How Bitcoin Could Serve the Marijuana Industry as Banks Remain Too Scared to Enter

The reason venture capitalists have become so intrigued with Bitcoin over the past year or so is because it is what the industry refers to as a “disruptive technology.” Some of the key tenets of a disruptive technology are that it allows people and businesses within a certain industry (or industries) to do things cheaper, faster, and better than before by a significant, if not revolutionary margin. Bitcoin easily checks all these boxes. Even more than that, it also frees humanity from the vengeful whims, or simply the bureaucratic inefficiencies, of the state apparatus. Case in point, when Wikileaks was unable to access the traditional banking system due to a state sponsored blockade, they were still able to obtain funds through Bitcoin. In fact, that specific example, is the primary reason that I officially got behind Bitcoin in late summer 2012. I made this point clear in my debut article on the topic titled: Bitcoin: A Way to Fight Back Against the Financial Terrorists?

Which brings me to the topic of today’s post. Medical marijuana is already legal in 20 states plus the District of Columbia. It is also completely legal for recreational use in two states; Colorado where I reside, as well as Washington State. Nevertheless, big daddy government still thinks it knows best and continues to classify the relatively benign substance as a schedule one drug under federal law. As such, the banking system, (including state banks) is simply to afraid to get involved. Enter Bitcoin.

Well at least that is what I suspect will happen. As of now, it has been anecdotally reported that one dispensary has made Bitcoin payments an option, but I haven’t seen any clarification as to which one. I see this as a fantastic opportunity for both the Bitcoin community as well as the marijuana industry to come together to solve a major problem. It could be a huge win-win for both. The main question on my mind at this point is whether or not the main Bitcoin payment processing companies Coinbase and BitPay will agree to play along…

First let’s examine the problem. A recent article from the New York Times highlighted it. Here are some key excerpts.

The New York Times writes:

Legal marijuana merchants like Mr. Kunkel — mainly medical marijuana outlets but also, starting this year, shops that sell recreational marijuana in Colorado and Washington — are grappling with a pressing predicament: Their businesses are conducted almost entirely in cash because it is exceedingly difficult for them to open and maintain bank accounts, and thus accept credit cards.

As a result, banks, including state-chartered ones, are reluctant to provide traditional services to marijuana businesses. They fear that federal regulators and law enforcement authorities might punish them, with measures like large fines, for violating prohibitions on money-laundering, among other federal laws and regulations.

“Banking is the most urgent issue facing the legal cannabis industry today,” said Aaron Smith, executive director of the National Cannabis Industry Association in Washington, D.C. Saying legal marijuana sales in the United States could reach $3 billion this year, Mr. Smith added: “So much money floating around outside the banking system is not safe, and it is not in anyone’s interest. Federal law needs to be harmonized with state laws.”

The limitations have created unique burdens for legal marijuana business owners. They pay employees with envelopes of cash. They haul Chipotle and Nordstrom bags containing thousands of dollars in $10 and $20 bills to supermarkets to buy money orders. When they are able to open bank accounts — often under false pretenses — many have taken to storing money in Tupperware containers filled with air fresheners to mask the smell of marijuana.

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/13/how-bitcoin-could-serve-the-marijuana-industry-as-banks-remain-too-scared-to-enter/
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BitPay is Now Adding 1,000 New Merchants Per Week

Earlier today, the Bitcoin news website Coindesk reported that BitPay is adding 1,000 new merchants per week, within an article highlighting the fact that private jet company PrivateFly had just teamed up with the payment processor to accept BTC for its charter flights.

Just to put this into perspective and understand just how staggering this growth it, BitPay only first surpassed 1,000 total merchants in September 2012 and a total of 10,000 in September 2013. At its current growth rate, the company is set to double the milestone of 10,000 merchants every two and a half months. Incredible.

From Coindesk:

“We believe that merchants are starting to see the value that accepting bitcoin can bring to their business,” said BitPay’s Jan Jahosky. “We’re adding merchants at a pace of 1,000 new merchants per week.”

“We expect exponential growth in the popularity of bitcoin around the world with both merchants and consumers, and anticipate seeing the biggest growth in China, India, Russia and South America.”

Full article here.

In Liberty,
Mike

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BitPay is Now Adding 1,000 New Merchants Per Week originally appeared on A Lightning War for Liberty on January 11, 2014.

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/11/bitpay-is-now-adding-1000-new-merchants-per-week/
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A Year Ago Today We Lost Aaron Swartz – R.I.P.

Exactly one year ago today, the world lost a kind, brilliant and courageous human being. Aaron Swartz, who had already accomplished so much in his short time with us, was driven to suicide by an out of control, unenlightened and increasingly fascistic government, determined to prosecute this gentle genius.

In remembrance of Aarron, I am reposting in full, the post I wrote about him and his story shortly after his death one year ago titled: Remembering Internet Prodigy and Activist Aaron Swartz (1986-2013): Your Life is an Inspiration.

Rest in Peace.

Remembering Internet Prodigy and Activist Aaron Swartz (1986-2013): Your Life is an Inspiration

It takes a person like Aaron Swartz to remind you how little you are actually doing to bring forth social, political and economic justice in this increasingly insane and sick world.  I’m not exaggerating when I say his life was an inspiration.   At 14 years old he helped start the RSS feed system, which so many now use to read content online.  He also co-founded Reddit, and its sale to Conde Nast is what afforded him the resources to dedicate his life to the defense of a free and open internet.  His most remarkable success in this regard was the creation of the organization Demand Progress, which was instrumental in defeating the internet censorship bill know as SOPA (the Stop Online Piracy Act).

He ran afoul of the law due to his actions in the fall of 2010 when he downloaded millions of academic journal articles from the nonprofit online database JSTOR.  While JSTOR could have pursued charges against Aaron for his activities, they decided against it.  However, our Federal Government was not so kind.  They decided to make an example of Aaron and charged him with multiple felonies.  Charges that carried up to 35 years in prison and $1 million in fines.  Aaron was found dead in his Brooklyn apartment this past Friday, in an apparent suicide.

If you had asked me about Aaron Swartz three days ago I could have told you none of the above.  This is despite the fact that I now spend pretty much all of my time trying to read through news and understand the true nature of the world around me.  Even more pathetically, it is despite the fact that a close friend of mine had met Aaron this past summer and was trying to coordinate a time for us all to meet.  Sadly, we never connected.

As part of my tribute to Aaron, I will commit myself even more fully to the cause of freedom in America.  I spent the last 12 hours reading about him and I have compiled some of the most interesting excerpts from various sources below.  Please take the time.

First from the official statement from his family and partner:

Aaron’s death is not simply a personal tragedy. It is the product of a criminal justice system rife with intimidation and prosecutorial overreach.Decisions made by officials in the Massachusetts U.S. Attorney’s office and at MIT contributed to his death. The US Attorney’s office pursued an exceptionally harsh array of charges, carrying potentially over 30 years in prison, to punish an alleged crime that had no victims. Meanwhile, unlike JSTOR, MIT refused to stand up for Aaron and its own community’s most cherished principles.

Next from Lawrence Lessig, the director of the Edmond J. Safra Center for Ethics at Harvard University and the Roy L. Furman Professor of Law at Harvard Law School and friend of Aaron.  He writes:

Early on, and to its great credit, JSTOR figured “appropriate” out: They declined to pursue their own action against Aaron, and they asked the government to drop its. MIT, to its great shame, was not as clear, and so the prosecutor had the excuse he needed to continue his war against the “criminal” who we who loved him knew as Aaron.

From the beginning, the government worked as hard as it could to characterize what Aaron did in the most extreme and absurd way. The “property” Aaron had “stolen,” we were told, was worth “millions of dollars” — with the hint, and then the suggestion, that his aim must have been to profit from his crime. But anyone who says that there is money to be made in a stash of ACADEMIC ARTICLES is either an idiot or a liar. It was clear what this was not, yet our government continued to push as if it had caught the 9/11 terrorists red-handed.

I get wrong. But I also get proportionality. And if you don’t get both, you don’t deserve to have the power of the United States government behind you.

For remember, we live in a world where the architects of the financial crisis regularly dine at the White House — and where even those brought to “justice” never even have to admit any wrongdoing, let alone be labeled “felons.”

From the Huffington Post:

Swartz spent the last two years fighting federal hacking charges. In July 2011, prosecutor Scott Garland working under U.S. Attorney Carmen Ortiz, a politician with her eye on the governor’s mansion, charged Swartz with four counts of felony misconduct — charges that were deemed outrageous by internet experts who understood the case, and wholly unnecessary by the parties Swartz was accused of wronging.

Swartz repeatedly sought to reduce the charges to a level below felony status, but prosecutors pressed on, adding additional charges so that by September 2012 Swartz faced 13 felony counts and up to half a century in prison.

Swartz’s friend Henry Farrell, a political scientist at George Washington University, also pointed at the DOJ. “They sought felony convictions with decades of prison time for actions which, if they were illegal at all, were at most misdemeanors.”

Had JSTOR wanted to pursue civil charges against Swartz for breach of contract, it could have. But JSTOR did not, and washed its hands of the whole affair.

Last June, Swartz told HuffPost that both JSTOR and MIT had advised prosecutors they were not interested in pursuing criminal or civil charges.

But the government pressed on, interpreting Swartz’s actions as a federal crime, alleging mass theft, damaged computers and wire fraud, and suggesting that Swartz stood to gain financially.

JSTOR issued a statement late on Saturday expressing regret at Swartz’s passing, criticizing his prosecution.

“The case is one that we ourselves had regretted being drawn into from the outset, since JSTOR’s mission is to foster widespread access to the world’s body of scholarly knowledge,” the statement reads. “At the same time, as one of the largest archives of scholarly literature in the world, we must be careful stewards of the information entrusted to us by the owners and creators of that content. To that end, Aaron returned the data he had in his possession and JSTOR settled any civil claims we might have had against him in June 2011.”

From Glenn Greenwald at the Guardian:

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/11/a-year-ago-today-we-lost-aaron-swartz-r-i-p/
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Overstock’s First Day of Bitcoin – $130,000 in Sales, 850 Transactions, CEO is “Stunned”

Upon the conclusion of the Senate hearing on Bitcoin this past November, I tweeted that I thought we had entered Phase 2 of the Bitcoin story. A month later, following news that Andreessen Horowitz had led an venture capital investment of $25 million in Coinbase, I wrote:

As I tweeted at the time, I think Bitcoin began phase two of its growth and adoption cycle upon the conclusion of the Senate hearings last month (I suggest reading: My Thoughts on the Bitcoin Hearing).

I think phase two will be primarily characterized by two things. More mainstream adoption and ease of use, as well as increasingly large investments by venture capitalists. In the past 24 hours, we have seen evidence of both.

Phase 2 so far is going even more positively than I had expected. Overstock.com accelerated its plans to accept BTC by many months, and the early rollout has been a massive success. The company’s CEO just tweeted:

This is absolutely huge news and any retail CEO worth their salt will immediately begin to look into Bitcoin adoption.

I hope financial publications that missed the biggest financial story of 2013 continue to mock it with covers of unicorns and waterfalls. It’s the most bullish thing I can imagine.

In Liberty,
Mike

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Overstock’s First Day of Bitcoin – $130,000 in Sales, 850 Transactions, CEO is “Stunned” originally appeared on A Lightning War for Liberty on January 10, 2014.

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/10/first-day-of-bitcoin-sales-on-overstock-850-transactions-130k-in-sales-ceo-is-stunned/
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Humana Warns of “‘Adverse ObamaCare Enrollment Mix”

Thought the incredibly unpopular ObamaCare health plan (the most epic disaster story was the woman who was touted as a success and then later kicked off her plan) had put most of its problems behind it? Think again. Yesterday, after the stock market close, health insurer Humana warned that the “risk mix” of those who have signed up for the program will be “more adverse than previously expected.”

In plain english what this means is that only old and sick people are signing up, while younger generations with piles of student debt, a couch in their parents’ basements and no jobs decide to ride things out uninsured.

Honestly, I can’t blame them, as I just received my own 12% rate hike the other day. Happy New Year to you too Barry.

From Investor’s Business Daily:

Humana said the “risk mix” of its ObamaCare exchange members will be “more adverse than previously expected,” the latest evidence that the health reform is attracting older, sicker Americans than originally projected.

The health insurer, in an SEC filing late Thursday, cited the Obama administration’s 11th hour decision to let people stay on plans that had been cancelled due to ObamaCare regulations. The White House was reacting to political anger of President Obama’s “if you like your plan, you can keep it” vow.

Humana made no mention of the administration’s late December decision to let people with cancelled plans avoid the individual mandate tax penalty in 2014. Those who choose to forgo insurance presumably will be younger and healthier.

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/10/humana-warns-of-adverse-obamacare-enrollment-mix/
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Sales of Hitler’s Mein Kampf are Surging…

How fortunate for governments that the people they administer don’t think.
– Adolf Hitler

The headline of this post is one that I am not sure how to interpret, but undoubtably marks something of significance. Personally, there have been many occasions throughout my youth, as well as my adult life, where I had a desire to read Mein Kampf. I was always curious to get into the mind of one of humanity’s greatest sociopaths. To get a glimpse of the thought process of a man capable of such cruelty and evil. To understand the types of words he used and the various psychological tactics he employed to manipulate an economically destitute and politically demoralized German population.

These feelings welled up inside of me once again back in 2008, when I feared that a financial and economic meltdown could cause the U.S. population to be thrust into the arms of a demagogue. I wanted to be able to more accurately identify the rhetoric of one of history’s more “successful” demagogue dictators in order to be able to spot similar trends should they arise in my time.

While I never got around to reading it, I did read part of one of Hitler’s speeches from before the war. It was interesting to not how he did not openly speak as a raging psychopath on his way to destroying much of Europe. Rather, he attempted to appeal to his audience as rational, passionate leader there to protect and exalt the German people back to greatness. That was the scariest thing of all.

This is what the top sales chart on iTune’ category Politics and Current Events looks like.

Screen Shot 2014-01-09 at 7.29.56 AM

At this point I’d like to remain hopeful that these sales trends spring from a similar curiosity on behalf of the population, rather than from a darker more hateful place.

From Time: 

The infamous manifesto Adolf Hitler wrote while in prison after a failed coup in 1923, Mein Kampf or My Struggle, in which the dictator outlined his idea of a global Jewish conspiracy, is a surprise hit on the ebook market. While the book’s print copy sales remain stagnant, the ebook is in the top 20 on iTunes’s Politics & Events chart, next to books by Sarah Palin and Glenn Beck, the number one Propaganda & Political Psychology book on Amazon, and the 17th bestseller in the company’s Nationalism list. How could that be?

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/09/sales-of-hitlers-mein-kampf-are-surging/
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And the Most Popular Political Party in America is…

The following poll results from Gallup represent the most significant domestic news story I have come across in 2014 to-date. Gallup polling in 2013 showed that the highest number of Americans now identify as Independents since it starting asking the question 25 years ago. Specifically, 42% identify as Independents, versus 31% as Democrats and 25% as Republicans. Even more interesting, the trend accelerated as the year progressed. If we look at quarterly results, in 4Q13 46% identified as Independents, versus 29% Democrat and 22% Republican.

This is huge, huge news and it seems that my long held belief that both the Democrat and Republican parties are set to completely disintegrate during this current 4th Turning. Earlier in 2012, wrote a piece titled, The Seventy Percent, in which I predicted that no matter who would go on to win the Presidential election, 70% of the public would be disappointed.

This sets up huge opportunities for non-conventional candidates to gain control of local and national office in 2014 and beyond. While I hold out limited hope for traditional politics, we must fight on all fronts for secular reform and the window right now is wide open.

From Gallup.

Forty-two percent of Americans, on average, identified as political independents in 2013, the highest Gallup has measured since it began conducting interviews by telephone 25 years ago. Meanwhile, Republican identification fell to 25%, the lowest over that time span. At 31%, Democratic identification is unchanged from the last four years but down from 36% in 2008.

The results are based on more than 18,000 interviews with Americans from 13 separate Gallup multiple-day polls conducted in 2013.

Screen Shot 2014-01-08 at 3.01.26 PM

In each of the last three years, at least 40% of Americans have identified as independents. These are also the only years in Gallup’s records that the percentage of independents has reached that level.

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/08/and-the-most-popular-political-party-in-america-is/
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Meet the MQ-4C Triton – A New Navy Drone with the Wingspan of a Boeing 757

Spying on humanity’s every electronic move is clearly not good enough for the U.S. government. It is also necessary to be able to surveil the species’ every move from 50,000 feet in the sky. You know, because of the terrorists and all.

The past couple of years have seen many frightening new advances from the U.S. military. From “Atlas” the 6 Foot Tall Humanoid Robot, to “ARGUS” The World’s Highest Resolution Video Surveillance Platform, to domestic drone use, the Department of Defense is hard at work making sure that you can never engage in a private act again without the fear of a hellfire missile landing on your head.

Now here’s the latest…a Northrop Grumman drone with the wingspan of a 757.

From Wired:

A new drone with the mammoth wingspan of a Boeing 757 is set to give the U.S. Navy some serious surveillance power.

Northrop Grumman and the Navy say they’ve just completed the ninth flight trial of the Triton unmanned aircraft system (UAS), an improvement upon its predecessor in the Air Force, the Global Hawk.

With its 130-foot wingspan, Triton will provide high-altitude, real-time intelligence, surveillance and reconnaissance (ISR) from a sensor suite that supplies a 360-degree view at a radius of over 2,000 nautical miles, allowing monitoring from higher and farther away than any of its competitors.

Thus far, Triton has completed flights up to 9.4 hours at altitudes of 50,000 feet at the company’s manufacturing facility in Palmdale, California. According to Northrop Grumman, Triton could support missions up to 24 hours.

Now here’s this sucker in the wild.

Sleep tight serfs.

Full article here.

In Liberty,
Mike

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Meet the MQ-4C Triton – A New Navy Drone with the Wingspan of a Boeing 757 originally appeared on A Lightning War for Liberty on January 8, 2014.

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/08/meet-the-mq-4c-triton-a-new-navy-drone-with-the-wingspan-of-a-boeing-757/
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How the U.S. Employs Overseas Sweatshops to Produce Government Uniforms

The following article from the New York Times is extraordinarily important as it perfectly highlights the incredible hypocrisy of the U.S. government when it comes to overseas slave labor and human rights. While the Obama Administration (and the ones that came before it) publicly espouse self-important platitudes about our dedication to humanitarianism, when it comes down to practicing what we preach, our government fails miserably and is directly responsible to immense human suffering.

Let’s get down to some facts. The U.S. government is one of the largest buyers of clothing from overseas factories at over $1.5 billion per year. To start, considering our so-called “leaders” are supposedly so concerned about the state of the U.S. economy, why aren’t we spending the money here at home at U.S. factories? If we don’t have the capacity, why don’t we build the capacity? After all, if we need the uniforms anyway, and it is at the taxpayers expense, wouldn’t it make sense to at least ensure production at home and create some jobs? If a private business wants to produce overseas that’s fine, but you’d think the government would be a little more interested in boosting domestic industry.

However, the above is just a minor issue. Not only does the U.S. government spend most of its money for clothing at overseas factories, but it employs some of the most egregious human rights abusers in the process. Child labor, beatings, restrictions on bathroom brakes, padlocked exits and much more is routine practice at these factories. Even worse, in the few instances in which the government is required to actually use U.S. labor, they just contract with prisons for less than $2 per hour using domestic slave labor. Then, when questions start to get asked, government agencies actually go out of their way to keep the factory lists out of the public’s eye, even going so far as denying requests when pressed for information by members of Congress.

Sadly, as usual, at the end of the day this is all about profits and money. Money government officials will claim is being saved by the taxpayer, but in reality is just being funneled to well connected bureaucrats.

From the New York Times:

WASHINGTON — One of the world’s biggest clothing buyers, the United States government spends more than $1.5 billion a year at factories overseas, acquiring everything from the royal blue shirts worn by airport security workers to the olive button-downs required for forest rangers and the camouflage pants sold to troops on military bases.

But even though the Obama administration has called on Western buyers to use their purchasing power to push for improved industry working conditions after several workplace disasters over the last 14 months, the American government has done little to adjust its own shopping habits.

Labor Department officials say that federal agencies have “zero tolerance” for using overseas plants that break local laws, but American government suppliers in countries including Bangladesh, the Dominican Republic, Haiti, Mexico, Pakistan and Vietnam show a pattern of legal violations and harsh working conditions, according to audits and interviews at factories. Among them: padlocked fire exits, buildings at risk of collapse, falsified wage records and repeated hand punctures from sewing needles when workers were pushed to hurry up.

In Bangladesh, shirts with Marine Corps logos sold in military stores were made at DK Knitwear, where child laborers made up a third of the work force, according to a 2010 audit that led some vendors to cut ties with the plant. Managers punched workers for missed production quotas, and the plant had no functioning alarm system despite previous fires, auditors said. Many of the problems remain, according to another audit this year and recent interviews with workers.

At Zongtex Garment Manufacturing in Phnom Penh, Cambodia, which makes clothes sold by the Army and Air Force, an audit conducted this year found nearly two dozen under-age workers, some as young as 15. Several of them described in interviews with The New York Times how they were instructed to hide from inspectors.

“Sometimes people soil themselves at their sewing machines,” one worker said, because of restrictions on bathroom breaks.

And there is no law prohibiting the federal government from buying clothes produced overseas under unsafe or abusive conditions.

Why am I not surprised…

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/07/how-the-u-s-employs-overseas-sweatshops-to-produce-government-uniforms/
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The FBI Admits its Primary Focus is NOT Law Enforcement

Recently, the FBI made a significant change to its self-proclaimed primary focus in its fact sheet from “law enforcement” to “national security.” This change merely confirms what I and countless others have claimed to be true for quite some time. That the entire regulatory, security and intelligence apparatus of these United States has been redirected away from protecting the Constitution and the rule of law, toward a narrow focus on protecting the economic and social positions of the oligarch class at all costs under the guise of a “war on terror.” We have seen many signs of cronyism at the FBI for decades now, something most accurately pointed out in the priceless image “All My Heroes Have FBI Files.”

While this change to the FBI fact sheet is just confirmation of something we already knew, it’s still mind-boggling to see it shoved right in our faces:

Screen Shot 2014-01-06 at 2.52.09 PM

TechDirt covered this story well. Here are some excerpts:

A couple years ago, it was revealed that the FBI noted in one of its “counterterrorism training manuals” that FBI agents could “bend or suspend the law and impinge upon the freedoms of others,” which seemed kind of odd for a government agency who claimed its “primary function” was “law enforcement.” You’d think that playing by the rules would be kind of important. However, as John Hudson at Foreign Policy has noted, at some point last summer, the FBI quietly changed its fact sheet, so that it no longer says that “law enforcement” is its primary function, replacing it with “national security.”

Of course, I thought we already had a “national security” agency — known as the “National Security Agency.” Of course, while this may seem like a minor change, as the article notes, it is the reality behind the scenes. The FBI massively beefed up resources focused on “counterterrorism” and… then let all sorts of other crimes slide. Including crimes much more likely to impact Americans, like financial/white collar fraud.

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from A Lightning War for Liberty http://libertyblitzkrieg.com/2014/01/06/the-fbi-admits-its-primary-focus-is-not-law-enforcement/
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