regional Office with substantial assistance from Charles Riely, Market Abuse Unit member in the New York Regional Office who will handle the SEC’s litigation. The SEC appreciates the assistance of the Options Regulatory Surveillance Authority (ORSA).

U.S. MILITARY AND CYBER THREATS

Graphic Credit:  U.S. Air Force.

FROM:  U.S. DEPARTMENT OF DEFENSE
Military Works to Counter Cyber Threats
By Jim Garamone
American Forces Press Service
WASHINGTON, Feb. 19, 2013 - The United States military is working diligently to beef up cyber defenses against all threats, Pentagon Press Secretary George Little said here today.

In a meeting with Pentagon reporters, Little said the United States believes in an all-of-government approach to cybersecurity, which includes diplomatic, economic and military measures.

The U.S. government "will continue to draw upon the capabilities of all our agencies and departments to strengthen our cyber defenses," he added.

Recent attention has focused on China since a private firm accused a Chinese army unit in Shanghai of launching cyberattacks against U.S. firms. Little declined to comment on the allegation, saying the Pentagon does not comment on intelligence matters. But he noted that Defense Secretary Leon E. Panetta raised concerns about cyber issues during his visit to the nation last year.

"We have repeatedly raised our concerns at the highest levels about cyber theft with Chinese officials, including the military, and we will continue to do so," Little said.

The United States is a target of cyberattacks from around the world, the press secretary noted.

"I'm not commenting on any particular state actor," he said. "We see cyber threats emanate from a number of places. We have discussed the cyber threat with many countries around the world."

The U.S. publication "Chinese Military Power" said the U.S. government "appeared to be the target of intrusions, some of which appear to have originated within the People's Republic of China. These intrusions were focused on exfiltrating information."