Judicial Watch has just dumped a new treasure trove of FBI emails regarding Deputy Director Andrew McCabe"s conflict check relative to the Clinton email investigation (for those who missed it, we reviewed all of McCabe"s many scandals here: "FBI Director McCabe Subject Of Three Separate Federal Inquiries Into Alleged Misconduct: Report"). Ironically, this particular FOIA request was filed in October 2016 under the Obama administration but they apparently just "didn"t have time" to get to it.
Judicial Watch today released 79 pages of Justice Department documents concerning ethics issues related to FBI Deputy Director Andrew McCabe’s involvement with his wife’s political campaign. The documents include an email showing Mrs. McCabe was recruited for a Virginia state senate race in February 2015 by then-Virginia Lieutenant Governor Ralph Northam’s office.
The news that Clinton used a private email server broke five days later, on March 2, 2015. Five days after that, former Clinton Foundation board member and Democrat party fundraiser, Virginia Governor Terry McAuliffe, met with the McCabes. She announced her candidacy on March 12. Soon afterward, Clinton/McAuliffe-aligned political groups donated nearly $700,000 (40% of the campaign’s total funds) to McCabe’s wife for her campaign.
Judicial Watch obtained the documents through a July 24, 2017, Freedom of Information Act (FOIA) lawsuit filed after the Justice Department failed to respond to an October 24, 2016, FOIA request
Among other things, the new FOIA dump reveals a panicked FBI"s efforts to enlist the support of an army of lawyers and public relations personnel to deal with the original Wall Street Journal article (see: "Clinton Ally Aided Campaign of FBI Official’s Wife") that first revealed McCabe"s ties to the Clintons and his simultaneous oversight of the Clinton email investigation.
But perhaps none of the newly revealed emails from Judicial Watch today are more important than the following one in which McCabe describes how FBI Director Comey was breifed on his ties to the Clintons just days before his wife announced her Senate bid (and subsequently received roughly $700,000 in political donations for Clinton-friendly PACs) and then confirmed that he "has no issue with it."
An October 23, 2016, email shows McCabe running the response effort to a Wall Street Journal article that was published that day, titled “Clinton Ally Aided Campaign of FBI Official’s Wife.” McCabe provides Michael Kortan, the assistant director of Public Affairs, his version of a timeline of events surrounding the Clinton investigation and his wife’s campaign. McCabe said he contacted then-FBI Chief of Staff Chuck Roseburg about Jill McCabe’s candidacy and was told that “the D [Comey] has no issue with it.” (Judicial Watch earlier this month released documents showing that McCabe finally did recuse himself from the Clinton investigation only a week before last year’s presidential election.)
Internally, the Wall Street Journal article started a flurry of emails among Mrs. McCabe’s campaign, Kortan, Director McCabe, and the FBI’s General Counsel. Part of that exchange is an email from McCabe to someone in the General Counsel’s Office: “Sucks pretty much. Buckle in. It’s going to get rough.” The colleague responds, “I know. It’s awful. I shouldn’t be shocked by now, but I really am appalled.” McCabe also forwarded the article to Comey who responded, “Copy.”
On October 24, 2016, a memo was sent to all Special Agents in Charge, Assistant Directors, Executive Directors and the General Counsel’s Office regarding the Wall Street Journal article discussing campaign activities concerning Mrs. McCabe. Kortan suggested that questions could be referred to his office and he attached an “Overview of Deputy Director McCabe’s Recusal Related To Dr. McCabe’s Campaign for Political Office.” The Overview itself was previously reported by Judicial Watch.
Meanwhile, the documents also show repeated use of the official FBI email system in connection with Mrs. McCabe’s political campaign.
On March 13, 2015, Mrs. McCabe emails to her husband’s official FBI email account a draft press release announcing her run for state Senate.
In August 2015, McCabe uses his official FBI email account to advise a redacted recipient to visit his wife’s campaign website: “Jill has been busy as hell since she decided to run for VA state senate (long story). Check her out on Facebook as Dr. Jill McCabe for Senate.”
On November 2, 2015, Mrs. McCabe forwards an email to her husband – then the Assistant Director in Charge of the FBI’s Washington Office – that accuses her opponent of extorting local businessmen. The email was sent to her husband’s official FBI account.
In summarizing these latest revelations, Judicial Watch President Tom Fitton said "these new documents show that the FBI leadership was politicized and compromised in its handling of the Clinton email investigation...it"s well past time for a do-over on the Clinton emails that requires a new, honest criminal investigation of her misconduct."
Empires get stupider and more corrupt as they age..
Why are US Green Berets, four of whom were recently killed, in Niger? Why does the US have at least 36 bases, outposts, and staging areas in Africa, located in 24 countries?Why does a website, TomDispatch, have to file a Freedom of Information Act request to get that information, which contradicts years of assurances from AFRICOM, the US’s African military command, that the US has only one base in Africa, in the Republic of Djibouti? Why is AFRICOM headquartered in Stuttgart, Germany? How does anything that happens in Niger, or most of the rest of Africa for that matter, affect anyone’s way of life in the US? Why do we say the dead were heroes protecting our way of life when the country where they died poses no threat?
The United States and Niger have a long-standing bilateral relationship. Our militaries have been stalwart allies focused on working together to deter and to defeat terrorist threats in the West African nation and across the Sahel region.
A war on a tactic, terror, can provide the rationale for anything. Terror is ubiquitous, it can be fought anywhere. Anyone who uses or threatens to use violence in furtherance of political or economic ends can be deemed a terrorist. Any “terrorist” who yells, “Death to the United States!” can be deemed a threat to Americans. Terrorism will never be eradicated, so the war against it is perpetual. President George W. Bush even arrogated the right to wage that war preemptively, before terrorists actually struck the US or its citizens. And that’s how the US finds itself in Niger, its “long-standing” and “stalwart” ally that 999,999 out of a million Americans can’t find on an unlabeled map.
The noninterventionist counsel in George Washington’s Farewell Address and John Quincy’s “In Search of Monsters to Destroy” speech has been relegated to the historical dustbin. The latest in a long line of justifications for America making the world safe for democracy, liberty, global order, or some other good thing came from John McCain. It might have come from McCain’s hero, Theodore Roosevelt (except that Roosevelt made no attempt to hide his disdain for those he regarded as inferior races). Or it might have come from Woodrow Wilson, either of the Bushes, or John F. Kennedy.
Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty.
-President John F. Kennedy’s Inaugural Address, January 20, 1961
When a nation has 36 military outposts on the least developed continent and over 800 around the globe, its running an empire, not Kennedy’s altruistic crusade.
It’s an empire for which the US can no longer afford to “pay any price,” if it ever could. The proponents and many beneficiaries of America’s imperial power recoil at mundane accounting considerations. However, the US government has over $20 trillion in debt, a fair proportion of which funded its empire, and over $200 trillion in unfunded pension and medical-care promises. Its biggest adversary may one day be the credit markets.
Costs are not just reckoned in treasure and blood, but the erosion of the US and its government’s stature in the world, encouraged and hastened by the two countries the US regards as its most threatening adversaries: Russia and China. This week, Secretary of State Rex Tillerson journeys to Pakistan “…with a demand that Islamabad do more to eliminate militant havens on its territory…” (Wall Street Journal, “U.S. Refocuses on Pakistan ‘Havens’,” 10/21-22/17 ) Outside of Washington most of us have to offer something to get something. Washington’s potentates demand, with an implicit or explicit “or else.” Military and intelligence capabilities that dwarf the rest of the world’s underwrites the hubris and the “or else.”
It’s ironic that the former exemplars of collectivist command economies, Russia and China, are offering the nations in their Eurasian orbit all sorts of goodies in furtherance of their Belt and Road Initiative (BRI), China will upgrade and expand Gwadar, Pakistan’s Indian Ocean port, and has given Pakistan $230 million to build a new international airport there. A 2,282-acre free-trade area is being established, with the China Overseas Port Holding Company holding a 43-year lease. Quite a contrast to the “demands” of the former exemplar of free trade and voluntary exchange, the US.
There are caveats concerning the BRI. It is being spearheaded by the Chinese and Russian governments. The book Successful Government Projects is thin; Government Boondoggles is a multi-volume set. China will write most of the checks, but it’s carrying a huge debt load that will one day implode. Historically the Eurasian region has been riven with conflict, and it’s not clear if those animosities can be submerged. India is leery of playing ball with long-time rival China.
Europe is the terminus for many proposed BRI infrastructure projects, giving the Europeans yet another reason to question their fealty to the US (see “Europe’s Lost Testicles,” SLL). Job-creating and wealth-building trade with the Eurasian axis, including a shot at BRI contracts, or more terrorism and unwanted immigration from getting along and going along with US interventionism in the Middle East and Africa?
The US’s ham-handed Middle Eastern forays have many nations in that region questioning their allegiance to the US and its petrodollar regime. Strategy regarding ISIS in Syria and Iraq has been particularly maladroit. The US was ostensibly fighting ISIS but actually using it as a regime change agent in Syria. With this contradictory policy the US has simultaneously managed to disappoint and anger both its allies favoring regime change via ISIS: Saudi Arabia, the Gulf monarchies, Turkey, and Israel, and its allies fighting ISIS: Syrian rebels, the Kurds, and Iraq. Sunday Tillerson demanded that Iraq expel the Iranian militias that have so effectively fought ISIS in Iraq and Syria.
Russia stood by long-time ally Syria and its leader, Bashar al-Assad, allied with Iran and Hezbollah, turned the battle against ISIS, and revealed US prevarications and ineptitude. Is it any wonder that Turkey, Saudi Arabia, and some of the Gulf states are making friendly overtures towards Russia and buying its weaponry, while edging toward the exit on the US and its petrodollar?
And that’s how you lose an empire. Impose prices you cannot pay and burdens you cannot bear upon yourself and your allies. Overestimate your strengths and underestimate your weaknesses. Do the opposite with your adversaries. Demand instead of listen, borrow instead of save, bully instead of bargain, bomb instead of negotiate.
The US could read the writing on the wall, let go of empire, accept inevitable multipolarity, and play a large and constructive role in it. Or it can suffer the fate its tired, delusional Deep State ordains: decay, defeat, the loss of the world’s admiration and respect, and moral, intellectual, and financial bankruptcy.
There’s no cause for optimism. On historical form empires get stupider and more corrupt as they age.
On October 4 in Niger in central Africa four American special forces soldiers were killed in an ambush by “fifty fighters, thought to be associated with ISIS [Islamic State], a US official said.” In the course of the attack, one US soldier was left behind when the others withdrew, and was subsequently found dead. Nigerien soldiers were also killed, and it is interesting to examine how US media outlets recorded this aspect of what was obviously a disaster for US Africa Command, AFRICOM, the organisation headquartered, bizarrely, in Germany, that has 46 military bases (that we know of) in that continent. (Niger, incidentally, is twice the size of Texas.)
ABC News reported that “a soldier from Niger also died from the attack” while CBS thought that “four Nigerien soldiers died,” and Stars and Stripes went with “several.” CNN’s tally was five but the New York Times didn"t mention Nigerien soldiers at all. Fox News, surprisingly, said that four were killed, as did the Washington Post and the Los Angeles Times, which even expanded to record that there had been eight Nigerien soldiers wounded.
It isn’t to be expected that the US media would ever concern themselves with deep research into how many foreign soldiers are killed in any of the countries in which the US is involved in armed conflict, but the sloppy reporting is a good indicator of the shrug factor.
And the western media continues to shrug about the deep involvement of the US military and the CIA in countries throughout Africa.
President Donald Trump claims he would win an IQ contest against his Secretary of State, Rex Tillerson (how bizarre and nationally demeaning that a President of the United States of America can stoop to such childish yah boo behaviour), but it’s a fair bet he would not be able to identify on a blank map of Africa the countries in which his armed forces are at present engaged in various degrees of conflict. As recorded by Alexis Okeowo in the New Yorker, “Publicly, Africa may not be on the radar of the Trump Administration, but it is a priority for the US military. At the moment, seventeen hundred members of the Special Forces and other military personnel are undertaking ninety-six missions in twenty-one countries, and the details of most are unknown to Americans.”
It is intriguing that the US military - the Pentagon - so rarely informs the public of their global operations, yet much of the world knows about them down to the last detail. For example, it’s obvious that the Taliban in Afghanistan are well aware of all the crash-and-bash US special forces assaults in villages, because they have become more expert in avoiding them and then concentrating on defeating the weak, corrupt, and increasingly ineffectual Afghan armed forces. Not only that, but they reap massive propaganda benefit from publicising the fact that the wham-bam kick-the-doors-down infidels have once again struck a blow for Islamic State recruiting efforts. In Africa, it’s much the same game, with no publicity until that becomes unavoidable because there has been a major disaster involving the deaths of US soldiers. (Mere injuries are never mentioned, but some reporters keep an eye on casevac [casualty evacuation] flights arriving for attention of the caring saints at the US military hospital in Landstuhl in Germany. The numbers are interesting.)
The United States military and the CIA have a large presence in Africa and, as recorded by Nick Turse in April, “A set of previously secret documents, obtained by TomDispatch via the Freedom of Information Act, offers clear evidence of a remarkable, far-ranging, and expanding network of outposts strung across the continent . . . AFRICOM lists 36 US outposts scattered across 24 African countries.”
According to the Pentagon “US forces are in Niger to provide training and security assistance to the Nigerien Armed Forces, including support for intelligence, surveillance and reconnaissance efforts, in their efforts to target violent extremist organizations in the region.” In fact, as CNN reports, “There are about 800 US troops in Niger and the US military has maintained a presence in the northwest African country for five years, with small groups of US Special Operations Forces advising local troops as they battle terrorist groups, including, Islamic State in Greater Sahara, the ISIS-affiliated Boko Haram and al Qaeda"s North African branch, al Qaeda in the Islamic Maghreb.” The place is a war zone, and citizens of the US and Europe have little idea about what’s going on in their names — and at their expense in cash, international credibility and growing distrust and hatred of the West.
Mind you, it’s unlikely that very many Chinese citizens are aware of the deep involvement of their country in the African continent, either. But the difference between ephemeral US policy and long-term Chinese strategy is that Washington seeks domination, while China seeks trade and gradual influence and trust.
While attending the UN General Assembly in September President Trump addressed the leaders of several African nations at lunch. He didn’t mention drones or Special Forces or CIA interrogation cells but made clear his enthusiasm for their countries by declaring that “Africa has tremendous business potential, I have so many friends going to your countries trying to get rich. I congratulate you, they’re spending a lot of money. It has tremendous business potential, representing huge amounts of different markets. It’s really become a place they have to go, that they want to go.”
It’s a pity he hadn’t read the Financial Times in June, when it sagely pointed out that in Africa “In the past 15 years the level of engagement by Chinese state-owned enterprises, political leaders, diplomats and entrepreneurs has put centuries of previous contact in the shade... While Europeans and Americans view Africa as a troubling source of instability, migration and terrorism — and, of course, precious minerals — China sees opportunity. Africa has oil, copper, cobalt and iron ore. It has markets for Chinese manufacturers and construction companies. And, perhaps least understood, it is a promising vehicle for Chinese geopolitical influence.”
Trump doesn’t read the FT or any other source of balanced information, but gets his news and forms his opinions from US television channels, which suits the military-industrial complex very well, as it can count on being unhindered by the White House as it expands its counter-productive military operations across the continent.
Not that China has avoided Africa militarily. Not at all. The United Nations records that China has some 2,600 troops in Africa — all of them firmly under command of UN peacekeeping missions in Congo, Liberia, Mali, Sudan and South Sudan. (The US contributes a total of 48 military personnel and 19 police to worldwide peacekeeping.) The duties of Trump’s soldiers in Africa are, in the words of their chief, General Thomas Waldhauser, to conduct “joint operations, protection of US personnel and facilities, crisis response, and security cooperation.”
General Waldhauser considers that “Just as the US pursues strategic interests in Africa, international competitors, including China and Russia, are doing the same. Whether with trade, natural resource exploitation, or weapons sales, we continue to see international competitors engage with African partners in a manner contrary to the international norms of transparency and good governance. These competitors weaken our African partners’ ability to govern and will ultimately hinder Africa’s long-term stability and economic growth, and they will also undermine and diminish US influence — a message we must continue to share with our partners.”
But the US doesn’t have any genuine partners in Africa. On the other hand, China has created many. As noted by Forbes, “In December 2015, President Xi Jinping ushered in a new era of ‘real win-win cooperation’ between China and Africa. This strategy aims to create mutual prosperity, allowing investors to ‘do good while doing right.’ China has backed this proposal up with a commitment of $60 billion of new investment in major capital projects, which are tied to developing local economic capacity. This level of commitment contrasts starkly with the action, or lack thereof from the West.”
The message is clear. The US military-industrial complex has overtaken and indeed supplanted State Department diplomacy in Africa, as elsewhere in the world, and is intent on escalating its military presence while China is quietly winning friends and influencing people by engaging in massive, well-planned economic projects. No prizes for deducing who is winning in Africa.
The event which according to many democrats cost Hillary Clinton the election (aside from Putin personally hacking the brains of several million middle-class Americans and forcing them to vote against Hillary, of course) is finally getting closure. On Thursday, the FBI turned over 7,000 new documents from Anthony Weiner’s private laptop to the State Department as part of a Judicial Watch"s freedom of information act lawsuit related to last year"s Hillary Clinton email case.
On Thursday, conservative watchdog group Judicial Watch and State Department representatives appeared in federal court in Washington, D.C., over the group"s FOIA suit seeking Clinton emails from her tenure at the State Department. During the hearing it was revealed that 7,000 new documents were turned over from Weiner"s notebook computer, the same computer which prompted James Comey to restart the FBI probe shortly before last year"s presidential election. The stack of emails is also expected to contain some emails sent by Weiner’s estranged wife, Clinton aide Huma Abedin.
Speaking to Fox News, Judicial Watch President Tom said that they expect to begin receiving those documents in three months, once the State Department determines whether the Weiner documents are government or personal records. Last November, the State Department was ordered to turn over 500 pages of Clinton-related documents a month to Judicial Watch.
Fitton, expressed his displeasure with the speed of the process, especially now that another 7,000 documents are being added to the pile. Based on the 500-page-per-month rate, Fitton does not expect to receive the Weiner laptop documents in full for more than a year “at best.”
“This pushes this out until 2020 and beyond,” Fitton told Fox News after the hearing Thursday. “Production is slow because the legal counsel is a holdover from the Obama administration—the folks that are responsible for slow-rolling this are still here.” State Department attorneys blamed the slow “drip” of documents on a lack of resources due to President Trump’s federal hiring freeze and a supposedly “diminished public interest” in the Clinton email case since November. It was unclear if said interest was said to be replaced with heightened public interest in the NSA"s leaks of emails from those in Trump"s closest circle.
“I can’t imagine the Trump White House is not interested in Clinton emails,” Fitton said. “Six months into the Trump administration and their lawyers are defending Hillary Clinton and the misconduct of the Obama administration.”
Judicial Watch has been seeking emails from Weiner"s laptop to find out whether Abedin was sharing sensitive government information on another non-government device. The sharing of such information was at the heart of the Clinton email investigation, after it emerged she used a personal server for government business while secretary of state. The unexpected discovery of related emails on the computer of Weiner led James Comey to briefly reopen the FBI"s case. Two months ago, Weiner pleaded guilty in connection with a sexting case.
In an Orwellian-sounding step, The White House has planted politically appointed aides in government agencies to monitor President Trump"s Cabinet secretaries’ loyalty (according to The Washington Post).
Barry Bennett, a former Trump campaign adviser, encouraged the embed strategy, however.
“Especially when you’re starting a government and you have a changeover of parties when policies are going to be dramatically different, I think it’s something that’s smart,” Bennett told the newspaper.
“Somebody needs to be there as the White House’s man on the scene. Because there’s no senior staff yet, they’re functioning as the White House’s voice and ears in these departments.”
The network of political appointees reports to Rick Dearborn, left, the White House deputy chief of staff for policy, according to administration officials.
As The Hill details,every Cabinet agency has an embedded appointee, with the job title senior White House adviser, who is situated near the secretary’s office, the newspaper reported.
These appointees report to the Office of Cabinet Affairs instead of the Cabinet secretary.
The appointees serve as observer and White House enforcers, the Post reports, ensuring that the agency’s leadership implements the president’s agenda.
Agencies with embedded appointees include large departments like Energy and Health and Human Services, as well as smaller agencies including NASA, records shared with the Post from a ProPublica Freedom of Information Act request show.
Some of the aides are reportedly being shut out by the secretaries and the aides.
Environmental Protection Agency Administrator Scott Pruitt has shut out the aide in his agency for offering unsolicited advise during his staff meetings, the Post reports.
Sounds very Orwellian even in the face of constant leaks - maybe better to full drain that swamp first?
The Obama administration spent over $36 million on FOIA lawsuits to keep its files secret and granted less than a quarter of public requests for government files in its last year in office, according to a new transparency report by the Associated Press. Having entered the White House with promise to be “the most transparent administration in history”, the Obama administration instead set records for denying, delaying or obstructing requests for government records under the Freedom of Information Act (FOIA), the AP reported on Tuesday, citing analysis of data provided by the US government..
The DOJ spent $12 million on legal fees to keep its files from the public, followed by the Department of Homeland Security at $6.3 million and the Department of Defense at $4.8 million. The three departments received more than half of the total FOIA requests made in 2016. During Obama"s final term in office, the number of FOIA lawsuits filed by news organizations increased drastically.
The Obama administration set many FOIA records last year, from the number of requests received which amounted to 788,769, to the massive amount spent on answering them - nearly half a billion, or $478 million to be exact. Obama"s team of of FOIA-ists could populate a small town: there were 4,263 full-time FOIA employees across over 100 federal agencies, 142 people more than in 2015.
The Obama admin also broke its own 2015 record in telling citizens, journalists and others who made FOIA requests that they couldn’t find a single page of the requested files, AP reported, without however quantifying the number of such cases.
Finally, under Obama, the US government also set records for denying access to files, refusing to quickly process requests described as particularly newsworthy, and denying requests for waivers of copy and research fees. In 77% of the cases, people who asked for records in 2016 received partly or fully redacted files, compared to 65 percent in 2009.
The AP report comes during “Sunshine Week,” an event organized in March each year by the American Society of News Editors to educate the public on the importance of open government.
Under the 1966 Freedom of Information Act, individuals can request copies of federal records for a nominal cost, or free if they can not afford to pay. The government is obligated to hand them over, unless the disclosure could harm national security, violate personal privacy, or expose confidential decision-making, exemptions which authorities - and especially Obama - constantly abuse.
“I will hold myself as president to a new standard of openness,” Obama said upon assuming office in 2009. “Transparency and the rule of law will be the touchstones of this presidency. It wasn"t and ironically, during the 2015 Sunshine Week, the White House exempted itself from the FOIA.
And so while in his first two months in office, the media has slammed Trump for everything from lying, to being hyperbolic, to engaging in all out war with the press, it is odd how little the media seemed to mind that Trump"s predecessor spent billions in taxpayer funds to make sure the truth never makes it to the public domain.
US Mint Releases New Fort Knox “Audit Documentation”: First Critical Observations
In response to a FOIA request the US Mint has finally released reports drafted from 1993 through 2008 related to the physical audits of the US official gold reserves. However, the documents released are incomplete and reveal the audit procedures have not been executed proficiently. Moreover, because the Mint could not honor its promises in full the costs ($3,144.96 US dollars) of the FOIA request have been refunded.
Thanks to my readers that donated to the crowdfunding campaign I’ve been able to force the US Mint through a Freedom Of Information Act (FOIA) request to hand over documents related to the physical audits of the US official gold reserves stored at the Mint; also referred to as Deep Storage gold. Although the PDF-package digitally sent to me is redacted, incomplete, includes pages copied twice and materials I didn’t ask for, it’s the closest thing that I’ve ever seen to physical audit documentation of gold at Fort Knox and the other Mint depositories drafted in between 1993 and 2008.
What is worrying is that the reports now in my possession reveal the audit procedures have not competently been executed. Combine that with the fact the documents are incomplete and redacted, and the result is suspicion of fraud. In this blog post we’ll have a first critical look at the reports and the problems to be found within.
For starters, allow me to expand on what I think happened at the Mint’s headquarter on the 8th floor at 801 9th Street NW Washington DC, before these documents were sent to me.
It should be clear that the US Treasury (owner of the gold), US Mint (main custodian), Federal Reserve Bank Of New York (second custodian), and the Office Inspector General of the US Treasury (head auditor), are reluctant to disclose information about the audits of the gold at the four largest depositories that store over 8,000 fine metric tonnes. Consider that the most seasoned gold analysts aren’t even aware this gold is audited.
What nobody knows is that according the US government 100 per cent of the Deep Storage gold has been audited in between 1974 and 2008 (page 4). This period can be divided in two chapters: the first runs from 1974 until 1986 when the Committee for Continuing Audit of the U.S. Government-owned Goldverified the majority of the Deep Storage metal. The second chapter covers 1993 until 2008 when the residual was examined under the supervision of the Office Inspector General of the US Treasury. In my previous posts on this subject we focused on the first chapter, what is written below skims the surface of the second. As promised, eventually I will publish a full in-depth analysis of all chapters (there are additional chapters in the fifties, from 1986-1993, in 2009, 2010 and 2011).
Over the years my inquiries at the US government though regular channels have produced little intelligence about the physical audits of the Deep Storage gold. Some departments cooperated at first, but eventually they stopped replying emails or just hang up the phone while I was talking. The second layer of defense was raised when I started submitting FOIAs. Instead of honoring my requests they tried to delay and dodge most appeals. Clearly, the US government prefers not to answer my questions than to flaunt with the audit results.
However, in 2016 I embraced the motivation to push through and find out how many gold bars were counted, weighed and assayed in between 1993 and 2008, when allegedly the last series of physical audits was conducted. Not surprisingly, zero US government departments could provide me the information I was looking for, but through certain FOIAs I obtained leads to submit new FOIAs, and so on 12 Augustus 2016 I demanded, inter alia, the “memoranda submitted by the US Mint Director’s representative regarding audits of the Mint Schedule of Custodial Gold and Silver Reserves to the Chief Financial Officer drafted from 1993 through 2008”. The Mint replied this request would costs me $3,144.96 dollars because it would take 40 hours to search the respective documents, 8 hours for review, and additional costs would be incurred to duplicate 1,200 pages. I thought this was hogwash – 1,200 pages seemed out of proportion for such memoranda, how hard can it be to find a few pages and how did they know it were going to be 1,200 pages if they had to search 40 hours for it – but decided to start a crowdfunding campaign to collect the money.
Within 24 hours the campaign was completed and late August 2016 I sent the Mint a check, in the hopes to receive the documents a.s.a.p.. After the Mint pretended the check was missing for a few weeks, they communicated on 28 September 2016 the funds had arrived and they were working to get the requested documents out to me (exhibit 1).
Exhibit 1. Screenshot email form the US Mint (Jones, Lateau). My FOIA request was originally dated from 1 August 2016, but was revised on 12 August 2016. Jan Nieuwenhuijs is my real name.
Months past but nothing happened. I sent several emails and called the Mint three times, but time and time again I was maintained with false excuses. Then, finally, on 23 December 2016 the Mint delivered the documents I paid for. Sort of. Instead of 1,200 pages I received 223 redacted pages that contained 68 pages of reports I didn’t ask for and 21 pages that were copied twice. Effectively, I got 134 pages related to my FOIA request.
When I confronted the Mint I paid $3,144.96 dollars for a meager 134 pages they agreed the costs had been estimated to high and a refund was reasonable. Actually, they told me they never cashed the check. So, quickly I told my bank to cancel the check and ordered my crowdfunding platform to refund all my donors.
As of now all donors to my crowdfunding campaign should have received their money back (if not, please write me an email, see below for my address). From the bottom of my heart I would like to thank everyone for the loan that made this operation possible1!
For me a slight doubt remained if the Mint had tried to fend me off by asking a disproportionate amount of money for a few pages that I assume are alphabetically archived, or that they handled my case in all honesty. A skeptical mind would think the former. To find out I read the internal emails of the Mint employees that handled my FOIA. Those are not directly publicly available, but I was told a trick by more experienced FOIA scholars that reached out to me after I published my previous blog posts on this subject, to ask the Mint for internal emails through, what else, a Freedom Of Information Act request (exhibit 2).
Exhibit 2. FOIA asking to obtain email correspondence written or received by Mint employees that was related to my case.
And it worked! On 10 January 2017 I received all (I hope) emails from the Mint I was looking for. Including one wherein Audit Liaison at the United States Mint Tom Noziglia makes an estimate for the costs of my FOIA request of 12 August 2016. Read below (exhibit 3).
Exhibit 3. Email by Noziglia to Saunders-Mitchell, Grimsby and Fletcher.
At first sight it seems Noziglia and his office stick to prudent protocols. But possibly this email is a veil, meant to deceive me if I would ever read it. Actually, yes, I think it’s a cloak and I’ll share my theory.
Exhibit 4. Screen shot LinkedIn page Tom Noziglia. Note, we can read he’s a schooled psychologist that was unemployed from 1985 until 2012 after which he started as auditor at the US Mint. I count 5 typos on this page, which suggests Noziglia is not the most meticulous auditor.
We can read from Noziglia, “as Audit Liaison at the US Mint, I [Noziglia] am responsible for the coordination of all external audit initiatives … I have extensive experience in precious metal inventory, … I … coordinate the execution of the annual OIG [Office Inspector General] Joint Seal Inspection of the Custodial Gold at the US Mint”. This page tells us Noziglia is one of the auditors of the US official gold reserves. So, the email above (exhibit 3) was written by the auditor who was involved in the procedures of which I requested the documentation. Noziglia must have known my inquiry could be simply honored by sending just a few pages of documentation, as he was a co-author of the documents in question.
Firstly, with the benefit of hindsight we know Noziglia was lying in his email because by now I have the documents that count only 134 pages, and he was the coordinator of the annual inspections of custodial gold at the Mint. He must have known there were no “1,200 pages in 80 boxes” and so his $2640.00 dollar estimate is a hoax. I think Noziglia wrote the email expecting I would NOT pay the ludicrous amount of dollars, but possibly DID submit a new FOIA to view the Mint’s internal emails. Chances are slim someone could pay $3,144.96 dollars right? But I’m not the first who submits an additional FOIA to obtain internal emails. Hundreds of people went before me, this is a well-known trick for FOIA pundits, and many public servants in the US must be aware of this hazard. Hence I reckon public servants consciously write emails to colleagues, as if these will be publicly released some day. I’ve come to understand submitting and answering FOIAs is nothing but a cat and mouse game.
Second, the Mint never cashed the check. If they really thought they would have to search 40 hours, why not cash the check immediately and get busy? I guess they knew very well there was no searching required.
Third, in case Noziglia had never seen a “memoranda submitted by the US Mint Director’s representative regarding audits of the Mint Schedule of Custodial Gold and Silver Reserves to the Chief Financial Officer”, which is not likely but let’s give him the benefit of the doubt, he could have viewed the most recent version at his office that wasn’t sent to the National Archives (NARA) yet. By doing so he would have learned very effectively these annual memoranda count only a few pages.
Fourth, Noziglia states in his email (exhibit 3) he’s not sure if he will find the documents at all. But this is impossible because he’s a dedicated Mint auditor so he must know what documents the Mint sends to NARA every year. In addition, there was no need for Noziglia to “order off site” boxes, because he simply could have commanded NARA staff to deliver specific documents – this is common practice.
Fifth, in the CC of Noziglia’s email is Kenyatta Fletcher, who is the Chief of the Accounting Division of the Mint. If, which is a big if, Noziglia didn’t know what I was looking for, Fletcher would’ve known these documents wouldn’t count 1,200 pages. But still I was charged a laughable $3,144.96 dollars.
Sixth, Noziglia’s estimate is $2.640.00 dollars, but I have no emails that clarify why $504.96 dollars were added for a total of $3,144.96 dollars I was charged. This indicates, Mint staff communicated in person or through phone calls to finalize my request, and so could have done likewise to handle it in general. Concluding, Noziglia’s email doesn’t paint the full picture of the internel communication.
Seventh, please read what Noziglia’s colleague Grimsby replied to him after 4 minutes.
Exhibit 5. Email by Grimsby to Noziglia.
“Great email”? Why would Grimsby praise Noziglia for his email? If Grimsby would have written,“I agree”, I can understand. But,“great email”? Perhaps Grimsby meant to write, “great calculation that makes no sense, but is likely deceive an ignorant FOIA requester if he would ever read it!”? It sure looks like it.
My guess is that Noziglia, Grimsby and Saunders-Mitchell met in the hallway in the afternoon of 15 August 2016 and agreed for Noziglia to write a phony email that arrives at an amount of dollars aimed to scare me off. In the email below you can read Noziglia suggested to Grimsby to discuss in person in the afternoon of 15 August 2016 the estimate for the costs.
Exhibit 5.2. Email by Noziglia to Grimsby 15 August 2016.
So far we’re confirmed, again, that the US gold is held in secrecy. No surprises there. Moving on to the content of the documents.
Audit Documents Released Are Incomplete
When one walks into a US Mint repository the main barrier will be the door to the vault room. In the case of Fort Knox this a 20-tonne door of which no one person is entrusted with the combination. Once inside the vault room the gold is stored in segregated compartments that are sealed since at least the fifties.
The official narrative is that by 2008 the load of all 42 compartments had been physically audited. Every compartment had been opened, the gold inside counted, weighed and assayed, after which the gold was stacked in an adjacent compartment in the vault room (in several documents it’s described this is the way the gold is physically audited). Subsequently the target compartment door was closed and placed under Official Joint Seal, if during the verification no discrepancies had been found with the Mint’s bullion ledger. In most years until 2008 one or two compartments were opened for a physical bar examination, while the other compartments were merely inspected for any tampering of the Official Joint Seal (OJS). The purpose of joint seals is to avoid the necessity of verifying all assets in each annual audit.
Thus the audits of the Deep Storage gold consist of two conventions gold verifications, which are the physical audits of gold bars inside the compartments. And OJS inspections, which are checks of the seals placed on the compartment doors. The superintendent in the audit procedures is the Office Inspector General of the US Treasury, in short, the OIG.
When reading the audit documents delivered to me (the Memoranda hereafter) the distinction between gold verifications and OJS inspections is clear. Let me show you an example of Fort Knox. The first screen shots below are from a gold verification at Fort Knox in March 1998.
Exhibit 7.1. Gold verification at Fort Knox March 1998, page 1.
Exhibit 7.2. Gold verification at Fort Knox March 1998, page 2.
Exhibit 7.3. Gold verification at Fort Knox March 1998, page 3.
Exhibit 8.1. OJS inspection at Fort Knox June 1998, page 1.
Exhibit 8.2. OJS inspection at Fort Knox June 1998, page 2.
Exhibit 8.3. OJS inspection at Fort Knox June 1998, page 3.
Exhibit 8.4. OJS inspection at Fort Knox June 1998, page 4.
Clickhereandhereto download all Memoranda sent to me by the US Mint.
After I had organized the documents and imported all data in spreadsheets I noted the 134 pages exclude 27 OJS inspection reports and at least 3 gold verification reports. I’ve asked the Mint to deliver the missing Memoranda, although I’m not expecting them to ever comply.
The fact 30 Memoranda are missing is of course highly problematic. Bear in mind, I offered the Mint $3,144.96 dollars to produce these documents.
Exhibit 9. Overview gold verification and OJS inspection reports Deep Storage gold. Note, throughout time the Memoranda format changed, so in some years one Memorandum included both gold verification and OJS inspection paragraphs.
In case you’re wondering how I know what gold verifications reports I’m missing, this is because references are made to these physical audits in succeeding gold verification reports. Fort OJS inspection reports, those should be done every year.
Below is an example of an Official Joint Seal. I obtained nearly all OJS copies from a separated FOIA request at the OIG.
Exhibit 10. OJS Fort Knox compartment 29.
Submitted a whole bunch of FOIA request at US government departments regarding Fort Knox today. #gold
Fort Knox Compartment 31 Was Opened In 1996 For Dubious Reasons
There are a couple of disturbing lines written in the Fort Knox OJS inspection report of 1996. Although for an OJS inspection seals should only be examined for tampering, on 12 August 1996 at the Fort Knox OJS inspection two representatives of the General Accounting Office (GAO) showed up in the vault room and decided to select “a single joint sealed compartment for opening and inspection”.
Exhibit 10. Fort Knox OJS inspection report 1996.
Unfortunately the report doesn’t say what was in the vault compartment; how many bars and fine troy ounces (FTO) it contained. Based purely on this document it would impossible to decipher what the GAO exactly did. However, by combining the info in the 1996 OJS inspection report with documentation obtained through a FOIA requests at the OIG, we do know what happened.
Have another look at exhibit 10. We can read Fort Knox compartment 29 was sealed in 1998. But the content, 19,800 gold bars weighing 6,470,624.049 FTOs before assays samples were taken, was sourced from compartment 31 that was sealed on 12 August 1996. Was compartment 31 the one opened by the GAO in 1996? Yes, without a doubt.
By examining all OJS copies – such as demonstrated in exhibit 10 – it shows there was no other vault segment freshly sealed on 12 August 1996 other than compartment 31. Moreover, the 1996 OJS inspection report mentions only one joint sealed compartment was breached. Therefore we know the GAO representatives opened Fort Knox compartment 31 comprising 19,800 gold bars weighing 6,470,624.049 FTOs on 12 August 1996.
Furthermore, in the 1995 OJS inspection report we read there was one compartment – the number is redacted – that contained 19,800 gold bars weighing 6,470,624.049 FTOs. And in 1995, 1996 and 1997 there were no gold verifications at Fort Knox as far as I know, other than the GAO incident. Have a look below at a screenshot from the 1995 Fort Knox OJS inspection report.
Exhibit 11. Fort Knox OJS report 1995.
What happened is that on 12 August 1996 compartment 31 was opened by the GAO to “check a few bars”, but then two years later in 1998 the same gold was verified by the OIG; all the gold inside taken out of compartment 31, counted, weighed and assayed, to be stored across the hall in compartment 29. This is suspicious. I quote, “the purpose of joint seals is to avoid the necessity of verifying all assets in each annual audit”.
I do not possess the official rules for US Mint OJS inspection and gold verification for the year 1996 (“MD 8H-1”), but based on the rules that prevailed in 1975, what the GAO did on 12 August 1996 was not done. Read with me.
How come the GAO could open a compartment? The OIG stated under oath in 2011, “since 1993, when we assumed responsibility for the audit, my office has continued to directly observe the inventory and test the gold” (page 4). If the OIG is responsible how come the GAO could break a seal?
Let’s contemplate this: if the “random checks” the GAO performed in 1996 in compartment 31 formed an adequate gold verification, why did the OIG re-audit the exact same gold in 1998? And what was the intention of the GAO in 1996? The GAO couldn’t fully audit compartment 31, because they were present at Fort Knox only for one day (12 August), and no single person or flock of auditors can verify 19,800 large gold bars in one day. The fact these 19,800 gold bars were re-audited in 1998 underlines what the GAO did in 1996 was inappropriate at best.
One theory is that the gold in compartment 31 was prepared in 1996 to be physically audited down the road. Remember what the Fort Knox gold verification report of 1998 stated (exhibit 7.2)? In 1998 the OIG, “selected predetermined individual bars to be drilled for assay”. Possibly, the OIG selected the exact bars in 1998 that were put in in 1996. If this is true the names and autographs of the perpetrators of this crime are on the seal of compartment 29 (exhibit 10).
My succeeding post on this subject will expose that many other Deep Storage compartments at the Mint have been opened for dubious reasons as well. Which could be the reason the Mint didn’t provide us ALL the OJS inspection reports from Denver and West Point from 1993 through 2003 (exhibit 9).
Weighing Sample Size Remarkably Low
We need to discuss the sample size of the gold verifications. In 1998 at Fort Knox 19,800 gold bars were inspected but only 105 of them were weighed and assayed (exhibit 7.2). That’s not much in my humble opinion. In any case, I expected a higher sample size.
In the 1953 audit at Fort Knox (download report here) in total 88,000 bars weighing 48,506,985 FTOs were counted for verification. About 10 % of those were weighed.
During the Continuing Audits from 1974 through 1986 it seems 2 % of the gold counted was weighed. A huge decline from 1953.
Although gold bars tested to be out of tolerance during a Fort Knox audit in 1977 at a sample size of 2 %, by 1998 the sample size had been further debased to 0.53 %. I’m not a professional auditor (if you are one please contact me), but common sense suggests that when irregularities are found the sample size should be increased, not decreased.
To make matters worse, in 1999 at West Point the sample size was 0.52 %, and again, a melt appeared to be out of tolerance.
Exhibit 14. Gold verification report West Point 1999.
Was the sample size increased after 1999? Not really. At Fort Knox in July 2000 the samples size was 0.65 % (93 bars weighed of 14,262 bars counted). But wait until I show you what numbnuts were entrusted handling the scale for the audits of the world’s greatest gold hoard.
Scale Didn’t Work, Repeatedly
Let’s study the 2004 physical audit at West Point. Please read:
Exhibit 15.1. Gold verification report West Point 2004.
Exhibit 15.2. Gold verification report West Point 2004.
When all parties tried to reconcile the weight of samples on 22 and 23 July 2004, they found out, “the scale was reading at ounces rather than fine troy ounces”, because, “a setting on the scale had not been properly changed”. Allegedly this is what caused alternative readings in the books of the Director of the Mint’s Representative and the OIG’s Representative. And presumably because nobody could figure out how to use the scale correctly they decided to postpone re-weighing the samples until 24 August 2004. This failure of how to use a scale is a colossal disaster for the credibility of the Deep Storage audit procedures.
In 2004 a mere 71 bars were weighed and assayed, but it appeared that none of the auditors present knew how to rightly use the scale. The Memoranda mentions they found out the scale wasn’t properly functioning when weighing the assay samples, but what about the weighing of the actual bars? What about the weighing of every Deep Storage gold bar under the supervision of the OIG from 1993 until 2008? We have no guarantee this has ever been executed competently.
To repeat, the official explanation for this blunder reads, “the scale was reading at ounces rather than fine troy ounces”, because, “a setting on the scale had not been properly changed”.
First, in my mind there can be no imaginable circumstances in which setting of the scale should have been changed. The scale should read troy ounces to as many decimals all day long. That’s it. Why change the settings?
Second, they say, “the scale was reading at ounces rather than fine troy ounces”, but scales don’t read fine troy ounces so this statement is fake. A scale reads troy ounces, or digital ones can be set to reading grams; it cannot smell what is the purity of the gold and thus display fine troy ounces. That’s what the assay test is for.
In 2008 at West Point a similar disaster happened. Read with me:
Exhibit 16.1. Gold verification report West Point 2008.
Exhibit 16.2. Gold verification report West Point 2008.
The auditors couldn’t clearly read the decimal point. After assay samples were drilled to be taken out, the auditors weighed the same amount of gold granules to replace the samples, in order for the Deep Storage FTOs to remain flat in 2008. But the assay lab, White Sands Missile Range, which is a division of the US Army, found out from the paper work that the weight of the assay samples didn’t match the weight of the granules. And so West Point compartment 10-H had to be re-opened on 22 September 2008 to put an exact 10.346 ounces of gold in, instead of 1.0346 ounces.
What a catastrophe! Be aware that before weighing the granules the auditors weighed 86 gold bars and the assay samples. How do we know they properly weighed the assay samples and the totals of the 86 bars? The short answer is, we don’t.
Thereby, anybody with a sense for gold can see the difference between 10 ounces and 1 ounce of yellow metal.
Conclusion
From the examples above it should be clear that the Deep Storage gold has not been audited by professionals, but the precious metals have been verified by imbeciles. Clearly the scale was repeatedly handled by amateurs, which throws a wrench at the integrity of the entire US official gold reserves auditing project. I’m not at all surprised the US Mint has tried everything to keep the records of the auditors out from the pubic domain. Fortunately most of it will be out in the open eventually. The citizenry of the world deserves to know everything there is about the Deep Storage gold.
Let’s finish with one more comment from the West Point 2006 audit report.
Exhibit 17.1. Gold verification report West Point 2006.
The auditors couldn’t figure how to use the drill to take assay samples (how about pointing the tip to a bar and press the button). They also were oblivious how to calculate fine troy ounces. We must wonder if these people would be capable of tying their own shoelaces. In any case, the fact the US government chose to assign very inexperienced people widely opens the possibility that the audits are a complete hoax.
As we noted previously, given the FBI has already "cleared" Flynn, the only possible path for escalation from here by the deep state, is to leak the actual recorded calls to the press, thus "proving" Flynn lied, assuming of course, he did.
...How do we know what was really said without the transcript? The New York Times tells us...
"During the Christmas week conversation, he urged Mr. Kislyak to keep the Russian government from retaliating over the coming sanctions — it was an open secret in Washington that they were in the works — by telling him that whatever the Obama administration did could be undone, said the officials, who spoke on the condition of anonymity because they were discussing classified material. Federal officials who have read the transcript of the call were surprised by Mr. Flynn’s comments, since he would have known that American eavesdroppers closely monitor such calls. They were even more surprised that Mr. Trump’s team publicly denied that the topics of conversation included sanctions. Prosecutions in these types of cases are rare, and the law is murky, particularly around people involved in presidential transitions. The officials who had read the transcripts acknowledged that while the conversation warranted investigation, it was unlikely, by itself, to lead to charges against a sitting national security adviser."
I have so many issues with the above reporting it’s hard to know where to start. Everything mentioned above is given to us secondhand via “anonymous American officials.” Nowhere do I see any specific quotes from the transcript, despite the fact that the paper admits it talked with federal officials who read it. Why not? Why must we hear about the content of the transcripts secondhand from anonymous officials? This is the most significant red flag with this whole story. If the leakers were truly interested in transparency, and wanted the public to know the truth, why not leak the transcript to Wikileaks and let the public decide?
I’ll tell you why. They didn’t do this because transparency was never the goal here. They wanted to illegally use intelligence information to take a scalp from a Trump administration they hate, and they knew they could do this via mainstream media journalists. I know what you’re thinking, Edward Snowden didn’t leak everything to Wikileaks either. He likewise picked a few journalists and trusted them to responsibly report the information. How is this any different?
It’s different in two important respects. First, we are talking about a single transcript, or a few transcripts, as opposed to the enormous intelligence data-dump that Snowden provided. Secondly, The Intercept and others who reported on the Snowden material provided a huge amount of primary source documentation for the public to see so that it could come to its own conclusion.
They didn’t simply tell everyone what to think about leaked documents while refusing to share any actual content. Where are the specific, comprehensive quotes from the Flynn transcript? Why doesn’t the public have a right to see the entire thing? Instead, we are being told what happened and what to think via secondhand anonymous sources. Sorry, but this doesn’t cut it for me.
I have yet to see any excerpts from the transcript. All I’ve seen is what anonymous officials say was discussed. This is absurd. We the people should demand the content of the relevant transcripts so we can decide for ourselves just how bad Flynn’s actions were. In the absence of this, we’re essentially being manipulated on a massive scale by rogue intelligence agents and told what to think through the major newspapers. This doesn’t cut it for me. I want to see the content of these conversations so I can make up my own mind. Perhaps it’s even worse than we know. So be it. We should be treated as adults and allowed to see the actual conversation if it’s going to be made into a story of such huge national importance.
Today, absent any adults in the room, we learn that conservative watchdog Judicial Watch is planning to sue several government agencies if they do not hand over records related to the wiretapping of former National Security Adviser Michael Flynn. The group filed Freedom of Information Act requests for the records weeks ago but are planning to sue by next week for the records if they do not receive anything by then.
Judicial Watch filed the requests with the FBI, NSA, CIA, and Treasury Department, according to the group’s Director of Investigations and Research Chris Farrell. Below is a tweet from Judicial Watch President Tom Fitton on the National Security Advisor scandal.
The unprecedented FBI/DOJ investigation of Flynn and @realDonaldTrump transition reeks of corruption. @JudicialWatch investigating.
"it would be a very narrow universe of persons who would have had access to that classified material. Even the number of persons who would have access should be definable. That sort of communication intelligence, or comment collection activity is very specific. The list of people is narrow."
Rest assured, Judicial Watch is committed to uncovering the truth and holding those individuals accountable who may have broken the law.
One way or another the "leaking" intelligent officials need to "put up or shut up" with their Flynn allegations - leak (or release to JW) the transcript or stop the fake news supposition.
Over the weekend, openly defiant CEOs, particularly among the tech sector, expressed their displeasure with Trump"s Friday executive order temporarily banning refugees and limiting travel from seven Muslim countries, with both words and deeds, among which the following (summary courtesy of Axios):
VCs funding the ACLU: Several venture capitalists, as well as a few entrepreneurs, took turns soliciting donations to the American Civil Liberties Union through social media and personally matching those donations.
Airbnb volunteers to help provide housing for impacted immigrants: The home-sharing company said that it will work with travelers and organizations to provide housing for those impacted by the executive order, whether through volunteer hosts or by funding housing.
Lyft and Uber commit millions of dollars to legal aid: On Sunday, Lyft said it will donate $1 million to the ACLU over the next four years. Later in the day, Uber said it will create a $3 million legal defense fund for impacted drivers, as well as provide legal assistance and compensate their lost wages.
Google is setting up a $2 million crisis fund: The search giant has set up a fund that will donate to the American Civil Liberties Union, Immigrant Legal Resource Center, International Rescue Committee, and UNHCR.
On Monday morning, former US Treasury Secretary Larry Summers, speaking in an interview with Bloomberg Television, said that he is “gratified” by what he heard from the tech community. “As global businesses, they have a huge stake in the United States being a nation of the Statue of Liberty rather than being a nation of refugee camps.” He added that “they have a huge stake in the United States supporting an open and tolerant global system, they have that stake for their employees, their customers, they have it for the reputation of the United States and they have spoken out.”
Donald Trump sitting down with tech CEOs during less turbulent times.
That may be, but the biggest reason for the anger by tech CEOs at the Trump administration is a simple, and a more selfish one. The reason for the simmering cold war between tech CEOs and Trump can be summarized in just three letters: H1-B.The bottom line is that tech CEOsfear Trump will single them out for outsourcing jobs or shut down the so-called H-1B visa program they use to hire high-skilled foreign employees for crucial engineering and technical jobs.
And, as Axios adds, White House officials say they are right to be nervous, especially about changes to the visa program. Chief strategist Steve Bannon and policy chief Stephen Miller are known to be deeply skeptical of the program, and will have a strong, vocal ally when Jeff Sessions gets confirmed as Attorney General. Some further observations:
Trump"s mixed messages: On the campaign trail, he promised to "end forever the use of H-1B as a cheap labor program." He later signaled in a meeting with tech leaders that he"s most concerned about companies misusing the visas to displace lower-wage American workers.
How it works: Visas are capped at 65,000 a year, with 20,000 additional visas for foreign workers with master"s degrees. The demand for the visas is so high that the cap is usually exceeded within a few days of the application window opening. The visas are distributed to companies through a lottery system.
Tech companies such as Microsoft, Google, IBM, Cisco, Apple, Intel and Facebook say the visas are crucial for specialized jobs they can"t fill domestically because of a shortage of American graduates with the right technical skills. When CEOs spoke out over the weekend about the ban, they pointed out the importance of allowing the "best and brightest" to work in the U.S.
* * *
Which is why if a news report about Trump"s next imminent executive order is accurate, the simmering cold war between the tech CEOs and Trump is about to nuclear.
Bloomberg reports that the Trump administration has drafted an executive order aimed at overhauling the work-visa programs technology companies depend on to hire tens of thousands of employees each year. If implemented, the reforms could force wholesale changes at India companies such as Infosys Ltd. and Wipro Ltd., and shift the way American companies like Microsoft Corp., Amazon.com Inc. and Apple Inc. recruit talent. Companies would have to try to hire American first and if they recruit foreign workers, priority would be given to the most highly paid.
The draft of Trump’s executive order covers an alphabet soup of visa programs, including H-1B, L-1, E-2 and B1. The first is a popular program with technology companies and is aimed at allowing them to bring in high-skill workers when they can’t find local hires with the appropriate skills. The legislation caps the number of people who can enter the U.S. annually at 85,000, including those with undergrad and master’s degrees.
The average salary of an H-1B worker at Apple is reportedly more than $100k.
“Our country’s immigration policies should be designed and implemented to serve, first and foremost, the U.S. national interest,” the draft proposal reads, according to a copy reviewed by Bloomberg. “Visa programs for foreign workers … should be administered in a manner that protects the civil rights of American workers and current lawful residents, and that prioritizes the protection of American workers -- our forgotten working people -- and the jobs they hold.”
The foreign work visas were originally established to help U.S. companies recruit from abroad when they couldn’t find qualified local workers. But in recent years, there have been allegations the programs have been abused to bring in cheaper workers from overseas to fill jobs that otherwise may go to Americans. The top recipients of the H-1B visas are outsourcers, primarily from India, who run the technology departments of large corporations with largely imported staff.
“If firms are using the program for cheap labor, I think it will affect them and they will have to pay workers more,” said Ron Hira, an associate professor at Howard University. “If tech firms are using the program for specialized labor, they may find there are more visas available.”
The Trump administration did not respond to a request for comment on the draft. The proposal is consistent with the president’s public comments on pushing companies to add more jobs to the U.S., from auto manufacturing to technology.
It’s not clear how much force the executive order would have if it is signed by the president. Congress is also working on visa reforms and the parties will have to cooperate to pass new laws. Zoe Lofgren, a Democratic congresswoman from California, introduced a bill last week to tighten requirements for the H-1B work visa program.
"My legislation refocuses the H-1B program to its original intent – to seek out and find the best and brightest from around the world, and to supplement the U.S. workforce with talented, highly-paid, and highly-skilled workers,” Lofgren said in a statement.
Meanwhile, as Bloomberg adds, India’s technology companies, led by Tata Consultancy Services Ltd, Infosys and Wipro, have argued they are helping corporations become more competitive by handling their technology operations with specialized staff. They also contend the visa programs allow them to keep jobs in the U.S. and that if they have to pay more for staff, they will handle more of the work remotely from less expensive markets like India. Trump, however, see things differently.
“Inspections and investigations in the past have shown no cases of wrongdoing by Indian IT services companies, which have always been fully compliant with the law,” said R Chandrashekhar, president of Nasscom, the trade group for India’s information technology sector. “The industry is open to any kind of checks in the system, but they should not cause any hindrance to the smooth operation of companies.
The proposed Trump order is also aimed at bringing more transparency to the program. It calls for publishing reports with basic statistics on who uses the immigration programs within one month of the end of the government’s fiscal year. The Obama Administration had scaled back the information available on the programs and required Freedom of Information Act requests for some data.
Whatever specific changes are implemented, they are likely to add to the expenses for India’s technology companies. That may accelerate a shift to new kinds of services, such as cloud computing and artificial intelligence, said Raja Lahiri, partner at the Mumbai-based partner at consultancy Grant Thornton India
“The visa challenges are not going to go away easily,” he said. “They will continue to be a challenge for Indian IT companies.”
But while the pain for India will be acute, it will be Silicon Valley that may be most impacted, as suddenly its favorite source of cheap, skilled labor is eliminated. How it will responds remains to be seen.
