FROM: U.S. JUSTICE DEPARTMENT
Tuesday, November 12, 2013
Court Authorizes IRS to Issue Summonses for Records Relating to U.S. Taxpayers with Offshore Bank Accounts
Five Banks Directed to Produce Records for Accounts at Zurcher Kantonalbank, The Bank of
N.T. Butterfield & Son Limited and Affiliates
U.S. District Judge Kimba M. Wood of the Southern District of New York entered an order on Nov. 7, 2013, authorizing the IRS to issue summonses requiring Bank of New York Mellon (Mellon) and Citibank NA (Citibank) to produce information about U.S. taxpayers who may be evading or have evaded federal taxes by holding interests in undisclosed accounts at Zurcher Kantonalbank and its affiliates (collectively, ZKB) in Switzerland; and U.S. District Judge Richard M. Berman of the Southern District of New York entered an order today authorizing the IRS to issue summonses requiring Mellon, Citibank, JPMorgan Chase Bank NA (JPMorgan), HSBC Bank USA NA (HSBC), and Bank of America NA (Bank of America) to produce similar information in connection with undisclosed accounts at The Bank of N.T. Butterfield & Son Limited and its affiliates (collectively, Butterfield) in the Bahamas, Barbados, Cayman Islands, Guernsey, Hong Kong, Malta, Switzerland, and the United Kingdom. U.S. Attorney for the Southern District of New York Preet Bharara, Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally, and Acting Commissioner of the Internal Revenue Service (IRS) Danny Werfel made the announcement today.
In these actions, the Court granted the IRS permission to serve what are known as “John Doe” summonses on Mellon, Citibank, JPMorgan, HSBC, and Bank of America. The IRS uses John Doe summonses to obtain information about possible tax fraud by individuals whose identities are unknown. The John Doe summonses approved today direct these five banks to produce records identifying U.S. taxpayers with accounts at ZKB, Butterfield and their affiliates, including other foreign banks that used ZKB and Butterfield’s U.S. correspondent accounts at Mellon, Citibank, JPMorgan, HSBC, and Bank of America to service U.S. clients.
“These cases once again demonstrate the department’s resolve to uncover and identify taxpayers who tried to hide money overseas as a way to avoid federal taxes,” said Assistant Attorney General Keneally. “These John Doe summonses will provide information about individuals using financial institutions from Switzerland to the Cayman Islands to Hong Kong to avoid their U.S. tax obligations. U.S. taxpayers still holding accounts who have not come clean should come forward and do the right thing before it’s too late.”
“Today’s action show that the use of foreign banks for tax evasion remains a high investigative priority of this office and U.S. citizens should understand that loud and clear,” said U.S. Attorney Bharara. “By issuing these John Doe summonses, we continue our joint efforts with the IRS to identify and hold accountable those who try to evade their legal responsibility to pay taxes.”
“International issues remain a major focus for the IRS, and we are continuing our efforts to fight tax evaders who use offshore accounts to skirt the law,” said IRS Acting Commissioner Werfel. “These John Doe summonses for correspondent account records show our determination to pursue evaders using offshore accounts, even if the person hiding money overseas chooses a bank that has no offices on U.S. soil.”
IRS Offshore Voluntary Disclosure programs and initiatives enable U.S. taxpayers to resolve their tax liabilities and minimize their chances of criminal prosecution by voluntarily disclosing previously undisclosed foreign accounts and income. To date, U.S. taxpayers have identified 371 previously undisclosed accounts at ZKB and 81 such accounts at Butterfield. In addition, a number of U.S. taxpayers with beneficial ownership and control over funds held in accounts at ZKB and Butterfield have admitted failing to report income earned from their offshore accounts on their federal tax returns. The IRS has reason to believe that other U.S. taxpayers who held or presently hold similar accounts at ZKB, Butterfield, and their affiliates have done the same in violation of federal tax law. In December 2012, three employees of ZKB were indicted for conspiring with U.S. taxpayers and others to hide at least $423 million from the IRS in secret Swiss bank accounts.
Federal tax law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. Willful failure to report a foreign account can result in a fine of up to 50 percent of the amount in the account at the time of the violation.
These cases are being handled by the Office’s Tax and Bankruptcy Unit. Assistant U.S. Attorney Tomoko Onozawa is in charge of the Butterfield case and Assistant U.S. Attorney Christopher B. Harwood is in charge of the ZKB case.
Wednesday, November 13, 2013
U.S. TARGETS TRANSNATIONAL ORGANIZED CRIME WITH REWARDS PROGRAM
FROM: U.S. STATE DEPARTMENT
Transnational Organized Crime Rewards Program: Targeting Global Criminal Networks
Fact Sheet
Bureau of Public Affairs
November 12, 2013
This rewards program “will promote the leads and tips needed to hobble transnational organized crime, the movement of international criminals . . . and transnational criminal organizations that pose threats not only abroad, but right in our own back yard.” - Secretary of State John Kerry
The United States established the Transnational Organized Crime Rewards Program in order to assist efforts to dismantle transnational criminal organizations and bring their leaders and members to justice.
The program gives the Secretary of State statutory authority to offer rewards for information that helps:
Dismantle transnational criminal organizations
Identify or locate key leaders
Disrupt financial mechanisms
Lead to the arrest or conviction of members and leaders
The program complements the Narcotics Rewards Program by offering rewards up to $5 million for information on significant transnational criminal organizations involved in activities beyond drug trafficking, such as human trafficking, money laundering, maritime piracy, and trafficking in arms, counterfeits, and other illicit goods.
Combating Transnational Crime
The U.S. Department of State’s Bureau of International Narcotics and Law Enforcement Affairs (INL) manages the program with U.S. federal law enforcement agencies. It is a key element of the White House Strategy to Combat Transnational Organized Crime, which recognizes that transnational criminal networks are expanding in size and scope, and diversifying their illicit activities.
How the Rewards Work
Proposals to pay rewards are submitted to the Department of State by U.S. agencies or U.S. Embassies overseas. Reward proposals are carefully reviewed by an interagency committee, which makes a recommendation for a reward payment to the Secretary of State. Only the Secretary of State has the authority to determine if a reward should be paid. In cases where there is U.S. federal criminal jurisdiction, the Secretary must obtain the concurrence of the Attorney General.
Contact Information
Overseas, individuals wishing to provide information on major transnational criminal organizations may contact the nearest U.S. Embassy or Consulate. In the United States, individuals should contact the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), or the Department of Homeland Security, Immigration and Customs Enforcement (ICE). Government officials and employees are not eligible for rewards.
All communications regarding information provided will be held in the strictest confidence.
For more information about the Transnational Organized Crime Rewards Program and current reward offers, please visit: www.state.gov/TOCrewards
Transnational Organized Crime Rewards Program: Targeting Global Criminal Networks
Fact Sheet
Bureau of Public Affairs
November 12, 2013
This rewards program “will promote the leads and tips needed to hobble transnational organized crime, the movement of international criminals . . . and transnational criminal organizations that pose threats not only abroad, but right in our own back yard.” - Secretary of State John Kerry
The United States established the Transnational Organized Crime Rewards Program in order to assist efforts to dismantle transnational criminal organizations and bring their leaders and members to justice.
The program gives the Secretary of State statutory authority to offer rewards for information that helps:
Dismantle transnational criminal organizations
Identify or locate key leaders
Disrupt financial mechanisms
Lead to the arrest or conviction of members and leaders
The program complements the Narcotics Rewards Program by offering rewards up to $5 million for information on significant transnational criminal organizations involved in activities beyond drug trafficking, such as human trafficking, money laundering, maritime piracy, and trafficking in arms, counterfeits, and other illicit goods.
Combating Transnational Crime
The U.S. Department of State’s Bureau of International Narcotics and Law Enforcement Affairs (INL) manages the program with U.S. federal law enforcement agencies. It is a key element of the White House Strategy to Combat Transnational Organized Crime, which recognizes that transnational criminal networks are expanding in size and scope, and diversifying their illicit activities.
How the Rewards Work
Proposals to pay rewards are submitted to the Department of State by U.S. agencies or U.S. Embassies overseas. Reward proposals are carefully reviewed by an interagency committee, which makes a recommendation for a reward payment to the Secretary of State. Only the Secretary of State has the authority to determine if a reward should be paid. In cases where there is U.S. federal criminal jurisdiction, the Secretary must obtain the concurrence of the Attorney General.
Contact Information
Overseas, individuals wishing to provide information on major transnational criminal organizations may contact the nearest U.S. Embassy or Consulate. In the United States, individuals should contact the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), or the Department of Homeland Security, Immigration and Customs Enforcement (ICE). Government officials and employees are not eligible for rewards.
All communications regarding information provided will be held in the strictest confidence.
For more information about the Transnational Organized Crime Rewards Program and current reward offers, please visit: www.state.gov/TOCrewards
HHS REPORTS THAT POVERTY AFFECTS BRAIN GROWTH IN CHILDREN
FROM: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Poverty, parenting, and kids’ brains
From the U.S. Department of Health and Human Services, I’m Ira Dreyfuss with HHS HealthBeat.
Researchers say poverty can interfere with a child’s brain growth – but that attentive parenting can offset at least some of the damage. Child psychiatrist Joan Luby of Washington University School of Medicine in St. Louis saw this in data on brain scans of 145 8- to 12-year-olds.
Luby says poor children tended to have smaller hippocampuses, important in learning and memory – possibly from stresses of poverty on the developing brain. But she says her study indicates the main driver was how nurturing parents were:
“It suggests that even in circumstances of great adversity, supportive parenting can be an important protective factor.”
The study in the journal JAMA Pediatrics was supported by the National Institutes of Health.
Poverty, parenting, and kids’ brains
From the U.S. Department of Health and Human Services, I’m Ira Dreyfuss with HHS HealthBeat.
Researchers say poverty can interfere with a child’s brain growth – but that attentive parenting can offset at least some of the damage. Child psychiatrist Joan Luby of Washington University School of Medicine in St. Louis saw this in data on brain scans of 145 8- to 12-year-olds.
Luby says poor children tended to have smaller hippocampuses, important in learning and memory – possibly from stresses of poverty on the developing brain. But she says her study indicates the main driver was how nurturing parents were:
“It suggests that even in circumstances of great adversity, supportive parenting can be an important protective factor.”
The study in the journal JAMA Pediatrics was supported by the National Institutes of Health.
FORMER DEFENSE CONTRACTOR AND WIFE PLEAD GUILTY FOR PARTICIPATION IN PROCUREMENT FRAUD SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, November 12, 2013
Former Defense Contractor Employee and Wife Plead Guilty to Conspiring to Defraud Millions in Scheme Involving Supplies to Afghan National Army
Keith Johnson, 46, and his wife, Angela Johnson, 44, of Maryville, Tenn., pleaded guilty today to their roles in a $9.7 million procurement fraud scheme.
Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Robert E. Craig, Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office; John Sopko, Special Inspector General for Afghanistan Reconstruction (SIGAR); and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU), made the announcement after the pleas were accepted by U.S. District Judge Leonie M. Brinkema of the Eastern District of Virginia.
The Johnsons were indicted on July 16, 2013, by a federal grand jury on conspiracy to commit wire fraud and wire fraud charges. Keith Johnson faces a maximum penalty of 20 years in prison, and Angela Johnson faces a maximum penalty of five years in prison when they are sentenced on Feb. 14, 2014.
In a statement of facts filed with the plea agreement, Keith Johnson admitted to serving as the program manager for a Department of Defense contractor that operated a central maintenance facility (CMF) in Kabul, Afghanistan, and other facilities in that country to maintain and repair vehicles used by the Afghan National Army. In his position during 2007 to 2008, Keith Johnson was involved in purchasing vehicle parts from vendors. The Johnsons formed a company in Tennessee, Military Logistics Support (MLS), and listed only the names of relatives as officials in the documents filed. Angela Johnson operated the company. When Keith Johnson’s company solicited quotes for different vehicle parts that were needed, Angela Johnson, using her maiden name of “Angela Gregory” to conceal her relationship to Keith Johnson, responded with quotes based on parts that she was able to purchase from other vendors of vehicle parts. Keith Johnson used his position as program manager to write letters justifying awards of purchase orders for parts to MLS without seeking competitive quotes, and in instances in which there had been competitive quotes, approving recommendations that the awards be made to MLS.
The Johnsons also conspired with John Eisner and Jerry Kieffer, two individuals who worked at the CMF as subcontractors to Keith Johnson’s company, to have Keith Johnson similarly steer purchase orders for other types of vehicle parts to Eisner’s and Kieffer’s separate company, Taurus Holdings. Eisner submitted the quotes for Taurus using a fake name to conceal his connection to the subcontractor. Eisner and Kieffer paid kickbacks to the Johnsons and on occasion engaged in collusive bidding with the Johnsons so that MLS could win competitions for certain purchase orders. Eisner and Kieffer previously pleaded guilty to conspiracy and will be sentenced on Dec. 18, 2013.
As a result of the scheme, Keith Johnson’s company awarded MLS at least $9.7 million worth of purchase orders for vehicle parts by Keith Johnson’s company.
This case was investigated by DCIS, FBI, SIGAR and Army MPFU. Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section and Assistant United States Attorneys Jack Hanly and Ryan Faulconer of the Eastern District of Virginia are prosecuting the case on behalf of the United States.
Tuesday, November 12, 2013
Former Defense Contractor Employee and Wife Plead Guilty to Conspiring to Defraud Millions in Scheme Involving Supplies to Afghan National Army
Keith Johnson, 46, and his wife, Angela Johnson, 44, of Maryville, Tenn., pleaded guilty today to their roles in a $9.7 million procurement fraud scheme.
Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Robert E. Craig, Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office; John Sopko, Special Inspector General for Afghanistan Reconstruction (SIGAR); and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU), made the announcement after the pleas were accepted by U.S. District Judge Leonie M. Brinkema of the Eastern District of Virginia.
The Johnsons were indicted on July 16, 2013, by a federal grand jury on conspiracy to commit wire fraud and wire fraud charges. Keith Johnson faces a maximum penalty of 20 years in prison, and Angela Johnson faces a maximum penalty of five years in prison when they are sentenced on Feb. 14, 2014.
In a statement of facts filed with the plea agreement, Keith Johnson admitted to serving as the program manager for a Department of Defense contractor that operated a central maintenance facility (CMF) in Kabul, Afghanistan, and other facilities in that country to maintain and repair vehicles used by the Afghan National Army. In his position during 2007 to 2008, Keith Johnson was involved in purchasing vehicle parts from vendors. The Johnsons formed a company in Tennessee, Military Logistics Support (MLS), and listed only the names of relatives as officials in the documents filed. Angela Johnson operated the company. When Keith Johnson’s company solicited quotes for different vehicle parts that were needed, Angela Johnson, using her maiden name of “Angela Gregory” to conceal her relationship to Keith Johnson, responded with quotes based on parts that she was able to purchase from other vendors of vehicle parts. Keith Johnson used his position as program manager to write letters justifying awards of purchase orders for parts to MLS without seeking competitive quotes, and in instances in which there had been competitive quotes, approving recommendations that the awards be made to MLS.
The Johnsons also conspired with John Eisner and Jerry Kieffer, two individuals who worked at the CMF as subcontractors to Keith Johnson’s company, to have Keith Johnson similarly steer purchase orders for other types of vehicle parts to Eisner’s and Kieffer’s separate company, Taurus Holdings. Eisner submitted the quotes for Taurus using a fake name to conceal his connection to the subcontractor. Eisner and Kieffer paid kickbacks to the Johnsons and on occasion engaged in collusive bidding with the Johnsons so that MLS could win competitions for certain purchase orders. Eisner and Kieffer previously pleaded guilty to conspiracy and will be sentenced on Dec. 18, 2013.
As a result of the scheme, Keith Johnson’s company awarded MLS at least $9.7 million worth of purchase orders for vehicle parts by Keith Johnson’s company.
This case was investigated by DCIS, FBI, SIGAR and Army MPFU. Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section and Assistant United States Attorneys Jack Hanly and Ryan Faulconer of the Eastern District of Virginia are prosecuting the case on behalf of the United States.
JUSTICE SAYS AIRLINE MERGER SETTLEMENT WILL "ENHANCE" COMPETITION
FROM: U.S. JUSTICE DEPARTMENT
TO DIVEST FACILITIES AT SEVEN KEY AIRPORTS TO ENHANCE
SYSTEM-WIDE COMPETITION AND SETTLE MERGER CHALLENGE
Divestitures at Airports in Boston, Chicago, Dallas, Los Angeles, Miami, New York and Near Washington, D.C. Opens Door for Low Cost Carriers to Compete Resulting in More Choices and More Competitive Airfares for Consumers
WASHINGTON — The Department of Justice today announced that it is requiring US Airways Group Inc. and American Airlines’ parent corporation, AMR Corp. to divest slots and gates at key constrained airports across the country to low cost carrier airlines (LCCs) in order to enhance system-wide competition in the airline industry resulting in more choices and more competitive airfares for consumers.
The department said the proposed settlement will increase the presence of the LCCs at Boston Logan International, Chicago O’Hare International, Dallas Love Field, Los Angeles International, Miami International, New York LaGuardia International and Ronald Reagan Washington National. Providing the LCCs with the incentive and ability to invest in new capacity and permitting them to compete more extensively nationwide will enhance meaningful competition in the industry and benefit airline travelers.
“This agreement has the potential to shift the landscape of the airline industry. By guaranteeing a bigger foothold for low-cost carriers at key U.S. airports, this settlement ensures airline passengers will see more competition on nonstop and connecting routes throughout the country,” said Attorney General Eric Holder. “The department’s ultimate goal has remained steadfast throughout this process - to ensure vigorous competition in airline travel. This is vital to millions of consumers who will benefit from both more competitive prices and enhanced travel options.”
Six state attorneys general–Arizona, Florida, Pennsylvania, Michigan, Tennessee and Virginia–and the District of Columbia joined in the department’s proposed settlement, which was filed in the U.S. District Court for the District of Columbia. If approved by the court, the settlement will resolve the department’s competitive concerns and the lawsuit.
“The extensive slot and gate divestitures at these key airports are groundbreaking and they will dramatically enhance the ability of LCCs to compete system-wide,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “This settlement will disrupt the cozy relationships among the incumbent legacy carriers, increase access to key congested airports and provide consumers with more choices and more competitive airfares on flights all across the country.”
On Aug. 13, 2013, the department, six state attorneys general and the District of Columbia filed an antitrust lawsuit against US Airways and American alleging that US Airway’s $11 billion acquisition of American would have substantially lessened competition for commercial air travel in local markets throughout the United States. The department alleged that the transaction would result in passengers paying higher airfares and receiving less service. In addition, the department alleged that the transaction would entrench the merged airline as the dominant carrier at Reagan National, where it would control 69 percent of take-off and landing slots, thus effectively foreclosing entry or expansion by competing airlines.
The settlement requires US Airways and American to divest slots, gates and ground facilities at key airports around the country. Specifically, the settlement requires the companies to divest or transfer to low cost carrier purchasers approved by the department:
All 104 air carrier slots (i.e. slots not reserved for use only by smaller, commuter planes) at Reagan National and rights and interest in other facilities at the airport necessary to support the use of the slots;
Thirty-four slots at LaGuardia and rights and interest in other facilities at the airport necessary to support the use of the slots; and
Rights and interests to two airport gates and associated ground facilities at each of Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles International and Miami International.
The Reagan National and LaGuardia slots will be sold under procedures approved by the department. Under the terms of the settlement, JetBlue at Reagan National and Southwest at LaGuardia will be given the opportunity to acquire the slots they currently lease from American. The remaining 88 slots at Reagan National and 24 slots at LaGuardia plus any JetBlue or Southwest decline to acquire will be grouped into bundles, taking into account specific slot times to ensure commercially viable and competitive patterns of service for the recipients of the divested slots. The parties will divest these slot bundles and all rights and interests in any gates and other ground facilities (e.g., ticket counters, baggage handling facilities, office space and loading bridges) as necessary to support the use of the purchased slots.
The gates at the five airports will be transferred on commercially reasonable terms to the new acquirers. The acquirers of the slot and gate divestitures also require approval of the department. Preference will be given to airlines at each airport that do not currently operate a large share of slots or gates.
The proposed settlement allows the department to appoint a monitoring trustee to oversee the divestitures or transfers of the slots and gates. The settlement also prohibits the merged company from reacquiring an ownership interest in the divested slots or gates during the term of the settlement. The companies must also provide advance notice of any future slot acquisition at Reagan National regardless of whether or not it is a reportable transaction under the premerger notification law and further provides for waiting periods and opportunities for the department to obtain additional information in order to review the transaction.
AMR is a Delaware corporation with its principal place of business in Fort Worth, Texas. AMR is the parent company of American Airlines. Last year American flew more than 80 million passengers to more than 250 destinations worldwide and took in more than $24 billion in revenue. In November 2011, American filed for bankruptcy reorganization.
US Airways is a Delaware corporation with its principal place of business in Tempe, Ariz. Last year US Airways flew more than 50 million passengers to more than 200 destinations worldwide and took in more than $13 billion in revenue.
TO DIVEST FACILITIES AT SEVEN KEY AIRPORTS TO ENHANCE
SYSTEM-WIDE COMPETITION AND SETTLE MERGER CHALLENGE
Divestitures at Airports in Boston, Chicago, Dallas, Los Angeles, Miami, New York and Near Washington, D.C. Opens Door for Low Cost Carriers to Compete Resulting in More Choices and More Competitive Airfares for Consumers
WASHINGTON — The Department of Justice today announced that it is requiring US Airways Group Inc. and American Airlines’ parent corporation, AMR Corp. to divest slots and gates at key constrained airports across the country to low cost carrier airlines (LCCs) in order to enhance system-wide competition in the airline industry resulting in more choices and more competitive airfares for consumers.
The department said the proposed settlement will increase the presence of the LCCs at Boston Logan International, Chicago O’Hare International, Dallas Love Field, Los Angeles International, Miami International, New York LaGuardia International and Ronald Reagan Washington National. Providing the LCCs with the incentive and ability to invest in new capacity and permitting them to compete more extensively nationwide will enhance meaningful competition in the industry and benefit airline travelers.
“This agreement has the potential to shift the landscape of the airline industry. By guaranteeing a bigger foothold for low-cost carriers at key U.S. airports, this settlement ensures airline passengers will see more competition on nonstop and connecting routes throughout the country,” said Attorney General Eric Holder. “The department’s ultimate goal has remained steadfast throughout this process - to ensure vigorous competition in airline travel. This is vital to millions of consumers who will benefit from both more competitive prices and enhanced travel options.”
Six state attorneys general–Arizona, Florida, Pennsylvania, Michigan, Tennessee and Virginia–and the District of Columbia joined in the department’s proposed settlement, which was filed in the U.S. District Court for the District of Columbia. If approved by the court, the settlement will resolve the department’s competitive concerns and the lawsuit.
“The extensive slot and gate divestitures at these key airports are groundbreaking and they will dramatically enhance the ability of LCCs to compete system-wide,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “This settlement will disrupt the cozy relationships among the incumbent legacy carriers, increase access to key congested airports and provide consumers with more choices and more competitive airfares on flights all across the country.”
On Aug. 13, 2013, the department, six state attorneys general and the District of Columbia filed an antitrust lawsuit against US Airways and American alleging that US Airway’s $11 billion acquisition of American would have substantially lessened competition for commercial air travel in local markets throughout the United States. The department alleged that the transaction would result in passengers paying higher airfares and receiving less service. In addition, the department alleged that the transaction would entrench the merged airline as the dominant carrier at Reagan National, where it would control 69 percent of take-off and landing slots, thus effectively foreclosing entry or expansion by competing airlines.
The settlement requires US Airways and American to divest slots, gates and ground facilities at key airports around the country. Specifically, the settlement requires the companies to divest or transfer to low cost carrier purchasers approved by the department:
All 104 air carrier slots (i.e. slots not reserved for use only by smaller, commuter planes) at Reagan National and rights and interest in other facilities at the airport necessary to support the use of the slots;
Thirty-four slots at LaGuardia and rights and interest in other facilities at the airport necessary to support the use of the slots; and
Rights and interests to two airport gates and associated ground facilities at each of Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles International and Miami International.
The Reagan National and LaGuardia slots will be sold under procedures approved by the department. Under the terms of the settlement, JetBlue at Reagan National and Southwest at LaGuardia will be given the opportunity to acquire the slots they currently lease from American. The remaining 88 slots at Reagan National and 24 slots at LaGuardia plus any JetBlue or Southwest decline to acquire will be grouped into bundles, taking into account specific slot times to ensure commercially viable and competitive patterns of service for the recipients of the divested slots. The parties will divest these slot bundles and all rights and interests in any gates and other ground facilities (e.g., ticket counters, baggage handling facilities, office space and loading bridges) as necessary to support the use of the purchased slots.
The gates at the five airports will be transferred on commercially reasonable terms to the new acquirers. The acquirers of the slot and gate divestitures also require approval of the department. Preference will be given to airlines at each airport that do not currently operate a large share of slots or gates.
The proposed settlement allows the department to appoint a monitoring trustee to oversee the divestitures or transfers of the slots and gates. The settlement also prohibits the merged company from reacquiring an ownership interest in the divested slots or gates during the term of the settlement. The companies must also provide advance notice of any future slot acquisition at Reagan National regardless of whether or not it is a reportable transaction under the premerger notification law and further provides for waiting periods and opportunities for the department to obtain additional information in order to review the transaction.
AMR is a Delaware corporation with its principal place of business in Fort Worth, Texas. AMR is the parent company of American Airlines. Last year American flew more than 80 million passengers to more than 250 destinations worldwide and took in more than $24 billion in revenue. In November 2011, American filed for bankruptcy reorganization.
US Airways is a Delaware corporation with its principal place of business in Tempe, Ariz. Last year US Airways flew more than 50 million passengers to more than 200 destinations worldwide and took in more than $13 billion in revenue.
Tuesday, November 12, 2013
U.S. DEFENSE DEPARTMENT CONTRACTS FOR NOVEMBER 12, 2013
FROM: U.S. DEFENSE DEPARTMENT
CONTRACTS
NAVY
Maersk Line Ltd., Norfolk, Va., is being awarded a $73,677,038 firm-fixed-price contract for the time charter of one U.S.-flagged, twin-shaft vessel, which shall function as a maritime support vessel. This contract includes four 12-month option periods, which, if exercised, would bring the cumulative value of this contract to $143,149,058. Work will be performed at sea worldwide, and is expected to be completed November 2014. If all options are exercised, work will continue through October 2018. Working capital contract funds in the amount of $73,677,038 are obligated for fiscal 2014, and will not expire at the end of the current fiscal year. This contract was competitively procured with over 200 proposals solicited via a solicitation posted to the Military Sealift Command and Federal Business Opportunities websites, with 13 offers received. The Military Sealift Command, Washington, D.C., is the contracting activity (N00033-14-C-2015).
General Dynamics Information Technology, Falls Church, Va., is being awarded a $49,999,999 cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity contract for approximately 600,000 hours of integrated logistics services in support of technical analysis and investigation of Foreign Military Sales Programs. Work will be performed in Patuxent River, Md. (59 percent); Annandale, Va. (9 percent); Philadelphia, Pa. (7 percent); Jacksonville, Fla. (6 percent); Kuwait (6 percent); Australia (5 percent); Arlington, Va. (4 percent); Egypt (1 percent); Japan (1 percent); Malaysia (1 percent); and Taiwan (1 percent), and is expected to be completed in November 2014. Funds are not being obligated at time of award. Funds will be obligated on individual delivery orders as they are issued. This contract was not competitively procured pursuant to FAR 6.302-1. The Naval Air Warfare Center Aircraft Division, Patuxent River, Md., is the contracting activity (N00421-14-D-0002).
TRANSPORTATION COMMAND
Federal Express Charter Programs Team Arrangement, Memphis, Tenn., is being awarded an estimated $145,223,956 modification to previously awarded contract HTC711-13-D-CC02 for international airlift services. Team members include: Air Transport International LLC, Little Rock, Ark.; Atlas Air, Inc., Purchase, N.Y.; Delta Air Lines, Inc., Atlanta, Ga.; Federal Express Corp.; Polar Air Cargo Worldwide, Inc., Purchase, N.Y.; and MN Airlines, LLC, doing business as Sun Country Airlines, Mendota Heights, Minn. Work will be performed at worldwide locations, and is expected to be completed Sept. 30, 2014. Fiscal 2014 Transportation Working Capital Funds are being obligated on individual task orders. The U.S. Transportation Command Directorate of Acquisition, Scott Air Force Base, Ill., is the contracting activity.
National Air Cargo Group, Inc., doing business as National Airlines of Orlando, Fla., is being awarded an estimated $12,267,057 firm-fixed-price contract modification to increase the estimated contract value under previously awarded contract HTC711-13-D-CC08 for international airlift services. Work will be performed at worldwide locations and is expected to be completed Sept. 30, 2014. Fiscal 2014 Transportation Working Capital Funds are being obligated on individual task orders. The U.S. Transportation Command Directorate of Acquisition, Scott Air Force Base, Ill., is the contracting activity.
DEFENSE LOGISTICS AGENCY
Northrop Grumman Systems Corp., Bethpage, N.Y., has been awarded a maximum $37,484,783 firm-fixed-price contract for procurement of weapons system outer wing panels. This contract is a sole-source acquisition. Location of performance is New York, with a Nov. 31, 2017 performance completion date. This contract is a four-year base with no option-year periods. Using military service is Navy. Type of appropriation is fiscal 2014 Navy working capital funds. The contracting activity is the Defense Logistics Agency Aviation, Philadelphia, Pa., (SPM4AX-12-D-9401-THA5).
Quality Fruit and Vegetable LLC*, El Paso, Texas, has been awarded a maximum $30,000,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for fresh fruit and vegetable support. This contract is a competitive acquisition, and two offers were received. Location of performance is Texas with a May 17, 2015 performance completion date. This contract is an 18-month base period with two 18-month option-year periods. Using military services are Army and Department of Agriculture school customers. Type of appropriation is fiscal 2014 through fiscal 2015 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPE300-14-D-P231).
ARMY
BAE Systems - Land and Armaments LP, York, Pa., was awarded a $26,484,767 modification (P00001) to an existing fixed-price-incentive, option-included contract (W56HZV-14-C-0002) to exercise the option for Paladin Integrated Management low rate initial production technical data package and electronic technical manuals. Work will be performed in York; Sterling Heights, Mich.; and Santa Clara, Calif.; with an estimated completion date of Oct. 31, 2016. Fiscal 2014 procurement funds are being obligated on this award. The Army Contracting Command, Warren, Mich., is the contracting activity.
AIR FORCE
A-YZ Corp., Winchester Mass., has been awarded a $7,166,660 cost-plus-fixed-fee contract to create the capability to perform inference on real-world problems with 100 times “bigger” models than previously known to be achievable. “Bigger” models can translate into orders of magnitude, less training data required, less computation required for inference, and more accurate results. The contractor will develop and deliver a software prototype that will offer inference performance equal to or greater than 1e6-1e9 Metropolis-Hastings Markov Chain Monte Carlo (MH MCMC) samples per second and approximately 1e2-1e5 greater inference performance than existing systems. The innovations that will enable this capability are new forms of map-reduce based parallel inference on the cloud leveraging both a diversity of existing solvers as well as exploring the assimilation of certain core solvers into a more mathematically integrated and computationally efficient form. Work will be performed at Winchester, Mass., and is expected to be complete by Aug. 30, 2017. This award is the result of a competitive acquisition via an open Broad Agency Announcement, DARPA BAA No. 13-31; offers were solicited electronically, and 78 offers were received. Fiscal 2013 research and development funds in the amount of $311,842 are being obligated at time of award. Air Force Research Laboratory/RIKF, Rome N.Y., is the contracting activity (FA8750-14-C-0001).
CONTRACTS
NAVY
Maersk Line Ltd., Norfolk, Va., is being awarded a $73,677,038 firm-fixed-price contract for the time charter of one U.S.-flagged, twin-shaft vessel, which shall function as a maritime support vessel. This contract includes four 12-month option periods, which, if exercised, would bring the cumulative value of this contract to $143,149,058. Work will be performed at sea worldwide, and is expected to be completed November 2014. If all options are exercised, work will continue through October 2018. Working capital contract funds in the amount of $73,677,038 are obligated for fiscal 2014, and will not expire at the end of the current fiscal year. This contract was competitively procured with over 200 proposals solicited via a solicitation posted to the Military Sealift Command and Federal Business Opportunities websites, with 13 offers received. The Military Sealift Command, Washington, D.C., is the contracting activity (N00033-14-C-2015).
General Dynamics Information Technology, Falls Church, Va., is being awarded a $49,999,999 cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity contract for approximately 600,000 hours of integrated logistics services in support of technical analysis and investigation of Foreign Military Sales Programs. Work will be performed in Patuxent River, Md. (59 percent); Annandale, Va. (9 percent); Philadelphia, Pa. (7 percent); Jacksonville, Fla. (6 percent); Kuwait (6 percent); Australia (5 percent); Arlington, Va. (4 percent); Egypt (1 percent); Japan (1 percent); Malaysia (1 percent); and Taiwan (1 percent), and is expected to be completed in November 2014. Funds are not being obligated at time of award. Funds will be obligated on individual delivery orders as they are issued. This contract was not competitively procured pursuant to FAR 6.302-1. The Naval Air Warfare Center Aircraft Division, Patuxent River, Md., is the contracting activity (N00421-14-D-0002).
TRANSPORTATION COMMAND
Federal Express Charter Programs Team Arrangement, Memphis, Tenn., is being awarded an estimated $145,223,956 modification to previously awarded contract HTC711-13-D-CC02 for international airlift services. Team members include: Air Transport International LLC, Little Rock, Ark.; Atlas Air, Inc., Purchase, N.Y.; Delta Air Lines, Inc., Atlanta, Ga.; Federal Express Corp.; Polar Air Cargo Worldwide, Inc., Purchase, N.Y.; and MN Airlines, LLC, doing business as Sun Country Airlines, Mendota Heights, Minn. Work will be performed at worldwide locations, and is expected to be completed Sept. 30, 2014. Fiscal 2014 Transportation Working Capital Funds are being obligated on individual task orders. The U.S. Transportation Command Directorate of Acquisition, Scott Air Force Base, Ill., is the contracting activity.
National Air Cargo Group, Inc., doing business as National Airlines of Orlando, Fla., is being awarded an estimated $12,267,057 firm-fixed-price contract modification to increase the estimated contract value under previously awarded contract HTC711-13-D-CC08 for international airlift services. Work will be performed at worldwide locations and is expected to be completed Sept. 30, 2014. Fiscal 2014 Transportation Working Capital Funds are being obligated on individual task orders. The U.S. Transportation Command Directorate of Acquisition, Scott Air Force Base, Ill., is the contracting activity.
DEFENSE LOGISTICS AGENCY
Northrop Grumman Systems Corp., Bethpage, N.Y., has been awarded a maximum $37,484,783 firm-fixed-price contract for procurement of weapons system outer wing panels. This contract is a sole-source acquisition. Location of performance is New York, with a Nov. 31, 2017 performance completion date. This contract is a four-year base with no option-year periods. Using military service is Navy. Type of appropriation is fiscal 2014 Navy working capital funds. The contracting activity is the Defense Logistics Agency Aviation, Philadelphia, Pa., (SPM4AX-12-D-9401-THA5).
Quality Fruit and Vegetable LLC*, El Paso, Texas, has been awarded a maximum $30,000,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for fresh fruit and vegetable support. This contract is a competitive acquisition, and two offers were received. Location of performance is Texas with a May 17, 2015 performance completion date. This contract is an 18-month base period with two 18-month option-year periods. Using military services are Army and Department of Agriculture school customers. Type of appropriation is fiscal 2014 through fiscal 2015 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPE300-14-D-P231).
ARMY
BAE Systems - Land and Armaments LP, York, Pa., was awarded a $26,484,767 modification (P00001) to an existing fixed-price-incentive, option-included contract (W56HZV-14-C-0002) to exercise the option for Paladin Integrated Management low rate initial production technical data package and electronic technical manuals. Work will be performed in York; Sterling Heights, Mich.; and Santa Clara, Calif.; with an estimated completion date of Oct. 31, 2016. Fiscal 2014 procurement funds are being obligated on this award. The Army Contracting Command, Warren, Mich., is the contracting activity.
AIR FORCE
A-YZ Corp., Winchester Mass., has been awarded a $7,166,660 cost-plus-fixed-fee contract to create the capability to perform inference on real-world problems with 100 times “bigger” models than previously known to be achievable. “Bigger” models can translate into orders of magnitude, less training data required, less computation required for inference, and more accurate results. The contractor will develop and deliver a software prototype that will offer inference performance equal to or greater than 1e6-1e9 Metropolis-Hastings Markov Chain Monte Carlo (MH MCMC) samples per second and approximately 1e2-1e5 greater inference performance than existing systems. The innovations that will enable this capability are new forms of map-reduce based parallel inference on the cloud leveraging both a diversity of existing solvers as well as exploring the assimilation of certain core solvers into a more mathematically integrated and computationally efficient form. Work will be performed at Winchester, Mass., and is expected to be complete by Aug. 30, 2017. This award is the result of a competitive acquisition via an open Broad Agency Announcement, DARPA BAA No. 13-31; offers were solicited electronically, and 78 offers were received. Fiscal 2013 research and development funds in the amount of $311,842 are being obligated at time of award. Air Force Research Laboratory/RIKF, Rome N.Y., is the contracting activity (FA8750-14-C-0001).
RECENT NAVY PHOTOS OF UNMANNED COMBAT AIR SYSTEM DEMONSTRATOR X-47B
FROM: U.S. NAVY
ATLANTIC OCEAN (Nov. 10, 2013) The experimental X-47B Unmanned Combat Air System Demonstrator (UCAS-D) launches from the aircraft carrier USS Theodore Roosevelt (CVN 71). Theodore Roosevelt is the third carrier to test the tailless, unmanned autonomous aircraft's ability to integrate with the carrier environment. (U.S. Navy photo by Mass Communication Specialist 3rd Class Sean Weir/Released)
ALANTIC OCEAN (Nov. 9, 2013) The experimental X-47B Unmanned Combat Air System Demonstrator (UCAS-D) conducts an arrested landing aboard the aircraft carrier USS Theodore Roosevelt (CVN 71). Theodore Roosevelt is the third carrier to test the tailless, unmanned autonomous air craft's ability to integrate with carrier environment. (US Navy photo By Mass Communication Specialist Seaman Anthony N. Hilkowski/Released)
SUMMIT HELD IN WASHINGTON D.C. TO PROMOTE "DOING BUSINESS IN THE USA"
FROM: U.S. LABOR DEPARTMENT
Doing Business in the USA
Secretary Perez meets with SelectUSA attendees to discuss our talented, diverse and resilient workforce. The local level is where economic development partnerships are forged, Secretary Perez, who has been a local elected official, noted at the SelectUSA 2013 Investment Summit. These local workforces are talented, diverse and resilient and, having met workers across the country, Perez said, "they are raring to go!" Perez spoke on Oct. 31 at the summit, which connects businesses and investors from around the world with state, regional and local economic development organizations. The summit, held in Washington, D.C., was hosted by the U.S. Department of Commerce, International Trade Administration and SelectUSA, and attracted more than 3,000 business leaders, entrepreneurs, government officials and others. Earlier in the day, President Obama addressed the summit on the importance of doing business in America, where "you'll find some of the world's best workers, some of the world's most innovative entrepreneurs. You'll find a government, and a president who is committed to helping you create more good jobs for the middle class, and helping you succeed well into the 21st century." Other participants included Commerce Secretary Penny Pritzker, Treasury Secretary Jack Lew, Secretary of State John Kerry, U.S. Trade Representative Michael Froman, and the chair of the Council of Economic Advisors, Jason Furman.
Doing Business in the USA
Secretary Perez meets with SelectUSA attendees to discuss our talented, diverse and resilient workforce. The local level is where economic development partnerships are forged, Secretary Perez, who has been a local elected official, noted at the SelectUSA 2013 Investment Summit. These local workforces are talented, diverse and resilient and, having met workers across the country, Perez said, "they are raring to go!" Perez spoke on Oct. 31 at the summit, which connects businesses and investors from around the world with state, regional and local economic development organizations. The summit, held in Washington, D.C., was hosted by the U.S. Department of Commerce, International Trade Administration and SelectUSA, and attracted more than 3,000 business leaders, entrepreneurs, government officials and others. Earlier in the day, President Obama addressed the summit on the importance of doing business in America, where "you'll find some of the world's best workers, some of the world's most innovative entrepreneurs. You'll find a government, and a president who is committed to helping you create more good jobs for the middle class, and helping you succeed well into the 21st century." Other participants included Commerce Secretary Penny Pritzker, Treasury Secretary Jack Lew, Secretary of State John Kerry, U.S. Trade Representative Michael Froman, and the chair of the Council of Economic Advisors, Jason Furman.
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