WikiLeaks publishes STRATFOR intelligence emails

Ellen Branaghin The Independent

Monday, 27 February 2012

Whistleblowing website WikiLeaks has started to publish more than five million confidential emails from a global intelligence company.

The emails, dated from July 2004 and late December 2011, are said to reveal the "inner workings" of US-based company Stratfor.
The group said the emails show Stratfor's "web of informers, pay-off structure, payment-laundering techniques and psychological methods".
WikiLeaks claims the company "fronts as an intelligence publisher", but provides confidential intelligence services to large corporations such as Bhopal's Dow Chemical Co, Lockheed Martin, Northrop Grumman, Raytheon and government agencies, including the US Department of Homeland Security, the US Marines and the US Defense Intelligence Agency.
At a press conference in London today, WikiLeaks founder Julian Assange would not reveal where the emails had come from.
"We are a source protection organisation," he said.
"As a source protection organisation and simply as a media organisation we don't discuss or speculate on sourcing."
The documents are believed to have come from loose-knit hacker group Anonymous, which claimed to have stolen information from the firm in December.
WikiLeaks said the material contains privileged information about the US government's attacks against Julian Assange and WikiLeaks and Stratfor's own attempts to subvert WikiLeaks. The group said there are more than 4,000 emails mentioning WikiLeaks or Julian Assange.
But today Mr Assange said more information would emerge in the near future: "We have looked most closely at the actions against us, the bigger story is likely to come out of this probably in three or four days' time."
Mr Assange said: "Today WikiLeaks started releasing over 5 million emails from private intelligence firm Stratfor based in Texas, the United States.
"Together with 25 other media partners from around the world we have been investigating the activities of this company for some months.
"And what we have discovered is a company that is a private intelligence Enron.
"On the surface it presents as if it's a media organisation providing a private subscription intelligence newsletter.
"But underneath it is running paid informants networks, laundering those payments through the Bahamas, and through Switzerland, through private credit cards.
"It is monitoring Bhopal activists for Dow Chemicals, Peta activities for Coca-Cola.
"It is engaged in a seedy business."
Mr Assange said Stratfor was using the secret intelligence it had paid for to invest in a wide range of "geopolitical financial instruments".
"This makes News of the World look like kindergarten," he added.
Mr Assange said the exposure of the emails was part of a long history WikiLeaks has had in exposing the activities of secret organisations.
"The activities of intelligence organisations increasingly are privatised and once privatised they are taken out of the realm of the Freedom of Information Act, of US military law and so they are often used by governments who want to conceal particular activity.
"But Stratfor is simply out of control.
"Even as a private intelligence organisation it is being completely hopeless in protecting the identity of its informants, or even providing accurate information. It is engaged in internal deals with a financial investment firm that it is setting up.
"It really is some type of Enron where there is not even proper corporate control within the organisation."
WikiLeaks said it had worked with 25 media organisations to investigate and information would be released over the coming weeks.
The group said the emails expose a "revolving door" in private intelligence companies in the US, claiming Government and diplomatic sources give Stratfor advance knowledge of global politics and events in exchange for money.
"The Global Intelligence Files exposes how Stratfor has recruited a global network of informants who are paid via Swiss banks accounts and pre-paid credit cards," the group said.
"Stratfor has a mix of covert and overt informants, which includes government employees, embassy staff and journalists around the world.
"The material shows how a private intelligence agency works, and how they target individuals for their corporate and government clients."
WikiLeaks accused Stratfor of "routine use of secret cash bribes to get information from insiders", and claims an email from chief executive George Friedman in August 2011 suggested his concern over its legality.
In it, he wrote: "We are retaining a law firm to create a policy for Stratfor on the Foreign Corrupt Practices Act.
"I don't plan to do the perp walk and I don't want anyone here doing it either."
The group said: "Like WikiLeaks' diplomatic cables, much of the significance of the emails will be revealed over the coming weeks, as our coalition and the public search through them and discover connections."
It said Stratfor did secret deals with dozens of media organisations and journalists - from Reuters to the Kiev Post.
"While it is acceptable for journalists to swap information or be paid by other media organisations, because Stratfor is a private intelligence organisation that services governments and private clients these relationships are corrupt or corrupting."
The group said it has also obtained Stratfor's list of informants and, in many cases, records of its payoffs.
PA

Some History of Monetary Unions

Making friends the shared currency way

Greece is falling out with its neighbours over their common currency - just as it did about a century ago. But forging closer bonds through shared currencies rarely works for long, says historian David Cannadine.

The continuing travails of the Greek economy and the threat they represent to European Monetary Union may both seem novel and unprecedented, but in several significant ways, we've been there before.

Far from being a recent innovation, there have been monetary unions for almost as long as there has been money. But across two and a half millennia, and whatever varied forms they may have taken, few of them have endured, which helps explain why they've been so easily and so largely forgotten.

On earlier occasions, too, the part played by Greece has been pivotal - sometimes positive but sometimes negative. And history has recently been repeating itself in other ways, for the present single currency is not the first such European scheme from which Britain has held aloof.

It's no exaggeration to say that European history is littered with the ruins of earlier endeavours. The most immediate predecessor to the EMU was the 19th Century Latin Monetary Union, which attempted to unify several European currencies at a time when most circulating coins were still made of gold or silver.

It came into being in August 1866; its initial members were France, Belgium, Italy and Switzerland, and they agreed that their national currencies should be standardised and interchangeable. There was no shared, single legal tender, but the currencies of the member countries were pegged at a fixed rate with each other.

Two years later, the four founding nations were joined by Spain and Greece and in 1889 the union was further enlarged by admitting Romania, Bulgaria, Venezuela, Serbia and San Marino. Thus the enlarged Latin Monetary Union lasted until World War I, which abruptly brought to an end the global financial system based on the gold standard. The result was that the LMU effectively came to an end in 1914, although it lingered on as a legal entity until its formal dissolution in 1927.

Negotiations to bring such a union into being had started in 1865, and Britain had initially been part of them. But two proposals were made, which proved to be a major stumbling block: the first was that the UK must reduce the amount of gold in its sovereigns, albeit by only a tiny amount, to make one pound sterling the exact equivalent of 25 French francs.

The second was that Britain must give up shillings and pence and decimalise its coinage to bring it into line with the other European currencies. Neither of these proposals was deemed acceptable, and so then, as in 1999, Britain stayed out, and left the continentals to their own devices. It also showed no interest in another and even more grandiose scheme floated by the French in 1867, for what was termed a "universal currency", which would have been based on equivalent gold coins to be issued by France, Britain and the United States.

Here were signs and portents aplenty of recent British attitudes and behaviour.

As Walter Bagehot, the essayist and editor of The Economist, put it in the late 1860s, there seemed to be a real danger that, "Before long, all Europe, save England, will have one money, and England will be left outstanding with another money."

If this happened, Bagehot went on, "We shall, to use the vulgar expression, 'be left out in the cold'. If we could adopt this coinage ourselves without material inconvenience, I confess I, for one, should urge our doing so."

But Bagehot believed that the practical difficulties of such a step were "simply insurmountable". He feared more generally that "the attempt to found a universal money is not possible now", and the unhappy fate of the Latin Monetary Union would later bear him out. Yet with the establishment of the late 20th Century European Monetary Union, it did seem as if the state of affairs, which Bagehot one day envisaged - and feared - had come very close to realisation.

But in 2001, Greece joined the European Monetary Union, and the rest, as they say, is history - but a history that is not yet anything like being over.

Ever since it gained its hard-fought independence from the Ottoman Empire in 1832, Greece has been plagued by recurrent budget crises, frequent state defaults and long periods during which it's effectively been cut off from the international capital markets.

So while it was one of the earliest nations to join the Latin Monetary Union, its membership soon became more a cause of concern than celebration, for its chronically weak economy meant successive Greek governments responded by decreasing the amount of gold in their coins, thereby debasing their currency in relation to those of other nations in the union and in violation of the original agreement.
So irresponsible and unacceptable did Greece's behaviour become that it was formally expelled from the Latin Monetary Union in 1908. As a result, some effort was made to readjust the nation's
monetary policy and Greece was readmitted to the Union two years later. But by then, the whole enterprise was increasingly fragile, its future looked increasingly uncertain, and the outbreak of WWI was only four years off.

The Latin Monetary Union was not the only one of its kind in Europe during the 19th Century. A German monetary union was created in 1857, which replaced the many different currencies of the many different German states with a dual system based on the north German thaler and the south German gulden. It proved to be a rare success story among such ventures, surviving until German unification in 1870, when political union was effectively aligned with monetary union and five years later the two separate currencies were replaced by the reichsmark.

Less successful was the Scandinavian Monetary Union, established between Denmark and Sweden in 1873, which was joined by Norway two years later. The aim was to do for Scandinavia what the Latin Monetary Union was attempting more broadly for Europe as a whole but it, too, effectively ceased to function on the outbreak of WWI and it was formally brought to an end in 1924.

Such efforts to create common currencies during the 19th and 20th Centuries are only the most recent examples of a process that's been going on for almost as long as coinage itself has existed. It's an intriguing historical irony that among the pioneers of these endeavours seem to have been none other than the ancient Greeks.

One of the earliest examples of such a union occurred sometime about 400BC, along the western coast of Asia Minor, where seven Greek states allied themselves and produced a coinage that directly foreshadowed later European monetary unions. On the front of the coins was a common design of the baby Heracles strangling a snake, and the first three letters of the Greek word for alliance. On the reverse, each state placed its own particular image. All these coins were minted to the same weight and formed a unified currency, which was the tangible symbol of the seven members' economic alliance.

No-one quite knows why or when this early effort at a monetary union collapsed but 200 years later, the ancient Greeks had another try, organised through what was known as the Achaean League, an alliance of territories and city states covering the whole of the Peloponnese that had been formed about 280BC.

Once again, their shared currency had a common obverse design, in this case the head of Zeus, and reverse patterns that were specific to the individual issuing authority.

The result, according to the historian Polybius, was that the Greeks "had not only formed an allied and friendly community but they have the same laws, weights, measures and coinage, as well as the same officials, council and courts of justice". Here was a level of integration, which the most ardent and ambitious Eurocrat of today might envy and this may help explain why, unlike the Latin or the Scandinavian monetary unions, the Achaean League lasted for well over 100 years.

Its eventual dissolution, in 146BC, was not because the members of the league fell out with each other, over the currency or anything else but was the result of an external shock in the form of a crushing military defeat by the Romans at the Battle of Corinth. Which leaves us with the following paradox: the ancient Greeks were pioneers of monetary unions and were quite eager to keep them in being.

Modern Greece, by contrast, has been a threat and a danger to any monetary union that it has ever joined.

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Einstein RIP - Your hunch about the speed of light is still true

Faster-than-light neutrinos could be down to bad wiring

What might have been the biggest physics story of the past century may instead be down to a faulty connection.

In September 2011, the Opera experiment reported it had seen particles called neutrinos evidently travelling faster than the speed of light.

The team has now found two problems that may have affected their test in opposing ways: one in its timing gear and one in an optical fibre connection.

More tests from May will determine just how they affect measured speeds.

The Opera collaboration (an acronym for Oscillation Project with Emulsion-Racking Apparatus) was initially started to study the tiny particles as they travelled through 730km of rock between a particle accelerator at the European Organisation for Nuclear Research (Cern) in Switzerland and the Gran Sasso underground laboratory in Italy.

Its goal was to quantify how often the neutrinos change from one type to another on the journey.
But during the course of the experiments the team found that the neutrinos showed up 60 billionths of a second faster than light would have done over the same distance - a result that runs counter to a century's worth of theoretical and experimental physics.

The team submitted the surprising result to the scientific community in an effort to confirm or refute it, and several other experiments around the world are currently working to replicate the result.
A repeat of the experiment by the Opera team will now address whether the issues they have found affect the ultimate neutrino speed they measure.

The two problems the team has identified would have opposing effects on the apparent speed.

On the one hand, the team said there is a problem in the "oscillator" that provides a ticking clock to the experiment in the intervals between the synchronisations of GPS equipment.

This is used to provide start and stop times for the measurement as well as precise distance information.

That problem would increase the measured time of the neutrinos' flight, in turn reducing the surprising faster-than-light effect.

But the team also said they found a problem in the optical fibre connection between the GPS signal and the experiment's main clock.

In contrast, the team said that effect would increase the neutrinos' apparent speed.

Only repeats of the experiments by Opera and other teams will put the matter to rest.

"These latest developments show how hard the OPERA team is working to understand the results," said Dave Wark, a particle physicist from the Rutherford Appleton Laboratory in the UK and committee member of Japan's principal neutrino facility T2K.

"Just as it would have been unwise to jump to the conclusion that the initial results were the result of an anomaly, it would be unwise to make any assumptions now. It is the nature of science that theories have to be tested, re-tested and then tested again".

In a statement, the Opera collaboration said: "While continuing our investigations, in order to unambiguously quantify the effect on the observed result, the collaboration is looking forward to performing a new measurement of the neutrino velocity as soon as a new bunched beam will be available in 2012."

Meanwhile, the Borexino and Icarus experiments, also at Gran Sasso, the Minos experiment based at the US Fermilab, and Japan's T2K facility are all working on their own neutrino speed measurements, with results expected in the next few months.

It's time to start talking to the City

A radical reform of the financial sector can only be achieved if we know what kind of capitalism we want

• Ha-Joon Chang
• guardian.co.uk, Monday 20 February 2012

Last week I delivered a lecture on my latest book to about 150 people from the financial industry at the London Stock Exchange. The event was not organised or endorsed by the LSE itself, but the venue was quite poignant for me, given that a few months ago I did the same thing on the other side of the barricade, so to speak, at the Occupy London Stock Exchange movement.

At the exchange I made two proposals I knew may not be popular with the audience. My first was that we need to completely change the way we run our corporations, especially in the UK and the US. I started from the observation that financial deregulation since the 1980s has greatly increased the power of shareholders by expanding the options open to them, both geographically and in terms of product choice. Such deregulation was particularly advanced in Britain and America, making them the homes of "shareholder capitalism".

With greater abilities to move around, shareholders have begun to adopt increasingly short time horizons. As Prem Sikka wrote in the Guardian in December 2011, the average shareholding period in UK firms fell from about five years in the mid-1960s to 7.5 months in 2007. The figure for UK banks had fallen to three months by 2008 (although it is up to about two years now).
In order to satisfy impatient shareholders, managers have maximised short-term profits by squeezing other "stakeholders", such as workers and suppliers, and by minimising investments, whose costs are immediate but whose returns are remote. Such strategy does long-term damages by demoralising workers, lowering supplier qualities, and making equipment outmoded. But the managers do not care because their pay is linked to short-term equity prices, whose maximisation is what short term-oriented shareholders want.

That is not all. An increasing proportion of profits are distributed to shareholders through dividends and share buybacks (firms buying their own shares to prop up their prices). According to William Lazonick – a leading authority on this issue – between 2001 and 2010, top UK firms (86 companies that are included in the S&P Europe 350 index) distributed 88% of their profits to shareholders in dividends (62%) and share buybacks (26%).

During the same period, top US companies (459 of those in the S&P 500) paid out an even greater proportion to shareholders: 94% (40% in dividends and 54% in buybacks). The figure used to be just over 50% in the early 80s (about 50% in dividends and less than 5% in buybacks).

The resulting depletion in retained profit, traditionally the biggest source of corporate investments, has dramatically undermined these corporations' abilities to invest, further weakening their long-term competitiveness. Therefore, I concluded, unless we significantly restrict the freedom of movement for shareholders, through financial reregulation, and reward managers according to more long term-oriented performance measures than share prices, companies will continue to be managed in a way that undermines their own viability and weakens the national economy in the long run.

My second proposal was that, in order to improve the stability of our financial system, we need to radically simplify it. I argued that financial deregulation in the last 30 years led to the proliferation of complex financial derivatives. This has created a financial system whose complexity has far outstripped our ability to control it, as dramatically demonstrated by the 2008 financial crisis.
Drawing on the works of Herbert Simon, the 1978 Nobel economics laureate and a founding father of the study of artificial intelligence, I pointed out that often the crucial constraint on good decision-making is not the lack of information but our limited mental capability, or what Simon called "bounded rationality". Given our bounded rationality, I asserted, the only way to increase the stability of our financial system is to make it simpler. And the most important action to take is to restrict, or even ban, complex and risky financial instruments through the financial world equivalent of the drugs approval procedure.

The reactions of my audience were rather surprising. Not only did nobody challenge my proposals, but many agreed with me. Yes, they said, "quarterly capitalism" has been destructive. True, they related, we've seen too many derivative products that few people understood. And, yes, many of those products have been socially harmful.

It seems that, as it is wrong to label the Occupy movement as anti-capitalist, it is misleading to characterise the financial industry as being in denial about the need for reform. I am not naive enough to think that the people who came to my lecture are typical of the financial industry. However, a surprisingly large number of them acknowledged the problems of short-termism and excessive complexity that their industry has generated to the detriment of the rest of the economy – and ultimately to its own detriment, as the financial industry cannot thrive alone.

The rest of us need to have a closer dialogue with reform-minded people in the financial industry. They are the ones who can generate greater political acceptance of reforms among their colleagues and who can also help us devise technically competent reform proposals. After all, without a degree of "changes from within", no reform can be truly durable.