FROM: U.S. STATE DEPARTMENT
Assessing the P5+1 Joint Plan of Action With Iran
Testimony
Wendy R. Sherman
Under Secretary for Political Affairs
Written Statement Before the Senate Committee on Banking, Housing and Urban Affairs
Washington, DC
December 12, 2013
Good morning, Chairman Johnson, Ranking Member Crapo, distinguished members of the committee. Thank you for inviting me to discuss the details of the Joint Plan of Action (JPA) concluded with Iran and our P5+1 partners on November 24 in Geneva.
Let me begin by noting that the diplomatic opportunity before us is a direct result of the cooperation between Congress and the Administration to put in place and implement a comprehensive and unprecedented sanctions regime designed to press Iran to address international concerns with its nuclear program.
Our collaboration on sanctions is what brought Iran to the table. However, it is important to underscore that what we do from this point forward is just as critical, if not more so, in terms of testing Iran’s intentions. In that regard, I look forward to our consultations over the important weeks and months ahead.
Today, I want to give you the facts about what was agreed to in Geneva, so you can judge the merits of the JPA for yourself.
Iran Commitments
We have long recognized that the Iranian nuclear program constitutes one of the most serious threats to U.S. national security and our interests in the Middle East. Thanks to the sanctions pressure, and a firm and united position from the P5+1 (China, France, Russia, UK, U.S. and Germany, in coordination with the EU), we have reached an understanding that constitutes the most significant effort to halt the advance of Iran’s nuclear program in nearly a decade. As a consequence, the JPA agreed to in Geneva is profoundly in America’s national security interest, and makes our regional partners safer and more secure.
The JPA is sequenced, with a 6-month period designed explicitly to block near-term Iranian pathways to a nuclear weapon, while creating space for a long-term comprehensive solution. The goal of that comprehensive solution is to resolve the international community’s concerns with Iran’s nuclear program. What this initial plan does is help ensure that Iran’s nuclear program cannot advance while negotiations towards that solution proceed.
Upon implementation in the coming weeks, this initial step will immediately: halt progress of the Iranian nuclear program; roll it back in key respects; and introduce unprecedented monitoring into Iran’s nuclear activities. Taken together, these measures will prevent Iran from enhancing its ability to create a nuclear weapon and increase the confidence in our ability to detect any move towards nuclear break-out or diversion of material towards a covert program.
The details demonstrate why this is the case. First, as stated, Iran must halt the progress of its enrichment program. This means, under the express terms of the JPA, that Iran cannot increase its enrichment capacity. Iran’s stockpile of 3.5 percent enriched uranium hexafluoride (UF6) cannot grow – it will be the same amount or less at the end of the six month period as it is as the beginning. Iran cannot build new enrichment facilities for the production of enriched uranium. Iran cannot install additional centrifuges of any type in their production facilities, operate more centrifuges, nor replace existing centrifuges with more advanced types. Moreover, Iran must limit centrifuge production to those needed to replace damaged machines; thus Iran cannot expand its stockpile of centrifuges.
Second, during this initial phase, Iran will roll back or neutralize key aspects of its program. Iran must cease all enrichment over five percent. The piping at Fordow and Natanz that is used to more efficiently enrich uranium over five percent must be dismantled. Iran must neutralize its entire 20 percent stockpile of enriched uranium hexafluoride by diluting it to a lower level of enriched uranium hexafluoride or converting it to oxide for fuel for the Tehran Research Reactor.
Finally, Iran cannot advance work on the plutonium track. At Arak, Iran cannot commission the heavy water reactor under construction nor transfer fuel or heavy water to the reactor site. Iran cannot test additional fuel or produce more fuel for the reactor nor install remaining components for the reactor. Iran cannot construct a facility for reprocessing spent fuel. Without reprocessing, Iran cannot separate plutonium from spent fuel and therefore cannot obtain any plutonium for use in a nuclear weapon. As such, this first step freezes the timeline for beginning operations at the Arak reactor and halts progress on any plutonium pathway to a weapon.
Significantly, the monitoring measures outlined in the JPA will provide much more timely warning of a breakout at Iran’s declared enrichment facilities and add new checks against the diversion of equipment for any potential covert enrichment program. Some have rightfully asked why we should trust Iran to live up to these commitments. As Secretary Kerry has said, the JPA is not based on trust, it is based on verification – and the verification mechanisms set forth in the JPA are unprecedented.
Under its express terms, Iran must permit daily access by International Atomic Energy Agency (IAEA) inspectors to the facilities at Natanz and Fordow and allow more frequent access to the Arak reactor. Iran must allow IAEA inspectors access to sites related to centrifuge assembly and production of centrifuge rotors (both key aspects of the program). Iran must allow IAEA inspectors access to uranium mines and mills. Iran must provide design information for the Arak heavy water reactor. These monitoring mechanisms will provide additional warning of breakout or diversion of equipment all along the nuclear fuel cycle and would not be in place without the understanding reached in Geneva.
In summary, even in its initial phase, the JPA stops any advances in each of the potential pathways to a weapon that has long concerned us and our closest allies. It eliminates Iran’s stockpile of 20 percent enriched uranium hexafluoride. It stops installation of additional centrifuges at production facilities, especially Iran’s most advanced centrifuge design, together with freezing further accumulation of 3.5 percent enriched uranium hexafluoride. And it ensures that the Arak reactor cannot be brought on line while we negotiate a comprehensive solution.
P5+1 Commitments
In return for these concrete actions by Iran and as Iran takes the required steps, the P5+1 will provide limited, temporary, and reversible relief while maintaining the core architecture of our sanctions regime – including key oil and banking sanctions. And we will vigorously enforce these and all other existing sanctions.
We estimate that this limited relief will provide approximately $6-7 billion in revenue.
First, we will hold steady Iran’s exports of crude oil at levels that are down over 60 percent since 2011. This means that Iran will continue to lose $4-5 billion per month while the JPA is in effect compared to 2011. Let me be clear, however. We will not allow Iran’s exports to increase and we will continue collaboration with our international partners to ensure that they understand that any increases in Iranian oil purchases – or any new purchases of Iranian oil – remain subject to sanctions.
Second, we are prepared to allow Iran to access $4.2 billion in its restricted assets, not in a lump sum, but in monthly allocations that keep up with verified Iranian progress on its nuclear commitments. Remember, Iran will continue to lose $4-5 billion a month due to our oil sanctions compared to 2011, so this access to funds is less than one month of those losses. And this is a fraction of Iran’s total needs for imports or its budget shortfall.
Third, the P5+1 agreed to suspend certain sanctions on gold and precious metals, Iran’s auto sector and on Iran’s petrochemical exports. The suspension of the sanctions on gold and precious metals will not allow Iran to use restricted assets to purchase gold and precious metals, rather it allows Iranians to import and export gold and precious metals. The suspension of the sanctions on the auto industry will allow Iran to obtain support and services from third countries for the assembly and manufacturing of light and heavy vehicles. The suspension of sanctions on petrochemical exports means Iran will be able to sell petrochemicals and retain the revenues from these sales. We estimate that Iran will earn approximately $1.5 billion in revenue from the temporary suspension of these sanctions.
We will also license the supply and installation of spare parts for the safety of flight for airplanes to occur in Iran. We will also license safety inspections and related services to occur in Iran. Notably, this will not apply to any airline subject to sanctions under our counter-terrorism authorities.
In addition, solely for the financing of humanitarian transactions and tuition assistance for Iranians studying abroad, we will facilitate access to Iran’s overseas accounts for these specific transactions. Even before the JPA, we never intended to deprive the Iranian people of humanitarian goods, like food and medicine. In fact, Congress has explicitly exempted these transactions from sanctions.
There have been some that have incorrectly represented the limited relief as being far more. So, let me reiterate. The total relief envisioned in the JPA amounts to between $6-7 billion – nowhere near the $20 or $40 billion that some have reported. The total relief for Iran envisioned in the JPA would be a modest fraction of the approximately $100 billion in foreign exchange holdings that are inaccessible or restricted because of our ongoing sanctions pressure. This sanctions pressure, moreover, will continue to increase over the six months of this initial phase through the continued enforcement of our sanctions.
Continued Enforcement of Sanctions
It is important to understand that the overwhelming majority of our sanctions remain in place and we will continue to vigorously enforce those sanctions to ensure that Iran receives only the limited relief that we agreed to. This will include aggressive enforcement of sanctions under the Comprehensive Iran Sanctions Accountability and Divestment Act of 2010 (CISADA), the Iran Sanctions Act, the Iran Threat Reduction and Syria Human Rights Act of 2012, and the Iran Freedom and Counter-Proliferation Act of 2012. This means that sanctions will continue to apply to broad swaths of Iran’s economy including its energy, financial, shipping, and shipbuilding sectors. By rigorous monitoring we will also prevent abuse of the relief that is part of the JPA. Were we to see increased purchases of oil or sanctions evasion, we are prepared to act swiftly to sanction the offenders.
Moreover, the U.S. trade embargo remains in place and U.N. Security Council’s sanctions remain in place. All sanctions related to Iran’s military program, state sponsorship of terrorism, and human rights abuses and censorship remain in place. Our vigilance will continue.
What is also important to understand is that we remain in control. If Iran fails to live up to its commitments as agreed to in Geneva, we would be prepared to work with Congress to ramp up sanctions. In that situation, we would be well-positioned to maximize the impact of any new sanctions because we would likely have the support of the international community, which is essential for any increased pressure to work
In comparison, moving forward on new sanctions now would derail the promising and yet-to-be-tested first step outlined above, alienate us from our allies, and risk unraveling the international cohesion that has proven so essential to ensuring our sanctions have the intended effect.
The Way Ahead
In assessing this deal on the merits, we must compare where we would be without it.
Without the JPA, Iran’s program would continue to advance: Iran could spin thousands of additional centrifuges; install and spin next-generation centrifuges that reduce its breakout times; advance on the plutonium track by fueling and commissioning the Arak heavy water reactor and install remaining components ; and grow its stockpile of 20 percent enriched uranium hexafluoride. It could do all of that, moreover, without the new inspections that are part of this deal and give us new tools to help detect breakout.
With the JPA, we halt the program in its tracks, roll it back in key respects, and put time on the clock to negotiate a long-term, comprehensive solution with strict limits and verifiable assurances that Iran’s nuclear program is solely for peaceful purposes.
In a perfect world, we could get to such a comprehensive solution right away. But the reality is that in the absence of the JPA, we would have had an Iranian nuclear program that could double its enrichment capacity, grow its stockpile of enriched uranium, and make progress on starting up the Arak reactor.
We are now moving forward to prepare for implementation. This week, our experts are in Vienna discussing with their P5+1 counterparts, Iran, and the IAEA, the mechanisms and timeframes for beginning implementation and setting a start date. These are technical and complex discussions, and it is critical that we do them well and right -- working to protect our national security interests at every step along the way.
At the same time, the JPA and its implementation is only a first step. There are still many issues related to Iran’s nuclear program that must be addressed, and in the process, Iran must work with the IAEA to resolve all past and present issues of concern. That is why our ultimate aim is a comprehensive agreement that fully addresses all of our longstanding concerns.
Conclusion
Finally, let me be clear about one thing: Our policy with regard to Iran has not changed. The President has been clear that he will not allow Iran to acquire nuclear weapon. While his strong preference is for a diplomatic solution, he is prepared to use all elements of American power to prevent that outcome.
Our commitment to working with our partners, in the region and elsewhere, to hold Iran accountable for all its actions also remains firm. These negotiations will solely focus on Iran’s nuclear program. So we will continue to counter Iran’s destabilizing activities in the region. We will continue to hold Iran accountable for its support for terrorism. Iran remains listed as a State Sponsor of Terror and our sanctions for their support of terror remain in place.
Our sanctions on Iran’s human rights abusers will also continue and so will our support for the fundamental rights of all Iranians. Last week, National Security Advisor Rice reiterated our support for the UN Special Rapporteur on Human Rights and called on Iran to allow him to visit Iran. We will continue to speak forcefully for the oppressed inside Iran, including through our support, later this month, for a resolution before the UN General Assembly condemning Iran’s human rights practices
We call on Iran to release Saeed Abedini and Amir Hekmati and support our efforts to bring Robert Levinson home. As Secretary Kerry has said, one day is too long to be in captivity, and one day for any American citizen is more than any American wants to see somebody endure. Mr. Abedini, Mr. Hekmati, and Mr. Levinson have been gone too long and we will continue to do everything we can, using quiet diplomacy.
And we will prevent Iran from obtaining a nuclear weapon. That is what these negotiations are all about. We have been encouraged that nearly 70 countries have expressed support for the understandings reached in Geneva, including statements of support from our partners in the Gulf Cooperation Council, with whom we remain closely engaged. The sentiment from our partners has been clear: give this process a chance. If Iran lives up to its commitments then the world will become a safer place. If it does not, then we retain all options to ensure that Iran can never obtain a nuclear weapon. The coming months will be a test of Iranian intentions, and of the possibility for a peaceful resolution to this crisis.
Throughout, and as always, we look forward to working closely with the Congress to ensure that U.S. national security interests are protected and advanced.
Thank you.
Saturday, December 14, 2013
CDC REPORT ON SUDDEN CARDIAC DEATHS ASSOCIATED WITH LYME CARDITIS
FROM: CENTERS FOR DISEASE CONTROL AND PREVENTION
Three Sudden Cardiac Deaths Associated with Lyme Carditis — United States, November 2012–July 2013
Lyme carditis is a known but rare cause of sudden cardiac death. Lyme carditis can cause heart palpitations, chest pain, light-headedness, fainting, and shortness of breath in addition to the commonly recognized Lyme disease symptoms of fever, rash, and body aches. If you live in an area where Lyme disease is common and have these symptoms, see a healthcare provider immediately. Between November 2012 and July 2013, three young adults who lived in high-incidence Lyme disease regions suffered from sudden cardiac death associated with undiagnosed Lyme carditis. Lyme carditis is a known, but rare cause of death in persons who have Lyme disease. The CDC and state and local health departments investigated these three deaths. Two of the three individuals who died had corneas transplanted to three separate recipients before the cause of death was notified, but there was no evidence of disease transmission. Prompt recognition and early, appropriate therapy for Lyme disease with antibiotics is essential. These deaths underscore the urgent need for better methods of primary prevention of Lyme disease and other tickborne infections.
Three Sudden Cardiac Deaths Associated with Lyme Carditis — United States, November 2012–July 2013
Lyme carditis is a known but rare cause of sudden cardiac death. Lyme carditis can cause heart palpitations, chest pain, light-headedness, fainting, and shortness of breath in addition to the commonly recognized Lyme disease symptoms of fever, rash, and body aches. If you live in an area where Lyme disease is common and have these symptoms, see a healthcare provider immediately. Between November 2012 and July 2013, three young adults who lived in high-incidence Lyme disease regions suffered from sudden cardiac death associated with undiagnosed Lyme carditis. Lyme carditis is a known, but rare cause of death in persons who have Lyme disease. The CDC and state and local health departments investigated these three deaths. Two of the three individuals who died had corneas transplanted to three separate recipients before the cause of death was notified, but there was no evidence of disease transmission. Prompt recognition and early, appropriate therapy for Lyme disease with antibiotics is essential. These deaths underscore the urgent need for better methods of primary prevention of Lyme disease and other tickborne infections.
EXPORT-IMPORT BANK REPORTS FINANCING OVER $27 BILLION IN FISCAL YEAR 2013
FROM: U.S. EXPORT-IMPORT BANK
Export-Import Bank Financing Exceeds $27 Billion in FY’13
Supports more than 200,000 U.S. Jobs
Record Number of Small Businesses Reached
Washington, DC – In Fiscal Year 2013 (FY’13) results released today, the Export-Import Bank of the United States (Ex-Im Bank) unveiled its annual numbers highlighting its approval of more than $27 billion in authorizations, which supported approximately 205,000 American jobs in communities across the country.
“This year American businesses exported a record $2.3 trillion worth of goods and services, and Ex-Im Bank played a key role in that success,” said Ex-Im Bank Chairman and President Fred P. Hochberg. “Over the past five years, Ex-Im Bank has created or sustained an estimated 1.2 million American jobs – including 205,000 jobs in FY’13 alone. The Bank is a great example of government operating at the speed of business. I would like to thank the dedicated Ex-Im Bank staff who help our nation’s businesses big and small remain globally competitive.”
Ex-Im Bank worked with more than 3,400 small businesses (89 percent of all transactions) – making it the highest number of small business deals in the Bank’s history. As part of its efforts to increase this portfolio, Ex-Im Bank has hosted more than 60 Global Access for Small Business forums across the country since launching the program in January 2011.
Key highlights
Ex-Im financing created or supported an estimated 205,000 export-related U.S. jobs.
In FY’13, Ex-Im Bank authorized financing for a record high 3,842 export transactions, which totaled an estimated export value of $37.4 billion.
In FY’13, Ex-Im Bank approved 3,413 small-business authorizations – the highest number of small-business authorizations in the Bank’s history.
In the last five years (FY’09 to FY’13), Ex-Im Bank has assisted in financing more than $188 billion of U.S. exports and supported 1.2 million American jobs.
Manufacturing was the industry with the highest authorized amount at $8.4 billion, surpassing Aircraft for the first time since 1997.
Export-Import Bank Financing Exceeds $27 Billion in FY’13
Supports more than 200,000 U.S. Jobs
Record Number of Small Businesses Reached
Washington, DC – In Fiscal Year 2013 (FY’13) results released today, the Export-Import Bank of the United States (Ex-Im Bank) unveiled its annual numbers highlighting its approval of more than $27 billion in authorizations, which supported approximately 205,000 American jobs in communities across the country.
“This year American businesses exported a record $2.3 trillion worth of goods and services, and Ex-Im Bank played a key role in that success,” said Ex-Im Bank Chairman and President Fred P. Hochberg. “Over the past five years, Ex-Im Bank has created or sustained an estimated 1.2 million American jobs – including 205,000 jobs in FY’13 alone. The Bank is a great example of government operating at the speed of business. I would like to thank the dedicated Ex-Im Bank staff who help our nation’s businesses big and small remain globally competitive.”
Ex-Im Bank worked with more than 3,400 small businesses (89 percent of all transactions) – making it the highest number of small business deals in the Bank’s history. As part of its efforts to increase this portfolio, Ex-Im Bank has hosted more than 60 Global Access for Small Business forums across the country since launching the program in January 2011.
Key highlights
Ex-Im financing created or supported an estimated 205,000 export-related U.S. jobs.
In FY’13, Ex-Im Bank authorized financing for a record high 3,842 export transactions, which totaled an estimated export value of $37.4 billion.
In FY’13, Ex-Im Bank approved 3,413 small-business authorizations – the highest number of small-business authorizations in the Bank’s history.
In the last five years (FY’09 to FY’13), Ex-Im Bank has assisted in financing more than $188 billion of U.S. exports and supported 1.2 million American jobs.
Manufacturing was the industry with the highest authorized amount at $8.4 billion, surpassing Aircraft for the first time since 1997.
3-D PRINTED REPLACEMENT PARTS FOR THE HUMAN BODY
FROM: NATIONAL SCIENCE FOUNDATION
3-D printed implants may soon fix complex injuries
Researchers adapt technology for 3-D printing metals, ceramics and other materials to create custom medical implants designed to fix complicated injuries
December 12, 2013
In an age where 3-D printers are becoming a more and more common tool to make custom designed objects, some researchers are using the technology to manufacture replacement parts for the most customized and unique object of all--the human body.
With funding from the National Science Foundation, a husband and wife duo--materials scientist Susmita Bose and materials engineer Amit Bandyopadhyay--are leading a team of researchers at Washington State University to create implants that more closely mimic the properties of human bone, and can be custom-designed for unusual injuries or anatomy.
"In the majority of cases, results are fantastic with off-the-shelf implants," Bandyopadhyay says. "However, physicians come across many patients in which the anatomy or injury is so unique they can't take a part off the shelf. In these unique situations, the surgeon becomes a carpenter."
Using a technology called Laser Engineered Net Shaping (LENS®), these new implants integrate into the body more effectively, encouraging bone regrowth that ultimately results in a stronger, longer lasting implant.
Parts on demand
In the LENS® process, tiny particles are blown into the path of a laser and melted. The material cools and hardens as soon as it is out of the laser beam, and custom parts can be quickly built up layer by layer. The process is so precise that parts can be used straight off the printer without the polishing or finishing needed in traditional manufacturing.
Implant manufacturers using this strategy could simply start with a CT scan or MRI and use that to make a 3-D model of the injury. A consultation with a physician would determine where the problem was and how to repair it.
According to Bandyopadhyay, "the most exciting part is it doesn't take months. Within a few hours the first iteration of a design can be done. It then takes another five to six hours to manufacture it. As long as the physician is connected to the Internet, within three days he or she can have a custom, patient-specific implant in hand."
There is a real need for these sorts of solutions for people with complex injuries, such as victims of traffic accidents or natural disasters.
Making the best even better
Not every implant needs to be custom manufactured. In most cases, surgeons can choose a standard-size implant based on the anatomy of the patient.
The standard materials for weight-bearing implants--titanium or stainless steel--are well-tolerated by the human body. Nevertheless, these metals have different properties from the bone they replace. Although bone seems stiff and solid, it in fact has some "spring" and millions of microscopic pores.
Because a metal implant is much stiffer, the surrounding bone doesn't have to support as much weight as it normally would. This is a significant problem with today's implants. Bones weaken and break down when they aren't properly exercised.
LENS® can be used to make parts out of many different materials, including metals and ceramics. Unlike many traditional manufacturing processes, LENS® allows different kinds of materials to be easily combined into a single part. The heating and cooling processes are so fast that the component materials don't react with one another to create unexpected materials or properties.
"Once we built confidence that the properties of LENS®-manufactured implants were the same as standard implants, we then focused on materials that were difficult to manufacture, like tantalum. We can make a tantalum implant or coating in less than 15 minutes, even though its melting temperature is over 3000 degrees Celsius," Bandyopadhyay says.
Tantalum is non-irritating and can directly bond to hard tissue like bone. This gives researchers like Bandyopadhyay greater control over how implants interact with the body.
A metal core can be coated with a thin ceramic layer, for example, so that new bone is more likely to grow and bond with the implant. And because LENS® builds a layer at a time, implants can be manufactured with structures that are difficult to make using traditional techniques. They can have pores in the center but be solid at the edges, or have texture on the surface to help bond with bone or other biological materials.
Porous structures are particularly challenging to make using traditional manufacturing, yet they are potentially critical in making implants that more closely mimic natural bone. The LENS® process allows implants to be manufactured with microscopic holes for bone to grow into and attach. The holes have the added benefit of making the metal part less stiff and more like the bone it replaces, also helping the bone grow.
When bone grows into an implant, it forms a strong bond between the two and makes the bone less likely to degrade. The less the bone degrades, the less chance a replacement might be needed.
Wave of the future
Early in development the greatest challenge was to show that the material produced using the LENS® process showed similar mechanical and physical properties compared to standard implants. Over time, the technology has matured to a level where it is reliable enough to become commercially feasible.
Bandyopadhyay expects that by 2020 custom-designed and manufactured implants will become commonplace.
According to Bandyopadhyay, "Biomedical device companies have invested heavily in this research and are setting up 3-D printing facilities. The FDA approved its first 3-D printed device last year."
-- Katie Feldman, AAAS Science and Technology Policy Fellow and National Science Foundation, Directorate for Engineering
Investigators
Susmita Bose
Amit Bandyopadhyay
3-D printed implants may soon fix complex injuries
Researchers adapt technology for 3-D printing metals, ceramics and other materials to create custom medical implants designed to fix complicated injuries
December 12, 2013
In an age where 3-D printers are becoming a more and more common tool to make custom designed objects, some researchers are using the technology to manufacture replacement parts for the most customized and unique object of all--the human body.
With funding from the National Science Foundation, a husband and wife duo--materials scientist Susmita Bose and materials engineer Amit Bandyopadhyay--are leading a team of researchers at Washington State University to create implants that more closely mimic the properties of human bone, and can be custom-designed for unusual injuries or anatomy.
"In the majority of cases, results are fantastic with off-the-shelf implants," Bandyopadhyay says. "However, physicians come across many patients in which the anatomy or injury is so unique they can't take a part off the shelf. In these unique situations, the surgeon becomes a carpenter."
Using a technology called Laser Engineered Net Shaping (LENS®), these new implants integrate into the body more effectively, encouraging bone regrowth that ultimately results in a stronger, longer lasting implant.
Parts on demand
In the LENS® process, tiny particles are blown into the path of a laser and melted. The material cools and hardens as soon as it is out of the laser beam, and custom parts can be quickly built up layer by layer. The process is so precise that parts can be used straight off the printer without the polishing or finishing needed in traditional manufacturing.
Implant manufacturers using this strategy could simply start with a CT scan or MRI and use that to make a 3-D model of the injury. A consultation with a physician would determine where the problem was and how to repair it.
According to Bandyopadhyay, "the most exciting part is it doesn't take months. Within a few hours the first iteration of a design can be done. It then takes another five to six hours to manufacture it. As long as the physician is connected to the Internet, within three days he or she can have a custom, patient-specific implant in hand."
There is a real need for these sorts of solutions for people with complex injuries, such as victims of traffic accidents or natural disasters.
Making the best even better
Not every implant needs to be custom manufactured. In most cases, surgeons can choose a standard-size implant based on the anatomy of the patient.
The standard materials for weight-bearing implants--titanium or stainless steel--are well-tolerated by the human body. Nevertheless, these metals have different properties from the bone they replace. Although bone seems stiff and solid, it in fact has some "spring" and millions of microscopic pores.
Because a metal implant is much stiffer, the surrounding bone doesn't have to support as much weight as it normally would. This is a significant problem with today's implants. Bones weaken and break down when they aren't properly exercised.
LENS® can be used to make parts out of many different materials, including metals and ceramics. Unlike many traditional manufacturing processes, LENS® allows different kinds of materials to be easily combined into a single part. The heating and cooling processes are so fast that the component materials don't react with one another to create unexpected materials or properties.
"Once we built confidence that the properties of LENS®-manufactured implants were the same as standard implants, we then focused on materials that were difficult to manufacture, like tantalum. We can make a tantalum implant or coating in less than 15 minutes, even though its melting temperature is over 3000 degrees Celsius," Bandyopadhyay says.
Tantalum is non-irritating and can directly bond to hard tissue like bone. This gives researchers like Bandyopadhyay greater control over how implants interact with the body.
A metal core can be coated with a thin ceramic layer, for example, so that new bone is more likely to grow and bond with the implant. And because LENS® builds a layer at a time, implants can be manufactured with structures that are difficult to make using traditional techniques. They can have pores in the center but be solid at the edges, or have texture on the surface to help bond with bone or other biological materials.
Porous structures are particularly challenging to make using traditional manufacturing, yet they are potentially critical in making implants that more closely mimic natural bone. The LENS® process allows implants to be manufactured with microscopic holes for bone to grow into and attach. The holes have the added benefit of making the metal part less stiff and more like the bone it replaces, also helping the bone grow.
When bone grows into an implant, it forms a strong bond between the two and makes the bone less likely to degrade. The less the bone degrades, the less chance a replacement might be needed.
Wave of the future
Early in development the greatest challenge was to show that the material produced using the LENS® process showed similar mechanical and physical properties compared to standard implants. Over time, the technology has matured to a level where it is reliable enough to become commercially feasible.
Bandyopadhyay expects that by 2020 custom-designed and manufactured implants will become commonplace.
According to Bandyopadhyay, "Biomedical device companies have invested heavily in this research and are setting up 3-D printing facilities. The FDA approved its first 3-D printed device last year."
-- Katie Feldman, AAAS Science and Technology Policy Fellow and National Science Foundation, Directorate for Engineering
Investigators
Susmita Bose
Amit Bandyopadhyay
Friday, December 13, 2013
U.S. DEFENSE DEPARTMENT CONTRACTS FOR DECEMBER 13, 2013
FROM: U.S. DEFENSE DEPARTMENT
NAVY
Lockheed Martin Corp., Mission Systems and Training, Manassas, Va., is being awarded a $124,531,317 modification to a previously awarded contract (N00024-11-C-6294) for the development and production of the acoustic rapid commercial-off-the-shelf insertion (A-RCI) and common acoustics processing for Technology Insertion 12 (TI12) through Technology Insertion 14 (TI14) for the U.S. submarine fleet. A-RCI is a sonar system that integrates and improves towed array, hull array, sphere array, and other ship sensor processing, through rapid insertion of commercial off-the-shelf based hardware and software. Work will be performed in Manassas, Va., (60 percent) and Clearwater, Fla., (40 percent) and is expected to be completed by December 2014. Fiscal 2013 and 2014 research, development, test and evaluation funds; fiscal 2009, 2010, 2011 and 2012 shipbuilding and conversion, Navy funds and fiscal 2014 other procurement, Navy funding in the amount of $20,573,237 will be obligated at the time of the award. Contract funds in the amount of $8,385,273 will expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington Navy Yard, Washington, D.C., is the contracting activity.
General Dynamics Advanced Information Systems, Inc., Pittsfield, Mass., is being awarded a $115,049,349 cost-plus-incentive-fee, cost-plus-fixed-fee, and fixed-price-incentive contract for engineering, development, and production efforts necessary to support to United States and United Kingdom Trident II Strategic Weapons Systems, SSBN Fire Control Subsystem (FCS) and support to SSGN Attack Weapons Control Subsystem, and continued engineering and trade studies on US SSBN replacement and UK SSBN successor common missile compartment. These efforts include technical engineering and support, including performance evaluation, logistics, fleet documentation, and reliability maintenance engineering services for the deployed US and UK SSBN fleets; US SSBN replacement and UK SSBN successor FCS development, production, integration, planning, and installation; SSP alteration (SPALT) kits (hardware, software, and fleet documentation) for the US and UK; planning, management, and field engineering services for the Trident-II SWS; FCS engineered refueling overhauls; planning, management, and field engineering services for attack weapons control system major modernization periods and voyage repair periods; long-term supportability and sustainment efforts aimed at implementation of new technology within the subsystem as required to offset obsolescence and avoid cost growth; and training hardware, software, curricula, and technical engineering support including support to equipment repair and SPALTs. The maximum dollar value, including the base period and one option year, is $217,685,976. Work will be performed in Pittsfield, Mass., and work is expected to be completed March 31, 2016. Fiscal 2013 and 2014 other procurement, Navy contract funds in the amounts of $8,211,247 and $12,343,418 respectively; fiscal 2014 operations and maintenance, Navy contract funds in the amount of $8,942,052; fiscal 2012, 2013, and 2014 UK contract funds in the amounts of $760,000, $1,298,432, and $7,653,569 respectively; fiscal 2014 research, development, test and evaluation contract funds in the amount of $2,795,309; and fiscal 2014 weapons procurement, Navy contract funds in the amount of $1,251,739 are being obligated at time of award. Contract funds in the amount of $28,975,275 will expire at the end of the current fiscal year. This contract was a sole source acquisition in accordance with 10 U.S.C. 2304(c)(1). Strategic Systems Programs, Washington, D.C., is the contracting activity. (N00030-14-C-0005)
Lockheed Martin Mission Systems & Training, Liverpool, N.Y., is being awarded a $24,462,051 fixed-price incentive, firm-fixed-price, and cost-plus-fixed-fee contract for the production and support of AN/BQS-25 low-cost conformal arrays (LCCA). The AN/BQS-25 LCCA is a passive planar array mounted on the aft submarine sail structure that is integrated with the Acoustic Rapid commercial-off-the-shelf insertion AN/BQQ-10 system to provide situational awareness and collision avoidance for improved tactical control in high density environments. This contract includes options which, if exercised, would bring the cumulative value of this contract to $92,476,516. Work will be performed in Syracuse, N.Y. (90 percent), Akron, Ohio (7 percent), and Marion, Mass. (3 percent), and is expected to complete by March 2015. Fiscal 2013 other procurement, Navy funds in the amount of $3,846,509 will be obligated at time of award and will not expire at the end of the current fiscal year. This contract was competitively procured via the Federal Business Opportunities website, with two offers received. The Naval Sea Systems Command, Washington D.C., is the contracting activity (N00024-14-C-6227).
Science Applications International Corp., McLean, Va., is being awarded a $14,425,908 modification to a previously awarded indefinite-delivery/indefinite-quantity contract (N00421-11-D-0030) to exercise an option for technical and engineering services in support of the Naval Air Systems Command's Air Vehicle Engineering Department and the Manned Flight Simulator/Air Combat Environment Test and Evaluation Facilities. Services to be provided support the development and utilization of advanced air vehicle technology for evaluating air vehicle flying qualities and controllability, developing simulation software, and building prototype simulations. Work will be performed in Patuxent River, Md., and is expected to be completed in December 2014. Funds will not be obligated at time of award; funds will be obligated on individual orders as they are issued. The Naval Air Warfare Center Aircraft Division, Patuxent River, Md., is the contracting activity.
Northrop Grumman Systems Corp., Bethpage, N.Y., is being awarded an $11,764,551 modification to a previously awarded indefinite-delivery/indefinite-quantity contract (N68936-11-D-0028) to provide additional engineering, technical and programmatic support services for development of products within the Airborne Electronic Attack Integrated Product Team; to include, EA-6B operational flight software, EA-6B unique planning component and EA-18G operational flight software. Work will be performed in Pt. Mugu, Calif. (80 percent); and Baltimore, Md. (20 percent); and is expected to be completed by July 2014. No funds will be obligated at time of award; funds will be obligated on individual orders as they are issued. The Naval Air Warfare Center Weapons Division, Pt. Mugu, Calif., is the contracting activity.
Southeast Aerospace, Melbourne, Fla., is being awarded a $7,350,121 modification (P00004) to a previously awarded contract (N68836-13-D-0004) to exercise option one to extend the term of the contract to provide additional quantity of 23 additional parts kits, and miscellaneous components for the Avionics System Upgrade of the T-44 aircraft. With the exercise of this option, the total contract value will be $16,568.406. Work will be performed at Melbourne Fla., and is expected to be completed by Jan. 24, 2015. No funds are being obligated at the time of award and will not expire before the end of the current fiscal year. Funds will be obligated on individual task orders issued against the contract. This contract was competitively procured via Navy Electronic Commerce Online website, with five offers received in response to the solicitation. Naval Supply Systems Fleet Logistics Center, Jacksonville, Fla., is the contracting activity.
ARMY
General Atomics Aeronautical, Poway, Calif., was awarded an $110,453,269 cost-plus-fixed-fee contract for continuing logistic services to the Warrior unmanned aircraft system. Fiscal 2014 operations and maintenance, Army funds in the amount of $8,000,000 were obligated at the time of the award. Estimated completion date is Dec.15, 2015. One bid was solicited with one received. Work will be performed in Afghanistan and Poway, Calif. Army Contracting Command, Redstone Arsenal (Aviation), Ala., is the contracting activity (W58RGZ-14-C-0008).
Lockheed Martin Corp., Orlando, Fla., was awarded a $92,915,233 contract modification (P00015) to contract W58RGZ-12-C-0009 to exercise option year two of the Apache attack helicopter performance based logistics program to modernize target designation sight/pilot's night vision sensor equipment. Fiscal 2014 other procurement funds in the amount of $92,915,233 were obligated at the time of the award. Estimated completion date is Dec. 31, 2014. Work will be performed in Orlando, Fla. Army Contracting Command, Redstone Arsenal (Aviation), Ala., is the contracting activity.
Northrop Grumman Systems Corp., Linthicum Heights, Md., was awarded a $65,288,028 contract modification (P00037) to contract W15P7T-11-C-H267 for continued operations and sustainment of the vehicle and dismount exploitation radar (VADER) currently deployed in theater. Fiscal 2014 operations and maintenance, Army funds in the amount of $24,861,376 were obligated at the time of the award. Estimated completion date is Dec. 31, 2014. Work will be performed at Linthicum Heights, Md., Hagerstown, Md., and Afghanistan. Army Contracting Command, Redstone Arsenal (Aviation), Ala., is the contracting activity.
Encompass Digital Media Inc, Atlanta, Ga., was awarded a $10,915,918 firm-fixed-price contract for a Defense Video and Imagery Distribution System (DVIDS) operations hub. The hub will transmit and receive broadcast-quality high definition/standard definition video, two-way data, stories, stills, audio and data from DVIDS worldwide satellite transmitters (SATCOM). It will maintain up and downlink service to all government portable SATCOM terminals accessing the DVIDS integrated network. Fiscal 2014 operations and maintenance, Army funds in the amount of $4,200,000 were obligated at the time of the award. Estimated completion date is Dec. 15, 2016. Bids were solicited via the Internet with one received. Work will be performed in Atlanta, Ga. Army Contracting Command, Rock Island Arsenal; Ill., is the contracting activity (W52P1J-14-C-0014).
AIR FORCE
Boeing Boeing Co., Seal Beach, Calif., has been awarded a $59,617,404 modification (P00024) on an existing firm-fixed-price contract (FA8807-13-C-0001) for on-orbit support, factory reach-back, maintenance, and storage. This contract provides for exercise of options for additional launch and on-orbit support for GPS IIF space vehicles. Work will be performed at El Segundo, Calif., Colorado Springs, Colo., and Cape Canaveral, Fla., and is expected to be completed by Dec. 31, 2014. Fiscal 2012, 2013 and 2014 missile procurement funds in the amount of $56,867,404 are being obligated at time of award. The Air Force Space and Missile Systems Center Contracting Directorate, Los Angeles Air Force Base, Calif., is the contracting activity.
J. Torres Company Inc., Bakersfield, Calif., has been awarded a $7,396,934, firm-fixed-price contract for integrated solid waste services at Edwards Air Force Base, Calif., to include municipal solid waste, recycling, and landfill services. The location of performance is Edwards AFB, Calif. The work is expected to be complete by Dec. 31, 2018. Fiscal 2014 operations and maintenance in the amount of $129,501 are being obligated at time of award. This award is the result of a competitive acquisition with numerous offers solicited, and three offers received. Air Force Test Center, Aerospace Systems Support Branch, Edwards AFB, Calif., is the contracting activity (FA9301-14-D-0006).
Raytheon Co., Integrated Defense Systems, Sudbury, Mass., has been awarded a $6,896,385 modification (P0005) on an existing cost-plus-fixed-fee, firm-fixed-price, cost-reimbursement contract (FA8730-13-C-0003) for the Taiwan Surveillance Radar program follow-on support string upgrade engineering change proposal. The contract modification provides a continental United States sustainment string upgrade that creates a controlled site-like testing environment for build deployment and system troubleshooting at the CONUS development facility. Work will be performed at Sudbury, Mass., and is expected to be completed by Nov. 8, 2017. This contract involves foreign military sales to Taiwan. Air Force Life Cycle Management Center/HBNA, Hanscom Air Force Base, Mass., is the contracting activity.
DEFENSE LOGISTICS AGENCY
O.C. Lugo Co., Inc.*, New York, N.Y., has been awarded a maximum $15,300,000 modification (P00105) exercising the first one-year option period on a two-year base contract (SPM8EF-129-D-0002) with three one-year option periods for chlorate candles and igniters. This is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract. Location of performance is New York with a March 13, 2015 performance completion date. Using military service is Navy. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.
Thomas Scientific Inc.*, Swedesboro, N.J., has been awarded a maximum $9,600,000 fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for laboratory supplies and wares. This contract is a competitive acquisition, and four offers were received. Location of performance is New Jersey with a Jan. 1, 2015 performance completion date. This contract is a one-year base with four one-year option periods. Using services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPM2DE-14-D-7349).
NAVY
Lockheed Martin Corp., Mission Systems and Training, Manassas, Va., is being awarded a $124,531,317 modification to a previously awarded contract (N00024-11-C-6294) for the development and production of the acoustic rapid commercial-off-the-shelf insertion (A-RCI) and common acoustics processing for Technology Insertion 12 (TI12) through Technology Insertion 14 (TI14) for the U.S. submarine fleet. A-RCI is a sonar system that integrates and improves towed array, hull array, sphere array, and other ship sensor processing, through rapid insertion of commercial off-the-shelf based hardware and software. Work will be performed in Manassas, Va., (60 percent) and Clearwater, Fla., (40 percent) and is expected to be completed by December 2014. Fiscal 2013 and 2014 research, development, test and evaluation funds; fiscal 2009, 2010, 2011 and 2012 shipbuilding and conversion, Navy funds and fiscal 2014 other procurement, Navy funding in the amount of $20,573,237 will be obligated at the time of the award. Contract funds in the amount of $8,385,273 will expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington Navy Yard, Washington, D.C., is the contracting activity.
General Dynamics Advanced Information Systems, Inc., Pittsfield, Mass., is being awarded a $115,049,349 cost-plus-incentive-fee, cost-plus-fixed-fee, and fixed-price-incentive contract for engineering, development, and production efforts necessary to support to United States and United Kingdom Trident II Strategic Weapons Systems, SSBN Fire Control Subsystem (FCS) and support to SSGN Attack Weapons Control Subsystem, and continued engineering and trade studies on US SSBN replacement and UK SSBN successor common missile compartment. These efforts include technical engineering and support, including performance evaluation, logistics, fleet documentation, and reliability maintenance engineering services for the deployed US and UK SSBN fleets; US SSBN replacement and UK SSBN successor FCS development, production, integration, planning, and installation; SSP alteration (SPALT) kits (hardware, software, and fleet documentation) for the US and UK; planning, management, and field engineering services for the Trident-II SWS; FCS engineered refueling overhauls; planning, management, and field engineering services for attack weapons control system major modernization periods and voyage repair periods; long-term supportability and sustainment efforts aimed at implementation of new technology within the subsystem as required to offset obsolescence and avoid cost growth; and training hardware, software, curricula, and technical engineering support including support to equipment repair and SPALTs. The maximum dollar value, including the base period and one option year, is $217,685,976. Work will be performed in Pittsfield, Mass., and work is expected to be completed March 31, 2016. Fiscal 2013 and 2014 other procurement, Navy contract funds in the amounts of $8,211,247 and $12,343,418 respectively; fiscal 2014 operations and maintenance, Navy contract funds in the amount of $8,942,052; fiscal 2012, 2013, and 2014 UK contract funds in the amounts of $760,000, $1,298,432, and $7,653,569 respectively; fiscal 2014 research, development, test and evaluation contract funds in the amount of $2,795,309; and fiscal 2014 weapons procurement, Navy contract funds in the amount of $1,251,739 are being obligated at time of award. Contract funds in the amount of $28,975,275 will expire at the end of the current fiscal year. This contract was a sole source acquisition in accordance with 10 U.S.C. 2304(c)(1). Strategic Systems Programs, Washington, D.C., is the contracting activity. (N00030-14-C-0005)
Lockheed Martin Mission Systems & Training, Liverpool, N.Y., is being awarded a $24,462,051 fixed-price incentive, firm-fixed-price, and cost-plus-fixed-fee contract for the production and support of AN/BQS-25 low-cost conformal arrays (LCCA). The AN/BQS-25 LCCA is a passive planar array mounted on the aft submarine sail structure that is integrated with the Acoustic Rapid commercial-off-the-shelf insertion AN/BQQ-10 system to provide situational awareness and collision avoidance for improved tactical control in high density environments. This contract includes options which, if exercised, would bring the cumulative value of this contract to $92,476,516. Work will be performed in Syracuse, N.Y. (90 percent), Akron, Ohio (7 percent), and Marion, Mass. (3 percent), and is expected to complete by March 2015. Fiscal 2013 other procurement, Navy funds in the amount of $3,846,509 will be obligated at time of award and will not expire at the end of the current fiscal year. This contract was competitively procured via the Federal Business Opportunities website, with two offers received. The Naval Sea Systems Command, Washington D.C., is the contracting activity (N00024-14-C-6227).
Science Applications International Corp., McLean, Va., is being awarded a $14,425,908 modification to a previously awarded indefinite-delivery/indefinite-quantity contract (N00421-11-D-0030) to exercise an option for technical and engineering services in support of the Naval Air Systems Command's Air Vehicle Engineering Department and the Manned Flight Simulator/Air Combat Environment Test and Evaluation Facilities. Services to be provided support the development and utilization of advanced air vehicle technology for evaluating air vehicle flying qualities and controllability, developing simulation software, and building prototype simulations. Work will be performed in Patuxent River, Md., and is expected to be completed in December 2014. Funds will not be obligated at time of award; funds will be obligated on individual orders as they are issued. The Naval Air Warfare Center Aircraft Division, Patuxent River, Md., is the contracting activity.
Northrop Grumman Systems Corp., Bethpage, N.Y., is being awarded an $11,764,551 modification to a previously awarded indefinite-delivery/indefinite-quantity contract (N68936-11-D-0028) to provide additional engineering, technical and programmatic support services for development of products within the Airborne Electronic Attack Integrated Product Team; to include, EA-6B operational flight software, EA-6B unique planning component and EA-18G operational flight software. Work will be performed in Pt. Mugu, Calif. (80 percent); and Baltimore, Md. (20 percent); and is expected to be completed by July 2014. No funds will be obligated at time of award; funds will be obligated on individual orders as they are issued. The Naval Air Warfare Center Weapons Division, Pt. Mugu, Calif., is the contracting activity.
Southeast Aerospace, Melbourne, Fla., is being awarded a $7,350,121 modification (P00004) to a previously awarded contract (N68836-13-D-0004) to exercise option one to extend the term of the contract to provide additional quantity of 23 additional parts kits, and miscellaneous components for the Avionics System Upgrade of the T-44 aircraft. With the exercise of this option, the total contract value will be $16,568.406. Work will be performed at Melbourne Fla., and is expected to be completed by Jan. 24, 2015. No funds are being obligated at the time of award and will not expire before the end of the current fiscal year. Funds will be obligated on individual task orders issued against the contract. This contract was competitively procured via Navy Electronic Commerce Online website, with five offers received in response to the solicitation. Naval Supply Systems Fleet Logistics Center, Jacksonville, Fla., is the contracting activity.
ARMY
General Atomics Aeronautical, Poway, Calif., was awarded an $110,453,269 cost-plus-fixed-fee contract for continuing logistic services to the Warrior unmanned aircraft system. Fiscal 2014 operations and maintenance, Army funds in the amount of $8,000,000 were obligated at the time of the award. Estimated completion date is Dec.15, 2015. One bid was solicited with one received. Work will be performed in Afghanistan and Poway, Calif. Army Contracting Command, Redstone Arsenal (Aviation), Ala., is the contracting activity (W58RGZ-14-C-0008).
Lockheed Martin Corp., Orlando, Fla., was awarded a $92,915,233 contract modification (P00015) to contract W58RGZ-12-C-0009 to exercise option year two of the Apache attack helicopter performance based logistics program to modernize target designation sight/pilot's night vision sensor equipment. Fiscal 2014 other procurement funds in the amount of $92,915,233 were obligated at the time of the award. Estimated completion date is Dec. 31, 2014. Work will be performed in Orlando, Fla. Army Contracting Command, Redstone Arsenal (Aviation), Ala., is the contracting activity.
Northrop Grumman Systems Corp., Linthicum Heights, Md., was awarded a $65,288,028 contract modification (P00037) to contract W15P7T-11-C-H267 for continued operations and sustainment of the vehicle and dismount exploitation radar (VADER) currently deployed in theater. Fiscal 2014 operations and maintenance, Army funds in the amount of $24,861,376 were obligated at the time of the award. Estimated completion date is Dec. 31, 2014. Work will be performed at Linthicum Heights, Md., Hagerstown, Md., and Afghanistan. Army Contracting Command, Redstone Arsenal (Aviation), Ala., is the contracting activity.
Encompass Digital Media Inc, Atlanta, Ga., was awarded a $10,915,918 firm-fixed-price contract for a Defense Video and Imagery Distribution System (DVIDS) operations hub. The hub will transmit and receive broadcast-quality high definition/standard definition video, two-way data, stories, stills, audio and data from DVIDS worldwide satellite transmitters (SATCOM). It will maintain up and downlink service to all government portable SATCOM terminals accessing the DVIDS integrated network. Fiscal 2014 operations and maintenance, Army funds in the amount of $4,200,000 were obligated at the time of the award. Estimated completion date is Dec. 15, 2016. Bids were solicited via the Internet with one received. Work will be performed in Atlanta, Ga. Army Contracting Command, Rock Island Arsenal; Ill., is the contracting activity (W52P1J-14-C-0014).
AIR FORCE
Boeing Boeing Co., Seal Beach, Calif., has been awarded a $59,617,404 modification (P00024) on an existing firm-fixed-price contract (FA8807-13-C-0001) for on-orbit support, factory reach-back, maintenance, and storage. This contract provides for exercise of options for additional launch and on-orbit support for GPS IIF space vehicles. Work will be performed at El Segundo, Calif., Colorado Springs, Colo., and Cape Canaveral, Fla., and is expected to be completed by Dec. 31, 2014. Fiscal 2012, 2013 and 2014 missile procurement funds in the amount of $56,867,404 are being obligated at time of award. The Air Force Space and Missile Systems Center Contracting Directorate, Los Angeles Air Force Base, Calif., is the contracting activity.
J. Torres Company Inc., Bakersfield, Calif., has been awarded a $7,396,934, firm-fixed-price contract for integrated solid waste services at Edwards Air Force Base, Calif., to include municipal solid waste, recycling, and landfill services. The location of performance is Edwards AFB, Calif. The work is expected to be complete by Dec. 31, 2018. Fiscal 2014 operations and maintenance in the amount of $129,501 are being obligated at time of award. This award is the result of a competitive acquisition with numerous offers solicited, and three offers received. Air Force Test Center, Aerospace Systems Support Branch, Edwards AFB, Calif., is the contracting activity (FA9301-14-D-0006).
Raytheon Co., Integrated Defense Systems, Sudbury, Mass., has been awarded a $6,896,385 modification (P0005) on an existing cost-plus-fixed-fee, firm-fixed-price, cost-reimbursement contract (FA8730-13-C-0003) for the Taiwan Surveillance Radar program follow-on support string upgrade engineering change proposal. The contract modification provides a continental United States sustainment string upgrade that creates a controlled site-like testing environment for build deployment and system troubleshooting at the CONUS development facility. Work will be performed at Sudbury, Mass., and is expected to be completed by Nov. 8, 2017. This contract involves foreign military sales to Taiwan. Air Force Life Cycle Management Center/HBNA, Hanscom Air Force Base, Mass., is the contracting activity.
DEFENSE LOGISTICS AGENCY
O.C. Lugo Co., Inc.*, New York, N.Y., has been awarded a maximum $15,300,000 modification (P00105) exercising the first one-year option period on a two-year base contract (SPM8EF-129-D-0002) with three one-year option periods for chlorate candles and igniters. This is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract. Location of performance is New York with a March 13, 2015 performance completion date. Using military service is Navy. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.
Thomas Scientific Inc.*, Swedesboro, N.J., has been awarded a maximum $9,600,000 fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for laboratory supplies and wares. This contract is a competitive acquisition, and four offers were received. Location of performance is New Jersey with a Jan. 1, 2015 performance completion date. This contract is a one-year base with four one-year option periods. Using services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPM2DE-14-D-7349).
HHS ON HIGH SCHOOL SPORTS AND PAINKILLERS
FROM: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
From the U.S. Department of Health and Human Services, I’m Ira Dreyfuss with HHS HealthBeat.
Sports can be tough competition for high school boys, and sometimes pain from an injury is bad enough for a doctor to prescribe painkillers. But a researcher warns that opioid drugs can cause problems if they’re not watched closely.
At the University of Michigan, Philip Veliz looked at national survey data on 1,540 teens. He found boy athletes were more likely than non-athletes to report having used and misused opioids in the previous year. Veliz suspects injuries led to the prescriptions.
He says drug use needs careful supervision:
"Parents should be the ones monitoring these medications and they should be the ones who dispense the medications to their adolescents."
The study in the Journal of Adolescent Health was supported by the National Institutes of Health.
Learn more at healthfinder.gov.
HHS HealthBeat is a production of the U.S. Department of Health and Human Services. I’m Ira Dreyfuss.
From the U.S. Department of Health and Human Services, I’m Ira Dreyfuss with HHS HealthBeat.
Sports can be tough competition for high school boys, and sometimes pain from an injury is bad enough for a doctor to prescribe painkillers. But a researcher warns that opioid drugs can cause problems if they’re not watched closely.
At the University of Michigan, Philip Veliz looked at national survey data on 1,540 teens. He found boy athletes were more likely than non-athletes to report having used and misused opioids in the previous year. Veliz suspects injuries led to the prescriptions.
He says drug use needs careful supervision:
"Parents should be the ones monitoring these medications and they should be the ones who dispense the medications to their adolescents."
The study in the Journal of Adolescent Health was supported by the National Institutes of Health.
Learn more at healthfinder.gov.
HHS HealthBeat is a production of the U.S. Department of Health and Human Services. I’m Ira Dreyfuss.
SECRETARY OF STATE KERRY SPEAKS AT U.S. EMBASSY IN TEL AVIV, ISRAEL'
FROM: U.S. STATE DEPARTMENT
Secretary Kerry's Press Availability in Tel Aviv
John Kerry
Secretary of State
Secretary of State
U.S. Embassy
Tel Aviv, Israel
December 13, 2013
SECRETARY KERRY: Well, good afternoon, everybody. I want to thank Prime Minister Netanyahu and President Abbas yet again for their great hospitality and for their joint commitment to try to continue very, very doggedly to work on these difficult issues.
We had a very interesting evening last night which unfortunately was a little bit cut short because of the road conditions and the need for us to be able to get back from Ramallah to Jerusalem. So we did not have as long a session as I had hoped. And we had, obviously, an enormous challenge in the weather, and we’re very grateful to the police officers and the road crews of both the Palestinian Authority as well as Israel for helping to facilitate travel at night in those very difficult storm conditions. We’re very grateful.
I am, as many people know, on my way to Asia, and I thought it would be valuable on the way to stop off here to continue the conversations with Prime Minister Netanyahu and President Abbas. I appreciate the fact that both of them continue to be very serious, providing both their personnel and their own personal time to the effort to be able to carry on these discussions. And we had some in-depth focus on the issue particularly of security, and also some of the other critical issues with respect to the Palestinian Authority.
I know that the nature of these talks breeds speculation inevitably, and that’s because we really don’t want to talk about the details of any proposals or what we’re discussing. And the reasons for that are obvious. It lends to distortion, they may never be the real things that you wind up focusing on, and the proposal is merely that – a proposal.
So I want to just make clear what our goal is. Our goal remains as it always has been – for the Israelis and Palestinians to reach a final status agreement – not an interim agreement, a final status agreement. And both parties remain committed to fulfilling their obligations to stay at the table and negotiate hard during the nine-month period that we set for that. The core principles, the core framework, if you want to call it that, which we are discussing with respect to this, centers on the critical issues – borders, security, refugees, Jerusalem, mutual recognition, and an end to conflict and to all claims.
The United States is committed to remaining the principal facilitator in this process. And again, I want to thank both Prime Minister Netanyahu and President Abbas for the serious way in which they are pursuing these discussions. Security is obviously a key issue. It is a key issue because all of the countries in the region and all of the people in the region understand the threats that exist, and particularly the threat from terrorism, the threat from – externally to the State of Israel. So we have a major interest in being able to make certain that both Palestinians and Israelis, when they reach final status, have the ability to be able to deal with their mutual security interests and their independent security interests.
The United States is committed to both. Everybody knows that we have had a long-time commitment to the security of Israel. Our willingness and readiness to defend the State of Israel is ironclad, and that is because – our commitment to security for the region is because we are convinced that the greatest security, in fact, will come from the agreement of the parties for the creation of two states with two peoples living side by side in peace. Last night, General Allen, a former Marine Corps four-star general, one of the best military minds in the American military, continued to lay out to President Abbas in Ramallah ways in which he believes the security of the West Bank and the territories can be secured, and ultimately, a Palestinian state, and how that will interact with Israel so that Israel will be confident of its security.
We are working on an approach that both guarantees Israel’s security and fully respects Palestinian sovereignty. We remain hopeful that we can achieve that final status agreement. Why? Because we are absolutely confident – President Obama, myself, I believe the leaders – that – from both sides and from the region at large – peace can bring enormous benefits. It will make Israelis more secure and Palestinians, too. It will make Palestinians more prosperous and Israelis, too. And with peace, both Israelis and Palestinians will become known globally for what they create and for their capacity to be able to contribute to the peace and stability of the region rather than for the conflicts that have been perpetuated here. And I believe in doing so that both peoples will be able to fulfill common aspirations. That’s what drives us, that’s what continues to make this a challenge worth trying to succeed at. And we will continue in the days ahead.
On that note, I’d be delighted to answer any questions.
MS. PSAKI: Matt Lee, Associated Press.
QUESTION: Thank you. Mr. Secretary, I’m just wondering – you say you remain hopeful and you’re committed to the nine-month – the target that was set for the – for final status agreement. But really, it’s now past halfway through there, there hasn’t been any sign of – tangible sign of progress, at least to the outside world. I’m just wondering if it is really realistic, and if it’s not time now to start focusing more on what you talked about as the framework – not an interim agreement, but this idea of a framework agreement. Should the focus now be on that rather than on a final status agreement? And also, do you think that an extension of the nine months is going to have to be – is going to be needed?
SECRETARY KERRY: No. At this point in the talks, Matt, we are comfortable that we’re discussing a host of subjects. We’re fleshing out a lot of different issues, and we’re comfortable with the fact that everything is on the table and everything is being discussed. And I think it’s important in that process to be thinking about the framework core principles which guide you, but I think we have a pretty good sense of that. And as I said to you, I just laid out what all those core issues are that are on the table. So we’re not talking at this point about any shifts, and the next tranche of the prisoners is due to take place on the 29th of December, and it will take place then.
MS. PSAKI: Indira from Bloomberg.
QUESTION: Thank you, Mr. Secretary. A two-part question – first of all, on Syria: Have you spoken with General Idris and can you comment on the earlier reports that he was run out of Syria? And does the U.S. Government still have confidence in the FSA and the Syrian opposition given the apparent divisions?
And secondly, on Iran: What concerns have caused a halt in the expert talks in Vienna on implementing the November 24th deal? And has there been any progress towards the release of Robert Levinson, whom the AP reported was working on an authorized CIA mission in Iran? And will his case be tied to the larger talks over a final deal with Iran?
SECRETARY KERRY: Well, regarding General Idris, we are in touch with General Idris. I have not personally talked to him, but we are touch in with him, and he is, I believe, in Turkey at this moment. We are talking with both him and others in the SMC staff to inventory the equipment that was in the warehouse that was raided by the Islamic front, al-Nusrah. And we are in discussions with our friends and consulting with everybody in the opposition about the next steps in support of the Syrian people. What’s happened thus far has no impact on our support for the opposition or anything to do with the material assistance that we’re going to continue to provide to the opposition. As a result of the situation, though, we have suspended deliveries of nonlethal assistance into northern Syria simply while we evaluate the situation on the ground. But we continue to have confidence in General Idris and confidence in the opposition, and we will continue to support them.
With respect to the second part of your question on Iran, this is – we’ve been hard at it in Vienna, a lot of discussions taking place. I've talked with Cathy Ashton the last days. We’re making progress, but I think we’re at a point in those talks where folks feel a need to consult, take a moment. There is every expectation that talks are going to continue in the next few days, and that we will proceed to the full implementation of that plan. This is sort of the normal part of the process in developing the implementation plan.
And finally, with respect to Mr. Levinson, I don’t have any comment whatsoever on the condition with respect to employment or any other issue except to say to you that we have raised the issue of his whereabouts on a continuous basis. I have personally raised it with the Iranians in the course of our discussions, and we will continue to try to seek his release and return to the United States.
MS. PSAKI: Thank you, everyone.
SECRETARY KERRY: Thanks, all. Appreciate it. Thank you very much.
We had a very interesting evening last night which unfortunately was a little bit cut short because of the road conditions and the need for us to be able to get back from Ramallah to Jerusalem. So we did not have as long a session as I had hoped. And we had, obviously, an enormous challenge in the weather, and we’re very grateful to the police officers and the road crews of both the Palestinian Authority as well as Israel for helping to facilitate travel at night in those very difficult storm conditions. We’re very grateful.
I am, as many people know, on my way to Asia, and I thought it would be valuable on the way to stop off here to continue the conversations with Prime Minister Netanyahu and President Abbas. I appreciate the fact that both of them continue to be very serious, providing both their personnel and their own personal time to the effort to be able to carry on these discussions. And we had some in-depth focus on the issue particularly of security, and also some of the other critical issues with respect to the Palestinian Authority.
I know that the nature of these talks breeds speculation inevitably, and that’s because we really don’t want to talk about the details of any proposals or what we’re discussing. And the reasons for that are obvious. It lends to distortion, they may never be the real things that you wind up focusing on, and the proposal is merely that – a proposal.
So I want to just make clear what our goal is. Our goal remains as it always has been – for the Israelis and Palestinians to reach a final status agreement – not an interim agreement, a final status agreement. And both parties remain committed to fulfilling their obligations to stay at the table and negotiate hard during the nine-month period that we set for that. The core principles, the core framework, if you want to call it that, which we are discussing with respect to this, centers on the critical issues – borders, security, refugees, Jerusalem, mutual recognition, and an end to conflict and to all claims.
The United States is committed to remaining the principal facilitator in this process. And again, I want to thank both Prime Minister Netanyahu and President Abbas for the serious way in which they are pursuing these discussions. Security is obviously a key issue. It is a key issue because all of the countries in the region and all of the people in the region understand the threats that exist, and particularly the threat from terrorism, the threat from – externally to the State of Israel. So we have a major interest in being able to make certain that both Palestinians and Israelis, when they reach final status, have the ability to be able to deal with their mutual security interests and their independent security interests.
The United States is committed to both. Everybody knows that we have had a long-time commitment to the security of Israel. Our willingness and readiness to defend the State of Israel is ironclad, and that is because – our commitment to security for the region is because we are convinced that the greatest security, in fact, will come from the agreement of the parties for the creation of two states with two peoples living side by side in peace. Last night, General Allen, a former Marine Corps four-star general, one of the best military minds in the American military, continued to lay out to President Abbas in Ramallah ways in which he believes the security of the West Bank and the territories can be secured, and ultimately, a Palestinian state, and how that will interact with Israel so that Israel will be confident of its security.
We are working on an approach that both guarantees Israel’s security and fully respects Palestinian sovereignty. We remain hopeful that we can achieve that final status agreement. Why? Because we are absolutely confident – President Obama, myself, I believe the leaders – that – from both sides and from the region at large – peace can bring enormous benefits. It will make Israelis more secure and Palestinians, too. It will make Palestinians more prosperous and Israelis, too. And with peace, both Israelis and Palestinians will become known globally for what they create and for their capacity to be able to contribute to the peace and stability of the region rather than for the conflicts that have been perpetuated here. And I believe in doing so that both peoples will be able to fulfill common aspirations. That’s what drives us, that’s what continues to make this a challenge worth trying to succeed at. And we will continue in the days ahead.
On that note, I’d be delighted to answer any questions.
MS. PSAKI: Matt Lee, Associated Press.
QUESTION: Thank you. Mr. Secretary, I’m just wondering – you say you remain hopeful and you’re committed to the nine-month – the target that was set for the – for final status agreement. But really, it’s now past halfway through there, there hasn’t been any sign of – tangible sign of progress, at least to the outside world. I’m just wondering if it is really realistic, and if it’s not time now to start focusing more on what you talked about as the framework – not an interim agreement, but this idea of a framework agreement. Should the focus now be on that rather than on a final status agreement? And also, do you think that an extension of the nine months is going to have to be – is going to be needed?
SECRETARY KERRY: No. At this point in the talks, Matt, we are comfortable that we’re discussing a host of subjects. We’re fleshing out a lot of different issues, and we’re comfortable with the fact that everything is on the table and everything is being discussed. And I think it’s important in that process to be thinking about the framework core principles which guide you, but I think we have a pretty good sense of that. And as I said to you, I just laid out what all those core issues are that are on the table. So we’re not talking at this point about any shifts, and the next tranche of the prisoners is due to take place on the 29th of December, and it will take place then.
MS. PSAKI: Indira from Bloomberg.
QUESTION: Thank you, Mr. Secretary. A two-part question – first of all, on Syria: Have you spoken with General Idris and can you comment on the earlier reports that he was run out of Syria? And does the U.S. Government still have confidence in the FSA and the Syrian opposition given the apparent divisions?
And secondly, on Iran: What concerns have caused a halt in the expert talks in Vienna on implementing the November 24th deal? And has there been any progress towards the release of Robert Levinson, whom the AP reported was working on an authorized CIA mission in Iran? And will his case be tied to the larger talks over a final deal with Iran?
SECRETARY KERRY: Well, regarding General Idris, we are in touch with General Idris. I have not personally talked to him, but we are touch in with him, and he is, I believe, in Turkey at this moment. We are talking with both him and others in the SMC staff to inventory the equipment that was in the warehouse that was raided by the Islamic front, al-Nusrah. And we are in discussions with our friends and consulting with everybody in the opposition about the next steps in support of the Syrian people. What’s happened thus far has no impact on our support for the opposition or anything to do with the material assistance that we’re going to continue to provide to the opposition. As a result of the situation, though, we have suspended deliveries of nonlethal assistance into northern Syria simply while we evaluate the situation on the ground. But we continue to have confidence in General Idris and confidence in the opposition, and we will continue to support them.
With respect to the second part of your question on Iran, this is – we’ve been hard at it in Vienna, a lot of discussions taking place. I've talked with Cathy Ashton the last days. We’re making progress, but I think we’re at a point in those talks where folks feel a need to consult, take a moment. There is every expectation that talks are going to continue in the next few days, and that we will proceed to the full implementation of that plan. This is sort of the normal part of the process in developing the implementation plan.
And finally, with respect to Mr. Levinson, I don’t have any comment whatsoever on the condition with respect to employment or any other issue except to say to you that we have raised the issue of his whereabouts on a continuous basis. I have personally raised it with the Iranians in the course of our discussions, and we will continue to try to seek his release and return to the United States.
MS. PSAKI: Thank you, everyone.
SECRETARY KERRY: Thanks, all. Appreciate it. Thank you very much.
JUSTICE OFFICIALS TESTIFY BEFORE SENATE JUDICIARY COMMITTEE ABOUT FISA COURT
FROM: U.S. JUSTICE DEPARTMENT
Deputy Attorney General James M. Cole, Director Keith B. Alexander and General Counsel Robert S. Litt Testify Before the U.S. Senate Judiciary Committee
Washington, D.C. ~ Wednesday, December 11, 2013
Thank you for inviting us to continue our discussions with this Committee on our efforts to enhance public confidence in the important intelligence collection programs that have been the subject of unauthorized disclosures since earlier this year: the collection of bulk telephony metadata under the business records provision found in Section 215 of the USA PATRIOT Act, and the targeting of non-U.S. persons overseas under Section 702 of FISA. As we have emphasized in previous appearances before this and other Committees, we remain committed, as we review any modifications to these authorities, both to protecting privacy and civil liberties in the conduct of our intelligence activities, in a manner consistent with the Constitution, the law and our values, and to ensuring that we continue to have the authorities we need to collect important foreign intelligence to protect the country from terrorism and other threats to national security. We also remain committed to working closely with this Committee as any modifications to these activities are considered.
A key step in promoting greater public confidence in these intelligence activities is to provide greater transparency so that the American people, as well as ordinary citizens around the world, understand what the activities are, how they function, and how they are overseen. As you know, many of the reports appearing in the media concerning the scope of the Government’s intelligence collection efforts have been inaccurate, including with respect to the collection carried out under Sections 215 and 702. In response, the Administration has released substantial information since June to increase transparency and public understanding, while also working to ensure that these releases are consistent with national security. We welcome the opportunity to discuss ways to make more information about intelligence activities conducted under FISA available to the public in a meaningful and responsible way. At the same time, we are mindful of the need not to publicly disclose information that our adversaries could exploit to evade surveillance and harm our national security. There is no doubt that the recent unauthorized disclosures about our surveillance capabilities risk causing substantial damage to our national security, and it is essential that we not take steps that will increase that damage.
In keeping with this balance, in June the President directed the Intelligence Community to make as much information about the Section 215 and Section 702 programs available to the public as possible, consistent with the need to protect national security and sensitive sources and methods. Since then, the Director of National Intelligence has declassified and publicly released substantial information in order to facilitate informed public debate about these programs. Among other things, the Government has declassified and disclosed the primary and secondary orders from the FISA Court that describe in detail how the bulk telephony metadata collection program operates and the important restrictions on how the data collected under the program are accessed, retained, and disseminated. The Government has also released two recent FISA Court opinions, as well as an Administration white paper, that articulate in detail the legal authority and rationale for this program. We have also declassified and released to the public several other FISA Court opinions and orders concerning the two programs, including detailed discussions of compliance issues that have arisen during the programs’ history and the Government’s responses to these incidents. We have declassified and released extensive materials that were provided to the Congress in conjunction with its oversight and reauthorization of these authorities. Finally, just this week we have declassified and released additional materials, including FISA Court opinions relating to a separate program (no longer in operation) to collect certain internet metadata in bulk pursuant to court orders issued under the pen register/trap and trace provision of FISA (Section 402). Our efforts to promote greater transparency through declassification and public release of relevant documents are not yet complete. We will continue our efforts to promote greater transparency through declassification and public release of relevant documents, while carefully protecting information that we cannot responsibly release because of national security concerns. These efforts are an important means of enhancing public confidence that the Intelligence Community is using its legal authorities appropriately, which has become increasingly important in the wake of confusion, concerns, and misunderstandings caused by the recent and continuing unauthorized disclosures of classified information.
As part of our ongoing efforts to increase transparency, the Director of National Intelligence has also committed to providing annual public reports that include nationwide statistical data on the Intelligence Community’s use of certain FISA authorities. Specifically, for each of the following categories of FISA and related authorities, beginning in January 2014 and on an annual basis thereafter, the Intelligence Community will release to the public the total number of orders issued during the prior twelve-month period and the number of targets affected by these orders:
FISA orders based on probable cause (Titles I and III and Sections 703 and 704 of FISA).
Directives under Section 702 of FISA.
FISA Business Records orders (Title V of FISA).
FISA Pen Register/Trap and Trace orders (Title IV of FISA).
National Security Letters issued pursuant to 12 U.S.C. § 3414(a)(5), 15 U.S.C.
This information will enable the public to understand how often the Intelligence Community uses these authorities nationwide, how many persons or entities are targeted by these efforts, and how these figures change over time. The Director of National Intelligence has concluded that providing this information on a nationwide basis is an acceptable course in light of the goal of public transparency, without unduly risking national security.
We also understand the concerns that specific companies have expressed as to their ability to inform their customers of how often data is provided to the Government in response to legal process. In light of those concerns, we have authorized companies to report within certain ranges the total number of federal, state, and local law enforcement and national security legal demands they receive on a nationwide basis, and the number of user accounts affected by such orders. This allows companies to illustrate that those demands affect only a tiny percentage of their users, even taking all of the demands together, and thus to refute inaccurate reports that companies cooperate with the Government in dragnet surveillance of all of their customers. At the same time, this approach avoids the disclosure of information to our adversaries regarding the extent or existence of FISA coverage of services or communications platforms provided by particular companies
The scope of the voluntary disclosures by the Executive Branch concerning sensitive intelligence collection activities carried out under FISA is unprecedented. We hope that the information we have released, and will continue to release, will allow the public to understand better how our intelligence collection authorities are used. We also hope the public will appreciate the rigorous oversight conducted by all three branches of government over our intelligence activities, a whole of government approach that is unique and exacting in comparison to the many governments that conduct similar intercept programs with substantially less stringent oversight. The extensive oversight that we conduct helps to ensure that our activities protect national security, balance important privacy considerations, and operate lawfully.
In addition to the unprecedented steps we have taken to promote transparency, we are open to working with Congress on legislation designed to increase public confidence in these intelligence activities and enhance the protection of privacy and civil liberties. Regarding Section 215, we would consider statutory restrictions on querying the data that are compatible with operational needs, including perhaps greater limits on contact chaining than what the current FISA Court orders permit. We could also consider a different approach to retention periods for the data—consistent with operational needs—and enhanced statutory oversight and transparency measures, such as annual reporting on the number of identifiers used to query the data. To be clear, we believe the manner in which the bulk telephony metadata collection program has been carried out is lawful, and existing oversight mechanisms protect both privacy and security. However, there are some changes that we believe could be made that would enhance privacy and civil liberties as well as public confidence in the program, consistent with our national security needs.
On the issue of FISA Court reform, we believe that the ex parte nature of proceedings before the FISA Court is fundamentally sound and has worked well for decades in adjudicating the Government’s applications for authority to conduct electronic surveillance or physical searches in the national security context under FISA. However, we understand the concerns that have been raised about the lack of independent views in certain cases, such as cases involving bulk collection, that affect the privacy and civil liberties interests of the American people as a whole.
Therefore, we would be open to discussing legislation authorizing the FISA Court to appoint an amicus , at its discretion, in appropriate cases, such as those that present novel and significant questions of law and that involve the acquisition and retention of information concerning a substantial number of U.S. persons. Establishing a mechanism whereby the FISA Court could solicit independent views of an amicus in cases that raise broader privacy and civil liberties questions, but without compromising classified information, may further assist the Court in making informed and balanced decisions and may also serve to enhance public confidence in the FISA Court process.
While we remain open to working with Congress to effectuate meaningful reforms along the lines just described, we do not support legislation that would have the effect of ending the Section 215 program, which the Government continues to find valuable in protecting national security. And, while we support increased transparency, we do not support legislation that would require or permit public reporting of information concerning intelligence activities under FISA that could be used by our adversaries to evade surveillance, or which otherwise raises practical and operational concerns. The bill approved by the Senate Intelligence Committee includes a number of constructive provisions that we support and that we think will enhance protections for privacy and civil liberties without harming national security.
Finally, we want to address the Committee’s interest in the legal standard for collection of records under Section 215. As the Administration explained in a white paper that it published in August, the telephony metadata program satisfies the statutory requirement that there be “reasonable grounds to believe” that the records collected are “relevant to an authorized investigation . . . to obtain foreign intelligence information . . . or to protect against international terrorist or clandestine intelligence activities.” The text of Section 215, considered in light of the well-developed understanding of “relevance” in the context of civil discovery and criminal and administrative subpoenas, as well as the broader purposes of the statute, indicates that there are “reasonable grounds to believe” that the records at issue here are “relevant to an authorized investigation.” Specifically, in the circumstance where the Government has reason to believe that conducting a search of a broad collection of telephony metadata records will produce counterterrorism information—and that it is necessary to collect a large volume of data in order to employ the analytic tools needed to identify that information—the standard of relevance under Section 215 is satisfied, particularly in light of the strict limitations on the use of the data collected and the extensive oversight of the program.
As noted above, two decisions of the FISA Court that have recently been declassified by the Government and released publicly by the Court explain why the collection of telephony metadata in bulk is constitutional and is authorized under the statute. These opinions reflect the independent conclusions of two federal judges serving on the FISA Court that the Government’s request for the production of call detail records under Section 215 meets the relevance standard and all other statutory requirements. Moreover, these opinions conclude that because the Government seeks only the production of telephony metadata, and not the content of communications, there are no Fourth Amendment impediments to the collection. Indeed, 15 separate judges of the FISA Court have held on 35 occasions that Section 215 authorizes the collection of telephony metadata in bulk in support of counterterrorism investigations. Last week, a district court in a criminal case in California also held that the collection of telephony metadata in bulk under Section 215 is consistent with the Fourth Amendment.
We appreciate that privacy concerns persist about the telephony metadata collection program, even considering the limited data the Government receives, the stringent constraints set by the FISA Court on how it is used, and the aforementioned legal rulings that have consistently upheld its legality. But we hope you will weigh those concerns against the increased risks to national security if this capability were terminated with no equivalent program that addresses what the 9/11 Commission pointed out as a critical gap in the ability of the intelligence community to detect and “connect the dots” for foreign terror plots against our homeland. This program fills a significant gap in our ability to identify terrorist communications and, together with other authorities, can help us identify and disrupt terrorist plots, thus fulfilling the vision of the 9/11 Commission, which implored the Government to undertake mechanisms and collaboration which would prevent the recurrence of another 9/11.
We look forward to answering any questions you might have about these important intelligence collection programs and related issues. We understand that there are a variety of views in the Congress and among the American people about these activities, and we look forward to discussing these issues with this Committee as new legislation concerning these activities is considered. We hope that, with the assistance of this Committee, we can ensure that these programs are on the strongest possible footing, from the perspective of both national security and privacy, so that they will continue to enjoy Congressional support in the future. Thank you.
Deputy Attorney General James M. Cole, Director Keith B. Alexander and General Counsel Robert S. Litt Testify Before the U.S. Senate Judiciary Committee
Washington, D.C. ~ Wednesday, December 11, 2013
Thank you for inviting us to continue our discussions with this Committee on our efforts to enhance public confidence in the important intelligence collection programs that have been the subject of unauthorized disclosures since earlier this year: the collection of bulk telephony metadata under the business records provision found in Section 215 of the USA PATRIOT Act, and the targeting of non-U.S. persons overseas under Section 702 of FISA. As we have emphasized in previous appearances before this and other Committees, we remain committed, as we review any modifications to these authorities, both to protecting privacy and civil liberties in the conduct of our intelligence activities, in a manner consistent with the Constitution, the law and our values, and to ensuring that we continue to have the authorities we need to collect important foreign intelligence to protect the country from terrorism and other threats to national security. We also remain committed to working closely with this Committee as any modifications to these activities are considered.
A key step in promoting greater public confidence in these intelligence activities is to provide greater transparency so that the American people, as well as ordinary citizens around the world, understand what the activities are, how they function, and how they are overseen. As you know, many of the reports appearing in the media concerning the scope of the Government’s intelligence collection efforts have been inaccurate, including with respect to the collection carried out under Sections 215 and 702. In response, the Administration has released substantial information since June to increase transparency and public understanding, while also working to ensure that these releases are consistent with national security. We welcome the opportunity to discuss ways to make more information about intelligence activities conducted under FISA available to the public in a meaningful and responsible way. At the same time, we are mindful of the need not to publicly disclose information that our adversaries could exploit to evade surveillance and harm our national security. There is no doubt that the recent unauthorized disclosures about our surveillance capabilities risk causing substantial damage to our national security, and it is essential that we not take steps that will increase that damage.
In keeping with this balance, in June the President directed the Intelligence Community to make as much information about the Section 215 and Section 702 programs available to the public as possible, consistent with the need to protect national security and sensitive sources and methods. Since then, the Director of National Intelligence has declassified and publicly released substantial information in order to facilitate informed public debate about these programs. Among other things, the Government has declassified and disclosed the primary and secondary orders from the FISA Court that describe in detail how the bulk telephony metadata collection program operates and the important restrictions on how the data collected under the program are accessed, retained, and disseminated. The Government has also released two recent FISA Court opinions, as well as an Administration white paper, that articulate in detail the legal authority and rationale for this program. We have also declassified and released to the public several other FISA Court opinions and orders concerning the two programs, including detailed discussions of compliance issues that have arisen during the programs’ history and the Government’s responses to these incidents. We have declassified and released extensive materials that were provided to the Congress in conjunction with its oversight and reauthorization of these authorities. Finally, just this week we have declassified and released additional materials, including FISA Court opinions relating to a separate program (no longer in operation) to collect certain internet metadata in bulk pursuant to court orders issued under the pen register/trap and trace provision of FISA (Section 402). Our efforts to promote greater transparency through declassification and public release of relevant documents are not yet complete. We will continue our efforts to promote greater transparency through declassification and public release of relevant documents, while carefully protecting information that we cannot responsibly release because of national security concerns. These efforts are an important means of enhancing public confidence that the Intelligence Community is using its legal authorities appropriately, which has become increasingly important in the wake of confusion, concerns, and misunderstandings caused by the recent and continuing unauthorized disclosures of classified information.
As part of our ongoing efforts to increase transparency, the Director of National Intelligence has also committed to providing annual public reports that include nationwide statistical data on the Intelligence Community’s use of certain FISA authorities. Specifically, for each of the following categories of FISA and related authorities, beginning in January 2014 and on an annual basis thereafter, the Intelligence Community will release to the public the total number of orders issued during the prior twelve-month period and the number of targets affected by these orders:
FISA orders based on probable cause (Titles I and III and Sections 703 and 704 of FISA).
Directives under Section 702 of FISA.
FISA Business Records orders (Title V of FISA).
FISA Pen Register/Trap and Trace orders (Title IV of FISA).
National Security Letters issued pursuant to 12 U.S.C. § 3414(a)(5), 15 U.S.C.
This information will enable the public to understand how often the Intelligence Community uses these authorities nationwide, how many persons or entities are targeted by these efforts, and how these figures change over time. The Director of National Intelligence has concluded that providing this information on a nationwide basis is an acceptable course in light of the goal of public transparency, without unduly risking national security.
We also understand the concerns that specific companies have expressed as to their ability to inform their customers of how often data is provided to the Government in response to legal process. In light of those concerns, we have authorized companies to report within certain ranges the total number of federal, state, and local law enforcement and national security legal demands they receive on a nationwide basis, and the number of user accounts affected by such orders. This allows companies to illustrate that those demands affect only a tiny percentage of their users, even taking all of the demands together, and thus to refute inaccurate reports that companies cooperate with the Government in dragnet surveillance of all of their customers. At the same time, this approach avoids the disclosure of information to our adversaries regarding the extent or existence of FISA coverage of services or communications platforms provided by particular companies
The scope of the voluntary disclosures by the Executive Branch concerning sensitive intelligence collection activities carried out under FISA is unprecedented. We hope that the information we have released, and will continue to release, will allow the public to understand better how our intelligence collection authorities are used. We also hope the public will appreciate the rigorous oversight conducted by all three branches of government over our intelligence activities, a whole of government approach that is unique and exacting in comparison to the many governments that conduct similar intercept programs with substantially less stringent oversight. The extensive oversight that we conduct helps to ensure that our activities protect national security, balance important privacy considerations, and operate lawfully.
In addition to the unprecedented steps we have taken to promote transparency, we are open to working with Congress on legislation designed to increase public confidence in these intelligence activities and enhance the protection of privacy and civil liberties. Regarding Section 215, we would consider statutory restrictions on querying the data that are compatible with operational needs, including perhaps greater limits on contact chaining than what the current FISA Court orders permit. We could also consider a different approach to retention periods for the data—consistent with operational needs—and enhanced statutory oversight and transparency measures, such as annual reporting on the number of identifiers used to query the data. To be clear, we believe the manner in which the bulk telephony metadata collection program has been carried out is lawful, and existing oversight mechanisms protect both privacy and security. However, there are some changes that we believe could be made that would enhance privacy and civil liberties as well as public confidence in the program, consistent with our national security needs.
On the issue of FISA Court reform, we believe that the ex parte nature of proceedings before the FISA Court is fundamentally sound and has worked well for decades in adjudicating the Government’s applications for authority to conduct electronic surveillance or physical searches in the national security context under FISA. However, we understand the concerns that have been raised about the lack of independent views in certain cases, such as cases involving bulk collection, that affect the privacy and civil liberties interests of the American people as a whole.
Therefore, we would be open to discussing legislation authorizing the FISA Court to appoint an amicus , at its discretion, in appropriate cases, such as those that present novel and significant questions of law and that involve the acquisition and retention of information concerning a substantial number of U.S. persons. Establishing a mechanism whereby the FISA Court could solicit independent views of an amicus in cases that raise broader privacy and civil liberties questions, but without compromising classified information, may further assist the Court in making informed and balanced decisions and may also serve to enhance public confidence in the FISA Court process.
While we remain open to working with Congress to effectuate meaningful reforms along the lines just described, we do not support legislation that would have the effect of ending the Section 215 program, which the Government continues to find valuable in protecting national security. And, while we support increased transparency, we do not support legislation that would require or permit public reporting of information concerning intelligence activities under FISA that could be used by our adversaries to evade surveillance, or which otherwise raises practical and operational concerns. The bill approved by the Senate Intelligence Committee includes a number of constructive provisions that we support and that we think will enhance protections for privacy and civil liberties without harming national security.
Finally, we want to address the Committee’s interest in the legal standard for collection of records under Section 215. As the Administration explained in a white paper that it published in August, the telephony metadata program satisfies the statutory requirement that there be “reasonable grounds to believe” that the records collected are “relevant to an authorized investigation . . . to obtain foreign intelligence information . . . or to protect against international terrorist or clandestine intelligence activities.” The text of Section 215, considered in light of the well-developed understanding of “relevance” in the context of civil discovery and criminal and administrative subpoenas, as well as the broader purposes of the statute, indicates that there are “reasonable grounds to believe” that the records at issue here are “relevant to an authorized investigation.” Specifically, in the circumstance where the Government has reason to believe that conducting a search of a broad collection of telephony metadata records will produce counterterrorism information—and that it is necessary to collect a large volume of data in order to employ the analytic tools needed to identify that information—the standard of relevance under Section 215 is satisfied, particularly in light of the strict limitations on the use of the data collected and the extensive oversight of the program.
As noted above, two decisions of the FISA Court that have recently been declassified by the Government and released publicly by the Court explain why the collection of telephony metadata in bulk is constitutional and is authorized under the statute. These opinions reflect the independent conclusions of two federal judges serving on the FISA Court that the Government’s request for the production of call detail records under Section 215 meets the relevance standard and all other statutory requirements. Moreover, these opinions conclude that because the Government seeks only the production of telephony metadata, and not the content of communications, there are no Fourth Amendment impediments to the collection. Indeed, 15 separate judges of the FISA Court have held on 35 occasions that Section 215 authorizes the collection of telephony metadata in bulk in support of counterterrorism investigations. Last week, a district court in a criminal case in California also held that the collection of telephony metadata in bulk under Section 215 is consistent with the Fourth Amendment.
We appreciate that privacy concerns persist about the telephony metadata collection program, even considering the limited data the Government receives, the stringent constraints set by the FISA Court on how it is used, and the aforementioned legal rulings that have consistently upheld its legality. But we hope you will weigh those concerns against the increased risks to national security if this capability were terminated with no equivalent program that addresses what the 9/11 Commission pointed out as a critical gap in the ability of the intelligence community to detect and “connect the dots” for foreign terror plots against our homeland. This program fills a significant gap in our ability to identify terrorist communications and, together with other authorities, can help us identify and disrupt terrorist plots, thus fulfilling the vision of the 9/11 Commission, which implored the Government to undertake mechanisms and collaboration which would prevent the recurrence of another 9/11.
We look forward to answering any questions you might have about these important intelligence collection programs and related issues. We understand that there are a variety of views in the Congress and among the American people about these activities, and we look forward to discussing these issues with this Committee as new legislation concerning these activities is considered. We hope that, with the assistance of this Committee, we can ensure that these programs are on the strongest possible footing, from the perspective of both national security and privacy, so that they will continue to enjoy Congressional support in the future. Thank you.
MANAGING PARTNERS OF INVESTMENT ADVISORY FIRM ALLEGEDLY ALLOWED THIRD PARTY TO INFLUENCE PORTFOLIO
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today charged the managing partners of a Charlotte, N.C.-based investment advisory firm for compromising their independent judgment and allowing a third party with its own interests to influence the portfolio selection process of a collateralized debt obligation (CDO) being offered to investors.
The investment managers have agreed to collectively pay more than $472,000 and exit the securities industry to settle the SEC’s charges.
According to the SEC’s order instituting settled administrative proceedings, disclosures to investors indicated that NIR Capital Management LLC was solely selecting the assets for Norma CDO I Ltd. as the designated collateral manager. However, NIR’s Scott H. Shannon accepted assets chosen by hedge fund firm Magnetar Capital LLC for the Norma CDO’s portfolio, and Joseph G. Parish III allowed Magnetar to influence the selection of some other assets. Shannon himself called at least one of the residential mortgage-backed securities (RMBS) ultimately included in the portfolio a “real stinker.” Magnetar bought the equity in the CDO but also placed short bets on collateral in the CDO and therefore had an interest not necessarily aligned with potential long-term debt investors that relied on the CDO and its collateral to perform well.
The SEC also today announced charges against Merrill Lynch, which structured and marketed the Norma CDO.
“Shannon and Parish could not serve two masters,” said George S. Canellos, co-director of the SEC’s Division of Enforcement. “They allowed Magnetar to influence asset selection and abdicated their duty to pick only the assets they believed were best for their client.”
According to the SEC’s order, NIR initially was unaware when Magnatar purchased $472.5 million in long exposure to RMBS for the Norma CDO in August and September 2006 based on information that NIR provided to Magnetar that was preliminary and not intended as a basis for actual collateral selection. By the time it learned about the purchases in November 2006, NIR already had purchased a substantial portion of the RMBS collateral. Nevertheless, NIR used its own internal credit metrics to analyze the collateral that Magnetar purchased, and Shannon then sought to exclude some of the RMBS collateral that Magnetar had acquired and selected. NIR, however, ultimately incorporated the collateral that Magnetar purchased in the closing portfolio. Shannon explained to an NIR credit analyst that the final portfolio included a number of trades that NIR did not execute, and “this leaves us with several names we probably would not want...”
According to the SEC’s order, Parish allowed Magnetar to exercise so-called approval rights by permitting the firm to be involved in the process of selecting CDO assets acquired for the portfolio. As a result, Parish knew that Magnetar was the short counterparty for much of the Norma CDO’s synthetic exposure to CDO securities. NIR attested in the collateral management agreement with the Norma CDO that it would act in good faith and exercise reasonable care in selecting the portfolio. However, the CDO and its debt investors knew nothing about NIR’s compromised decision-making with Magnetar involved in the collateral selection process.
Shannon and Parish consented to the SEC’s order finding that Shannon violated Sections 206(1) and (2) of the Investment Advisers Act of 1940 and Parish violated Section 206(2). Shannon agreed to be barred from the securities industry for at least two years and must pay disgorgement and prejudgment interest of $140,662 and a penalty of $116,553. Parish agreed to be suspended from the securities industry for at least 12 months and must pay disgorgement and prejudgment interest of $140,662 and a penalty of $75,000. Without admitting or denying the SEC’s findings, Shannon and Parish consented to cease and desist from violating respective Sections of 206 of the Advisers Act. They have agreed to dissolve the NIR business.
The SEC’s investigation was conducted by Steven Rawlings, Tony Frouge, Sharon Bryant, Kapil Agrawal, Douglas Smith, Howard Fischer, and Daniel Walfish with assistance from Gerald Gross and Joshua Pater of the New York Regional Office. They were assisted by examiners Edward Moy, Luis Casais, and Thomas Shupe in the New York office.
The Securities and Exchange Commission today charged the managing partners of a Charlotte, N.C.-based investment advisory firm for compromising their independent judgment and allowing a third party with its own interests to influence the portfolio selection process of a collateralized debt obligation (CDO) being offered to investors.
The investment managers have agreed to collectively pay more than $472,000 and exit the securities industry to settle the SEC’s charges.
According to the SEC’s order instituting settled administrative proceedings, disclosures to investors indicated that NIR Capital Management LLC was solely selecting the assets for Norma CDO I Ltd. as the designated collateral manager. However, NIR’s Scott H. Shannon accepted assets chosen by hedge fund firm Magnetar Capital LLC for the Norma CDO’s portfolio, and Joseph G. Parish III allowed Magnetar to influence the selection of some other assets. Shannon himself called at least one of the residential mortgage-backed securities (RMBS) ultimately included in the portfolio a “real stinker.” Magnetar bought the equity in the CDO but also placed short bets on collateral in the CDO and therefore had an interest not necessarily aligned with potential long-term debt investors that relied on the CDO and its collateral to perform well.
The SEC also today announced charges against Merrill Lynch, which structured and marketed the Norma CDO.
“Shannon and Parish could not serve two masters,” said George S. Canellos, co-director of the SEC’s Division of Enforcement. “They allowed Magnetar to influence asset selection and abdicated their duty to pick only the assets they believed were best for their client.”
According to the SEC’s order, NIR initially was unaware when Magnatar purchased $472.5 million in long exposure to RMBS for the Norma CDO in August and September 2006 based on information that NIR provided to Magnetar that was preliminary and not intended as a basis for actual collateral selection. By the time it learned about the purchases in November 2006, NIR already had purchased a substantial portion of the RMBS collateral. Nevertheless, NIR used its own internal credit metrics to analyze the collateral that Magnetar purchased, and Shannon then sought to exclude some of the RMBS collateral that Magnetar had acquired and selected. NIR, however, ultimately incorporated the collateral that Magnetar purchased in the closing portfolio. Shannon explained to an NIR credit analyst that the final portfolio included a number of trades that NIR did not execute, and “this leaves us with several names we probably would not want...”
According to the SEC’s order, Parish allowed Magnetar to exercise so-called approval rights by permitting the firm to be involved in the process of selecting CDO assets acquired for the portfolio. As a result, Parish knew that Magnetar was the short counterparty for much of the Norma CDO’s synthetic exposure to CDO securities. NIR attested in the collateral management agreement with the Norma CDO that it would act in good faith and exercise reasonable care in selecting the portfolio. However, the CDO and its debt investors knew nothing about NIR’s compromised decision-making with Magnetar involved in the collateral selection process.
Shannon and Parish consented to the SEC’s order finding that Shannon violated Sections 206(1) and (2) of the Investment Advisers Act of 1940 and Parish violated Section 206(2). Shannon agreed to be barred from the securities industry for at least two years and must pay disgorgement and prejudgment interest of $140,662 and a penalty of $116,553. Parish agreed to be suspended from the securities industry for at least 12 months and must pay disgorgement and prejudgment interest of $140,662 and a penalty of $75,000. Without admitting or denying the SEC’s findings, Shannon and Parish consented to cease and desist from violating respective Sections of 206 of the Advisers Act. They have agreed to dissolve the NIR business.
The SEC’s investigation was conducted by Steven Rawlings, Tony Frouge, Sharon Bryant, Kapil Agrawal, Douglas Smith, Howard Fischer, and Daniel Walfish with assistance from Gerald Gross and Joshua Pater of the New York Regional Office. They were assisted by examiners Edward Moy, Luis Casais, and Thomas Shupe in the New York office.
HACKER SENTENCED FOR ROLE IN SCHEME TO SELL ACCESS TO COMPUTER NETWORKS
FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 12, 2013
Pennsylvania Man Sentenced to 18 Months in Prison for Hacking into Multiple Computer Networks
A Pennsylvania man was sentenced to serve 18 months in prison for his role in a scheme to hack into computer networks and sell access to those networks.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U .S. Attorney Carmen M. Ortiz of the District of Massachusetts made the announcement after sentencing by U.S. District Judge Mark Wolf in the District of Massachusetts on Dec. 11, 2013.
Andrew James Miller, 23, of Devon, Pa., pleaded guilty to conspiracy and computer fraud on Aug. 26, 2013. According to court documents, from 2008 to 2011, Miller remotely hacked into a variety of computers located in Massachusetts and elsewhere, and, in some instances, surreptitiously installed “backdoors” into those computers. These “backdoors” were designed to provide future administrator-level, or “root,” access to the compromised computers.
Miller obtained login credentials to the compromised computers. He and his co-conspirators then sold access to these backdoors, as well as other login credentials. The access sold by Miller and his co-conspirators allowed unauthorized people to access various commercial, education and government computer networks. Miller attempted to sell access for $50,000 to two supercomputers at the Lawrence Livermore Laboratory in Oakland, California, that were part of the National Energy Research Scientific Computing Center.
The case was investigated by the FBI and prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the U.S. Attorney’s Office for the District of Massachusetts.
Thursday, December 12, 2013
Pennsylvania Man Sentenced to 18 Months in Prison for Hacking into Multiple Computer Networks
A Pennsylvania man was sentenced to serve 18 months in prison for his role in a scheme to hack into computer networks and sell access to those networks.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U .S. Attorney Carmen M. Ortiz of the District of Massachusetts made the announcement after sentencing by U.S. District Judge Mark Wolf in the District of Massachusetts on Dec. 11, 2013.
Andrew James Miller, 23, of Devon, Pa., pleaded guilty to conspiracy and computer fraud on Aug. 26, 2013. According to court documents, from 2008 to 2011, Miller remotely hacked into a variety of computers located in Massachusetts and elsewhere, and, in some instances, surreptitiously installed “backdoors” into those computers. These “backdoors” were designed to provide future administrator-level, or “root,” access to the compromised computers.
Miller obtained login credentials to the compromised computers. He and his co-conspirators then sold access to these backdoors, as well as other login credentials. The access sold by Miller and his co-conspirators allowed unauthorized people to access various commercial, education and government computer networks. Miller attempted to sell access for $50,000 to two supercomputers at the Lawrence Livermore Laboratory in Oakland, California, that were part of the National Energy Research Scientific Computing Center.
The case was investigated by the FBI and prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the U.S. Attorney’s Office for the District of Massachusetts.
IRPAC ISSUES RECOMMENDATIONS ON TAX ISSUES TO IRS COMMISSIONER
FROM: U.S. INTERNAL REVENUE SERVICE
IRPAC Issues Annual Report for 2013
WASHINGTON — The Information Reporting Program Advisory Committee (IRPAC) today released its annual report for 2013, including numerous recommendations to the Commissioner of Internal Revenue on new and existing issues in tax administration.
“In their report, IRPAC members provide valuable feedback to the IRS on a wide range of information reporting issues,” IRS Acting Commissioner Danny Werfel said. “Committee members have graciously offered their time and expertise. The IRS will carefully consider their recommendations.”
In the 2013 report, IRPAC recommends that IRS:
Extend truncation of taxpayer identification numbers (TINs) to employer identification numbers (EINs)
Expand the TIN matching program to permit matching on a greater number of return types
Improve instructions to reduce errors on Form 1099-MISC and
Provide additional guidance with regard to merchant card reporting on Form 1099-K
The committee also commented on cost basis reporting for debt instruments, specifically addressing requirements, practices and capabilities for reporting market premium and discount. There are also extensive discussions of reporting requirements under the Foreign Account Tax Compliance Act (FATCA) and the Affordable Care Act.
IRPAC Issues Annual Report for 2013
WASHINGTON — The Information Reporting Program Advisory Committee (IRPAC) today released its annual report for 2013, including numerous recommendations to the Commissioner of Internal Revenue on new and existing issues in tax administration.
“In their report, IRPAC members provide valuable feedback to the IRS on a wide range of information reporting issues,” IRS Acting Commissioner Danny Werfel said. “Committee members have graciously offered their time and expertise. The IRS will carefully consider their recommendations.”
In the 2013 report, IRPAC recommends that IRS:
Extend truncation of taxpayer identification numbers (TINs) to employer identification numbers (EINs)
Expand the TIN matching program to permit matching on a greater number of return types
Improve instructions to reduce errors on Form 1099-MISC and
Provide additional guidance with regard to merchant card reporting on Form 1099-K
The committee also commented on cost basis reporting for debt instruments, specifically addressing requirements, practices and capabilities for reporting market premium and discount. There are also extensive discussions of reporting requirements under the Foreign Account Tax Compliance Act (FATCA) and the Affordable Care Act.
SECRETARY OF STATE KERRY'S REMARKS AT TRANSFORMATIONAL TRENDS STRATEGIC FORUM
FROM: U.S. STATE DEPARTMENT
Remarks at the Transformational Trends Strategic Forum
Remarks
John Kerry
Secretary of State
Four Seasons Hotel
Washington, DC
December 11, 2013
SECRETARY KERRY: Well, thank you, David, very, very much. Thank you, Foreign Policy Magazine. And thank you, all of you, for not singing. I really appreciate it. (Laughter.)
The – I understand that you’ve had a terrific session today talking about transformational trends with a lot of speakers. I guess Danny Russel was just here, who’s doing a superb job on Asia. And I have just come from the Hill, where I spent a good part of the afternoon with my former senator colleagues briefing them on this first-step agreement that we have secured with Iran and with P5+1. And I’ll say a few words about that in the course of this evening.
I also want to thank, recognize David McKean, who’s the State Department’s Director of Policy Planning. And his office is happily and proudly co-hosting today’s conference. We’re delighted with that. I’m looking over here, I see Ambassador David Thorne, who’s serving as the Counselor in the Department now. And Tom Friedman sitting there, and so I’ve got to be really careful with what I say tonight. (Laughter.)
Thank you very much for giving me an opportunity to talk to you. I have to tell you that at the frightening age of 70 you don’t get an AARP card, you don’t get a Medicare card, you don’t get anything, you don’t get many birthday cards either; you just get a little older. And my staff
asked me what I wanted for my birthday, and I said I want a trip around the world. They said, “Really? Another one?” (Laughter.)
The truth is I’m leaving shortly on another trip, ultimately heading for the next few days back to Vietnam, my first trip there as Secretary of State. But many, many trips, obviously, to try to lift the embargo, normalize relations, and begin the process of the transformation that we’re in today. So I’ll be proud to be back there and see the differences being made.
This conference is rightfully focused on transformation trends. And we do so, obviously, in a week where all the world is celebrating one of those really rare, truly transformational figures: Nelson Mandela. I had the privilege of attending the service, at least most of it, at the National Cathedral today.
Madiba left behind a lot of powerful lessons and a lot of profound words. But one observation of his that has always intrigued me is this: It always seems impossible until it is done. In many ways, his entire life journey seemed impossible. Mandela knew that nothing is impossible – but as President Obama said in Johannesburg just yesterday, “Nothing that he achieved was inevitable.” He didn’t know he would succeed, only that he had a responsibility to act. And he had a vision, a dream, whatever you want to call it. He knew that South Africa had to transform and that it needed agents of transformation.
I think President Obama and I both believe in agents of transformation. It takes leadership, and you have to understand that the greatest risk is not taking a risk at all. As we reflect on his life, we have to make sure that our own work summons his courage and summons his common sense.
Today, the greatest risk the United States faces not – doesn’t come from a rising rival, but it comes from dangers that arise in a world if we fail to lead. We risk creating a vacuum that, believe me, would be all too quickly filled by those with values very much different from our own – by nihilists eager to destroy, who have proven that that is their goal, without any slightest interest or stated intent in providing health care, building schools, developing energy, establishing trade, creating opportunity, expanding rights, or even most importantly perhaps, pursuing peace and stability.
The United States, without a statement of arrogance or chauvinism, still remains the indispensable nation. Why? Because we have an unparalleled ability to transform things and places, people, and the world by convening allies and adversaries alike around a set of values and around a set of principles. And after a decade of war, it has never been more clear that diplomacy can be the transformational tool that shapes the world according to our values.
Now this doesn’t mean – does not mean, I want to emphasize – that America must be the world’s parent or the world’s policeman, not at all. That’s not what the world wants from us, nor is it what we want for the world. The hard work of diplomacy and our hopes for the world have to be informed by humility. We can’t do it alone.
But the truth is America has a singular ability to be able to articulate a vision, to lay down a set of principles that we have actually lived by and practiced and made a difference by in order to galvanize the global community. History is what documents what I just said. History shows that when America musters the courage to tackle the toughest challenges, we do and can inspire our partners around the world to do the same – and to do what seems, at first, to be the impossible.
Last week, which ended with the world learning of Mandela’s death, it began with the world celebrating the progress that we’ve made on another great struggle of the 20th century: the scourge of HIV and AIDS.
Thirty years ago, as the world slowly became aware of a disease that few even understood, and even fewer believed anything could be done about it, and many feared even talking about it. People were uncomfortable with that concept. When I arrived in the Senate, I saw this discomfort that people had with even the discussion. And as recently as 10 years ago, experts said that the crisis had reached a point of no return, and AIDS was considered an automatic death sentence in much of the world.
But the United States didn’t let this pessimism deter us from bringing the world together and using our collective power to establish programs, like PEPFAR, that are turning the trend around and preventing an even greater catastrophe. I know something about that because in 1991, I think it was, Bill Frist as the Majority Leader and I joined forces in bipartisan fashion to serve as co-chairs of the CSIS Task Force on AIDS. And out of that grew an initiative that we put together, which we even got Jesse Helms to support and pass unanimously in the United States Senate. That became PEPFAR.
And since its peak in the last decade, AIDS-related deaths have declined by a third. New HIV infections have declined by 40 percent in Sub-Saharan Africa – the region that’s most heavily affected. And the number of people receiving life-saving HIV treatments has increased 40-fold. The goal that President Obama set of an AIDS-free generation – one you could barely dream about when the program began – is actually within reach today.
This is the combination of hope and hard work that only the United States can inspire to rally the world to take on that kind of complex challenge. That’s an example, and that is the spirit that guides American diplomacy, I believe, under President Obama. That’s the charge that he gave me nearly a year ago now – a little shy, a couple of months. And that vision can prove transformational in the days to come as we confront challenges of peace and prosperity, and even the very future of our planet. And that is not an exaggeration or excessively stated proposition.
There’s a reason that I believe diplomacy should always be our first resort. As many of you know, or most of you know, I’ve worn the uniform of my country and I have seen war. I know what it’s like to be shot at and I know what it’s like to lose friends in that process. And I can tell you point blank that when you have been there, done that, it sharpens your focus on the responsibility of leaders to avoid that if possible – not because you’re a pacifist but because you know the consequences. War is the failure of diplomacy.
In the first decade of this century, we all saw what happens when America favors the force of arms over the force of our diplomacy. In three of today’s most pressing challenges – in Iran, Syria, and the Israeli-Palestinian conflict – we saw the dangerous direction that events were heading. But with the careful balance of strength and diplomacy, we have now worked hard to transform those trends to shape a more secure future for our friends and allies, and deliver a hard-won and sustainable peace.
In Iran, the regime was spinning centrifuges faster and faster. In 2003, there were 164 centrifuges. Now, there are 19,000. There was a clear direction in which that program was moving, and Iran was clearly marching closer and closer to a nuclear bomb. The Syrian regime used chemical weapons against its own people, started a civil war that has taken more than a hundred thousand lives, and continues to use starvation as a weapon of war. Right next door, we see a demographic ticking time bomb testing whether Israel can remain both a Jewish and a democratic state. And we see a Palestinian people frustrated in their hopes of realizing their legitimate aspirations of economic opportunity and sovereignty.
In each of these cases, pundits and armchair isolationists said addressing the problem would be too hard, or that we were too late, or that it wasn’t our place, or that diplomacy wasn’t up to the task. But today, we see that American diplomacy, often backed by the strength of our military, in fact gives us the best chance to deliver a more secure future for our friends and allies, one where the people of the region are more free to pursue their common aspirations.
From day one, President Obama realized the danger a nuclear Iran would pose to our national security interests in the region, including our ally Israel. The President has kept his personal commitment to assuring that Iran does not obtain a nuclear weapon and will not obtain a weapon by keeping the credible threat of force on the table while using all of the tools of American diplomacy to pursue a peaceful resolution.
As only the President of the United States can, President Obama brought the world together to impose the most biting sanctions regime in history. Thanks to the President’s leadership, Iran did come to the table. In fact, you can, beyond any reasonable doubt, carry the argument that the Iranian election was profoundly affected by the will of the people to get out from under those sanctions, and that they sent a message directly contrary to what was the original intent of the regime and the people they were backing for president, that they wanted to move in a new direction. And Iran came to the table, and we are negotiating from a position of strength.
So when those same pessimists said that we should accept or contain a nuclear armed Iran, the President actually saw a different future. He knew that if the United States didn’t test Iran, the region would only grow more dangerous, that if Iran indeed was merely contained, or that somehow we threw up our hands and said this can’t be achieved, there would absolutely be to a certainty an arms race in the Gulf states and in the region.
Today, to the contrary, it is clear that diplomacy provides the best path to neutralize this threat. And I am convinced beyond any doubt that our friends in the region absolutely, positively became safer the moment this agreement was inked. And the moment it is implemented, they will truly be able to measure additional safety. And that is because we have ensured, providing the implementation provides – proceeds forward, that Iran’s program will not advance while we negotiate.
As we negotiate, Iran will forfeit its entire stock of 20 percent enriched uranium, and that – that puts it a short step away from weapons grade uranium and bomb-making material. As we negotiate, Iran will be unable to grow its stock of 3.5 percent uranium, or to stockpile centrifuges, or to increase the number of centrifuges that were in operation. As we negotiate, international inspectors will have unprecedented access to Iran’s key facilities, including daily access – which we don’t have today – to Fordow, daily access – which we don’t have today – to Natanz, and regular access to Arak, the heavy water reactor. As we negotiate, construction on the – as we negotiate, during the reprocessing facility at Arak, which could have provided an alternative path to a bomb because the plutonium – that now will not be able to move forward. All components that are not yet installed will not be able to be installed. No fuel rods will be transferred. No fuel will be transferred. No additional fuel will be able to be tested. The nuclear component of that facility will stop dead in its tracks where it is today.
As we negotiate, our Treasury Department will strongly enforce core sanctions architecture, which has deprived Iran of nearly 80 billion to 100 billion in oil revenues since 2012 as well as access to the international banking system. None of that architecture is undone in this first step agreement. It stays in place. As we negotiate, we will continue to be clear – absolutely clear – about the price of noncompliance, or of failing to satisfy the international concerns about the nuclear program in Iran. And guess what? If, in the course of this, Iran does not live up to those agreements, or if in the course of this we have failed to be able to reach agreement, we will immediately have the ability to ratchet up new sanctions and take whatever further steps are needed to prevent Iran from acquiring a nuclear weapon. Nothing has been taken off the table.
The first step that the P5+1 achieved in Geneva, I will tell you, was far from easy. And our task is far from complete. And none of us approach this on the basis somehow of existing trust. It’s not based on trust. Reagan said trust but verify. We say test but verify – test and verify. And that is exactly what we’re setting out to do. And we know the next six months are going to be even harder than this first step, because it’s going to take really tough decisions by Iran in order to absolutely live up to the notion that they’re prepared to prove that their program can only be peaceful. And when we say that, we know there are capacities that have already been built in and that are already part of their capacity today, but what we seek to do in this is expand every conceivable notion of breakout possibility from months to years. That makes Israel and the region and the world safer.
Now, it’s going to take strong military consultations with our partners, including Israel. Yossi Cohen, the national security advisor to Prime Minister Netanyahu, is here in Washington this week, already consulting with us. And we will consult with all of our partners – our European partners, Russia, China, our P5+1 partners, as well as other countries in the world – in order to focus in on what we must achieve at the negotiating table.
We still are convinced – we know that no deal, in the end, is better than a bad deal. A bad deal can lull you into some belief that you achieved something you haven’t while they have a loophole that allows them to do what you don’t want them to do. I assure you every expert in the world will be looking at this. Obviously, our friends and allies will, and we will, with as careful an eye as is humanly possible to make certain that if Iran has this program going forward, it is indeed the peaceful program, and can only be the peaceful program, that they profess it to be.
Now, there is another place in the region where strong, smart diplomacy backed by the threat of force has created a better path. As in Iran, the historic agreement to rid Syria of its chemical weapons was only a first step. But guess what? Against all the naysayers, against all the cynics, against the people who believed that dropping some bombs over the course of whatever period of time was somehow going to – which were calculated to degrade and deter their program, or the use of their program, that somehow that was more intelligent than getting all of the weapons out of the country and destroyed. That’s a logic that I find hard to follow.
What we proved was that diplomacy can be so powerful that it can diffuse the worst weapons of war. And while the President was prepared to use military force and made his decision known to the world, we also knew that that alone would not solve the problem. Force could deter and degrade Syria’s chemical weapons, but we needed to destroy it. That was our goal. And it’s because the President chose the path of diplomacy that today we are on our way to actually completing an historic first time ever complete removal of all weapons of mass destruction of a certain kind from a country. We’re going to rid this region of these heinous weapons.
But we also know that to bring an end to the humanitarian crisis, and to build a foundation for a future in which all Syrians have a say, and we end this conflict, diplomacy is going to have to do a lot more. We’ve also been pushing for Geneva II, which is to implement Geneva I, which is a transitional government, in order to try to bring that stability. And we’re finally at a point where, despite difficulties, despite delays, despite all the hurdles, that conference will take place in January.
There has to be a legitimate transition to a new government. And I haven’t heard anybody – not Putin, not Foreign Minister Lavrov, not any of our fellow foreign ministers in the region – say to us that they believe somehow there is a military solution here. Everybody has adopted and stated – the London 11 – there has to be a political solution. Well, how do you arrive at a political decision? You’ve got to negotiate. You’ve got to have diplomacy.
We knew that if the United States didn’t engage, the dangers in that region would only grow, disintegrate potentially into a complete and total breakup of the state of Syria, compartmentalization, the enclave creation of a failed state. So only as our country can do, we are working to bring opposing forces and international partners to the table. Now, I know again this is not going to be easy, but that doesn’t absolve us of our responsibility. It doesn’t mean you don’t try.
And of course, nowhere in the Middle East has peace eluded diplomats longer than in the sliver of land between the Mediterranean Sea and the Jordan River. I have been focused on that issue for a good 30 years. I’ve heard all the arguments from all the pundits on all sides – the conflict is too frozen, it’s too complicated, they don’t trust each other enough, there’s no way possible that there’s ingredients to try to make peace, it’s a fool’s errand to believe that the future can be better than the past.
Well, President Obama and I reject that cynicism. Countless prime ministers and presidents over the years have made it clear what a two-state solution looks like. That’s not the question. The question is how to get there. Today’s leaders – on both sides – have already made some tough decisions, tough choices, courageous choices, to try to take steps to move in the right direction.
President Obama is committed to this process because he understands that the possibilities of peace are dramatic and worth fighting for: a secure, Jewish, and democratic Israel living alongside a sovereign and independent Palestinian state; an Israel that enjoys peace and normalized relations with 22 Arab nations. That’s what waiting if you can implement a peace, because that’s what’s been promised in the Arab Peace Initiative, which has now been updated to include the possibility of swaps along ‘67 lines, as long as Israel is recognized – and also with 35 Muslim nations – 57 nations in all in one fell swoop.
Imagine what peace would do for trade and for tourism, what it would mean for developing technology and talent, for future generations of Israeli and Palestinian children. Imagine the possibilities of a warm peace with Egypt and other countries, where you can export the technology, help Egypt deal with a $13 billion agriculture deficit, energy deficit. The possibilities are infinite.
And that’s why exercising leadership that comes from our partnerships in the world is so critical, and that’s why we work to bring the parties back to the table. One of the reasons I’m late is I was just on the phone talking to Prime Minister Netanyahu. And I’m leaving tonight, shortly after this speech, to head back over there and then onto Vietnam and the Philippines. And we are going to continue this conversation on both sides, clear-eyed about the challenges but knowing that the status quo is unsustainable.
What you see today, this complacency, this sense of affluence and prosperity, and the lack of the violence that used to characterize it because of the nature of the fenced wall, then the – and the commitment of the Palestinians to a track of nonviolence has changed life. But it’s not going to change it forever if you don’t resolve the final status issues. The status quo is unsustainable, and there is no realistic alternative but two states for two peoples.
If diplomacy, backed by the credible threat of military force, can erase the menace of chemical weapons in Syria, if it can ultimately prevent the menace of nuclear weapons in Iran, if it can pave the way to peace and security between Israelis and Palestinians, if we can fully address these threats near and far without going to war, the region and the world will be far better off, and you, we, together will invite a true transformation in the life of that region. And the United States will gain because of that.
In the 21st century, American diplomacy, however, is not just defined by addressing conflict. The global economy is more interconnected than ever before. And I said to my – at my confirmation hearing that, in my judgment, in the modern-day world of diplomacy, foreign policy, economic policy and foreign policy are really part and parcel of the same thing; they’re one and the same.
So we know that the hard work of diplomacy demands creating shared prosperity. If you don’t deal with a problem of whole countries in large swaths of the world where 60 and 65 percent of the population are under the age of 25 or 30 at least, and 50 percent are under the age of 21, and 40 percent are under the age of 18, and they have no hope for education or jobs or a future, what do you think is going to supplant that vacuum? What’s going to fill it?
At the core of President Obama’s strategic rebalance to Asia is this whole notion of increased prosperity, of shared prosperity. And after the great recession, we saw where the trends were heading. America’s debts were too high, global demand for our products was too low. We all heard many in Congress argue that we should just turn inward, rebuilding at home instead of promoting better economic partnerships abroad.
President Obama always understood that this was a false choice. He understood that building bridges to opportunity requires breaking down barriers to competition and opening up new markets for our products abroad.
And thanks to the President’s leadership, we have signed new trade agreements with Korea, Columbia, Panama, and today we are engaged in two of the largest high-standard trade negotiations in history. The Trans-Pacific Partnership will integrate the most dynamic economic region of the world, comprising 40 percent of global economic activity. And at the same time, the United States is leading the charge to forge the Transatlantic Trade and Investment Partnership, which represents another 40 percent of the global economy.
President Obama understood that if America doesn’t speak up for high standards when it comes to labor and trade, globalization will force a race to the bottom rather than a race to the top. And as the largest market on earth, only we have the power to set that standard. We also have a responsibility to ensure that globalization is a force that affirms human dignity, ensuring strong protections for workers and consumers, and especially nowadays the environment.
We must also be mindful, as I said a moment ago, of this challenge of young people. What happened in Tunisia – it was started by a fruit vendor. It wasn’t religious motivation. It wasn’t some kind of ideological extremism. It was a human being, a person who aspired to a life where he could sell his wares without corruption, without being slapped around by a police officer. And he was so frustrated and so despairing that he took his own life in self-immolation. And that ignited a revolution that got rid of a dictator of 30 years of so.
In Tahrir Square, it wasn’t an ounce of Muslim Brotherhood. It wasn’t a religious movement. It was young people with their cell phones, smart phones, and texting and googling and talking to each other and trying to have a change because they knew they didn’t get the education they wanted, didn’t have the jobs they wanted.
And so it was incidentally in Syria, too. That began in the same form and was met with bullets and violence and has now translated into the civil war that it is, and I might add with huge extremist overtures that are threatening in many different ways.
So if we don’t create opportunity, we have multiple examples of how we create instability and how we create the problem of these conflicts that confound us. As more and more young people join the labor market, the world is going to need about a half billion new jobs by 2030.
That’s why it is hugely in the United States’ interest to support young innovators through programs like President Obama’s Global Entrepreneurship Summit, which I had the privilege of speaking at in Malaysia recently. It’s why we invest in the flagship Fulbright program and efforts like 100,000 Strong, which spur greater educational exchange. We’re trying to bring 100,000 young people from Latin America to America and send people from here to there. It’s why in every mission around the world diplomats are forging deeper and more durable links to young people. And through initiatives like SelectUSA, our ambassadors and Commerce Department are working with businesses around the world to create jobs for American workers.
In a time of tighter and tighter budgets, I’ve heard some people try to argue that these somehow are luxuries that we can’t afford. I could not disagree more, and I hope you join me in that. These are not luxuries. This is not something we do because it’s out of the goodness of our heart and it’s altruistic. These are investments that pay off in the opportunities that they create, in the far more dangerous alternatives that they avoid. A good job and a hopeful future is the best antidote to extremism.
And we’ve seen the transformation from aid to trade actually work. Our nation has had a long tradition of helping other nations stand on their own two feet. We did it brilliantly after World War II, George Marshall’s great plan, Harry Truman, which brought Europe back, developed democracies, wrote constitutions, and created wealth. We also know that this is the way to create prosperity and security here at home. Guess what? Today, 11 out of 15 of our biggest trading partners are former recipients of American foreign aid. One of them, South Korea, graduated not so long ago from recipient of aid to donor to other countries. So I just say to you, think of the opportunities awaiting us in Africa, home to seven of the 10 fastest-growing economies in the world. There is no long-term challenge more worthy of our diplomatic energy, however. I can say a lot more about this, incidentally because – I don’t have time tonight, but there’s just so much staring us in the face in terms of these opportunities.
And by the way, those of you who travel have experienced firsthand the infrastructure gap that is growing between the United States and lots of other countries. The quality of airports, quality of train stations, quality of tracks, quality of available infrastructure, the fact that America is a great big gaping hole right in the center of our country where we don’t have a grid, we don’t connect our energy. You could produce clean energy in the four corners down around Colorado, Arizona, New Mexico, and so forth, but we can’t send it anywhere. We have an east coast grid, a west coast grid, a little line up in the north of America, and down south we got the Texas grid all by itself. Huge hole in the middle. So if you produce clean energy in Minnesota by wind power, you can’t send it somewhere. If you produce clean energy in the south by solar power, and you can’t send it to the north when they need it. This doesn’t make sense. And guess what? There’s a huge amount of private capital in the world waiting to invest in revenue-producing infrastructure projects, and we’re not even in the ballgame.
In the end, there’s no more long-term challenge more worthy of our diplomatic energy than the one that might just trump all the others. And it’s not about territory, it’s not about security, it’s not about religion. It is the threat of global climate change. I just read the latest report from the United Nations Intergovernmental Panel on Climate Change, who Foreign Policy Magazine had the good sense to recognize as one of this year’s 100 global thinkers. If we continue down the path that we’re on today, scientists predict – not politicians, not radio talk show hosts – scientists, people we once most respected in our society for their knowledge and their body of work and their evidentiary process and their pedagogy for how they produce what they produce – well, they predict today that by the end of this century, the sea will have risen on average by a full meter. I know a meter doesn’t sound like a lot to some people, but if you put it into reality, it’s enough to put large swaths of Miami, Calcutta, Dhaka, Tokyo, and a host of other major cities under water. That would displace millions of people, threaten billions in economic activity and infrastructure. It would also mean longer, more unpredictable monsoon seasons and more extreme weather events. We’ll see more frequent and more intense droughts, which means poor crop yields, ultimately higher food prices, and challenges food security in a world that already has food security challenges.
The scientific consensus has been clear, not for this one year, but for years and years. I remember the first hearings we held in the United States Senate. Al Gore, Tim Wirth, myself, others, we had a series of hearings. It’s been clear for years since then that this is growing in its impact and reality. And it grows only more unanimous with each study – thousands of studies, peer reviewed. Some minimal number of paid for, quote, “peer reviewed” to the contrary. Ninety-seven percent of climate experts on this planet agree that humans are creating climate change, global warming. Climate change is an economic threat. It’s a security threat. You will have climate refugees in the world, you will have climate conflicts in the world as people fight for water, where people fight for food, and they’re dislocated.
A handful of world leaders say we have reached the point of no return. And some members of Congress nevertheless still claim that this is a hoax. Even some of those who believe the science say it’s not America’s responsibility to help lead the charge. Well, we’ve heard this pessimism before. But just as the United States rallied the world to take on the scourge of AIDS, President Obama has imagined a different future, and with his Climate Action Plan is taking as much executive action as he can to try to make a different choice.
The United States has a fundamental responsibility to help address this global crisis, and we are in a unique position to do so in important ways. And our responsibility comes from a simple fact: The United States and China alone represent not quite 50 percent of all the climate – of all of the greenhouse gasses in the world. And if you put 17 to 20 nations together, they represent what is happening to the rest of the world, well over 90-plus percent. So we need to constructively engage in tough negotiations with all the major countries of the world to forge an ambitious and sustainable climate agreement.
And second, we have to help countries coming onto the grid to do so in a way that doesn’t buy into the same old mistakes and the same old process of the past. Right now, we’re seeing this plethora of gas wind up lowering the price of coal, and whole countries are turning accordingly, just driven by price, to go buy the coal and burn it. Nothing could be more damaging to our efforts to deal with climate change. We cannot look at climate change only as a burden. It actually is an incredible opportunity. The energy market that is staring us in the face, my friends, is a $6 trillion market. And it’s going to grow over the next several decades to include about 6 billion to 9 billion users.
Let me put that in perspective. In the 1990s, when every single quintile of American income earner saw their income go up, that was a $1 trillion market with 1 billion users, the high tech market. We’re looking at a $6 trillion market today with 4- to 5 billion users, going up to 6 to 9, because that’s what's going to happen to the population of the planet. And we have technology. We could be leading the charge in this if we were willing to make some tough decisions.
And so listening to the cynics who see this problem as too large, or our solutions as too late, would be absolutely the greatest missed opportunity in the world. As the most innovative economy in the world, what the United States decides to do will determine not just whether the sea is going to continue to rise, but whether the world will rise to meet this challenge at all. I think it’s an understatement to say that none of these challenges I’ve just gone through are easy. Obviously, if they were, they would have been solved some time ago. Although in today’s political world, not even that is a guarantee. But the United States takes these issues on because I think we are moved more by our vision of what is possible than by the pessimism of naysayers.
We’ve had a vision for a better world – for greater peace, for greater prosperity, for a greater future for the planet. That doesn’t mean we’re going to succeed every time or that we can solve every problem in our time. But let me tell you something for certain, that is not an excuse for letting whole states fail, for letting peace pass us by, for letting economic opportunity elude us, or letting our environment fall into further disrepair.
So I will be on this plane a few hours from now. And this weekend, I’ll be in Vietnam for the first time since I think I was there with President Clinton back in around 2000 or so. And in the years after we returned from our combat tours, I will tell you, my friends and I often dreamed of a day when someone would say the word “Vietnam,” and we would think of the country, not a war. I believe that day is here. It’s proof that as painful as the past can be, we can still believe in the possibility of change. Through the hard work of diplomacy, history’s enemies can become partners for a new day. I remind our friends in the West Bank of that every day when I talk to them. In 1967, Jordanians and Israelis were shooting at each other, right across the line from the Old City to the King David Hotel. Today, they are fast, firm partners working together for peace. The challenges now can become opportunities, I believe, for a new age.
We’re not unrealistic about the road ahead of us. We know that the solutions that may or may not be possible are rarely perfect. But I’ll tell you, like all Americans, President Obama believes we can be the authors of our own future. We really can be, despite all the negativity and the conflict we see today in our politics. And as Mandela proved, though it may sometimes seem impossible, when we stay hopeful, when we stay persistent, when we stay true to our deepest values, when we are prepared to stand up and fill the vacuum or to lead, we can transform history. That’s what this is all about, and that’s what we have to go out and do.
Thank you very, very much. (Applause.)
Remarks at the Transformational Trends Strategic Forum
Remarks
John Kerry
Secretary of State
Four Seasons Hotel
Washington, DC
December 11, 2013
SECRETARY KERRY: Well, thank you, David, very, very much. Thank you, Foreign Policy Magazine. And thank you, all of you, for not singing. I really appreciate it. (Laughter.)
The – I understand that you’ve had a terrific session today talking about transformational trends with a lot of speakers. I guess Danny Russel was just here, who’s doing a superb job on Asia. And I have just come from the Hill, where I spent a good part of the afternoon with my former senator colleagues briefing them on this first-step agreement that we have secured with Iran and with P5+1. And I’ll say a few words about that in the course of this evening.
I also want to thank, recognize David McKean, who’s the State Department’s Director of Policy Planning. And his office is happily and proudly co-hosting today’s conference. We’re delighted with that. I’m looking over here, I see Ambassador David Thorne, who’s serving as the Counselor in the Department now. And Tom Friedman sitting there, and so I’ve got to be really careful with what I say tonight. (Laughter.)
Thank you very much for giving me an opportunity to talk to you. I have to tell you that at the frightening age of 70 you don’t get an AARP card, you don’t get a Medicare card, you don’t get anything, you don’t get many birthday cards either; you just get a little older. And my staff
asked me what I wanted for my birthday, and I said I want a trip around the world. They said, “Really? Another one?” (Laughter.)
The truth is I’m leaving shortly on another trip, ultimately heading for the next few days back to Vietnam, my first trip there as Secretary of State. But many, many trips, obviously, to try to lift the embargo, normalize relations, and begin the process of the transformation that we’re in today. So I’ll be proud to be back there and see the differences being made.
This conference is rightfully focused on transformation trends. And we do so, obviously, in a week where all the world is celebrating one of those really rare, truly transformational figures: Nelson Mandela. I had the privilege of attending the service, at least most of it, at the National Cathedral today.
Madiba left behind a lot of powerful lessons and a lot of profound words. But one observation of his that has always intrigued me is this: It always seems impossible until it is done. In many ways, his entire life journey seemed impossible. Mandela knew that nothing is impossible – but as President Obama said in Johannesburg just yesterday, “Nothing that he achieved was inevitable.” He didn’t know he would succeed, only that he had a responsibility to act. And he had a vision, a dream, whatever you want to call it. He knew that South Africa had to transform and that it needed agents of transformation.
I think President Obama and I both believe in agents of transformation. It takes leadership, and you have to understand that the greatest risk is not taking a risk at all. As we reflect on his life, we have to make sure that our own work summons his courage and summons his common sense.
Today, the greatest risk the United States faces not – doesn’t come from a rising rival, but it comes from dangers that arise in a world if we fail to lead. We risk creating a vacuum that, believe me, would be all too quickly filled by those with values very much different from our own – by nihilists eager to destroy, who have proven that that is their goal, without any slightest interest or stated intent in providing health care, building schools, developing energy, establishing trade, creating opportunity, expanding rights, or even most importantly perhaps, pursuing peace and stability.
The United States, without a statement of arrogance or chauvinism, still remains the indispensable nation. Why? Because we have an unparalleled ability to transform things and places, people, and the world by convening allies and adversaries alike around a set of values and around a set of principles. And after a decade of war, it has never been more clear that diplomacy can be the transformational tool that shapes the world according to our values.
Now this doesn’t mean – does not mean, I want to emphasize – that America must be the world’s parent or the world’s policeman, not at all. That’s not what the world wants from us, nor is it what we want for the world. The hard work of diplomacy and our hopes for the world have to be informed by humility. We can’t do it alone.
But the truth is America has a singular ability to be able to articulate a vision, to lay down a set of principles that we have actually lived by and practiced and made a difference by in order to galvanize the global community. History is what documents what I just said. History shows that when America musters the courage to tackle the toughest challenges, we do and can inspire our partners around the world to do the same – and to do what seems, at first, to be the impossible.
Last week, which ended with the world learning of Mandela’s death, it began with the world celebrating the progress that we’ve made on another great struggle of the 20th century: the scourge of HIV and AIDS.
Thirty years ago, as the world slowly became aware of a disease that few even understood, and even fewer believed anything could be done about it, and many feared even talking about it. People were uncomfortable with that concept. When I arrived in the Senate, I saw this discomfort that people had with even the discussion. And as recently as 10 years ago, experts said that the crisis had reached a point of no return, and AIDS was considered an automatic death sentence in much of the world.
But the United States didn’t let this pessimism deter us from bringing the world together and using our collective power to establish programs, like PEPFAR, that are turning the trend around and preventing an even greater catastrophe. I know something about that because in 1991, I think it was, Bill Frist as the Majority Leader and I joined forces in bipartisan fashion to serve as co-chairs of the CSIS Task Force on AIDS. And out of that grew an initiative that we put together, which we even got Jesse Helms to support and pass unanimously in the United States Senate. That became PEPFAR.
And since its peak in the last decade, AIDS-related deaths have declined by a third. New HIV infections have declined by 40 percent in Sub-Saharan Africa – the region that’s most heavily affected. And the number of people receiving life-saving HIV treatments has increased 40-fold. The goal that President Obama set of an AIDS-free generation – one you could barely dream about when the program began – is actually within reach today.
This is the combination of hope and hard work that only the United States can inspire to rally the world to take on that kind of complex challenge. That’s an example, and that is the spirit that guides American diplomacy, I believe, under President Obama. That’s the charge that he gave me nearly a year ago now – a little shy, a couple of months. And that vision can prove transformational in the days to come as we confront challenges of peace and prosperity, and even the very future of our planet. And that is not an exaggeration or excessively stated proposition.
There’s a reason that I believe diplomacy should always be our first resort. As many of you know, or most of you know, I’ve worn the uniform of my country and I have seen war. I know what it’s like to be shot at and I know what it’s like to lose friends in that process. And I can tell you point blank that when you have been there, done that, it sharpens your focus on the responsibility of leaders to avoid that if possible – not because you’re a pacifist but because you know the consequences. War is the failure of diplomacy.
In the first decade of this century, we all saw what happens when America favors the force of arms over the force of our diplomacy. In three of today’s most pressing challenges – in Iran, Syria, and the Israeli-Palestinian conflict – we saw the dangerous direction that events were heading. But with the careful balance of strength and diplomacy, we have now worked hard to transform those trends to shape a more secure future for our friends and allies, and deliver a hard-won and sustainable peace.
In Iran, the regime was spinning centrifuges faster and faster. In 2003, there were 164 centrifuges. Now, there are 19,000. There was a clear direction in which that program was moving, and Iran was clearly marching closer and closer to a nuclear bomb. The Syrian regime used chemical weapons against its own people, started a civil war that has taken more than a hundred thousand lives, and continues to use starvation as a weapon of war. Right next door, we see a demographic ticking time bomb testing whether Israel can remain both a Jewish and a democratic state. And we see a Palestinian people frustrated in their hopes of realizing their legitimate aspirations of economic opportunity and sovereignty.
In each of these cases, pundits and armchair isolationists said addressing the problem would be too hard, or that we were too late, or that it wasn’t our place, or that diplomacy wasn’t up to the task. But today, we see that American diplomacy, often backed by the strength of our military, in fact gives us the best chance to deliver a more secure future for our friends and allies, one where the people of the region are more free to pursue their common aspirations.
From day one, President Obama realized the danger a nuclear Iran would pose to our national security interests in the region, including our ally Israel. The President has kept his personal commitment to assuring that Iran does not obtain a nuclear weapon and will not obtain a weapon by keeping the credible threat of force on the table while using all of the tools of American diplomacy to pursue a peaceful resolution.
As only the President of the United States can, President Obama brought the world together to impose the most biting sanctions regime in history. Thanks to the President’s leadership, Iran did come to the table. In fact, you can, beyond any reasonable doubt, carry the argument that the Iranian election was profoundly affected by the will of the people to get out from under those sanctions, and that they sent a message directly contrary to what was the original intent of the regime and the people they were backing for president, that they wanted to move in a new direction. And Iran came to the table, and we are negotiating from a position of strength.
So when those same pessimists said that we should accept or contain a nuclear armed Iran, the President actually saw a different future. He knew that if the United States didn’t test Iran, the region would only grow more dangerous, that if Iran indeed was merely contained, or that somehow we threw up our hands and said this can’t be achieved, there would absolutely be to a certainty an arms race in the Gulf states and in the region.
Today, to the contrary, it is clear that diplomacy provides the best path to neutralize this threat. And I am convinced beyond any doubt that our friends in the region absolutely, positively became safer the moment this agreement was inked. And the moment it is implemented, they will truly be able to measure additional safety. And that is because we have ensured, providing the implementation provides – proceeds forward, that Iran’s program will not advance while we negotiate.
As we negotiate, Iran will forfeit its entire stock of 20 percent enriched uranium, and that – that puts it a short step away from weapons grade uranium and bomb-making material. As we negotiate, Iran will be unable to grow its stock of 3.5 percent uranium, or to stockpile centrifuges, or to increase the number of centrifuges that were in operation. As we negotiate, international inspectors will have unprecedented access to Iran’s key facilities, including daily access – which we don’t have today – to Fordow, daily access – which we don’t have today – to Natanz, and regular access to Arak, the heavy water reactor. As we negotiate, construction on the – as we negotiate, during the reprocessing facility at Arak, which could have provided an alternative path to a bomb because the plutonium – that now will not be able to move forward. All components that are not yet installed will not be able to be installed. No fuel rods will be transferred. No fuel will be transferred. No additional fuel will be able to be tested. The nuclear component of that facility will stop dead in its tracks where it is today.
As we negotiate, our Treasury Department will strongly enforce core sanctions architecture, which has deprived Iran of nearly 80 billion to 100 billion in oil revenues since 2012 as well as access to the international banking system. None of that architecture is undone in this first step agreement. It stays in place. As we negotiate, we will continue to be clear – absolutely clear – about the price of noncompliance, or of failing to satisfy the international concerns about the nuclear program in Iran. And guess what? If, in the course of this, Iran does not live up to those agreements, or if in the course of this we have failed to be able to reach agreement, we will immediately have the ability to ratchet up new sanctions and take whatever further steps are needed to prevent Iran from acquiring a nuclear weapon. Nothing has been taken off the table.
The first step that the P5+1 achieved in Geneva, I will tell you, was far from easy. And our task is far from complete. And none of us approach this on the basis somehow of existing trust. It’s not based on trust. Reagan said trust but verify. We say test but verify – test and verify. And that is exactly what we’re setting out to do. And we know the next six months are going to be even harder than this first step, because it’s going to take really tough decisions by Iran in order to absolutely live up to the notion that they’re prepared to prove that their program can only be peaceful. And when we say that, we know there are capacities that have already been built in and that are already part of their capacity today, but what we seek to do in this is expand every conceivable notion of breakout possibility from months to years. That makes Israel and the region and the world safer.
Now, it’s going to take strong military consultations with our partners, including Israel. Yossi Cohen, the national security advisor to Prime Minister Netanyahu, is here in Washington this week, already consulting with us. And we will consult with all of our partners – our European partners, Russia, China, our P5+1 partners, as well as other countries in the world – in order to focus in on what we must achieve at the negotiating table.
We still are convinced – we know that no deal, in the end, is better than a bad deal. A bad deal can lull you into some belief that you achieved something you haven’t while they have a loophole that allows them to do what you don’t want them to do. I assure you every expert in the world will be looking at this. Obviously, our friends and allies will, and we will, with as careful an eye as is humanly possible to make certain that if Iran has this program going forward, it is indeed the peaceful program, and can only be the peaceful program, that they profess it to be.
Now, there is another place in the region where strong, smart diplomacy backed by the threat of force has created a better path. As in Iran, the historic agreement to rid Syria of its chemical weapons was only a first step. But guess what? Against all the naysayers, against all the cynics, against the people who believed that dropping some bombs over the course of whatever period of time was somehow going to – which were calculated to degrade and deter their program, or the use of their program, that somehow that was more intelligent than getting all of the weapons out of the country and destroyed. That’s a logic that I find hard to follow.
What we proved was that diplomacy can be so powerful that it can diffuse the worst weapons of war. And while the President was prepared to use military force and made his decision known to the world, we also knew that that alone would not solve the problem. Force could deter and degrade Syria’s chemical weapons, but we needed to destroy it. That was our goal. And it’s because the President chose the path of diplomacy that today we are on our way to actually completing an historic first time ever complete removal of all weapons of mass destruction of a certain kind from a country. We’re going to rid this region of these heinous weapons.
But we also know that to bring an end to the humanitarian crisis, and to build a foundation for a future in which all Syrians have a say, and we end this conflict, diplomacy is going to have to do a lot more. We’ve also been pushing for Geneva II, which is to implement Geneva I, which is a transitional government, in order to try to bring that stability. And we’re finally at a point where, despite difficulties, despite delays, despite all the hurdles, that conference will take place in January.
There has to be a legitimate transition to a new government. And I haven’t heard anybody – not Putin, not Foreign Minister Lavrov, not any of our fellow foreign ministers in the region – say to us that they believe somehow there is a military solution here. Everybody has adopted and stated – the London 11 – there has to be a political solution. Well, how do you arrive at a political decision? You’ve got to negotiate. You’ve got to have diplomacy.
We knew that if the United States didn’t engage, the dangers in that region would only grow, disintegrate potentially into a complete and total breakup of the state of Syria, compartmentalization, the enclave creation of a failed state. So only as our country can do, we are working to bring opposing forces and international partners to the table. Now, I know again this is not going to be easy, but that doesn’t absolve us of our responsibility. It doesn’t mean you don’t try.
And of course, nowhere in the Middle East has peace eluded diplomats longer than in the sliver of land between the Mediterranean Sea and the Jordan River. I have been focused on that issue for a good 30 years. I’ve heard all the arguments from all the pundits on all sides – the conflict is too frozen, it’s too complicated, they don’t trust each other enough, there’s no way possible that there’s ingredients to try to make peace, it’s a fool’s errand to believe that the future can be better than the past.
Well, President Obama and I reject that cynicism. Countless prime ministers and presidents over the years have made it clear what a two-state solution looks like. That’s not the question. The question is how to get there. Today’s leaders – on both sides – have already made some tough decisions, tough choices, courageous choices, to try to take steps to move in the right direction.
President Obama is committed to this process because he understands that the possibilities of peace are dramatic and worth fighting for: a secure, Jewish, and democratic Israel living alongside a sovereign and independent Palestinian state; an Israel that enjoys peace and normalized relations with 22 Arab nations. That’s what waiting if you can implement a peace, because that’s what’s been promised in the Arab Peace Initiative, which has now been updated to include the possibility of swaps along ‘67 lines, as long as Israel is recognized – and also with 35 Muslim nations – 57 nations in all in one fell swoop.
Imagine what peace would do for trade and for tourism, what it would mean for developing technology and talent, for future generations of Israeli and Palestinian children. Imagine the possibilities of a warm peace with Egypt and other countries, where you can export the technology, help Egypt deal with a $13 billion agriculture deficit, energy deficit. The possibilities are infinite.
And that’s why exercising leadership that comes from our partnerships in the world is so critical, and that’s why we work to bring the parties back to the table. One of the reasons I’m late is I was just on the phone talking to Prime Minister Netanyahu. And I’m leaving tonight, shortly after this speech, to head back over there and then onto Vietnam and the Philippines. And we are going to continue this conversation on both sides, clear-eyed about the challenges but knowing that the status quo is unsustainable.
What you see today, this complacency, this sense of affluence and prosperity, and the lack of the violence that used to characterize it because of the nature of the fenced wall, then the – and the commitment of the Palestinians to a track of nonviolence has changed life. But it’s not going to change it forever if you don’t resolve the final status issues. The status quo is unsustainable, and there is no realistic alternative but two states for two peoples.
If diplomacy, backed by the credible threat of military force, can erase the menace of chemical weapons in Syria, if it can ultimately prevent the menace of nuclear weapons in Iran, if it can pave the way to peace and security between Israelis and Palestinians, if we can fully address these threats near and far without going to war, the region and the world will be far better off, and you, we, together will invite a true transformation in the life of that region. And the United States will gain because of that.
In the 21st century, American diplomacy, however, is not just defined by addressing conflict. The global economy is more interconnected than ever before. And I said to my – at my confirmation hearing that, in my judgment, in the modern-day world of diplomacy, foreign policy, economic policy and foreign policy are really part and parcel of the same thing; they’re one and the same.
So we know that the hard work of diplomacy demands creating shared prosperity. If you don’t deal with a problem of whole countries in large swaths of the world where 60 and 65 percent of the population are under the age of 25 or 30 at least, and 50 percent are under the age of 21, and 40 percent are under the age of 18, and they have no hope for education or jobs or a future, what do you think is going to supplant that vacuum? What’s going to fill it?
At the core of President Obama’s strategic rebalance to Asia is this whole notion of increased prosperity, of shared prosperity. And after the great recession, we saw where the trends were heading. America’s debts were too high, global demand for our products was too low. We all heard many in Congress argue that we should just turn inward, rebuilding at home instead of promoting better economic partnerships abroad.
President Obama always understood that this was a false choice. He understood that building bridges to opportunity requires breaking down barriers to competition and opening up new markets for our products abroad.
And thanks to the President’s leadership, we have signed new trade agreements with Korea, Columbia, Panama, and today we are engaged in two of the largest high-standard trade negotiations in history. The Trans-Pacific Partnership will integrate the most dynamic economic region of the world, comprising 40 percent of global economic activity. And at the same time, the United States is leading the charge to forge the Transatlantic Trade and Investment Partnership, which represents another 40 percent of the global economy.
President Obama understood that if America doesn’t speak up for high standards when it comes to labor and trade, globalization will force a race to the bottom rather than a race to the top. And as the largest market on earth, only we have the power to set that standard. We also have a responsibility to ensure that globalization is a force that affirms human dignity, ensuring strong protections for workers and consumers, and especially nowadays the environment.
We must also be mindful, as I said a moment ago, of this challenge of young people. What happened in Tunisia – it was started by a fruit vendor. It wasn’t religious motivation. It wasn’t some kind of ideological extremism. It was a human being, a person who aspired to a life where he could sell his wares without corruption, without being slapped around by a police officer. And he was so frustrated and so despairing that he took his own life in self-immolation. And that ignited a revolution that got rid of a dictator of 30 years of so.
In Tahrir Square, it wasn’t an ounce of Muslim Brotherhood. It wasn’t a religious movement. It was young people with their cell phones, smart phones, and texting and googling and talking to each other and trying to have a change because they knew they didn’t get the education they wanted, didn’t have the jobs they wanted.
And so it was incidentally in Syria, too. That began in the same form and was met with bullets and violence and has now translated into the civil war that it is, and I might add with huge extremist overtures that are threatening in many different ways.
So if we don’t create opportunity, we have multiple examples of how we create instability and how we create the problem of these conflicts that confound us. As more and more young people join the labor market, the world is going to need about a half billion new jobs by 2030.
That’s why it is hugely in the United States’ interest to support young innovators through programs like President Obama’s Global Entrepreneurship Summit, which I had the privilege of speaking at in Malaysia recently. It’s why we invest in the flagship Fulbright program and efforts like 100,000 Strong, which spur greater educational exchange. We’re trying to bring 100,000 young people from Latin America to America and send people from here to there. It’s why in every mission around the world diplomats are forging deeper and more durable links to young people. And through initiatives like SelectUSA, our ambassadors and Commerce Department are working with businesses around the world to create jobs for American workers.
In a time of tighter and tighter budgets, I’ve heard some people try to argue that these somehow are luxuries that we can’t afford. I could not disagree more, and I hope you join me in that. These are not luxuries. This is not something we do because it’s out of the goodness of our heart and it’s altruistic. These are investments that pay off in the opportunities that they create, in the far more dangerous alternatives that they avoid. A good job and a hopeful future is the best antidote to extremism.
And we’ve seen the transformation from aid to trade actually work. Our nation has had a long tradition of helping other nations stand on their own two feet. We did it brilliantly after World War II, George Marshall’s great plan, Harry Truman, which brought Europe back, developed democracies, wrote constitutions, and created wealth. We also know that this is the way to create prosperity and security here at home. Guess what? Today, 11 out of 15 of our biggest trading partners are former recipients of American foreign aid. One of them, South Korea, graduated not so long ago from recipient of aid to donor to other countries. So I just say to you, think of the opportunities awaiting us in Africa, home to seven of the 10 fastest-growing economies in the world. There is no long-term challenge more worthy of our diplomatic energy, however. I can say a lot more about this, incidentally because – I don’t have time tonight, but there’s just so much staring us in the face in terms of these opportunities.
And by the way, those of you who travel have experienced firsthand the infrastructure gap that is growing between the United States and lots of other countries. The quality of airports, quality of train stations, quality of tracks, quality of available infrastructure, the fact that America is a great big gaping hole right in the center of our country where we don’t have a grid, we don’t connect our energy. You could produce clean energy in the four corners down around Colorado, Arizona, New Mexico, and so forth, but we can’t send it anywhere. We have an east coast grid, a west coast grid, a little line up in the north of America, and down south we got the Texas grid all by itself. Huge hole in the middle. So if you produce clean energy in Minnesota by wind power, you can’t send it somewhere. If you produce clean energy in the south by solar power, and you can’t send it to the north when they need it. This doesn’t make sense. And guess what? There’s a huge amount of private capital in the world waiting to invest in revenue-producing infrastructure projects, and we’re not even in the ballgame.
In the end, there’s no more long-term challenge more worthy of our diplomatic energy than the one that might just trump all the others. And it’s not about territory, it’s not about security, it’s not about religion. It is the threat of global climate change. I just read the latest report from the United Nations Intergovernmental Panel on Climate Change, who Foreign Policy Magazine had the good sense to recognize as one of this year’s 100 global thinkers. If we continue down the path that we’re on today, scientists predict – not politicians, not radio talk show hosts – scientists, people we once most respected in our society for their knowledge and their body of work and their evidentiary process and their pedagogy for how they produce what they produce – well, they predict today that by the end of this century, the sea will have risen on average by a full meter. I know a meter doesn’t sound like a lot to some people, but if you put it into reality, it’s enough to put large swaths of Miami, Calcutta, Dhaka, Tokyo, and a host of other major cities under water. That would displace millions of people, threaten billions in economic activity and infrastructure. It would also mean longer, more unpredictable monsoon seasons and more extreme weather events. We’ll see more frequent and more intense droughts, which means poor crop yields, ultimately higher food prices, and challenges food security in a world that already has food security challenges.
The scientific consensus has been clear, not for this one year, but for years and years. I remember the first hearings we held in the United States Senate. Al Gore, Tim Wirth, myself, others, we had a series of hearings. It’s been clear for years since then that this is growing in its impact and reality. And it grows only more unanimous with each study – thousands of studies, peer reviewed. Some minimal number of paid for, quote, “peer reviewed” to the contrary. Ninety-seven percent of climate experts on this planet agree that humans are creating climate change, global warming. Climate change is an economic threat. It’s a security threat. You will have climate refugees in the world, you will have climate conflicts in the world as people fight for water, where people fight for food, and they’re dislocated.
A handful of world leaders say we have reached the point of no return. And some members of Congress nevertheless still claim that this is a hoax. Even some of those who believe the science say it’s not America’s responsibility to help lead the charge. Well, we’ve heard this pessimism before. But just as the United States rallied the world to take on the scourge of AIDS, President Obama has imagined a different future, and with his Climate Action Plan is taking as much executive action as he can to try to make a different choice.
The United States has a fundamental responsibility to help address this global crisis, and we are in a unique position to do so in important ways. And our responsibility comes from a simple fact: The United States and China alone represent not quite 50 percent of all the climate – of all of the greenhouse gasses in the world. And if you put 17 to 20 nations together, they represent what is happening to the rest of the world, well over 90-plus percent. So we need to constructively engage in tough negotiations with all the major countries of the world to forge an ambitious and sustainable climate agreement.
And second, we have to help countries coming onto the grid to do so in a way that doesn’t buy into the same old mistakes and the same old process of the past. Right now, we’re seeing this plethora of gas wind up lowering the price of coal, and whole countries are turning accordingly, just driven by price, to go buy the coal and burn it. Nothing could be more damaging to our efforts to deal with climate change. We cannot look at climate change only as a burden. It actually is an incredible opportunity. The energy market that is staring us in the face, my friends, is a $6 trillion market. And it’s going to grow over the next several decades to include about 6 billion to 9 billion users.
Let me put that in perspective. In the 1990s, when every single quintile of American income earner saw their income go up, that was a $1 trillion market with 1 billion users, the high tech market. We’re looking at a $6 trillion market today with 4- to 5 billion users, going up to 6 to 9, because that’s what's going to happen to the population of the planet. And we have technology. We could be leading the charge in this if we were willing to make some tough decisions.
And so listening to the cynics who see this problem as too large, or our solutions as too late, would be absolutely the greatest missed opportunity in the world. As the most innovative economy in the world, what the United States decides to do will determine not just whether the sea is going to continue to rise, but whether the world will rise to meet this challenge at all. I think it’s an understatement to say that none of these challenges I’ve just gone through are easy. Obviously, if they were, they would have been solved some time ago. Although in today’s political world, not even that is a guarantee. But the United States takes these issues on because I think we are moved more by our vision of what is possible than by the pessimism of naysayers.
We’ve had a vision for a better world – for greater peace, for greater prosperity, for a greater future for the planet. That doesn’t mean we’re going to succeed every time or that we can solve every problem in our time. But let me tell you something for certain, that is not an excuse for letting whole states fail, for letting peace pass us by, for letting economic opportunity elude us, or letting our environment fall into further disrepair.
So I will be on this plane a few hours from now. And this weekend, I’ll be in Vietnam for the first time since I think I was there with President Clinton back in around 2000 or so. And in the years after we returned from our combat tours, I will tell you, my friends and I often dreamed of a day when someone would say the word “Vietnam,” and we would think of the country, not a war. I believe that day is here. It’s proof that as painful as the past can be, we can still believe in the possibility of change. Through the hard work of diplomacy, history’s enemies can become partners for a new day. I remind our friends in the West Bank of that every day when I talk to them. In 1967, Jordanians and Israelis were shooting at each other, right across the line from the Old City to the King David Hotel. Today, they are fast, firm partners working together for peace. The challenges now can become opportunities, I believe, for a new age.
We’re not unrealistic about the road ahead of us. We know that the solutions that may or may not be possible are rarely perfect. But I’ll tell you, like all Americans, President Obama believes we can be the authors of our own future. We really can be, despite all the negativity and the conflict we see today in our politics. And as Mandela proved, though it may sometimes seem impossible, when we stay hopeful, when we stay persistent, when we stay true to our deepest values, when we are prepared to stand up and fill the vacuum or to lead, we can transform history. That’s what this is all about, and that’s what we have to go out and do.
Thank you very, very much. (Applause.)
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