Month: July 2019

More on Liberals and Federalism

My recent Washington Post article on growing liberal support for federalism generated considerable interest. In this follow-up, I am going to further explore two possible reasons why liberal interest in federalism might turn out to be largely ephemeral: the possibility that it’s all a matter of “fair weather federalism” and the idea that modern liberalism is inherently centralizing, and therefore inherently inimical to constitutional limitations on federal power.

I. Is Fair-Weather Federalism Inevitable?

Fair-weather federalism is all too common. Both liberals and conservatives routinely invoke federalism when their opponents control Congress and the White House, only to ignore it when they hold the same reins of power themselves. There are plenty of recent examples during both the Obama and Trump administrations. If a Democratic president is elected in 2020 or 2024, liberal support for federalism could wane, much as many conservatives are now willing to turn a blind away to the Trump administration’s undermining of constitutional limits on federal power in its attempts to coerce sanctuary cities.

However, it is not true that attitudes towards constitutional limits on federal power are purely opportunistic. While there have been many cases of such opportunism, there are plenty of counterexamples, as well. With the exception of one unusual case, conservative judges have almost invariably ruled against the Trump administration’s recent attempts to coerce sanctuary cities by attaching new conditions to federal grants. In Gonzales v. Raich (2005), all four liberal Supreme Court justices ruled that the Commerce Clause allows the federal government to ban the possession of medical marijuana, even though these justices likely favored the state policy that got overridden by the federal government (3 of 5 conservative justices voted to strike the policy down, even though they probably sympathized with the federal ban on policy grounds). I  believe Raich was a terrible decision. But it’s hard to deny that at least 7 of the 9 justices who voted on the case prioritized their general principles over immediate policy priorities.

More generally, from the New Deal until quite recently, conservatives tended to favor tighter judicial enforcement of federalism than liberals did; and this remained true across a wide range of administrations. Some specific policy controversies were obvious exceptions to this general rule. But the existence of exceptions does not prove that the rule was totally absent. Generally speaking, judges have tended to be more consistent in their positions on federalism than politicians and activists, in part because they are more removed from short-term policy debates, and have less incentive to sacrifice principle for the sake of immediate policy advantage.

It is easy to be cynical about not only federalism, but pretty much any other constitutional principle. Just as there are cases of fair-weather federalism, there are also cases of fair-weather separation of powers, fair-weather freedom of speech, fair-weather protection for the rights of criminal defendants, and so on.

In each of these fields, we can find people who support rigorous judicial enforcement of limits on government power when it benefits their side of the political spectrum, and a highly deferential attitude when it does not.  Even so, there is broad agreement that each of these types of rules needs to be enforced with at least some substantial consistency and courts often do just that, even when the judges don’t  particularly like the immediate political consequences. For example, many of the Court’s most important free speech decisions involve communist and neo-Nazi speakers whom few if any mainstream jurists feel any sympathy for.

The key question is whether judicial enforcement of federalism can become one of those principles for which there is substantial cross-ideological support. For the reasons outlined in my Washington Post article, I think liberals—as well as conservatives—have good reason to conclude that the answer should be “yes,” even if they did not think so in previous eras.

Among other considerations, federalism—like freedom of speech—provides valuable “insurance” against situations where your opponents hold the reins of power in Washington. Such insurance is especially valuable during periods of severe political polarization, like the one we are in right now. At such times, we need more protection against political adversaries than may otherwise be the case, because they are especially likely to enact policies deeply inimical to our values or interests. More generally, tighter limits on federal power can help promote coexistence in a large and highly diverse society.

The fact that liberals have good reason to commit to federalism doesn’t mean they necessarily will. The “fair weather” approach is still tempting to many (as is also the case with many on the right). But it is not inevitable  they will succumb to it. Moreover, we can achieve adequately broad support for federalism even if not all liberals (or all conservatives) are genuinely committed to it. We just need a large enough cross-ideological coalition of committed federalists that they can make their influence strongly felt, often by working together with “fair weather” types on a case-by-case basis.

Some fair-weather federalism is probably inevitable. But it is not inevitable that it will dominate the system.

II. Is the Left Inherently Centralizing?

A deeper reason for pessimism about liberal interest in federalism is the concern that the  political left is inherently pro-centralization. If their ultimate goal is to enforce uniform national policies on most significant political issues, then they are unlikely to ever support meaningful limits on federal power, except perhaps as an occasional short-term expedient.

This concern is not unreasonable. At least since the early twentieth century, the political left in the US has favored extensive federal government control of the economy, and—often—increased federal regulation of a wide range of “non-economic” issues.

In its most extreme “democratic socialist” variant, the modern left probably really is inherently inimical to federalism. It is difficult to think of any area that socialists would be willing to leave beyond the scope of federal power. And the kind of large-scale central planning required by socialism is ultimately incompatible with any significant autonomy for sub-national governments. While modern “democratic socialists” claim they do not advocate government ownership of the means of production, the extent of federal control they want to impose by less direct means, nonetheless amounts to central planning of the lion’s share of the economy.

The nonsocialist left is a different story. There is no inherent incompatiblity between advocating extensive—but not comprehensive—federal spending and regulation, while also recognizing significant limits on federal authority, including even on some “economic” issues. Liberals of this type could support broad federal power to spend money on “universal” entitlement programs, while also barring federal spending on a variety of local projects and giveaways to narrow special interests. In this way, they could support meaningful limits on federal power to spend money under the General Welfare Clause.  Similarly, nothing in the non-socialist liberal agenda requires unlimited federal power to pressure states through “commandeering” or conditional spending grants. Indeed, as the sanctuary cities cases demonstrate, limits on that power can actually help protect liberal values.

Looking around the world, it is simply not true that the left universally rejects structural constraints on central government power within federal systems. In nations such as Canada, Australia, Germany, and Switzerland, the enforcement of such constraints enjoys broad support and does not systematically divide people along right-left ideological lines.

The main factor that has made the US different for most of the last 70-80 years is the association between “states’ rights” and oppression of racial and ethnic minorities. There is indeed anawful history of state governments repressing minorities.  And, at several crucial points, federal power has curbed that oppression—most notably during the abolition of slavery and the triumph of the Civil Rights Movement in the 1950s and 60s.

Thus, many on the left came to the conclusion that the state autonomy is inimical to minorities, while federal power is their friend. The idea that this is  true as a general  general rule is, in my view, an oversimplification of American history. But, whatever may have been the case in earlier eras, it is not true today, for reasons well-explained by Yale Law School Dean Heather Gerken. As I emphasized in my Washington Post article,  the Trump era is a dramatic illustration of this point, which Gerken began to make long before.

When it comes to federalism, the political left is currently flux, as it also is on a number of other issues. It is difficult to say where they will ultimately come down. It may turn out that liberals will continue to differ among themselves on federalism for some time to come.

But there is a real chance that left-wing support for robust limits on federal power will continue to increase. That tendency began to emerge before Trump. But the liberal reaction to his administration has given it a major boost. To the extent that the developments in American law and politics that gave rise to Trump go beyond his personal idiosyncracies (and I believe they do), the changing ideological valence of federalism might well outlive his time in the White House.

 

 

 

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More on Liberals and Federalism

My recent Washington Post article on growing liberal support for federalism generated considerable interest. In this follow-up, I am going to further explore two possible reasons why liberal interest in federalism might turn out to be largely ephemeral: the possibility that it’s all a matter of “fair weather federalism” and the idea that modern liberalism is inherently centralizing, and therefore inherently inimical to constitutional limitations on federal power.

I. Is Fair-Weather Federalism Inevitable?

Fair-weather federalism is all too common. Both liberals and conservatives routinely invoke federalism when their opponents control Congress and the White House, only to ignore it when they hold the same reins of power themselves. There are plenty of recent examples during both the Obama and Trump administrations. If a Democratic president is elected in 2020 or 2024, liberal support for federalism could wane, much as many conservatives are now willing to turn a blind away to the Trump administration’s undermining of constitutional limits on federal power in its attempts to coerce sanctuary cities.

However, it is not true that attitudes towards constitutional limits on federal power are purely opportunistic. While there have been many cases of such opportunism, there are plenty of counterexamples, as well. With the exception of one unusual case, conservative judges have almost invariably ruled against the Trump administration’s recent attempts to coerce sanctuary cities by attaching new conditions to federal grants. In Gonzales v. Raich (2005), all four liberal Supreme Court justices ruled that the Commerce Clause allows the federal government to ban the possession of medical marijuana, even though these justices likely favored the state policy that got overridden by the federal government (3 of 5 conservative justices voted to strike the policy down, even though they probably sympathized with the federal ban on policy grounds). I  believe Raich was a terrible decision. But it’s hard to deny that at least 7 of the 9 justices who voted on the case prioritized their general principles over immediate policy priorities.

More generally, from the New Deal until quite recently, conservatives tended to favor tighter judicial enforcement of federalism than liberals did; and this remained true across a wide range of administrations. Some specific policy controversies were obvious exceptions to this general rule. But the existence of exceptions does not prove that the rule was totally absent. Generally speaking, judges have tended to be more consistent in their positions on federalism than politicians and activists, in part because they are more removed from short-term policy debates, and have less incentive to sacrifice principle for the sake of immediate policy advantage.

It is easy to be cynical about not only federalism, but pretty much any other constitutional principle. Just as there are cases of fair-weather federalism, there are also cases of fair-weather separation of powers, fair-weather freedom of speech, fair-weather protection for the rights of criminal defendants, and so on.

In each of these fields, we can find people who support rigorous judicial enforcement of limits on government power when it benefits their side of the political spectrum, and a highly deferential attitude when it does not.  Even so, there is broad agreement that each of these types of rules needs to be enforced with at least some substantial consistency and courts often do just that, even when the judges don’t  particularly like the immediate political consequences. For example, many of the Court’s most important free speech decisions involve communist and neo-Nazi speakers whom few if any mainstream jurists feel any sympathy for.

The key question is whether judicial enforcement of federalism can become one of those principles for which there is substantial cross-ideological support. For the reasons outlined in my Washington Post article, I think liberals—as well as conservatives—have good reason to conclude that the answer should be “yes,” even if they did not think so in previous eras.

Among other considerations, federalism—like freedom of speech—provides valuable “insurance” against situations where your opponents hold the reins of power in Washington. Such insurance is especially valuable during periods of severe political polarization, like the one we are in right now. At such times, we need more protection against political adversaries than may otherwise be the case, because they are especially likely to enact policies deeply inimical to our values or interests. More generally, tighter limits on federal power can help promote coexistence in a large and highly diverse society.

The fact that liberals have good reason to commit to federalism doesn’t mean they necessarily will. The “fair weather” approach is still tempting to many (as is also the case with many on the right). But it is not inevitable  they will succumb to it. Moreover, we can achieve adequately broad support for federalism even if not all liberals (or all conservatives) are genuinely committed to it. We just need a large enough cross-ideological coalition of committed federalists that they can make their influence strongly felt, often by working together with “fair weather” types on a case-by-case basis.

Some fair-weather federalism is probably inevitable. But it is not inevitable that it will dominate the system.

II. Is the Left Inherently Centralizing?

A deeper reason for pessimism about liberal interest in federalism is the concern that the  political left is inherently pro-centralization. If their ultimate goal is to enforce uniform national policies on most significant political issues, then they are unlikely to ever support meaningful limits on federal power, except perhaps as an occasional short-term expedient.

This concern is not unreasonable. At least since the early twentieth century, the political left in the US has favored extensive federal government control of the economy, and—often—increased federal regulation of a wide range of “non-economic” issues.

In its most extreme “democratic socialist” variant, the modern left probably really is inherently inimical to federalism. It is difficult to think of any area that socialists would be willing to leave beyond the scope of federal power. And the kind of large-scale central planning required by socialism is ultimately incompatible with any significant autonomy for sub-national governments. While modern “democratic socialists” claim they do not advocate government ownership of the means of production, the extent of federal control they want to impose by less direct means, nonetheless amounts to central planning of the lion’s share of the economy.

The nonsocialist left is a different story. There is no inherent incompatiblity between advocating extensive—but not comprehensive—federal spending and regulation, while also recognizing significant limits on federal authority, including even on some “economic” issues. Liberals of this type could support broad federal power to spend money on “universal” entitlement programs, while also barring federal spending on a variety of local projects and giveaways to narrow special interests. In this way, they could support meaningful limits on federal power to spend money under the General Welfare Clause.  Similarly, nothing in the non-socialist liberal agenda requires unlimited federal power to pressure states through “commandeering” or conditional spending grants. Indeed, as the sanctuary cities cases demonstrate, limits on that power can actually help protect liberal values.

Looking around the world, it is simply not true that the left universally rejects structural constraints on central government power within federal systems. In nations such as Canada, Australia, Germany, and Switzerland, the enforcement of such constraints enjoys broad support and does not systematically divide people along right-left ideological lines.

The main factor that has made the US different for most of the last 70-80 years is the association between “states’ rights” and oppression of racial and ethnic minorities. There is indeed anawful history of state governments repressing minorities.  And, at several crucial points, federal power has curbed that oppression—most notably during the abolition of slavery and the triumph of the Civil Rights Movement in the 1950s and 60s.

Thus, many on the left came to the conclusion that the state autonomy is inimical to minorities, while federal power is their friend. The idea that this is  true as a general  general rule is, in my view, an oversimplification of American history. But, whatever may have been the case in earlier eras, it is not true today, for reasons well-explained by Yale Law School Dean Heather Gerken. As I emphasized in my Washington Post article,  the Trump era is a dramatic illustration of this point, which Gerken began to make long before.

When it comes to federalism, the political left is currently flux, as it also is on a number of other issues. It is difficult to say where they will ultimately come down. It may turn out that liberals will continue to differ among themselves on federalism for some time to come.

But there is a real chance that left-wing support for robust limits on federal power will continue to increase. That tendency began to emerge before Trump. But the liberal reaction to his administration has given it a major boost. To the extent that the developments in American law and politics that gave rise to Trump go beyond his personal idiosyncracies (and I believe they do), the changing ideological valence of federalism might well outlive his time in the White House.

 

 

 

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LAPD Spied On And Infiltrated Anti-Trump Protesters

The Los Angeles Police Department spied on anti-Trump protesters and even infiltrated an activist group that was planning anti-Trump protests, according to the Guardian.

An informant working for the LAPD secretly infiltrated a group called “Refuse Fascism” in 2017, recording multiple meetings that the group held. LAPD transcripts that were submitted in a criminal case against activists who blocked a California freeway during an anti-Trump rally were the first admissions that the informant existed.

The undercover officer was equipped with a hidden recording device and attended “Refuse Fascism” gatherings at a local church “in an attempt to elicit information regarding the closure” of the freeway and to express interest in being involved “in any such future activities,” according to the LAPD. 

One of the activists who was monitored and recorded as well as charged with misdemeanors, Miguel Antonio, said he would not let the surveillance stop him from organizing:

 “We’re not scared. We’re not going to back down in the face of repression. You’re in a church, and you’re meeting about organizing a peaceful protest, and you’re running the risk of being charged with conspiracy or these petty crimes.”

Similar incidents have also taken place across the US. In Sacramento, police pursued cases against left-wing activists at a white supremacist rally. In Berkeley, police collaborated with a “violent pro Trump demonstrator” to prosecute a left-wing group. There have also been similar controversies in Washington DC and Oregon.

The LAPD surveillance was “striking”, given documented evidence of violence from the far right as well as the far left.

Mike German, a former FBI agent and expert on local extremist groups, said: 

“This case seems to fall into a pattern of police agencies viewing anti-fascist organizing as terrorism, while overlooking the far more deadly and frequent violence perpetrated by white supremacists and other far-right militants.”

The LAPD reportedly didn’t conduct similar spying operations on far right groups.

The LAPD police chief, Michel Moore, reportedly “ordered a top-to-bottom review to determine whether the department’s stringent requirements for the use of confidential informants were followed”.

On September 27, 2017, Antonio was arrested after he shut down a freeway in downtown LA to protest Trump a year after his election. Shortly thereafter, the LAPD had an informant approach Antonio at a meeting.

During an 11 October meeting, the informant approached Antonio and said, “Are we gonna do like any freeway things again…or major things like that?”, according to a transcript of a secret recording.

“I’m not sure,” Antonio responded.

The informant then said he was interested in joining future activities: “I thought the freeway thing was pretty good.”

At one point, the informant caught someone on a recording say: “That’s an awfully hot coffeepot, should I drop it on Donald Trump?”

Damon Alimouri, Antonio’s lawyer, said:

“The LAPD surveillance was unjust and outrageous. [I] suspect this type of spying [is] likely to escalate across the country. The further left that younger people go, we will continue to see law enforcement infiltrating these groups secretly. To a certain extent, it might intimidate some, and I think that’s the intention of the LAPD.”

Frank Wulf, the pastor of the church, said: “The government is interfering with the rights of protest in America,” he said, adding that he worried about a chilling effect: “You never know if the person sitting next to you is a police informant or not.”

via ZeroHedge News https://ift.tt/2Y6JjoM Tyler Durden

Iran Legalizes Crypto-Mining As “Official Industry”

After weeks of uncertainty, the Iranian government’s Economic Commission has approved a mechanism of cryptocurrency mining in the country, according to an announcement by the Iran Chamber of Commerce, Industries, Mines and Agriculture on July 22.


As CoinTelegraph’s Ana Alexandre reports, Governor of the Central Bank of Iran (CBI), Abdolnaser Hemmati said that “a mechanism to mine digital coins was approved by the government’s economic commission and will later be put to discussion at a Cabinet meeting.”

Initially, Iranian authorities announced that they are planning to authorize Bitcoin and cryptocurrency mining earlier in July, when the CBI governor Abdol Hemmati reportedly claimed that the Iranian government had approved some parts of an executive law that would authorize mining of cryptocurrencies in Iran.

At the time, Hemmati argued that digital currency miners in Iran should contribute to the country’s economy, rather than letting mined Bitcoin escape abroad.

Also, at the Commission’s latest meeting, its head Elyas Hazrati said that cryptocurrency is now recognized as official by the government, adding:

“We do believe that cryptocurrency industry should be recognized as an official industry in Iran to let the country take advantage of its tax and customs revenues.”

image courtesy of CoinTelegraph

Today’s news also follows yesterday’s reports that The Iranian Economic Commission has reportedly finalized a tariff scheme for cryptocurrency miners, according to a report from Iranian economic daily Financial Tribune.

CoinTelegraph’s Aaron Wood details that Energy Minister Homayoon Ha’eri announced that while the tariff scheme has been finalized, it is awaiting approval from the Cabinet of Iran – a governmental body consisting of various ministers and other officials chosen by the president. 

While Ha’eri did not elaborate on the exact price scheme, he stated that the price is dependent on market factors such as fuel prices in the Persian Gulf. 

The head of Iran Electrical Industry Syndicate, Ali Bakhshi, previously proposed a price of $0.07 per kilowatt hour for cryptocurrency miners. Electricity in Iran is currently very cheap due to government subsidies; one kilowatt hour of electricity currently costs $0.05, with power being cheaper in the agricultural and industrial sectors. 

To put these prices in context, Mostafa Rajabi Mashhadi, the Energy Ministry spokesman for the power department, previously stated that the production of a single Bitcoin (BTC) uses about $1,400 in state subsidies. 

The Financial Tribune reports that mining one Bitcoin reportedly consumes as much electricity as 24 buildings in Tehran do in one year. 

This news follows an announcement from the Central Bank of Iran (CBI), in which the banks governor Abdol Hemmati claimed that the CBI was planning to authorize cryptocurrency mining. 

Similar to the statements from Energy Minister Ha’eri, Hemmati said that a planned law will require crypto mining in Iran to abide with the price of electricity for export, rather than allowing miners to use the heavily subsidized internal energy grid.

Also today, Deputy President of the Islamic Republic of Iran Customs Administration Jamal Arounaghi announced that the agency has not yet issued licenses for the import of cryptocurrency mining equipment. While a tariff scheme exists, the final decision on licensure awaits approval from the government.

via ZeroHedge News https://ift.tt/2SuwmUz Tyler Durden

How to survive a big data breach

Today, I interview Frank Blake, who as CEO brought Home Depot through a massive data breach. Frank’s a former co-clerk of mine, a former Deputy Secretary of Energy, and the current host of Crazy Good Turns, a podcast about people who have found remarkable, even crazy, ways to help others. In addition to his insights on what it takes to lead an organization, Frank offers his views on how technology can transform nonprofit charitable initiatives. Along the way, he displays his characteristic sense of humor, especially about himself.

In the News Roundup, I ask Matthew Heiman if Google could have had a worse week in Washington. First Peter Thiel raised the question of whether it’s treasonous for the company to work on AI with Chinese scientists but not the US Defense Department, then Richard Clarke, hardly a conservative, says he agrees with the criticism. And, inevitably, President Trump weighs in with a Thiel-supporting tweet. Meanwhile, on the Hill, Google’s VP says the company has “terminated” Project Dragonfly, an effort to build a search engine that the Chinese government would approve. But that doesn’t prevent conservatives from lambasting the company for bias against conservatives and an unfair subsidy in the form of Section 230 of the Communications Decency Act. The only good news for Google is that despite all the thunder, no lightning has yet struck. Or so we thought for about five minutes, at which time Gus Hurwitz noted that Google is likely to face multimillion-dollar fines in an FTC investigation of child Internet privacy violations, not to mention a rule-making designed to increase the probability of future fines.

Speaking of which, European lightning struck Amazon this week in the form of new competition law scrutiny. Gus offers skepticism about the EU’s theory, and I offer counter-skepticism.

Julian Assange has completed his transformation from free-speech crusader to feces-speech crusader. Nick Weaver is astonished at the way Julian Assange managed to turn the Ecuadorian embassy into a fist-fighting, feces-smearing, election-meddling command post.

Nick also predicts that Kazakhstan will lose its war with Silicon Valley browser makers over a man-in-the-middle certificate the Kazakh government is forcing on its citizens in order to monitor their Internet browsing.

And in short hits, Gus questions whether $650 million is a harsh settlement of Equifax’s data breach liability; Nick closes the books on NSA hoarder Hal Martin’s 9-year prison sentence; and Nick explains the latest doxing of an intelligence agency – this time a contractor for the Russian FSB.

Download the 273rd Episode (mp3).

You can subscribe to The Cyberlaw Podcast using iTunes, Google Play, Spotify, Pocket Casts, or our RSS feed!

As always, The Cyberlaw Podcast is open to feedback. Be sure to engage with @stewartbaker on Twitter. Send your questions, comments, and suggestions for topics or interviewees to CyberlawPodcast@steptoe.com. Remember: If your suggested guest appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

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FBI Raids LA’s Department Of Water & Power, City Hall

Rumors about a federal investigation into Los Angeles city hall have been circulating for months now, and on Monday, the Los Angeles Times reported that the FBI carried out a search of the Department of Water and Power and City Hall.

Power

A spokesman for the FBI confirmed the search.

“There is a search taking place at the DWP building. The affidavit in support of the search warrant is under seal by the court,” said Rukelt Dalberis, an FBI spokesman in Los Angeles. Law enforcement sources said the FBI was also at Los Angeles City Hall.

A champagne-colored van was parked outside the DWP headquarters with a placard saying “FBI” and “Official Business.”

An FBI van was parked outside City Hall East, which serves as the headquarters for City Atty. Mike Feuer ‘s office and several government agencies.

A spokesman for the City Attorney’s Office refused to confirm whether the FBI agents had entered the City Attorney’s office.

The mayor’s office released a statement saying Eric Garcetti’s office welcomed the investigation.

Alex Comisar, a spokesman for Mayor Eric Garcetti, said in a statement: “We were notified earlier this morning that federal search warrants were being executed today. The mayor believes that any criminal wrongdoing should be investigated and prosecuted. His expectation is that any city employee asked to cooperate will do so fully and immediately.”

DWP Commissioner Christina Noonan declined to comment, saying she had been advised to refer all questions to a department spokesman.

LADWP spokesman Joe Romallo did not return multiple calls seeking comment.

Federal investigators have cast a wide net for information about foreign investment in Los Angeles real estate developments. Among those named in the warrant were Councilman Jose Huizar, Curren Price, the former head of he Department of Building and Safety and high-level appointees of Garcetti and Council President Herb Wesson.

Recently, the developers of projects in Councilman Jose Huizar’s district have received grand jury subpoenas demanding they turn over communications with the councilman and other current and former staffers.

The DWP has been struggling with its own series of scandals, including the fallout from a billing system that sent out wildly inaccurate bills to customers, prompting a flood of lawsuits.

The warrant also named executives of Chinese firms bankrolling new residential and hotel towers on Figueroa Street in downtown Los Angeles. It doesn’t say whether the FBI has gathered evidence of criminal activity.

via ZeroHedge News https://ift.tt/2GplWk3 Tyler Durden

How to survive a big data breach

Today, I interview Frank Blake, who as CEO brought Home Depot through a massive data breach. Frank’s a former co-clerk of mine, a former Deputy Secretary of Energy, and the current host of Crazy Good Turns, a podcast about people who have found remarkable, even crazy, ways to help others. In addition to his insights on what it takes to lead an organization, Frank offers his views on how technology can transform nonprofit charitable initiatives. Along the way, he displays his characteristic sense of humor, especially about himself.

In the News Roundup, I ask Matthew Heiman if Google could have had a worse week in Washington. First Peter Thiel raised the question of whether it’s treasonous for the company to work on AI with Chinese scientists but not the US Defense Department, then Richard Clarke, hardly a conservative, says he agrees with the criticism. And, inevitably, President Trump weighs in with a Thiel-supporting tweet. Meanwhile, on the Hill, Google’s VP says the company has “terminated” Project Dragonfly, an effort to build a search engine that the Chinese government would approve. But that doesn’t prevent conservatives from lambasting the company for bias against conservatives and an unfair subsidy in the form of Section 230 of the Communications Decency Act. The only good news for Google is that despite all the thunder, no lightning has yet struck. Or so we thought for about five minutes, at which time Gus Hurwitz noted that Google is likely to face multimillion-dollar fines in an FTC investigation of child Internet privacy violations, not to mention a rule-making designed to increase the probability of future fines.

Speaking of which, European lightning struck Amazon this week in the form of new competition law scrutiny. Gus offers skepticism about the EU’s theory, and I offer counter-skepticism.

Julian Assange has completed his transformation from free-speech crusader to feces-speech crusader. Nick Weaver is astonished at the way Julian Assange managed to turn the Ecuadorian embassy into a fist-fighting, feces-smearing, election-meddling command post.

Nick also predicts that Kazakhstan will lose its war with Silicon Valley browser makers over a man-in-the-middle certificate the Kazakh government is forcing on its citizens in order to monitor their Internet browsing.

And in short hits, Gus questions whether $650 million is a harsh settlement of Equifax’s data breach liability; Nick closes the books on NSA hoarder Hal Martin’s 9-year prison sentence; and Nick explains the latest doxing of an intelligence agency – this time a contractor for the Russian FSB.

Download the 273rd Episode (mp3).

You can subscribe to The Cyberlaw Podcast using iTunes, Google Play, Spotify, Pocket Casts, or our RSS feed!

As always, The Cyberlaw Podcast is open to feedback. Be sure to engage with @stewartbaker on Twitter. Send your questions, comments, and suggestions for topics or interviewees to CyberlawPodcast@steptoe.com. Remember: If your suggested guest appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!

The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.

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via IFTTT

The Non-Hack That Hurt Hillary – On The 3rd Anniversary Of WikiLeaks Release Of The DNC Emails

Authored by Ray McGovern via ConsortiumNews.com,

Three years ago Monday WikiLeaks published a trove of highly embarrassing emails that had been leaked from inside the Democratic National Committee. As has been the case with every leak revealed by WikiLeaks, the emails were authentic. These particular ones, however, could not have come at a worse time for top Democratic Party officials.

The emails made it unmistakably clear that the DNC had tipped the scales sharply against Democratic insurgent Bernie Sanders, giving him a snowball’s chance in hell for the nomination. The posting of the DNC emails is also widely seen as having harmed the the electoral prospects of Hillary Clinton, who could not escape responsibility completely, while a handful of the very top DNC officials were forced to immediately resign.

Relatively few Americans read the actual emails, their attention diverted to the incessant media-fostered question: Why Did the Russians Hack the DNC to Hurt Hillary? For the millions of once enthusiastic Democrats who favored Sanders, however, the disclosure that the nomination process had been fixed came as a bitter pill, leaving a sour taste in their mouths and a passive-aggressive reluctance to promote the candidacy of one they considered a usurper. Having had a huge stake in Bernie’s candidacy, they had little trouble seeing through the diversion of attention from the content of the emails.

Clinton Prevails

A mere four days after the WikiLeaks release, a well orchestrated Democratic Convention nominated Clinton, while many Sanders supporters loudly objected. Thus, she began her campaign under a cloud, and as more and more Americans learned of the fraud that oozed through the DNC email correspondence — including the rigging of the Democratic primaries — the cloud grew larger and darker.

On June 12, 2016, six weeks before the convention, WikiLeaks publisher Julian Assange had announcedin an interview on British TV, “We have upcoming leaks in relation to Hillary Clinton … We have emails pending publication.”

Independent forensic investigations demonstrated two years ago that the DNC emails were not hacked over the Internet, but had been copied onto an external storage device — probably a thumb drive. Additional work over recent months has yielded more evidence that the intrusion into the DNC computers was a copy, not a hack, and that it took place on May 23 and 25, 2016.

The DNC almost certainly knew what had happened — not only that someone with physical access to DNC computers had copied thousands of emails, but also which ones they had copied, and thus how prejudicial to the Clinton campaign they would be when they saw the light of day.

And so, candidate Clinton, the DNC, and the mainstream media (forever quoting anonymous “current and former intelligence officials”) appear to have colluded, deciding the best defense would be a good offense. No one knew how soon WikiLeaks would publish the emails, but the DNC offense/defense would surely have to be put in place before the convention scheduled to begin on July 25. That meant there were, at most, six weeks to react. But it only took two days. As early as July 24, about 48 hours after the leaks were published, and a day before the convention, the DNC first blamed Russia for hacking their emails and giving them to WikiLeaks to sabotage Clinton.

A Magnificent Diversion

Granted, it was a stretch — and the DNC would have to hire a pliable cybersecurity firm to back up their claim. But they had good reason to believe that CrowdStrike would perform that service. It was the best Clinton campaign manager Robbie Mook and associates could apparently come up with. If they hurried, there would be just enough time to prepare a PR campaign before the convention and, best of all, there was little doubt that the media could be counted on to support the effort full bore.

Clinton: Already blaming the Russians at DNC 2016 convention. (Wikipedia)

When WikiLeaks published the emails on July 22, 2016, just three days before the Democratic convention, the propagandists were ready to deflect attention from the damning content of the DNC emails by repeating incessantly that the Russians hacked the emails and gave them to WikiLeaks to hurt Clinton.

It pretty much worked like a charm. The late Senator John McCain and others were quick to call the Russian “hack” an “an act of war.” Evidence? None. For icing on the cake, then-FBI Director James Comey decided not to seize and inspect the DNC computers. Nor, as we now know, did Comey evenrequire a final report from CrowdStrike.

Eight months after the convention, in remarks at the Clinton/Podesta Center for American Progress on April 6, 2017, Clinton’s PR director, Jennifer Palmieri, could scarcely contain her pride that, after a difficult start, she was ultimately successful in keeping the Russian bear front and center.

Transcribed below (verbatim) are some of Palmieri’s more telling remarks when asked to comment, from her insider perspective, on “what was actually going on in late summer/early fall.”

“…I did appreciate that for the press to absorb … the idea that behind the stage that the Trump campaign was coordinating with Russia to defeat Hillary Clinton was too fantastic for people to, um, for the press to process, to absorb…. But then we go back to Brooklyn and heard from the — mostly our sources were other intelligence, with the press who work in the intelligence sphere, and that’s where we heard things and that’s where we learned about the dossier and the other story lines that were swirling about … And along the way the administration started confirming various pieces of what they were concerned about what Russia was doing. … [Emphasis added.]

“And we did finally get to the point on October 7, when the administration came out with a very stunning [memorandum]. How stunning it was for both the Director of National Intelligence and the Director of Homeland Security to put out a statement – a long statement – that said with high confidence that Russia was interfering in the election and they were also directing the timing of the leaks. And it named the institutions – WikiLeaks, DC Leaks, and Guccifer – as being Russian-led, and how stunning that was to be that certain and that public. … So I do think that the answer for the Democrats now … in both the House and the Senate is to talk about it more and make it more real ….”

And so, the Magnificent Diversion worked as intended.

Recognizing Liminal Time

But not all journalists fell for it.

Patrick Lawrence (once of The Nation, now of Consortium News) was onto the ruse from the start. He says he had “fire in the belly” on the morning of July 25, 2016, the day the Democratic convention began, and that he dashed off an article “in one long, furious exhale” within 12 hours of when the media started really pushing the “the Russians-did-it” narrative. The title of his article, pointed out to me a few months ago by VIPS member Todd Pierce, was “How the DNC fabricated a Russian hacker conspiracy to deflect blame for its email scandal … a disturbing resemblance to Cold War red-baiting.”

Lawrence’s off-the-cuff ruminations, which Salon published the next day are extraordinarily prescient and worth reading in full. He instinctively recognized the email disclosure-cum-media-obfuscation campaign as a liminal event. Here are some excerpts, reprinted here with Lawrence’s permission:

”Now wait a minute, all you upper-case “D” Democrats. A flood light suddenly shines on your party apparatus, revealing its grossly corrupt machinations to fix the primary process and sink the Sanders campaign, and within a day you are on about the evil Russians having hacked into your computers to sabotage our elections … Is this how lowly you rate the intelligence of American voters? …

The Sanders people have long charged that the DNC has had its fingers on the scale … in favor of Hillary Clinton’s nomination. The prints were everywhere … Last Friday WikiLeaks published nearly 20,000 DNC email messages providing abundant proof that Sanders and his staff were right all along. The worst of these, involving senior DNC officers, proposed Nixon-esque smears having to do with everything from ineptitude within the Sanders campaign to Sanders as a Jew in name only and an atheist by conviction. …

The caker came on Sunday, when Robby Mook … appeared on ABC’s “This Week” and … CNN’s “State of the Union” to assert that the D.N.C.’s mail was hacked “by the Russians for the purpose of helping Donald Trump.” He knows this … because “experts” — experts he will never name — have told him so.

…the Clinton campaign now goes for a twofer. Watch as it advances the Russians-did-it thesis on the basis of nothing, then shoots the messenger, then associates Trump with its own mess — and, finally, gets to ignore the nature of its transgression (which any paying-attention person must consider grave). Preposterous, readers. Join me, please, in having absolutely none of it. There is no “Russian actor” at the bottom of this swamp, to put my position bluntly. You will never, ever be offered persuasive evidence otherwise. …[Emphasis added.]

Trump, to make this work, must be blamed for his willingness to negotiate with Moscow. This is now among his sins. Got that? Anyone who says he will talk to the Russians has transgressed the American code. … I am developing nitrogen bends … Which way for a breath of air?”

Sad Sequel

A year later Lawrence was commissioned by The Nation to write an investigative report on the so-called “Russian hack.” On August 9, 2017, after he interviewed several Veteran Intelligence Professionals for Sanity, among others, The Nation published his findings in an article entitled “A New Report Raises Big Questions About Last Year’s DNC Hack.” Lawrence wrote, “Former NSA experts, now members of Veteran Intelligence Professionals for Sanity (VIPS), say it wasn’t a hack at all, but a leak—an inside job by someone with access to the DNC’s system.”

Again, Lawrence got it right — this time relying less on his own experience and intuition than on applied science as practiced by real technical experts with no axes to grind. But, sadly, that cut across the grain of the acceptable Russia-gate narrative, and a furor erupted among Hillary followers still licking their wounds over her loss. It proved simply too much for them to entertain the notion that Clinton was quite capable, with help from the likes of Mook, to snatch defeat out of the jaws of victory — without any help from Vladimir Putin.

via ZeroHedge News https://ift.tt/30RtC6x Tyler Durden

Man Killed In San Francisco After Tesla Runs Red Light, Crashes Into Tourists

One pedestrian has died and another is in “life that threatening condition” after a Tesla ran a red light and caused a two car accident in downtown San Francisco on Sunday afternoon, according to CBS.

The incident took place at the intersection of Taylor and O’Farrell Streets at about 2 o’clock in the afternoon. The Tesla was being rented out by its owner using the Getaround car sharing app.

The woman driving the Tesla was reportedly speeding and ran a red light, police said, citing surveillance footage. An investigator said the car was doing “at least 45 mph” when it entered the intersection and was broadsided by a Mini-Cooper. After the accident, the Tesla hit two pedestrians walking in the crosswalk.

The victims were tourists visiting from Clovis, California and were transported to San Francisco General Hospital with life-threatening injuries. The husband was pronounced dead at the hospital. He was identified as 39-year-old Benjamin Dean.

Both of the drivers were uninjured and police said alcohol and drugs didn’t seem to be factors in the collision. A USB thumb drive was collected from the Tesla’s computer to determine if the driver was using the vehicle’s Autopilot feature. A CBS camera caught the driver being placed into custody. The 22-year-old driver has been charged with vehicular manslaughter and running a red light.

The owner of the car, Albert Kim, said that he rented his car to a woman at about 4PM on Saturday. He said he was notified by an app that his car had been in an accident on Sunday. 

He said: 

“The Tesla app sent me a message that my car was in an accident, not drivable, and was in an accident. I didn’t believe it. I accepted that risk because based on probability, it might happen, but nobody is protected from it, even if you’re a perfect driver. There is a probability that you might make a mistake. That’s why I’m not mad at the driver. I might actually pray for her, you know, she’s now in a difficult situation.”

via ZeroHedge News https://ift.tt/2y5579y Tyler Durden

Oil Will “Go Bust” If Recession Hits

Authored by Nick Cunningham via OilPrice.com,

Oil prices plunged last week, dragged down by fears of slowing demand, and shrinking geopolitical risk premia.

An unexpected increase in inventories underscored the downside risk to oil prices. The EIA reported a drawdown in crude stocks, but a huge 9.25 million barrel combined increase in gasoline and diesel inventories, which surprised traders. Also, gasoline demand plunged by 0.5 mb/d in the week ending on July 12, although week-to-week changes are typical and make the data a bit noisy.

Crude prices sold off on the news, falling by nearly 3 percent on Thursday.

The data release renewed fears of a slowdown in demand. But cracks in U.S. demand are larger than one week’s worth of data. “The [year-on-year] increase in demand for the year to 11 July was just 29 thousand barrels per day (kb/d), up 0.1%,” Standard Chartered wrote in a note.

“Demand will have to be strong for the rest of the year if consensus forecasts for 2019 growth are to be achieved.”

The investment bank sees U.S. oil demand only rising by 89,000 bpd this year, while the EIA expects a stronger 248,000-bpd increase. Standard Chartered says U.S. oil demand “appears consistent with a slowing economy.”

The worrying thing for the oil market is that the U.S. economy has held up better than elsewhere.

In China, GDP growth has slowed to its weakest pace in nearly three decades. India, which is widely seen as the most important source of oil demand growth in the medium- and long-term, has also disappointed.

The International Energy Agency (IEA) said that global oil demand only grew by 0.45 mb/d in the second quarter. That contributed to a surprise 0.5 mb/d supply/demand surplus in the second quarter. As recently as June the IEA anticipated the oil market would see a 0.5 mb/d deficit.

The agency said that there were many reasons for tepid demand in recent months.

“European demand is sluggish; growth in India vanished in April and May due to a slowdown in LPG deliveries and weakness in the aviation sector; and in the US demand for both gasoline and diesel in the first half of 2019 is lower year-on-year,” the IEA wrote in its July Oil Market Report.

Nevertheless, the IEA stuck with its full-year forecast for demand growth at 1.2 mb/d, arguing that economic growth would rebound in the second half of 2019. Some of that optimism hinges on a resolution to the U.S.-China trade war, which seems a bit speculative. Reports suggest that trade negotiations are “stalled” while the Trump administration wrestles with how to handle Chinese tech giant Huawei. The Trump-Xi meeting on the sidelines of the G20 conference in June was supposed to lead to a restart in trade talks, but as the Wall Street Journal reports, no meetings have been scheduled as of yet. The WSJ also said that the Trump administration “appears to have resigned itself to a drawn-out battle.”

That certainly calls into question the optimism surrounding the IEA’s demand growth figures. “Both IEA and EIA remain optimistic in assuming an economic rebound in 2H19 and see global demand growth nearly tripling from ~0.6 mb/d y/y in 1H19 to ~1.5-1.8 mb/d y/y in 2H19,” said Allyson Cutright, Senior Analyst at Rapidan Energy Group. “While we do see some pickup in 2H19, in particular in China due to macroeconomic stimulus and eased restrictions on gasoline-cars, the overall trend in agency revisions is still probably headed down.”

Weak demand and rising supply are creating a perfect storm heading into 2020. The IEA said that the “call on OPEC” could fall by 0.8 mb/d next year, and even that is based on the agency’s rather optimistic demand growth figures.

As a result, OPEC+ has a serious problem on its hands. On the one hand, it can continue to cut production in order to prevent oil prices from collapsing. But that would require mustering up consensus and taking on deeper sacrifice. The alternative is not much better. OPEC+ can keep the current production cuts in place (or abandon them altogether) and let prices crash.

“Our balances have long assumed OPEC+ would have to extend and deepen cuts next year and project Saudi Arabia will be the brunt of the additional cuts,” Allyson Cutright of Rapidan Energy Group said.

“Our most recent update sees Saudi Arabia need to cut production toward the low-9 mb/d range next year, and that’s assuming decent economic growth.”

Rapidan is betting that OPEC+ will opt for cutting, which might be just enough to head off a price slide. “However, if a recession develops or US sanctions on Iran are removed, then the deluge of new oil would more likely prove too large for OPEC+ to manage and oil prices would bust,” Cutright said.

via ZeroHedge News https://ift.tt/2Yo4fvm Tyler Durden