WYETH PHARMACEUTICALS AGREES TO PAY $490.9 MILLION FOR MARKETING DRUG FOR UNAPPROVED USES

FROM:  U.S. DEPARTMENT OF JUSTICE 

Tuesday, July 30, 2013
Wyeth Pharmaceuticals Agrees to Pay $490.9 Million for Marketing the Prescription Drug Rapamune for Unapproved Uses

Wyeth Pharmaceuticals Inc., a pharmaceutical company acquired by Pfizer, Inc. in 2009, has agreed to pay $490.9 million to resolve its criminal and civil liability arising from the unlawful marketing of the prescription drug Rapamune for uses not approved as safe and effective by the U.S. Food and Drug Administration (FDA), the Justice Department announced today.  Rapamune is an “immunosuppressive” drug that prevents the body’s immune system from rejecting a transplanted organ.

 “FDA’s drug approval process ensures companies market their products for uses proven safe and effective,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.  “We will hold accountable those who put patients’ health at risk in pursuit of financial gain.”

 The Federal Food, Drug and Cosmetic Act (FDCA) requires a company such as Wyeth to specify the intended uses of a product in its new drug application to the FDA.  Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses.  In 1999, Wyeth received approval from the FDA for Rapamune use in renal (kidney) transplant patients.  However, the information alleges, Wyeth trained its national Rapamune sales force to promote the use of the drug in non-renal transplant patients.  Wyeth provided the sales force with training materials regarding non-renal transplant use and trained them on how to use these materials in presentations to transplant physicians.  Then, Wyeth encouraged sales force members, through financial incentives, to target all transplant patient populations to increase Rapamune sales.

“The FDA approves drugs for certain uses after lengthy clinical trials,” said Sanford Coats, U.S. Attorney for the Western District of Oklahoma.  “Compliance with these approved uses is important to protect patient safety, and drug companies must only market and promote their drugs for FDA-approved uses.  The FDA approved Rapamune for limited use in renal transplants and required the label to include a warning against certain uses.  Yet, Wyeth trained its sales force to promote Rapamune for off-label uses not approved by the FDA, including ex-renal uses, and even paid bonuses to incentivize those sales.  This was a systemic, corporate effort to seek profit over safety.  Companies that ignore compliance with FDA regulations will face criminal prosecution and stiff penalties.”

Wyeth has pleaded guilty to a criminal information charging it with a misbranding violation under the FDCA.  The resolution includes a criminal fine and forfeiture totaling $233.5 million.  Under a plea agreement, which has been accepted by the U.S. District Court in Oklahoma City, Wyeth has agreed to pay a criminal fine of $157.58 million and forfeit assets of $76 million.

The resolution also includes civil settlements with the federal government and the states totaling $257.4 million.  Wyeth has agreed to settle its potential civil liability in connection with its off-label marketing of Rapamune.  The government alleged that Wyeth violated the False Claims Act, from 1998 through 2009, by promoting Rapamune for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by Medicare, Medicaid and other federal health care programs.  These unapproved uses included non-renal transplants, conversion use (switching a patient from another immunosuppressant to Rapamune) and using Rapamune in combination with other immunosuppressive agents not listed on the label.  The government alleged that this conduct resulted in the submission of false claims to government health care programs.  Of the amounts to resolve the civil claims, Wyeth will pay $230,112,596 to the federal government and $27,287,404 to the states.  

“Wyeth’s conduct put profits ahead of the health and safety of a highly vulnerable patient population dependent on life-sustaining therapy,” said Antoinette V. Henry, Special Agent in Charge, Metro-Washington Field Office, FDA Office of Criminal Investigations.  “FDA OCI is committed to working with the Department of Justice and our law enforcement counterparts to protect public health.”

Pfizer is currently subject to a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General that it entered in connection with another matter in 2009, shortly before acquiring Wyeth.  The CIA covers former Wyeth employees who now perform sales and marketing functions at Pfizer.  Under the CIA, Pfizer is subject to exclusion from federal health care programs, including Medicare and Medicaid, for a material breach of the CIA, and the company is subject to monetary penalties for less significant breaches.

“We are committed to enforcing the laws protecting public health, taxpayers and government health programs, and to promoting effective compliance programs,” said Daniel R. Levinson, Inspector General, Department of Health and Human Services.  “Our integrity agreement with Pfizer, which acquired Wyeth, includes required risk assessments, a confidential disclosure program, and auditing and monitoring to help prospectively identify improper marketing.”

 The civil settlement resolves two lawsuits pending in federal court in the Western District of Oklahoma under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and share in any recovery.  The first action was filed by a former Rapamune sales representative, Marlene Sandler, and a pharmacist, Scott Paris.  The second action was filed by a former Rapamune sales representative, Mark Campbell.  The whistleblowers’ share of the civil settlement has not been resolved.

 "The success obtained in this case is an excellent example of how we address the threats to our nation’s health care system; the importance of the public reporting of fraud, waste, or abuse; and the significant results that can be obtained through multiple agencies cooperating in investigations,” said James E. Finch, Special Agent in Charge of the Oklahoma City Division of the FBI.

 The criminal case was handled by the U.S. Attorney’s Office for the Western District of Oklahoma (USAO) and the Justice Department’s Civil Division, Consumer Protection Branch.  The civil settlement was handled by USAO and the Justice Department’s Civil Division, Commercial Litigation Branch.  The Department of Health and Human Services’ (HHS) Office of Counsel to the Inspector General; the HHS Office of General Counsel, Center for Medicare and Medicaid Services; the FDA’s Office of Chief Counsel; and the National Association of Medicaid Fraud Control Units.  These matters were investigated by the FBI; the FDA’s Office of Criminal Investigation; HHS’ Office of Inspector General, Office of Investigations and Office of Audit Services; the Defense Criminal Investigative Service; the Office of Personnel Management’s Office of Inspector General and Office of Audit Services; the Department of Veterans’ Affairs’ Office of Inspector General; and TRICARE Program Integrity.

 Except for conduct admitted in connection with the criminal plea, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability.  The civil lawsuits are captioned United States ex rel. Sandler et al v. Wyeth Pharmaceuticals, Inc., Case No. 05-6609 (E.D. Pa.) and United States ex rel. Campbell v. Wyeth, Inc., Case No. 07-00051 (W.D. Okla.).

SEC ANNOUNCES INSIDER TRADING CHARGES AGAINST SYSTEMS ADMINISTRATOR AT GREEN MOUNTAIN COFFEE ROASTERS

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission today announced insider trading charges against a former systems administrator at Vermont-based Green Mountain Coffee Roasters who repeatedly obtained quarterly earnings data and traded in advance of its public release. The SEC also charged his friend who illegally traded along with him.

In a complaint unsealed July 31 in U.S. District Court for the District of Connecticut, the SEC alleges that Chad McGinnis of Morrisville, Vermont purchased Green Mountain securities - typically out-of-the-money options - shortly before earnings announcements were made. McGinnis also tipped his longtime friend and business associate Sergey Pugach of Hamden, Connecticut, who illegally traded in his own account and his mother's trading account. Together, McGinnis and Pugach garnered $7 million in illegal profits by using inside information to correctly predict the reaction of Green Mountain's stock price to 12 of the past 13 quarterly earnings announcements since 2010.

The SEC alleges that as an information technology employee, McGinnis had access to shared folders on Green Mountain's computer server where drafts of pending press releases and earnings announcements were stored. He also had access to other employees' e-mail accounts. Both sources provided McGinnis with details about upcoming Green Mountain earnings announcements before they became public.

The SEC's complaint was filed under seal on July 24, when the court granted the Commission's motion seeking a temporary restraining order, asset freeze, and other emergency relief. A hearing has been set for August 7.

The SEC's complaint alleges that McGinnis and Pugach violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Pugach's mother Bella Pugach is named as a relief defendant in the SEC's complaint for the purpose of recovering ill-gotten gains in her trading account.

The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Connecticut, the Federal Bureau of Investigation, and the Options Regulatory Surveillance Agency.

THREE SENTENCED IN PUERTO RICO IN OPERATION GUARD SHACK DRUG SECURITY PROSECUTION

FROM:  U.S. DEPARTMENT OF JUSTICE 
Wednesday, July 31, 2013

Three Men Sentenced in Puerto Rico in Operation Guard Shack Prosecution
131 Defendants Have Pleaded Guilty or Been Convicted After Trial 

Two former officers with the Police of Puerto Rico and another individual were sentenced to prison late yesterday for their roles in providing security for drug transactions.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Field Office made the announcement after sentencing by U.S. District Judge Carmen Consuelo Cerezo in the District of Puerto Rico.

Former Police of Puerto Rico officers Daviel Salinas-Acevedo, 29, of Bayamon, Puerto Rico, and Miguel Santiago-Cordero, 30, of Lares, Puerto Rico, were each sentenced on July 30, 2013, to serve 181 months in prison. In addition, Wendell Rivera-Ruperto, 38, of Las Marias, Puerto Rico, was also sentenced yesterday to 420 months in prison.

On Jan. 10, 2013, Salinas-Acevedo and Santiago-Cordero were each convicted at trial of one count of conspiring to possess with intent to distribute more than five kilograms of cocaine and one count of possessing a firearm in furtherance of a drug transaction.  Rivera-Ruperto was convicted of one count of conspiring to possess with intent to distribute more than five kilograms of cocaine, attempting to possess with the intent to distribute more than five kilograms of cocaine and possessing a firearm in furtherance of a drug transaction.  Rivera-Ruperto had been convicted previously of 15 other counts arising from his participation in other, related drug transactions.

The case against the three defendants arose from the FBI’s undercover operation known as “Operation Guard Shack.”  To date, 131 defendants have pleaded guilty or been convicted at trial, and 123 defendants have been sentenced as a result of the operation.

According to the evidence presented in court, Salinas-Acevedo, Santiago-Cordero and Rivera-Ruperto each provided security for what they believed were illegal cocaine deals that occurred on March 24, April 9 and July 8, 2010, respectively.  In fact, each purported drug transaction was one of dozens of simulated transactions conducted as part of the undercover FBI operation.  The three men performed armed security for the multi-kilogram cocaine deals by frisking the buyer, standing guard as the kilos were counted and inspecting and escorting the buyer in and out of the transaction.

In return for the security they provided, Salinas-Acevedo, Santiago-Cordero and Rivera-Ruperto each received a cash payment of $2,000.  The money was never returned by any of the defendants, and none of the defendants ever reported the transactions.

The case was investigated by the FBI.  The Puerto Rico Department of Justice also provided assistance in this case.

The case was prosecuted by Trial Attorneys Anthony J. Phillips and Edward J. Loya Jr. of the Criminal Division’s Public Integrity Section. The U.S. Attorney’s Office for the District of Puerto Rico participated in the investigation and prosecution of this case.

STOCK PROMOTER TO PAY OVER $1.6 MILLION FOR INFORMATION ISSUED IN PENNY STOCK PUBLICATIONS

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION
Massachusetts-Based Penny Stock Promoter Ordered to Pay Over $1.6 Million in Penny Stock Fraud Case

The Securities and Exchange Commission announced today that on July 24, 2013, a final judgment was entered by default against Massachusetts-based National Financial Communications, Inc. ("NFC"). NFC is a defendant in an action filed by the Commission in the U.S. District Court for the District of Massachusetts on December 12, 2011, alleging that Massachusetts resident Geoffrey J. Eiten and NFC made material misrepresentations and omissions in penny stock publications they issued.

The judgment enjoins NFC from further violations of the antifraud provisions of the federal securities laws (Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder) and from certain specified activities related to penny stocks, including the promotion of a penny stock or deriving compensation from the promotion of a penny stock. The judgment also imposed a penny stock bar against NFC which permanently bars it from participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for the purpose of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock. The judgment orders NFC to pay disgorgement of $605,262, representing NFC's ill-gotten gains, plus prejudgment interest of $38,819 and a civil penalty of $1 million.

The Commission's complaint alleged that Eiten and NFC issued a penny stock promotional publication called the "OTC Special Situations Reports." According to the complaint, the defendants promoted penny stocks in this publication on behalf of clients in order to increase the price per share and/or volume of trading in the market for the securities of penny stock companies. The complaint alleged that Eiten and NFC made misrepresentations in these reports about the penny stock companies they promoted. For example, the Commission's complaint alleged that during 2010, Eiten and NFC issued reports promoting four penny stock companies: (1) Clean Power Concepts, Inc., based in Regina, Saskatchewan, Canada, a purported manufacturer and distributor of various fuel additives and lubrication products made from crushed seed oil; (2) Endeavor Power Corp., based in Robesonia, Pennsylvania, a purported recycler of value metals from electronic waste; (3) Gold Standard Mining, based in Agoura Hills, California, a purported owner of Russia gold mining operations; and (4) Nexaira Wireless Corp., based in Vancouver, British Columbia, Canada, a purported developer and seller of wireless routers. The Commission's complaint alleged that in these four reports, Eiten and NFC made material misrepresentations and omissions, concerning, among other things, the companies' financial condition, future revenue projections, intellectual property rights, and Eiten's interaction with company management as a basis for his statements.

According to the complaint, Eiten and NFC were hired to issue the above reports and used false information provided by their clients, without checking the accuracy of the information with the companies in question or otherwise ensuring that the statements they were making in the OTC Special Situations Report were true.

Weekly Address: Securing a Better Bargain for the Middle Class | The White House

Weekly Address: Securing a Better Bargain for the Middle Class | The White House

FTC ANNOUNCES COURT ORDER HALTING DEBT COLLECTORS ILLEGAL PRACTICES

FROM:  FEDERAL TRADE COMMISSION
At FTC's Request, Court Orders Halt to Debt Collector's Illegal Practices, Freezes Assets

Defendants Allegedly Broke the Law by Posing as Process Servers, Threatening Lawsuits, and Contacting Consumers’ Employers and Family Members in Violation of Their Privacy.

At the request of the Federal Trade Commission, a U.S. district court has halted a debt collection operation that allegedly extorted payments from consumers by using false threats of lawsuits and calculated campaigns to embarrass consumers by unlawfully communicating with family members, friends, and coworkers.  The court order stops the illegal conduct, freezes the operation’s assets, and appoints a temporary receiver to take over the defendants’ business while the FTC moves forward with the case.

The lawsuit, part of the FTC’s continuing crackdown on scams that target consumers in financial distress, charged four individuals and seven companies.  The FTC alleged that the defendants were part of an elaborate debt collection scheme operating from locations in Orange and Riverside counties in California, and that they used various business names including Western Performance Group, as well as fictitious names, which they changed frequently to avoid law enforcement scrutiny.

The FTC alleged that the defendants called consumers and their employers, colleagues, and family members posing as process servers or law office employees, and claimed they were seeking to deliver legal papers that purportedly related to a lawsuit.  In some instances, the defendants threatened that consumers would be arrested if they did not respond to the calls.  But the debt collectors were not process servers or law office employees, and the defendants did not file lawsuits against the consumers.  The FTC charged that the defendants’ false and misleading claims violated the FTC Act and the Fair Debt Collection Practices Act.  In addition, the FTC alleged that the defendants violated the Fair Debt Collection Practices Act by:

improperly contacting third parties about consumers’ debts; failing to disclose the name of the company they represented, or the fact that they were attempting to collect a debt, during telephone calls to consumers; and failing to notify consumers of their right to dispute and obtain verification of their debts.

The complaint names as defendantsThai Han; Jim Tran Phelps; Keith Hua; James Novella; One FC, LLC, also doing business as Western Performance Group and WPG; Credit MP, LLC, also doing business as AFGA, CMP, AFG & Associates, AF Group, Allied Financial Group, and Allied Guarantee Financial; Western Capital Group, Inc., also doing business as ERA, LMR, WCG, and WC Group; SJ Capitol LLC, also doing business as SCG; Green Fidelity Allegiance, Inc., also doing business as WRA; Asset and Capital Management Group; and Crown Funding Company, LLC.

The Commission vote authorizing the staff to file the complaint was 4-0.  The FTC filed the complaint and the request for a temporary restraining order in the U.S. District Court for the Central District of California.  On July 24, 2013, the court granted the FTC’s request for a temporary restraining order.  The Federal Trade Commission would like to thank the U.S. Postal Inspection Service for its assistance in bringing this case.

SECRETARY OF LABOR PEREZ LAUDS SENATE WORKFORCE INVESTMENT BILL

FROM:  U.S. DEPARTMENT OF LABOR
Perez: Senate workforce investment bill will create opportunity, strengthen middle class

WASHINGTON — Secretary of Labor Tom Perez today issued the following statement regarding Senate committee markup of the Workforce Investment Act of 2013:

"To create opportunity for the American people and ensure a better bargain for the middle class, we need strong partnerships to build a world-class workforce.
"By collaborating with business leaders, labor, workforce boards, community colleges, nonprofits and others, we can build a workforce system that ensures workers have the skills they need to succeed and employers have the workforce they need to compete in the 21st century.

"We applaud the U.S. Senate for taking a major step in that direction with the bipartisan approval by the Committee on Health, Education, Labor and Pensions of S. 1356, the Workforce Investment Act of 2013. I particularly want to thank Chairman Harkin, Ranking Member Alexander, Senator Murray and Senator Isakson for their efforts. This step to modernize the Act is long overdue — it was 15 years ago this summer that the Workforce Investment Act first became law.
"We need a demand-driven approach to workforce development, one that responds to the needs of employers and prepares people for the jobs that are actually available. We need to align the workforce system with regional economies and establish a more integrated network of American Job Centers. We need to promote innovation and strengthen performance evaluation in the system, so consumers can get information about programs and services that work and taxpayers know we are spending their dollars wisely.

"S. 1356 meets these tests, building on the strength of the current law at the same time that it updates and streamlines the system. It is a significant improvement over the partisan legislation passed by the House in March. The House bill froze funding and failed to provide many of the services needed by workers with the greatest barriers to employment, including veterans, disadvantaged youth and people with disabilities.

"We hope that S. 1356 will move quickly to the Senate floor, with Congress sending a sound, bipartisan bill to the White House for the president's signature. Reauthorizing the Workforce Investment Act will grow our economy, help restore middle-class security and empower more people to live the American Dream."

FLORIDA-BASED AMERIFIRST MANAGEMENT LLC AND OWNERS CHARGED IN FRAUDULENT PRECIOUS METALS SCHEME

FROM:  U.S. COMMODITY FUTURES TRADING COMMISSION 
CFTC Charges Florida-Based AmeriFirst Management LLC and Its Owners, John P. D’Onofrio, George E. Sarafianos, and Scott D. Piccininni, in Multi-Million Dollar Fraudulent Precious Metals Scheme

CFTC alleges that the Defendants engaged in illegal, off-exchange commodity transactions and deceived retail customers regarding financed precious metals transactions

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against AmeriFirst Management LLC (AML) of Fort Lauderdale, Florida, and its owners, John P. D’Onofrio of Fort Lauderdale, George E. Sarafianos of Lighthouse Point, Florida, and Scott D. Piccininni of Fort Lauderdale.  The CFTC Complaint charges the Defendants with operating a precious metals scheme where the Defendants marketed illegal, off-exchange financed commodity transactions and fraudulently misrepresented the nature of those transactions.

According to the Complaint, filed on July 29, 2013, AML held itself out as a precious metals wholesaler and clearing firm, operating through a network of more than 30 precious metals dealers. As alleged, these dealers solicited retail customers to invest in financed precious metals transactions, where a customer gave a percentage deposit of the total value of the metal, typically 20%, and the dealer supposedly made a loan to the customer for the remaining 80%, supposedly sold the customer the total metal amount, and supposedly allocated the total metal amount at a depository to be held for the customer.

The Complaint alleges that AML created customer documents that represented that the dealer had in fact made such a loan and sold and allocated the total metal amount to the customer. However, these documents were false because the dealer never made a loan to the customer, nor did the dealer sell or allocate any metal to the customer, according to the Complaint. Further, the Complaint alleges that although there was no loan and no metal was allocated to the customer, AML charged the customer finance and storage fees.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 expanded the CFTC’s jurisdiction over transactions like these and requires that such transactions be executed on or subject to the rules of a board of trade, exchange, or commodity market, according to the Complaint. This new requirement took effect on July 16, 2011. The Complaint alleges that all of the Defendants’ financed commodity transactions took place after this date and were illegal. The Complaint also alleges that the Defendants defrauded customers in these financed commodity transactions.

In its continuing litigation, the CFTC seeks a permanent injunction from future violations of federal commodities laws, permanent registration and trading bans, restitution to defrauded customers, disgorgement of ill-gotten gains, and civil monetary penalties.

The CFTC Division of Enforcement staff responsible for this action are David Chu, Mary Beth Spear, Eugene Smith, Patricia Gomersall, Ava Gould, Scott Williamson, Rosemary Hollinger, and Richard Wagner.

Remarks at the Iftar Roundtable

Remarks at the Iftar Roundtable

TREASURY TARGETS SUPPORTERS, BUSINESSES LINKED TO LEADER OF SINALOA CARTEL

FROM:  U.S. DEPARTMENT OF TREASURY 
Action Targets Supporters and Businesses Linked to Sinaloa Boss Ismael Zambada Garcia

 WASHINGTON – The U.S. Department of the Treasury today designated three individuals and three entities linked to Ismael Zambada Garcia, one of the principal leaders of the Sinaloa Cartel.  Those designated include Jose Antonio Nunez Bedoya, a Mexican attorney and notary public who helps to create front companies in order to conceal and launder assets on behalf of Zambada Garcia, members of Zambada Garcia’s family, and other members of the Sinaloa Cartel.  Nunez Bedoya incorporated Estancia Infantil Nino Feliz and Establo Puerto Rico on behalf of Zambada Garcia, and he notarized real estate purchases on behalf of Santa Monica Dairy, all of which were previously designated by the Treasury Department’s Office of Foreign Assets Control (OFAC) in May 2007.  Additionally, Nunez Bedoya notarized real estate purchases on behalf of Sinaloa Cartel leader Joaquin Guzman Loera and his wife, Griselda Lopez Perez, whom OFAC designated in September 2012.

“Treasury will continue to target and disrupt financial operations linked to the Sinaloa Cartel by taking action against any facilitators, legal or financial professionals, or businesses that are laundering their narcotics proceeds,” said OFAC Director Adam J. Szubin.

The cash-intensive businesses designated by OFAC today were Parque Acuatico Los Cascabeles, a Sinaloa-based water park, Centro Comercial y Habitacional Lomas, a shopping mall in Culiacan, and Rancho Agricola Ganadero Los Mezquites, a cattle ranch in Sinaloa.  Nunez Bedoya incorporated and notarized all three businesses on behalf of Zambada Garcia.

Also designated today were Tomasa Garcia Rios and Monica Janeth Verdugo Garcia, wife and daughter of deceased narcotics trafficker Jose Lamberto Verdugo Calderon.  Verdugo Calderon, who was killed by the Mexican military in January 2009, was widely identified by U.S. and Mexican authorities as a major financial operative and lieutenant for Zambada Garcia.  Tomasa Garcia Rios and Monica Janeth Verdugo Garcia own Rancho Agricola Ganadero Los Mezquites and Parque Acuatico Los Cascabeles.

Today’s action would not have been possible without critical support from the Drug Enforcement Administration.

“The Sinaloa Cartel cannot hide behind front companies like a water park or agricultural business,” said DEA Special Agent in Charge Doug Coleman.  “We are working with OFAC to expose these traffickers’ front companies for what they really are – illegal enterprises that fuel the drug trade, its violence and corruption.  As we continue to follow the money trail, we starve these traffickers of their assets and eventually put their global criminal networks out of business.”

Today’s action, pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act), generally prohibits U.S. persons from conducting financial or commercial transactions with these designees and also freezes any assets they may have under U.S. jurisdiction.  The President named Ismael Zambada Garcia and the Sinaloa Cartel as significant foreign narcotics traffickers pursuant to the Kingpin Act in May 2002 and April 2009, respectively.

Internationally, OFAC has designated more than 1,300 businesses and individuals linked to 103 drug kingpins since June 2000.  Penalties for violations of the Kingpin Act range from civil penalties of up to $1.075 million per violation to more severe criminal penalties.  Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. Criminal fines for corporations may reach $10 million.  Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

COURT AUTHORIZES JOHN DOE SUMMONSES IN NORWAY SEEKING IDENTITIES OF PAYMENT CARD USERS

FROM:  U.S. DEPARTMENT OF JUSTICE 
Monday, July 29, 2013
Federal Courts Authorize Service of John Doe Summonses Seeking Identities of Persons Using Payment Cards in Norway

Ten Lawsuits Initiated Pursuant to Tax Treaty Between United States and Norway; Seven Petitions Granted, Three Petitions Remain Pending
The Justice Department announced that federal courts in Minnesota, Texas, Pennsylvania, Oklahoma, Virginia and California have entered orders over the past week authorizing the Internal Revenue Service (IRS) to serve John Doe summonses on certain U.S. banks and financial institutions, seeking information about persons who have used specific credit or debit cards in Norway.  The summonses are referred to as “John Doe” summonses because the IRS does not know the identity of the person being investigated.  While orders have been entered in seven of these cases, the United States’ petitions in three additional cases remain pending.

The lawsuits, filed on July 19 and 22, 2013, in nine federal districts, were initiated at the request of the Norwegian government under a treaty between Norway and the United States.  The treaty allows the two countries to cooperate in exchanging information that is helpful in enforcing each country’s tax laws.  The United States is seeking the identities of persons who have used specific debit or credit cards issued by certain U.S. financial institutions so that Norway can determine if those persons have complied with Norwegian tax laws. A total of 18 U.S. financial institutions are identified in the government’s court filings. The filings do not allege that these financial institutions have violated any U.S. laws with respect to these accounts.

As alleged in court papers filed by the Justice Department, Norwegian authorities have reason to believe, based upon the use of payment cards in Norway that were issued by U.S. banks, that unidentified card holders may have failed to report financial account information or income on their Norwegian tax returns.  Court papers cite examples where individuals using non-Norwegian payment cards have claimed to be tax residents of other countries but were found to have resided in Norway for sufficient time to subject them to taxes in Norway.  

 “The Department of Justice and the IRS are committed to working with our treaty partners to fight tax evasion wherever it occurs,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “All taxpayers should know that our efforts in this area are global, coordinated and will continue.”

  “These summonses reflect our continuing efforts to work with our international partners on offshore tax evasion,” said Douglas O’Donnell, IRS Assistant Deputy Commissioner, Large Business & International (LB&I). “By using effectively our existing network of bilateral agreements, countries can help one another put an end to the global practice of evading taxation by hiding assets abroad.”

The lawsuits are a part of ongoing international efforts to stop persons from using foreign financial accounts as a way to evade taxes.  Courts have previously approved John Doe summonses allowing the IRS to identify individuals using offshore accounts to evade their U. S tax obligations.  In the present suits, the Justice Department is seeking the identities of persons who may be attempting to hide their Norwegian taxable income in U.S. financial accounts.

ATTORNEY GETS 3 YEAR SUSPENSION FOR ROLE IN INSIDER TRADING CASE

FROM:  SECURITIES AND EXCHANGE COMMISSION 

New York State Suspends Attorney Mitchell S. Drucker from Practicing Law for Three Years Based On Insider Trading Violation

The Commission announces that on July 17, 2013, the Appellate Division, Second Department, of the New York State Supreme Court (the "Appellate Division"), issued a decision suspending attorney Mitchell S. Drucker from the practicing law for three years, commencing August 16, 2013. The decision provides that Drucker cannot apply for reinstatement earlier than February 16, 2016. The Court imposed this sanction based on the judgment the Commission obtained in its insider trading case against Drucker. SEC v. Mitchell S. Drucker, et al, 06 Civ. 1644 (S.D.N.Y.) In December 2007, a jury in the United States District Court for the Southern District of New York found that Drucker, who was in the legal department of public company NBTY, Inc., violated the antifraud provisions of the securities laws by insider trading the common stock of NBTY, tipping his father, who traded, and trading his friend's NBTY shares. In its decision, the Appellate Division upheld the determination of a Special Referee that Drucker had (1) "engaged in conduct involving dishonesty, deceit, fraud, or misrepresentation, in violation of former Code of Professional Responsibility DR1-102(a)(4) (22 NYCRR 1200.3[a][4])," and (2) "engaged in conduct adversely reflecting on his fitness as an attorney, in violation of former Code of Professional Responsibility DR 1-102(a)(7) (22 NYCRR 1200.3[a][7])." In imposing its sanction, the Appellate Division found:

. . . [W]e note the absence of cooperation by the respondent with the SEC, as well as the absence of any admission by the respondent that he engaged in insider trading. As the District Court noted, the respondent "failed to cooperate … until … he could no longer conceal his transgression, thereby misleading his employer," and he failed to take responsibility for what he did. We find the absence of remorse to be an aggravating factor, consistent with the District Court's finding that the respondent was entitled to "no mercy" as a result of the "brazenness" of his conduct and his "cocky refusal to own up to it." Moreover, we note the District Court's description of the respondent as having "demonstrated utter indifference to the law and to his client," and of his conduct as "egregious."

Previously, on December 26, 2007, Judge Colleen McMahon, whose decision and findings were cited by the Appellate Division, enjoined Drucker from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and barred him from serving as an officer and director of any public company. The judgment also ordered defendant Drucker to pay disgorgement and prejudgment interest totaling $201,146, to pay, and be jointly and severally liable with his father, defendant Ronald Drucker for, disgorgement and prejudgment interest totaling $74,411, and to pay, and be jointly and severally liable with his friend, relief defendant William Minerva for, disgorgement and prejudgment interest totaling $11,577. Finally, the judgment ordered Mitchell Drucker to pay a civil penalty of $394,486, representing two times the combined ill-gotten gains obtained by defendants Mitchell Drucker and Ronald Drucker, and relief defendant Minerva. Drucker subsequently completed those payments to the U.S. Treasury.

In February 2008, the Commission issued an Order temporarily and then permanently suspending Drucker from practicing before the Commission based on his insider trading judgment.

West Wing Week: 08/02/13 or "Let Us Be Awed By Their Shining Deeds" | The White House

West Wing Week: 08/02/13 or "Let Us Be Awed By Their Shining Deeds" | The White House

SECRETARY OF STATE KERRY'S REMARKS WITH UAE FOREIGN MINISTER ABDULLAH BIN ZAYED

FROM:  U.S. DEPARTMENT OF STATE 
Remarks With United Arab Emirates Foreign Minister Abdullah bin Zayed Before Their Meeting
Remarks
John Kerry
Secretary of State
London, United Kingdom
August 2, 2013

SECRETARY KERRY: Welcome, everybody. I’ll say a couple – do you want to say anything? Let me just say it’s a great pleasure for me to meet with Sheikh Abdullah, the Foreign Minister of the Arab Emirates. And I’m really grateful for his enormous efforts over the last weeks to try to help resolve the crisis in Egypt.

Yesterday, I made a few comments about sort of the intent of the July 30th movement, and what I want to make clear – I think His Highness Sheikh Abdullah would join me in this – is that all of the parties involved have a responsibility to be inclusive, to work towards a peaceful resolution. The last thing that we want is more violence. The temporary government has a responsibility with respect to demonstrators to give them the space to be able to demonstrate in peace. But at the same time, the demonstrators have a responsibility not to stop everything from proceeding in Egypt.

Egypt needs to get back to a new normal. It needs to begin to restore stability to be able to attract business and good people to work. And that’s a high priority. And we will work very, very hard, together and with others, in order to bring parties together to find a peaceful resolution that grows the democracy and respects the rights of everybody. That’s what we’re engaged in and that’s part of what we will talk about – not all but part of what we’ll talk about today.

Your Highness.

FOREIGN MINISTER ABDULLAH: Well, first of all, Secretary, I have to thank you for meeting with me today. And I think it’s extremely important to see the U.S. leadership not only in helping calm the situation in Egypt, but also your efforts in putting new life in the peace process. We saw that huge effort that United States and yourself is doing at the moment. And of course, you’ll find all support from our end, from the Arab side.


But just to go back to Egypt for a second, Egypt is an extremely important country, not only for the Arab countries but for the region as well. And here we think we have to look forward. We have to make sure that this interim government can be successful, can be successful in leading Egypt to a better future. And the UAE, with the United States and others, is doing its very best to give this government the support it needs, but also to encourage all the other parties to reach to a position where it can negotiate with this government – here I’m talking about the previous government.

We’d like to see the situation go normal in Egypt, because normalcy is the only way for a successful Egypt. We don’t want to see anybody stopping Egypt from the way it should go, but that’s only going to happen by all parties being in an inclusive dialogue. And I think here the UAE and the United States do agree.

SECRETARY KERRY: Thank you all very much. Appreciate it.

Consumer Updates What is Gluten-Free? FDA Has an Answer

Consumer Updates What is Gluten-Free? FDA Has an Answer

Week in Images

Week in Images

RECENT U.S. DEFENSE DEPARTMENT PHOTOS FROM AFGHANISTAN

FROM:  U.S. DEFENSE DEPARTMENT 

U.S. Marine Corps Cpls. Michael Emerson, left, scans the surrounding area for threats as Andrew Crisp, right, relays information to his leadership team during Operation Grizzly in Helmand province, Afghanistan, July 18, 2013. Emerson and Crisp are assigned to Fox Company, 2nd Battalion, 2nd Marine Regiment. U.S. Marine Corps photo by Cpl. Alejandro Pena.

A U.S. Marine scans the surrounding area for threats during Operation Grizzly in Helmand province, Afghanistan, July 18, 2013. U.S. Marine Corps photo by Cpl. Alejandro Pena.

SECRETARY OF STATE KERRY MAKES REMARKS WITH PAKISTANI FOREIGN AFFAIRS ADVISOR SARTAJ AZIZ

FROM:  U.S. DEPARTMENT OF STATE 
Remarks With Pakistani Foreign Affairs Advisor Sartaj Aziz
Remarks
John Kerry
Secretary of State
Prime Minister's Residence
Islamabad, Pakistan
August 1, 2013

MODERATOR: Good afternoon, ladies and gentlemen. (Inaudible.)

SECRETARY KERRY: Well, thank you very much. As-Salaam Alaikum. It’s a pleasure to be here and I was privileged to be able to meet with the Prime Minister as well as the Prime Minister’s Foreign Affairs Advisor, His Excellency Sartaj Aziz. We’ve just come from a very productive meeting with Prime Minister Sharif, and I’m very grateful to him for delaying his trip. He is leaving for a pilgrimage to Mecca during this most Holy Month of Ramadan, and I want to honor his willingness to delay his trip a little bit in order to be able to meet today. I’m very grateful to him for that.

Let me say what a pleasure it is for me to be back in Pakistan. I have been here many times, as the people of Pakistan know, and I was very privileged to work in the United States Senate in order to pass what became known as the Kerry-Lugar-Berman bill, which provided significant economic assistance to the people of Pakistan. And we did that because we specifically wanted to make clear that America does not want to have a transactional relationship, we do not want to have a relationship based on the moment or based on an issue such as counterterrorism or Afghanistan, but we want a relationship with the people of Pakistan for the long term. One of the largest diasporas of Pakistanis lives in the United States of America. We have a huge Pakistani-American population. We’re proud of their many contributions to America, to our society, and they are proud always of their heritage and of their continuing links to their homeland, to Pakistan.

I also want to applaud the people of Pakistan for this remarkable, historic transition that has taken place here with this election. I was privileged to be here a few years ago at the last election with then Senator Joe Biden and Senator Chuck Hagel. Now the three of us are privileged to work for President Obama in his Administration – obviously, one as the Vice President of the United States, Secretary Hagel is the Secretary of Defense. So we’re privileged – all three of us – to continue to work on the relationship with Pakistan, and it’s with our friendship and our understanding as we come here today at an historic time in Pakistan’s democratic journey. I was privileged to be here the day of the election for the first transfer of power from one president to another at the ballot box. And now we have seen the first transfer of that elected president civilian to another civilian president. So the march towards democracy in Pakistan is something to be celebrated. And that is another reason why I’m privileged to be here at this moment. The people of Pakistan deserve enormous credit for their role in the peaceful transition of power from one democratically-elected government to another.

I’m here with a simple message: The United States is committed to a long-term partnership with the people of Pakistan, and we remain fully engaged in building a relationship that is based on mutual interests and mutual respect. And we are working closely with the new government in order to advance a shared vision of the future that is marked by peace, by stability, and by prosperity.

It is also no secret that along this journey in the last few years we’ve experienced a few differences. I think we came here today, both the Prime Minister and myself, with a commitment that we cannot allow events that might divide us in a small way to distract from the common values and the common interests that unite us in big ways. As we discussed this morning, the common interests far exceed and far outweigh any differences. So we’re here to speak honestly with each other, openly about any gaps that may exist that we want to try to bridge. And our people deserve that we talk directly and with candor and represent their interests.

I’m pleased to announce that today very quickly we were able to agree to a resumption of the Strategic Dialogue in order to foster a deeper, broader, and more comprehensive partnership between our countries. And this revitalized dialogue will address in a realistic fashion all of the many key issues between us, from border management to counterterrorism to promoting U.S. private investment and to Pakistan’s own journey to economic revitalization.

I want to emphasize the relationship is not defined simply by the threats that we face. It is not only a relationship about combatting terrorism. It is about supporting the people of Pakistan and particularly helping at this critical moment for Pakistan’s economic revival. That has been a centerpiece of Prime Minister Nawaz Sharif’s campaign, it is a centerpiece of his governing efforts, and it will be a centerpiece of our relationship.

The Prime Minister has outlined an ambitious agenda of reforms that will unlock growth and opportunity. And I know that some of these reforms are going to be difficult. They always are. But they are essential to creating sustainable development, more reliable energy supplies, and better services for the people of Pakistan.

Our partnership is also about energy, education, trade, and investment. We have the largest Fulbright program in the world right here in Pakistan. And through the Kerry-Lugar-Berman Act, we’ve helped to bring 1,000 megawatts of power to the national grid, which is providing power and uplifting the lives of 16 million Pakistanis. We’ve launched a new investment fund that will help grow small and medium sized enterprises. And I’m pleased to report that we are funding the rehabilitation of all four major trade routes between Pakistan and Afghanistan.

Pakistan’s regional position brings enormous economic opportunities, and we want to recognize those. That’s why we welcome and encourage the steps that Pakistan and India have taken to expand their economic relationship. As I said when I visited New Delhi just a few weeks ago, if Pakistan and India can confidently invest in each other, then the rest of the world is more confidently going to invest in both of them, and the returns on that investment to this region will be simply enormous.

Now, of course, Pakistan cannot achieve its full economic potential until it overcomes extremism, extremist threats within its borders. I want to say that Pakistan troops have fought very bravely against this threat and its people have suffered enormously, including perhaps more than 40,000 Pakistanis who have been killed by terrorists over the past decade. The truth is we face a common enemy in terrorism, and the choice for Pakistanis is clear: Will the forces of violent extremism be allowed to grow more dominant, eventually overpowering the moderate majority? And I ask anybody in Pakistan to ask themselves: How many bridges have those terrorists offered to build? How many schools have they opened? How many economic programs have they laid out for the people? How many energy plants have they tried to build? I think the choice is clear. I believe Pakistanis are going to recommit to the values that are espoused by the founder of the country, Muhammad Ali Jinnah, who helped people come together to build a stable, moderate democracy and an economically vibrant and tolerant nation that is at peace with itself and its neighbors.

The reality is that the fates of Afghanistan and Pakistan are intertwined. And addressing the threat that is posed by cross-border militancy is a key aspect of our Strategic Dialogue. This is a challenge that cannot be met by any one country. It will take a united effort to resolve the issues of safe havens and political reconciliation.

So I want to thank His Excellency in particular for his visit to Kabul, which was a very important visit last month. Both of our countries share an interest in a unified, stable, and peaceful Afghanistan, and so we greatly appreciate Pakistan’s assistance in the Afghan reconciliation process. And that is a process that obviously will take time and perseverance.

In the end, the relationship between the United States and Pakistan has traveled a long way. And yes, we still do have ground to cover. But after my discussions today, I can tell you unequivocally that we do share a long-term vision for the relationship. And I believe that in Prime Minister Nawaz Sharif we have someone who is committed to try to grow that relationship.

To ensure that we continue our important bilateral conversation at the highest levels, I have extended on behalf of the President of the United States an invitation to Prime Minister Sharif to meet with the President and have a bilateral meeting with him in the United States this fall.

So I thank you again, Your Excellency, for the gracious hospitality which I always have received when I come here to Pakistan. But thank you for the hospitality and welcome you’ve shown me and my team here today, and I will look forward after your comments to taking a couple of questions.

MR. AZIZ: Thank you. It’s my pleasure to welcome Secretary of State John Kerry on his first bilateral visit to Pakistan and also thank him for the very positive and constructive statement that he just made. Senator Kerry is a very familiar and well-respected figure who has always been welcomed in Pakistan as a good friend. We appreciate the leadership that he has exhibited in the past as the Chairman of the Senate Foreign Relations Committee and now in his new capacity as Secretary of State to promote and strengthen the partnership between our two countries.

As Secretary Kerry mentioned, we have had very intensive and frank discussion in a very collegial atmosphere to strengthen the foundations of our friendship and to further build our partnership to achieve our shared goals in the future. As he mentioned, in these foundations there are many mutually reinforcing elements. The U.S. is our largest trading partner and a major source of foreign direct investment and economic assistance. We have – Pakistan has a large diaspora in the United States, and a significant number of highly-educated Pakistanis both in the public and private sectors owe their skills to universities in the U.S. However, most importantly --

SECRETARY KERRY: I think they have a microphone problem.

MR. AZIZ: However, most importantly, it is our shared faith in democracy and respect for the rule of law and human freedoms and commitment to the promotion of peace and security in the region that binds our countries in a new and stronger partnership. As we look into the future, we want trade, more trade, larger investment and cooperation in development, including education as the building blocks of a new and renewed partnership.

In this regard, we highlighted the importance of securing greater market access for Pakistani products in the U.S. and larger foreign direct investment as the new government attaches highest priorities to economic revival. I also conveyed our gratitude to the U.S. for their support for the Diamer-Bhasha dam as a part of its vital effort to deal with the energy crisis.

Of course, these efforts to revive the economy and produce – will not produce full results without peace and stability in our region. In fact, both of us agreed that Pakistan wishes to have good relation with all its neighbors and we hope to expand our connectivity for the mutual benefit.

There are, of course, other challenges too, and today we have discussed the path forward as the U.S. draws down its forces in Afghanistan in areas such as Afghan reconciliation, ground lines of communication, IEDs, counterterrorism. We have to improve – we have improved our bilateral coordination significantly, and we have continued to work to improve them further.

I have reiterated Pakistan’s clear commitment to facilitating U.S. withdrawal from Afghanistan and supporting any Afghan-led and Afghan-owned solution and reconciliation for peace and stability in Afghanistan.

I also briefed Secretary Kerry about the (inaudible) of a comprehensive counterterrorism strategy our government is in the process of formulating in consultation with all the stakeholders.

We also shared our concerns on the drone strikes which Pakistan not only considers a violation of our sovereignty but it’s also counterproductive as they undermine the overall counterterrorism cooperation efforts.

And as Secretary Kerry mentioned, in order to give impetus to these understandings, we have agreed on the resumption of the Strategic Dialogue process and holding the next ministerial-level dialogue within the next six months. As some of you would recall, this dialogue started in 2010 and three sessions were held within 2010, in March, July and October. But then several events derailed this process and no meeting has been held since October 2010, and therefore the objective of transforming U.S.-Pakistan relations from a transactional to a sustainable strategic partnership has remained unfulfilled. And we think after the historic democratic transition in Pakistan the time to realize this objective has arrived, and that is what we have agreed on.

And we are also grateful for the invitation to the Prime Minister visit President Obama later this year which will further help to (inaudible) and strengthen. And in particular on the economic front, which is the key building block of our relationship, we hope that we can double our bilateral trade through enhanced market access to something like $11 billion in the next five years.

So I thank Secretary Kerry for this visit. Let me state it clearly that we are committed to work together in all these areas in a very pragmatic and positive manner on the basis of respect for each other’s interests as well as concerns. So I thank you again and look forward to seeing you (inaudible).

SECRETARY KERRY: Thank you, Sartaj. Thank you very much.

MODERATOR: We’ll take four questions, two each side. Michael Gordon of New York Times. Sir, you’ll have to speak up because (inaudible).

QUESTION: Hello. Okay. Mr. Secretary, the effort to get talks going with the Afghan Taliban in Doha is frozen and it now appears that NATO’s military mission may well end and that most if not all of the NATO troops may be gone before any negotiations even get underway. And that means that the United States’ leverage and the Afghan Government’s leverage in these talks will be reduced if they’re ever resumed. What have you asked the Pakistanis to do to get these talks going, and what steps are you taking to bring the United States military strategy and the diplomatic strategy into alignment?

And a question, please, for Mr. Aziz: What specific efforts is Pakistan undertaking now to get these talks underway? And sir, as you know, the United States has repeatedly pressed Pakistan to crack down on safe havens that Haqqani and other networks have used to carry out attacks in Afghanistan. Was this issue raised again today by Mr. Kerry? And what is Pakistan actually prepared to do, and would Pakistan be prepared to do more about the safe havens if the United States would commit to reducing its drone strikes? Thank you.

SECRETARY KERRY: Well, Michael, let me just say that I – of course, we talked about this issue today. Pakistan has been very helpful with respect to this process and we’re very grateful to the Pakistanis for their initiative, and they will continue to be helpful.

I disagree that I think the NATO mission will end before – I mean, look, if the talks are going to take place, they’re going to take place. If they don’t, that’s their choice, but it will not change the fundamental strategy of what the United States and Afghanistan and the ISAF forces are doing. The President has made it clear that he will, at the appropriate time, be announcing an ongoing American presence. And the negotiations on a bilateral security agreement are underway and I am confident will be completed at an appropriate moment in time. And our plans continue for an election in Afghanistan in 2014 that will be the centerpiece of this transition. The Afghan forces this year, without regard to what happens with the Taliban, have taken over lead responsibility in Afghanistan for security. We are working with them. And so that will continue, obviously, into next year, and the training and equipping will continue beyond that.

So the reason we hope the talks can take place is because everybody understands that a political resolution is better than continued fighting. And our hopes are that it would be possible to be able to combine that with the rest of the transition that is taking place in Afghanistan. We will continue those efforts, but it doesn’t – I don’t agree that there is a lack of synchronization between the military strategy and the diplomatic strategy. The diplomatic strategy is to try to get to talks but to continue the process of preparing the Afghan people for their election and for a transition that will take place regardless.

MR. AZIZ: Well, what can Pakistan do? I think as Secretary Kerry said, it is a process between the Afghan stakeholders and we are doing our best to facilitate that process. We can’t do more than facilitate. And obviously, there are many stakeholders, and Taliban have not so far been persuaded to talk to Karzai directly, but they may be persuaded to talk to the High Peace Council under certain conditions. So that is the next effort that is being made. And if they do, then at least they can talk about talks and how to organize them. But I think in these efforts what President Karzai will be coming here later this month, so we’ll explore with him also how much flexibility he will show in dealing with this issue, and hopefully after that some new attempt can be made.

On the safe havens, of course, we had a very detailed discussion with our plans, on our overall comprehensive strategy, the All Parties Conference that we are planning to hold, and how the follow-up will take place. And as it unfolds, all of you will come to know how we propose to deal with it. Thank you.

MODERATOR: Mr. Asif Bhatti of Geo Television.

QUESTION: Thank you very much. I have a question to His Excellency, Senator John Kerry. As advisor mentioned that we have reservations on drone attacks, so you might know about the public reservations and sentiments on the drone attacks. And the Pakistani Government especially criticizing these attacks and they think that it should be stopped now. What is your strategy? Are you seriously thinking to change your drone attack policy?

And the second part of my question is that are you considering the swapped deal of prisoners with Pakistan and especially handing over Dr. Aafia Siddiqui to Pakistan? Thank you.

SECRETARY KERRY: Say the last part again? I’m sorry.

QUESTION: Secretary, there’s a – are you considering seriously that there will be exchange of prisoners deal between Pakistan and United States, and will you hand over Dr. Aafia Siddiqui to Pakistan?

SECRETARY KERRY: Well, I don’t have any comment or anything to add with respect to any potential prisoner exchange or non-exchange. It’s just we didn’t even talk about that at this point this morning.

With respect to the drone policy, we’ve had an ongoing dialogue with our friends in Pakistan regarding all aspects of our relationship, our shared interests, including, obviously, the counterterrorism cooperation. And I think the President of the United States made it very, very clear recently in a major speech that he delivered at our National Defense University in which he laid out the legal and the policy standards that guide any actions that we have against any individuals with respect to terror and under what circumstances we might take direct action.

That stands on its own. That is a very clear articulation of our policy and of what it – where it will go. But we obviously don’t discuss publicly every aspect of our counterterrorism activities. I will say this, I’ll quote the President: “We must define our effort not as a boundless global war on terror, but rather as a series of persistent, targeted efforts to dismantle specific networks of violent extremists that threaten America.”

I know there are issues of sovereignty that are raised often. I would simply remind all of our friends that somebody like an al-Qaida leader like al-Zawahiri is violating the sovereignty of this country. And when they attack people in mosques and blow up people in villages and in marketplaces, they are violating the sovereignty of the country.

So I think the President has made a policy as limited and as clear as is humanly possible, and he has laid out a very transparent, accountable, thorough legal justification for any counterterror policies the United States may or may not engage in.

QUESTION: Do you have any --

MODERATOR: Deb Riechmann of Associated Press.

QUESTION: Thank you. Mr. Aziz, on the drone attacks, is Pakistan – the number of drone attacks has recently declined. Is Pakistan still asking for a further curtailment of these strikes that are so unpopular in your country?

And Secretary Kerry, back on the bilateral security agreement issue, there’s an unnamed State Department official that’s been quoted as saying that the U.S. has resolved most of the issues on the BSA and that is nearing completion on the agreement with Afghanistan. And right now, you’re running up against the one-year deadline on those negotiations and the troop level decision is hinged on this. Where do we stand on this? Are you guys about ready to wrap this up or are we, as Karzai said, still not talking about this, or – there’s even reports that you’ve read a completed text on this.

SECRETARY KERRY: Well, I’m not going to comment on an agreement that hasn’t been finalized. It’s always dangerous to predict completion prior to completion. So we’re making progress. We’re working on it. I am personally confident that we will have an agreement and the agreement will be timely, and I am confident that the President has ample space here within which to make any decisions he wants to make regarding the future troop levels. So I think we’re on a good track. I feel very comfortable with where we are. And as I say to you, I expect this agreement to be completed at an appropriate time.

QUESTION: (Inaudible) you expect it?

SECRETARY KERRY: I expect it to be completed at an appropriate time.

QUESTION: Secretary Kerry, (inaudible) both questions --

MODERATOR: Mr. Baqir Sajjad of Dawn newspaper, a question.

QUESTION: (Inaudible) on both questions (inaudible) --

QUESTION: (Inaudible) regards to (inaudible).

QUESTION: Sir, do you have any (inaudible)?

QUESTION: (Inaudible) answer to the question that we --

MR. AZIZ: Yes, the question about drones. As I mentioned, we have registered our concern and will continue to do so that drone attacks are counterproductive in terms of our relationship (inaudible). So in the light of today’s discussion we’ll continue this dialogue on how to stop this policy of drone attacks as far as the U.S. is concerned.

QUESTION: Have you asked for curtailment?

MR. AZIZ: We are – no, we are (inaudible) stopping, not just containment. (Laughter.)

MODERATOR: Mr. Baqir Sajjad of Dawn newspaper.

QUESTION: Sir, you mentioned that you took up the issue of cross-border insurgency. Are you confident that Pakistan, which has not moved on safe havens on its side of the border, will do it this time?

SECRETARY KERRY: Well, I’m confident that we’re working in good faith to find ways to go forward and find the best policy that we can put in place. We talked for a number of hours this morning and we covered an enormous amount of topics, and a couple of them it was important for me to cover very closely and very specifically. So we began to scratch the surface of some of this. I’ll be meeting again later this evening. I’m going to have further meetings, and this afternoon, and we agreed precisely because of the complexity of working out the details that we’re going to begin the Strategic Dialogue immediately. And over the six months, we will have a ministerial, but we have five committees that will begin to meet very quickly on this. So I expect a lot of definition and a lot of progress to come to the forefront.

What was important today was that there was a determination by the United States and by Pakistan to move this relationship to the full partnership that it ought to be and to find the ways to deal with these individual issues that have been irritants over the course of the past years. And I believe that the Prime Minister is serious about doing that. I know that President Obama is also, which is why the President looks forward to meeting with the Prime Minister in about a month or so in the United States. So this conversation will continue, and I’m confident we’re going to find effective ways to manage the challenges that we both face.

MODERATOR: Ms. Saima Mohsin of CNN.

QUESTION: Thank you. He’s introduced me already. My first question is for Sartaj Aziz. There’s a lot of talk about safe havens in Pakistan, and the United States in the past few years has put a lot of pressure on Pakistan to deal with it, but that hasn’t happened. With the new government – and it seems that the military is keen to do so as it did with Swat, but not without the backing of the government – is the government looking at this, and are you planning on doing something about it and sending in a military operation in Waziristan?

And for Secretary of State Kerry and looking ahead to troop withdrawal in Afghanistan and this relationship with Pakistan, Afghanistan, and the United States, there seems to be a huge upsurge in violence and a lot of concern about what’s going to happen come 2014. And we’re already seeing violence, as I said. So you mentioned monitoring the border, but what do you think you can achieve that you haven’t managed to in the past decade?

MR. AZIZ: Well, on the first question, as you know, this operation started in 2009, and out of seven agencies in the tribal areas, six we have already launched military operation and tried to gain effective control and establish the right of the state. The only agency left is now Waziristan. And obviously, with 150,000 troops deployed in the tribal areas, we are overstretched right now. And therefore, right now, we are planning to have an All Parties Conference in which we consult all the stakeholders. Obviously, dialogue has to go along with military action, so we will explore that option first. And if that doesn’t work, then we’ll see under what conditions and by what timeframe we’ll do the alternative actions.

So I think basically, partly it’s a question of capacity, partly it’s a question of timing, and the other options without which the basic objectives cannot be achieved. So in the coming weeks, you’ll know how the strategy works.

SECRETARY KERRY: Well, let me be very clear. The United States is drawing down, not withdrawing. There’s a distinction. The President will announce the number of forces that he will commit for the United States, and other countries have already committed certain numbers of forces who will remain in Afghanistan for two purposes: one, counterterrorism; and two, to train, equip, and advise the armed forces.

Together, all of these countries, over 50 nations – about 52, 53 nations – have combined to help train and equip a military of 350,000 people in Afghanistan. That’s a very sizable army. And I believe, properly trained and equipped as they will continue to be over the course of the next year and beyond, they will have an ability to be able to cooperate, hopefully, with the Pakistanis and others in order to provide the kind of security and protection that the people of Afghanistan and the people of Pakistan deserve.

So I am very hopeful that as we go forward here, people will remember that this is a transition, not an ending. It is a transition to Afghans themselves who will stand up and fight for the freedoms that they want and for the lifestyle they want and for the country that they want. And I believe that as in other places in the world, when people are given the ability and the capacity to be able to fight for their own future, they do.

So I think we’re going to see an important transition take place, and if we work out modalities between us that begin to deal with some of these issues with respect to the borders and safe havens and other things, which I think we can work out, that will only strengthen the effort going forward. So I think this is a very important year, and not – and I think most importantly, a year with the opportunity for the people of Afghanistan to choose their future leadership in the spring of next year.

I think we’ve got to wrap up in a moment, don’t we?

MODERATOR: One question, please.

SECRETARY KERRY: Well, I’m afraid if it’s one, it’s ten, and then I’m going to be late. (Laughter.) So bear with me. I’m sorry, folks. Thank you.

MR. AZIZ: Thank you very much.

SECRETARY KERRY: Thanks so much.

SECRETARY OF DEFENSE HAGEL'S STATEMENT ON SENATE CONFEREES OF SENIOR MILITARY LEADERS

FROM:  U.S. DEPARTMENT OF DEFENSE 
Secretary Hagel Statement on Senior Leaders

              I would like to congratulate General Martin Dempsey and Admiral Sandy Winnefeld on their Senate confirmation to second terms as chairman and vice chairman of the Joint Chiefs of Staff.  Both of these proven leaders are tireless advocates for our men and women in uniform and innovative thinkers who are helping to shape the military of the future.  I strongly value their counsel, as does President Obama.  Their continued service and wise advice will be essential as we continue to draw down from the war in Afghanistan and confront other national security challenges.

              I also strongly support President Obama's nomination of Deborah James to serve as the 23rd secretary of the Air Force.  Deborah is an outstanding leader with deep experience in the Department  of Defense, the private sector, and non-profit organizations that support the men and women of our armed services.  If confirmed, Deborah will lead the Air Force during a time of great consequence for our airmen and their families.  I appreciate her willingness to serve her country once again.

DOJ FILES LAWSUIT OVER ALLEGED RETALIATION AGAINST A DEAF COUPLE

FROM:  U.S. DEPARTMENT OF JUSTICE
Monday, July 29, 2013
Department of Justice Files Lawsuit Against Vero Beach, Fla. Doctor and Medical Practice for Retaliating Against Deaf Couple

The Department of Justice announced today that it has filed a lawsuit against Dr. Hal Brown and Primary Care of the Treasure Coast of Vero Beach, Fla. (PCTC), alleging that the doctor and the medical practice violated the Americans with Disabilities Act by discriminating against Susan and James Liese, who are deaf. The complaint alleges that the doctor and the practice violated the ADA by retaliating against Mr. and Mrs. Liese because they engaged in activities protected under the act.  The suit was filed in the U.S. District Court for the Southern District of Florida in Ft. Pierce.

According to the Justice Department’s complaint, the doctor and medical practice terminated Mr. and Mrs. Liese as patients because the couple pursued ADA claims against a hospital for not providing effective communication during an emergency surgery.  The hospital is located next door to and affiliated with PCTC.  The complaint alleges that the Lieses threatened the hospital with an ADA suit based on failure to provide sign language interpreter services, and upon learning of the lawsuit, PCTC and Dr. Brown, who was the Liese’s primary doctor at PCTC, immediately terminated the Lieses as patients.

“The Department of Justice is committed to enforcing the provisions of the ADA that protect an individual from retaliation when he or she opposes disability discrimination and prohibit interference with an individual in the exercise of rights granted by the ADA,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “A person cannot be terminated as a patient because he or she asserts the right to effective communication at a hospital.”

The enforcement of the ADA is a top priority of the Justice Department’s Civil Rights Division.  The ADA prohibits retaliation against an individual because they oppose an act that is unlawful under the ADA and because they made a charge, testified, assisted or participated in any manner in an investigation, proceeding or hearing under the ADA.  The ADA also makes it unlawful to coerce, intimidate, threaten or interfere with any individual exercising their rights protected by the ADA.