WORLD ECONOMIC FORUM REMARKS BY SECRETARY OF STATE KERRY

FROM:  STATE DEPARTMENT 
Remarks at the World Economic Forum
Remarks
John Kerry
Secretary of State
Davos, Switzerland
January 24, 2014

Well, Klaus, thank you very, very much. It’s an enormous pleasure for me to be back in Davos and to have this opportunity to be able to share some thoughts with all of you about American foreign policy. And I have – as Klaus just said to you all, I have had the privilege of being here many times over the past 20 years. I always appreciate the diversity of thought and the thirst for new ideas that really characterizes this forum. It’s safe to say that Davos pushes the limits of thinking, tries hard to find the new thinking, and that’s really what makes this forum so special. So Klaus, I congratulate you on many, many years of putting together a really remarkable venue for everybody.

Today, I want to share our latest thinking with respect to the role that U.S. diplomacy can play in addressing some of the most pressing foreign policy challenges that we face in an obviously extraordinarily complex, very different world from the world of the last century.

I must say I am perplexed by claims that I occasionally hear that somehow America is disengaging from the world, this myth that we are pulling back or giving up or standing down. In fact, I want to make it clear today that nothing could be further from the truth. This misperception, and in some case, a driven narrative, appears to be based on the simplistic assumption that our only tool of influence is our military, and that if we don’t have a huge troop presence somewhere or we aren’t brandishing an immediate threat of force, we are somehow absent from the arena. I think the only person more surprised than I am by the myth of this disengagement is the Air Force pilot who flies the Secretary of State’s plane.

Obviously, our engagement isn’t measured in frequent flier miles – though it would be pretty nice if I got a few, as a matter of fact – but it is really measured – and I think serious students of foreign policy understand this – it is measured by the breadth of our global commitments, their depth, especially our commitments to our allies in every corner of the world. It is measured by the degree of difficulty of the crises and the conflicts that we choose to confront, and it is measured ultimately by the results that we are able to achieve.

Far from disengaging, America is proud to be more engaged than ever, and, I believe, is playing as critical a role, perhaps as critical as ever, in pursuit of peace, prosperity, and stability in various parts of the world.

Right here in Europe, we are working with our partners to press the Government of Ukraine to forgo violence, to address the concerns of peaceful protesters, to foster dialogue, promote the freedom of assembly and expression. And I literally just received messages before walking in here of the efforts of our diplomats on the ground working with President Yanukovych to try to achieve calm and help move in this direction in the next days. We will stand with the people of Ukraine.

We’re also making progress towards finalizing the Transatlantic Trade and Investment Partnership, which would link the world’s largest market, the EU, with the world’s single largest economy, the United States, raising standards and creating jobs on both sides of the Atlantic.

In the Asia Pacific region, we are negotiating the Trans Pacific Partnership, which will similarly encourage a race to the top, not the bottom, as it unifies 40 percent of the world’s economy. The United States is working extremely closely with China and our allies in the region in order to address North Korea’s reckless nuclear program, and also on diplomatic priorities like disaster relief and development. I was recently in the Philippines, and in a few weeks, I will be back in Asia, my fifth trip as Secretary of State within a year. We are working with our ASEAN partners to discourage escalatory steps and conflict in the South China Sea. And this is a critical part of the President’s rebalance to Asia.

Across Africa, the home to seven of the world’s 10 fastest-growing economies, we are investing heavily in both development and trade. And in the Great Lakes region, we just recently helped end an armed rebellion, demobilizing the M23 armed group. And just yesterday, thanks to our diplomatic intense engagement on the ground, we have helped to achieve a ceasefire in South Sudan. And I can tell you that almost every day during the so-called Christmas break, I was on the phone to either President Kiir or to former Vice President Riek Machar or to the prime minister of Ethiopia or President Museveni of Uganda as we worked diligently to try to move towards peace.

Closer to home, we just completed a U.S.-Canada-Mexico summit in Washington last week in preparation for our leaders who will focus on increased cooperation in our hemisphere, a North American effort for renewed entrepreneurship, renewable energy, and educational exchanges.

So after a decade that was perhaps uniquely, and in many people’s view, unfortunately, excessively defined foremost by force and our use of force, we are entering an era of American diplomatic engagement that is as broad and as deep as any at any time in our history. And such are the responsibilities of a global power.

The most bewildering version of this disengagement myth is about a supposed retreat by the United States from the Middle East. Now, my response to that suggestion is simple: You cannot find another country – not one country – that is as proactively engaged, that is partnering with so many Middle Eastern countries as constructively as we are on so many high-stake fronts. And I want to emphasize that last point: partnering. We have no pretense about solving these problems alone. Nor is anyone suggesting, least of all me, that the United States can solve every one of the region’s problems or that every one of them can be a priority at the same time.

But as President Obama made clear last fall at the United Nations, the United States of America will continue to invest significant effort in the Middle East because we have enduring interests in the region, and we have enduring friendships with countries that rely on us for their security in a volatile neighborhood. We will defend our partners and our allies as necessary, and we will continue to ensure the free flow of energy, dismantle terrorist networks, and we will not tolerate the proliferation of nuclear weapons.

Now in reality, all three of these challenges and the relationships that surround them and accomplishing all of these goals requires, in President Obama’s words, for the United States to “be engaged in the region for the long haul.”

From security cooperation with our Gulf partners like Saudi Arabia and the United Arab Emirates, with whom we are both discussing longer-term security framework for the region, as well as to helping countries in transition like Tunisia, Libya, Egypt, Yemen, to countering al-Qaida and its affiliates, to ensuring stability for the world’s shipping lanes and energy supply, there is no shortage of the places where we are engaged in the Middle East.

So the question isn’t whether we’re leaving. The question is how we are leading. Today, we believe that there are initiatives that, taken together, have the potential to reshape the Middle East and could even help create the foundations of a new order.

First, the agreement that we reached with Iran. As of this week, Iran’s nuclear weapons program is being rolled back in important ways. On Monday, Iran took a series of steps that the world has long demanded, including reducing its stockpile of 20 percent enriched uranium, disabling the infrastructure for its production, and allowing unprecedented transparency and monitoring to guarantee Iran is complying with the agreement.

They will have to reduce their 20 percent to zero, and they do not have and will not have the capacity for reconversion. They will have to reduce it to forms that are not suitable for making weapons. Iran must also halt enrichment above 5 percent and it will not be permitted to grow the current stockpile of 3.5 percent enriched uranium. Iran cannot increase the number of centrifuges that are in operation, and it cannot install or use any next-generation centrifuges to enrich uranium. And while we negotiate a final agreement over these next months, Iran will not be permitted to take any steps to commission the Arak plutonium reactor.

Now clearly, there are good reasons to ask tough questions of Iran going forward – and believe me, we will – and good reasons to require that the promises Iran made are promises kept. Remember – we certainly haven’t forgotten – there is a reason that world has placed sanctions on Iran. There’s a reason why they exist in the first place. And there’s a reason why the core architecture of those sanctions remains in place. And that is why this effort is grounded not in trusting, not in words, but in testing. And that is why now inspectors can be at Fordow every day.

That wasn’t the case before the agreement we struck. Inspectors can now also be at Natanz every day. That’s also new, thanks to the agreement we struck. And inspectors will visit Arak plutonium plant every month, and they are under an obligation to deliver the plans for that plant to us.

Taken altogether, these elements will increase the amount of time that it would take for Iran to break out and build a bomb – the breakout time, as we call it – and it will increase our ability to be able to detect it and to prevent it. And all of this will to an absolute guarantee beyond any reasonable doubt make Israel safer than it was the day before we entered this agreement, make the region safer than it was the day before we entered this agreement, and make the world safer than it was.

Now yesterday, President Rouhani stood here and he said that Iran is eager to engage with the world, and hopefully. But Iran knows what it must do to make that happen. He told you that Iran has no intention of building a nuclear weapon. Well, while the message is welcome, my friends, the words themselves are meaningless unless actions are taken to give them meaning. Starting now, Iran has the opportunity to prove these words beyond all doubt to the world.

Now, let’s be clear: If you are serious about a peaceful program, it is not hard to prove to the world that your program is peaceful. For sure, a country with a peaceful nuclear program does not need to build enrichment facilities in the cover of darkness in the depth of a mountain. It doesn’t need a heavy water reactor designed to produce weapons-grade plutonium, like the one at Arak. It has no reason to fear intrusive monitoring and verification. And it should have no problem resolving outstanding issues with the International Atomic Energy Agency.

This is true for every country in the world with an exclusively peaceful nuclear program. And it is the tough but reasonable standard to which Iran must also be held.

So we welcome this week’s historic step. But now the hard part begins, six months of intensive negotiations with the goal of resolving all the international community’s concerns about Iran’s nuclear program. I want to say that the P5+1 has acted in unity, in great cooperation, and we welcome the international community’s efforts that has characterized this initiative.

So Iran must meet this test. If it does, the Middle East will be a safer place, free from the fear of a nuclear arms race. And diplomatic engagement, my friends, backed by sanctions and other options, will have proved its worth.

The second challenge is Syria, where an enormous, almost unimaginable human tragedy is unfolding before our eyes. Just this week, we have seen the terrible new evidence of torture at the hands of the Assad regime. But this week we also saw the Syrian regime and the opposition sit at the same table in the same room – or separate tables but in the same room – for the first time since the war began. They were joined by more than 40 countries and institutions who have assented to the Geneva communique, which clearly outlines how this conflict must conclude: With the creation of a transitional government with full executive authority by mutual consent.

Let me tell you in simple terms why that means Bashar al-Assad cannot be part of that future. It is simple. It is first because of the extraordinary havoc that he has wreaked on his own country, on his own people; a man who has killed university students and doctors with Scud missiles; a man who has gassed his own people in the dead of night – families sleeping, women, children, grandparents; a man who has unleashed extraordinary force of artillery and barrel bombs against civilians against the laws of warfare. Assad will never have or be able to earn back the legitimacy to bring that country back together.

That’s number one. But number two, because of those things that he has done, because of 130,000 people who have been killed, the opposition will never stop fighting while he is there. And so if your objective is to have peace, this one man must step aside in favor of peace and of his nation. You can never achieve stability until he is gone. And finally, any transitional government formed by mutual consent by definition will not include Assad because the opposition will never consent to permit him to be there.

The United States is engaged in this difficult endeavor because we know that the longer the fighting continues, the greater the risk that Syria’s sectarian divisions will spiral out of control. We know there are people who wish that American young men and women who were on the ground fighting for them – there are people who would love to see America fight the war for them. But that is not the choice.

The choice is first diplomacy in order to avoid the devastating results that could result in the disintegration of the Syrian state, and the instability that could spread across the entire region. We are engaged because the number of refugees pouring into Jordan – I see our friend Nasser Judeh, the foreign minister here – into Lebanon, and Turkey is destabilizing and it’s unsustainable.

We are engaged because, while we are proud to be the largest contributor to the humanitarian assistance to deal with those refugees, the ultimate solution can only come when we stop the supply of refugees, when we stop the fighting. And that can’t happen soon enough because Assad continues to kill and displace innocent Syrians, and in doing so has become the world’s greatest single individual magnet for jihad and terror.

Absent a political solution, we know where this leads: more refugees, more terrorists, more extremism, more brutality from the regime, more suffering for the Syrian people. And we do not believe that we or anyone should tolerate one man’s brutal effort to cling to power. We must instead empower all of the Syrian people.

That is why the United States and our partners who sat around that table this week will continue to fight for a pluralistic, inclusive Syria where all minorities are protected, where all rights are protected, and where Syria can come together to be once again the secular and unified state that it was, represented by a government of the people’s choice where all minorities are protected.

Now, we believe this vision is achievable, and we will continue to work closely with our partners for a new Syria that can exist peacefully as a sovereign, independent, and democratic state where Syrians will be able to able have their voices heard without fear of retribution, imprisonment, or even death.

Now obviously, we know this isn’t going to be easy. In fact, it’s obviously very, very hard. It’s already hard. But we’ve already seen in Syria what forceful diplomacy is able to achieve. As we speak, a man who, the day before he agreed to do it, denied he even had the weapons, is now removing all the chemical weapons from that country. As we speak, the international community is on its way to completely removing all of Syria’s chemical weapons, an unprecedented undertaking that is making the region and the world safer and is setting an example on a global basis.

We are convinced that if the Syrian people are to have the chance to rebuild their country and if millions of Syrian refugees are to have the chance to return home, it is ultimately diplomacy that will make it possible. There is no military solution to the problem of Syria.

And that brings me to the most intractable of all conflicts: the struggle to make peace between Israelis and Palestinians. Every time I meet my foreign counterparts, anywhere in the world – when they visit me in Washington or when I travel to their countries – I am not kidding you when I tell you that invariably the first issue that they ask me about is the challenge of Middle East peace. It may seem improbable to you, but I’m telling you it’s absolutely true. From Asia to Latin America to Africa, all through Europe, this question lingers. This intractable conflict has confounded administration after administration, prime minister after prime minister, leaders, and peacemakers. And they always ask this about the Middle East even before they complain about what we’re doing or not doing, ironically.

Despite this global interest, my friends, people still ask me – I’m astonished by it – why, with all the troubles in the world, and in the Middle East in particular, why is the Obama Administration so focused on trying to forge Israeli-Palestinian peace? And obviously, I’ve had that question directed at me in personal and in other ways. Well, the reason that we are so devoted to trying to find a solution is really very simple: Because the benefits of success and the dangers of failure are enormous for the United States, for the world, for the region, and most importantly, for the Israeli and Palestinian people. After all the years expended on this, the last thing we need is a failure that will make certain additional conflict.

There are some people who assert this may be the last shot. I don’t know the answer to that. I don’t want to find out the hard way. But I want you to consider what happens if talks fail. For Israel, the demographic dynamic will make it impossible to preserve its future as a democratic, Jewish state. Israel’s current relative security and prosperity doesn’t change the fact that the status quo cannot be sustained if Israel’s democratic future is in fact to be secured. Today’s status quo, my friends, I promise you will not last forever.

President Abbas is committed to negotiation and to nonviolence. But failure will only embolden extremists and empower hardliners at the expense of the moderates who have been committed to a nonviolent track to try to find peace. And what would happen in the West Bank without that commitment to nonviolence?

The Israeli and Palestinian members of Breaking the Impasse initiative who are here today know well what is at stake. Israel’s economic juggernaut is a wonder to behold. Prime Minister Netanyahu was able to talk to you about it here today. But a deteriorating security environment and the growing isolation that could come with it could put that prosperity at risk.

Meanwhile, if this fails, Palestinians will be no closer to the sovereignty that they seek, no closer to their ability to be the masters of their own fate, no closer to their ability to grow their own economy, no closer to resolving the refugee problem that has been allowed to fester for decades. And if they fail to achieve statehood now, there is no guarantee another opportunity will follow anytime soon.

This issue cannot be resolved at the United Nations. It can only be resolved between the parties. If peace fails, the region risks another destabilizing crisis. One unilateral act from one side or the other will beget another, and yet another, and another, until we have fallen yet again into a dangerous downward spiral at a time where there’s already too much danger in the region.

And you know what’s interesting? We often spend so much time talking about what both parties stand to lose without peace that we actually sometimes forget to talk enough about what they stand to gain from peace. I believe that the fact that peace is possible, especially in a region with so much tension and turmoil, ought to motivate people.

Palestinians stand to gain, above all else, an independent, viable, contiguous state, their own place among the community of nations. Imagine this time next year here in Davos if Palestinian businessmen and government leaders from the state of Palestine are able to pitch the world’s largest investors a host of projects from the Palestinian Economic Initiative. And imagine if they could be invited to participate in building a new state with new jobs, new infrastructure, and a new life free from occupation.

And for Israel, the benefits of peace are enormous as well, perhaps even more significant. For starters, no nation on earth stands to gain so many new economic partners so quickly as Israel does, because 20 additional members – nations of the Arab League and 35 Muslim countries stand ready under the Arab Peace Initiative to all recognize Israel and normalize relations the moment a peace agreement is reached.

As Sheikh Abduallah bin Zaid said at a meeting of the foreign ministers of the Arab League, which we held in Paris a few months ago, he said to his minister colleagues – completely spontaneously, unexpected from me, he said, “You know what? After peace, Israel will enjoy greater economic benefit from relations with the Gulf than it now enjoys with Europe.” That’s the foreign minister of the United Arab Emirates.

Just imagine what that would mean for commerce and trade. Stanley Fischer, the former governor of the Bank of Israel who President Obama has nominated to serve on our own Federal Reserve Board, said that a peace agreement with the Palestinians could boost Israel’s GDP by as much as 6 percent a year.

And together, the Jewish state of Israel and the Arab state of Palestine can develop into an international hub for technology, for trade, tourism – tourism, unbelievable tourism, the holy sites of the world, of the major three religions. This would invigorate a region. It is long past time that the people of this great and ancient part of the world became known for what they can create, not for the conflicts that they can perpetrate. It is long past time that Jerusalem – the crucible of the world’s three great monotheistic religions – becomes known not as the object of constant struggle, but as the golden city of peace and unity, embodying the aspirations of Israelis and Palestinians alike.

The truth is that after decades of struggling with this conflict, we all know what the endgame looks like: an independent state for Palestinians wherever they may be; security arrangements for Israel that leave it more secure, not less; a full, phased, final withdrawal of the Israeli army; a just and agreed solution to the Palestinian refugee problem; an end to the conflict and all claims; and mutual recognition of the nation-state of the Palestinian people and the nation-state of the Jewish people.

That is our destination. And the real challenge is not what is it; it’s just how to get there – how to get the leaders and the body politic of both places to make the courageous decisions necessary to embrace what would be fair and what would work. That’s why I am working with President Abbas and with Prime Minister Netanyahu to achieve a framework for the negotiations that will define the endgame and all the core issues, and provide guidelines for the negotiators in their efforts to achieve a final-status peace agreement.

I have watched over 30 years in the United States Senate. I was on the lawn in Washington when the great handshake took place. I’ve watched Annapolis and Wye and Madrid and Oslo and all of these efforts, but always we’ve left out the endgame. Always, people have had to wonder when or if the real peace could be achieved.

One of the biggest challenges in reaching this agreement, I will tell you, my friends, is security. The Palestinians need to know that at the end of the day, their territory is going to be free of Israeli troops, that occupation ends; but the Israelis rightfully will not withdraw unless they know that the West Bank will not become a new Gaza. And nobody can blame any leader of Israel for being concerned about that reality. We have been working hard on addressing this challenge. President Obama’s approach begins with America’s steadfast commitment to Israel’s security. He knows and I know that there cannot be peace unless Israel’s security and its needs are met.

We have put the full range of resources of the U.S. Government behind this effort in an unprecedented way. For the past nine months, a team led by General John Allen – a four-star general and one of the most respected minds in the U.S. military – has been engaged in a comprehensive security dialogue with our Israeli and Palestinian counterparts.

Based on his efforts, we are confident that, together with Israel, working with Jordan, working with the Palestinians, working with us, all of us together can create a security structure that meets the highest standards anywhere in the world. And by developing a layered defense that includes significantly strengthening the fences on both sides of the border, by deploying state-of-the-art technology, with a comprehensive program of rigorous testing, we can make the border safe for any type of conventional or unconventional threat, from individual terrorists or a conventional armed force. We are well aware that technology alone is not the answer, but we also know that it can play a key role in helping to secure the Jordanian border, just like Iron Dome has played a key role in securing Israel’s southern communities.

Security is a priority because we understand that Israel has to be strong to make peace, but we also believe that peace will make Israel stronger. We are convinced that the greatest security of all will actually come from a two-state solution that brings Israel the lasting peace and secure borders that they deserve, and brings Palestinians the freedom and the dignity that they deserve.

As committed as we are, it is ultimately up to the Israelis and the Palestinians to reach an agreement on how to end this conflict. Make no mistake: this will require difficult political decisions and painful compromises on both sides. These are emotional issues, many embedded in age-old narratives. At the end of the day, it is up to Prime Minister Netanyahu and President Abbas to recognize what the world has recognized: that peace is in the best interests of their people. But that makes it no less true that at every level, everybody has a role to play. The Arab League and the European Union have already shown how they can pave the way for peace, and they have been unbelievably cooperative, and we’re grateful for their help. I thank King Abdullah of Jordan and Nasser Judeh and the extraordinary efforts of Jordan to help move this; the Arab League Nabil Elaraby, and Khalid Atiyah, the leader of the Arab League Follow-On Committee that is working month to month to stay current and to be engaged in this.

Many states have made contributions to the Palestinian economy, including a micro-infrastructure initiative that is making a difference to people’s everyday lives. Many companies, including some of you here, have invested in both Israel and the Palestinian territories, and you’ve shown the difference that the private sector can make in this endeavor. And all of you can make a positive contribution by dismissing, please, the all-too-easy skepticism by seeing the possibilities and by building the momentum for peace.

Successful diplomacy, like the conversations here at Davos, demands the kind of cooperation that has to come from many stakeholders. As Klaus Schwab says, in an interconnected world, all challenges must be addressed on the basis of togetherness. That is true, whether you’re talking about this peace effort or about what we must achieve in Syria, or about what we must ensure in Iran. Intensive, creative, strong diplomacy requires cooperation, and that is exactly why the United States is so engaged in the Middle East and around the world, and why we will stay so.

As our friends and partners take courageous steps forward, they can be assured that President Obama and his Administration will remain engaged for the long haul. But we will also confront these challenges with the urgency that they deserve. We dare not, and I sure you, we will not miss this moment.

Thank you. (Applause.)

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT FOR WEEK ENDING JANUARY 18, 2014

FROM:  LABOR DEPARTMENT
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT
          SEASONALLY ADJUSTED DATA

In the week ending January 18, the advance figure for seasonally adjusted initial claims was 326,000, an increase of 1,000 from the previous week's revised figure of 325,000. The 4-week moving average was 331,500, a decrease of 3,750 from the previous week's revised average of 335,250.

The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending January 11, unchanged from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 11 was 3,056,000, an increase of 34,000 from the preceding week's revised level of 3,022,000. The 4-week moving average was 2,939,000, an increase of 31,000 from the preceding week's revised average of 2,908,000.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 411,678 in the week ending January 18, a decrease of 121,020 from the previous week. There were 436,955 initial claims in the comparable week in 2013.

The advance unadjusted insured unemployment rate was 2.8 percent during the week ending January 11, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,563,268, a decrease of 65,558 from the preceding week. A year earlier, the rate was 2.9 percent and the volume was 3,711,100.

The total number of people claiming benefits in all programs for the week ending January 4 was 3,706,087, a decrease of 1,003,734 from the previous week. There were 5,659,482 persons claiming benefits in all programs in the comparable week in 2013.

No state was triggered "on" the Extended Benefits program during the week ending January 4.

Initial claims for UI benefits filed by former Federal civilian employees totaled 2,227 in the week ending January 11, an increase of 661 from the prior week. There were 2,449 initial claims filed by newly discharged veterans, an increase of 704 from the preceding week.

There were 23,306 former Federal civilian employees claiming UI benefits for the week ending January 4, an increase of 466 from the previous week. Newly discharged veterans claiming benefits totaled 31,591, an increase of 567 from the prior week.

The Emergency Unemployment Compensation (EUC) program expired on January 1, 2014, and under current law no EUC payments will be made for weeks of unemployment after this date.

The highest insured unemployment rates in the week ending January 11 were in Alaska (5.8), Puerto Rico (4.9), Pennsylvania (4.5), Connecticut (4.4), New Jersey (4.4), Michigan (3.8), Montana (3.8), Wisconsin (3.8), Rhode Island (3.6), California (3.5), Illinois (3.5), and Massachusetts (3.5).

The largest increases in initial claims for the week ending January 11 were in Texas (+12,800), California (+8,319), Pennsylvania (+7,107), Indiana (+6,622), and Florida (+5,790), while the largest decreases were in New York (-18,019), Georgia (-7,278), Alabama (-2,639), Wisconsin (-2,577), and South Carolina (-1,810).

EMAIL SPAMMER CHARGED WITH AFFORDABLE CARE ACT FRAUD SCHEME

FROM:   FEDERAL TRADE COMMISSION 
FTC Charges Email Spammer with Tricking Consumers With Phony Information About the Affordable Care Act

The Federal Trade Commission is taking action against a website operator that allegedly tricked consumers – in advance of the roll-out of the Affordable Care Act (ACA) – with spam emails that falsely claimed that consumers would be violating the ACA if they did not immediately click a link to enroll in health insurance.

The case against Kobeni Inc. and its president, Yair Shalev, is the first the agency has brought alleging ACA-related fraud.  According to the FTC’s complaint, from at least May 2013 through August 2013, the defendants sent consumers email with statements such as:

Today is the deadline to make your election or be in violation of federal law

Must Receive Your Election Or You Will Be In Violation of Federal Law.

Effective Monday (08-05-13) health coverage is REQUIRED BY LAW.

Why is this mandatory? New Federal Law signed by the President made it mandatory for all U.S. residents to have active coverage.  You will be in violation and face penalties if you do not elect.

You Must Select One of These 5 Options

As stated in the complaint, links in the email messages led to websites with advertisements for insurance.  The websites’ operators paid the defendants when consumers clicked links contained in the ads.  Insurance companies whose ads appeared on the websites did not authorize the email messages.

The FTC charges the defendants with violating the FTC Act by falsely representing that consumers would violate federal law if they did not select health insurance by the dates that appeared in their email messages.  The complaint alleges that the defendants violated the CAN-SPAM Act by not providing consumers who received the spam email messages with a clear and conspicuous notice that they had the right to opt out of receiving future commercial email messages from the defendants, and by sending commercial email messages that did not include the sender’s physical postal address.

The Commission vote authorizing the staff to file the complaint was 4-0.  The complaint was filed in the U.S. District Court for the Southern District of Florida.

NUCLEAR REACTOR COMPONENT MAKER TO PAY $2.7 MILLION TO RESOLVE FALSE CLAIMS ALLEGATIONS

FROM:  DEFENSE DEPARTMENT
Thursday, January 23, 2014
General Electric Hitachi Nuclear Energy Americas Agrees to Pay $2.7 Million for Alleged False Claims Related to Design of Advanced Nuclear Reactor

The Justice Department announced today that General Electric Hitachi Nuclear Energy Americas LLC (GE Hitachi) has agreed to pay $2.7 million to resolve allegations under the False Claims Act that it made false statements and claims to the Department of Energy and the Nuclear Regulatory Commission (NRC) concerning an advanced nuclear reactor design.  GE Hitachi, a provider of nuclear energy products and services headquartered in Wilmington, N.C., is a subsidiary of General Electric Company (GE) that is also partially owned by Hitachi Ltd., a multinational engineering and manufacturing firm headquartered in Tokyo, Japan.  GE is headquartered in Fairfield, Conn.

“Transparency and honesty are absolutely critical when dealing with issues relating to the design of a nuclear reactor,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The Department of Justice will protect federal funds and the Nuclear Regulatory Commission’s crucial mandate of ensuring public safety.”  

“Fraud involving government contracts will be zealously pursued in North Carolina,” said U.S. Attorney for the Eastern District of North Carolina Thomas G. Walker.  “We encourage our citizens to report fraud related to government contracts and our federal programs.”

GE Hitachi allegedly made false statements to the NRC and Department of Energy about a component of the advanced nuclear Economic Simplified Boiling-Water Reactor (ESBWR) known as the steam dryer.  A steam dryer removes liquid water droplets from steam produced by the nuclear reaction that generates electricity in boiling-water type reactors.  The NRC requires that applicants for nuclear reactor design certification, such as GE Hitachi, demonstrate that vibrations caused by the steam dryer will not result in damage to a nuclear plant.  The government alleged that GE Hitachi concealed known flaws in its steam dryer analysis and falsely represented that it had properly analyzed the steam dryer in accordance with applicable standards and had verified the accuracy of its modeling using reliable data.    

Between 2007 and 2012, GE Hitachi received funding from the Department of Energy to cover up to half of the cost of developing, engineering and obtaining design certification for the advanced nuclear ESBWR.  The NRC, which regulates the civilian use of nuclear power in the U.S., is responsible for determining whether to approve GE Hitachi’s application for the reactor design certification.  The NRC is still reviewing the application and has not reached a final decision on the certification.

“The Nuclear Regulatory Commission supports the settlement and appreciates the Department of Justice’s close coordination during its investigation of these allegations,” said Director of NRC’s Office of New Reactors Glenn Tracy.  “The NRC continues to rigorously review the ESBWR application in order to reach a final design certification decision, ensure compliance with NRC regulations and protect public health and safety.”

The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by LeRay Dandy, a former employee of GE Hitachi.  Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery.  Dandy’s share of the settlement has not been determined.  

This case was handled by the Department of Justice Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Eastern District of North Carolina and the Offices of Inspector General for the Nuclear Regulatory Commission and the Department of Energy.

NATO's FUTURE DISCUSSED AT CHIEFS OF DEFENSE MEETING

FROM:  DEFENSE DEPARTMENT 

Military Chiefs Look to NATO’s Future
By Jim Garamone
American Forces Press Service

ABOARD A U.S. MILITARY AIRCRAFT, Jan. 23, 2014 – The NATO chiefs of defense “talked a little bit about today, a little bit about tomorrow, and a little bit about 10 years from now,” the chairman of the Joint Chiefs of Staff said as he returned to Washington today from alliance meetings in Brussels.
Army Gen. Martin E. Dempsey took advantage of the 170th Chiefs of Defense Meeting to not only address NATO issues, but to strengthen military-to-military relations with other nations.

The chairman’s first engagement in Brussels was a meeting with his Russian counterpart Gen. Valery V. Gerasimov. Dempsey said the session was very positive and constructive, describing U.S.- Russian relations as important “not just because of the issues that are apparent to us, but the ones that are not yet apparent,” he said. The alliance’s possible future in Afghanistan after its current mission ends this year was also discussed. At the NATO meeting itself, he said, “We reminded ourselves that while the discussions are going on about our 2015 presence, we still have some tasks at hand to accomplish,” he said.

The chiefs looked at ways to increase the pace of development of the Afghan national security forces – focusing on how to improve the institutions that build and manage them. And, they discussed what can be done to help Afghans hold a credible, transparent and fair presidential election in April.

Most of the NATO support will be peripheral, as the Afghans have the lion’s share of conducting the vote. The United States will provide some logistical support and transportation for election observers.

The chiefs also discussed how they can “preserve our options so when the political decision is made on 2015 and beyond, we’ll have a pretty clear understanding of how we will have to shift to accomplish it.”

The other main outcome of the meeting was an increased awareness of the threats and risks building on the alliance’s southern flank. The United States has long spoken about transnational threats emanating from North Africa and the Middle East. Terrorist organizations take advantage of weak governments or ungoverned spaces and use them as safe havens, Dempsey said. Al-Qaida in the Islamic Mahgreb is one of these groups and there are others.

“I am encouraged that the alliance is beginning to understand some of the risks that are building on its southern flank,” the chairman said. “Now we have reached the point of entering into conversations about what as an alliance we might do about it.”

The chiefs spoke about NATO’s nascent cyber defense capability. “It’s mostly all national level,” he said. “We’re trying to find ways to link it together to make ourselves more capable in the cyber dimension.”

The meeting in Brussels will be followed by a NATO defense ministers’ meeting next month, which will help set up a NATO Summit that will be hosted by the United Kingdom later this year.

AUTO COMPANY, ADVERTISING AGENCY SETTLE FTC DECEPTIVE AD CHARGES

FROM:  FEDERAL TRADE COMMISSION 

Nissan North America, Inc., Advertising Agency TBWA Worldwide, Inc., Settle FTC Charges that that Nissan Frontier Dune Buggy Rescue Ad Was Deceptive

Advertisers Cannot Misrepresent Key Attributes in Product Demonstrations, FTC Says

Nissan North America, Inc., and an advertising agency that designed television ads for the mid-sized Nissan Frontier pickup truck have agreed to settle Federal Trade Commission charges of deceptive advertising for a 30-second ad showing a Frontier pushing a dune buggy up a steep hill, something the truck actually cannot do.

Under the proposed settlements, Nissan and TBWA Worldwide, Inc. are prohibited from using deceptive demonstrations in advertisements for pickup trucks.

According to the administrative complaints, Nissan and TBWA promoted the Frontier pickup truck with a “Hill Climb” advertisement that showed the vehicle rescuing a dune buggy trapped in sand on a steep hill, while onlookers observe the feat in amazement.  It was produced in a realistic “YouTube” style, as if it were shot on a mobile phone video camera.

The administrative complaints allege that Nissan and TBWA violated the FTC Act by representing that the ad accurately showed the performance of an unaltered Nissan Frontier under the conditions that were depicted.  In fact, the truck is not capable of pushing the dune buggy up and over the hill, and both the truck and the dune buggy were dragged to the top of the hill by cables, according to the complaints.  The complaints also allege that the hill was made to look significantly steeper than it actually was.

“Special effects in ads can be entertaining, but advertisers can’t use them to misrepresent what a product can do,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.  “This ad made the Nissan Frontier appear capable of doing something it can’t do.”

Under the proposed settlements, Nissan and TBWA cannot misrepresent any material quality or feature of a pickup truck through the depiction of a test, experiment, or demonstration. The orders do not prohibit the use of special effects and other production techniques as long as they do not misrepresent a material quality or feature of the pickup truck.

This case is part of the FTC’s ongoing efforts to protect consumers from misleading advertising.  

The Commission vote to accept the consent agreement package containing the proposed consent orders for public comment was 4-0.  The FTC will publish a description of the consent agreement package in the Federal Register shortly.

The agreements will be subject to public comment for 30 days, beginning today and continuing through Monday February 24, 2014, after which the Commission will decide whether to make the proposed consent orders final.  Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.  Comments in electronic form should be submitted using the following Web link: https://ftcpublic.commentworks.com/ftc/nissannorthamericaconsent, and following the instructions on the web-based form. Comments in paper form should be mailed or delivered to:  Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580.  The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.  When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.  Each violation of such an order may result in a civil penalty of up to $16,000.

REPORTERS TOLD AFGHAN FORCES DOING WELL AGAINST TALIBAN

FROM:  DEFENSE DEPARTMENT 
Afghan Forces Winning Tough Fight Against Taliban
By Amaani Lyle
American Forces Press Service

WASHINGTON, Jan. 23, 2014 – Afghan National Security Forces are prevailing in their battles against the Taliban and other fighters, a senior U.S. commander told reporters from Afghanistan today.

And, Afghan forces are doing well with minimal assistance from the International Security Assistance Force as the end of the U.S.-led NATO mission in Afghanistan nears, Army Lt. Gen. Mark A. Milley, the commander of ISAF’s Joint Command said as he addressed the Pentagon press corps via satellite.

“Throughout the summer, it was a tough fight and the Afghans stood up … and fought well across the board throughout the provinces and the districts,” Milley said. “The Afghan security forces were tactically overmatching anything that the Taliban … or anybody else could throw at them.”

But Milley acknowledged Afghan casualties have increased 50-70 percent during some 3,000-4,000 firefights in recent years.

The U.S. and its NATO allies, Milley said, have shifted gears in Afghanistan since the invasion following the 9/11 attacks. At that time, he said, there were no Afghan police, and only remnants of the Northern Alliance patched together in small units.
“We came into this country … to prevent [it] from ever again being a platform to carry terrorism to the shores of the United States or any other vital national interest,” Milley said.

Antiterrorism efforts in Afghanistan, Milley explained, were intended to stabilize the country and establish a capable Afghan security force.

In the ensuing years, Afghan forces’ leadership, skills and cohesion have continued to improve, Milley said.

“The Afghans stepped up to the fight,” the general said. “Was it perfect? No. Was it pretty? No. But war is not a pretty thing.”

FDA STATEMENT: IOM REPORT ON CAFFEINE IN FOOD AND DIETARY SUPPLEMENTS

FROM:  FOOD AND DRUG ADMINISTRATION 
FDA STATEMENT
Jan. 17, 2014
Consumer Inquiries: 888-INFO-FDA

FDA Deputy Commissioner for Foods and Veterinary Medicine Michael R. Taylor's Statement on the Institute of Medicine Report on Caffeine in Food and Dietary Supplements

The FDA thanks the Institute of Medicine (IOM) for convening the Aug. 5-6, 2013, public workshop on caffeine in food and dietary supplements. The FDA requested the workshop because we know how important it is to get the science right. The summary report that IOM issued today will be extremely informative as we continue our investigation of the safety of caffeine, particularly its effects on children and adolescents.

In the last ten years, the marketplace has seen an influx of caffeinated energy drinks and a wide range of foods with added caffeine. It is apparent that caffeine is now appearing in a range of new foods and beverages. We are especially concerned with products that may be attractive and readily available to children and adolescents, without careful consideration of their cumulative impact.

Since the IOM workshop, we have engaged in a dialog with industry, consumers and the scientific community on a number of options to address this important public health issue. We appreciate the voluntary restraint that some companies have shown as we continue to investigate safe levels of caffeine consumption.

With public safety as our top priority, we also continue to investigate each adverse event report we receive on energy drinks and other caffeinated products. We have just recently moved to an online adverse event reporting system for dietary supplements that will make it easier for the FDA to detect dietary supplements that pose risk for a range of reasons, including excessive levels of caffeine.

AG HOLDER'S REMARKS AT ROANOKE VETERANS TREATMENT COURT PROGRAM

FROM:  DEFENSE DEPARTMENT  
Attorney General Eric Holder Delivers Remarks at the Roanoke Veterans Treatment Court Program
~ Thursday, January 23, 2014

Thank you, Tim [Heaphy] – and good morning, everyone.  It is a pleasure to be in Roanoke today.  And it’s a privilege to hear directly from so many criminal justice leaders about the critical work you’re doing to build stronger, safer communities.

I want to thank Judges [Robert] Ballou and [Michael] Urbanski – and their colleagues here in the Western District – for their leadership from the bench.  As we’ve just heard, your shared commitment to innovation, and your fidelity to the highest ideals of our justice system, are helping to transform the lives of veterans who have been charged with nonviolent misdemeanors.

I also want to acknowledge the outstanding work of U.S. Attorney [Tim] Heaphy and every one of his Assistant U.S. Attorneys and support staff members – along with their counterparts from the Federal Public Defender’s Office and the United States Probation Office.  By coming together in a non-adversarial manner – and working together to protect public safety, to advocate for the interests of the community, and to evaluate the needs of individual participants in this Veterans Treatment Court – you’re demonstrating the unique power of collaboration when it comes to addressing the root causes of criminal conduct.  And alongside dedicated Veterans Justice Outreach Specialists and others from the Salem Veterans Affairs Medical Center, you’re connecting those who have served our nation with the resources and support they need to overcome substance abuse disorders and to receive treatment for mental health concerns.

Since its inception just over two years ago, this Veterans Treatment Court has shown tremendous promise in helping eligible men and women to break the destructive cycle of criminality and incarceration that traps too many people and weakens too many communities across America.  By offering alternatives to incarceration – and linking participants with vital rehabilitation and treatment resources – this program provides a model for preventing recidivism, reducing relapse, and empowering veterans convicted of certain nonviolent crimes to rejoin their communities as productive, law-abiding members of society.  It’s also saving resources at a time when they could not be more scarce.

For President Obama – and for me – strengthening programs like this one, and building on work that’s underway in similar diversion and reentry programs throughout the nation, has always been a top priority.  As we’ve said many times before: we will never be able to arrest and incarcerate our way to becoming a safer nation.

That’s why – this past August – I unveiled a new “Smart on Crime” initiative that will drive the Justice Department’s efforts to reform America’s criminal justice system as a whole.  As a central part of this initiative, we’ve enhanced our focus on diversion programs.  And I have directed every U.S. Attorney to designate a Prevention and Reentry Coordinator in his or her office.

I’ve also instituted highly-targeted reforms – including a significant modification of the Justice Department’s charging policies – to ensure that individuals accused of certain low-level federal drug crimes will no longer face excessive mandatory minimum sentences that are out of proportion with their alleged conduct, and serve no deterrent purpose.  These changes, coupled with programs like this one, will improve criminal justice outcomes while reducing the burden on our overcrowded prison system.  They will make our expenditures both more efficient and more effective.  And they can pave the way for additional improvements and legislative changes that can take this work to a new level – provided that leaders in Washington seize the opportunity to come together and do even more.

That’s why – today – I am urging Congress to pass common-sense reforms like the bipartisan Smarter Sentencing Act – introduced by Senators Dick Durbin and Mike Lee – which would give judges more discretion in determining appropriate sentences for people convicted of certain federal drug crimes.  This bill would also provide a new mechanism for some individuals – who were sentenced under outdated laws and guidelines – to petition judges for sentencing reductions that are consistent with the Fair Sentencing Act passed by Congress in 2010.

These reforms would advance the goals of the “Smart on Crime” initiative – and efforts like this Veterans Treatment Court – by fundamentally improving policies that exacerbate, rather than alleviate, key criminal justice challenges.  Such legislation could ultimately save our country billions of dollars while keeping us safe.  And it’s becoming clear – thanks to Senators Durbin and Lee, along with Senators Patrick Leahy and Rand Paul – that this type of approach enjoys broad, bipartisan support on Capitol Hill.

I look forward to working with members of both parties to refine and advance these proposals in the days ahead.  And I pledge my own best efforts – and those of my colleagues throughout the Justice Department – to continue to strengthen America’s criminal justice system and working with leaders like you to keep building the more just society that everyone in this country deserves.

I understand, as you do, that significant challenges lie ahead, and the journey before us will be anything but easy.  But that’s exactly why I wanted to be here today: to call attention to the great work you’re leading.  To encourage you to keep moving our system forward.  And to join you in striving not only to transform lives, but to improve your communities, strengthen your country – and support those who have served in uniform.

I commend you for your dedication to these efforts.  I wish you all the best as you continue this important and innovative program.  And I thank you, once again, for inviting me to be here today.

U.S. DEFENSE DEPARTMENT CONTRACTS FOR JANUARY 23, 2014

FROM:  DEFENSE DEPARTMENT CONTRACTS

DEFENSE LOGISTICS AGENCY

Metals USA, I-Solutions Group, Fort Washington, Pa., has been awarded a maximum $99,253,923 modification (P00049) exercising the third option year period of a two-year base contract with three one-year option periods for various metal items in support of the Metals Prime Vendor West Region.  This is a fixed-price-with economic-price adjustment, indefinite-delivery/indefinite-quantity contract.  Location of performance is Pennsylvania with a Jan. 25, 2015 performance completion date.  Using military 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., (SPM8EG-09-0013).

Voto Manufacturing Sales Company,* Steubenville, Ohio, has been awarded a maximum $10,000,000 modification (P00008) exercising the fourth option year period of a five-year base contract (SPM8EE-10-D-0001) with four one-year option periods for multiple leg slings.  This base is a fixed-price-with economic-price adjustment contract.  Location of performance is Pennsylvania with a Jan. 28, 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.

MIL-Base Industries,* New Cumberland, Pa., has been awarded a maximum $10,000,000 modification (P00007) exercising the fourth option year period of a five-year base contract (SPM8EE-10-D-0002) with four one-year option periods for multiple leg slings.  This base is a fixed-price-with economic-price adjustment contract.  Location of performance is Pennsylvania with a Jan. 28, 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.

NAVY

BAE Systems Hawaii Shipyards, Honolulu, Hawaii, is being awarded a $37,439,506 not-to-exceed, firm-fixed-price contract for fiscal 2014 USS Chung Hoon (DDG 93) dry-docking selected restricted availability.  The availability will include maintenance and modernization efforts.  This contract will complete the FY14 Dry-Docking Selected Restricted Availability (DSRA) on the USS Chung Hoon (DDG 93). Work will be performed in Pearl Harbor, Hawaii, and is expected to be completed by August 2014.  Fiscal 2014 operation and maintenance, Navy funding in the amount of $10,929,436 will be obligated at time of award and will expire at the end of the current fiscal year.  This contract was not competitively procured pursuant to FAR 6.302-1.  The Naval Sea Systems Command, Washington, D.C., is the contracting activity (N00024-14-C-4411).

Kemron Environmental Services, Inc.,* Atlanta, Ga. (N69450-14-D-0008); Sovereign Consulting, Inc.,* Robbinsville, N.J. (N69450-14-D-0009); Bhate Environmental Associates, Inc.*, Birmingham, Ala. (N69450-14-D-0010); North Wind, Inc.,* Greenville, S.C. (N69450-14-D-0011); Zapata, Inc.,* Charlotte, N.C. (N69450-14-D-0012); PPM Consultants,* Spanish Fort, Ala. (N69450-14-D-0013) are being awarded a $25,000,000 firm-fixed-price, indefinite-delivery/indefinite-quantity, multiple award contract for remedial actions at environmentally contaminated sites located primarily within the Naval Facilities Engineering Command Southeast area of responsibility.  The work to be performed provides for environmental remedial actions; removal actions; remedial design; expedited and emergency response actions; pilot and treatability studies; remedial action systems operation and maintenance; and other related activities associated with returning sites to safe and acceptable levels of contamination.  Remedial actions may include, but are not limited to capping landfills, pump-and treat remediation, bioremediation, soil vapor extraction, natural attenuation, bioventing, air sparging, thermal treatment, phytoremediation, soil washing, and free product recovery.  Work will be performed in South Carolina (40 percent); Texas (30 percent); Mississippi (10 percent); Alabama (5 percent); Georgia (5 percent), and Louisiana (5 percent).  Work may also be performed in the remainder of the United States (U.S.) and outside continental U.S. (5 percent).   Sovereign Consulting, Inc.* is being awarded task order 0001 at $159,594 for the removal of debris from Solid Waste Management Unit at Marine Corps Air Station Beaufort, S.C.  Work for this task order is expected to be completed by July 2015.  The term of the contract is not to exceed 36 months, with an expected completion date of January 2017.  Fiscal 2014 environmental restoration, Navy funds in the amount of $184,594 are obligated at the time of this award and will not expire at the end of the current fiscal year.  This contract was competitively procured via the Navy Electronic Commerce Online website, with 16 proposals received.  These six contractors may compete for task orders under the terms and conditions of the awarded contract.  The Naval Facilities Engineering Command, Southeast, Jacksonville, Fla., is the contracting activity.

L-3 Corp. Systems West, Salt Lake City, Utah, is being awarded a $17, 611,443 modification to a previously awarded indefinite-delivery, indefinite-quantity contract (N00019-13-D-0001) for supplies and services associated with Surface Terminal Equipment for Hawklink Tactical Common Data Link (TCDL) and the Littoral Combat Ship configurations, and the Vortex Mini-TCDL Shipset components.  These supplies and services are in support of the Vertical Take-off and Landing Unmanned Aerial Vehicle Fire Scout MQ-8B/8C.  Work will be performed in Salt Lake City, Utah (90 percent), Point Mugu, Calif. (5 percent), and the Patuxent River Naval Air Station, Md., (5 percent), and is expected to be completed in December 2014.  No funds are being obligated at time of award.  Funds will be obligated on individual delivery orders as they are issued.  The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

Huntington Ingalls Inc., Newport News Shipbuilding, Newport News, Va., is being awarded a not to exceed, $9,800,000 unpriced contract action to previously awarded contract (N00024-08-C-2110) for onboard repair parts in support of the USS Gerald R. Ford (CVN 78) construction.  This contract action is necessary to begin the procurement of onboard repair parts in advance of contract award.  The funding of warehouse labor is a separate contract action; this contract action is for material only.  Work will be performed in Newport News, Va., and is expected to complete by September 2014.  Fiscal 2011 shipbuilding and conversion, Navy funding in the amount of $3,500,000 will be obligated at time of award and will not expire at the end of the current fiscal year.  Supervisor of Shipbuilding Conversion and Repair, Newport News, Va., is the contracting activity.

*Small Business

COMPANIES SUED IN IRAQ KICKBACK AND FALSE CLAIMS CASE

FROM:  JUSTICE DEPARTMENT 

Thursday, January 23, 2014

United States Government Sues Kellogg, Brown & Root Services Inc. and Two Foreign Companies for Kickbacks and False Claims Relating to Iraq Support Services Contract

The government has filed a complaint against Kellogg, Brown & Root Services Inc. (KBR) and Kuwaiti companies La Nouvelle General Trading & Contracting Co. (La Nouvelle) and First Kuwaiti Trading Co. (First Kuwaiti) for submitting false claims in connection with KBR’s contract with the Army to provide logistical support in Iraq, the Department of Justice announced.  KBR is an engineering, construction and services firm headquartered in Houston, Texas.  Kuwait-based La Nouvelle and First Kuwaiti provided transportation, maintenance and other services in support of KBR’s contract with the Army.

“We depend on companies like KBR and its subcontractors to provide valuable services to our military,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “We will en sure that contractors do not engage in corrupt practices at the expense of our troops abroad, while profiting at the expense of taxpayers at home.”

Allegedly, KBR made claims to the government, knowing them to be false, under a contract with the Army to provide wartime logistical support, known as the Logistics Civil Augmentation Program (LOGCAP) III.  The award of LOGCAP III paved the way for the company to become a critical source for logistical support services in Iraq, which included transportation, maintenance, food, shelter and facilities management.  KBR performed many of these services through subcontracts awarded to foreign companies local to the region, such as La Nouvelle and First Kuwaiti.

In its complaint, filed in federal court in Rock Island, Ill., the government alleged that, in 2003 and 2004, KBR employees took kickbacks from La Nouvelle and First Kuwaiti in connection with the award and oversight of subcontracts awarded to these companies.  KBR then claimed reimbursement from the government for costs it incurred under the subcontracts that allegedly were inflated, excessive or for goods and services that were grossly deficient or not provided.  For example, KBR allegedly awarded La Nouvelle a subcontract to supply fuel tankers for more than three times the tankers’ value.  La Nouvelle later rewarded the KBR employee who awarded the subcontract with a $1 million bank draft.  As another example, KBR allegedly continued to make monthly lease payments to First Kuwaiti for trucks KBR had already returned to the subcontractor.  KBR billed the government for the costs of both of these subcontracts.  The lawsuit also alleges that KBR used refrigerated trailers to transport ice for consumption by the troops that had previously been used as temporary morgues without first sanitizing them.

“Our office investigated the actions of KBR and related companies, as well as certain KBR employees,” said U.S. Attorney for the Central District of Illinois Jim Lewis.  “We were able to obtain criminal convictions against several subcontract managers whose actions were illegal and caused damage to our military, and we are now committed to pursue these civil claims against the companies themselves.”
         
The U.S. Attorney’s Office in Rock Island has convicted 10 companies and individuals in connection with wartime contracts in Iraq.  The convictions include three KBR subcontract managers who admitted taking kickbacks or making false statements in connection with the allegations made in the government’s complaint.  Anthony J. Martin pleaded guilty in 2007 to taking kickbacks in return for awarding First Kuwaiti subcontracts for trucks and trailers and also admitted including the amount of the kickbacks in the price of the subcontracts.  In 2005, Jeff Alex Mazon pleaded guilty to making a false written statement in connection with a subcontract for fuel tankers awarded to La Nouvelle in 2003.  And in 2006, Stephen Lowell Seamans admitted taking kickbacks from La Nouvelle, during a guilty plea to a kickback arrangement with another subcontractor, Saudi Arabia-based Tamimi Global Co. Ltd. (Tamimi).  The government previously entered into criminal and civil agreements with Tamimi in which Tamimi paid the U.S. government $13 million, including $7.4 million for civil claims and $5.6 million in criminal fines, to resolve its liability for the kickbacks.

The government is suing KBR, La Nouvelle and First Kuwaiti under the False Claims Act, as well as the Anti-Kickback Act.

“Contractors and subcontractors are expected to comply with their statutory obligations and act in good faith when dealing with the United States government,” said Special Agent in Charge of the Defense Criminal Investigative Service’s Southwest Field Office Janice M. Flores.  “The lawsuit demonstrates the commitment of DCIS and its partner agencies to prevent false billing and corrupt practices involving the military contracting process.”        

Some of the allegations contained in the government’s complaint were originally alleged in a lawsuit filed in a federal court in Houston by a whistleblower, Bud Conyers, under the qui tam provisions of the False Claims Act.  The case was later transferred to the U.S. District Court for the Central District of Illinois in Rock Island, Ill., where LOGCAP III is administered by the Department of Defense at the Rock Island Arsenal.  The False Claims Act authorizes private parties to sue, on behalf of the government, companies and persons whom they believe have falsely claimed federal funds and to share in any recovery.  The Act also allows the government to intervene and take over the action, as it has done in this case.  The government notified the court earlier this year that it was intervening in Conyers’ case and intended to file its own complaint with additional allegations.

The lawsuit is being handled by the Civil Division of the Department of Justice with investigative support by the Defense Contract Audit Agency, the Defense Criminal Investigative Service and the Army Criminal Investigation Command.  The U.S. Attorney’s Office for the Southern District of Texas also participated in the investigation.

The case is captioned United States ex rel. Conyers v. Kellogg Brown & Root Inc. et al., No. 4:12-cv-04095-SLD-JAG (C.D. Ill.).  The claims asserted in this case are allegations only; there has been no determination of liability except to the extent of admissions made in the criminal proceedings.

WHITE HOUSE BRIEFING FOR JANUARY 22, 2014

FROM:  THE WHITE HOUSE
Daily Briefing by the Press Secretary, 1/22/14

James S. Brady Press Briefing Room

12:55 P.M. EST

MR. CARNEY:  Kind of feels like Monday, weirdly.  My kids still haven't gone to school this week.

Good afternoon.  I hope you're holding up in the wintry weather, today’s cold.  Before I take your questions I'd like to tell you that this morning the President and Vice President held a meeting in the Oval Office with Attorney General Holder, Secretaries Hagel, Sebelius and Duncan, and senior administration officials to discuss their commitment to combating rape and sexual assault in all settings.  During the meeting the President and Vice President reiterated their deep, personal interest in doing everything possible to root out these types of abuse and build on the steps their administration has taken to protect Americans from it.

They discussed the findings of a report issued by the White House Council on Women and Girls that was issued earlier today and identifies key areas to focus on as part of these continued efforts, including working to change social norms, improving criminal justice response, and protecting students from sexual assault.  Each of the Cabinet members briefed the President and Vice President on various actions their respective agencies are taking to lead a coordinated, comprehensive effort to combat sexual assault from the military to college campuses and beyond.
And later today, the President and Vice President and these Cabinet officials will join additional representatives of the Council on Women and Girls for a meeting in the East Room -- which I think you know -- where the President will sign a new presidential memorandum to establish the White House Task Force on Protecting Students from Sexual Assault.  In his meeting this morning, the President said that he looks forward to seeing recommendations from the task force within 90 days.

Working to combat rape and sexual assault in all settings has been a priority for the President and Vice President throughout their time in office, and these new efforts build on steps that this administration has taken to combat these crimes, including last year’s reauthorization of the Violence Against Women Act, which the Vice President himself authored, and the series of executive actions that Secretary Hagel recently announced to address sexual assault in the military.

With that, I take your questions.  Julie.

Q    Thanks, Jay.  I have a couple questions about Iran and Syria.  I know the State Department has talked about this over the weekend, but what is the White House’s understanding of what happened with the Ban Ki-moon invitation to Iran to the Syria talks and then having to pull that invitation back?

MR. CARNEY:  Well, I would refer you to the U.N. Secretary General for more detail about this.  I think he’s spoken to it and explained.  Our position never changed and remains today what it has always been, which in order to participate in the Geneva conference you need to endorse the Geneva Communiqué.  And the purpose of the Geneva II conference is the full implementation of that communique, including the establishment by mutual consent of a transitional governing body with full executive authorities.

So I would refer you to what Secretary General Ban has said on this issue.  Our position is clear.  And we're certainly following events in Montreux now as that conference has gotten underway.

Q    Is there any concern that any tension that was created through this invitation and pulling back the invitation might bleed over into the nuclear talks between the U.S. and Iran?

MR. CARNEY:  No.  I think that we have made clear and the P5-plus-1 in general have made clear that the focus of the implementation of the Joint Plan of Action and of the next step, the six-month process of trying to reach a comprehensive resolution of this matter, is on how we can persuade Iran to abide by its international commitments, how we can ensure that Iran will not obtain and cannot obtain a nuclear weapon.  There are other issues, very serious ones, in the Iran account that we have and that includes our profound differences over Syria and the fact that Iran has clearly played a negative role there and a violent role there.

Q    And on those talks, they’re off to a bit of a rocky start.  Does the administration see this round, Geneva II, as sort of the last, best chance to get Assad out?  And if this round of talks ends without a positive conclusion, where does the discussion on Syria go from here?

MR. CARNEY:  Well, first of all, I’d note that this is the beginning of what will be a tough and complicated negotiation to end the war in Syria.  The meetings in Montreux are ongoing and the start of the Syria-Syria negotiations will begin on Friday in Geneva.  That is where the two parties themselves are negotiating.

The international community is focused on the full implementation of the Geneva Communiqué, including the establishment, based on mutual consent, of a transitional governing body exercising full executive powers, as I just said, including over military and security entities.  It’s important to be clear:  Mutual consent for a transitional governing body means that that government cannot be formed with someone who is objected to by one side or the other.  In other words, that means that Bashar al-Assad will not and cannot be part of that transition government.

Now, the most important work will be done in the coming days, weeks, and months ahead with the regime and the opposition sitting down together to negotiate the implementation of the Geneva Communiqué and the formation of that transitional governing body, and that will be hard work.  But today is the beginning of an important process that will hopefully lead to an end to that terrible war.

Q    Given how hard it’s been to get these parties to even come to the table, do you see this as really the last, best chance to have a political solution?

MR. CARNEY:  There is no alternative to a political solution, a negotiated political settlement.  And I wouldn't, as these talks are just starting, move ahead to an assumption that they’ll fail -- although I will recognize, as we all will and the President will, that this is going to be tough and complicated work.  But there is no alternative.  There is no other way forward for Syria absent a negotiated political settlement; absent a settlement based on the principles of the Geneva Communiqué, which calls very clearly for a transitional governing body that is reached to by mutual consent.  That’s going to be hard work, but it’s important that it’s gotten started.

Jeff.

Q    Thanks, Jay.  The President spoke yesterday with President Putin of Russia and your readout said that they discussed the Olympics and security.  What more would the White House like to see Russia doing on security there?  And what more would the United States like to do or to be involved in to address the mounting concerns about security in Sochi?

MR. CARNEY:  Well, let me say that starting with the call yesterday that the United States has offered its full support and any assistance to the Russian government in its security preparations for the Sochi Games.  Russian authorities will be responsible for overall security at the Olympics, and the State Department’s Bureau of Diplomatic Security has the security lead for United States.  We will send diplomatic security and FBI agents to liaise with host nation security and law enforcement officials.  And that’s standard operating procedure for large events like this, where thousands of U.S. citizens -- athletes from Team USA, American corporate sponsors and members of the U.S. media are present for an extended period of time.

Now, the United States and Russia have had discussions on counterterrorism cooperation in a number of venues, as we’ve noted in the past, including in working groups of the Bilateral Presidential Commission.  The United States has also been working with the Russian government through the International Security Events Group on Sochi preparation, specifically as we do with any host country.  Now, U.S. citizens planning to attend the games in Sochi should be contact with the State Department.  Potential threats to safety and security can be found on the embassy’s website and the Department of State’s travel website.

I’ll also note that we have seen an uptick in threat reporting prior to the Olympics, which is, of course, of concern, although it is also not unusual for a major international event. And we have offered, as I said, assistance to the Russians -- any assistance that they might need to counter that threat.

Q    Is Russia accepting any of that assistance that’s been offered?

MR. CARNEY:  I would, first of all, refer you to the Department of Defense for details on assistance that’s been offered.  I would also say that we’re having ongoing conversations with the Russians about this and have offered any assistance that we can provide.  They obviously have lead for security at the Olympics -- they are the host nation.

Q    But did that offer come out of a concern that they’re not doing enough?

MR. CARNEY:  No, I think that this is an international event; there will be a large U.S. citizen presence there for an extended period of time, and we take the necessary precautions as you would expect.  I think the Pentagon said on Monday of this week that the United States has offered its full support to the Russian government, and that includes the two U.S. ships that have been sent to the Black Sea as part of the prudent planning and preparations that are required for an event like this.

Q    All right.  And then one other issue -- The Washington Post today had a story quoting U.S. officials expressing concern that they would not be able to make good on the President’s promise regarding the telephone records and the NSA proposals.  How confident is the White House that a deadline can be met?  Was it realistic?

MR. CARNEY:  Well, I would say the relevant agencies are already at work on implementing the directions in the President’s speech that he gave.  As the President said, these are complicated issues, but they are not new to us.  We’ve already been working on them over the past six months and doing everything in our power, already we are, to meet those timelines. So it’s complicated, but the word has already gone out, some of the work has already been done, and the President looks forward to progress being made and completed.

Jon.

Q    On Russia, the call with Putin, who called who?  Did the President call or did Putin?  Who initiated the call?

MR. CARNEY:  I don't know the answer to that, Jon.  They speak with some frequency, but I can find out if there is an initiator.

Q    And get back to us?

MR. CARNEY:  Sure.

Q    And on this question of security at the Olympics, what is your assessment, what is the White House assessment?  How are the Russians doing on security?  Are they doing enough?

MR. CARNEY:  Well, again, what I can tell you is there has been an uptick in some of the reporting, but that is not unusual. It’s of concern, but not unusual for an event like this.  The State Department has handled and is handling the issue of travel advisories for U.S. citizens, and we are offering the Russians any assistance that they might require or request in a situation like this.

But I wouldn’t be qualified -- I wouldn’t want to venture to assess overall except that these kinds of major events around the world obviously present security challenges; this one is not unique.  And we take matters like this seriously because of the presence of U.S. citizens.  That's why we’re working with the Russian government.  That's why we’re offering the assistance that we’re offering, as well as encouraging U.S. citizens planning to travel to Sochi to be in contact with the State Department to make sure they're aware of the advisories that are out there.

Q    Can you characterize our level of confidence in the steps they have taken?  You’ve heard -- obviously Putin has talked a “ring of steel” around the Sochi Olympics.  Do we have a great deal of confidence that they have done enough on this?

MR. CARNEY:  All I can tell you, Jon, is that we have had conversations with the Russian government about security in Sochi.  The President spoke with President Putin about this.  We have offered any assistance that they might want to avail themselves of, and we’re taking, I think, prudent precautions on this matter, as evidenced by some of the steps the Department of Defense and the State Department have taken.

I wouldn’t want to assess from here because this is a complicated piece of business, obviously -- an international event like this, Olympics in general -- because they, unlike already complicated events like a single day of a sporting event, the Olympics last over a significant period of time.

Q    And can I ask a question on the Iran -- on the negotiations with Iran on the nuclear issue?  Is it the White House’s belief that if you can reach an agreement with the Iranians that those sanctions can be lifted without congressional approval?  Can further sanctions be lifted?  Obviously there are some steps which you’re able to do without congressional approval, but can you strike a deal with Iran and lift sanctions without Congress okaying it?

MR. CARNEY:  I haven’t seen that assessment made because it presupposes what is the only acceptable outcome to these negotiations, which is a verifiable, transparent agreement by Iran to forsake its nuclear weapons ambitions.  And the promise of that for Iran is that by coming into compliance with its international obligation, by offering in a way that is 100 percent reassuring to the P5-plus-1 and our international partners and allies that they will not pursue and cannot pursue a nuclear weapon, there will be an opportunity for Iran to end its isolated state that its violation of its international obligations has brought upon it.

But how that process would work, I think it’s a little early to discuss that because the six-month period that we’ve been talking about for the negotiations over a comprehensive solution is only just beginning.

Q    Okay.  And then just one last thing.  The First Lady had her 50th birthday party and I believe you said that the President picks up the cost for that party.

MR. CARNEY:  I think we put out information.  I don’t have it here.  I would refer you to the East Wing.

Q    And I was just wondering if you had an estimate on what the cost was.

MR. CARNEY:  I don’t, but I would refer you to the East Wing.

Q    On that uptick in threat reporting, you said that it’s something you should expect with events like this.  But really going beyond that, part of that uptick is because of recent events in the area because of the region we’re talking about.  Is that correct?

MR. CARNEY:  Well, I mean, you’re asking me to assess the region.  I think that international events like this always represent -- or present, rather, security challenges, and that’s broadly speaking.  Obviously each event presents unique challenges.  But I’m not going to get into a detailed analysis of how this one might be different from another one.  The approach that the U.S. government takes and the administration takes is one of prudent preparation because of any risks that might be out there.

So as I said, as you might expect in the run-up to an event like this, there has been an uptick in some of the threat reporting, and we’re taking precautions accordingly.  But that is not unusual.

Q    And does President Putin seem welcoming of U.S. offers for assistance?

MR. CARNEY:  I think that we have communicated at a variety of levels including between the two Presidents that we are absolutely willing to assist the Russian government where we can, and those conversations are being engaged.  And I wouldn’t characterize them -- I can point you to the Defense Department in terms of some of the conversations they’ve had and some of the steps they’ve taken.  But we’re going to continue to work with the Russian government and have those conversations moving forward.

Q    And on The New Yorker piece, the President said a couple of things about marijuana.  He said that legalization experiments in Washington State and Colorado should “go forward.” He also mentioned that he didn’t think marijuana was any more dangerous than alcohol.  In 2010, this White House put out a policy paper on national drug policy stating that marijuana should not be legalized.  Was the President setting new drug policy?

MR. CARNEY:  No, the President’s position on these matters hasn’t changed.  I think he was making a couple of points -- one, that we ought to use discretion appropriately in our prosecution prioritization -- A.  B, when it comes to marijuana use, he made clear that he sees it as a bad habit and a vice and not something that he would encourage -- and this is a quote:  “It’s not something I encourage, and I told my daughters I think it’s a bad idea, a waste of time, not very healthy.”

But there’s no question that we’ve applied our drug laws in a way that has been counterproductive and that there are issues there that need to be addressed.  I think that it’s important to -- because he’s quoted quite extensively in that article -- to look at the full context of some of these quotes that have been taken out in phrases when, at least in this instance, there’s an opportunity to see him speak at length.

Q    But he does want to see those experiments to go forward in Washington State and Colorado.  What does he hope to find out --

MR. CARNEY:  I think the point he was -- well, see, I think again that you’re probably not aware of the entire sentence.  “It’s important for the experiment” -- which is bracketed -- “to go forward because it’s important for society not to have a situation in which a large portion of people have at one time or another broken the law, and only a select few get punished.”  In other words, he’s talking about the issue of the disparities in our prosecution of our drug laws that an experiment like this may be addressing.  He’s not endorsing any specific move by a state; he’s simply making an observation.  His position on these matters has not changed.

Q    And, Jay, on Syria, getting back to Syria, there has been a huge cache of photos that have been released showing what appears to be widespread killings, mass killings, mass torture in Syria.  Has the White House examined these photos?  Does it have an opinion on what should happen with respect to those photos?

MR. CARNEY:  We stand with the rest of the world in horror at these images that have come to light, and we condemn in the strongest possible terms the actions of the Assad regime and call on it to adhere to international obligations with respect to the treatment of prisoners.  While we cannot independently confirm or affirm the information that was presented recently, these photos cannot be ignored or dismissed.  They suggest widespread and apparently systematic violations of international human law and demonstrate just how far the regime is willing to go in harming its own people.  They’re very disturbing images.

Let me move around a little bit.  Christie.

Q    Thanks, Jay.  Back on the metadata program.  Can you say when the DOJ and the ODNI began working on the storage -- the new storage place for this database?  Was it 10 minutes after the President speech or --

MR. CARNEY:  I would refer you to them.  I don’t know when they --

Q    Well, your answer to Jeff made it sound like --

MR. CARNEY:  I’m saying that on -- the examination of these issues was part of the review process.  So moving forward, participants in that effort are not starting from scratch.  And that was the point I’m making -- not that the President had issued specifically this directive prior to his speech, but that there’s a knowledge base there that was built in part by the review the President asked for and got, and that will certainly be of assistance as the work moves forward to make some determinations about storage.

Q    And do you know if the Attorney General has assured the President that he can make the deadline that he has set?

MR. CARNEY:  Again, I think I would point you to what I said earlier.  There’s work that’s been done on this issue broadly speaking so people aren’t starting from scratch.  It’s a complicated piece of business, but the President expects that action can be taken in the timeline he set.

Q    Well, you also have the component of needing congressional help on this.  What would happen if Congress did not act to set something up by the deadline the President is talking about?  Is the President willing to stop -- he said in his speech that the government will no longer maintain this database.  Would he stop doing that --

MR. CARNEY:  Well, we’re going to work with Congress because we think that this is the kind of thing that can enjoy bipartisan support.  There’s a shared interest in moving forward on this so I think that we hope and expect congressional cooperation moving forward.

Q    On income inequality, the President has repeatedly made it clear recently that this is going to be a big part of the next three years.  But with so little appetite in Congress to do anything about it, how much effort is he going to put behind measures that can actually reduce the trend?

MR. CARNEY:  Well, there’s no question, as you heard the President say in Anacostia late last year, and as you’ve heard him say over the years, including in Osawatomie and earlier this year, that the challenge we face when it comes to economic mobility in this country and the ability of Americans from all stations in life to achieve the American Dream is something he considers his number-one priority.  And addressing that challenge, addressing that problem, making sure that there’s opportunity for everyone, is something that we can do together with Congress and it’s also something that he can tackle using all of the tools in his toolbox as President of the United States.

And you have seen him do that -- or rather you have seen examples of how he can do that just recently with the Promise Zones that he talked about, and the manufacturing hub in North Carolina, where we can continue to work on the renaissance of manufacturing in this country and focus on advanced manufacturing and the kind of industries that create well-paying jobs for middle-class families to live on here in the United States.  You've seen it in the initiative last week with a hundred representatives from colleges and universities and elsewhere interested in improving education for Americans, and that, in turn, helps address the issue, because it’s not something that a single piece of legislation will resolve.

You've seen it in efforts across the states to raise the minimum wage, state by state.  The President strongly supports action by Congress, strongly supports action here in Washington to raise the minimum wage, because as a basic principle in this country you ought to be able to earn a living, i.e. not live in poverty, if you put in a hard day's work.  That's certainly the President's view.  And that's something that has enjoyed across the country and through the years bipartisan support.  So there's an opportunity for action with Congress on that specific issue -- and others.

So the President is fiercely committed to this agenda that goes right at the heart of what he believes America has always been about, which is the foundational belief that no matter what the circumstances of your birth that you have endless opportunity in this country to advance yourself and your family if you're willing to work hard, if you're willing to take responsibility, and if you're willing to educate yourself and help your family move forward.  So this is obviously something the President has spoken about before.  I think you can expect that it will be something he'll speak about in the coming days and weeks, and throughout his presidency.

Q    How would he measure success?

MR. CARNEY:  I think he would measure success by evidence that we have improved economic opportunity in this country for everyone; that the mobility that we've seen declining in this country is on the rise again, where you don't have I think surprising statistics that suggest that countries in Europe have greater economic mobility than the United States, which sort of goes at the heart of who we believe we are in this country and what our history has been about when it comes to opportunity for people who have been willing to work hard and take responsibility.  So that's an agenda that could not have more presidential force behind it.

Major.

Q    There was a report last night that the Pentagon sent to the President a report or a recommendation that there would be 10,000 U.S. military personnel in Afghanistan after 2014 provided the BSA is signed, but that those forces would be removed by 2016.  A, can you confirm if that's true?  And if so, does it reflect a presidential desire to wind down the war completely by the end of his term, even if the bilateral security agreement is signed by the Afghan government?

MR. CARNEY:  What I can tell you, Major, is that the President has not made any decisions about final troop numbers  and I'm not going to discuss ongoing deliberations.  We will be weighing inputs from our military commanders, as well as the intelligence community, our diplomats and development experts as we make decisions about our post-2014 presence in Afghanistan.

As you mentioned, in addition, our position continues to be that if we cannot conclude a bilateral security agreement promptly then we will initiate planning for a post-2014 future in which there would be no U.S. or NATO troop presence in Afghanistan.  That's not the future we're seeking; it’s not the policy we think is best, and we don't believe it’s in Afghanistan’s best interest.  But the further this slips into 2014, the more likely such an outcome is.

Meanwhile, as the interagency convenes to continue considering options to present to the President for a post-2014 presence, we will have to increasingly take into account the lack of a signed BSA in that planning.  We'll have to frame decisions based on our clear position that we can't pursue a post-2014 mission without a BSA.  And that mission, if I could just reiterate, would be one tailored to focus on counterterrorism operations and on the training and support of Afghan security forces.

So no decisions have been made.  We're not going to get into ongoing deliberations.  And it’s important to note in the context of all of these discussions that we are still waiting for the Afghan government to sign the bilateral security agreement.

Q    Does the difficulty in obtaining that signature on the BSA inject into these deliberations a new question about the utility of keeping forces for a long period after 2014 because it appears the Afghan -- we may not be welcome there and therefore the utility of us staying might be in question now?

MR. CARNEY:  Well, I think, in fact, the loya jirga strongly endorsed the bilateral security agreement, and as a body that represents the will and opinion of the Afghan people, we think that is significant and it reflects the fact that the BSA was negotiated in good faith with the Afghan government.  And we consider that another strong reason why it ought to be signed.

Q    But you know as well as I do that part of this is the succession of Karzai and this being a live issue, so that if it’s not overshadowed, certainly presents itself within the succession of the Karzai government and it certainly is a factor being weighed by not just the loya jirga but whoever may succeed Karzai.

MR. CARNEY:  Well, I think that's probably the case, but we're not basing the need for the BSA to be signed on that timeline in Afghan politics.  We're basing it on the fact that we have to make decisions -- we and our NATO allies have to make decisions and make plans for 2014 that need to take into account whether or not there is a BSA that's been signed, because there cannot be a further troop presence beyond 2014 absent a signed BSA.  So the further we slip into this year, the more we have to take that into account as we make plans.

Q    It was suggested on a couple of Sunday talk shows that there is evidence in possession of the U.S. government that Edward Snowden may well have received assistance from the Russian government in transit on his way to Russia and that he may be cooperating in ways that is harmful to the U.S. government on an ongoing basis.  Does the administration agree with those assessments?

MR. CARNEY:  I would say that this is an ongoing criminal investigation; there have been charges brought.  And I don't have anything to add from here on that matter.

Q    Would the administration cast any doubts on those suspicions?

MR. CARNEY:  Again, I just don't have anything to add.  There is a case that has been presented against Mr. Snowden, charges have been brought.  It is our firm position that he ought to return to the United States and face the charges against him here where he will be afforded all of the protections of due process that our judicial system provides.

Q    In The New Yorker piece, the President said he was haunted by Syria.  You read a statement about the images that the administration had a chance to look at.  You also said there’s no alternative to Assad staying in power.  Why isn't there any alternative to Assad staying in power?  He’s been there for almost two and a half years, a wide-running bloody civil war.  The military does not appear to be any less aggressive in its defense of the Assad regime than it has been from the start.  The opposition is splintered.  The Geneva II peace process or conversations are off to, at best, a rocky start.  Why isn't it possible that Assad stays and the President remains haunted by this for the remainder of his administration?

MR. CARNEY:  Because there’s no future that the Syrian people will endorse for their country that includes Assad in the government or as President.  He has forsaken in bloody fashion any claim he might have to lead that country into the future by massacring his own people --

Q    But with respect, that may undermine his moral authority, but the practical reality is he’s there, his military is there and fights aggressively to keep him there.

MR. CARNEY:  And there’s an ongoing civil war there, and there is no solution, there is no end to that war absent a negotiated political settlement.  And that settlement has to be based on the Geneva Communiqué, which calls for a transitional governing authority based on mutual consent.  And there’s no achieving mutual consent in Syria of the members of that governing authority that could include Bashar al-Assad in the government.  It won’t happen.  It can't happen.

So our view that Assad can't be part of Syria’s future is not one that we make on our own; it’s one we observe in the fulfillment of the Geneva Communiqué, because there’s no way the opposition would agree to -- nor should -- a governing transitional authority that would include Assad among those participants.

Q    Jay, on that point, is a U.S. military strike against Syria -- a potential U.S. military strike still on the table?

MR. CARNEY:  Well, Ed, I don't think that we would ever rule out options when dealing with matters like this.  But what I can tell you is that we foresee no U.S. troops in Syria and that there is -- the only resolution here -- I think that suggesting the use of force somehow answers the mail when we said there’s no resolution here that doesn't include a negotiated political settlement --

Q    The President very publicly considered U.S. force, was right up to the line of it, and then went to Congress.  All that only played out a few months ago.  My question is two summers ago, the President from that podium had a news conference and drew the red line and that was on chemical weapons specifically.

MR. CARNEY:  As was the threat of the use of force.

Q    The threat of force.  And the President, though, then when he drew that red line in August of 2012, said that if they crossed the line there would be enormous consequences.  Now, in addition to the mass killings that were just talked about a moment ago, chemical weapons were used in mass fashion, and as result, in a positive step, Syria started turning over some of those chemical weapons.  But my question is, Assad is still in power, as Major suggested.  He’s still killing his own people. What is -- what can the U.S. do about it?

MR. CARNEY:  Well, Ed, if I could briefly clarify the history that you recounted, the President made clear that it was a red line for Syria to use chemical weapons.  And he then very clearly and forcefully threatened force when the evidence demonstrated that the Syrian government had used chemical weapons.  It was because of that credible use of force -- threat of force, rather, that something happened that I don't think anybody would have predicted, which is that a government that had long denied that it even possessed chemical weapons agreed to give them all up.  And that process is underway.

What remains the case is that there’s an ongoing civil war. What the President has said is that we will do everything we can through provision of humanitarian assistance, through pushing the Geneva process forward, including the meetings underway now, including help and assistance to the opposition, to help bring about an end to the war and a negotiated political --

Q    But all of that has been going on for a couple of years now is my question, I guess.  And if the President is haunted by it, does he feel paralyzed?  Does he feel --

MR. CARNEY:  Well, I guess, Ed, I would point you to the words of the President when he’s made clear that we cannot intervene in every -- militarily into every civil war, but we can do what we have done in this case, which is work with international partners to help try to bring about a negotiated political settlement.

And we can, as we did, working with our international partners, help bring about the commitment by Syria to give up one of the largest collections of chemical weapons in the world.  And that is obviously something that’s very positive and that work is ongoing.

Q    Last thing on health care.  The Hill newspaper reported a couple of days ago that a procurement document from late December says that federal officials decided to bring on Accenture for the healthcare.gov contract.  And they did it quickly; they did it without open bid because they justified it, administration officials, by saying they had to move quickly because they said the health insurance industry was at risk if the site was not fixed.  They also went on to say, ”The entire health care reform program is jeopardized if these fixes are not made by mid-March.”

MR. CARNEY:  Who said that?

Q    Federal officials who were quoted in --

MR. CARNEY:  Which officials?

Q    From CMS, I would expect.  Not from the White House.

MR. CARNEY:  I didn’t see the article.  I’m not aware of those statements --

Q    But you’ve been saying the website is turning the corner.  Does this document suggest that there are still concerns here in the administration?

MR. CARNEY:  Again, I’m not aware of the document.  What I can you tell you is there has been an enormous effort expended and an enormous effort that continues to be expended in making sure that the website functions effectively for the millions of Americans who have so clearly demonstrated that they desire the product on offer here.  And I certainly hope that as those improvements have resulted in significantly increased numbers of Americans enrolling in and purchasing insurance through the exchanges, that that story is getting the full coverage that it merits.

Margaret.

Q    Thanks.  I wanted to go back to Sochi for a second.  Just to clarify, there were some reports beginning yesterday that the U.S. was using counterterrorism operatives to help the Russians look for potential suicide bombers inside the security zone.  Can you confirm that?  And even if you can’t, is the U.S. concerned that there may be suicide bombers inside the security zone?

MR. CARNEY:  Margaret, I just don’t have more.  I don’t have -- I have not seen that report.  What I can tell you is that we are having conversations with the Russians.  We have made clear that we are prepared to provide any assistance that we can if Russia asks for it.  And we’re going to continue to work with them and take steps as we’ve been taking out of prudence, given that this is the kind of event where security is an issue.

Q    On the President’s call with Mr. Putin, the one thing in the readout that I didn’t notice was any mention of Edward Snowden.  Can you tell us explicitly, did they -- is this like in the agree-to-disagree category and they just don’t talk about it? Or they talked about it and it’s just not going in the readout because there’s nothing you could possibly tell us about what they said?

MR. CARNEY:  Well, I don’t have more detail on the phone call.  What I can tell you is that our position on Mr. Snowden I think is abundantly clear to everyone, including the Russians, and our view that he ought to be returned to the United States where he will be afforded all the rights and protections in our system.  That hasn't changed.  So I don't think there's any doubt in Moscow or elsewhere of our position on that matter.

Q    Can I do one more?

MR. CARNEY:  Sure.

Q    There's an ally of Angela Merkel's who is like the foreign policy spokesman for her party in the Parliament, and what he had said is that it's their view that what the President has promised or offered in terms of the foreign leader aspect of the NSA role last week isn't quite enough and that -- he said, "Transatlantic relations are in the deepest crisis now since the Iraq war."  I'm just wondering if the President is concerned about the sort of ongoing steps to repair the relationship with Germany specifically and what he is doing in the wake of the NSA remarks?

MR. CARNEY:  Well, we have had direct country-to-country and, in some cases, leader-to-leader consultations on these matters as they have arisen.  And we've certainly been clear about that when it comes to the United States and Germany and President Obama and Chancellor Merkel.  And I would say that at Chancellor Merkel and President Obama's direction, we have undertaken extensive, close consultations on our intelligence cooperation in recent months, which has resulted -- those consultations, rather, have resulted in a better understanding of the requirements and concerns that exist on both sides.  And those consultations will continue among our intelligence services.  And I think they reflect the very close relationship we have across the board, including on issues of and matters of intelligence.

Peter.

Q    Jay, clearly, there was a greater degree of sharing in past Olympics -- in London, in Vancouver, and even Beijing before that.  What specifically would you like to see with Russia that would give this administration more confidence in the safety of Americans not just in Sochi, but throughout Russia?

MR. CARNEY:  Again, Peter, I just don't have more on this beyond what I've said, which is that we are in conversations with the Russians, we've made clear that we are prepared to offer any assistance that they might require.  Russian authorities are, of course, responsible for overall security at the Olympics -- they are the host nation -- and the State Department's Bureau of Diplomatic Security has the security lead for the United States. As part of that responsibility, we will send diplomatic security and FBI agents to liaise with host nation security and law enforcement officials.

I think that reflects the actions that we take in situations like this; they're fairly standard.  But these are obviously events that present security challenges, so we work with host nations and we take actions that we think are necessary to make sure that the precautions we can take are taken.

Q    So at this time, is the White House satisfied that Russia is prepared to host a safe games?
MR. CARNEY:  I think that Russia has responsibility for overall security in terms of the steps that they've taken, and assurances that they can make are ones that they have to make.  Our view is that we partner with host nations and liaise with them.  We also, in this case, are offering security assistance and we'll continue to work with the Russians as the event approaches and begins.

Q    Senator Angus King said a couple of days ago, "I would not go and I don't think I'd send my family."  Americans are making those decisions right now.  Should Americans go?  Should they feel safe sending their family?

MR. CARNEY:  Sure.  I think there will be, as I understand it, a lot of Americans in Sochi, which is why, of course, we pay close attention to an event like this.  There will be Team USA members there, as well as corporate sponsors.  And our advice to Americans who might travel to the games is to avail themselves of the information provided by the State Department in the form of travel advisories related to this and to take the standard precautions that those advisories recommend.  And beyond that, we're just going to continue to work with -- to take the necessary precautions and to work with the Russian government.

Q    As for Chairman Rogers, who this weekend discussed his suspicion or belief that Edward Snowden received some help -- this is going to a question that was asked earlier -- but he made these -- you could call them allegations or accusations -- at least it was his belief system that there was help provided to Edward Snowden.  A senior FBI official told us on Sunday that it’s still the Bureau’s conclusion that Mr. Snowden acted alone. So I guess I’m curious right now if Chairman Rogers and others using language like that somehow hinders the relationship the U.S. is trying to develop right now with Russia by making those suggestions when it appears the administration has no evidence of that.

MR. CARNEY:  I think the disagreement we have with Russia over Edward Snowden I think has been publicly expressed with some frequency.  I don’t think that --

Q    Is he helping or hurting by saying that if there’s no evidence?

MR. CARNEY:  Well, I don’t think that that’s really an issue because we have -- the President spoke with President Putin directly and does so with some frequency, as Presidents of Russia and the President --

Q    Wait, about -- I’m sorry, about Edward Snowden?

MR. CARNEY:  No, I’m just saying in general that we don’t -- that the President can talk to President Putin, and does.  And in our relations with Russia, we have areas of significant cooperation where our interests are aligned and we have areas of significant disagreement, including but not limited to the matter of Edward Snowden.  But I don’t think we’re anything but transparent about that.  And we have expressed that very clearly both on that matter and other matters.  That’s been the approach the President has taken in our relations with Russia because he thinks that best serves the interests of the United States, which is a very clear-eyed approach to U.S.-Russian relations that allows for cooperation on matters that are vital to U.S. national security and U.S. interests, and can also allow for the clear expression of disagreements -- and that happens.

We are still able to move forward and cooperate with the Russians on a host of areas.  That includes the P5-plus-1.  It includes counterterrorism cooperation in general.  And it includes obviously the ability to discuss security around the Sochi games.

Q    Finally, very quickly, we’re under the impression you’ll get back to us on who delivered -- who placed the phone call, whether it was President Putin or President Obama yesterday.  But we’re under the -- we’ve been told that the conversation was apparently several days or even weeks in the making.  Did the two of them agree to have other conversations and have other conversations been set before the games where further decisions will be made in terms of cooperation?

MR. CARNEY:  I don’t have any previews of additional phone calls that may or may not happen.  As I said, the President speaks with President Putin with some frequency, as you might expect, but I don’t know when the next call might be.

Yes, Jess.

Q    On the U.S.-Africa summit that you announced earlier this week, can you talk about what prompted that, and also why Egypt is not among those that are invited, especially given what’s going on there right now?

MR. CARNEY:  Well, I can tell you that what prompted it is the hope that the summit will build on the progress made since the President’s trip to Africa last summer that it will advance the administration’s focus on trade and investment in Africa and highlight America’s commitment to Africa’s security, its democratic development and its people.
I think that on matters of the invitation list, on Egypt -- I know I have this here somewhere.  Hold on.  I can give you -- Egypt has not been invited because it is suspended from the African Union, and that’s the reason why Egypt was not invited.  I can read you the entire list of the invitees, but I think you’ve probably seen it.  But that’s why Egypt was not invited.

Q    Is there any concern that that is a missed opportunity to have discussions that you’d like to be having with Egypt?

MR. CARNEY:  Well, I think we have regular discussions with Egyptian leaders and authorities focused on the bilateral relationship, on security matters, but also on developments in Egypt and our belief that Egypt needs to transition to a civilian-led government in a process that is inclusive where Egyptians from all walks of life get to express their views and be heard.

Reid.

Q    Jay, yesterday after he was indicted, former Virginia Governor McDonnell and his attorneys both described his actions while he was governor as similar to things that President Obama has done in the White House.  They said in the legal brief the President routinely participates in corporate events which lend credibility to his major benefactors, invites benefactors to events in the White House, allows his photo to be taken with benefactors, and includes benefactors in policy discussions with senior administration officials, in describing or explaining Governor McDonnell’s actions with Jonnnie Williams.  I’m sure you're going to refer questions about the prosecution to the Justice Department.  But does the President sort of concede the point that a lot of the people who are involved in some of these policy discussions are people who have contributed to his campaign?

MR. CARNEY:  Reid, I have no comment on what is obviously an ongoing matter of prosecution, and I’ll leave it at that.

Q    Thanks, Jay.

MR. CARNEY:  Mark.

Q    Jay, how will foreign leaders know if they are among the friends and allies whose phone calls the United States will not conduct surveillance on?

MR. CARNEY:  Mark, what I would say is that we have direct conversations through diplomatic channels on these issues and will continue to do so.  I think you can address those questions, that question elsewhere, but I think that we -- as has been the case since these revelations began, where they have affected our relations with a specific country, there have been direct and substantive conversations between the two countries using diplomatic channels, which is the tradition.

Q    So you’re saying you’ll tell them, you’re okay, your phone calls won’t be surveilled?

MR. CARNEY:  Well, I’m not sure what other method you might suggest, Mark.  (Laughter.)  I can simply tell you that we have close relationships with our friends and allies -- our close friends and allies, and these kinds of discussions take place through normal diplomatic channels.

Q    And have you responded to the ad yesterday in the paper from Europe 1 Radio requesting an interview with the President?  And would you suggest that's a way for many of us to request interviews from now on?  (Laughter.)

MR. CARNEY:  No, I think CBS has requested interviews through more traditional means successfully, as have many of the news organizations here.  But I wouldn’t rule out that as a means to request.  I think it’s an expensive way to do it.  But keep those invitations coming.

Thanks very much.

END
1:48 P.M. EST