11/21/17

It’s Worse Than You Think: The Federal Government Has No Clue What It Is Spending

By: Denise Simon | Political Vanguard

Do you think our federal government knows how much and where it is is spending money?

Well, think again.

Back in 2014, the Government Accountability Office presented this is prepared testimony:

“The federal government has no idea how many tax dollars it’s wasting on redundant federal programs every year—but it’s likely in the neighborhood of $45 billion.”

That’s according to the Government Accountability Office, which identified more than two dozen new areas of inefficiency and overlap in its annual report to Congress. This is on top of the more than 160 redundant areas that the GAO has identified in its three previous reports.

“It’s impossible to account for how much money is wasted through duplication, in part because the government doesn’t keep track of which programs each agency is responsible for,” Comptroller Gene Dodaro said prepared congressional testimony.

Examples you ask?

Right now, there are 10 different agencies within the Department of Health and Human Services that are providing similar services relating to AIDS outreach in minority communities. There are also 11 different agencies performing autism research without properly coordinating their efforts.

In another example included in the 200-page report, the auditors found that Colorado’s Schriever Air Force Base has eight different satellite control centers controlling 10 different satellite programs.

Meanwhile, the report also identified a $4.2 billion loan program within the Department of Energy for Advanced Technology Vehicles Manufacturing that hasn’t been utilized since 2011.

There is even a video to report waste, fraud and abuse, but no one seems to know how to solve those issues. Checking the House Oversight and Government Reform Committee website, there are no reports or menu of items they are investigating. Where is the confidence in that?

The GAO issued a report dated November 2017, that included this little passage:

“Reported improper payment estimates totaled over $1.2 trillion government-wide from fiscal years 2003 through 2016. Agencies are statutorily required to perform improper payment risk assessments to identify programs and activities that may be susceptible to significant improper payments and are required to report an improper payment estimate for ones that are susceptible to significant improper payments.”

Due to the Harvey Weinstein predatory sexual behavior scandal, many other names have recently hit the headlines with similar cases including members of both houses of Congress. As such, we learned there is essentially a pay-off slush fund where the victim was provided taxpayer funds to shut up, sign a non-disclosure and to for the most part go away. Note the payouts:

Still not convinced spending is literally out of control?

GAO’s 2016 report found that the Social Security Administration (SSA) has not fully addressed the growing amount of Disability Insurance overpayments. In FY 2014, SSA identified $1.3 billion in such payments, in part because Congress still allows individuals to collect both full Social Security Disability Insurance benefits and Unemployment Insurance at the same time. The Congressional Budget Office (CBO) estimates that eliminating this double-dipping would save $1.9 billion over the next 10 years. The Treasury department’s Earned Income Tax Credit program had $15.6 billion in improper payments and the Social Security Administration’s errant payments totaled $7.1 billion.

The 2016 report also highlights a mounting problem of obsolete information technology (IT) systems in the federal government. For example, the Department of Homeland Security was supposed to integrate and modernize its 422 different human resources systems and applications in 2003. GAO found that “limited progress” has been made, and none of its many recommendations in this area have been addressed.

The federal government spends more than $1 billion on mobile devices per year; however, “GAO found that among 15 selected agencies, only 5 had complete service and device inventories.” Therefore, most agencies are unable to know when taxpayer-funded devices are no longer needed or are being abused.

The 2016 report also cites many other outlandish examples of government duplication run amok, one of the most obvious being the existence of two programs in two different agencies that are tasked with inspecting the same type of catfish. There are 45 programs in nine different agencies for employment for people with disabilities. The federal government operates more than 90 different programs to foster the construction of green buildings in the private sector. In FY 2014, unobligated balances, or the amount of money not spent by an agency or department, stood at $870 billion.

So, it seems we have enough reasons to declare we don’t trust you, the government anymore right? Yes, but is anyone listening? Not so much.

So, trotting over to the U.S. Treasury website you can find the Final Monthly Treasury Statement. The report includes the final budget results and details a deficit of $666 billion for Fiscal Year 2017. Fascinating number eh?

The issue is only 36 pages and it is suggested you begin at Table 3 and mobilize a team of friends where collectively you can perhaps define the line items, the duplicate programs or worse why they exist at all.

There is an app for that at least at the state level for only a handful of states. Yeah for California, right?

The Pew Charitable Trust in part published the following:

“In Long Beach, California, six city employees were fired after people complained items had gone missing from inside impounded cars. In Philadelphia auditors found safety issues in a dozen rental properties as well as over $350,000 in unpaid taxes. And in Richmond, Virginia, a city employee is on the hook for nearly $10,000 in bogus expenses.”

All of these cases were brought to auditors’ attention by tipsters using hotlines or fraud apps, which allow smartphone users to anonymously report government waste, fraud and abuse.

Cities and states have long had hotlines for reporting misuse of government resources. But mobile apps bring a new level of sophistication. They allow people to submit photos and videos in support of their claims; and in some cases auditors can use the app to respond and ask for follow-up information, all while maintaining a tipster’s anonymity.

Sixty-four percent of American adults now carry a smartphone, according to a report from the Pew Research Center. (The Pew Charitable Trusts funds both the Pew Research Center and Stateline.) Because reporting waste, fraud and abuse through an app is so easy, people are more inclined to do so, auditors say.

“Smartphones are becoming a ubiquitous tool, and I think we need to meet people where they are,” said Dave Yost, the state auditor who in 2014 introduced a fraud app in Ohio.

The cost of developing the apps varies. Ohio was able to develop its app in-house, while Richmond spent about $10,000 for outside help. Pittsburgh’s app was unveiled this month. It cost $20,000 to develop and will cost $3,000 for upkeep, but it also allows users to access a range of databases on city contracts and campaign contributions.

Uncertain Impact

In many places, it’s hard to discern how much of a difference the apps are making compared to traditional hotlines because auditors don’t keep track of where tips originate. Many of the apps allow users to call a fraud hotline from the app.

So far, relatively few citizens have downloaded the apps. In Long Beach there have only been 160 downloads. In Ohio there have been 673. In Philadelphia, which in 2011 developed one of the first fraud apps, there have been 2,015 downloads.

Whether tips are received through a hotline or an app, governments have received valuable information.

This is an important exercise for every American paying taxes and the challenge is to question your senator or representative. If that fails, try contacting the House Oversight Committee and ask some hard questions, in fact make some demands.

Those dollars reported by Treasury, those dollars in payouts and those dollars in waste, fraud and abuse are yours….you need to take ownership all while we are watching congress playing in the tax reform sandbox.

11/21/17

What the Uranium One Documents Reveal

By: Denise Simon | Founders Code

Uranium One is engaged through its subsidiaries and joint ventures in uranium production, and in the exploration and development of uranium properties, in Kazakhstan, the United States, Tanzania and elsewhere. Uranium One is focused on low cost and low technical risk operations, with existing, near and medium-term production visibility in some of the world’s largest uranium resource jurisdictions.

Uranium One is a joint venture partner with JSC NAC Kazatomprom, the Kazakhstan state-owned atomic energy company, in six major producing uranium mines in Kazakhstan – Akdala, South Inkai, Karatau, Akbastau, Zarechnoye and Kharasan. The company also operates the Willow Creek uranium mine in Wyoming, and is the operator of, and owns a 13.9 percent interest in, the Mkuju River uranium development project in Tanzania.

Uranium One’s revenues are largely derived from the sale of uranium concentrates. The company sells its uranium to major nuclear utilities in Russia, Europe, North America, South America, Middle East and Asia.

***

This was an internal coup advanced by the Obama administration. What is worse, where are those Hillary, State Department of CFIUS or White House related emails?

***

William Campbell, the FBI informant, documented for his FBI handlers the first illegal activity by Russians nuclear industry officials in fall 2009, nearly a entire year before the Russian state-owned Rosatom nuclear firm won Obama administration approval for the Uranium One deal, the memos show.

Evidence gathered by an FBI undercover informant conflicts with several media reports as well as statements by Justice officials concerning the connections between a Russian nuclear bribery case and the Obama administration’s approval of the sale of Uranium One to Russia’s state-owned Rosatom nuclear company. More here.

***

During Campbell’s time working as a confidential informant, he was required by the Russians to launder large sums of money to financial institutions in Cyprus, Latvia and Seychelles. With Campbell’s help the FBI uncovered an extensive money Russian nuclear money laundering apparatus and Campbell was working solo. He was required to launder money, from his own salary, on particular days and times when Russian money handlers would be working at the banks. If he missed a scheduled pay time for any reason his Russian counterparts would threaten him, he told his attorney. He was also required on many occasions to deliver cash directly to those who were being paid off, most of which he recorded on hidden cameras for the FBI.

It didn’t end there. In order to keep his cover he spent many nights with his Russian counterparts drinking, collecting information and more importantly gaining their trust. He was in his early 60s and his once unblemished driving record ended with a DUI in 2008 and two other reckless driving charges in 2010 and 2012, said Toensing, who noted they were all misdemeanors.

THE PLAYERS

The cast of characters deep within the Russian nuclear agency also included another American businessman named Rod Fisk, whose company Transportation Logistics International, also known as TLI, was the primary transport company for Russian enriched uranium sold to the United States.

Fisk passed away in 2011, and his Vice President Daren Condrey replaced him. In 2015, Daren Condrey, of Maryland, pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act (FCPA) and conspiring to commit wire fraud, according to the DOJ.

Adding to the colorful array of Russian criminals the FBI was watching, was a Russian national named Vadim Mikerin. He was then a top official of the Russian nuclear arms subsidiary Tenex. Mikerin, who had close ties to elite members of the Kremlin, and who bragged in emails and documents about his families connections to current Russian President Vladimir Putin, would later become president of Tenam, the American subsidiary that began operations in 2010, according to the contract. Boris Rubizhevsky, another Russian national from New Jersey, who was president of the security firm NEXGEN Security, also pleaded guilty in 2015, to conspiracy to commit money laundering. He served as a consultant to TENAM and to Mikerin. He was sentenced to prison last week along with three years of supervised release and a $26,500 fine, according to a recent Reuters report.

Mikerin was eventually arrested for a racketeering scheme that dated back to 2004, and included fraud, extortion and money laundering. But he only plead guilty to money-laundering. He was sentenced to 48 months in prison in December 2015. More here.

Here are five revelations from those documents reviewed by The Hill:

Russia saw its purchase of Uranium One as part of a strategy to dominate global uranium markets, including making the United States more dependent on Moscow’s nuclear fuel.

Documents the informant gave the FBI clearly show that the purchase of Uranium One was seen by Russia and its American consultants as one tool in a strategy to “control” the uranium market worldwide. In the United States, that strategy focused on securing billions of new uranium contracts to create a new reliance on Russian nuclear fuel just as the Cold War-era Megatons to Megawatts program was ending.

Uranium One did export some of its U.S. uranium ore.

News organizations, including The Washington Post, continue to report none of Uranium One’s product left the U.S. after Russia took control. In fact, the Nuclear Regulatory Commission (NRC) approved an export license for a third party trucking firm to export Uranium One ore to Canada for enrichment, and that some of that uranium ended up in Europe, NRC memos show. Uranium One itself admits that as much as 25 percent of the uranium it exported to Canada ended up with European or Asian clients through what is know in the industry as “book transfers.”

The FBI informant Douglas Campbell does have information to share with Congress about Rosatom’s Uranium One purchase.

Justice officials have suggested in recent stories that Campbell has little on Uranium One because his work forced on nuclear bribery involving a different Rosatom subsidiary. While it’s true Campbell’s undercover work focused on criminality inside the Rosatom subsidiary Tenex, he did gather extensive documents about Rosatom’s efforts to win approval to buy Uranium One.

The FBI did have evidence that Rosatom officials were engaged in criminality well before the Obama administration approved Rosatom’s purchase of Uranium One.

Evidence that a foreign company is involved in criminality can disqualify it from Committee on Foreign Investment in the United States (CFIUS) approval to buy a sensitive U.S. asset. And Campbell helped the FBI recorded the first criminal activity by Rosatom officials inside its Tenex arm in November 2009, nearly an entire year before CFIUS approved Rosatom’s purchase of Uranium One.

Justice officials trusted the informant Campbell enough to keep him working undercover for six years and to pay him more than $51,000 once the convictions were secured.

A check obtained by The Hill shows the FBI paid Campbell an informant fee of more than $51,000 in January 2016, shortly after the last convictions in the Russian nuclear bribery case were made.

11/21/17

Counterfeit Operations, Iran and North Korea

By: Denise Simon | Founders Code

It is a global business and a nasty one.

U.S. officials have long accused Iran of supplying arms to rebel Houthi forces battling for control of Yemen. But Monday’s sanctions help highlight the scope of what Western officials commonly describe as the IRGC’s far-reaching and malign activities.

“Iran itself, together with its proxy, Lebanese Hezbollah, is knee-deep and has been knee-deep in the counterfeit business for quite some time,” said Matthew Levitt with the Washington Institute for Near East Policy. “Exposing this is kind of a two-for one, both exposing the organization’s terrorist activity and also exposing the nature of the criminal activity that it engages in.” More here.

Treasury Designates Large-Scale IRGC-QF Counterfeiting Ring

11/20/2017

Iranian Network Prints Counterfeit Yemeni Bank Notes for IRGC-Qods Force

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a network of individuals and entities involved in a large-scale scheme to help Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) counterfeit currency to support its destabilizing activities. This network employed deceptive measures to circumvent European export control restrictions and procured advanced equipment and materials to print counterfeit Yemeni bank notes potentially worth hundreds of millions of dollars for the IRGC-QF. The IRGC-QF was designated pursuant to the global terrorism Executive Order (E.O.) 13224.

“This scheme exposes the deep levels of deception the IRGC-Qods Force is willing to employ against companies in Europe, governments in the Gulf, and the rest of the world to support its destabilizing activities. Counterfeiting strikes at the heart of the international financial system, and the fact that elements of the government of Iran are involved in this behavior is completely unacceptable,” said Treasury Secretary Steven Mnuchin. “This counterfeiting scheme exposes the serious risks faced by anyone doing business with Iran, as the IRGC continues to obscure its involvement in Iran’s economy and hide behind the façade of legitimate businesses to perpetrate its nefarious objectives.”

Reza Heidari and Pardazesh Tasvir Rayan Co.

Reza Heidari (Heidari) is being designated today for having acted for or on behalf of the IRGC-QF and having assisted in, sponsored, or provided financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.

Pardavesh Tasvir Rayan Co. (Rayan Printing) is being designated today for being controlled by Heidari; for having acted for or on behalf of the IRGC-QF; having assisted, sponsored, or provided financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF; and being owned by Tejarat Almas Mobin Holding, another Iranian company also being designated today.

Heidari played a key role in procuring secure printing equipment and materials for the IRGC-QF in support of the group’s currency counterfeiting scheme. Heidari served as the managing director of Iran-based Rayan Printing, a company involved in printing counterfeit Yemeni rial bank notes potentially worth hundreds of millions of dollars for the IRGC-QF, as of late 2016. Heidari used front companies to obfuscate the actual end user and facilitate deceptive transactions when dealing with European suppliers of secure printing equipment and materials.

ForEnt Technik and Printing Trade Center

ForEnt Technik GmbH is being designated today for being owned or controlled by Heidari, while Printing Trade Center GmbH (PTC) is being designated for having acted for or on behalf of, and assisted in, sponsored, or provided financial, material, or technological support for, or financial or other services to or in support of, Heidari.

Heidari used German-based ForEnt Technik GmbH and PTC as front companies to deceive European suppliers, circumvent export restrictions, and acquire advanced printing machinery, security printing machinery, and raw materials in support of the IRGC-QF’s counterfeit currency capabilities. These raw materials included watermarked paper and specialty inks from European suppliers. Heidari is the Managing Director and sole shareholder of ForEnt Technik Gmbh.

Mahmoud Seif and Tejarat Almas Mobin

Mahmoud Seif is being designated today for having assisted, sponsored, or provided financial, material, or technological support for, or other services to or in support of, the IRGC-QF. Tejarat Almas Mobin Holding is being designated today for being controlled by Seif.

Seif is the managing director of Tejarat Almas Mobin, the parent company of Rayan Printing. Heidari and Seif coordinated on the procurement of raw supplies and equipment that enabled the IRGC-QF counterfeiting capabilities. Seif was involved with the logistics of importing materials for the counterfeiting project into Iran. Additionally, Seif has previously been involved in the procurement of weapons for the IRGC-QF.

For identifying information on the individuals and entities listed today, click here: https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20171120.aspx

*** So, did Iran teach North Korea to counterfeit or was it the other way around? North Korea has been counterfeiting and participating in illicit activities going back decades. North Korea is not especially fretful over the newly applied sanctions or being listed again as a terror state by President Trump. While it should be done, the regime has proven methods to finesse the system.

Ri Jong Ho had simply had enough. He’d seen too many executions.

Ri, a high-profile North Korean defector, spent years working for what is essentially a slush fund for one of the most notorious regimes on the planet, Kim Jong Un and his compatriots.

Life was good. Ri helped bring in somewhere between $50 million and $100 million for North Korean elites, and was handsomely rewarded with luxuries most North Koreans couldn’t dream of in years past: a car, a color TV and some extra cash on the side, once rarities in the communist state but more commonplace now in the capital, Pyongyang.

But he watched the regime kill his peers and their families, even children.

“It was not just high level officers, officials, but their families, their children (and) their followers,” Ri told CNN in his first interview to a major US broadcast network. “It was not just once or twice a year — it was ongoing throughout the year, thousands of people being executed or purged.”

Ri said the final straw came in late 2013, when Kim Jong Un executed his own uncle, Jang Song Thaek, with an anti-aircraft gun.

“It was a cruel and crude method of execution,” he said. “After all these years living in the socialist system, I never witnessed anything like that.”

Ri was living in China at the time, and in 2014 was able to safely defect with his family.

And just like that, Kim lost one of his top money makers.

Office 39

Ri said he worked for decades in what’s known as “Office 39.”

The office is in charge of bringing in hard currency for the regime. Ri calls it a “slush fund for the leader and the leadership.”
Ri told CNN “Office 39” is not engaged in illicit activities, but the US Treasury Department says otherwise.

The US government accused the office of engaging in “illicit economic activities” to support the North Korean government. It has branches throughout the nation that raise and manage funds and is responsible for earning foreign currency for North Korea’s Korean Workers’ Party senior leadership through illicit activities such as narcotics trafficking.

North Korea has been accused of crimes like hacking banks, counterfeiting currency, dealing drugs and even trafficking endangered species.

Workers who help bring in cash for the regime are granted access to the outside world — especially China — in order to establish networks that are crucial to making money, analysts say. They often have diplomatic privileges that allow them to evade their host country’s domestic laws, experts say.

Ri said he was not involved in illegal activities and that they were not under the purview of Office 39, but did not deny they occurred. He said much of North Korea’s hard cash is earned through exporting labor — the country sends workers across the globe and collects much of their pay, according to the UN — and exporting natural resources like coal, which China used to buy but has since stopped.

Illicit activities make a lot of money, though. The Congressional Research Service estimated in 2008 that North Korea could earn anywhere from $500 million to $1 billion from these types of illicit activities.

That money helps fund the lavish lifestyles of the North Korean elites while sanctions limit the country’s ability to make money. That keeps North Korea’s leadership happy and helps Kim prevent coup attempts, analysts say.

“They (North Korean leaders) are focused on maintaining their ruling power, and they are working on making this dynasty-like system lasting for a long time,” Ri said. “So instead of focusing on their economic development or better life, they are more focused on maintaining their system.

Some of Office 39’s profits also go to the country’s nuclear and missile programs, which crossed an important threshold this month with the testing of two intercontinental ballistic missiles, weapons that experts say likely put the United States homeland in North Korea’s range.

CNN reached out to the North Korean mission at the United Nations for a response to the interview with Ri. An official at the mission said Ri was lying to “make money and save his own life.”

‘Hundreds of fishing boats’

Analysts say Office 39 is likely now in the cross hairs of US President Donald Trump’s administration.

The Trump team has made it clear that one of the ways it plans to deal with North Korea is to squeeze its revenue streams across the globe in order to pressure them into negotiations over their weapons programs.

Who speaks for the United States on North Korea? Contradictions emerge

Ri is not sure if the tactic will work, as he says it’s easy to side-step sanctions and believes the international community has made strategic mistakes that could come back to bite them.

North Korean companies can just change their names once sanctioned, he says. North Korean leaders don’t keep much money abroad, so the sanctions against them are pointless, according to Ri. Smugglers are difficult to catch.

“Smuggling is conducted by any and every means you could imagine. Mostly larger items are done using ships, for example by filing a cargo list … where what’s written on the (list) is different from what is really being shipped,” he said. “On the open sea, the Yellow Sea, there are hundreds of fishing boats — both from China and North Korea — and all the smuggling is done by these so-called fishing boats.

Going after China

Ri believes that secondary sanctions — targeting those who do business with North Korea, like the United States did to China’s Bank of Dandong in June — is the way to go, especially in China.

Beijing accounts for about 85% of North Korean imports in 2015, according to UN data, though Ri revealed that Pyongyang does import some oil from Russia.

North Korean economist Ri Gi Song told CNN in February that China accounts for 70% of trade and that trade with Russia is increasing. More here from CNN.