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WHITE HOUSE FACT SHEET ON SUPPLIERPAY INITIATIVE EXPANSION

FROM:  THE WHITE HOUSE 
November 17, 2014

FACT SHEET: President Obama’s SupplierPay Initiative Expands; 20 Additional Companies Pledge to Strengthen America’s Small Businesses

Today, the White House announced an expansion of President Obama’s SupplierPay initiative, a partnership with the private sector to strengthen small businesses by increasing their working capital, so they can grow and hire more workers.

Twenty companies are joining the 26 companies that adopted the SupplierPay pledge at a launch announcement with President Obama in July. As part of the SupplierPay initiative, companies pledge to pay their small suppliers faster or enable a financing solution that helps them access working capital at a lower cost.

The SupplierPay initiative helps address the difficulties small businesses face in accessing affordable working capital. Reducing the time it takes for smaller suppliers to get paid or lowering their short-term borrowing costs enables them to devote more of their resources to investing in their business, hiring, and growing.

Also today, the Commerce Department is releasing a new report which finds that the larger companies participating in the SupplierPay initiative also have the potential to realize significant economic benefits.  High working capital costs for small suppliers can get passed onto large customers in the form of lower-quality goods and services, less stable suppliers, and higher prices. Reducing working capital costs—as SupplierPay companies are doing—unlocks capital to be put to work for the benefit of large buyers, and for the entire economy, according to the report.

Today’s SupplierPay Working Session

Also today, the White House will hold a SupplierPay working session hosted by National Economic Council Director Jeff Zients and SBA Administrator Maria Contreras-Sweet. The working session will bring together both existing and new SupplierPay companies to discuss actions companies are taking to implement the SupplierPay pledge, and ensure the metrics are in place to track and measure impact of this initiative going forward.

The following new companies have signed on to SupplierPay:

Akima
Chugach Alaska
Cook Inlet Region, Inc.
ConAgra Foods, Inc.
Dominion Resources, Inc.
Dun & Bradstreet Credibility Corp.
Intel Corp.
Hallmark Cards, Inc.
Kaiser Permanente
McGraw Hill Financial, Inc.
Nova Corp., Inc.
Oracle Corp.
Sacramento Municipal Utility District
Sealaska
Siemens Corp.
Sempra Energy
Southern California Edison Co.
3M Co.
Xerox Corp.
Zappos.com., Inc.

A list of the 26 SupplierPay participants announced in July is available here.

SupplierPay Builds on Success of Federal Government’s QuickPay Initiative

SupplierPay builds on the success of the Federal Government’s QuickPay initiative, which President Obama launched in 2011 and renewed in July to help accelerate payments to federal small business subcontractors. Under QuickPay, the federal government pays its large contractors faster and, in return, requires them to pay their small business subcontractors faster.

SupplierPay Impact

SupplierPay companies participating in today’s meeting will be providing updates on how they are implementing this initiative and accelerating payments to their small suppliers. Among the examples that will be discussed:

Intuit. After taking the pledge, Intuit surveyed its supplier base and offered 10-day payment terms to 320 small businesses. Intuit also moved all of its 80+ independent contractors to contracts that committed to pay them within 10 days. Intuit’s actions will impact an estimated $40 million in payments this year, and an estimated $80 million in annual payments when more small and medium-sized suppliers are brought on board. “Prompt payment is important to small firms such as mine,” said Jeff Adams, owner of Jeff Adams Copywriting in Santee, CA.

Lockheed Martin. Lockheed Martin, the world’s largest security and aerospace company, sources more than 60 percent of its work through its supply chain, which includes more than 15,000 companies across all 50 states. More than half of these suppliers are small businesses, with whom the company did $4.9 billion worth of business in fiscal year 2014. Lockheed Martin is committed to expedited payments and is paying 100 percent of small business supplier invoices on an accelerated schedule. The company’s supplier portal flags small businesses so Lockheed Martin can accelerate payment, cutting time to payment in half to just 15 days.

Siemens. Siemens has more than 100 U.S. manufacturing sites and more than 60,000 U.S. employees. Just last year, Siemens’ Procurement & Logistics small business spending was approximately $266 million, and its spending on small and diverse companies was 16 percent of its total overall annual spending. A new participant in the SupplierPay initiative, Siemens offers small business suppliers a supply chain finance program which includes several supplier benefits such as cash flow improvement, working capital optimization, cost reduction, and cash flow transparency. About 1,300 Siemens North America suppliers participate in its supply chain finance program.
ADDITIONAL BACKGROUND:

Small businesses play a vital role in the American economy – employing half the workforce, creating about 60 percent of net new American jobs, and often being the source of the next great American innovation.

Small businesses were disproportionately impacted by the Great Recession, losing 40 percent more jobs than the rest of the private sector combined. When the President took office, small business credit markets were effectively frozen. Today, trends are moving in the right direction. For 15 straight quarters, small firms have contributed to employment growth. According to a recent survey, more than a quarter of small business owners are planning capital investments, the second highest such reading since 2008.

Small business capital access has been an area of focus for this Administration, starting with the Recovery Act in 2009 and continuing with the Small Business Jobs Act in 2010 and the JOBS Act in 2012. Collectively, this legislation has been instrumental in driving improvement from the depths of the recession. The Administration has achieved record SBA small business lending volumes and recent Federal Reserve Small Business surveys indicate improved access to financing. Yet, more can be done. Too many small businesses still struggle to access the capital they need:

A 2014 Pepperdine and D&B study reported that 66 percent of small businesses found it “difficult to raise new business financing.”
Regional survey data from the Federal Reserve Bank of New York showed that 40 percent of the roughly one-third of small businesses that applied for credit in late 2013 received either none or less than the amount they requested. And another fifth of small businesses didn’t even apply for credit, because they assumed the process was too difficult, or they would not qualify.
Capital access challenges are magnified by the fact that small businesses are waiting longer to get paid for their products and services. The amount of time it took a corporation to pay an invoice increased from an average of 35 days in March 2009 to 46 days in July 2014, according to the Georgia Tech Financial Analysis Lab. Extended payment terms mean small businesses are spending unnecessary funds to cover cash flow. These are funds that could be otherwise spent on growing their business and creating new jobs.

FTC, FLORIDA AG SETTLEMENT STOPS ROBOCALL OPERATION THAT PUSHED SALES OF MEDICAL ALERT DEVICES TO SENIORS

FROM:  U.S. JUSTICE DEPARTMENT
Settlement with the FTC and Florida Attorney General Stops Operations that Used Robocalls to Fraudulently Pitch Medical Alert Devices to Seniors

A settlement obtained by the Federal Trade Commission and the Office of the Florida Attorney General permanently shuts down an Orlando-based operation that bilked seniors by using pre-recorded robocalls to sell them supposedly free medical alert systems.

The settlement order bans the defendants from making robocalls, prohibits other telemarketing activities, and bars them from making misrepresentations related to the sale of any product or service. The order includes a judgment of nearly $23 million, most of which will be suspended after the defendants surrender assets including cash, cars, and a boat.

”This case is a great example of how federal and state law enforcement can work together to stop fraudulent telemarketing targeting older consumers,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “The FTC will continue to work with its state partners to protect senior citizens from pernicious schemes like this one.”

“We must do everything within our power to protect Florida’s consumers. The scheme we have stopped allegedly targeted Florida’s senior citizens, and we, along with our Federal Trade Commission partners, have held these individuals accountable,” said Attorney General Pam Bondi.

According to the joint agency complaint, announced in January, the defendants violated the FTC Act, the Commission’s Telemarketing Sales Rule (TSR), and Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) by blasting robocalls to senior citizens falsely stating that they were eligible to receive a free medical alert system that was bought for them by a friend, family member, or acquaintance. Many of the consumers who received the defendants’ calls were elderly, live alone, and have limited or fixed incomes.

Consumers who pressed one (1) on their phones for more information were transferred to a live representative who continued the deception by falsely saying that their medical alert systems are recommended by the American Heart Association, the American Diabetes Association, and the National Institute on Aging. In addition, the telemarketers falsely said that the $34.95 monthly monitoring fee would be charged only after the system has been installed and activated. In reality, consumers were charged immediately, regardless of whether the system was activated or not.

The court order settling the agencies’ charges also imposes a judgment of $22,989,609, the total amount consumers paid for monthly monitoring services for their medical alert devices. The judgment will be suspended as to all of the settling defendants once the individual defendants turn over cash and other assets valued at about $79,000, including $24,000 that was transferred in violation of a court-ordered asset freeze.

Assets that will be sold include a 2008 BMW, a 1984 Hans Christian sailboat, a 2004 Mercedes, and a 2008 Lincoln Navigator. In addition, defendant Joseph Settecase is subject to a second judgment of $39,300, which will not be suspended. This judgment reflects the funds that Settecase retained after selling his Ferrari in violation of the asset freeze and transferring a portion of the proceeds to another defendant.

The defendants subject to the settlement include: 1) Worldwide Info Services, Inc., also doing business as (d/b/a) The Credit Voice; 2) Elite Information Solutions Inc., also d/b/a The Credit Voice; 3) Absolute Solutions Group Inc., also d/b/a The Credit Voice; 4) Global Interactive Technologies, Inc., also d/b/a The Credit Voice Inc.; 5) Global Service Providers, Inc.; 6) Arcagen, Inc., also d/b/a ARI; 7) American Innovative Concepts, Inc.; 8) Unique Information Services Inc.; 9) National Life Network, Inc., and their principals 10) Michael Hilgar; 11) Gary Martin; 12) Joseph Settecase; and 13) Yuluisa Nieves.

One defendant, Live Agent Response 1 LLC, also d/b/a LAR, has not settled, and the FTC and Florida AG are seeking a default judgment against it. In May, the parties stipulated to the dismissal of The Credit Voice, Inc. as a defendant.

The FTC and Florida Attorney General’s Office appreciate the assistance of the following agencies, offices, and organizations in helping to investigate and bring this case: 1) the Indiana Office of the Attorney General; 2) the Minnesota Office of the Attorney General; 3) the Florida Department of Agriculture and Consumer Services; 4) the Better Business Bureau Serving Eastern Missouri and Southern Illinois; 5) the American Heart Association; 6) the American Diabetes Association; 7) the National Institute on Aging;  8) the United States Postal Inspection Service, including its Atlanta, Boston, and Houston divisions; and 9) the Seminole County Sheriff’s Office, Financial Crimes Task Force.

FORMER SWISS BANKER CHARGED FOR ROLE IN CASE INVOLVING THE HIDING OF HUNDREDS OF MILLION OF DOLLARS FROM IRS

FROM:  U.S. JUSTICE DEPARTMENT 
Thursday, November 13, 2014

Former Swiss Banker Charged in Manhattan Federal Court for Conspiring with U.S. Taxpayers to Hide Hundreds of Millions of Dollars in Swiss Bank Accounts
U.S. Attorney Preet Bharara for the Southern District of New York and Acting Special Agent in Charge Shantelle P. Kitchen of the New York Field Office of the Internal Revenue Service- Criminal Investigation (IRS-CI) announced today the indictment of Martin Dunki, a former client advisor and Senior Vice President at a Swiss bank headquartered in Zurich, Switzerland (Swiss Bank No. 1), for conspiring with U.S. taxpayer-clients and others to hide hundreds of millions of dollars in offshore accounts from the IRS, and to evade U.S. taxes on the income earned in those accounts.

“As alleged, Martin Dunki went to great lengths to help his U.S. taxpayer clients secret away millions of dollars in Swiss bank accounts,” said U.S. Attorney Bharara.  “With today’s Indictment, Dunki joins the ranks of many other individuals this Office has charged in connection with hiding money in offshore bank accounts from the Internal Revenue Service.”  

“The vigorous pursuit of unreported income in hidden offshore accounts is a top priority for the Internal Revenue Service,” said Acting IRS-CI Special Agent in Charge Shantelle P. Kitchen.  “As part of our strategy, we will continue to identify and investigate banking and finance professionals who advise U.S. clients about ways to conceal their assets from the U.S. Government.”

According to the allegations contained in the indictment, which was unsealed today in Manhattan federal court, and other publicly available information:

Between 1995 and 2012, Dunki helped U.S. taxpayers evade taxes and hide hundreds of millions of dollars in undeclared accounts at Swiss Bank No. 1.  Dunki provided this advice and assistance to U.S. taxpayers in his capacity as a client advisor at Swiss Bank No. 1, where he was employed until early 2012.

One of Dunki’s co-conspirators was Edgar Paltzer, an attorney based in Zurich, Switzerland, who previously pleaded guilty in the Southern District of New York for his role in assisting U.S. taxpayers and others to evade taxes.  In 1999, Dunki, Paltzer and an attorney from Santa Barbara, California (Attorney 1), began working together in the management of undeclared accounts at Swiss Bank No. 1 for a number of U.S. taxpayers (collectively, the Dunki/Attorney 1 Clients).  The undeclared assets of the Dunki/Attorney 1 Clients were maintained in accounts held in the names of sham foreign foundations, rather than in the names of the clients individually, to help the clients conceal their ownership of these undeclared accounts from the IRS.  Initially, the sham foundations that held the accounts were organized under the laws of Liechtenstein.  In December 2008, however, Liechtenstein and the United States signed a Tax Information Exchange Treaty (TIEA), under which Liechtenstein agreed to provide the United States with access to certain bank and other information needed to enforce U.S. tax laws.  As a result of the TIEA between Liechtenstein and the United States, and to prevent disclosure to the IRS of the undeclared accounts maintained by the Dunki/Attorney 1 Clients, Dunki and others transferred the undeclared assets of the Dunki/Attorney 1 Clients to new accounts at Swiss Bank No. 1, held by new sham foundations organized under the laws of Panama.  Moreover, beginning in August 2009, in response to the investigation of another Swiss bank, UBS AG, for helping U.S. taxpayers maintain undeclared accounts in Switzerland, Dunki and others helped to further conceal the undeclared accounts of the Dunki/Attorney 1 Clients by using assets in those accounts to purchase gold and other precious metals.  The gold and precious metals, which amounted to tens of millions of dollars, were then transferred to escrow accounts opened at Swiss Bank No. 1 and hidden, along with substantial sums of cash, in a vault in Switzerland for the benefit of the Dunki/Attorney 1 Clients.

In addition to opening, maintaining, and managing undeclared accounts at Swiss Bank No. 1 for the Dunki/Attorney 1 Clients, Dunki opened, maintained and managed undeclared accounts at Swiss Bank No. 1 for other U.S. taxpayers.  For instance, between 2000 and 2012, Dunki helped one U.S. taxpayer hide nearly $300 million in assets at Swiss Bank No. 1, in undeclared accounts held in the names of sham Liberian corporations.  Further, between 1995 and 2008, Dunki helped another U.S. taxpayer maintain approximately $70 million in an undeclared account at Swiss Bank No. 1.  When Dunki met with this taxpayer in the United States, the account statements that Dunki brought with him were deliberately cut off at the top, to omit the account number and the name of Swiss Bank No. 1, because – as Dunki himself acknowledged to the taxpayer – Dunki had to be careful not to leave a trace when going through U.S. customs.

Dunki also helped U.S. taxpayers bring funds back to the United States in ways designed to ensure that U.S. authorities would not discover the existence of the taxpayers’ undeclared accounts at Swiss Bank No. 1.  For example, on at least one occasion, Dunki met a U.S. taxpayer in the United States and provided the taxpayer with an envelope containing approximately $10,000 in cash, which represented a cash withdrawal from the taxpayer’s undeclared account at Swiss Bank No. 1.  On other occasions, Dunki helped send money from a U.S. taxpayer’s undeclared account at Swiss Bank No. 1 to another account in Geneva, Switzerland, and, from there, to a diamond dealer in Manhattan.  Once the money was received by the diamond dealer, the U.S. taxpayer would pick it up and give the diamond dealer a fraction of the money as a commission.

Dunki, 66, a Swiss citizen, resides in Switzerland and has not been arrested.  Dunki is charged with one count of conspiracy to defraud the IRS, which carries a maximum sentence of five years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

U.S. Attorney Bharara praised the outstanding efforts of IRS-CI in the investigation, which he noted is ongoing.  He also thanked the Justice Department’s Tax Division for their significant assistance in the investigation.

This case is being handled by the U.S. Attorney’s Office for the Southern District of New York Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Sarah E. Paul and Jason H. Cowley are in charge of the prosecution.

The charge and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

A.G. HOLDER'S REMARKS AFTER MEETING WITH EU OFFICIALS REGARDING FOREIGN TERRORIST FIGHTERS AND COOPERATION

FROM:  U.S. JUSTICE DEPARTMENT 
Remarks by Attorney General Holder at the Media Availability Following Meeting with European Union Officials About Foreign Terrorist Fighters and Other Areas of Mutual Concern
Washington, DCUnited States ~ Thursday, November 13, 2014

Thank you all for being here.  It has been a pleasure to welcome so many of my colleagues and counterparts to Washington, D.C., for this week’s important ministerial meeting.

Over the past two days, we have discussed the considerable work that’s currently enabling the U.S. and the EU to coordinate on common threats – in addition to the steps that we can, and must, take together in the days ahead.

In the last year alone, our nations have taken tough, coordinated action against cyber criminals, online child pornographers, and transnational organized crime.  We had the privilege of hearing today from some of our lead prosecutors on the Game Over Zeus cyber investigation and the action against Tor dark markets, including the second edition of the Silk Road website, that have taken place over the past few days.  Both, of course, involved U.S. authorities and multiple EU member states.

And we also have heard how we have worked together against traditional organized crime groups, including ’Ndranghta – where our coordinated work with Italy led to 25 arrests in New York and Calabria earlier this year.

Importantly, we also discussed a number of steps that the U.S. – and the EU and its member states – can take together to address the issue of foreign terrorist fighters, including through information sharing, investigations and prosecutions, and countering violent extremism.

One important area, we agreed, was developing the capabilities of our partner governments to deal with foreign terrorist fighters.

The Department of Justice is part of a U.S. Government-wide effort in this regard.

I can announce today that, with the support of the State Department’s Bureau of Counterterrorism, the Department of Justice has detailed federal prosecutors and senior law enforcement advisors to reside in key regions – including the Balkans, the Middle East and North Africa – to work with countries seeking to increase their capacity to investigate and prosecute foreign terrorist fighters.

The Department of Justice has advisors residing in four Balkans countries.  And we will soon be placing a regional counterterrorism advisor in the area.

Justice Department prosecutors have also been placed in ten countries in the Middle East and North Africa.  These personnel will provide critical assistance to our allies in order to help prosecute those who return from the Syrian region bent on committing acts of terrorism.

Our counterterrorism prosecutors here in the U.S. also travel to other countries to collaborate with their counterparts.

And we have assigned a U.S. prosecutor as the Interim Director of the International Institute for Justice and the Rule of Law, or IIJ – located in Malta – which provides a forum to discuss the Foreign Terrorist Fighter problem and work with international partners to arrive at solutions.

The Justice Department provides vital expertise and support to the IIJ, in partnership with the State Department’s Bureau of Counterterrorism, and in collaboration with the UN Counter-Terrorism Committee Executive Directorate.

Finally, we are working with other partners, including the UN Office on Drugs and Crime, to help build the capacity of partners world-wide to engage in mutual legal assistance on cases involving terrorism and transnational crime.

Our goal in all these efforts is to build the capacity to fight Foreign Terrorist Fighters within the rule of law – so we can stop the flow of fighters into conflict regions, stem the tide of violence, and aggressively combat violent extremism.

As our discussions have shown, in all of these areas, we can succeed only as partners.  And I am happy to have partners such as these on both sides of the Atlantic.

I appreciate this chance to join so many invaluable colleagues and counterparts here in Washington, as we keep advancing these critical discussions – and building on the great work that’s underway.  And I look forward to all that our nations must – and surely will – achieve together in the months and years ahead.

Thank you.

THE RELATIONSHIP OF THE "MICROBIOME" AND INFECTIOUS DISEASE OUTBREAKS

FROM:  THE NATIONAL SCIENCE FOUNDATION 

"Microbiome" of Sierra Nevada yellow-legged frogs shifts during infectious disease outbreaks

Interaction between microbiome and infectious pathogens may drive disease
The adult human body is made up of some 37 trillion cells. But microbes, mainly bacteria, outnumber our body's cells by a ratio of 10-to-1.

Scientists now recognize that this huge community of benign microbes--called the microbiome--affects the health, development and evolution of all multicellular organisms, including humans.

Studies show that interactions between such microbiomes and pathogens, or disease-causing microorganisms, can have profound effects on infectious diseases.

In results of a new study, scientists from the University of California, Santa Barbara (UCSB) demonstrate that a fungal pathogen of amphibians does just that. The findings appear this week in the journal Proceedings of the National Academy of Sciences.

Infectious pathogens may disrupt the microbiome

Experiments with model organisms such as mice have shown that infectious pathogens can disrupt the microbiome, but the extent to which this process shapes disease outbreaks is largely unknown.

The work, conducted by scientists Cherie Briggs and Andrea Jani of UCSB, addresses a gap in disease ecology and microbiome research.

"This study shows the importance of knowing how the many benign microbes living on and in our bodies interact with those that cause disease," says Sam Scheiner, National Science Foundation program director for the joint NSF-NIH-USDA Ecology and Evolution of Infectious Disease Program, which funded the research.

"The results are important for developing responses to a disease that's causing amphibians to go extinct worldwide," says Scheiner, "and have implications for future studies of human health."

Jani and Briggs found that the fungus Batrachochytrium dendrobatidis (Bd) drives changes in the frogs' skin microbiomes during disease outbreaks in four populations of the Sierra Nevada yellow-legged frog (Rana sierrae).

Chytridiomycosis, an infectious disease of amphibian skin caused by the Bd pathogen, is a leading cause of amphibian losses worldwide.

"Since amphibian skin is the organ infected by Bd, there has been a lot of interest in how anti-fungal properties of some skin bacteria may protect the frogs," says Briggs.

"We focused on the flip side of this interaction: how infection with Bd can disrupt the skin microbial community."

Next-generation DNA sequencing documents changes

"We used next-generation DNA sequencing to document shifts in skin bacteria communities of the frogs during Bd outbreaks," Jani says.

"We paired field surveys with laboratory infection experiments, demonstrating a causal relationship in which Bd altered the frog's microbiome."

The researchers found that the severity of infection with Bd is strongly correlated with the composition of bacteria communities on the frogs' skin.

"It was surprising that across the different frog populations, there was a striking consistency in the correlation with Bd," says Jani.

One of the populations crashed due to Bd infection, but the other three populations tolerated Bd infections.

"There are different disease dynamics going on," says Jani, "yet there's a similar relationship between the microbiome and Bd."

Answers still elusive

The researchers were unable to conclusively determine whether the Bd-induced disturbance of the frog skin microbiome contributed to the disease symptoms.

The pathogens may interact with the microbiome directly or by manipulating the frogs' immune systems.

It's possible, the biologists say, that the pathogens directly compete with certain bacteria for space or resources or release compounds that affect some bacteria species.

Or the pathogens may control frog immune responses to favor their own growth and disrupt the normal microbiome.

The researchers say that promise exists for probiotic treatments as a way of fighting the decline of frogs due to Bd, but they're careful to qualify the statement.

There is a lot they still don't understand about the environmental effects of such treatments or the interactions between the frogs' microbiomes and the Bd pathogen.

-- Cheryl Dybas, NSF
-- Julie Cohen, UCSB (
Related Programs
Ecology of infectious disease

WHITE HOUSE VIDEO: PRESIDENT OBAMA ADDRESSES UNIVERSITY OF QUEENSLAND

PRESIDENT OBAMA'S STATEMENT ON DEATH OF ABDUL-RAHMAN KASSIG AT THE HANDS OF ISIL

FROM:  THE WHITE HOUSE 
November 16, 2014
Statement by the President on the Death of Abdul-Rahman Kassig

Today we offer our prayers and condolences to the parents and family of Abdul-Rahman Kassig, also known to us as Peter.  We cannot begin to imagine their anguish at this painful time.

Abdul-Rahman was taken from us in an act of pure evil by a terrorist group that the world rightly associates with inhumanity.  Like Jim Foley and Steven Sotloff before him, his life and deeds stand in stark contrast to everything that ISIL represents.  While ISIL revels in the slaughter of innocents, including Muslims, and is bent only on sowing death and destruction, Abdul-Rahman was a humanitarian who worked to save the lives of Syrians injured and dispossessed by the Syrian conflict.  While ISIL exploits the tragedy in Syria to advance their own selfish aims, Abdul-Rahman was so moved by the anguish and suffering of Syrian civilians that he traveled to Lebanon to work in a hospital treating refugees.  Later, he established an aid group, SERA, to provide assistance to Syrian refugees and displaced persons in Lebanon and Syria.  These were the selfless acts of an individual who cared deeply about the plight of the Syrian people.

ISIL's actions represent no faith, least of all the Muslim faith which Abdul-Rahman adopted as his own.  Today we grieve together, yet we also recall that the indomitable spirit of goodness and perseverance that burned so brightly in Abdul-Rahman Kassig, and which binds humanity together, ultimately is the light that will prevail over the darkness of ISIL.

The President Holds a Press Conference in Brisbane

GOES VIDEO OF THE NOV. 10-12 2014 WINTRY STORM

U.S.-CANADIAN OFFICIALS DISCUSS GLOBAL SECURITY

FROM:  U.S. DEFENSE DEPARTMENT 

Release No: NR-571-14
November 14, 2014

Readout of Deputy Secretary of Defense Robert Work's meeting with the Canadian Deputy Minister of Defense Richard Fadden

Deputy Secretary of Defense Spokesperson Navy Lt. Cmdr. Courtney Hillson provided the following readout:

Deputy Secretary of Defense Robert Work met with the Canadian Deputy Minister of Defense Richard Fadden this afternoon at the Pentagon.

Work led off the meeting by extending his personal condolences for the loss of Warrant Officer Patrice Vincent and Corporal Nathan Cirillo last month.

The two defense leaders then discussed global security challenges and their collaboration on counter-ISIL operations in Iraq. Work commended Canada for its contributions, particularly in conducting air strikes against Islamic State of Iraq and the Levant (ISIL) targets, and the delivery of humanitarian aid to Kurdish forces in Northern Iraq.

Deputy Secretary Work and Deputy Minister Fadden also discussed the situation in Ukraine, noting their ongoing efforts to provide assistance to Ukraine and both nations' contributions to NATO reassurance measures.

Deputy Secretary Work provided Deputy Minister Fadden with an overview of the department's review of our nuclear enterprise. He highlighted that our nuclear arsenal is safe, secure, and effective and that the department is taking action to address the issues identified in the review.

They concluded the meeting by reaffirming their commitment to sustaining a strong bilateral relationship and to continue working together on issues that transverse their shared borders.

MAN INDICTED FOR ALLEGEDLY TEACHING CUSTOMERS TO LIE DURING POLYGRAPH EXAMINATIONS

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, November 14, 2014
Owner of 'Polygraph.com' Indicted for Allegedly Training Customers to Lie During Federally Administered Polygraph Examinations

A former Oklahoma City law enforcement officer and owner of “Polygraph.com” has been indicted on obstruction of justice and mail fraud charges for allegedly training customers to lie and conceal crimes during polygraph examinations.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Assistant Commissioner Mark Morgan of U.S. Customs and Border Protection’s Office of Internal Affairs and Special Agent in Charge James E. Finch of the FBI’s Oklahoma City Field Office made the announcement.

Douglas Williams, 69, of Norman, Oklahoma, was charged in a five-count indictment in the Western District of Oklahoma with mail fraud and obstruction.  According to allegations in the indictment, Williams, the owner and operator of “Polygraph.com,” marketed his training services to people appearing for polygraph examinations before federal law enforcement agencies, federal intelligence agencies, and state and local law enforcement agencies, as well as people required to take polygraph examinations under the terms of their parole or probation.

The indictment further alleges that Williams trained an individual posing as a federal law enforcement officer to lie and conceal involvement in criminal activity from an internal agency investigation.  Williams is also alleged to have trained a second individual posing as an applicant seeking federal employment to lie and conceal crimes in a pre-employment polygraph examination.  Williams, who was paid for both training sessions, is alleged to have instructed the individuals to deny having received his polygraph training.

The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The investigation is being investigated by U.S. Custom and Border Protection’s Office of Internal Affairs and the FBI’s Oklahoma City Field Office.  The case is being prosecuted by Trial Attorneys Mark Angehr and Brian K. Kidd of the Criminal Division’s Public Integrity Section.

CATHERINE NOVELLI'S REMARKS ON CONNECTIVITY AND POLICY

FROM:  THE STATE DEPARTMENT 
Policy Choices for a Connected World
Remarks
Catherine A. Novelli
Under Secretary for Economic Growth, Energy, and the Environment 
University of Pretoria
Pretoria, South Africa
November 13, 2014

Good afternoon.  I am delighted to be here to speak at this distinguished university and to visit your beautiful country.  Thank you so much for inviting me.  South Africa is the last stop on an Africa trip that included Tanzania and Kenya.  Along the way, I’ve seen incredible energy and dynamism.

I’d like to speak today about a new economic reality and the policy choices we all face.  These choices are in front of every government, business, university, and individual as they determine their economic future.  The reality is, the world is more connected than ever before, with goods, services, information, people, and financial resources crossing borders at an unprecedented rate.
                 
Before this speech and after it – perhaps during it – you will be looking at mobile devices, tapping into the internet, engaging in social media, and conducting business and commercial transactions on line. The object in your hand, perhaps a smart phone, is the result of a manufacturing process that started with innovation and design at various locations around the world, manufacturing at a host of other sites, and distribution and marketing from even different corners of the globe.

That’s the reality of today’s world, whether you are in South Africa, Kenya and Tanzania – as I was in recent days – or Washington, DC, or London or Tokyo.  Global supply chains have come to define the way we do business in today’s economy.

The Connected World

McKinsey Global Institute recently wrote that cross-border flows of goods and services totaled $26 trillion in 2012.  This represents 36 percent of global gross domestic product, more than 50 percent larger than 20 years ago.  About half of those flows are knowledge-intensive, compared to labor-intensive, and the proportion is growing. Intermediate goods – ones that are incorporated into a finished product—have become an ever-increasing proportion of trade.   These goods in turn are fueling exports from the countries that have imported them.  Over a quarter of the total value of global exports is made up of intermediate imports, and this share has nearly doubled since 1970. These statistics bring to light the changing nature of business.  Older models of single-country, soup-to-nuts manufacturing arrangements are giving way to globally integrated supply chains.  Innovation and design come from a worldwide network of research and development.  Raw materials and components flow from site to site, supported by worldwide procurement systems, logistic hubs and warehousing.  Marketing and financial services may be at other locales. Consumers are targeted for sales around the globe.

How Countries Can Take Advantage of Value Chains

So what are the implications for countries, companies and citizens of a world where global value chains are increasingly dominating trade?  What policies should countries follow to benefit the most from value chains? I would suggest that countries need to focus on five policy areas as they enable their citizens to fully reap the benefits of today’s connected world.

First, open markets facilitated by fast customs procedures, international product standards and modern infrastructure is critical. Supply chain production is more complex than traditional export systems, with more import and export transactions for each unit of value added.  This means that as goods and services move across multiple borders on their way to the final market, even small barriers can add up and affect the competitiveness of a product.

In the connected world, policies that may have offered protection to domestic firms in an earlier era, like import substitution, local content requirements, or data localization obligations, now make them less attractive as supply chain partners.  An OECD study of local content requirements, found that local content requirements not only made countries less innovative, these requirements actually harmed the domestic market by raising prices for the public for products of lesser quality.

Because of just-in time production, concentrating on bread and butter trade facilitation issues like customs procedures, transportation and modern infrastructure is all the more important.  Since products need to be sold in many markets, adhering to international standards is essential for their international viability.

Second, countries need to adopt legal and regulatory processes for doing business that are transparent, predictable, streamlined and include input from all stakeholders. The ability for investors to enforce contracts, and high standards for labor and environmental protections along with an intolerance for corruption are all key considerations for businesses in deciding where to locate or source.
I have heard some voices suggest that these “doing business” issues don’t matter, and that companies merely want to find the lowest labor costs.  But in my experience, that’s not true.  The ability to do business transparently matters a great deal to the bottom line.  Morever, branded companies value their brand image, and don’t want to risk harming it due to scandals over labor or environmental conditions. Nor do they want to be in the position of being labor and environment regulators.  Besides the moral issues surrounding poor labor and environmental enforcement, the need to constantly oversee these practices among suppliers when countries are not policing them themselves adds a great deal of cost.

Fostering Global Collaboration Through the Internet

Third, an open Internet, access to broadband, and free flows of data are essential to competitiveness. As I mentioned earlier, global supply chains are dynamic and highly collaborative, with teams of suppliers and purchasers from various stages of the value chain working together across borders to solve design, manufacturing, and marketing problems.   This really is the essence of today’s connected world. This cannot occur without internet.

The best way to unleash the creativity and ingenuity of your people, your companies, and your universities is to let them connect with others to develop new ideas and start new businesses.

There is an inaccurate perception that the Internet mostly benefits industrialized countries.  The truth is that the Internet’s economic benefits are increasingly shifting to the developing world.  The Internet economy is growing at 15 to 25 percent per year in developing countries, double the rate in the developed world.  In Turkey, for example, smaller businesses that use the web have experienced revenue growth 22 percent higher than those that do not.  Here in South Africa, Ronnie Apteker founded the first Internet service provider and enabled countless new technology businesses.  I am looking forward to meeting some of those new entrepreneurs tomorrow.

A recent report by the American think tank, the Brookings Institution, showed how the internet and cross-border data flows are providing opportunities for small and medium-sized enterprises. The report notes that SMEs on eBay are almost as likely to export as large businesses and, in fact, over 80 percent of SMEs export to five or more countries.

Fourth, strong intellectual property protection allows countries to be part of a higher-value global supply chain. At a recent conference in Washington, General Electric noted that it maintains research and development centers in Shanghai, Bangalore, Munich, Rio de Janeiro and New York.  Many other international firms have similar R&D footprints.  This geographic diversity allows for an R&D operation that, given time zones, literally never stops.  Companies look at many factors when considering where to locate their R&D centers, including the level of education, vocational training, and scientific collaboration.  But the level of intellectual property protection is also critical.

Closely related to this is a fifth policy— an open market for services. We often think of trade as the physical movement of goods from place to place.  But in today’s global economy, knowledge-intensive trade and investment, particularly in the services sector, plays an increasingly central role.

Economists from the Organization for Economic Cooperation and Development have found that services now constitute 50% of the manufacturing process.  Insurance, accounting and other financial services, and creative and design services, are all integral parts of supply chains.  But in many countries, markets for these services are closed, or heavily regulated.   If the goal is to maximize participation in global value chains, closed market policies like these no longer make sense.

Regional Trade Liberalization

The policies I have set forth are important, but not sufficient to be globally competitive.  In addition to being islands of good practices, countries need to join together to create regions where those good practices are integrated.
Last August, I chaired a roundtable on global supply chains at the U.S-Africa Leaders Summit in Washington.  We invited corporate representatives as well as trade, investment, and economic ministers from African countries.
One of the most interesting themes was the need to create regional markets in Africa. Companies were clear that the markets in many individual countries in Africa are too small to support operations just for that market. That does not mean that there are no opportunities for smaller countries to benefit from the global supply chain.  In fact, recent research indicates that, on average, regional trade agreements increase member countries’ trade about 86 percent within 15 years.

The European Union is perhaps the largest, best known and most successful example or regional integration.  There is also the North American Free Trade Agreement, which just celebrated its 20th anniversary.  With Asia, we are now negotiating a Trans-Pacific Partnership, and with Europe we have launched talks on a Transatlantic Trade and Investment Partnership.
 
Arrangements such as these, which lower barriers to trade and investment, deliver a big boost to commerce in member countries. These arrangements also offer ready-made hubs for setting up a global supply chain.  Countries who haven’t established some type of true regional integration will find it harder to compete for the investment that a global supply chain brings.

In Africa, regional organizations like the Economic Community of West African States, the East African Community, and the Southern African Customs Union are working to create regional integration and address barriers so that countries can achieve economies of scale and maximize their comparative advantages.  Nelson Mandela recognized the importance of looking at regional integration when he  conceived of Development Corridors along cross-border  transportation routes.

Africa and Supply Chains

Here in South Africa, I had a wonderful illustration of the connected world yesterday at the Ford factory in Silverton.  It is an American investment, creating jobs in South Africa.  Inputs, like raw materials and components, arrive from various locations around the world.  Local workers assemble those components and the factory exports to other African countries and to European markets.
The United States recognizes Africa as a dynamic continent where economies are growing and innovation is taking root.  Many African countries are reaping the benefits of economic reforms, better governance and social investments.  We would like to be a part of this positive change and contribute to Africa taking its place in the global supply chain, so that the people of Africa can reap the benefits of global growth.

The United States is supporting Africa’s growth through the African Growth and Opportunity Act (AGOA), the Trade Africa Initiative, and similar efforts.  The Millennium Challenge Corporation, for example, has issued grants of almost $10 billion to support projects in sectors like transportation, education, and property rights and land policy.  Through President Obama’s Power Africa initiative, a number of U.S. agencies are making available $7 billion in financial assistance to double access to power in six sub-Saharan African countries.

Some continue to argue that African nations need “protectionism” to compete.  I disagree.  Africans are strong, resilient, and ingenious, and I have seen in my meetings with entrepreneurs, businesses, and students people who can go toe-to-toe with the most competitive companies in the world.  We need to go forward together towards openness, high standards, and opportunity for all of our citizens.

Thank you very much.

STATE DEPARTMENT FACT SHEET: BUREAU OF POPULATION, REFUGEES, AND MIGRATION

FROM:  U.S. STATE DEPARTMENT 
Fact Sheet
Bureau of Population, Refugees, and Migration
November 14, 2014

U.S. DEPARTMENT OF STATE and U.S. DEPARTMENT OF HOMELAND SECURITY

The United States is establishing an in-country refugee/parole program in El Salvador, Guatemala, and Honduras to provide a safe, legal, and orderly alternative to the dangerous journey that some children are currently undertaking to the United States. This program will allow certain parents who are lawfully present in the United States to request access to the U.S. Refugee Admissions Program for their children still in one of these three countries. Children who are found ineligible for refugee admission but still at risk of harm may be considered for parole on a case-by-case basis. The refugee/parole program will not be a pathway for undocumented parents to bring their children to the United States, but instead, the program will provide certain vulnerable, at-risk children an opportunity to be reunited with parents lawfully resident in the United States.

Applications for this program are initiated in the United States. Beginning in December 2014, a parent lawfully present in the United States will be able to file Department of State form DS-7699 requesting a refugee resettlement interview for unmarried children under 21 in El Salvador, Guatemala, or Honduras. Under certain circumstances, if the second parent resides with the child in the home country and is currently married to the lawfully present parent in the United States, the second parent may be added to the child’s petition and considered for refugee status, and if denied refugee status, for parole. Form DS-7699 must be filed with the assistance of a designated resettlement agency that works with the U.S. Department of State’s Bureau of Population, Refugees, and Migration to help resettle refugees in the United States. The form will not be available on the Department of State website to the general public and cannot be completed without the assistance of a Department of State-funded resettlement agency. These resettlement agencies are located in more than 180 communities throughout the United States. When the program is launched, the Department of State will provide information on how to contact one of these agencies to initiate an application.

Once a form DS-7699 has been filed, the child in his/her home country will be assisted through the program by the International Organization for Migration (IOM), which manages the U.S. Resettlement Support Center (RSC) in Latin America. IOM personnel from the RSC will contact each child directly and in the order in which the forms filed by lawfully present parents have been received by the U.S. Department of State. IOM will invite the children to attend pre-screening interviews in their country of origin in order to prepare them for a refugee interview with the Department of Homeland Security (DHS). DNA relationship testing will be required to confirm the biological relationship between the parent in the United States and the in-country child. After the IOM pre-screening interview but before the DHS interview, the lawfully present parent in the United States will be notified by IOM via the resettlement agency about how to submit DNA evidence of the relationship with their claimed child(ren) in El Salvador, Guatemala, or Honduras. If DNA relationship testing confirms the claimed relationship(s), IOM will schedule the DHS refugee interview.

DHS will conduct interviews with each child to determine whether he or she is eligible for refugee status and admissible to the United States. All applicants must complete all required security checks and obtain a medical clearance before they are approved to travel as a refugee to the United States. IOM will arrange travel for the refugee(s) to the United States. The parent of the child will sign a promissory note agreeing to repay the cost of travel to the United States. Approved refugees will be eligible for the same support provided to all refugees resettled in the United States, including assignment to a resettlement agency that will assist with reception and placement, and assistance registering children in school.

Applicants found by DHS to be ineligible for refugee status in the United States will be considered on a case-by-case basis for parole, which is a mechanism to allow someone who is otherwise inadmissible to come to the United States for urgent humanitarian reasons or significant public benefit. In order for the applicant(s) to be considered for parole, the parent in the United States will need to submit a Form I-134, Affidavit of Support, with supporting documentation to DHS. An individual considered for parole may be eligible for parole if DHS finds that the individual is at risk of harm, he/she clears all background vetting, there is no serious derogatory information, and someone has committed to financially support the individual while he/she is in the United States. Those children and any eligible parent considered for parole will be responsible for obtaining and paying for a medical clearance. An individual authorized parole will not be eligible for a travel loan but must book and pay for the flight to the United States. Parole is temporary and does not confer any permanent legal immigration status or path to permanent legal immigration status in the United States. Parolees are not eligible for medical and other benefits upon arrival in the United States, but are eligible to attend school and/or apply for employment authorization. Individuals authorized parole under this program generally will be authorized parole for an initial period of two years and may request renewal.

It is anticipated that a relatively small number of children from Central America will be admitted to the United States as refugees in FY 2015, given the anticipated December launch and the length of time it takes to be processed for U.S. refugee admission. Any child or parent admitted as a refugee will be included in the Latin America/Caribbean regional allocation of the U.S. Refugee Admissions Program, which is 4,000 for FY 2015. If needed, there is some flexibility within the U.S. Refugee Admissions Program to accommodate a higher than anticipated number from Latin America in FY 2015.

WHITE HOUSE VIDEO: BEHIND THE SCENES AT "IN PERFORMANCE AT SALUTE TO THE TROOPS"

Weekly Address: Open Enrollment Starts Today

WEST WING WEEK: 11/14/14

2 JAPANESE EXECUTIVES INDICTED IN PRICE FIXING, RIGGING BIDS CASE INVOLVING BEARINGS

FROM:  U.S. JUSTICE DEPARTMENT 
Friday, November 14, 2014
Two Executives of Japanese Automotive Parts Manufacturers Indicted for Their Role in a Conspiracy to Fix Prices and Rig Bids

A Kentucky federal grand jury returned a one-count indictment against two executives of Japanese automotive parts manufacturers for their participation in a conspiracy to fix prices and rig bids of bearings, the Department of Justice announced today.

The indictment, filed late yesterday in the U.S. District Court for the Eastern District of Kentucky in Covington, charges Hiroya Hirose an executive at NSK Ltd., and Masakazu Iwami an executive at Jtekt Corporation, with conspiring to fix the prices of bearings sold to Toyota Motor Corporation and Toyota Motor Engineering & Manufacturing North America Inc. (collectively, “Toyota”) in the United States and elsewhere, beginning at least as early as 2001 and continuing until as late as July 2011.

“The division will continue to pursue executives who violate the antitrust laws,” said Assistant Attorney General Bill Baer for the Antitrust Division.  “American consumers deserve the benefit of free competition between auto parts suppliers.”

Hirose was a group sales manager in NSK’s Mid-Japan Automotive Department Office from at least as early as January 2006 until at least 2009, and a general manager in that office from 2009 until at least 2011.  Iwami was a Section Manager, then General Manager, in Jtekt’s Toyota Branch office from at least as early as 1999 until at least October 2007, and then Vice Branch Manager in that office from October 2007 until at least June 2009.

The indictment alleges, among other things, that Hirose, Iwami, and co-conspirators participated in, and directed, authorized, or consented to the participation of subordinate employees in, meetings, conversations, and communications to discuss the bids and price quotations to be submitted to Toyota in the United States and elsewhere.  Hirose, Iwami, and their co-conspirators submitted bids and price quotations in accordance with the agreements reached at these meetings.

NSK is a corporation organized and existing under the laws of Japan with its principal place of business in Tokyo, Japan.  On Oct. 28, 2013, NSK pleaded guilty and agreed to pay a $68.2 million criminal fine for its role in the conspiracy.  Jtekt is a corporation organized and existing under the laws of Japan with its registered headquarters in Osaka, Japan.  On Dec. 3, 2013, Jtekt pleaded guilty and agreed to pay a $103.27 million criminal fine for its role in the conspiracy.  Both NSK and Jtekt were engaged in the business of manufacturing and selling bearings to Toyota in the United States and elsewhere for installation in vehicles manufactured and sold in the United States and elsewhere.

Including Hirose and Iwami, 46 individuals have been charged in the government’s ongoing investigation into market allocation, price fixing, and bid rigging in the auto parts industry.  Twenty-six of these individuals have pleaded guilty and have been sentenced to serve prison terms ranging from a year and one day to two years.  Additionally, 31 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of now more than $2.4 billion in fines.

Hirose and Iwami are charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Yesterday’s indictment is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by four of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the Antitrust Division’s Chicago Office and the FBI’s Cincinnati Field Office.

DOD SECRETARY SAYS ISIL "STALLED"

FROM:  U.S. DEFENSE DEPARTMENT 
Hagel: ISIL Degraded But Remains Dangerous
By Air Force Tech. Sgt. Jake Richmond
DoD News, Defense Media Activity

WASHINGTON, Nov. 13, 2014 – United States and coalition forces have made progress in recent months against the Islamic State in Iraq and the Levant, but the campaign will be “a long and difficult struggle,” Defense Secretary Chuck Hagel told Congress here today.

“We are three months into a multi-year effort,” Hagel said in testimony before the House Armed Services Committee. In some parts of Iraq, ISIL’s advance has been stalled and even reversed by Iraqi, Kurdish and tribal forces supported by U.S. and coalition air strikes. But ISIL still represents a “serious threat” to American interests, Hagel said.

The secretary stressed the importance of sustaining the regional and global coalition, which includes 16 more countries since Hagel’s last congressional testimony in September. More than 60 nations are now contributing to the fight against ISIL, Hagel said, with assistance ranging from air support to training to humanitarian aid.

“Coalition partners have carried out 130 airstrikes against ISIL in both Iraq and Syria,” Hagel said. “Coalition nations have also pledged hundreds of personnel to support our mission to train, advise, assist, and help build the capacity of Iraqi forces.”

Methods and Results

The comprehensive strategy to stop ISIL also focuses on supporting inclusive governance, undercutting ISIL’s flow of resources, countering ISIL’s messaging, and constricting the flow of foreign fighters, Hagel said.

The combined effort has yielded results in degrading and destroying elements of ISIL’s warfighting capacity and denying safe haven to its combatants. The secretary said that ISIL fighters have been forced to maneuver in smaller groups, hide their large equipment, and change their communication methods.

“Sustaining this pressure on ISIL will help provide time and space for Iraq to reconstitute its forces and continue going on the offense,” Hagel explained. “And as Iraqi forces build strength, the tempo and intensity of our coalition’s air campaign will accelerate in tandem.”

Governmental Factors

However, ISIL “will not be defeated through military force alone,” Hagel said. In Iraq, he said, “much more needs to be done to achieve political reform.” And in Syria, since there is no partner government to work with, Hagel said, military strategy will demand time, patience and perseverance to deliver results.
“The position of the United States remains that [Syrian President Bashar] Assad has lost the legitimacy to govern,” Hagel said. The U.S. and coalition goal, he explained, is to ultimately create conditions for a political settlement in Syria.
“We are still at the front end of our campaign against ISIL,” Hagel told the House panel. “Congressional support -- your support -- is vital for this campaign to succeed.”

DEFENSE SECRETARY HAGEL ANNOUNCES INCREASED INVESTMENT IN NUCLEAR DETERRENT TO FIX PROBLEMS

FROM:  U.S. DEFENSE DEPARTMENT   
Hagel Announces Changes to U.S. Nuclear Deterrent Enterprise
By Jim Garamone
DoD News, Defense Media Activity

WASHINGTON, Nov. 14, 2014 – Defense Secretary Chuck Hagel has announced a series of measures to increase investment in America’s nuclear deterrent after reviews found evidence of systemic problems in the enterprise.
Hagel announced the changes at a Pentagon press conference today before traveling to Minot Air Force Base, North Dakota, to speak with missileers about them.  The changes are the result of internal and external reviews Hagel ordered after a series of Associated Press stories disclosed problems in the nuclear force.
Retired Air Force Gen. Larry D. Welch and retired Navy Adm. John C. Harvey Jr. co-chaired the external review.

Nuclear Arsenal Safe

Hagel prefaced his remarks by assuring Americans that the nuclear arsenal is safe and secure. It can and must be better though, he said. “As long as we have nuclear weapons, we will and we must ensure that they are safe, secure and effective,” Hagel said.

Hagel said underfunding and a focus on two wars allowed the status of the nuclear deterrent to degrade. Service members accomplished the missions in the nuclear enterprise thanks to their own “heroic efforts.”

“The internal and external reviews I ordered show that a consistent lack of investment and support for our nuclear forces over far too many years has left us with too little margin to cope with mounting stresses,” Hagel said.
The reviews found evidence of systematic problems. These include manning, infrastructure and skill deficiencies. The reviews found “a culture of micromanagement and over-inspection,” the secretary said. Finally, the reviews found inadequate communication, follow-up and accountability.
Root Cause

“The root cause has been a lack of sustained focus, attention and resources, resulting in a pervasive sense that a career in the nuclear enterprise offers too few opportunities for growth and advancement,” Hagel said.

The secretary vowed to hold senior leaders accountable to ensure words match actions. “We must change the cultural perception of a nuclear enterprise, which has particularly suffered in the Air Force,” he said. “We must restore the prestige that attracted the brightest minds of the Cold War era, so our most talented young men and women see the nuclear pathway as promising in value.”

As part of this, the commander of the Air Force Global Strike Command will now be elevated to a four-star.

More funding is also crucial. The Air Force established a force improvement program for Global Strike Command and reallocated over $160 million in fiscal 2014 and $150 million in fiscal 2015. These will address some of the most urgent shortfalls. Hagel said missileers had to Fed-Ex a special wrench used in fastening warheads to missiles from base to base.

Some of the money will go to incentive pay for critical nuclear assignments.

Long-term Changes

Long-term changes are on the way, the secretary said. DoD is updating and standardizing inspections. The department wants to eliminate micromanagement, redundancies and administrative burdens that overtax the force and ultimately harm the mission.

“The Navy is reducing administrative distractions and is planning to both hire more than 2,500 workers and overhaul aging infrastructure at public shipyards, strategic weapons facilities and reactor training systems,” the secretary said.
The Air Force is planning construction to improve weapons storage facilities, will replace its Vietnam-era helicopters for ballistic missile security forces and is revamping training, evaluations and management of the nuclear force.
“Both services are elevating and reinforcing the nuclear mission, including in the budget request they’re preparing for fiscal year 2016,” Hagel said. “We will need to make billions of dollars of additional investments in the nuclear enterprise over the next five years.”

The secretary said the services are looking at a 10 percent increase in funding over five years. Today, the U.S. spends about $15 billion to $16 billion on our nuclear enterprise.