Friday, March 2, 2012
STATE DEPARTMENT REMARKS ON HUMAN TRAFFICKING AT LINCOLN'S COTTAGE
The following excerpt is from the U.S. State Department website:
Remarks at President Lincoln's Cottage
RemarksLuis CdeBaca
Ambassador-at-Large, Office To Monitor and Combat Trafficking in PersonsWashington, DC
February 23, 2012
As prepared for delivery
“Thank you all very much. And thank you, Brad Myles. The Polaris Project is on the front lines of the fight against modern slavery. A few years ago, a hotline was set up to report suspected cases of trafficking in persons. It’s a phone number that teachers and neighbors and concerned individuals can call when something looks suspicious. It’s a phone number the U.S. Government gives out to immigrants entering the country along with information about their rights and the potential warning signs of trafficking in persons. It has resulted in the investigation and prosecution of traffickers.
When those phones ring, they ring in the National Human Trafficking Resource Center, which the Polaris Project operates. And thanks to Brad’s intrepid leadership, the Resource Center is growing busier all the time.
And I’d like to thank Erin Carlson Mast and all the staff here at President Lincoln’s Cottage, both for working to make this new exhibit a reality and for all they do in their work for the National Trust. The National Trust for Historic Preservation does more than just maintain important sites across our country–they preserve our history and our heritage.
They preserve for posterity parts of our history such as this house, where Lincoln put pen to paper and took the first steps toward a policy of Emancipation. The Trust also preserves sites such as the Belle Grove Plantation, about 80 miles west of here, where for more than a century, hundreds of slaves labored on thousands of acres. Where in 1864 blood was spilled and lives lost as General Philip Sheridan rallied his men against a surprise attack, putting an end to the Confederate invasion of the North.
These are the places where our country was made, where our history—good and bad—was written. Places that allow us to hear, if we only listen, the voices reminding us who we are, and what we must become.
And sometimes the men and women who work at the Trust have brought voices that we don’t always recognize. Not just Lincoln or Sheridan or Douglass, but like the people whose voices are heard once again because of the Trust’s Vice President for Historic Sites, my friend and classmate Estevan Rael-Gálvez. Because of Estevan, we know about Rosario Romero, a Navajo woman who lived in New Mexico in the latter half of the 19th Century. Her given name, Ated-bah-Hozhoni, meant “Happy Girl” in Navajo, but she was taken from the wreckage of her family after a raid. She was sold to a man named Martínez for 150 pesos and given the name Rosario.
She lived 70 more years. During most of that time, slavery had already been outlawed, but for three generations the census places her in the service of that same family, listed in the census records from the time as a “servant,” and a “day laborer,” and a “wool weaver.”
The reality, of course, is that she had been a slave. A tragedy in the unknown history of Indian Slavery in our country. Not just forgotten, but in a society that tried to make sure everyone forgot, that the crime went unnamed, unremarked. And it would have, but for Estevan.
The Trust is working to make sure these stories are told. And they need to be told. They need to be seared into our collective memories, because the dark chapters in our history as well as our triumphs need to guide us as we chart the course toward our country’s future.
Of course, there is no greater blemish on our nation’s history—no darker chapter in the story of America—than that of chattel slavery. And there is no greater inspiration—no greater example of American values and the American spirit—than men and women who dedicated themselves to seeing that institution eliminated.
Whether they themselves escaped the bonds of slavery and then made it their work to help others do the same, or led soldiers into battle, or sat in a room and wrote the ideas of the Abolitionist Movement into our law, the fruits of their labors illuminate our history. Their example stands today as a challenge to fight this evil, no matter where or when it may occur.
And President Obama, Secretary Clinton, and the other members of the Cabinet are heeding that call, fighting what the President calls “the intolerable yoke of modern slavery.”
On the first of this month, we marked National Freedom Day, commemorating the date that President Lincoln signed the 13th Amendment and sent it to the states for ratification. Freedom Day. It started under President Truman; it grew into Black History month. In fact, the Freedom Day movement was founded by Major Richard Wright, born into slavery but by the end of his life a successful businessman. A survivor, whose voice could not be stilled.
And later this year, we will reach the 150th anniversary of the date on which President Lincoln issued the Executive Order beginning the process of freedom – the preliminary Emancipation Proclamation. The Proclamation that let millions of voices lift and sing.
But as we sit here, perhaps in the very room where those words were first written, there are estimated to be 27 million men, women and children around the world living in slavery today. Twenty-seven million. More than at any time in history.
Just as in New Mexico in the late 1800s, people want to turn away, to act as though it is not happening. Frederick Douglass once ridiculed the euphemisms that polite antebellum society used to avoid actually saying the word “slavery” outright. He might be surprised by the lack of progress we’ve made in that regard.
The polite term we now use to shield ourselves is “trafficking in persons.” “Trafficking” evokes movement, but at its core this is a crime of exploitation. The U.S. government broadly considers trafficking in persons to be all of the conduct involved in reducing a person to or maintaining a person in a state of compelled service for labor or commercial sexual exploitation. In a nutshell, slavery.
It takes many forms. It occurs in every country. And although the policy attention to “trafficking in persons” as a concept is relatively new, at the end of the day this phenomenon is nothing more than the newest manifestation of an ancient crime. As Secretary Clinton says, “Let’s just call it what it is – it’s modern slavery.”
A little more than ten years ago, led by then-First Lady Hillary Clinton, the international community came together to address this problem, and here at home we updated our own laws. Nearly 150 countries today are parties to the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons, which established what we call the 3P Paradigm—prevention, protection, and prosecution—as a guideline for fighting human trafficking.
In the United States, President Clinton issued what I think was the first Executive Order on this issue since President Lincoln, and signed into law the Trafficking Victims Protection Act, which focused our anti-slavery laws on these new types of exploitation and established my office, the Office to Monitor and Combat Trafficking in Persons, within the State Department to spearhead our efforts to combat trafficking abroad.
And now, under now-Secretary of State Hillary Clinton, my office is responsible for diplomacy and foreign assistance to root out modern slavery around the globe. We produce the annual Trafficking in Persons Report to assess nearly every government, including our own, on their efforts to stop trafficking.
In fulfilling these responsibilities, my staff and I spend a lot of time engaging with others who are part of the fight against modern slavery—whether our foreign government counterparts, or leaders in the NGO community, or academics, or business leaders. One of the things we try to make clear is the reason why the United States government considers this effort a priority.
These conversations are often geared toward those concerned with laws or development issues or a gamut of other policy concerns, and our rationale for fighting this crime often fits with those concerns. Trafficking in persons undermines the rule of law. It threatens our security. It devastates communities and hurts families. These are all very good and sound reasons for pressing full steam ahead in our battle against trafficking in persons; it is “fitting and proper that we should do this.”
But the way I usually end those conversations is to say that—as important as all of these policy reasons for fighting slavery might be, fighting slavery is also simply part of who we are as a nation. It’s part of delivering on the promise of freedom. It’s part of building on the legacy sprung from this very house, 150 years ago.
Why is this not simply a policy priority, but something more ingrained in the stuff of our country?
It’s because those two documents I mentioned earlier—the Emancipation Proclamation and the 13th Amendment—reflected the ultimate goal of the Abolitionist Movement, but they aren’t merely words in our law and history books. And they don’t mark moments in America’s history when slavery all of a sudden ceased to exist.
They’re promises. A promise that neither slavery nor involuntary servitude shall exist. A promise written in the blood of all who lived and died in slavery. In the blood of all who answered the Battle Hymn’s challenge to, if necessary, “die to make men free.”
Abraham Lincoln said famously “if slavery is not wrong, then nothing is wrong.” And he bound us with a sacred promise: neither slavery nor involuntary servitude shall ever again exist.
Not then. Not now. Not ever.
But maybe that doesn’t have to be my closing point anymore. Maybe people are starting to make that connection themselves. Just think: here I am, an American official who fights against slavery every day, standing in a room where Abraham Lincoln thought about – perhaps even actually put pen to paper to write – the Emancipation Proclamation. And what’s on display here 150 years later? An exhibit about modern slavery. About delivering on the promise of freedom.
It’s not just here. Last week, I spoke at an event commemorating the birthday of Frederick Douglass. Tomorrow, members of my staff will visit the National Underground Railroad Freedom Center in Cincinnati to explore ways to amplify that remarkable exhibit which focuses on the continuum between chattel slavery 150 years ago and what we call “trafficking in persons” today.
You see, whether here, in the Park Service, or in the civil rights museums, it seems that the people who are entrusted with preserving and interpreting the legacy of our country’s original sin are already reaching the conclusion that I have tried unartfully to make in my speeches and my diplomatic interventions:
Slavery, and our promise to end it, are not just part of the past. Emancipation was a promise for all time. Those of us who care about civil rights bear a responsibility to continue the fight.
So now that we’ve drawn that line, from past to present, how does the slavery of 150 years ago inform our struggle today?
First of all, when the 13th Amendment became the law of the land, this became the government’s fight, because slavery was from that moment forward illegal. Today, slavery is a crime, and we have an obligation to respond to it accordingly. And while the values that underlay the abolition of slavery and the promise of freedom haven’t changed, slavery itself has, and so has the way we’ve responded to it.
Over the last 150 years, enforcing the 13th Amendment has required laws that adapted to the way slavery had evolved. In the first half of the 20th Century, involuntary servitude and slavery continued across the American South as what we called peonage. It was debt bondage. Sharecropping.
A few administrations, under Presidents Grant, both Roosevelts, and Carter, made some progress curbing this crime, but those efforts always dropped off when power changed hands.
The longest sustained effort we’ve seen has taken place in the last 15 years. It has spanned three administrations and both major parties. When President Obama declared last month Slavery and Trafficking Awareness month, he continued and intensified the commitment shown by former Presidents George W. Bush and Bill Clinton.
Another thing that’s changed is America’s role in the world. As the United States has become a global leader and worked to advance our interests abroad, we count among those interests the eradication of slavery.
Part of our foreign policy agenda reflects the belief that trafficking in persons should be eradicated wherever it occurs, and thanks in part to our leadership, much of the international community has partnered in this struggle. Article 4 of the Universal Declaration of Human Rights track almost verbatim our Constitution’s 13th Amendment; the United Nations’ “Palermo” Trafficking Protocol closely mirrors our own anti-trafficking law of the year 2000.
These are the structures that in the last 15 (and indeed the last 150) years have been built around the promise of ending slavery. But laws and policies and college courses and the annual Trafficking in Persons Report—while all these things help us understand the changing nature of slavery and allow us to counter it—those things themselves aren’t slavery.
Slavery today is what slavery has always been about. Slavery is about people. People trapped under the power and cruelty not just of a system or a culture, but under actual cruel masters.
Slavery is about a woman leaving her home and her family because she’s been promised an opportunity for a good job, only to find herself locked in a basement as a domestic worker, or made to work in a field without pay or a way to leave. Slavery is about a man on a fishing boat, forced to work 18 hours a day for months on end, and beaten when he fails to catch enough fish in a day or asks for just a little chicken in his rice.
It’s about children who should be learning to read and write, but are instead forced into the worst kind of exploitation imaginable. Like Frederick Douglass as a small boy experienced when he was sent to be a “house servant” in Baltimore, it is the escalating violence of the curse… then the hand… then the belt.
That is why we continue this struggle.
And as much as our laws and policies are rooted in the past, so is the constant reminder that this crime is about people. It’s because we know about the life of Frederick Douglass that we’re so sure that the experience then can help us tackle this challenge today. It’s because we know that survivors like Harriet Tubman and Richard Wright endured and accomplished that we can truly see the line from the plantations of the antebellum South to the sweatshops and brothels where exploitation occurs today.
Frederick Douglass, of course, shed his bonds to become one of the great orators and statesmen in history. He travelled the country railing against the evil he had endured and escaped. He pushed President Lincoln to action. His activism expanded beyond the issue of slavery. His words and ideas about suffrage and immigration and civic responsibility still illuminate our nation’s great debates. He was one of the first to insist that Emancipation must apply to Hispanics and Asians, and to warn that slavery would not truly be snuffed out if we turned our backs.
I mentioned Richard Wright earlier. After Emancipation, young Richard Wright and his mother settled in Cuthbert, Georgia. He graduated valedictorian of Atlanta University. He eventually was appointed by President McKinley to be Paymaster of the volunteers of the U.S. Army, and was the highest ranking African American in the US military.
For 30 years, he was President of the Georgia State Industrial College for Colored Youth, now Savannah State University. At the age of 67, he enrolled in Wharton Business School and opened the first bank in the North owned by an African American. It was thanks to his leadership, his determination to commemorate the day Lincoln signed the 13thAmendment, that we now celebrate National Freedom Day on February 1st. It’s why February is now Black History Month.
These are the stories we all know, and we should. Harriet Tubman and others’ flight into the darkness – their journey on the Underground Railroad guided by Polaris the North Star – is as intrinsic to the fabric of America as are Lincoln’s words at Gettysburg.
One story I didn’t know until recently is about a man named Jourdon Anderson. Some of you may have seen this floating around the Internet in the last week or so. Jourdon Anderson was born into slavery in Big Spring, Tennessee, and after Emancipation moved his wife and children north to Dayton, Ohio.
According to some of the documents that emerged, in the summer of 1865, the man who had enslaved him, also named Anderson, wrote to Jourdan and actually asked that he come back to Tennessee and work on that farm where he had been held for 32 years.
Jourdon Anderson replied with the help of someone who could write, and apparently made his letter available to the press. It was published contemporaneously in the Cincinnati Commercial and the New York Tribune.
“I want to know particularly,” he wrote, “what the good chance is you propose to give me. I am doing tolerably well here. I get twenty-five dollars a month, with victuals and clothing; have a comfortable home for Mandy,—the folks call her Mrs. Anderson,—and the children—Milly, Jane, and Grundy—go to school and are learning well.”
He went on, addressing the particular points of his former abuser’s offer, and I’m going to read a good portion of this because it’s truly remarkable. I apologize for such a long quote, but his voice, lost for so long, deserves to be lifted and to ring:
“As to my freedom, which you say I can have, there is nothing to be gained on that score, as I got my free papers in 1864 from the Provost-Marshal-General of the Department of Nashville. Mandy says she would be afraid to go back without some proof that you were disposed to treat us justly and kindly; and we have concluded to test your sincerity by asking you to send us our wages for the time we served you. This will make us forget and forgive old scores, and rely on your justice and friendship in the future. I served you faithfully for thirty-two years, and Mandy twenty years. At twenty-five dollars a month for me, and two dollars a week for Mandy, our earnings would amount to eleven thousand six hundred and eighty dollars. Add to this the interest for the time our wages have been kept back, and deduct what you paid for our clothing, and three doctor's visits to me, and pulling a tooth for Mandy, and the balance will show what we are in justice entitled to…. If you fail to pay us for faithful labors in the past, we can have little faith in your promises in the future. We trust the good Maker has opened your eyes to the wrongs which you and your fathers have done to me and my fathers, in making us toil for you for generations without recompense…. Surely there will be a day of reckoning for those who defraud the laborer of his hire.”
He ends his letter by saying this: “The great desire of my life now is to give my children an education, and have them form virtuous habits.”
Whether we’re talking about the famous or the should-be-famous, Frederick Douglass or Harriet Tubman or Richard Wright or Jourdan Anderson, when we look at what each of them accomplished, the way they lived their lives, what we don’t see are helpless people plucked out of enslavement by some righteous rescuer. We see survivors.
We don’t see men and women who needed someone else to confer agency upon them before they moved onto their lives as advocates and teachers and businessmen and mothers and fathers. They weren’t waiting around for someone to free them so that they could become all of these things. Those who secured their freedom on the Underground Railroad didn’t steal away in the middle of the night because somebody told them it was OK.
Did they have help along the way? Of course. Did Emancipation clear a roadblock? Absolutely. But I would wager that whether or not the Provost-Marshal-General of the Department of Nashville had given Jourdan Anderson his free papers, in Jourdon Anderson’s mind, his freedom would still have been a fact.
The men and women who lived in chattel slavery didn’t fall victim to a cruel and exploitative institution because they were incapable or pitiful. And once free neither were they incapable or pitiful. We know this because once empowered it was through their own will and determination that they lived out their lives the way they wanted. Orators and advocates. Educators and businesspeople. Important to the entire world, or only to their family and friends – it was their choice. Mothers and fathers whose desire was to give their children an education. To get the education they themselves had been denied.
Census records show that Jourdon Anderson lived in the same house in Dayton, Ohio for many years, and after he died, his children and grandchildren were there for many more years. Those census records from 40, 50, 60 years later are the epilogue to that letter. The records tell the result of his journey to freedom. That his children and grandchildren got the education that he wanted so much for them.
These individual accounts of people like Jourdon Anderson or Rosario Romero show us that history isn’t a monolith. It’s a fabric woven of countless threads, each thread as unique as the experience it represents. And so today, when we consider the victims of modern slavery, we must first consider that modern slavery isn’t just happening in theory, or to some statistics. It’s happening to individuals with families and talents and hopes and lives as unique as those whose legacies we honor today.
Now, some have suggested that those of us who work to combat trafficking in persons envision ourselves as heroes swooping in to save the day, helping those who can’t help themselves. But if there’s a lesson to be learned from the lives of those who survived and moved on with their lives, if there’s one thing we should remember today as we think of all those who still endure exploitation, it’s that our goal should be to provide survivors the opportunities to lead the lives they choose.
Because they typically still want the lives the traffickers denied them. Many of them got enslaved because they were trying for a better life for their families. Because they were willing to chance it to get an education for their little sister, medical care for their grandmother, a roof for their parents’ hut.
Survivors may need protection from pimps or bosses. That doesn’t mean throwing them in a shelter and forcing them to stay there. If they’re immigrants, they may want to return home, or they may want to stay here and start a new life. That means providing them legal recourse. They may want to face their accuser in court; they may want to just walk away and leave their past behind. That means giving them the choice. It means letting their choices – and their voices – mean something.
Like Shamiya Hall. For years, the America she knew was the garage in California where she was kept by the family that enslaved her. They went to jail; she’s going to college and wants to be a federal agent, so that she can free those still in bondage. A few weeks ago, she became an American citizen. She had the opportunity. She is living a life she sought for herself. Like Douglass and others, she is a survivor whose voice cannot be stilled.
So when we talk about those laws and structures that surround modern slavery, we have to ask how the necessary government action—indeed, the primary responsibility for fighting this crime around the world rests with governments—how does that responsibility balance with the aim of empowering survivors?
The answer to that question depends on how far a government has come in addressing human trafficking. As I often say, no government is perfect at fighting modern slavery; no government is doing enough. But some are doing more, a lot more, than others. The governments doing the most have adopted the modern 3P Paradigm I was discussing before—prevention, protection, and prosecution.
It’s what we call a victim-centered approach. Whether in law enforcement or prosecution or survivor care, we focus on those who have been exploited because, again, at the end of the day this crime is about people. It isn’t a crusade to rescue those who can’t help themselves. At its best, effective government action is prosecuting and punishing the traffickers—something only governments can do—and providing survivors the assistance they need.
That’s the help we can give along the way, like so many did on the Underground Railroad. Treatment and counseling. Job training and education. We can level the playing field. We can put opportunity more within reach. But the reality is that many of the men and women who are freed from modern slavery are freed because they had within them the courage to walk away. To go to the police. To tell someone. Their courage gets them 90 per cent of the way there. Our role must be to get them across the finish line.
But not every government is there yet. Some have adopted modern anti-trafficking laws, but fail to use them; they’ve built the machine, but they’ve never switched it on. Some governments are resistant to call modern slavery what it is, and instead treat the exploitation as an immigration issue or a labor violation or some lesser crime. Some governments deny altogether that modern slavery occurs within their borders.
Of course, that doesn’t mean that slavery isn’t taking place. It doesn’t mean that there isn’t a robust NGO presence on the ground, or that there aren’t activists and leaders pushing for the sort of changes needed to effectively combat this crime. It doesn’t mean that people aren’t toiling unseen and unheard. It means that they simply have no way to let their voices be heard.
Often the difference between the governments that use their laws and the governments that don’t; between the governments that have enacted modern anti-trafficking statutes and those where such provisions languish in legislatures; between acknowledging the problem of modern slavery and sweeping it under the rug — the difference is political will.
In too many places, that political will does not exist.
This room, these walls, this house, constitute a symbol of that political will. It didn’t all happen here. Political will existed and grew in different corners of our country for many years prior to Emancipation, and continued to evolve for many years after. It pushed Lincoln as much as he pushed it. And he tried to calibrate what was right and what was possible.
Because when the war came, Lincoln had face the consequences Thomas Jefferson had predicted when he said of slavery in 1820, “We have the wolf by the ears and we can neither hold him nor safely
let him go. Justice is in one scale, and self-preservation in the other."
But the moment when the activism and the arguments and the opportunity and the bloodshed reached a tipping point come together in the very human and very daily life of President Lincoln. The ideas, and words, and decisions that Lincoln struggled with in this house.
This house will stand for a very, very long time as a monument to that moment. But if there’s one lesson to learn from that history—if there’s a bit of wisdom to glean from this place—it’s that as long as slavery endures, we need to keep building Lincoln’s Cottage.
We need to build it over and over again in halls of government around the world. We need to build it in our statehouses and our town halls. We need to build it in our board rooms and in the church basements where community groups lay out their agendas.
Just as Americans 150 years ago pushed and fought and died in pursuit of the promise that went forth from these walls, so too can we all contribute to making that moment happen again, and again, and again.
You don’t need to work in the anti-trafficking movement to be a modern-day abolitionist. We can all help to solve this problem. We can do it by learning the way our lives touch modern slavery—the way the goods we consume may be touched by forced labor—the way we are too accepting of a culture that permits exploitation in prostitution. We can do it by making sure people understand this lingering challenge, in our congregations, and our schools, and our community clubs.
Let’s write that final chapter. The promise made here demands that we continue to act. That we continue to be a voice for those who cannot lift their own. That we walk with them on that road to freedom and to recovery.
Lincoln foresaw the gravity of what he undertook here, and he understood what it took to write those words. The phrase on the wall behind me: “If my name ever goes into history, it will be for this act, and my whole soul is in it.” This is our history. And it’s the promise we work to fulfill today. Because we all deserve to live in Abraham Lincoln’s world – a world free from slavery.
Thank you.”
ATTORNEY GENERAL ERIC HOLDER TESTIFIES BEFORE CONGRESS
The following excerpt is from the Department of Justice website:
“Attorney General Eric Holder Testifies Before the U.S. House of Representatives Committee on Appropriations Subcommittee on Commerce, Justice, Science, and Related AgenciesWashington, D.C. ~ Tuesday, February 28, 2012
As prepared for delivery
Chairman Wolf, Ranking Member Fattah, and distinguished Members of the Subcommittee: Thank you for the opportunity to appear before you today – and for your ongoing support of the Justice Department’s critical work. I look forward to providing an update on our recent progress and future plans – and, specifically, to discussing how the President’s proposed budget for fiscal year 2013 will enable the Department to more effectively fulfill its core missions and build on its extraordinary record of achievement.
The President’s Budget demonstrates a strong commitment to the Justice Department’s work and ensures that we have the resources necessary to meet our essential responsibilities. Of course, no responsibility is more important than our obligation to protect the American people – from terrorism, violent crime, financial fraud, and a range of threats that put our national security and economic stability at risk.
In each of these areas – and despite the unprecedented demands and fiscal constraints that we’ve confronted in recent years – the Department has made remarkable – and, in many cases, historic – progress. We’ve also proven our commitment – and ability – to act as sound stewards of precious tax payer dollars. For example, in response to my call to identify savings across the Department, almost $700 million worth savings have been developed – funds that are being reinvested in critical mission areas. I also want to note that, in the Department’s FY 2013 Budget of $27.1 billion, proposed spending increases have been exceeded by proposed cuts.
Since I last appeared before this Subcommittee, the Department has achieved several milestones – perhaps most notably in our national security efforts. For example, last May a grand jury indicted Waad Ramadan Alwan on 23 charges, including conspiracy to use a weapon of mass destruction against U.S. nationals abroad; attempting to provide material support to al Qaeda in Iraq; and conspiracy to transfer, possess, and export explosive devices against U.S. troops in Iraq. In December, Alwan pleaded guilty to all 23 charges.
In October, the Department obtained a conviction against Umar Farouk Abdulmutallab for his role in the attempted bombing of an airplane full of holiday travelers on Christmas Day in 2009. Earlier this month, he was sentenced to four life terms in prison. By working closely with our U.S. and international partners, we’ve also thwarted multiple terrorist plots – including one by two Iranian nationals to assassinate the Saudi Ambassador to the United States, and several others hatched by homegrown violent extremists. We also secured the conviction of notorious arms dealer Viktor Bout for his efforts to sell millions of dollars in weapons for use in killing Americans.
These are just a few of many examples. And with the sustained and additional investments included in the President’s Budget – for the Comprehensive National Cybersecurity Initiative, the High Value Detainee Interrogation Group, the Joint Terrorism Task Forces, the Render Safe Program, and other national security efforts – I am confident that the Department can maintain and strengthen our intelligence-gathering and surveillance capabilities.
I’m also confident that, with the targeted investments included in the most recent budget request, we can bring our fight against financial fraud to a new level. Over the last three years, the Justice Department – and a host of our federal, state, and local partners – have come together in an unprecedented national effort to combat and prevent a wide range of financial-fraud crimes. We are holding accountable those who have violated our laws and abused the public trust.
Through the work of our United States Attorneys’ Offices and the Justice Department’s Civil and Criminal Divisions – we are making meaningful, measurable progress in this fight to ensure stability, accountability, and – above all – justice.
Through collaboration made possible by the interagency Financial Fraud Enforcement Task Force, launched by President Obama in 2009, we have taken bold steps to address the causes and consequences of our economic crisis. I am honored to chair this initiative. The work of the Task Force has resulted in charges against CEOs, CFOs, corporate owners, board members, presidents, general counsels, and other executives of Wall Street firms, hedge funds, and banks involved in financial-fraud activities.
In just the last six months, the Justice Department has achieved prison sentences of up to 60 years in a variety of fraud cases. We obtained a conviction – and record prison sentence – in the largest hedge-fund insider-trading case in U.S. history. And we’ve secured lengthy prison terms for the architects of multimillion-dollar Ponzi schemes involving hundreds of investors.
In addition to advancing these and other successful prosecutions, the Task Force has helped us to identify and focus on priority areas. For example, in recent weeks, it has given rise to two important working groups: the Residential Mortgage-Backed Securities Working Group, which brings together a variety of partners in order to marshal and strengthen current state and federal efforts to investigate and prosecute abuses in the residential mortgage-backed securities market; and the Consumer Protection Working Group, which will enhance civil and criminal enforcement of consumer fraud – as well as our anti-fraud public education efforts.
We’ve taken other steps to assist struggling consumers – and, specifically, struggling homeowners. Just a few weeks ago, the Departments of Justice and Housing and Urban Development, other agencies, and 49 state attorneys general achieved a landmark $25 billion agreement with the nation’s top five mortgage servicers. This marked the largest joint federal-state settlement in our nation’s history. Of course, this settlement will not – by itself – cure all that ails our housing market. But – combined with other measures – it is a step in the right direction toward the housing recovery that our nation so badly needs.
In just the last two fiscal years, we’ve indicted more than 2,100 individuals for mortgage-fraud related crimes. And, last year, the Department’s Civil Rights Division – through its new Fair Lending Unit – settled or filed a record number of cases – including a $335 million settlement, the largest fair lending settlement in history – to hold financial institutions accountable for discriminatory practices directed at African and Hispanic Americans.
But there is perhaps no better illustration of the effectiveness of our anti-fraud efforts than our recent work to combat health-care fraud. Over the last fiscal year alone – in cooperation with the Department of Health and Human Services and other partners, and by utilizing authorities provided under the False Claims Act and other critical statutes – we were able to recover nearly $4.1 billion in funds that were stolen or taken improperly from federal health-care programs. This represents the highest amount ever recovered in a single year.
At the same time, we opened more than 1,100 new criminal health-care fraud investigations, secured more than 700 convictions, and initiated nearly 1,000 new civil health-care fraud investigations. In fact, over the last three years, for every dollar we spent combating health-care fraud, we’ve been able to return an average of seven dollars to the U.S. Treasury, the Medicare Trust Fund, and others.
The President’s proposed budget also would bolster our fight against international crime networks, drug cartels, gangs, and cyber criminals; and enhance efforts to identify additional ways to protect the most vulnerable members of society, as well as the law enforcement officers who keep us safe. It also would expand on the critical work being done by our Civil Rights Division to ensure that the rights of all American are protected – in border areas, workplaces, housing markets, and voting booths.
I am proud of these – and our many other – achievements. And I am committed to building on them. I know you understand that, in this time of great challenge and consequence, we simply cannot afford to “cut back” on the extent or quality of justice that we are obliged to deliver. The Department is responsible for protecting this nation and enforcing the law – and these efforts must be appropriately and adequately funded. I look forward to continuing to work with this Subcommittee and with Congress to accomplish this. And, now, I am happy to answer any questions you may have.”
HHS SECRETARY KATHLEEN SEBELIUS SAYS NEW HEALTH CARE BILL IN SENATE WILL LIMIT BENEFITS
The following excerpt is from the Department of Health and Human Services website:
Statement by HHS Secretary Kathleen Sebelius on the Blunt Amendment
"Earlier this month, the Department of Health and Human Services reported that over 20 million American women in private health insurance plans have already gained access to at least one free preventive service because of the health care law. Without financial barriers like co-pays and deductibles, women are better able to access potentially life-saving services, and cancers are caught earlier, chronic diseases are managed and hospitalizations are prevented.
A proposal being considered in the Senate this week would allow employers that have no religious affiliation to exclude coverage of any health service, no matter how important, in the health plan they offer to their workers. This proposal isn't limited to contraception nor is it limited to any preventive service. Any employer could restrict access to any service they say they object to. This is dangerous and wrong.
The Obama administration believes that decisions about medical care should be made by a woman and her doctor, not a woman and her boss. We encourage the Senate to reject this cynical attempt to roll back decades of progress in women’s health."
U.S. RECOGNIZES 20TH ANNIVERSARY OF U.S.-AZERBAIJAN BILATERAL RELATIONS
The following excerpt is from a U.S. State Department e-mail:
"The 20th Anniversary of U.S.-Azerbaijan Bilateral Relations
Philip H. Gordon
Assistant Secretary, Bureau of European and Eurasian Affairs
Assistant Secretary, Bureau of European and Eurasian Affairs
Cosmos Club
Washington, DC
February 27, 2012
ASSISTANT SECRETARY GORDON: Thanks so much, Ambassador, for that kind introduction.
The Ambassador came to see me the other day, we had a very nice chat. As you left I couldn’t help but think to myself he seems almost as American as I am. [Laughter]. The Toledo, Ohio thing now puts -- [Laughter]. I didn’t know about the Toledo thing. But that explains a lot. We had a good talk then, and I’m really honored and delighted to be here with this distinguished group. You referred to it as a distinguished group and in the few minutes that I’ve been here, just looking around the room, it’s a testimony to the relationship of the people who have turned up here from Congress, from the U.S. military, my colleagues at the State Department, the Defense Department, the White House. It underscores the importance of this relationship, and again, I’m honored to be able to offer a few remarks on this 20th Anniversary of U.S.-Azerbaijan diplomatic relations.
There are far too many distinguished individuals to single out by name. I would, as you did, note General Scowcroft, I really appreciate your being here; Governor Sununu we keep in touch with on these issues; and so many others and Members of Congress.
It’s of course not a surprise, it speaks to the importance that President Obama, Secretary Clinton place on the relationship with Azerbaijan. When the Secretary visited Baku last year -- I was pleased to be able to accompany her to Azerbaijan -- she said very clearly that the bonds between the United States and Azerbaijan are deep, important and durable, and that’s something I would want to stress here with this group this evening.
We have been building on those bonds in the 20 years since diplomatic relations were established and these links are on multiple fronts but three core areas are really of central importance to the relationship. Those are the areas of security, energy and political and economic reform.
Where international security is concerned our soldiers, American soldiers, Azerbaijani soldiers, have stood shoulder to shoulder in Kosovo, in Iraq, and we are very grateful for Azerbaijan’s continued commitment to the allied effort in Afghanistan where Azerbaijani troops have served with great distinction.
Azerbaijan, of course, has also served as a vital transportation route for supporting NATO operations in Afghanistan with thousands of U.S. military flights transiting over Azerbaijan on the way to Afghanistan. You know the importance this President and Secretary place on our success in Afghanistan and Azerbaijan’s contribution to that success is immense.
You’ve recently taken a seat on the UN Security Council for a two year term, assuming very important responsibilities for promoting global security, and Azerbaijan has also played a critical role in enforcing international sanctions against Iran, another high priority for this administration.
On security, no issue is more important than our commitment to a peaceful and fair settlement of the Nagorno-Karabakh conflict. As a co-chair of the OSCE Minsk Group, the United States continues to work closely with the sides to achieve a lasting negotiated settlement.
The final steps towards peace, of course, are often the most difficult, but we believe peace is possible and necessary. And with commitment and political will from the sides, we can move towards a more secure and prosperous future.
It remains our conviction that only a negotiated settlement can lead to long-term peace and stability and open new opportunities for regional development and cooperation. Again, I want to underscore Ambassador, and to everybody in this room, this administration’s rock solid commitment to that process. Secretary Clinton follows the issue extraordinarily closely and has invested a lot of her time and attention on the issue. It is a commitment that goes to the highest levels of our government and we look forward to working with you. We’re determined to move forward.
We also of course work closely with Azerbaijan on energy security. Again, I’m delighted to see so many distinguished figures from the world of energy both in government and outside here this evening.
We’re building on past efforts like the so-called Contract of the Century and the Baku-Tbilisi-Ceyhan oil pipeline which are the hallmarks of, some of the hallmarks of the past 20 years of our cooperation.
We certainly share Azerbaijan’s goal of establishing a southern corridor in natural gas exports to Europe. We welcome progress made last year including transit agreements that Azerbaijan signed with Turkey last October and that has paved the way for the southern corridor to play a key role in diversifying energy routes and sources for European markets in the years ahead. The southern corridor would be good for Azerbaijan, it would be good for Europe, and it would be good for the United States.
Another important pillar of our efforts, we look forward to continuing work with Azerbaijan on democratic and economic reforms including promoting respect for the rule of law, fundamental freedoms and the development of a vibrant civil society which we believe is essential to Azerbaijan’s long term prosperity and success.
We view Azerbaijan as a country of tremendous potential and we want Azerbaijan to succeed in its goal of developing into a modern democracy and a regional and global leader. It goes without saying that Azerbaijan’s progress in these areas will help to deepen our bilateral relationship. A strong, independent, prosperous and democratic Azerbaijan will always be a friend and a partner for the United States.
Ultimately our people, Americans and Azerbaijanis alike, are the foundation of our friendship as human ties unite our two countries. We have enjoyed real cooperation between our governments, and most importantly over the past 20 years between our societies.
To take just one example among many, American and Azerbaijan -- this is building on the Ambassador’s experience in Toledo -- American and Azerbaijani students participate in academic exchanges every year to broaden our knowledge of each other and to share our ideals.
Over the past 20 years we have welcomed the progress Azerbaijan has made since it gained independence and our relationship continues to advance and deepen. The United States will remain a strong friend and partner.
From our joint efforts on the international stage to our shared cultural and family ties we have a great deal to celebrate about the future of the Azerbaijani-American relationship.
Thank you all again for being here. I’m honored to join you and look forward to building a relationship with you."
The Ambassador came to see me the other day, we had a very nice chat. As you left I couldn’t help but think to myself he seems almost as American as I am. [Laughter]. The Toledo, Ohio thing now puts -- [Laughter]. I didn’t know about the Toledo thing. But that explains a lot. We had a good talk then, and I’m really honored and delighted to be here with this distinguished group. You referred to it as a distinguished group and in the few minutes that I’ve been here, just looking around the room, it’s a testimony to the relationship of the people who have turned up here from Congress, from the U.S. military, my colleagues at the State Department, the Defense Department, the White House. It underscores the importance of this relationship, and again, I’m honored to be able to offer a few remarks on this 20th Anniversary of U.S.-Azerbaijan diplomatic relations.
There are far too many distinguished individuals to single out by name. I would, as you did, note General Scowcroft, I really appreciate your being here; Governor Sununu we keep in touch with on these issues; and so many others and Members of Congress.
It’s of course not a surprise, it speaks to the importance that President Obama, Secretary Clinton place on the relationship with Azerbaijan. When the Secretary visited Baku last year -- I was pleased to be able to accompany her to Azerbaijan -- she said very clearly that the bonds between the United States and Azerbaijan are deep, important and durable, and that’s something I would want to stress here with this group this evening.
We have been building on those bonds in the 20 years since diplomatic relations were established and these links are on multiple fronts but three core areas are really of central importance to the relationship. Those are the areas of security, energy and political and economic reform.
Where international security is concerned our soldiers, American soldiers, Azerbaijani soldiers, have stood shoulder to shoulder in Kosovo, in Iraq, and we are very grateful for Azerbaijan’s continued commitment to the allied effort in Afghanistan where Azerbaijani troops have served with great distinction.
Azerbaijan, of course, has also served as a vital transportation route for supporting NATO operations in Afghanistan with thousands of U.S. military flights transiting over Azerbaijan on the way to Afghanistan. You know the importance this President and Secretary place on our success in Afghanistan and Azerbaijan’s contribution to that success is immense.
You’ve recently taken a seat on the UN Security Council for a two year term, assuming very important responsibilities for promoting global security, and Azerbaijan has also played a critical role in enforcing international sanctions against Iran, another high priority for this administration.
On security, no issue is more important than our commitment to a peaceful and fair settlement of the Nagorno-Karabakh conflict. As a co-chair of the OSCE Minsk Group, the United States continues to work closely with the sides to achieve a lasting negotiated settlement.
The final steps towards peace, of course, are often the most difficult, but we believe peace is possible and necessary. And with commitment and political will from the sides, we can move towards a more secure and prosperous future.
It remains our conviction that only a negotiated settlement can lead to long-term peace and stability and open new opportunities for regional development and cooperation. Again, I want to underscore Ambassador, and to everybody in this room, this administration’s rock solid commitment to that process. Secretary Clinton follows the issue extraordinarily closely and has invested a lot of her time and attention on the issue. It is a commitment that goes to the highest levels of our government and we look forward to working with you. We’re determined to move forward.
We also of course work closely with Azerbaijan on energy security. Again, I’m delighted to see so many distinguished figures from the world of energy both in government and outside here this evening.
We’re building on past efforts like the so-called Contract of the Century and the Baku-Tbilisi-Ceyhan oil pipeline which are the hallmarks of, some of the hallmarks of the past 20 years of our cooperation.
We certainly share Azerbaijan’s goal of establishing a southern corridor in natural gas exports to Europe. We welcome progress made last year including transit agreements that Azerbaijan signed with Turkey last October and that has paved the way for the southern corridor to play a key role in diversifying energy routes and sources for European markets in the years ahead. The southern corridor would be good for Azerbaijan, it would be good for Europe, and it would be good for the United States.
Another important pillar of our efforts, we look forward to continuing work with Azerbaijan on democratic and economic reforms including promoting respect for the rule of law, fundamental freedoms and the development of a vibrant civil society which we believe is essential to Azerbaijan’s long term prosperity and success.
We view Azerbaijan as a country of tremendous potential and we want Azerbaijan to succeed in its goal of developing into a modern democracy and a regional and global leader. It goes without saying that Azerbaijan’s progress in these areas will help to deepen our bilateral relationship. A strong, independent, prosperous and democratic Azerbaijan will always be a friend and a partner for the United States.
Ultimately our people, Americans and Azerbaijanis alike, are the foundation of our friendship as human ties unite our two countries. We have enjoyed real cooperation between our governments, and most importantly over the past 20 years between our societies.
To take just one example among many, American and Azerbaijan -- this is building on the Ambassador’s experience in Toledo -- American and Azerbaijani students participate in academic exchanges every year to broaden our knowledge of each other and to share our ideals.
Over the past 20 years we have welcomed the progress Azerbaijan has made since it gained independence and our relationship continues to advance and deepen. The United States will remain a strong friend and partner.
From our joint efforts on the international stage to our shared cultural and family ties we have a great deal to celebrate about the future of the Azerbaijani-American relationship.
Thank you all again for being here. I’m honored to join you and look forward to building a relationship with you."
PIONEER 10 THE SOLAR EXPLORER CELEBRATES IT'S 40TH ANNIVERSARY
The picture (Right) and excerpt below are from the NASA-Ames Research Center website:
“Ames Celebrates the 40th Anniversary of Pioneer 1002.29.12 Launched on March 2,1972, Pioneer 10 was the first spacecraft to travel through the Asteroid belt, and the first spacecraft to make direct observations and obtain close-up images of Jupiter. Famed as the most remote object ever made through most of its mission, Pioneer 10 traveled more than 8 billion miles through space in 25 years. (On Feb. 17, 1998, Voyager 1's heliocentric radial distance equaled Pioneer 10 at 69.4 AU and thereafter exceeded Pioneer 10 at the rate of 1.02 AU per year.)
Pioneer 10 made its closest encounter to Jupiter on Dec. 3, 1973, passing within 81,000 miles of the cloudtops. This historic event marked humans' first approach to Jupiter and opened the way for exploration of the outer solar system - for Voyager to tour the outer planets, for Ulysses to break out of the ecliptic, for Galileo to investigate Jupiter and its satellites, and for Cassini to go to Saturn and probe Titan. During its Jupiter encounter, Pioneer 10 imaged the planet and its moons, and took measurements of Jupiter's magnetosphere, radiation belts, magnetic field, atmosphere, and interior. These measurements of the intense radiation environment near Jupiter were crucial in designing the Voyager and Galileo spacecraft.
Pioneer 10 made valuable scientific investigations in the outer regions of our solar system until the end of its science mission on March 31,1997. Pioneer 10’s weak signal continued to be tracked by the Deep Space Network (DSN) as part of an advanced concept study of communication technology supporting NASA's future interstellar probe mission.
After more than 30 years, it appears the venerable Pioneer 10 spacecraft has sent its last signal to Earth. Pioneer's last, very weak signal was received Jan. 23, 2003. The power source on Pioneer 10 finally degraded to the point in 2003 where its signal to Earth dropped below the threshold for detection. NASA's Deep Space Network (DSN) did not detect a signal during a contact attempt on Feb. 7, 2003. The previous three contacts, including the Jan. 23, 2003 signal, were very faint, with no telemetry received. The last time a Pioneer 10 contact returned telemetry data was April 27, 2002.
Pioneer 10 will continue to coast silently as a ghost ship through deep space into interstellar space, heading generally for the red star Aldebaran, which forms the eye of Taurus (The Bull). Aldebaran is about 68 light years away and it will take Pioneer more than 2 million years to reach it. “
U.S. SECURITIES AND EXCHANGE COMMISSION DISCUSSES BROKER-DEALER MONEY LAUNDERING COMPLIANCE
The following excerpt is from the SEC website:
“Broker-Dealer Anti-Money Laundering Compliance – Learning Lessons from the Past and Looking to the Future”
by
David W. Blass
Chief Counsel, Division of Trading and Markets
U.S. Securities and Exchange Commission
SIFMA Anti-Money Laundering & Financial Crimes Conference
February 29, 2012
The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed herein are those of the author and do not necessarily reflect the views of the Commission
or the staff of the Commission.
Introduction
Good Afternoon, I was honored to be asked to speak at this year’s anti-money laundering and financial crimes conference. I would like to thank Kevin Carroll and SIFMA’s AML committee for inviting me here and for SIFMA’s continued commitment over the years in promoting strong practices to combat money laundering.
Working on AML matters in my new role as Chief Counsel in the Division of Trading and Markets is in many ways a return to my roots at the SEC. I joined the Division almost a decade ago, as the primary attorney working in the AML area. Among other things, I represented the SEC during the 2006 FATF Evaluation of the United States and also participated in special due diligence rulemaking for correspondent and private banking accounts. While I have mainly been involved in other regulatory areas before returning to the Division, I’m pleased to be returning to this critically important and interesting area.
As you may know, my office is responsible for legal interpretations and policy issues relating to AML obligations for broker-dealers. Attorneys in the office work with our colleagues internationally, our fellow regulators domestically, in particular, Treasury, the Financial Crimes Enforcement Network, the U.S. Commodity Futures Trading Commission, and the banking agencies. We also work cooperatively with the industry on a variety of AML initiatives.
As I stated, I joined the SEC almost ten years ago, shortly after the passage of the USA PATRIOT Act.1 As I am returning to my original home at the SEC, it has caused me to reflect on the developments in the AML space during this time. I hope today’s talk will highlight the enormous strides made over the years, both by the industry and by regulators, in combating the abuse of the financial system by money launderers and criminal financiers. I also hope to highlight areas for further focus going forward.
Before I do, though, please let me remind you that my remarks represent my own views, and not those of the Commission, any individual Commissioners, or other members of the staff.
PATRIOT Act Transforms the AML Landscape for Broker-Dealers
Getting the basics right.
As we all know too well by now, the tragic events of September 11, 2001, were a watershed moment for the country and for the US financial service industry’s AML and counter-terrorist financing obligations. However, 9/11 was not the beginning of the story for the securities industry in the AML area.
Broker-dealers have been subject to many aspects of the Bank Secrecy Act since it was adopted in the 1970s.2 A focus on AML compliance has been part of the SEC’s program ever since, as evidenced by the early enforcement cases against a few broker-dealers for blatant violations of the Bank Secrecy Act’s currency reporting requirements.3
Still, while some aspects of AML compliance have long been applicable to securities firms, it was only in 2001 that broker-dealers became fully subject to anti-money laundering obligations with passage of the PATRIOT Act. In fact, within a few years of the President signing the PATRIOT Act into law, broker-dealers went from having basic reporting and recordkeeping obligations to a robust and complimentary set of obligations aimed at detecting and deterring money laundering and criminal financing. We at the SEC recognize that implementing those obligations was a significant challenge to the industry, requiring a considerable devotion of resources.
In the immediate aftermath of the PATRIOT Act, our primary focus was on trying to help firms get educated and started with their new AML obligations. In particular, our examiners focused on determining whether broker-dealers had fully implemented adequate AML programs, including identifying customers, detecting and reporting suspicious activity, and in certain cases, developing and implementing enhanced due diligence procedures.
Our enforcement actions from this period reflected that we were in the early days of firms’ AML understanding and compliance. Many firms were cited for failing on the basics. For example: some did not adopt and implement an adequate AML compliance program that complied with the basic AML requirements, including failing to designate an AML officer, to establish an AML training program, to perform basic customer identification, or to create suspicious activity monitoring procedures.4
Lessons learned -- filling out the contours and assessing the gaps
With the passage of time, all of the players – industry, regulators, and, likely, criminals – have become more sophisticated in their approach to AML. With this sophistication and experience, our expectations have changed, and frankly have increased, as is typically the case when a rule has been on the books for a while. As regulators, we have moved beyond the basic question of whether all the required parts are in place and generally functioning to a more nuanced approach addressing the rigor and effectiveness of a firm’s overall AML compliance structure. This evolution is reflective in the enforcement cases that have been brought by the SEC and FINRA over the last couple of years.
Take, for example, a recent action based largely on violations of CIP requirements, which, as you know, broadly require firms to obtain and verify certain identifying information about their customers. In the SEC’s enforcement action, the firm held master omnibus accounts for foreign entities, which in turn were subdivided into sub-accounts for other foreign entities.5 In this case, the holders of the sub-accounts were “customers” for CIP purposes because they were able to conduct unintermediated transactions directly on the US securities markets, but the firm failed to identify and verify the identities of the sub-account holders as required by the CIP rule. Merely calling an account an “omnibus” account did not relieve the firm of its CIP or other obligations with respect to the underlying customer of that account.
Of course, there are many legitimate account structures where it would be appropriate not to look through the account to the underlying accountholders for CIP purposes, and there is some guidance in this area that you may find helpful.6 What this enforcement action should make clear, however, is that we expect firms to look beyond the account label to the substance of their relationship with the underlying accountholders to determine whether those accountholders are in fact “customers” for purposes of CIP.
Moreover, even where firms adequately comply with CIP requirements, they must always consider the risks associated with grouped and other accounts, regardless of whether they are required to look through to the underlying customer for CIP purposes. A recent National Risk Alert on master/sub-accounts prepared by the SEC’s Office of Compliance Inspections and Examinations addressed some of these issues.7
We have also continued our focus on the adequacy of firms’ suspicious activity monitoring and reporting, which is an absolutely fundamental aspect of BSA compliance. As you know, the SAR rule requires reporting of transactions conducted or attempted “by, at or through” the broker-dealer, and we interpret this language broadly. Accordingly, firms should be monitoring any activity for red flags across their business lines, products, and transactions. Monitoring is not limited to “customer” activity or to certain types of transactions such as cash or securities movements. Instead, monitoring extends to all activity conducted “by, at or through” the broker dealer regardless of whether it is conducted by a “customer” of a firm for CIP or other purposes. So, for example, the fact that a trader in a subaccount may not be a “customer” for the CIP rule doesn’t mean that that trader’s transactions can be ignored for monitoring and reporting purposes. As part of this monitoring, we expect firms to have policies and procedures to resolve or report appropriate red-flags in a timely manner.
In one significant customer case brought by FINRA, a firm failed to obtain the names of the beneficial owners of a number of “high risk” accounts due to concerns that obtaining such information could cause the account holders to move their accounts elsewhere.8 This occurred despite repeated and ongoing requests from the firm’s counsel and the firm’s clearing firm to obtain the names of the beneficial owners before conducting transactions in the accounts. Turning a blind eye because of a fear of losing revenue is never an acceptable excuse for failing to fulfill a firm’s AML obligations or any other obligation under the federal securities laws or FINRA rules.
It is also important to note that suspicious activity monitoring and reporting is not only the responsibility of the firm but also individuals at the firm that are directly responsible for filing SARs on the behalf of the firm. The SEC and FINRA have brought a number of cases citing firms’ AML officers or Chief Compliance Officers for failing to follow up on red flags that are presented at the firm. These actions have resulted in significant fines, supervisory bars and industry suspensions.9
We have also become increasingly focused on how AML obligations interact with a broker-dealer’s other obligations under the securities laws and SRO rules, and with ensuring that firms do not silo information or take an overly narrow view of information that they have for other purposes. Firms should not view AML compliance as unrelated to their other obligations. AML obligations should be viewed as both complementary to and enhancing a firm’s compliance function. Firms should consider how to best leverage these corresponding requirements for a more holistic view of their risks. For example, a firm’s suitability and “know your customer” obligations require firms to obtain a significant amount of information about their customers that is useful in conducting the initial and ongoing customer due diligence necessary to assess the risk of and to adequately monitor an account for all suspicious activity, including securities fraud and other violations of the securities laws and SRO rules.
Learning from the Past to Predict the Future
The past ten years have clearly illustrated that AML compliance is not simply a “banking” issue or only a concern of “cash businesses.” Instead, it has affirmed our long-held belief that AML should be among the forefront of broker-dealers’ compliance concerns. The importance of AML compliance for us extends beyond money laundering and terrorist financing. AML compliance helps us detect and prevent securities fraud and other violations of the law. Accordingly, as we look forward, we will continue to emphasize the significance of this area in the securities industry to firms as well as to other regulators.
By looking back at the past ten years, we can also begin to identify some trends that I predict will manifest themselves in the future. Looking at the enforcement actions I have highlighted, it becomes clear that firms have been living under an expectation that they will be engaging in some form of due diligence of their customers and accounts.
While it is true that there currently is no rule that expressly requires due diligence in all instances, firms are required to have an AML program that at a minimum includes the establishment of policies and procedures reasonably designed to detect and cause the reporting of suspicious activity. It seems difficult to envision how a firm can comply with AML program or SAR responsibilities without having risk-based policies and procedures that allow firms to know who their customers are, what activities they may be reasonably expected to engage in, and also to have procedures to keep this information up to date over the course of the customer relationship. Of course, as SIFMA’s AML committee quite correctly explained in guidance issued in 2008, a firm’s AML program should be designed to permit firms the ability to make risk-based determinations about its customers, its customer’s source of income, and the customer’s expected activity.10 A firm should assess any risks associated with particular customers or transactions by evaluating its business to determine the likelihood that suspicious or potentially illegal activity will be present.11 This kind of common-sense approach to knowing who you are dealing with and what your dealings might reasonably entail should be no surprise to anyone in this room.
While I am on the topic of due diligence, I would like to take the opportunity to applaud David Cohen and his staff at Treasury and FinCEN for the issuance of the customer due diligence advance notice of proposed rulemaking earlier today. We in government should acknowledge and embrace our responsibility to speak clearly about our expectations for firms’ compliance. I believe Treasury’s ANPR can provide a solid roadmap of what a rule in this area could look like, or, at the very least, provide a starting point for discussions about that rule. It is my hope that any rulemaking for customer due diligence would further clarify regulatory expectations regarding this critical BSA obligation, and I encourage you to respond to the solicitation for comments.
As I mentioned, I do take seriously the responsibility to at least try to speak clearly about our expectations as regulators. I also believe we should be good listeners, to ensure that we understand the perspectives of all parties affected by our rules. While success is difficult to measure in this area, my goal is to strive to develop a productive, open relationship with the securities industry in dealing with AML concerns. I invite you to highlight for me and my team comments and concerns regarding the AML regime that are specifically targeted to the securities industry, in addition to those that cross industries. Identifying these issues is enormously helpful for us in working with Treasury, FinCEN, and other regulators in developing an effective AML regime.
To help us in this regard, I would like to let you know of a new initiative designed, at least in part, to enhance our understanding of how you comply with your AML obligations. We are partnering with the CFTC to establish a Capital Markets Working Group that will focus on money laundering vulnerabilities in the capital markets. Given the inherently complex and specialized nature of our capital markets, developing an accurate risk assessment requires the expertise and leadership of various public and private stakeholders, including regulatory agencies, the law enforcement community and representatives from the private sector. So we anticipate reaching out to some of you regarding this initiative. I would like to thank Chip Poncy, Katrina Carroll and Lawrence Scheinert, all from Treasury, for their strong support in this area. Also, I should thank the talented team of attorneys with vast AML expertise with whom I have the privilege of working with at the SEC for their continued dedication to all things AML.
Conclusion
To say the least, we have come a long way. But we could not have made such enormous strides in the area of broker-dealer AML compliance without the collective effort of the regulatory community and the securities industry participants.
I would also like to acknowledge you, as industry professionals, for your invaluable contribution to this shared effort. I know that success can often be difficult to measure in the AML area. An AML officer’s job might seem like a thankless job, but I am here to thank you. We in government appreciate the hard task that you and your firms face.
Thank you for the opportunity to speak today and for your giving me your time and attention. I would be happy to answer any questions.”
1
Thursday, March 1, 2012
DECLINES IN SEA ICE MAY BE INCREASING AIR POLLUTION IN THE ARCTIC
The following excerpt is from the NASA website:
"WASHINGTON -- Drastic reductions in Arctic sea ice in the last decade may be intensifying the chemical release of bromine into the atmosphere, resulting in ground-level ozone depletion and the deposit of toxic mercury in the Arctic, according to a new NASA-led study. The connection between changes in the Arctic Ocean's ice cover and bromine chemical processes is determined by the interaction between the salt in sea ice, frigid temperatures and sunlight. When these mix, the salty ice releases bromine into the air and starts a cascade of chemical reactions called a "bromine explosion." These reactions rapidly create more molecules of bromine monoxide in the atmosphere. Bromine then reacts with a gaseous form of mercury, turning it into a pollutant that falls to Earth's surface. Bromine also can remove ozone from the lowest layer of the atmosphere, the troposphere. Despite ozone's beneficial role blocking harmful radiation in the stratosphere, ozone is a pollutant in the ground-level troposphere. A team from the United States, Canada, Germany, and the United Kingdom, led by Son Nghiem of NASA's Jet Propulsion Laboratory in Pasadena, Calif., produced the study, which has been accepted for publication in the Journal of Geophysical Research- Atmospheres. The team combined data from six NASA, European Space Agency and Canadian Space Agency satellites, field observations and a model of how air moves in the atmosphere to link Arctic sea ice changes to bromine explosions over the Beaufort Sea, extending to the Amundsen Gulf in the Canadian Arctic. "Shrinking summer sea ice has drawn much attention to exploiting Arctic resources and improving maritime trading routes," Nghiem said. "But the change in sea ice composition also has impacts on the environment. Changing conditions in the Arctic might increase bromine explosions in the future." The study was undertaken to better understand the fundamental nature of bromine explosions, which first were observed in the Canadian Arctic more than two decades ago. The team of scientists wanted to find if the explosions occur in the troposphere or higher in the stratosphere. Nghiem's team used the topography of mountain ranges in Alaska and Canada as a "ruler" to measure the altitude at which the explosions took place. In the spring of 2008, satellites detected increased concentrations of bromine, which were associated with a decrease of gaseous mercury and ozone. After the researchers verified the satellite observations with field measurements, they used an atmospheric model to study how the wind transported the bromine plumes across the Arctic. The model, together with satellite observations, showed the Alaskan Brooks Range and the Canadian Richardson and Mackenzie mountains stopped bromine from moving into Alaska's interior. Since most of these mountains are lower than 6,560 feet (2,000 meters), the researchers determined the bromine explosion was confined to the lower troposphere. "If the bromine explosion had been in the stratosphere, 5 miles [8 kilometers] or higher above the ground, the mountains would not have been able to stop it and the bromine would have been transported inland," Nghiem said. After the researchers found that bromine explosions occur in the lowest level of the atmosphere, they could relate their origin to sources on the surface. Their model, tracing air rising from the salty ice, tied the bromine releases to recent changes in Arctic sea ice that have led to a much saltier sea ice surface. In March 2008, the extent of year-round perennial sea ice eclipsed the 50-year record low set in March 2007, shrinking by 386,100 square miles (one million square kilometers) -- an area the size of Texas and Arizona combined. Seasonal ice, which forms over the winter when seawater freezes, now occupies the space of the lost perennial ice. This younger ice is much saltier than its older counterpart because it has not had time to undergo processes that drain its sea salts. It also contains more frost flowers -- clumps of ice crystals up to four times saltier than ocean waters -- providing more salt sources to fuel bromine releases. Nghiem said if sea ice continues to be dominated by younger saltier ice, and Arctic extreme cold spells occur more often, bromine explosions are likely to increase in the future. Nghiem is leading an Arctic field campaign this month that will provide new insights into bromine explosions and their impacts. NASA's Bromine, Ozone, and Mercury Experiment (BROMEX) involves international contributions by more than 20 organizations."
NEW U.S. EMBASSY IN KYIV, UKRAINE
The following excerpt is from the U.S. State Department website:
"United States Dedicates New Embassy Compound in Kyiv, Ukraine
Office of the Spokesperson
Washington, DC
February 29, 2012
Following the 20th Anniversary of American-Ukrainian diplomatic relations celebrated on January 20, U.S. Ambassador John F. Tefft dedicated the new embassy facility in Kyiv today. Speaker of the Ukrainian Parliament, Volodomyr Lytvyn; Foreign Minister, Kostyantyn Gryshchenko; as well as Under Secretary for Management, Patrick F. Kennedy; Deputy Chief of Mission, Eric Schultz; and Deputy Director of the Bureau of Overseas Buildings Operations (OBO), Heather Townsend participated in the ribbon-cutting ceremony.
Occupying a 10-acre site in the capital city of Kyiv, the multi-building complex is a platform for increased U.S. interaction with the Ukrainian people. The embassy’s permanent art collection celebrates the exchange of artistic expression between the United States and Ukraine through work by contemporary Ukrainian, American, and regional artists, curated by OBO’s Office of Art in Embassies.
The new embassy incorporates numerous sustainable features, most notably advances in engineering design to maximize efficiency and minimize energy use, a green roof system, and rain gardens which pre-treat stormwater before it is infiltrated on-site. The compound is registered with the Green Building Certification Institute and is entering the formal review process; it is the first LEED® registered project in Ukraine. B.L. Harbert International of Birmingham, Ala., constructed the project, which was designed by Page Southerland Page of Arlington, Va. The $247 million project generated hundreds of jobs in both the United States and Ukraine.
Since 1999, as part of the Department’s Capital Security Construction Program, OBO has completed 88 new diplomatic facilities and has moved more than 27,000 people into safe, secure, and functional facilities. OBO has an additional 41 projects in design or construction."
Occupying a 10-acre site in the capital city of Kyiv, the multi-building complex is a platform for increased U.S. interaction with the Ukrainian people. The embassy’s permanent art collection celebrates the exchange of artistic expression between the United States and Ukraine through work by contemporary Ukrainian, American, and regional artists, curated by OBO’s Office of Art in Embassies.
The new embassy incorporates numerous sustainable features, most notably advances in engineering design to maximize efficiency and minimize energy use, a green roof system, and rain gardens which pre-treat stormwater before it is infiltrated on-site. The compound is registered with the Green Building Certification Institute and is entering the formal review process; it is the first LEED® registered project in Ukraine. B.L. Harbert International of Birmingham, Ala., constructed the project, which was designed by Page Southerland Page of Arlington, Va. The $247 million project generated hundreds of jobs in both the United States and Ukraine.
Since 1999, as part of the Department’s Capital Security Construction Program, OBO has completed 88 new diplomatic facilities and has moved more than 27,000 people into safe, secure, and functional facilities. OBO has an additional 41 projects in design or construction."
HILLARY CLINTON'S INTERVIEW WITH NPR ON MIDDLE EASTERN REGION
The following excerpt is from the U.S. State Department website:
“Interview With Michele Kelemen of NPR
Interview Hillary Rodham Clinton
Secretary of StateSofitel Hotel
Rabat, Morocco
February 26, 2012
QUESTION: You got a busy day here and there’s a lot to talk about. (Laughter.) I’d like, first of all, to ask you what did you tell the Egyptian foreign minister about these cases against democracy promoters? Would you ever let these Americans appear in a courtroom in Cairo?
SECRETARY CLINTON: Well, Michele, obviously we’ve been working on this ever since December, when we learned of the actions against not only American NGOs but NGOs from other countries as well. And we have been engaging at the highest levels of the Egyptian Government.
Our two concerns were, number one, to try to understand what the issues were, since both we and the Egyptian Government believed that our NGOs had been invited to help assist in ensuring that the elections were done in a credible way, which they were. But then also, we know that, ever since the Mubarak regime, there are a wealth of laws that are difficult to follow, even if you are intending to do so, which, of course, we were. And our NGOs kept trying to register so they could be viewed as legally entitled to operate within Egypt. So there was a lot of confusion, and the confusion was at all levels of the Egyptian Government as to what this all meant. So we have been engaging persistently and we hope that this matter will be resolved.
QUESTION: And how many Americans are now sheltering at the Embassy
?
SECRETARY CLINTON: I – the exact account, maybe, I think, 16, 17.
QUESTION: Turning to Syria, Syrian tanks have been battering Homs. There’s no sign of aid getting in. What do you and the Friends of Syria do now?
SECRETARY CLINTON: Well, I think, as I’ve said, we have to continue to consult with those who truly are Friends of the Syrian People, which of course, includes the United States and the many governments and organizations that gathered in Tunis on Friday. We are doing everything we can to facilitate humanitarian aid. It was distressing to hear that the Syrian Red Crescent and the ICRC, after many hours of negotiation just yesterday, were not permitted to go back into Homs. We are looking to set up and stage areas for getting humanitarian aid in. Secondly, we continue to ratchet up the pressure. It is an increasingly isolated regime. And third, we push for a democratic transition by working with and trying to build up the opposition so they can be an alternative.
QUESTION: But activists say you need, really, humanitarian corridors. You need to get aid in and people out. How do you do that without some sort of outside intervention?
SECRETARY CLINTON: Well, as you know, Michele, many of the people in the Syrian opposition have been quite vocal in their objection to any outside interference. And many of the countries that gathered on Friday are also quite vocal. What we tried to do in the Security Council was to get international support and legitimacy for the Arab League peace plan in order to have some leverage with the Assad regime. And unfortunately, Russia and China vetoed it.
So it’s a distressing and difficult situation. It’s not the first that the world has seen, unfortunately, but we remain engaged at every possible opening to accomplish our three objectives.
QUESTION: But there’s – there was a lot of talk about – and controversy about whether you arm the opposition, help them get arms. Is there anything the U.S. can do short of that, I mean, logistical support for the Free Syrian Army, satellite images to help them set up these humanitarian corridors?
SECRETARY CLINTON: Well, they don’t have tanks and they don’t have artillery. So I know there’s a lot of frustration, and I share it. This is a deeply, deeply distressing set of events. But you have one of the most highly militarized, best-defended countries on earth, because, of course, they spent an enormous amount of money with their Iranian and Russian friends so equipping themselves. And even if you were to somehow smuggle in automatic weapons of some kind, you’re not going to be very successful against tanks. And so the dilemma is how do we try to help people defend themselves? How do we push the Russians, Chinese, and others, who are, in effect, defending and deflecting for the Assad regime, to realize that this is undermining not only Assad’s legitimacy but theirs as well?
QUESTION: You, in fact, called the Russians despicable on this trip.
SECRETARY CLINTON: Well, not personally, but in terms of actions, I think continuing to arm a government that is turning its heavy weapons against their own citizens – I mean, there are a lot of words to describe that.
QUESTION: I want you to take a step back a bit and just to look at this political earthquake in the Arab world, as your Turkish counterpart likes to call it. How have you been adjusting to this new environment, and particularly the rise of political Islam, Islamist groups?
SECRETARY CLINTON: Well, look, I believe in freedom, and I believe in democracy, and I believe in self-determination, and I also believe in human rights and freedom and speech and freedom of religion. And so what we are supporting are – in countries that have every right to have self-determination and to set up their own democracies – the path that they’re on, and at the same time reminding Egyptians and Libyans and Tunisians and others that democracy is not one election one time. It is building institutions. It is carefully nurturing and tending the attitudes, what we call the habits of the heart, from our own early experience, a phrase of de Tocqueville.
And that’s difficult. It’s difficult for any political party or leadership. Everybody wants to believe that they’re best for their country and their people. But it’s important that the United States, which supports the aspirations of all people everywhere, also stand up for the values and principles that make democracy workable over the long term.
QUESTION: You spoke in Tunisia and Algeria about the need for moderate voices. And I wonder if you worry – if you’re worried that they’re being drowned out, that this – these changes across the region are becoming particularly violent. And what does that mean for U.S. interests?
SECRETARY CLINTON: Actually, I am not worried about where we are speaking today, here in the Maghreb. I mean, we’re in Morocco, which has had a very good election that led to new leadership taking place. I’m looking forward to working with them. I was just in Algeria, where they are planning for elections in May. And of course, you were with me in Tunis, where an Islamic-based party was elected but is in government in a coalition with parties representing other parts of view. That’s the way it should be in a democracy, because no matter who you are or where you live, there’s not unanimity of thought or feeling or political philosophy.
So I’m not expressing concern so much as speaking out about what we hope to see, because we’re judging these new governments no only what they say but what they do. And certainly in Tunisia, they are saying all the rights things. They are saying that they will protect women’s rights, that – they are saying that they will protect human rights. And now we want to see that actually take place.
But there is one element, which I am concerned about, and that is how people who were oppressed for so long – and particularly those who are of Islamic persuasion – are so well organized, because they had to be, it was a matter of survival, whereas many other voices in the society, the voices of business leaders, the voices of academia, the voices of young people are not politically organized. So wherever I go, I encourage those who are also hoping to reap the benefits of freedom and democracy to get involved in politics. I mean, politics is no easy game, as I know as well as anyone. But if you’re not at the table, then how can you blame people for pursuing certain programs that you may not agree with?
QUESTION: And you said you’re getting off the high wire of American politics after this job – (laughter) – so is there one thing that you really want to get done in this region before you leave office? You have a few months left. (Laughter.) Or is it just going to be putting out fires?
SECRETARY CLINTON: Well, I’ve always said from the very beginning that we do the emergencies, which are the responding to the fires right now; we do the important, which are trying to make sure that the fires don’t get out of control; and then we are looking at the long term. So it’s a constant panoply of all of these challenges.
But in particular, with respect to the Arab Spring, the coming of democracy of the Arab world, I want to see it take root. And, of course, I want to see it understand that elections are not the end, they’re the beginning, that you have to build institutions, you have to have an independent judiciary, you have to have a free press, you have to protect the rights of all minorities, religious, ethnic, you have to certainly empower and protect the rights of women. And this is at the beginning. We’re watching something unfold that is probably a generational enterprise.
So I’m encouraged in many regards by what I’ve seen in Tunisia, what I see in Morocco. The jury is out on Egypt. We’re waiting to see how that will actually be implemented. But the United States will help those who are truly invested in democracy that is not based on elevating some voices over others, imposing philosophical or religious beliefs on others, but truly having the free flow of ideas within a political culture that takes hold in these countries.
QUESTION: Madam Secretary, thank you very much for your time.
SECRETARY CLINTON: Thank you, Michele.”
PRESIDENT AND FIRST LADY PAY TRIBUTE TO IRAQI WAR VETERANS AND THEIR FAMILIES
The following excerpt is from the Department of Defense American Forces Press Service:
White House Pays Tribute to Iraq War Veterans, Families
By Army Sgt. 1st Class Tyrone C. Marshall Jr.
American Forces Press Service
American Forces Press Service
"WASHINGTON, March 1, 2012 - President Barack Obama and First Lady Michelle Obama hosted a White House tribute to Iraq War veterans and their families last night to honor them for their service, sacrifice and commitment to nation.
Vice President Joe Biden and his wife, Dr. Jill Biden, and Defense Secretary Leon E. Panetta, Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, along with senior officials from all branches of service joined the president and the first lady at an event dubbed "A Nation's Gratitude: Honoring Those Who Served in Operation Iraqi Freedom and Operation New Dawn."
"In one of our nation's longest wars, you wrote one of the most extraordinary chapters in American military history," Obama told the more than five dozen Iraq veterans and their guests. "Now, the Iraqi people have a chance to forge their own destiny, and every one of you who served there can take pride in knowing you gave the Iraqis that opportunity -- that you succeeded in your mission."
The vice president lauded service members for their ability to adapt to challenges, the capture of former Iraqi dictator Saddam Hussein and the opportunity they gave the people of Iraq to have a self-governing, self-sufficient nation.
"You're incredible. You adapted, you succeeded and you defeated," Biden said. "You defeated a tyrant, [and] you beat back violent extremists. And the most remarkable thing you did, because of the breadth of your capability, you enabled a country that had not been governed in any reasonable way for over four decades, you actually helped them set up institutions and train a military and a civilian corps that gives them a real fighting chance."
Panetta expressed his gratitude to all in attendance as well as the million-plus service members they represented for fulfilling their duties, for their dedication and for their service to the nation.
"To all who fought in Iraq, we thank you for your service," he said. "You've earned our nation's everlasting gratitude. We are indebted to you for your willingness to fight [and] your willingness to sacrifice for your country.
"We are [also] indebted to your families and your loved ones for the sacrifices that they made so that their loved ones could help defend this nation," Panetta said.
The chairman, who was first to speak, thanked the president and first lady for paying tribute to veterans and families of the Iraq War.
"Mr. President, Mrs. Obama, thank you for recognizing the service and sacrifice of the military family in this very special way," he said. "We really appreciate the support that you, the vice president and Dr. Biden, and those that they bound together in the 'Joining Forces' initiative and the nation provide us."
The first lady and Dr. Biden have championed the Joining Forces effort, which seeks to mobilize tangible support for service members and their families in all sectors of American society.
Just before dinner began, the president emphasized how proud he is of the U.S. military for working together to achieve success in Iraq.
"As your commander in chief, I could not be more proud of you," Obama said. "As an American, as a husband and father of two daughters, I could not be more grateful for your example [of] the kind of country we can be, [and] for what we can achieve when we stick together."
Obama paid tribute to "courageous" troops who served despite the likelihood of being sent into harm's way and to fallen service members and their families.
"You taught us about sacrifice -- a love of country so deep, so profound, you're willing to give your life for it," he said. "Tonight, we pay solemn tribute to all who did."
Obama recalled five service members who were the first casualties of the Iraq War, and the last U.S. casualty there, who was killed Nov. 14.
"Separated by nearly nine years, they are bound for all time among the nearly 4,500 American patriots who gave all that they had to give," the president said. "To their families, including the Gold Star families here tonight, know that we will never forget their sacrifice, and that your loved ones live on in the soul of our nation, now and forever."
NORTH KOREA AGREES TO HALT ACTIVITIES AT MAIN NUCLEAR PRODUCTION AND TESTING PLANT
The following excerpt is from the Department of Defense American Forces Press Service:
"North Korea Takes 'Positive First Step' on Nukes, Official Says
By Lisa Daniel
American Forces Press Service
American Forces Press Service
WASHINGTON, Feb. 29, 2012 - The North Korean government has agreed to stop all nuclear activities at its main production and testing plant and to allow the return of inspectors, in a move a Defense Department official described as a positive step toward denuclearization of the communist state.
The North Korean leadership's decision "is a positive first step toward complete and verifiable denuclearization of the Korean Peninsula in a peaceful manner, which remains our core goal," Pentagon spokeswoman Navy Cmdr. Leslie Hull-Ryde said in a written statement. "The only way to achieve that goal is through a deliberate process that requires engagement."
The State Department made the announcement today as a U.S. delegation returned from bilateral talks with North Korean officials in Beijing. It was the third such round of talks between the two nations.
"To improve the atmosphere for dialogue and demonstrate its commitment to denuclearization, [North Korea] has agreed to implement a moratorium on long-range missile launches, nuclear tests and nuclear activities at Yongbyon, including uranium enrichment activities," according to a State Department statement.
The North Korean delegation also agreed to the return of International Atomic Energy Agency inspectors to verify and monitor the moratorium on uranium enrichment activities at Yongbyon, and to confirm the disablement of the 5-MW reactor and associated facilities, the statement says.
State Department officials said U.S. officials "still have profound concerns regarding North Korean behavior across a wide range of areas, but today's announcement reflects important, if limited, progress in addressing some of these."
They went on to say that U.S. officials agreed to meet with the North Koreans to finalize administrative details for delivery of 240,000 metric tons of food aid, "along with the intensive monitoring required" for the delivery of such assistance.
Navy Adm. Robert F. Willard, commander of U.S. Pacific Command, told the Senate Armed Services Committee yesterday that he would be skeptical of any overtures from North Korea, and that he would not expect major changes in North Korea under the leadership of Kim Jong Un, who came to power in the fall after the death of his father, Kim Jong Il.
In a call with reporters today, a senior administration official who spoke on background said President Barack Obama "has been consistent in signaling that we will respond positively if North Korea chooses the path of negotiation, cooperation and denuclearization."
North Korea's agreement this week "begins the process of walking back" provocations that led to the breakdown of six-party talks, the official said. "This agreement opens the door to serious negotiations to achieve irreversible steps" toward denuclearization, she said.
U.S. officials will continue to emphasize the need for North Korea to pursue reconciliation with South Korea, the official said. About 30,000 U.S. troops are based in South Korea, a legacy of the 1950-53 war between the North and South.
As part of the bilateral talks, State Department officials said, U.S. officials:
-- Reaffirmed that the United States "does not have hostile intent toward [North Korea] and is prepared to take steps to improve our bilateral relationship in the spirit of mutual respect for sovereignty and equality";
-- Said the United States recognizes the 1953 armistice agreement as the "cornerstone of peace and stability" on the Korean peninsula;
-- Said the United States is prepared to take steps to increase people-to-people exchanges, including in the areas of culture, education, and sports; and
-- Said U.S. sanctions are not targeted against the livelihood of the North Korean people."
SECRETARY OF DEFENSE PANETTA MET WITH PORTUGUESE DEFENSE MINISTER
The following excerpt is from a Department of Defense American Forces Press Service e-mail:
"Panetta, Portuguese Defense Minister Discuss Common Challenges
American Forces Press Service
WASHINGTON, Feb. 27, 2012 - Defense Secretary Leon E. Panetta met with Portuguese Defense Minister Jose Pedro Aguiar-Branco here today to discuss a range of common challenges, Pentagon Press Secretary George Little said.
"Secretary Panetta thanked Minister Aguiar-Branco for Portugal's steadfast support in Afghanistan and other NATO missions," Little added. "He also stressed Portugal's indispensible role as a strategic ally."
The military leaders discussed enhancing and deepening the U.S.-Portuguese defense relationship, and Panetta confirmed that the United States will remain at Lajes Field in the Azores. The secretary said the United States will consult with Portugal on the modalities of the continued U.S. force posture at Lajes, the Little said.
"Secretary Panetta thanked Minister Aguiar-Branco for the warm hospitality U.S. troops have enjoyed and will continue to enjoy on Portuguese soil," he added.
Looking forward, he said, Panetta and Aguiar-Branco will work together with other alliance defense leaders to prepare for the NATO Chicago summit in May, building on what was accomplished at the 2010 summit in the Portuguese capital of Lisbon.
Panetta and Aguiar-Branco directed their staffs to develop options for enhancing the U.S.-Portuguese defense relationship, Little said, and will follow up in April at a NATO meeting in Brussels. The defense leaders also agreed to have their staffs meet at bilateral political-military talks scheduled here for June, he said."
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