Month: August 2022

Update (0945ET): Twitter CEO Parag Agrawal has sent a message to staff this morning about WaPo’s whistleblower story, according to CNN’s Donnie O’Sullivan. 

Agrawal’s message to staff reads:

Team,

There are news reports outlining claims about Twitter’s privacy, security, and data protection practices that were made by Mudge Zatko, a former Twitter executive who was terminated in January 2022 for ineffective leadership and poor performance. We are reviewing the redacted claims that have been published, but what we’ve seen so far is a false narrative that is riddled with inconsistencies and inaccuracies, and presented without important context.

I know this is frustrating and confusing to read, given Mudge was accountable for many aspects of this work that he is now inaccurately portraying more than six months after his termination. But none of this takes away from the important work you have done and continue to do to safeguard the privacy and security of our customers and their data. This year alone, we have meaningfully accelerated our progress through increased focus and incredible leadership from Lea Kissner, Damien Kieran, and Nick Caldwell. This work continues to be an important priority for us, and if you want to read more about our approach, you can find a summary here.

Given the spotlight on Twitter at the moment, we can assume that we will continue to see more headlines in the coming days — this will only make our work harder. I know that all of you take a lot of pride in the work we do together and in the values that guide us. We will pursue all paths to defend our integrity as a company and set the record straight.

See you all at «OneTeam tomorrow,

Parag

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Update (0850ET): Following the Washington Post’s story on the Twitter whistleblower complaint, Elon Musk’s legal team said they want to interview the former head of security Peiter Zatko. 

CNN’s Donnie O’Sullivan tweeted moments ago that Musk’s lawyer Alex Spiro wants to speak with the Twitter whistleblower:

“We have already issued a subpoena for Mr. Zatko, and we found his exit and that of other key employees curious in light of what we have been finding.”

NEW: Musk lawyer Alex Spiro said they want to talk to Twitter whistleblower.

“We have already issued a subpoena for Mr. Zatko, and we found his exit and that of other key employees curious in light of what we have been finding.”

— Donie O’Sullivan (@donie) August 23, 2022

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One day after Elon Musk’s legal team subpoenaed former Twitter CEO Jack Dorsey as part of an ongoing effort to fight a lawsuit by the social media company to force the billionaire to move forward with the $44 billion acquisition deal. The Washington Post released a new report alleging executives deceived federal regulators and the company’s board about “extreme, egregious deficiencies” to combat hackers. 

WaPo cited a whistleblower complaint from the former head of security Peiter Zatko who said some of the company’s servers are running out-of-date software, and executives withheld critical information about data breaches. Bezo’s news outlet interviewed more than a dozen current and former employees about past deficiencies. 

The complaint was filed last month with the SEC, DoJ, and FTC. It said thousands of employees had access to core company software, which led to data breaches and hacks of high-profile users.

WaPo said the whistleblower document alleges executives prioritized user growth over reducing spam and rewarded executives cash bonuses up to $10 million to increase the number of daily users. 

The complaint noted Chief Executive Parag Agrawal was “lying” when he said in May the company was “strongly incentivized to detect and remove as much spam as we possibly can.” 

In a WaPo interview, Zatko said his decision to reveal Twitter’s failures to the public is an extension of his previous work exposing security flaws within the company. 

“I felt ethically bound. This is not a light step to take,” said Zatko, who was fired by Agrawal in January. He declined to discuss what happened at Twitter, except to stand by the formal complaint. Under SEC whistleblower rules, he is entitled to legal protection against retaliation, as well as potential monetary rewards. -WaPo 

A company spokeswoman, Rebecca Hahn, told WaPo that Zatko’s allegations are “riddled with inaccuracies” and that “security and privacy have long been top companywide priorities at Twitter.”

Twitter also said Zatko was fired from his senior executive role at the company earlier this year for ineffective leadership and poor performance. 

Regarding the allegations about spam bots, something Musk’s legal team is requesting documents from the company. Hahn said Twitter removes more than a million spam accounts every day. 

Shares of Twitter dropped as much as 4.5% on the news. 

This revelation could offer Musk an ‘out’ on the deal as he could claim the security flaws are a clear material adverse change to the company; and as opposed to just a lower price, this could terminate the deal entirely – benefiting anyone who didn’t want Musk to obtain the social media company. 

Authored by Andrew Moran via The Epoch Times,

In the digital economy, cash is no longer a useful tool, and a central bank digital currency (CBDC) is the “only solution” to continue the existing monetary system, according to a new paper from the European Central Bank (ECB).

The eurozone’s central bank recently published a paper titled, “The Economics of Central Bank Digital Currency.” Authors assessed the implications for the financial system and examined data privacy and digital payments.

Researchers concluded that a CBDC, like a digital euro, would be the “only solution” to facilitate a “smooth continuation” of the present monetary system. Despite widespread concerns that CBDCs would limit the credit supply and function as a disruptive force in the financial markets, the paper rejected these concerns as being unfounded.

Digital money is critical in a digital economy, the ECB noted. Since “cash is losing its appeal as efficient means of payment,” a CBDC is a necessary tool to install. Although the research identified drawbacks of instituting a uniform digital monetary system, such as the sluggish pace of settlements, market developments, and adoption, the paper noted that “a digital update of cash” is crucial to advancing “the two-layer system of public and private money.”

Ultimately, cash possesses “large economic costs without clear benefits,” so “it is by construction not ‘fit’ for the digital age.”

Digital money might generate privacy concerns, authors warned.

However, researchers say that there is a “privacy paradox”: consumers will emphasize an importance to privacy in surveys, but they will give away their personal data for free or in exchange for small rewards.

A woman holds euro banknotes in this photo taken on May 30, 2022. (Dado Ruvic/Reuters)

“From a public policy perspective, these observations warrant further scepticism concerning the ability of market forces to reach efficient levels of privacy protection,” the report noted.

The paper also rejected cryptocurrencies and stablecoins, calling them a “threat to monetary sovereignty.” It welcomed President Joe Biden’s digital asset working group to put together a regulatory framework for the crypto sector, as well as the myriad of other regulations considered worldwide.

“These proposals would bring new forms of digital money into the regulatory perimeter and help to address some of the major concerns related to monetary sovereignty and financial stability,” the paper stated.

The Rise of CBDCs

Across the globe, many governments and central banks have been studying CBDCs as a potential successor or complement to physical money.

In January, for example, the Federal Reserve released a discussion paper titled, “Money and Payments: The U.S. Dollar in the Age of Digital Transformation.” It examined the pros and cons of a possible U.S. CBDC.

While speaking in front of Congress during his semiannual monetary policy report in June, Fed Chair Jerome Powell recommended that a digital dollar is “something we need to explore as a country” that “should not be a partisan thing.”

“It’s a very important potential financial innovation that will affect all Americans,” he said before the House Committee on Financial Services.

“Our plan is to work on both the policy side and the technological side in coming years and come to Congress with a recommendation at some point.”

Powell added that if the United States were to create a digital dollar, it would need to be issued by the federal government and not by a private institution.

“One question around CBDCs is do we want a private stablecoin to wind up being the digital dollar? I think the answer is no,” Powell said.

“If we’re going to have a digital dollar, it should be government-guaranteed money, not private money.”

Congress is requesting faster action on a digital dollar. A bipartisan group of members of Congress, led by Rep. French Hill (R-Ark.) and Rep. Maxine Waters (D-Calif.), introduced legislation this month ordering the Fed to speed up its work on a CBDC.

“With countries around the world competing to deploy digital versions of their own currencies, America can’t be left behind,” Waters said a statement in May before a hearing on the advantages of risks of CBDCs.

Last month, ECB President Christine Lagarde championed a digital euro, purporting that digitizing the official currency of 19 out of the 27 member states of the European Union can “achieve” stability and public access.

A digital euro would complement cash rather than replace it, according to Lagarde. She also pointed out that a CBDC would only be successful if it addressed the needs of consumers and businesses and ensured that privacy safeguards were established from the beginning.

This, co-wrote Lagarde in a blog post, makes certain that a digital euro “serves as an anchor for the whole payment system.”

US, Europe Take on the Digital Yuan?

But while the United States and Europe might be attempting to take the lead in such a critical issue in the global monetary system, market analysts note that advanced economies might be responding to China.

After seven years of intensive study, the People’s Bank of China (PBoC) unleashed the digital yuan in 2021. The e-yuan is a CBDC that is trying to replace a portion of the cash presently in circulation, as fewer Chinese consumers use physical money. It is estimated that cash represented about one-quarter of point-of-sale transactions in 2020, down from nearly 75 percent in 2012.

Some aver that Beijing is looking to dismantle the global currency system, but officials say otherwise.

While speaking at a Shanghai forum in December 2020, former PBoC head Zhou Xiaochuan noted that technology is the main goal, not currency supremacy. However, Richard Turrin, author of “Cashless: China’s Digital Currency Revolution,” told CNBC in March that a digital yuan could challenge the greenback in international trade settlements in the next decade.

“Remember, China is the largest trading country, and you’re going to see digital yuan slowly supplant the dollar when buying things from China,” he said.

“If we go about five to 10 years out, yes, the digital yuan can play a significant role in reducing the dollar’s usage in international trade.”

The yuan has become one of the most popular currencies in cross-border transactions in 2021, representing 2.7 percent of global payments, the highest level in six years, January statistics from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) show. The U.S. dollar accounted for more than 40 percent of international transactions.

Any attempt to dethrone the U.S. dollar as the chief international reserve currency would take time. According to the International Monetary Fund’s (IMF) Currency Composition of Official Foreign Exchange Reserves (COFER) data, dollars accounted for nearly 60 percent of reserves in the first quarter of 2022. The yuan represented less than 3 percent.

EU high representative and foreign policy chief Josep Borrell gave a surprisingly blunt assessment of the Ukraine war and Europe’s precarious position in an AFP interview published Tuesday, admitting that Russian President Vladimir Putin is betting on fracturing a united EU response amid the current crisis situation of soaring prices and energy extreme uncertainty headed into a long winter. 

Borrell’s words seemed to come close to admitting that Putin’s tactic is working on some level, or at least will indeed chip away at European resolve in the short and long run, given he chose words like EU populations having to “endure” the deep economic pain and severe energy crunch. He cited the “weariness” of Europeans while calling on leadership as well as the common people to “bear the consequences” with continued resolve.

Borrell explained to AFP that Putin sees “the weariness of the Europeans and the reluctance of their citizens to bear the consequences of support for Ukraine.”

But Borrell suggested that Europe will not back down no matter the leverage Moscow might have, particularly when it comes to ‘weaponization of energy’ – and called on citizens to continue to shoulder the cost. Who will blink first? …appears to be the subtext here. He urged: 

“We will have to endure, spread the costs within the EU,” Borrell told AFP, warning that keeping the 27 member states together was a task to be carried out “day by day.”

And yet, as some like Hungary’s Viktor Orbán have consistently argued since near the start of the Feb.24 invasion, it is inevitable that some will be forced to bear the “costs” much more than others. Already this is being seen with initiatives out of Brussels like rationing gas consumption, which has further led to scenarios like German towns and even residences being mandated to switch off lights or resources for designated periods at night. “More cold showers” – many are also being told.

As we round the corner of fall and enter the more frigid months, we are likely to only see more headlines like this: German cities impose cold showers and turn off lights amid Russian gas crisis.

Alarmingly, the AFP in commenting on Borrell’s assessment goes so far as to suggest Europeans must endure the costs of going “all in” on punitive anti-Russia actions and sanctions even if facing the prospect of deep recessions. Per the report:

Next week, Borrell will host meetings of EU foreign and defense ministers in Prague, hoping to shore up what has so far been a remarkably united diplomatic front against Russia’s aggression.

The EU member states, most of which are also NATO allies, have agreed a series of sanctions packages targeting Putin’s inner circle and sectors of the economy, including key oil exports.

But now, energy prices and inflation are soaring and several members, including economic powerhouse Germany, face the prospect of deep recessions.

Of course, Borrell’s call for common citizens to essentially ‘grin and bear it’ – even as everything from energy sanctions to billions in Western weapons shipments to Kiev has only thus far led to a grinding stalemated situation on the battlefield – is nothing new. 

Meanwhile, across the Atlantic…

US TO ANNOUNCE $3B IN ARMS PACKAGE TO UKRAINE: AP

To enforce all of this spending, the US is bulking up IRS audits on citizens. Enjoy

— The_Real_Fly (@The_Real_Fly) August 23, 2022

Biden administration officials, and the US president himself, alongside allies from the UK to Germany to Poland to Baltic allies have long ago said the same. It’s basically the same message every time: policy elites call for “sacrifice” …even as the self-generating crisis only hits the lower and middle classes. 

Authored by Chris Summers via The Epoch Times,

Heavyweight boxing champion Tyson Fury has called for “higher sentencing” for knife crime offenders after his cousin was stabbed to death at the weekend, but is knife crime really getting worse, and would longer sentences work?

Rico Burton, 31, died in Manchester Royal Infirmary on Sunday after being stabbed in the early hours outside a pub in Altrincham. A teenager was also injured in the incident.

Fury wrote on his Instagram account, which has 5.7 million followers:

“My cousin was murdered last night, stabbed in the neck this is becoming ridiculous … idiots carry knives. This needs to stop. Asap, UK government needs to bring higher sentencing for knife crime.”

Burton’s death came only days after 87-year-old Tom O’Halloran was stabbed to death as he rode a mobility scooter beside a busy road in west London.

O’Halloran’s was the 58th homicide in London, the vast majority of which were caused by bladed weapons.

An undated photo of Thomas O’Halloran, 87, who was murdered on his mobility scooter in Greenford, west London, on Aug. 16, 2022 (Metropolitan Police)

Last week the Mayor of London, Sadiq Khan, blamed violent crime in the capital on long, hot, sunny days.

Khan told LBC: “I’m afraid this summer we are seeing what we feared, which is an increase in violent crime … there are longer daylight hours, school holidays, a heatwave and so forth. We are working with the police to suppress that violence.”

The College of Policing said between 2014 and 2020, the number of violent crimes involving knives in England and Wales rose year-on-year but in the year ending March 2021 the Office for National Statistics (ONS) said it fell from 49,000 to 41,000 and the number of knife-related hospital admissions fell by 41 percent to 4,091.

The former Chief Constable of Greater Manchester Police, Sir Peter Fahy, sought to blame violent crime on a backlog of court cases, which he said had led to offenders spending more time on bail and reoffending.

Is This the ‘New Normal’?

Fahy told Sky News on Monday:

“The fact is that we saw a big reduction in knife crime and violence in general during the pandemic and I think the police is still trying to work out what has happened since then. Have we seen a real increase in violent crime or are we just coming to a new normal?”

But he doubted longer sentences would accomplish much, adding:

“Often when you’re talking about a random offence like knife crime where somebody chooses suddenly to pull out a knife, and they stab someone in the artery causing them to die, really it’s not in their mind how long of a prison sentence [they are] going to get.”

Knife crime is not a new problem in Britain, and nor are demands for longer sentences for offenders.

File photo showing a fleeing suspect clutching a knife moments after stabbing a man at the Notting Hill Carnival in London, England, on Aug. 29, 2011. (Oli Scarff/Getty Images)

In 2006 John Reid, who was the home secretary in Tony Blair’s Labour government, proposed introducing mandatory jail sentences for anyone carrying knives, including a maximum of five years.

Reid was speaking in the wake of the murder of off-duty special constable Nisha Patel-Nasri in northwest London. Her husband Fadi—who pretended to be distraught but was secretly having an affair—was later jailed for life for hiring a hitman to kill her.

Mandatory jail sentences were never introduced by the Labour government but the sentencing guidelines in England and Wales for possession of a knife have increased, from two years in 2006 to four years today. There remains no minimum sentence and some offenders escape with just a fine or a caution.

In 2016 the Scottish government allowed judges to jail people for up to five years for possessing knives, but in 2018 the Aberdeen Press and Journal reported the maximum sentence had only been used once.

Last month Craig Robson, 29, was jailed for 10 months for possessing a knife in the Scottish town of Hawick. Robson, who had been stabbed a fortnight before, claimed he carried the knife for his own protection.

Between year 2011 and 2018 the number of offenders who received an immediate prison sentence in England and Wales for carrying an offensive weapon had risen from 23 percent to 38 percent, and it remained stable until it fell to 31 percent in the year ending 2021.

The Office for National Statistics said the decrease was likely owing to the pandemic-related lockdowns and their knock-on effect on the criminal justice system, which saw an increase in backlogs and therefore fewer cases being sentenced.

When judges sentence in murder cases they are also entitled to increase the minimum tariff based on aggravating factors, one of which would be that the offender was carrying a knife and had not just grabbed a weapon on the spur of the moment.

A National Police Chiefs’ Council spokesman said, in an email to The Epoch Times:

“Tackling knife crime, reducing violence, and removing weapons from the streets are top priorities for policing. Proactive policing, speaking to local communities, weapons sweeps, and effective targeting of habitual knife carriers have played a role in the number of offensive weapon offences that are prosecuted. Every weapon removed from the streets is possibly a life saved.”

They added: “Preventing young people from carrying knives is not something that police forces can do alone—it requires schools, charities, the health service, and community groups to work together. Early intervention plays a vitally important role in stopping young people from getting involved in crime.”

The number of illegal migrants crossing the English Channel to England from northern France in small, sometimes makeshift boats, has hit a record high according to the UK government.

Approximately 1,295 people reportedly crossed on Monday – beating the previous single-day record from November 11, 2021 of 1,185 migrants according to AFP, citing the Ministry of Defense.

Last year, the UK authorities brought ashore a total of 28,526 people as they tried to cross the busy shipping lane.

The issue has caused a major political headache for the UK government, which promised tighter border controls after leaving the European Union.

Tensions have risen between London and Paris, with the UK government accusing France of not doing enough to stop the crossings. -AFP

In an effort to combat the problem, immigration laws have been strengthened to target the human traffickers behind the crossings – with rights groups arguing that the legislation could have the effect of criminalizing migrants who are illegally entering the country by not going through proper channels to flee their homeland.

Earlier this year, the UK signed a deal with Rwanda to send migrants to the African country for resettlement – a plan backed by both Liz Truss and Rishi Sunak, who are competing to succeed Boris Johnson as prime minister following his resignation, however a series of legal challenges in UK courts and the European Court of Human Rights have put the brakes on the plan.

The first flight in June was due to see some 130 asylum seekers sent to the Rwandan capital Kigali, but the numbers were whittled down to zero because of court action.

Groups representing asylum seekers are due to challenge the legality of the policy in court from next month.

The UK government has defended the policy as necessary because the costs involved in processing asylum claims and housing migrants are too high. -AFP

With some 60,000 migrants predicted to cross this year, Truss says she would extend the plan, while Sunak said he would do “whatever it takes” to ensure its success.

The UK government is also looking to challenge human rights legislation in order to expedite the deportation of asylum seekers who were determined to have entered the country illegally.

That said, some MPs have questioned whether the Rwanda plan would actually have a deterrent effect, suggesting there’s “no clear evidence” it would lead to a reduction in crossings. Since the deal was signed between Home Secretary Priti Patel and Rwanda four months ago, some 17,400 people have crossed the Channel using small craft.

Authored by Paul Joseph Watson via Summit News,

A top Green Party official has caused controversy by suggesting Germans use washcloths instead of taking showers, as well as buying expensive eco-heating systems that are unaffordable for the average person.

The comments were made by Baden-Württemberg’s Prime Minister Winfried Kretschmann in response to the energy crisis, which will be exacerbated this winter as a result of gas shortages caused by the war in Ukraine.

“Even the washcloth is a useful invention,” the Green politician told Südwest-Presse.

Bragging about his own eco-credentials, Kretschmann boasted, “I have an electric car, I have a huge photovoltaic system on the roof.”

The pellet heating system Kretschmann uses in his home costs anything up to €21,000 euros and beyond, a figure completely unrealistic for Germans already struggling to pay their energy bills.

Remix News explained the actual environmental cost of Kretschmann’s so-called solution.

“Wired magazine reports that these devices rely primarily on wood pellets sourced from forests in the southeastern United States. They are then shipped halfway around the world to individuals like Kretschmann despite many scientists arguing that these pellets are just as polluting as coal.”

“Although they come from a renewable resource, forests are cut down across the U.S. to make this resource, and according to Greenpeace, the practice destroys biodiversity and ruins entire ecosystems. Scientists estimate it takes between 44 to over 100 years for these forests to grow back, and for those worried about climate change, they say this destruction of natural forests will cost the planet immeasurably.”

The reaction to Kretschmann’s advice probably wasn’t what the green politician anticipated, with the hashtag #Waschlappen hashtag (German for “washcloth”) trending on Twitter.

Unser Land steht vor einer Energiekrise, die den Wohlstand von Millionen Menschen bedroht! Und wie lautet die Antwort des Grünen-Übervaters #Kretschmann? Nicht jeden Tag duschen: „Auch der #Waschlappen ist eine brauchbare Erfindung“. Was für Leute regieren eigentlich Deutschland?

— Gerhard Papke (@PapkeGerhard) August 19, 2022

“Our country faces an energy crisis that threatens the prosperity of millions of people! And what is the answer of the green father Kretschmann? Don’t shower every day: ‘The #Waschlappen is also a useful invention.’ What kind of people actually govern Germany?” asked Gerhard Papke, the president of the German-Hungarian Society.

As we previously highlighted, Germany could be facing blackouts and the collapse of the power grid this winter after citizens began panic buying electric heaters over fears gas supplies could be cut off.

Supplies of firewood and heating stoves are also being exhausted, while cities across Germany are planning to use sports arenas and exhibition halls as ‘warm up spaces’ this winter to help freezing citizens who are unable to afford skyrocketing energy costs.

Germans have also been told to take fewer showers, wear more layers of clothing and avoid washing their clothes and driving their cars as often.

As we reported last week, the interior minister of the German state of North Rhine-Westphalia (NRW), Herbert Reul (CDU), outrageously suggested Germans who may be planning to protest against energy blackouts were “enemies of the state” and “extremists” who want to overthrow the government.

Other observers are predicting riots in response to energy shortages that will make anti-lockdown unrest look like a “children’s birthday party.”

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