JUSTIN ELLIOTT, PROPUBLICA – 天美视频 天美视频 - Investigative Reporting Fri, 27 Dec 2013 02:09:08 +0000 en-US hourly 1 https://wordpress.org/?v=6.7.1 Presidential Panel Tells NSA to Stop Weakening Encryption /2013/12/20730-presidential-panel-tells-nsa-to-stop-weakening-encryption/ Sat, 21 Dec 2013 01:36:06 +0000 President Obama is slated to make a final decision on the panel's recommendations by January.

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The National Security Agency should not undermine encryption standards that are designed to protect the privacy of communications, the panel of experts appointed by President Obama to review NSA surveillance recommended in a released today.

The recommendation, among the strongest of the laid out by the panel, comes several months after ProPublica, the Guardian, and the New York Times that the NSA has successfully worked to undercut encryption. The story was based on a provided by former NSA contractor Edward Snowden.

Encryption technologies are supposed to render intercepted communications unreadable. But the NSA conducted what one secret memo described as an “aggressive, multipronged effort to break widely used Internet encryption technologies.” The agency deliberately weakened international cryptographic standards used by developers around the globe and worked with American and foreign tech companies to introduce backdoors into commercial products.

The White House said President Obama is reviewing the panel’s recommendations, which are not binding, and will make a final decision by January.

The panel said the U.S. government should not “in any way subvert, undermine, weaken, or make vulnerable generally available .”

The panel also recommended that an arm of the NSA whose mission is protecting information rather than spying be separated from the agency. The is charged with building secure data and communications systems for the government and also works closely with

The review panel submitted its report to Obama on Friday and met with the president today. The White House said Obama would speak publicly in January to disclose the “outcomes of our work” including how he will address the review group’s recommendations.

“Over the next several weeks, as we bring to a close the Administration’s overall review of signals intelligence, the President will work with his national security team to study the Review Group’s report, and to determine which recommendations we should implement,” the White House said in a .

Formally known as the Review Group on Intelligence and Communications Technologies, the panel was made up of five experts, including former deputy director of the CIA Michael Morrell, former counterterrorism czar Richard Clarke, and longtime Obama confidant and current Harvard Law professor Cass Sunstein.

The report was originally scheduled to be released this coming January. But in a surprise move, Press Secretary Jay Carney announced it would be published today because of “inaccurate and incomplete reports in the press about the report’s content.” The move also comes one day after a federal judge the administration’s defense of one NSA program.

Soon after the revelations about the NSA undermining in encryption, the National Institute of Standards and Technology, a government agency that sets standards for various technologies, “strongly” recommending against using one of its encryption standards. Secret documents described in our encryption story revealed the NSA’s role in heavily influencing the standard in question. NIST is required by law to consult with the spy agency.

Citing the importance of trust and transparency in the development of encryption standards, NIST also later that it is reviewing all of its previous cryptographic recommendations as well as its process for development of future standards.

In a technical appendix report released today, the NSA in the creation of various widely used encryption standards.  

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NSA Says It Can’t Search Its Own Emails /2013/07/19560-nsa-says-it-cant-search-its-own-emails/ Tue, 23 Jul 2013 21:48:52 +0000 The high-tech spy agency says it lacks the technology to research itself.

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The NSA is a “” with machines so powerful their speed is measured in of operations per second. The agency turns its giant machine brains to the task of sifting through troves of data its surveillance programs capture. 

But ask the NSA, as part of a freedom of information request, to do a seemingly simple search of its own employees’ email? The agency says it doesn’t have the technology.

“There’s no central method to search an email at this time with the way our records are set up, unfortunately,” NSA Freedom of Information Act officer Cindy Blacker told me last week.

The system is “a little antiquated and archaic,” she added.

I filed a request last week for emails between NSA employees and employees of the National Geographic Channel over a specific time period. The TV station had aired a on the NSA and I want to better understand the agency’s public-relations efforts.

A few days after filing the request, Blacker called, asking me to narrow my request since the FOIA office can search emails only “person by person,” rather than in bulk. The NSA has more than .

I reached out to the NSA press office seeking more information but got no response.

It’s actually common for large corporations to do bulk searches of their employees email as part of or .

“It’s just baffling,” says Mark Caramanica of the Reporters Committee for Freedom of the Press. “This is an agency that’s charged with monitoring millions of communications globally and they can’t even track their own internal communications in response to a FOIA request.”

Federal agencies’ public records offices are often underfunded, according to Lucy Dalglish, dean of the journalism school at University of Maryland and a longtime observer of FOIA issues.

But, Daglish says, “If anybody is going to have the money to engage in evaluation of digital information, it’s the NSA for heaven’s sake.”

For more on the NSA, read our story on the agency’s , our fact-check on claims about the , and our .

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What We Still Don’t Know About the Agency’s Internet Surveillance /2013/07/19555-what-we-still-dont-know-about-the-agencys-internet-surveillance/ Mon, 22 Jul 2013 20:13:28 +0000 As revelations about domestic and international surveillance continue, ProPublica takes a closer look.

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Among the snooping revelations of recent weeks, there have been tantalizing bits of evidence that the NSA is tapping fiber-optic cables that carry international phone and Internet data.

The idea that the NSA is sweeping up vast data streams via cables and other infrastructure 鈥 often described as the “backbone of the Internet” 鈥 is not new. In , the New York Times first described the tapping, which began after the Sept. 11, 2001 attacks. More details emerged in early 2006 when an AT&T whistleblower .

But like of NSA surveillance, virtually everything about this kind of NSA surveillance is highly secret and we’re left with far from a full picture.

Is the NSA really sucking up everything?

It’s not clear.

The most detailed, though now dated, information on the topic comes from Mark Klein. He’s the former AT&T technician who in 2006 describing the installation in 2002-03 of a secret room in an AT&T building in San Francisco. The equipment, detailed in technical , allowed the NSA to conduct what Klein described as “vacuum-cleaner surveillance of all the data crossing the internet — whether that be peoples’ e-mail, web surfing or any other data.”

Klein he was told there was similar equipment installed at AT&T facilities in San Diego, Seattle, and San Jose.

There is also evidence that the vacuuming has continued in some form right up to the present.

A draft NSA inspector’s general report from 2009, recently by the Washington Post, access via two companies “to large volumes of foreign-to-foreign communications transiting the United States through fiberoptic cables, gateway switches, and data networks.”

Recent stories by the and the also described the NSA’s cable-tapping, but neither included details on the scope of this surveillance.

A recently published NSA slide, , refers to so-called “Upstream” “collection” of “communications on fiber cables and infrastructure as data flows past.” 

These cables carry vast quantities of information, including 99 percent of international phone and Internet data, according to research firm .

This upstream surveillance is in contrast to another method of NSA snooping, Prism, in which the NSA isn’t tapping anything. Instead, the agency gets users’ data with the cooperation of tech companies like Facebook and Google.  

Other documents leaked by Edward Snowden  provide much more detail about the upstream surveillance by the British Government Communications Headquarters (GCHQ), the NSA’s U.K. counterpart.

GCHQ taps cables where they land in the United Kingdom carrying Internet and, phone data. According to the Guardian, unnamed companies serve as “intercept partners” in the effort.

The NSA is listening in on those taps too. By May 2012, 250 NSA analysts along with 300 GCHQ analysts were sifting through the data from the British taps.

Is purely domestic communication being swept up in the NSA’s upstream surveillance?

It’s not at all clear.

Going back to the revelations of former AT&T technician Mark Klein 鈥 which, again, date back a decade 鈥 a concluded that the secret NSA equipment installed at an AT&T building was capable of collecting information “not only for communications to overseas locations, but for purely domestic communications as well.”

On the other hand, the 2009 NSA inspector general report collecting “foreign-to-foreign communications” that are “transiting the United States through fiber-optic cables, gateway switches, and data networks”

But even if the NSA is tapping only international fiber optic cables, it could still pick up communications between Americans in the U.S.

That’s because data flowing over the Internet does not always take the most efficient geographic route to its destination.

Instead, says Tim Stronge of the telecom consulting firm , data takes “the least congested route that is available to their providers.”

“If you’re sending an email from New York to Washington, it could go over international links,” Stronge says, “but it’s pretty unlikely.”

That’s because the United States has a robust domestic network. (That’s not true for of the world, which can have their in-country Internet traffic routed through another country’s more robust network.)                            

But there are other scenarios under which Americans’ purely domestic communication might pass over the international cables. Google, for example, maintains a around the world.

Google spokeswoman Nadja Blagojevic told ProPublica that, “Rather than storing each user’s data on a single machine or set of machines, we distribute all data 鈥 including our own 鈥 across many computers in different locations.”

We asked Blagojevic whether Google stores copies of Americans’ data abroad, for example users’ Gmail accounts.  She declined to answer.  

Are companies still cooperating with the NSA’s Internet tapping?

We don’t know.

The Washington Post had a story earlier this month the government has struck with telecoms, but lots of details are still unclear, including what the government is getting, and how many companies are cooperating.

The Post pointed to a 2003 “Network Security Agreement” between the U.S. government and the fiber optic network operator Global Crossing, which at the time was being sold to a foreign firm.

That agreement, which the Post says became a model for similar deals with other companies, did not authorize surveillance. Rather, the newspaper reported, citing unnamed sources, it ensured “that when U.S. government agencies seek access to the massive amounts of data flowing through their networks, the companies have systems in place to provide it securely.”

Global Crossing was later sold to Colorado-based , which owns , and the 2003 agreement was replaced in 2011.

Level 3 released in response to the Post story saying that neither agreement requires Level 3 “to cooperate in unauthorized surveillance on U.S. or foreign soil.”

The does, however, explicitly require the company to cooperate with “lawful” surveillance.

More evidence, though somewhat dated, of corporate cooperation with NSA upstream surveillance comes from the 2009 inspector general report.

“Two of the most productive [signals intelligence] collection partnerships that NSA has with the private sector are with COMPANY A and COMPANY B,” . “These two relationships enable NSA to access large volumes of foreign-to-foreign communications transiting the United States through fiber-optic cables, gateway switches, and data networks.”

There’s that those companies may be AT&T and Verizon.

It’s also worth noting that the NSA might not need corporate cooperation in all cases. In 2005, the AP the outfitting of the submarine Jimmy Carter to place taps on undersea fiber-optic cables in case “stations that receive and transmit the communications along the lines are on foreign soil or otherwise inaccessible.”

What legal authority is the NSA using for upstream surveillance?

It’s unclear, though it may be a 2008 law that expanded the government’s surveillance powers.

The only evidence that speaks directly to this issue is the leaked slide on upstream surveillance, and in particular the document’s heading: “FAA702 Operations.” That’s a reference to Section 702 of the 2008 FISA Amendments Act. That legislation amended the Foreign Intelligence Surveillance Act, the that governs government surveillance in the United States.

Under , the attorney general and director of national intelligence issue one-year blanket authorizations to for surveillance of non-citizens who are “reasonably believed” to be outside the U.S. These authorizations don’t have to name individuals, but rather allow for targeting of broad categories of people.

The government has so-called minimization procedures that are supposed to limit the surveillance of American citizens or people in the U.S. Those procedures are by the FISA court.

Despite the procedures, there is evidence that in practice American communications are swept up by surveillance under this section.

In the case of Prism, for example, which is authorized under the same part of the law, the Washington Post that the NSA uses a standard of “51 percent confidence” in a target’s foreignness.

And according to dating from 2009 published by the Guardian, there are also exceptions when it comes to holding on to American communications. For example, encrypted communications 鈥 which, given the routine use of digital encryption, might include vast amounts of material 鈥 can be .

The government also has the authority to order communications companies to , and to do so in secret.

How much Internet traffic is the NSA storing?

We don’t know, but experts speculate it’s a lot.

“I think that there’s evidence that they’re starting to move toward a model where they just store everything,” says , a staff technologist at the Electronic Frontier Foundation. “The is a big indicator of this because the sheer storage capacity has just rocketed up.”

We know more details about how the GCHQ operates in Britain, again thanks to the . A breakthrough in 2011 allowed GCHQ to store metadata from its cable taps for 30 days and content for three days. The paper reported on how the spy agency 鈥 with some input from the NSA 鈥 then filters what it’s getting:

The processing centres apply a series of sophisticated computer programmes in order to filter the material through what is known as MVR 鈥 massive volume reduction. The first filter immediately rejects high-volume, low-value traffic, such as peer-to-peer downloads, which reduces the volume by about 30%. Others pull out packets of information relating to “selectors” 鈥 search terms including subjects, phone numbers and email addresses of interest. Some 40,000 of these were chosen by GCHQ and 31,000 by the NSA.

How does the NSA do filtering of the data it gets off cables in the United States?

“I think that’s the trillion dollar question that I’m sure the NSA is working really hard at all the time,” Auerbach, the EFF expert. “I think it’s an incredibly difficult problem.”

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Ed Rendell鈥檚 Plea for Fracking Fails to Disclose Industry Ties /2013/04/18727-ed-rendells-plea-for-fracking-fails-to-disclose-industry-ties/ Mon, 01 Apr 2013 21:22:29 +0000 Fracking not just a mainland issue 鈥 Hawaii plans to import LNG to lower electricity costs.

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Editor’s Note: Fracking may seem like a mainland issue, but in fact it could have major implications on Hawaii’s plans to import liquefied natural gas as a way to lower electricity costs. Hawaii Gas Co., HECO and the state hope to use LNG in the not too distant future but environmental groups are opposing it because LNG largely comes from production that involves hydraulic fracturing.

Former Pennsylvania Gov. Ed Rendell took to the New York Daily News recently with a message to local officials: stop worrying and learn to love fracking.

As New York Gov. Andrew Cuomo over whether to allow the controversial natural gas drilling technique, Rendell invoked his own experience as a Democratic governor who presided over a fracking boom. New York state, Rendell argued, has a major part to play in the nation’s fracking “revolution” 2014 and it can do so safely. He rejected what he called the “false choice” of “natural gas versus the environment.”

What Rendell’s passionate plea failed to note was this: since stepping down as governor in 2011, he has worked as a paid consultant to a private equity firm with investments in the natural gas industry.

The op-ed piece was other media outlets, and Cuomo wound up about it during a radio appearance on Wednesday. The New York State Petroleum Council promptly issued a hailing Rendell’s “strong and confident argument.”

Reached Wednesday, Rendell told ProPublica that he should have disclosed to the Daily News the private equity firm, Element Partners, and that the newspaper “should have included it.”

Rendell said the Pennsylvania-based firm pays him about $30,000 per year. Still, he insisted he is not conflicted on the issue of fracking, in which deep into the ground to extract previously unreachable natural gas from rock. He said he does not own equity in Element Partners or any fracking companies.

“The only conflict would be if I had a pecuniary interest in the natural gas industry doing well, and I certainly don’t,” he said.

Element Partners’ website several investments by the firm in natural gas companies, including a company called that specializes in “fluid management systems” for fracking.

Rendell is also a at the investment bank Greenhill, which has worked on several involving natural gas companies. A Greenhill spokesman said Rendell has not been involved in the firm’s work in the energy sector.

“I have no brief for industry,” Rendell told ProPublica. He said he supports fracking because of the potential for American energy independence and jobs.

“If we choose to embrace natural gas, it will help us get past a number of significant economic and environmental challenges,” Rendell argued in the Daily News op-ed. “On the other hand, if we let fear carry the day, we will squander another key moment to move forward together.”

Daily News opinion editor Josh Greenman said in an email to ProPublica that he was unaware of Rendell’s relationship with Element, and indeed had been assured by Rendell’s representative that there was no conflict.

“Had I known, I certainly would have disclosed that and conceivably would have made a different judgment on the piece,” Greenman said.

The Daily News has a disclosure line to the online version of the op-ed.

This isn’t the first time Rendell has popped up in New York advocating for fracking. The New York Post ran  with Rendell in November in which he said Cuomo would be “crazy” not to lift the fracking ban. That piece didn’t mention Rendell’s ties to the industry either.

Update 4:15 pm:

It’s worth noting that since leaving office, Rendell has been a vocal supporter of fracking around the country. He’s weighed in in support of a regulated fracking industry in venues including ; the ; a forum; the Austin, Texas, ; and a Wall Street Journal with businessman T. Boone Pickens. 

Here is a clip from the Journal’s 2012 ECO:nomics conference, in which Rendell says the burgeoning gas industry is “great for America in so many ways.”

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**DISCUSSION:** *How do you feel about fracking? Should Hawaii import LNG if it comes as a result of fracking?*

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Big Corporations Dominate Dark Money Group’s Secret Donor List /2013/02/18332-big-corporations-dominate-dark-money-groups-secret-donor-list/ Thu, 14 Feb 2013 21:08:54 +0000 Companies gave more than a million dollars each to Republican dark money group.

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Editor’s Note: In the 2012 elections, Hawaii saw one local dark money group emerge and play a major role in the Honolulu mayoral race. The Pacific Resource Partnership didn’t have to disclose its donors and yet spent $3.6 million to defeat anti-rail candidate Ben Cayetano.

Some of the nation’s biggest corporations donated more than a million dollars to launch a Republican nonprofit that went on to play a key role in recent political fights.

Like the that poured money into last year’s elections, the decade-old has been able to keep the identities of its funders secret. Until now.

A records request by ProPublica to the IRS turned up of the original funders of the group: Exxon, Pfizer, Time Warner, and other corporations put up at least 85 percent of the $1.3 million the foundation raised in the first year and a half of its existence, starting in 2003.

The donor list is stamped “,” and was submitted to the IRS as part of the foundation’s for recognition of tax-exempt status. If approved, such applications are public records.

The foundation and other similar nonprofits are allowed to take anonymous and unlimited donations from individuals or corporations. That’s because they are classified as “social welfare” nonprofits, which are supposed to benefit the community at large, and not just one group or political party.

Last year, how the State Government Leadership Foundation paid for Republican redistricting consultants to draw new congressional district maps in North Carolina. The resulting gerrymander helped flip the state’s congressional delegation to Republicans.

In recent years, the foundation has also funded TV ads during the 2011 Wisconsin showdown over collective bargaining rights; President Obama in Virginia over his energy policy; and teachers unions of “destroying our children’s future.”

The foundation also $1.25 million in 2011 to the Indiana Opportunity Fund, a state-level nonprofit that anti-union ads featuring Republican Gov. Mitch Daniels. (That group was founded by attorney Jim Bopp, who has against campaign finance regulation.)

The foundation’s single-biggest early donor was the mortgage lender Ameriquest, which gave more than $260,000. (We contacted a number of the companies on the list; they did not respond to requests for comment.) Corporate trade associations including the Pharmaceutical Research and Manufacturers of America, the Edison Electric Institute, and the American Tort Reform Association also pitched in, each giving between $50,000 and $100,000.

The foundation’s affiliated organization, the , focuses on winning state-level elections for the GOP and also gets , including from tobacco and insurance giants.  As an explicitly political organization, the committee has to disclose its donors.

By contrast, the recent funders of the foundation, which $2.5 million in 2011 including a single donation of $1 million, are still secret.

The foundation applied for IRS recognition as a social welfare group in late 2003 but was initially rejected. The IRS the foundation was “a partisan organization” that “operated primarily for the benefit of a select group” 鈥 the GOP. Social welfare groups, the IRS’ rejection letter noted, must promote the “general welfare of the whole community” 鈥 not a particular group.

The foundation’s lawyers from the firm Arent Fox fired back in , arguing that the foundation was not a partisan outfit.

The foundation, according to the 2005 appeal, “was created to promote public debate” about issues including pharmaceuticals, securities regulation, and asbestos litigation.

“It may be useful to describe what the SGLF is not,” the appeal says. “The SGLF:

鈥 Is not affiliated with the Republican Party in any way;

鈥 Does not meet with or coordinate its activities with the Republican Party;

鈥 Does not make contributions to, or accept contributions from, the Republican Party;

鈥 Does not participate in political campaigns, elections or publish electioneering messages on behalf of any candidate or party;

鈥 Does not invite Representatives of the Republican Party to speak at its events, and

鈥 Does not participate in the Republican Party platform, does not recruit or train Republican candidates, does not fundraise for Republican candidates, and does not coordinate its issue selection or policy positions with the Republican Party.

In 2007, more than three years after the foundation’s application, the IRS ultimately  it as a tax-exempt social welfare group.

But the group’s protestations that it has nothing to do with the GOP seems at odds with its recent activities. Besides running ads attacking Democrats, the foundation was involved in redistricting in several states to, as the foundation put it in , draw “legislative lines that we will have to defend in 2012 and beyond.”

Foundation spokesperson Jill Bader told ProPublica that since its creation the foundation’s “activities have evolved in some ways from those that were originally contemplated and conducted by the organization.”

Bader continued: “SGLF’s present activities are in strict compliance with the requirements of the Internal Revenue Code and all future SGLF activities will be in strict compliance as well.”

DISCUSSION: Should nonprofits that participate in elections be required to disclose their donors?


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FCC鈥檚 Plan to Put Political Ad Data Online Falls Short /2012/12/17862-fccs-plan-to-put-political-ad-data-online-falls-short/ Tue, 11 Dec 2012 05:03:26 +0000 Spotty compliance by stations and FCC officials' refusal to talk about how the effort is going cloud transparency effort.

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Editor’s Note: Civil Beat visited Hawaii’s broadcast stations weekly this election season to get copies of ad contracts to track how much candidates and outside groups were spending on political TV ads. The final tally was more than $13.8 million. Our “Public File” project was inspired by national media outlet ProPublica’s “Free the Files” series.

When the Federal Communications Commission passed a rule earlier this year to TV stations to post political ad buying information online, public interest groups (and ProPublica) welcomed the policy as a means to get an unprecedented look at how billions of campaign dollars flow around the country.

FCC Chairman Julius Genachowski the rule a victory for transparency, saying the disclosure requirements are 鈥減art of the public鈥檚 basic contract with broadcasters in exchange for use of the spectrum and other benefits.鈥

But, in practice, attempts to create a full picture of political ad spending from the TV station files exposed deep flaws in the FCC鈥檚 effort as well as spotty compliance by the stations themselves.

鈥淭he reviews are abysmal,鈥 says Campaign Legal Center Policy Director , who has been tracking the issue closely as a member of the Public Interest Public Airwaves Coalition. 鈥淭he information posted has not been as helpful as expected.鈥

Now, the commission is refusing to even talk about the future of its own transparency initiative.

The key to fulfilling the system鈥檚 potential is to require stations to submit political ad data in a consistent format making it actually sortable. Such a requirement would allow for a truly useful database that would show in unprecedented detail how ad money is spent in local, state, and federal campaigns. That was of an FCC working group last year.

Speaking at a public forum in July, the head of the FCC office overseeing the rule, Bill Lake, called making such improvements the 鈥.鈥

But it鈥檚 not at all clear when, or if, that will happen.

We repeatedly asked commission officials about their plans for the site, but our interview requests were denied and FCC spokeswoman Janice Wise declined to comment.

When the Campaign Legal Center鈥檚 McGehee proposed to FCC staff during the campaign that the system should move in the direction of 鈥渁 searchable, sortable, downloadable database 鈥 they looked at me like I was a wild-eyed Stalinist,鈥 said McGehee, who still praised the FCC for getting its system up just a few months after finalizing the new regulation.

The new is indeed a big improvement over the of keeping political ad information in difficult-to-access paper files at stations around the country. ProPublica along with other organizations and media outlets based on the new information, which shows where campaigns and outside groups bought ads and how much they paid. We had the help of nearly 1,000 volunteers who helped sift through pdf documents in our .

Many stations fell short of the to maintain an 鈥渙rderly鈥 public file. Some stations鈥 files were illegible writing, duplicate contracts, opaque revisions, and obscure internal filing practices.

At times stations filed five, ten, even twenty versions of a single contract between a campaign and a TV station to buy a week of ads. That made it nearly impossible to get an accurate picture of overall spending.

of just how poor the document quality can be.

McGehee now believes that any improvements may be on hold pending the appointment of a replacement for Chairman Julius Genachowksi, a longtime friend of President Obama who is to leave his post once a successor is found.

The other wild card? The position of the broadcast industry and its outstanding lawsuit against the FCC.

Media companies earlier this year mounted an lobbying push against the plan to put political ad data online. After the FCC voted to institute the system, industry trade group the National Association of Broadcasters . That lawsuit, in the D.C. Circuit Court of Appeals, was until early next year while TV stations tried out the new system in the election.

Industry spokesman Dennis Wharton told ProPublica that no final decisions have been made about whether to pursue the suit.

There are some scheduled changes ahead.

The system, which currently covers only the four affiliates of the major networks in the top 50 broadcast markets, will expand to cover all TV stations beginning in July 2014. That will increase the political ad spending reported on the FCC website in the midterm elections. The FCC has to seek comment in July 2013 on the impact of the expansion of the system before it goes into effect.


Here鈥檚 just one example of the kind of impossible-to-understand documents filed by some TV stations. This one involves a transaction 鈥 exactly what kind is not clear 鈥 between conservative dark money group Crossroads GPS and Albuquerque CBS affiliate . .

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The Campaign Finance Free-for-All: How We Got to This Point /2012/10/17418-the-campaign-finance-free-for-all-how-we-got-to-this-point/ Thu, 18 Oct 2012 23:16:44 +0000 A primer in the four-decade-long unraveling of campaign finance reform.

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Editor’s Note: Campaign finance has gotten a lot of attention nationally as money flows into the presidential campaigns. Here in Hawaii, we haven’t seen the big money that we expected in the U.S. Senate race. Nonetheless, independent expenditure groups have had a significant impact on local races with one in particular, Pacific Resource Partnership, mounting an unprecedented campaign locally.

In a forthcoming law review , Richard Briffault of Columbia Law School argues that the rise of super PACs and unfettered contributions and spending this election cycle are 鈥渆ffectively ending the post-Watergate era of campaign finance laws.鈥

To help understand what is shaping up as a watershed election cycle, I asked Briffault to explain the path that took the country from stringent post-Watergate contribution limits through Citizens United to today鈥檚 multi-billion-dollar free-for-all.

Briffault has about the history of campaign finance law. He has filed amicus briefs in cases on the side of defending regulation. His article on super PACs will be published in the Minnesota Law Review.

Our conversation has been edited for length and clarity.

Can you explain how the 1976 Buckley v. Valeo created the foundation of modern campaign finance law?

In the Buckley case the Supreme Court held that the First Amendment applies to campaign finance regulations, but it applies in different ways to different kinds of campaign finance activities. Contributions 鈥 that is, giving money to a group, a candidate, or a political party 鈥 are less protected. The court said that contributions raise the danger of corruption, that is, that candidates will feel indebted to their large donors, and also that contributions are less pure speech than expenditures.

The court said that an expenditure, which is money being spent on communications to the voters to persuade them how to vote, gets the highest level of protection. The court said that that kind of spending cannot be limited because it comes closer to pure speech and because it raises no danger of corruption.

A particularly difficult question involves what are called independent expenditures. Having reached the limit on the amount of money he is allowed to give a candidate, the donor might then just make an expenditure by taking out his own ads praising the candidate, or condemning the candidate’s opponent. In Buckley, the court said that so long as such an expenditure is not formally coordinated with the candidate it will get the full constitutional protection of expenditures.

The first big loophole in the law that politicians exploited became known as 鈥渟oft money.鈥 The symbol of the soft money era was Democratic donors in the Lincoln Bedroom under President Clinton. How did that happen?

As a result of some rulings by the Federal Election Commission, the political parties were allowed to accept unlimited donations and corporate and union money so long as the political party used the money not for direct candidate support, but for background activity, like voter registration and get-out-the-vote drives and certain kinds of advertising that avoided express advocacy of the election or defeat of candidates. Because the money did not go for direct support of candidates 鈥 although it certainly helped candidates 鈥 it was considered 鈥渟oft money鈥 not subject to the restrictions on the 鈥渉ard money鈥 used for direct support of candidates.

The parties and their donors started to figure out soft money in the late 80s and it really took off in the 90s, peaking in 2000 and 2002.

So the famous McCain-Feingold law passed in 2002 and was upheld by the Supreme Court in 2003. Explain the system that law created.

McCain-Feingold stopped the parties from collecting and using soft money. Many experts thought the parties would be hit hard by the soft money ban, but in 2004 they actually replaced all the lost soft money by redoubling their efforts to collect more hard money from individual donors.

However, there was an immediate effort to get around the soft money ban through so-called , which were named after a section of the tax code and were in effect a kind of political committee. The idea was that they would act independently of candidates, and engage in issue advocacy that helped candidates but did not expressly support them. The theory of the 527 was that they’re not working with the candidates and they’re not working with the parties, and they’re also not engaged in express electioneering. So they claimed that they could take unlimited individual, corporate, and union contributions.

How big a role did corporate money play in funding these 527s?

There wasn’t actually very much corporate money in the groups, but you did see large individual donations to organizations like MoveOn and the anti-John Kerry Swift Boat group. For the first time since Watergate, you began to see the first real appearance of million鈥慸ollar donations.

This is the last time the Federal Election Commission actually took any action. It brought enforcement actions against a number of the prominent 527s and several years later significant multi鈥慼undred thousand dollar penalties from them. The commission said that a number of the 527s had crossed the line into regulated electioneering and should have abided by the rules limiting contributions and disclosing spending.

The super PAC of today in many ways looks like these 527s from 2004 that were cited for breaking the rules. The difference is the super PACs seem to be acting within the rules. So how did we get from the 527 to the super PAC?

Part of the of 1974 limited donations to all political committees, which are defined as organizations that give money to candidates or spend money in support of candidates. That law is on the books from 1974 onward and the Supreme Court upheld it. No one had focused on the idea that there might be some committees that only engage in independent spending, and do not give contributions to candidates, too.

But in the late 2000s, even before Citizens United, some independent committees began to argue “All we’re going to do is engage in independent spending. If that’s all we’re going to do, we should not be subject to any restrictions on our donations.”

The Citizens United decision is popularly known for allowing corporate spending in elections. But what did it say about this issue of independent spending?

In the course of striking down the ban on corporate and union independent spending, the Court also said that independent spending does not cause corruption and can鈥檛 be limited. The solution to independent spending, the court said, is disclosure and the public reaction to candidates who do the bidding of independent spenders.

A D.C. Circuit Court of Appeals case called was moving through the system around the same time as Citizens United and the decision came down a couple months after Citizens United in 2010. The circuit court specifically cited Citizens United and said, in effect, “If there’s nothing corrupting about independent spending, then there’s nothing corrupting about donations to groups that engage in independent spending, and therefore these donations cannot be limited.”

That’s how we get the Super PACs.

The argument gets made that, before Citizens United and before SpeechNow, Sheldon Adelson or George Soros could have individually bought $100 million worth of ads. There was nothing stopping them from doing that.

That’s right. But in reality it didn鈥檛 happen. In theory, George Soros himself could have spent as much money as he wanted as long as it did not involve a committee. The ability to pool money into a super PAC turns out to be very significant.

On the issue of corporate and union expenditures, right now we鈥檙e seeing that don鈥檛 disclose their donors spending a lot of money, and there are that at least some of that money is coming from corporations. These types of groups were active in previous elections but not to the extent they are now. How were they previously constrained by the law?

The 70s-era law said that corporations couldn鈥檛 engage in independent spending in connection with an election. But “independent spending” was defined as express advocacy 鈥 that is, saying explicitly who to vote for. The McCain鈥慒eingold law redefined independent spending for corporations to include any broadcast message that mentions a candidate’s name, within 30 days before primaries or 60 days before a general election. That greatly expanded the scope of the ban on corporate and union spending.

There was a 2007 Supreme Court case, , that I think did most of the work that is attributed to Citizens United. It freed up groups funded by corporate or union money to do more in elections. Then Citizens United said that corporations and unions could also spend money on express advocacy. These groups can now contribute to 501(c) organizations that engage in electoral advocacy.

In your forthcoming you argue, 鈥淢ore than a century after Congress enacted the first restrictions on contributions in federal elections, and thirty-eight years after the comprehensive post-Watergate contribution limits were adopted, we appear to be rapidly heading into an era in which those contribution limits have been rendered functionally meaningless.鈥 How did you come to this conclusion?

It will be interesting to see what the total numbers are when this cycle ends. But if it turns out that as much a significant fraction 鈥 perhaps one quarter to one third 鈥 of the spending promoting a candidate is being spent by outside groups, and funded by a very, very small number of very, very wealthy people, the candidates are going to know who they are.

The purpose of the law was to reduce the dependency of candidates on large donations, and reduce the danger that office holders will feel dependent on that and reduce the effect of those donations on policy and appointments. If a significant fraction of the money that’s helping candidates is coming from a very small number of extremely wealthy people, that puts us back to where we were before.

Here’s a related explainer video entitled “Money is Speech: A Musical History of Campaign Finance.”

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How Politicians and the Press Overstated Military Budget Cuts by $100B /2012/08/16874-how-politicians-and-the-press-overstated-military-budget-cuts-by-100b/ Wed, 15 Aug 2012 21:48:53 +0000 Opponents of military budget cuts have repeatedly cited an inaccurate, inflated figure.

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Editor’s Note: There are more than 42,000 active-duty U.S. Department of Defense personnel stationed in Hawaii. Defense budget cuts are expected to hit the state hard, but Hawaii’s congressional delegation has vowed to maintain as much funding as possible.

Anxiety is rising in Washington about the big cuts to military spending slated to go into effect in January unless Congress takes action.

Republicans, defense industry executives, and some Democrats are arguing hard against the automatic cuts, which were the result of last summer鈥檚 to raise the debt ceiling and would also cut nondefense spending equally. Multiple members of Congress have warned that slashing defense spending by $600 billion would devastate the military, with Sen. Lindsey Graham this month would deal 鈥渁 death blow to our ability to defend ourselves.鈥

There鈥檚 just one problem: The number they cite is wrong.

The law triggering the cuts does not slash the military budget by $600 billion. That figure 鈥 which has also been widely cited in the 鈥 overstates the amount of military cuts by more than $100 billion.

Signed by President Obama last August after the debt ceiling drama, the law actually requires $492 billion in military budget cuts. (The cuts are slated to take place over nine years.)

The oft-repeated higher figure of $600 billion is actually the total in projected deficit reduction that the government would get by cutting $492 billion from the military. The extra $108 billion in projected savings would come via interest payments the government wouldn’t have to make. Since the government would be spending less, it could borrow less and thus save on interest.

鈥淚t is downright misleading to say that sequestration will cut defense by $600 billion,鈥 said , senior vice president at the Center for Strategic and International Studies and a former Defense Department official. ( is the term often used in Washington to refer to the cuts.)

鈥淭his entire exercise against sequestration is tainted by the intense desire of several parties 鈥 from the members of Congress who voted for the bill to the Pentagon that wants to avoid the cuts 鈥 to make sequestration seem untenable,鈥 Berteau added.

Both a Congressional Budget Office and of the Office of Management and Budget concur that the proper figure for the cuts is $492 billion, or about $55 billion annually over nine years.

In arguing against the cuts, the $600 billion figure has been cited recently by , R-S.C., , R-Ga., House Aerospace Caucus Co-Chair , R-Texas, and Virginia Gov. . Republican presidential candidate Mitt Romney the figure last year, and it is also included in a July press release on his .

Asked about the figure, spokespeople for the politicians offered a range of responses, none offering backing for the higher number.

A spokesperson for Rep. Olson, Melissa Kelly, said that the congressman 鈥渏ust misspoke鈥 and that he was not trying to inflate the figure. 鈥淚t was an honest mistake,鈥 she said.

The Romney campaign declined to comment. Sen. Graham didn’t respond. A spokesperson for Rep. Gingrey said the figure includes other cuts but declined to offer details.

As for Gov. McDonnell, a close ally of Romney, a spokesperson said 鈥渢he governor is using widely quoted numbers鈥 from the media and legislators.

Indeed, the inflated figure has been cited as fact in the , , , , , and on , and , among others.

Sometimes outlets have also offered conflicting numbers. For example, a June 3 in the Times reported that if Congress fails to act to prevent the triggered cuts, a 鈥$600 billion, across-the-board spending cut is to hit the Pentagon.鈥 On June 22, , referring to 鈥渢he roughly $492 billion in planned Pentagon cuts鈥 that will start next year, barring congressional action.

To understand the law requiring the cuts and how much money it really cuts from the military budget, let’s turn to the text of the bill, called the Budget Control Act of 2011. Here is the section that governs the cuts 鈥 half from defense and half from non-defense 鈥 that will start in 2013 barring action by Congress:

(OMB stands for Office of Management and Budget.)

The law requires deficit reduction of $984 billion 鈥 half from defense and half from nondefense.

Here鈥檚 the formula in the bill that gets to that number. It starts with a baseline of $1.2 trillion. That’s the minimum amount in deficit reduction that last year’s so-called congressional had to achieve to avoid the triggered cuts. (They any deficit reduction.) This is the figure that the incorrect references seem to be based on. But the formula doesn’t end there.

The formula then reduces the $1.2 trillion by 18 percent to account for projected savings because of interest payments the government would avoid. $1.2 trillion minus 18 percent is $984 billion. Half of $984 billion 鈥 the military portion of the cuts 鈥 is $492 billion.

As it turns out, the inflated $600 billion figure may not be correct even as the amount that the government would save. That’s because those projected savings on interest payments from the defense cut could be a bit smaller than originally estimated.

The Congressional Budget Office released a in January, several months after the Budget Control Act passed, projecting that the savings from debt service would be just $142 billion. Add that to the $984 billion in required cuts, and the law would save the government $1.13 trillion, not the much-touted $1.2 trillion figure. Since half of the cuts come from the military, the total savings attributed to defense cuts would be about $560 billion. None of this would affect the amount of required military budget cuts.

There’s one other wrinkle here. (Sorry.) House Armed Services Committee Chairman Buck McKeon, R-Calif., a fierce opponent of the impending cuts, to 鈥$500 billion to $600 billion鈥 in cuts. When we asked committee spokesman Claude Chafin where McKeon’s figures came from, Chafin offered an argument separate from the debt service issue.

鈥淸T]o achieve that [$492 billon in] savings, cuts will need to be much deeper to accommodate a variety of additional costs,鈥 Chafin said in an email. 鈥淭hese include, but certainly are not limited to the costs of contract renegotiation, contract cancellation penalties, terminating civilian positions and involuntarily separating members of the military.鈥

In other words, this argument goes, by cutting the military budget the government will incur extra costs that will require still further cuts to achieve the required $492 billion in deficit reduction. Another House Armed Services Committee aide said that there are no specific calculations that led to McKeon’s claim of 鈥$500 billion to $600 billion鈥 in cuts because it’s not yet clear which programs will be cut.

Several military budget experts interviewed by ProPublica were skeptical that any 鈥渁dditional costs鈥 — such as a contract termination fee– could push the total figure up to $600 billion.

, director of the Budgeting for Foreign Affairs and Defense program at the Stimson Center and a former defense analyst on the Senate Budget Committee, says that cuts will likely be structured to avoid penalties or other costs.

鈥淭he armed services committee argument is straight spurious,鈥 Rumbaugh said. 鈥淚t assumes dumb decisions throughout.鈥

McKeon’s own committee also cites the correct $492 billion figure in on its own website.

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