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Sunday, March 29, 2009

The Woman Who Could Nail Bush

by Scott Horton
The Daily Beast
March 26, 2009

Forget nanny issues and unpaid taxes. The GOP is threatening an ugly fight over an Obama Justice Department appointee who wants to disclose more Bush-era torture memos.

Until recently, the Justice Department’s Office of Legal Counsel, often considered the “brains” of the department, has been known mostly to legal experts. But for the past eight years, it was the epicenter of allegations of political manipulation and, worse, the source of infamous memoranda on torture. In tapping Eric Holder as attorney general, President Obama has promised to restore standards of professionalism to the department. For Republicans, this is tantamount to a declaration of partisan war.

The real reason for their vehement opposition is that Johnsen is committed to overturning the Bush administration’s policies on torture and warrantless surveillance that would clip the wings of the imperial presidency.

On March 19, the nomination of Indiana University law professor Dawn Johnsen to head the OLC was endorsed by the Judiciary Committee with every Republican voting against her and Sen. Arlen Spector (R-PA) abstaining. The nomination was to have been brought to the Senate floor for a vote on Monday and then again on Wednesday, but it has been held back. Republican leaders, it appears, are playing with the notion of making Johnsen the target of their first filibuster.

The highly credentialed Johnsen is an improbable target, and OLC was long viewed as an obscure post. But Johnsen served as a lawyer for the American Civil Liberties Union and the National Abortion & Reproductive Rights Action League. Antiabortion groups have targeted Johnsen over the last three weeks with a massive telephone, email, and letter-writing campaign, demanding that senators oppose her nomination.

Johnsen is labeled a “radical, pro-abortion activist,” although her views on the abortion issue line up very closely with the mainstream. While the noise surrounding the Johnsen nomination appears on the surface to be about the abortion issue—over which her position at OLC would have very little influence—discussions with Republican stalwarts reveal that their main concerns lie elsewhere.

The real reason for their vehement opposition is that Johnsen is committed to overturning the Bush administration’s policies on torture and warrantless surveillance, which would clip the wings of the imperial presidency. Even more menacingly (from their perspective), she is committed to shining a light on some of the darkest skeletons of the Bush years.

Already, publication of OLC memoranda authorizing torture, approving warrantless surveillance, and pronouncing the First and Fourth Amendments a dead letter in connection with domestic military operations has rocked the public. More memos, potentially even more disturbing, I have learned, are about to be made public soon. Yet these are difficult issues on which to attack Johnsen, other than through vague suggestions that she is “weak on national security.” Hence the steady stream of accusations linked to her largely irrelevant views about abortion rights.

Will the Republicans attempt to filibuster the Johnsen nomination? The threat is sufficiently serious to have provoked the editors of the New York Times to editorialize in support of Johnsen on Thursday. Calling the operation of OLC in the Bush era “lawless,” the editors wrote, “Ms. Johnsen is superbly qualified and has fought for just the sort of change the office needs.”

The controversy surrounding Johnsen provides a flashpoint for President Obama’s nominees for administration legal posts. Unsurprisingly, they look an awful lot like Barack Obama—strong legal credentials, an academic bent, and liberal attitudes balanced by a strong commitment to political pragmatism.

Obama’s top picks start with a couple of well-known Washington names. Eric Holder, the nation’s first black attorney general, was a career Justice Department attorney who spent his formative years as a prosecutor in the department’s Public Integrity Section (much-criticized for abuse under Bush). He spent time as a U.S. attorney, a judge, and ran the Justice Department for a while as deputy attorney general in the Clinton years. Obama’s White House counsel, Greg Craig, is a Washington fixture at the powerhouse Williams & Connolly law firm. The former foreign-policy aide to Sen. Edward Kennedy and State Department official has handled high-profile cases from Clinton’s impeachment defense to representing the father of Elian Gonzales.

In the way of Washington, he is also has ties to powerful Republicans, including Karl Rove and Alabama Sen. Richard Shelby, whom he successfully represented in a sensitive FBI investigation into the leaking of classified data.

But delving deeper into the list, the names are less known for pragmatic politics and inside-the-Beltway experience than for pure intellectual firepower. Nearly a quarter of all Obama nominees have a Harvard degree.

No fewer than 11 Harvard Law School faculty members drew appointments in the Obama team, including the dean, Elena Kagan, who was also deputy domestic-policy adviser to President Clinton. He also tapped Yale’s law-school dean, Harold Koh, widely thought to be a possible Supreme Court appointment, to serve as the principal lawyer at the State Department. Obama has mined the University of Chicago, the University of Michigan, and Georgetown. All these schools are being forced to scramble as professors announce the cancellation of classes and prepare to depart for Washington.

A scan of the names involved makes clear that Obama is not looking for any particular ideological line—the candidates tapped range from centrist conservatives to traditional liberals. But he clearly is seeking individuals highly regarded by their peers who are on top of the issues for which they will have responsibility.

The trio of appointments Obama announced for the OLC underscores this point. In addition to Johnsen, Obama chose Harvard law professor David Barron and Georgetown law professor Marty Lederman as her two deputies. The three nominees have similar histories. Each served in the OLC in prior administrations before departing for academia. And over the last eight years, each spent a good deal of time and energy studying and criticizing the conduct of the OLC in the Bush years.

Barron and Lederman co-authored a highly regarded two-part historical study of presidential powers, which demolished the underpinnings of the most significant OLC memoranda authored by John Yoo, including the famous torture memorandum. The three may well have been the Bush OLC’s most vocal critics, highlighting its departure from traditions and practices of earlier administrations.

All three were also sharply critical of the Bush team’s devotion to secrecy in the formation of legal policy. It is therefore unsurprising that the Obama team has moved very quickly to publish the previously secret opinions that their Bush predecessors issued and to overturn those decisions. It would be hard to identify three lawyers more knowledgeable about the subject than Johnsen, Barron, and Lederman.

In the coming two weeks, their push for transparency will result in the publication of more Bush-era OLC memos, including the specific approvals granted for waterboarding, extended isolation, and other torture techniques—memos that the Bush administration has sought to keep secret.

Former CIA Director Michael Hayden and Obama adviser John Brennan are said to have “gone to the mat” to keep the opinions secret, but Obama sided with his designated OLC team and upheld the decision to declassify and publish them.

Harvard law professor Laurence Tribe, one of the nation’s leading constitutional scholars and Supreme Court advocates, and Obama’s former teacher, is often mentioned as an adviser in the background, a gray eminence, counseling Obama on appointments and policy choices. He is widely believed to covet an appointment to the Supreme Court, though, at 67 years old, he might be passed over for a younger person.

While Tribe is a regular target of the right and closely connected to an array of liberal causes, those familiar with his role in the recent appointments process say that he has steadily advised Obama to avoid ideological confrontations and stressed pragmatism as an important quality for appointees.

Another legal academic said to figure in Obama’s inner circle is Harvard law professor Cass Sunstein, who until recently was a colleague of Obama’s at the University of Chicago Law School.

Sunstein has been appointed to head the White House Office of Information and Regulatory Affairs, while his wife Samantha Power, a Pulitzer Prize-winning author, serves as chief on the National Security Council as head of international organizations. Sunstein is associated with the notion of judicial minimalism, arguing that decisions should be taken on the narrowest possible case-specific grounds so as to preserve a broader range of options in future cases. The executive orders that Obama issued in his first two days in office were widely seen as following Sunstein’s minimalist approach in confronting a range of national-security issues on which Obama has pledged changes.

Unlike Obama, a professor of law, George W. Bush was noted for a sharp disdain for lawyers. He liked to make disparaging jokes about attorneys in pinstripes and tasseled loafers. “I don’t care what the international lawyers say, we are going to kick some ass,” he barked as the war on terror got under way, according to former counterterrorism chief Richard Clarke.

Through the Bush administration, appointment to high-level legal positions was usually a reward for faithful service—as personified by Alberto Gonzales, who as counsel to the president and attorney general arguably held the two most powerful legal posts. Gonzales’ entire career, as a partner at the prestigious Houston firm of Vinson & Elkins, in Texas state government, and finally in Washington, was marked by service to a single client: George W. Bush.

The Bush administration’s overriding concern was for political loyalty. It demanded individuals who would unquestioningly implement the White House’s directives. The notion of independent professional judgment was derided as counterproductive at best and a cloak for liberal activism at worst. To that end, selecting the best and the brightest was not advisable. Where prior administrations looked for the top graduates from the nation’s elite law schools, the Bush team scoured schools not found in a list of the top-100 law schools (and sometimes not even ABA-accredited), but with strong ties to the religious right and the Republican Party.

Justice Department officials openly asked job candidates whether they had worked for the Bush-Cheney campaign and contributed money and quickly rejected those whose offense was support for John McCain in the 2000 Republican primaries. Membership in the movement's conservative legal organization, the Federalist Society, was also a plus if not essential—in recently disclosed emails, former Bush-era U.S. attorney and Civil Rights Division Director Bradley Schlozman (whose case is now under review for the possible filing of criminal charges) called them “ideological comrades.” The result was a Justice Department filled with political hacks in appointed positions and a historically unprecedented level of politicization in its decision-making process.

The Obama nominees, presenting the sharpest possible contrast, have drawn sputtering fire from Republicans in Congress and have come under broad attack from religious-right leaders who previously had strong influence in Justice Department picks. Dawn Johnsen is an interesting test case. If the Republicans opt for a filibuster or move to line up a unanimous GOP vote in opposition, it will be a shot across the bow of the Obama Justice Department.

Scott Horton is a law professor and writer on legal and national-security affairs for Harper's magazine and the American Lawyer, among other publications.


Friday, March 27, 2009

The Dirty Dozen

Meet the bankers and brokers responsible for the financial crisis - and the officials who let them get away with it.

Mar 25, 2009

The Enabler

WAS Chairman of the Federal Reserve (1987-2006)
WHAT HE DID Pushed for sweeping power to regulate Wall Street — and then failed to use it. Fueled "irrational" bubble with low interest rates.
WORST MOVE Called derivatives like CDOs "extraordinarily useful"; regulating them would be a "mistake."
NOW ADMITS He was "partially" wrong to not impose tougher oversight.

The Pioneer

WAS CEO of Citigroup (1998-2003)
WHAT HE DID Created the first too-big-to-fail company, Citigroup. Led the boom in subprime mortgages.
RECENTLY Celebrated $45 billion taxpayer bailout of Citi by taking Mexican vacation on Citigroup jet, complete with $13,000 carpets, pillows made from Hermés scarves, and Baccarat crystal glassware.

The Ideologue

WAS Senate Banking Committee chair (1995-2000)
KNOWN AS "High priest of deregulation"
WHAT HE DID Pushed repeal of Glass-Steagall Act, leading to rise of megabanks.
WORST MOVE Wrote law that exempted disastrous CDS deals from all regulation.
NOW ADMITS Nothing. Says there is "no evidence" his laws caused crash, which he dismissed as a "mental recession."

The Arsonist

WAS Chief of AIG Financial Products (2001-2008)
WHAT HE DID Blew a $500 billion hole in fabric of the universe by placing massive bet on the bubble economy with money he didn't have.
WORST MOVE In August 2007 told investors his CDS deals could not lose even "$1"; lost $352 million that quarter.
NOW Enjoying his $280 million in earnings.

The Bagman

WAS Treasury secretary (1995-1999)
WHAT HE DID Opposed regulation of credit swaps; fought to overturn Glass-Steagall Act, leading to creation of Citigroup, where he later made $115 million.
WORST MOVE Asked Treasury to pressure ratings agencies to delay downgrading Enron, a Citigroup debtor.
NOW Still on Citi's board; mentor of Treasury Secretary Geithner.

Mr. Buck Passer

WAS Chairman of the SEC (2005-2009)
WHAT HE DID Gave the market a free ride, waiting until far too late to reverse the disastrous "voluntary regulation" program of 2004 and police the ratings agencies.
LAME EXCUSE Insisted it wasn't his fault, claiming deregulatory policies tied his hands.
NOW SAYS His "greatest contribution" during the crisis was staying "calm."

The Predator

WAS Head of Countrywide Financial (1969-2008)
WHAT HE DID Biggest provider of subprime mortgages; specialized in predatory loans that put broke people in mansions.
WORST MOVE "Friends of Angelo" program gave favorable mortgages to Sens. Chris Dodd and Kent Conrad.
NOW SAYS Called plea from homeowner facing foreclosure "disgusting."

The Decorator

WAS Chief of Merrill Lynch (2007-2009)
WHAT HE DID Concealed $15 billion hole in Merrill balance sheet until government subsidized the sale of his company. Went skiing in Vail just before revealing losses.
WORST MOVE Proposed $10 million bonus for himself as company imploded; OK'd $1.2 million office refurbishing.
IS NOW Facing class-action suit for concealing losses.

The Maestro

WAS CEO of Goldman Sachs (1999-2006); Treasury secretary (2006-2009)
WHAT HE DID Pushed for end to debt restrictions for banks like Goldman, then arranged big bailout for Goldman.
WORST MOVE TARP proposal just three pages long; made his decisions "non-reviewable."
NOW SAYS "I don't think we've made mistakes on the major decisions."

The Big Loser

WAS CEO of Lehman Brothers (1993-2008)
WHAT HE DID Piloted Lehman to largest ­bankruptcy in U.S. history; earned $22 million the year firm went bust.
WORST MOVE Tried to avoid lawsuits by selling his $13 million Florida home to his wife for $100.
NOW SAYS Feels "horrible" about Lehman, but insists his management was "prudent and appropriate."

Mr. Too Big

IS CEO of Bank of America (2001-present)
WHAT HE DID Created ultimate too-big-to-fail company, buying up Fleet, MBNA, Countrywide and Merrill Lynch.
WORST MOVE Failed to catch a $15 billion loss at Merrill before buying the firm; needed $20 billion bailout to close deal.
NOW SAYS It's a false "claim" to say "the banks that caused this mess must be held accountable."

[From Rolling Stone Issue 1075 — April 2, 2009]


Thursday, March 19, 2009


By Fred Burton and Scott Stewart
March 18, 2009

Two years ago, we wrote an article discussing the historical pattern of the boom and bust in counterterrorism spending. In that article we discussed the phenomenon whereby a successful terrorist attack creates a profound shock that is quite often followed by an extended lull. We noted how this dynamic tends to create a pendulum effect in public perception and how public opinion is ultimately translated into public policy that produces security and counterterrorism funding.

In other words, the shock of a successful terrorist attack creates a crisis environment in which the public demands action from the government and Washington responds by earmarking vast amounts of funds to address the problem. Then the lull sets in, and some of the programs created during the crisis are scrapped entirely or are killed by a series of budget cuts as the public's perception of the threat changes and its demands for government action focus elsewhere. The lull eventually is shattered by another attack -- and another infusion of money goes to address the now-neglected problem.

On March 13, The Washington Post carried a story entitled "Hardened U.S. Embassies Symbolic of Old Fears, Critics Say." The story discussed the new generation of U.S. Embassy buildings, which are often referred to as "Inman buildings" by State Department insiders. This name refers to buildings constructed in accordance with the physical security standards set by the Secretary of State's Advisory Panel on Overseas Security, a panel chaired by former Deputy CIA Director Adm. Bobby Inman following the 1983 attacks against the U.S. embassies in Beirut and Kuwait City.

The 1985 Inman report, which established these security requirements and contributed to one of the historical security spending booms, was also responsible for beefing up the State Department's Office of Security and transforming it into the Diplomatic Security Service (DSS).

It has been 11 years since a U.S. Embassy has been reduced to a smoking hole in the ground, and the public's perception of the threat appears to be changing once again. In The Washington Post article, Stephen Schlesinger, an adjunct fellow at the Century Foundation, faults the new Inman building that serves as the U.S. Mission to the United Nations in New York for being unattractive and uninviting.

Schlesinger is quoted as saying: "Rather than being an approachable, beckoning embassy -- emphasizing America's desire to open up to the rest of the globe and convey our historically optimistic and progressive values -- it sits across from the U.N. headquarters like a dark, forbidding fortress, saying, 'Go away.'" When opinion leaders begin to express such sentiments in The Washington Post, it is an indication that we are now in the lull period of the counterterrorism cycle.

Tensions Over Security

There has always been a tension between security and diplomacy in the U.S. State Department. There are some diplomats who consider security to be antithetical to diplomacy and, like Mr. Schlesinger, believe that U.S. diplomatic facilities need to be open and accessible rather than secure.

These foreign service officers (FSOs) also believe that regional security officers are too risk averse and that they place too many restrictions on diplomats to allow them to practice effective diplomacy. (Regional security officer -- RSO -- is the title given to a DSS special agent in charge of security at an embassy.)

To quote one FSO, DSS special agents are "cop-like morons." People who carry guns instead of demarches and who go out and arrest people for passport and visa fraud are simply not considered "diplomatic." There is also the thorny issue that in their counterintelligence role, DSS agents are often forced to confront FSOs over personal behavior (such as sexual proclivities or even crimes) that could be considered grounds for blackmail by a hostile intelligence service.

On the other side of the coin, DSS agents feel the animosity emanating from those in the foreign service establishment who are hostile to security and who oppose the DSS efforts to improve security at diplomatic missions overseas. DSS agents refer to these FSOs as "black dragons" -- a phrase commonly uttered in conjunction with a curse. DSS agents see themselves as the ones left holding the bag when an FSO disregards security guidelines, does something reckless, and is robbed, raped or murdered.

It is most often the RSO and his staff who are responsible for going out and picking up the pieces when something turns bad. It is also the RSO who is called before a U.S. government accountability review board when an embassy is attacked and destroyed. In the eyes of a DSS special agent, then, a strong, well-protected building conveys a far better representation of American values and strength than does a smoldering hole in the ground, where an "accessible" embassy once stood. In the mind of a DSS agent, dead diplomats can conduct no diplomacy.

This internal tension has also played a role in the funding boom and bust for diplomatic security overseas. Indeed, DSS agents are convinced that the black dragons consistently attempt to cut security budgets during the lull periods. When career foreign service officers like Sheldon Krys and Anthony Quainton were appointed to serve as assistant secretaries for diplomatic security -- and presided over large cuts in budgets and manpower -- many DSS agents were convinced that Krys and Quainton had been placed in that position specifically to sabotage the agency.

DSS agents were suspicious of Quainton, in particular, because of his history. In February 1992, while Quainton was serving as the U.S. ambassador to Peru, the ambassador's residence in Lima was attacked by Shining Path guerrillas who detonated a large vehicular-borne improvised explosive device in the street next to it. A team sent by the DSS counterterrorism investigations division to investigate the attack concluded in its report that Quainton's refusal to follow the RSO's recommendation to alter his schedule was partially responsible for the attack.

The report angered Quainton, who became the assistant secretary for diplomatic security seven months later. Shortly after assuming his post, Quainton proclaimed to his staff that "terrorism is dead" and ordered the abolishment of the DSS counterterrorism investigations division.

Using a little bureaucratic sleight of hand, then-DSS Director Clark Dittmer renamed the office the Protective Intelligence Investigations Division (PII) and allowed it to maintain its staff and function. Although Quainton had declared terrorism dead, special agents assigned to the PII office would be involved in the investigation of the first known al Qaeda attacks against U.S. interests in Aden and Sanaa,Yemen, in December 1992. They also played a significant role in the investigation of the World Trade Center bombing in February 1993, the investigation of the 1993 New York Landmarks Plot and many subsequent terrorism cases.

Boom-and-Bust Funding

One of the problems problem created by the feast-or-famine cycle of security funding is that during the boom times, when there is a sudden (and often huge) influx of cash, agencies sometimes have difficulty spending all the money allotted to them in a logical and productive manner. Congress, acting on strong public opinion, often will give an agency even more than it initially requested for a particular program -- and then expect an immediate solution to the problem.

Rather than risk losing these funds, the agencies scramble to find ways to spend them. Then, quite often, by the time the agency is able to get its act together and develop a system effectively to use the funds, the lull has set in and funding is cut. These cuts frequently are accompanied by criticism of how the agency spent the initial glut of funding.

Whether or not it was a conscious effort on the part of people like Quainton, funding for diplomatic security programs was greatly reduced during the lull period of the 1990s. In addition to a reduction in the funding provided to build new embassies or bring existing buildings up to Inman standards, RSOs were forced to make repeated cuts in budgets for items such as local guard forces, residential security and the maintenance of security equipment such as closed-circuit TV cameras and vehicular barriers.

These budget cuts were identified as a contributing factor in the 1998 bombings of the U.S. Embassies in Nairobi and Dar es Salaam. The final report of the Crowe Commission, which was established to investigate the attacks, notes that its accountability review board members "were especially disturbed by the collective failure of the U.S. government over the past decade to provide adequate resources to reduce the vulnerability of U.S. diplomatic missions to terrorist attacks in most countries around the world."

The U.S. Embassy in Nairobi was known to be vulnerable. Following the August 1997 raid on the Nairobi residence of Wadih el-Hage, U.S. officials learned that el-Hage and his confederates had conducted extensive pre-operational surveillance against the U.S. Embassy in Nairobi, indicating that they planned to attack the facility.

The U.S. ambassador in Nairobi, citing the embassy's vulnerability to car bomb attacks, asked the state department in December 1997 to authorize a relocation of the embassy to a safer place. In its January 1998 denial of the request, the state department said that, in spite of the threat and vulnerability, the post's "medium" terrorism threat level did not warrant the expenditure.

Old Fears

The 1998 East Africa embassy bombings highlighted the consequences of the security budget cuts that came during the lull years. Clearly, terrorism was not dead then, nor is it dead today, in spite of the implications in the March 13 Washington Post article. Indeed, the current threat of attacks directed against U.S. diplomatic facilities is very real.

Since January 2008, we have seen attacks against U.S. diplomatic facilities in Sanaa, Yemen; Istanbul, Turkey; Kabul, Afghanistan; Belgrade, Serbia; and Monterrey, Mexico (as well as attacks against American diplomats in Pakistan, Sudan and Lebanon). Since 2001, there have also been serious attacks against U.S. diplomatic facilities in Jeddah, Saudi Arabia; Karachi, Pakistan; Damascus, Syria; Athens, Greece; and Baghdad, Iraq.

Even if one believes, as we do, that al Qaeda's abilities have been severely degraded since 9/11, it must be recognized that the group and its regional franchises still retain the ability to conduct tactical strikes. In fact, due to the increased level of security at U.S. diplomatic missions, most of the attacks conducted by jihadists have been directed against softer targets such as hotels or the embassies of other foreign countries.

Indeed, attacks that were intended to be substantial strikes against U.S. diplomatic facilities in places like Sanaa, Jeddah and Istanbul have been thwarted by the security measures in place at those facilities. Even in Damascus, where the embassy was an older facility that did not meet Inman standards, adequate security measures (aided by poor planning and execution on the part of the attackers) helped thwart a potentially disastrous attack.

However, in spite of the phrase "war on terrorism," terrorism is a tactic and not an entity. One cannot kill or destroy a tactic. Historically, terrorism has been used by a wide array of actors ranging from neo-Nazis to anarchists and from Maoists to jihadists. Even when the Cold War ended and many of the state-sponsored terrorist groups lost their funding, the tactic of terrorism endured. Even if the core al Qaeda leaders were killed or captured tomorrow and the jihadist threat were neutralized next week, terrorism would not go away.

As we have previously pointed out, ideologies are far harder to kill than individuals. There will always be actors with various ideologies who will embrace terrorism as a tactic to strike a stronger enemy, and as the sole global superpower, the U.S. and its diplomatic missions will be targeted for terrorist attacks for the foreseeable future -- or at least the next 100 years.

During this time, the booms and busts of counterterrorism and security spending will continue in response to successful attacks and in the lulls between spectacular terrorist strikes like 9/11.

During the lulls in this cycle, it will be easy for complacency to slip in -- especially when there are competing financial needs. But terrorism is not going to go away any time soon, and when emotion is removed from the cycle, a logical and compelling argument emerges for consistently supplying enough money to protect U.S. embassies and other essential facilities.

This report may be forwarded or republished on your website with attribution to

Copyright 2009 Stratfor.


Wednesday, March 18, 2009

Obama and His Dick (Cheney)

By Mickey Z.
OpEd News
March 18, 2009

Here's how well they have us trained: The powers that be are no longer gonna call the illegally detained terrorism suspects (sic) by the name of "enemy combatants." Like the pre-programmed robots we've all become, we'll celebrate this as a welcome and much-needed change from the reviled Bush-Cheney administration. A step in the right direction, we might even say.

In addition, the Pope of Hope has promised not to torture. Our society is so fuckin' corrupt that a US president can announce—without shame—a purported plan to say no to committing crimes against humanity. Of course, we view this as "normal" and we foolishly believe him and even praise him.

Obama's blood brother, Dick Cheney, happily plays his pre-ordained role in this passion play by going on national television and declaring that our (sic) president's vague pledge to possibly adhere to accepted international law—a pledge more honored in the breach—is making the US less safe.

The pundit patrol gleefully spins into action. You see, what passes for intelligence and insight in America typically involves being handsomely paid to put on a suit and go on TV to debate whether its Obama or his Dick that's got it right.

This is mental illness in plain view—unabashed, unfettered lunacy not even trying to masquerade as sanity. If we woke up, it would take perhaps 3-5 seconds to recognize this: Obama is a heinous criminal. Cheney is a heinous criminal. The same can be said for the volunteer soldiers and all those who give the orders; the law enforcement types and all those who give the orders; the judges; the professional liars who stock the media ranks; and, of course, all the humans that comprise the power structure of Corporate America.

Since we habitually choose denial instead of rebellion, our willingness to play along at home by, for example, analyzing the subtle nuances that differentiate Obama from his Dick makes us heinous criminals, too. When things are as bad as they are now, there's more than enough guilt to go around.

Just about everything about US and global culture (e.g. raping the environment, the propaganda machine, avaricious materialism, insatiable military conquest, sexism, homophobia, racism, patriarchy, etc.) adds up to death and destruction. Yet we—the species with the allegedly superior cognitive skills—opt to spend our time getting worked up over Obama debating his Dick.

Joe votes Republican. Joann votes Democrat. Nothing changes.

Jane human loves Sean Hannity. John adores Jon Stewart. The planet remains in peril.

Joann and John think Obama's plan is the cat's meow. Joe and Jane agree with Dick. Big picture: It makes no difference at all.

Whatever side we choose in these fabricated conflicts, human society maintains its steady, relentless path toward mass homicide/suicide. If we ever decide to look up from our text screens and video games, we might actually catch the last act.

Mickey Z. is the author of several books and his work has also appeared in more than 10 published anthologies. His novel, CPR for Dummies, was released in 2008, as was his latest non-fiction book, No Innocent Bystanders: Riding Shotgun in the Land of Denial. Until the laws are changed or the power runs out, Mickey Z. can be found on the Web at


Sunday, March 15, 2009

How can we tell if the worst is over for the markets?

By Vikas Bajaj
March 15, 2009

The economist John Kenneth Galbraith once said, "The only function of economic forecasting is to make astrology look respectable."

Still, we have to ask: Was that the bottom we just hit?

After months of punishing economic news, the gloom seemed to lift last week, if only for a moment. The U.S. stock market shot up 12 percent in four days. Two of the biggest banks in America said they had returned to profitability. General Motors said it would not need an additional $2 billion in government help this month. And retail sales were better than expected.

Then again, perhaps that's what passes for good news these days.

The market is still down by more than 50 percent since its high 17 months ago. Yes, the banks made money, but for just two months, and never mind the billions of bad assets that remain on their books. G.M. will still, in all likelihood, need billions in taxpayer help down the road and there's no guarantee it will survive. And those retail sales numbers? They were still bad, just not as bad as analysts were expecting.

Still, there was a sense among some economists and Wall Street analysts that if the bottom was not touched, perhaps the free fall was at least slowing.

Which leads to a question: When we do hit the bottom this year or years from now how will we know?

Mr. Galbraith was not the first or last economist to acknowledge fallibility at predicting turning points. Forecasting the end of the current recession is even more difficult because it will hinge on how quickly and efficiently governments resolve the crisis in the banking system. Many investors continue to worry that the world's biggest financial institutions are insolvent, despite assurances from Washington that those firms have plenty of capital.

How political leaders diagnose and fix the banks will be critical.

Analysts say misguided and erratic government responses exacerbated Japan's "lost decade" in the 1990s and the Depression of the 1930s.

"The things that can screw it up are bad policies," said Thomas F. Cooley, dean of the Stern School of Business at New York University.

In the end, there's probably no way to know for sure that we've hit bottom until we're on the rebound. Still, analysts say there are some key indicators that might help in spotting a bottom and recovery at a time when it can be hard to see past the despair.

History shows that the stock market usually hits bottom before the economy does.

In October, Warren E. Buffett, one of the world's most successful investors, said he was buying American stocks because they usually rise "well before either sentiment or the economy." But even he acknowledged not having "the faintest idea" what would happen in the next month or year.

Since then, stocks have dropped by an additional 20 percent, and with the market at levels last seen in 1997, stocks are cheap by historical standards. The price/earnings ratio which investors use to gauge how much they are paying for each dollar of corporate profit is around 13, about 20 percent lower than the average of the past 130 years. But many investors remain on the sidelines.

What has made the current recession so pernicious is the eroding pressure of deflation, the general decline in prices that has hurt both businesses and consumers. They earn less and the value of their businesses and homes has fallen, yet they still owe as much as they did before, said Russell Napier, a consultant with Crédit Lyonnais and author of "Anatomy of the Bear: Lessons From Wall Street's Four Great Bottoms."

He said he believed stocks would not rise until deflation ended and businesses could charge higher prices to pay off debts. Early indications suggest that this may be happening and that the stock market may be near the bottom, Mr. Napier said. He pointed to three indicators that often signal that economic growth and inflation are on the way the prices of copper, corporate bonds and inflation-protected U.S. Treasury securities. Prices for all three are higher now than they were in November.

"All the indicators suggest you should be buying and not selling," he said. Still, Mr. Napier acknowledged that stocks, while cheap, could fall further. Measured by their 10-year P/E ratio, stocks were a lot less expensive in the early 1980s, when the ratio fell to less than seven, and in the 1930s, when it was below six.

Nouriel Roubini, the economics professor from New York University who predicted much of the current crisis, has warned that corporate earnings and stock prices could continue to fall, perhaps precipitously.

To determine whether home prices are still inflated, economists use ratios that compare the cost of buying a home to renting or to median family income. If the ratios move sharply higher, as they did in recent years, it suggests home prices might be inflated. When they are falling, as they are across the United States, owning a home becomes more affordable.

Barry Ritholtz, a professional investor who writes the popular economics blog The Big Picture, has a simpler, more subjective, approach: Assume a young couple earning two modest incomes is looking to buy a two- or three-bedroom starter home in a middle-income neighborhood in your city. Can they qualify for a mortgage and afford to buy it?

"If the answer is no, then you are not at a bottom in housing," said Mr. Ritholtz, who estimates that the decline in U.S. home prices is only half-complete.

Just as prices in the bubble did not go up uniformly in all parts of the country, they will not reach bottom together, said Ronald J. Peltier, chief executive of Home Services of America, a real estate brokerage firm.

In places like Riverside, California; and Miami, where homes are selling for half or less than what they sold for three or four years ago, real estate may be close to the bottom. One telling sign is that first-time home buyers and investors are snapping up homes, though they are mostly buying from banks selling foreclosed properties at deep discounts. Sales of existing homes in California jumped by more than 50 percent in January from a year earlier. But the median price was down more than 40 percent, to $224,000.

Of course, those who bought at the peak of the market will suffer the greatest pain if they have to sell. But Mr. Peltier and other specialists say the current dismal market will only be resolved by lower prices, easier lending and an improving economy.

Americans like to buy things, and for at least the past decade, many economists assumed they would continue to spend on cars, clothes and the latest digital toy, good times or not. Consumer spending has rarely declined since World War II, and when it has, it bounced back quickly.

The current recession is severely testing that article of faith.

Personal consumption fell by about 1 percent in the second half of last year the first sustained decline since 1980. Economists say consumption will be slow to recover because debt-saddled Americans are saving more or paying down debt. The savings rate jumped to about 3 percent late last year, from practically zero, still far below its postwar average of 7 percent.

A sign that consumption has hit bottom may come when the savings rate begins to flatten.

Spending should then rebound as pent-up demand gives way. Car sales, for instance, have fallen to levels last seen in 1981, when the population of the United States was about three-quarters of what it is today. Many families are deferring car purchases and making do with what they have.

Eventually, however, they will have to replace their aging vehicles.

In a study of economic cycles, Edward E. Leamer, an economist at the Anderson School of Management at the University of California, Los Angeles, found that auto sales and home building tended to lead recoveries.

An increase in international trade would be another early indicator that consumer spending in the United States and elsewhere has hit the floor and begun to rebound.

After growing at an average of 7 percent a year for most of this decade, global trade was little changed from March to September last year, according to the Organization for Economic Cooperation and Development. Many large economies including the United States, Japan and China have reported a sharp drop in exports and imports in recent months. There was more bad news on Friday, when the U.S. Commerce Department reported that exports from and imports to the United States fell by about 12 percent in January.

"Seeing global trade pick up would be a very positive sign," said Kenneth S. Rogoff, a former chief economist at the International Monetary Fund and now a professor at Harvard.

Tobias Levkovich, chief U.S. equity strategist at Citigroup, has another indicator for spotting when we have hit bottom: When we stop behaving like children in the back seat of the car asking their parents, "Are we there yet?"


Monday, March 09, 2009

Mossad linked to 9/11 Attacks

New found information has implicated the Israeli Intelligence agency Mossad in the staging of the terror attacks of September 11, 2001.

Mar 9, 2009

According to a recent article published in the American Free Press weekly, the revelation that the cousin of alleged 9/11 hijacker Ziad al-Jarrah was in fact working as a longtime Mossad agent is proof that Israel had a hand in the terror attacks on US soil.

The New York Times recently reported that Lebanese national Ali al-Jarrah, a supposedly earnest Palestinian supporter, had been actually working as a highly valued spy for Israel over the past two decades.

Al-Jarrah reportedly admitted that he had been conducting covert espionage activities against Palestinian groups and the Lebanese Hezbollah since 1983.

"It is not the family's first brush with notoriety. One of Mr. Jarrah's cousins, Ziad al-Jarrah, was among the 19 hijackers who carried out the terrorist attacks of Sept. 11, 2001," said the Times.

His connections with one of the key masterminds of the terror attacks have fueled speculations about Israel's recruitment of people claiming to be Muslims as undercover assets.

Israeli connections to 9/11, according to the New York Times, can be traced back to the five 'dancing Israelis' who were witnessed jumping and high-fiving with shouts of 'joy and mockery' as Flight 11 and Flight 175 slammed into the World Trade Center in New York.

The Israelis were reportedly held in custody for 71 days before being quietly released after they were suspected of being Mossad agents.

Citing two former CIA operatives, the Forward weekly then reported that at least two of the detained Israelis were found to be members of a Mossad surveillance team.

"There was no question but that [the order to close down the investigation] came from the White House. It was immediately assumed at CIA headquarters that this basically was going to be a cover-up so that the Israelis would not be implicated in any way in 9/11," the weekly stated.

At least 2,970 people died on the morning of September 11, most of whom were civilians.

Former Italian prime minister Francesco Cossiga has touched on the issue, suggesting that the events of 9/11 were none other than a CIA-Mossad inside job.

"All the [intelligence services] of America and Europe ... now know well that the disastrous attack has been planned by the CIA and the Mossad in order to put under accusation the Arabic countries and in order to induce the western powers to take part ... in Iraq [and] Afghanistan," the Italian ex-premier was quoted by Corriere della Sera as saying.

His argument was further strengthened by leaked reports that employees of Israeli telecom firm Odigo -- which provides instant messaging services -- received a warning two hours before the attacks on the World Trade Towers and forewarned Jews to stay away from work that day.

Odigo headquarters is situated 2 blocks away from the former location of the World Trade Towers.


Treasury Official Quits Amidst Fraud Scandal

Darrel Dochow, former Office of Thrift Supervision regional director who allowed IndyMac bank to hide its impending failure, has resigned from the federal government. IndyMac cost taxpayers over $9 billion in defaulted mortgages and subprime loans.

by Brian Ross, Justin Rood, & Joseph Rhee
ABC News
March 5, 2009

Darrel Dochow allowed IndyMac bank to cook its books, investigators say.

The man at the center of a fraud scandal at the Treasury Department has been allowed to quietly quit and retire from his job as a government regulator, despite allegations that he allowed a bank to falsify financial records and amidst outcries from investigators who say the case shows how cozy government regulators have become with the banks and savings and loans they are supposed to be checking on.

Darrel Dochow, the West Coast regional director at the Office of Thrift Supervision who investigators say allowed IndyMac to backdate its deposits to hide its ill health, quit last Friday.

Prior to his leaving, Dochow was removed from his position but remained on the government payroll while the Inspector General's Office investigates the allegations against him.

Treasury Department Inspector General Eric Thorson announced in November his office would probe how Dochow allowed the IndyMac bank to essentially cook its books, making it appear in government filings that the bank had more deposits than it really did. But Thorson's aides now say IndyMac wasn't the only institution to get such cozy assistance from the official who should have been the cop on the beat.

Investigators say Dochow, who reportedly earned $230,000 a year, allowed IndyMac to register an $18 million capital injection it received in May in a report describing the bank's financial condition in the end of March.

"They [IndyMac] were able to maintain their well-capitalized threshold and continue to use broker deposits to make loans," said Marla Freedman, an assistant Inspector General at Treasury. "Basically, while the institution was having financial difficulty, it kept the public from knowing earlier than it otherwise should have or would have."

In at least one instance, investigators say, banking regulators actually approached the bank with the suggestion of falsifying deposit dates to satisfy banking rules - even if it disguised the bank's health to the public.

The federal government took over IndyMac in July, after the bank's stock price plummeted to just pennies a share when it was revealed the bank had financial troubles due to defaulted mortgages and subprime loans, costing taxpayers over $9 billion.

Critics Point to Cozy Relationship Between Banks and Regulators

In order to backdate the filings, IndyMac sought and received permission from Dochow, according to Freedman.

"That struck us as very unusual," said Freedman. "Typically transactions are to be recorded in the period in which they occur, not afterwards. So it was very unusual."

One former regulator says Dochow's actions illustrate the cozy relationship between banks and government regulators.

"He did nothing to protect taxpayers in losses," former federal bank regulator William Black told ABC News. "Instead of correcting it [Dochow] made it worse by increasing the accounting fraud."

Meanwhile, IndyMac customers who lost their savings have launched their own website and are demanding answers from the government. They were further infuriated after learning Dochow was also the regulator in 1989 who oversaw the failed Lincoln Savings and Loan, a scandal that sent its CEO Charles Keating to prison.

"He's the person that claimed that he looked into Charles Keating's eyes and knew that Charles Keating was a good guy and therefore ignored all of the professional staff that told him that Keating was a fraud, and he produced the worst failure of the Savings and Loan Crisis at $3.4 billion. Now he's managed more than triple that," said Black, now an economics professor at the University of Missouri in Kansas City, Missouri.

Following the Lincoln scandal, Dochow was demoted and placed into a relatively obscure office, but later, inexplicably was brought back into the Office of Thrift Supervision.

Dochow declined to answer questions from ABC News.

IndyMac Customers Furious

After Ronnie Lopez was killed in Iraq, his mother Elaine invested the life insurance proceeds at IndyMac. She lost $37,000 of it.

While Dochow could end up losing his job, neither he nor his colleagues are expected to go to prison.

"This is criminal with the small 'c'," said Black. "No one within the regulatory ranks may go to jail, but they have done the worst possible disservice to the taxpayers of America."


Thursday, March 05, 2009

John Yoo Should Be Disbarred

by Robert Gammon
East Bay Express
March 3, 2009

Newly released secret memos of the Bush Administration include more evidence that notorious Berkeley law professor John Yoo should be disbarred. Two of the memos, written in January by Bush appointee, Steven Bradbury, a successor of Yoo's in the Justice Department, strongly repudiate Yoo's work. It was the second known repudiation of Yoo by a conservative legal scholar within Bush administration.

The memos released by the Obama administration yesterday also include opinions written by Yoo, okaying warrantless wiretaps and the use of the US military against targets inside the United States.

Yoo also authored the previously disclosed "Torture Memos," which authorized CIA and military interrogators to torture prisoners in Guantanamo Bay, Abu Ghraib, and elsewhere.

The Justice Deparmtent's Office of Professional Responsibility is finishing an internal investigation of Yoo and is expected to recommend disbarrment proceedings against him and other department lawyers who advocated that Bush be allowed to do essentialy whatever he wanted in the so-called "War on Terror."

Bush then used the memos to justify his actions. Yoo is a tenured professor at Berkeley, who took a leave of absence to work for the Bush Justice Department from 2001 to 2003. Yoo has his law license from the state of Pennsylvania.

If he's disbarred, it will further pressure UC Berkeley to fire him.


Tuesday, March 03, 2009

Mother India and other India

By Jawed Naqvi
Feb. 26, 2009

In the Nilgiri mountains of southern India, at an altitude of 8,000 feet French filmmaker Louis Malle found the ideal society — the Toda tribe.

In the 1960s, when the French legend made his celebrated — or notorious, if you were Indira Gandhi — documentaries on India there were only 800 Toda left. For untold centuries they had lived in the isolated mountains where solitude was undisturbed until the arrival of the British.

Certain ethnologists claimed they were of Sumerian origin. They’re also said to have been descendants of Alexander’s soldiers. But the Toda believed their mother goddess waved a magic wand and magnificent buffalos emerged from the river. Hanging from a buffalo’s tail was a Toda.

‘No Toda girl is a virgin past the age of 13,’ Malle recorded in his documentary. ‘Before puberty, they are entrusted to an experienced male to learn lovemaking. These lessons are part of their education, just like singing and cooking. Sex is a natural need and throughout their lives, the Toda practise free love.’

In fact, the Toda language had no word for sex. They used the words ‘fruit’ or ‘food’. Children didn’t go to school. Their education came from their contact with nature.

‘The Toda have never waged war, never had weapons. They have no laws, leaders or hierarchy.’ Malle may have described the kind of people that Beatle John Lennon would have liked all of us to become. Mrs Gandhi banished Malle.

The other day, India’s political class, led by Prime Minister Manmohan Singh, cheered Slumdog Millionaire when the movie, based on a story about Mumbai slum dwellers, won eight Oscars. Of course, there is no comparison between an award-winning feature film and a reviled documentary film, just as there is no comparison between their directors. And yet the different reaction to each reveals a common thread.

Thanks to rapid economic changes in the last two decades, India’s social divide runs along a 30:70 equation — 300 million Indians in the market, 700 million nowhere near it. Filmmakers entirely and film watchers mostly belong to the 30 per cent of the middle classes. To that extent both Malle and Danny Boyle can be accused of social voyeurism, as they both deal with themes on the wrong side of the class divide. But what accounts for the different reactions they got?

For one, Malle’s film threatened the middle classes, which Slumdog didn’t. He held India’s political class responsible, by suggestion, for the imminent harm the idyllic Toda community faced. Moreover, he shattered the illusion of Mrs Gandhi’s anti-poverty populism and questioned the axiom of the socialist, democratic republic of India. He turned the state virtually into a villain. Was he wrong? Well, today Indian newspapers are frequently replete with reports of how young tribal girls are being turned unwed mothers by the civilised half of India.

By contrast, there is no villain in Slumdog Millionaire. There are pimps and rogue policemen but no politically identifiable villain. This is a remarkable new trend in Indian movies, particularly those that create dreams popular among non-resident Indians.

These movies are mostly bereft of a political or a social context. There could be no better bargain for the ruling elite at home — a treasure trove of coveted awards thanks to people living in dehumanised squalor with no aspersions cast or responsibility assigned for their hapless state.

As a palliative, the film depicts the officially sanctioned collective dream to get rich quick, the only way, we are asked to believe, to survive in the mega superpower in the making.

To make a movie about those that do not have the means, other than a drug-like illusion offered by the film, to crawl out of their misery is to mock their poverty. The illusion was less insulting in the past. Mother India, for example, was the first Indian movie to be nominated for the Oscars but it missed the award by a whisker in the foreign films category. That was way back in 1958.

A box-office triumph at home, the film’s heroine bore a strong resemblance to Bertolt Brecht’s Mother Courage. It depicted the courageous saga of an Indian peasant woman who took on the wily village moneylender who was responsible for her many tragedies. In a manner of speaking the changing faces of the villains in Indian cinema have marked the evolution of the national polity.

It is not a flattering thought. The epidemic of suicides by indebted farmers across the country shows that the money-lending class is thriving though they may have moved out of the frame as the nation’s arch villain. Many of them have joined politics.

With time, new classes of villains came to the fore. Just until a few decades ago, a stockbroker, for example, whose antics keep today’s parliament glued to the Sensex, was denounced as an evil man. The Hindi word for the bourse, satta bazaar, conjured images of a criminal lot that lured gullible Indians to wrack and ruin. Today, a stockbroker is idolised as a guru of sorts.

Leading actors like Dev Anand, Raj Kapoor and Dilip Kumar all took turns to depict heroes that fell for the trap of easy lucre. The capitalist too was what he is seen today even in the western hemisphere — satanic. The priestly class was regarded with suspicion and contempt. Religious bigots were censured, for example in Dharamputra. In some movies, the partition of India was the villain, for instance in Garam Hawa and Chhaliya.

In the 1970s, the ubiquitous smuggler became a big-time villain. Today, he runs the country’s parallel economy. Among the many uses it lends itself to, parallel banking has become a lifeline for terrorists and leading filmmakers alike. It is a curious mix: the underworld that finances movies that paint the bomb-planting terrorist as the nation’s new villain, turns the financial wheels of terrorism itself, or so the story goes. But Slumdog cannot be accused of such small-time villainy. It has a far higher purpose, as the applause from India’s political class reveals.

Copyright © 2009 - Dawn Media Group


Monday, March 02, 2009

5 Facebook Scams
Protect Your Profile

By Jr Raphael
PC World

Beny Rubinstein knows computer security. An employee of a Seattle-area tech giant with 20 years of IT experience under his belt, Rubinstein has seen a side of the industry that most people will never know. He holds a degree in computer engineering, and - oh yeah - he just got scammed out of $1100 on Facebook.

Slideshow: 12 tips for safe social networking
Slideshow: Where IT pros do their social networking

Rubinstein's experience isn't entirely uncommon. (We'll get to the specifics in a moment.) What's striking about his story, though, is that it demonstrates how easily anyone--even a highly trained expert in computer security--can be ensnared by a seemingly simple social network scam. And all kinds of these scams are on the loose.

More than 20,000 pieces of malware attacked social networks in 2008 alone, estimates the online-security firm Kaspersky Lab. That's no surprise, either: While e-mail is still the most spam-filled medium, researchers suspect that social network cybercrime is growing at a far faster rate.

"People are used to receiving spam and malicious messages in their e-mail, but it is much less common on Facebook," says Graham Cluley, a senior technology consultant with Sophos. "They are lulled into a false sense of security and act unsafely as a result."

You can avoid becoming one of the many who make that mistake. We've dug up the dirt on five scams currently posing a threat on Facebook. We turned to analysts who study them as well as to users who have fallen for them, all to help spread the word about how these things work and how you can best dodge them. (Facebook representatives did not respond to our request for comment.)

Knowledge is the greatest weapon against becoming a victim.
Read on, and arm yourself well.

Scam #1: The Nigerian 419

The Scam: It may sound like a hip new emo band (or a somewhat old e-mail scam), but the Nigerian 419 will do more than just offend your ears--it'll also empty your wallet. The moniker refers to a scam dating back decades that has recently entered the social network scene.

Back to Beny Rubinstein. A couple of months ago, Rubinstein received some alarming Facebook messages from a friend and fellow tech professional.

"[He said] he was in the UK and was robbed, and needed $600 to fly back to Seattle," Rubinstein recalls.

The messages came both in Facebook-based IMs and in e-mail. They included details such as family members' names, making the notes appear all the more authentic. It wasn't until 2 hours and $1100 later that Rubinstein realized what had happened: Someone had hijacked his buddy's account, contacted his friends, and--at their expense--made off like a bandit.

"Scammers figured out that even though social networks don't have direct access to money, they have access to information that gives you a good shot at getting someone else's money," says Vicente Silveira, a product management director at VeriSign and a personal friend of Rubinstein's.

The Protection: Before you send cash to a pal who seems to be in trouble, try to contact him or her outside of the social network--either by phone or by external e-mail. Not feasible? Ask an extremely personal question that a hacker couldn't possibly figure out from information within the profile. We'll leave the specifics up to you.

Next: Be Wary of Widgets, The Koobface Virus, Facebook Phishing

Scam #2: The Widget Warrior

The Scam: Facebook is famous for its widgets--you know, the third-party applications that you can add onto your account. Sometimes, though, widgets turn into warriors with a single mission: stealing your data.

The first rogue widget reared its head in 2008, when researchers realized that a program called Secret Crush had anything but sweet intentions. The application, which was supposed to help you find your virtual admirers, instead installed spyware onto your computer. Even worse, it encouraged you to spread the love by getting other friends on-board--essentially "manipulating humans to pass it along on their own," says Guillaume Lovet, senior manager of Fortinet's Threat Response Team.

Secret Crush has since been crippled, but the potential for similar threats still exists. Just days ago, security experts determined that an application called Error Check System was misusing profile details and possibly stealing personal information. A few months earlier, researchers from Greece's Institute of Computer Science uploaded a malicious app to Facebook as an experiment (PDF). The team was able to configure the widget, which posed as a "Photo of the Day" displayer, to utilize its users' Internet connections for denial-of-service attacks.

The Protection: Use extra caution when installing third-party applications. "When you accept to install one, malicious or not, you are granting its author access to all the info in your profile," Lovet says. Make sure you know what the app's creator will do with it.

Scam #3: The Koobface Virus

The Scam: Don't be fooled by the name--there's little to laugh about when it comes to the quickly spreading Koobface virus. (The word, by the way, is an anagram of "Facebook.") Once the virus infects your PC, it starts sending messages or wall postings to your Facebook friends, directing them to a "hilarious video" or some "scandalous photos" of someone you both know.

"The link promises an enticing video, but when the user clicks, he is presented with a Web page with a fake Adobe Flash update or a fake codec that needs to be downloaded," explains Ryan Naraine, a security evangelist with Kaspersky Lab. "That download is malware."

The Protection: Antivirus software can help keep you safe, but some common sense can also go a long way. "Be wary of any kind of direct URL in messages or postings," advises Jamz Yaneza, a threat research manager with Trend Micro. If a site asks you to download a software update, Yaneza says, click Cancel and go directly to the vendor's page to see if the update is legit.

Scam #4: The Phishing Pond

The Scam: Phishing, a favorite hacker tactic, has found new life at social networking sites.

Scammers trick users into following links that open official-looking Facebook log-in prompts. If you enter your user name and password, the information is logged--and your account is theirs.

Brandon Donaldson, a pastor at the Internet Campus, fell for the scam. Someone gained control of his Facebook account and started sending messages to his friends and followers, trying to persuade them to follow the same links and unwittingly give up their accounts, too.

"This was a pretty bad ordeal, since I regularly put video content up on the Web, and I use the Internet as a tool for many relationships," Donaldson says. "You build a certain social trust in these spaces, and you want to keep that trust without these kinds of incidents."

The Protection: The previous plan also applies here: Watch where you click. Plus, if you're ever asked for your password midsession, don't enter it. Manually navigate back to the home page instead, and then log in there if need be.

Next: Fake Facebook Communities, Web of Trust

Scam #5: The Contrived Community

The Scam: Community enthusiasts, be cautioned: Facebook user groups can sometimes be cleverly disguised vehicles for marketing. And--whether you realize it or not--when you click the join link, you're effectively opting in.

Brad J. Ward was one of the first users to find such a scheme in action. Ward, then a member of Butler University's admissions department, discovered a Facebook group called "Butler Class of 2013."

The only problem: The people behind it had nothing to do with Butler. After posting about the issue on his blog, Ward soon learned that the names of nearly 400 other schools appeared in similarly suspicious groups, all created by the same small set of people.

"My initial reaction was that some company or person was essentially setting themselves up to be the administrator for hundreds of groups, which provides the opportunity to send out mass messages or to collect data," Ward says.

His instinct was right: The publisher of a college guidebook had set up the groups, seemingly with the goal of building a mass mailing list for marketing its products, Ward discovered.
"Was any of it illegal? Not necessarily," Ward points out. "But was it unethical, and could it be misconstrued as an official university presence? Yes."

Once exposed, the publishing company College Prowler admitted its involvement and agreed to back out of the groups. Still, that's only one company. More than likely, countless others haven't been detected, and are actively using groups to gain the trust (and information) of unsuspecting users.

The Protection: Be very selective in deciding what groups you join. If you aren't sure who runs a given Facebook community, or whether it's officially linked to the organization that it claims to be, don't accept the request. Your privacy is worth more than any membership.

The Web of Trust

In the end, staying safe comes down to maintaining control of your information and carefully selecting with whom you share it--because you never truly know who's on the other end of electronic communication. This past month, for example, a high school student was charged with 12 felonies after investigators say he posed as a girl on Facebook and tricked male classmates into sending him nude photos.

"An online version of the 'web of trust' is formed among users," notes Trend Micro's Jamz Yaneza. "Although this does work in the noncyberspace environment, the platform ... is really different when someone else is in charge of your medium."

It's easy to feel invulnerable while reading about such scams. The second you let your guard down, though, it's even easier to become the next victim. Just ask people who know Beny Rubinstein, the IT pro who lost more than a grand to a Facebook scammer.

"Worse than losing the money, he realized how exposed you are in a social network," says Vicente Silveira, Rubinstein's friend. "We're exposing things now that are in many ways a lot more valuable than money."

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