Monthly Archives: June 2014

Cyberwarriors: US and China

cyberhacking

On May 19th, 2014 the Justice Department unveiled 31 charges against five members of China’s People’s Liberation Army (PLA), involving breaking six laws, from relatively minor counts of identity theft to economic espionage, which carries a maximum sentence of 15 years. This is the first time the government has charged employees of a foreign government with cybercrime. The accused are unlikely ever to stand trial. Even so, the Justice Department produced posters with mugshots of the men beneath the legend “wanted by the FBI”. They may never be punished, but that is not the point. Google any of their names and the mugshots now appear, the online equivalent of a perp walk.

That China’s government spies on the commercial activities of companies in America is not news in itself. Last year Mandiant, a cyber-security firm based in Virginia, released a report that identified Unit 61398 of the PLA as the source of cyber-attacks against 140 companies since 2006. But the indictment does reveal more details about what sorts of things the Chinese cybersnoops have been snaffling.

Hackers stole designs for pipes from Westinghouse, an American firm, when it was building four nuclear power stations in China, and also took e-mails from executives who were negotiating with a state-owned company. They took financial information from SolarWorld, a maker of solar panels; gained access to computers owned by US Steel while it was in a trade dispute with a state-owned company; and took files from Alcoa, an aluminium producer, while it was in a joint venture with another Chinese government-backed firm. ATI, another metal firm, and the United Steelworkers union were hacked, too.

American firms that do business in China have long lobbied behind closed doors for Uncle Sam to do something about Chinese hackers. America’s government has hitherto followed a similar logic, pressing China in private. The decision to make a fuss reflects the failure of that approach. When the existence of Unit 61398 became public its troops paused for a while, then continued as before.

Confronting the PLA’s hackers comes at a cost. China has pulled out of a bilateral working group on cyber-security in response to the indictments. Global Times, a Chinese English-language daily, denounced America as: “a mincing rascal”. But doing nothing has a cost, too. Companies like Westinghouse and US Steel have a hard enough time competing with Chinese firms, without having their business plans and designs pinched by thieves in uniform. Nor is the spying limited to manufacturers: tech companies have been targeted by the same group…

Second, America’s spying on Huawei, a Chinese maker of telecoms and networking equipment, makes China’s government doubt that America follows its own rules.

Chinese spying: Cybersnoops and mincing rascals,  Economist, May 24, at 28

Barclays Toxic Landfill

barclays

The lawsuit filed by New York’s top securities regulator against Barclays, alleges that it favoured high-speed traders using its “dark pool” trading venue, while misleading other investors.The 30-page complaint gives examples of what Eric Schneiderman, the state attorney-general, claims were the bank’s practices.

The lawsuit claims that Barclays took advantage of its institutional investor clients, known as “the buy side.”  The complaint quotes a former director as saying: “[T]he way the deal would work is [Barclays] would invite the high frequency firms in. They would trade with the buy side. The buy side would pay the commissions. The high frequency firms would pay basically nothing. They would make their money off of manipulating the price.“Barclays would make their money off the buy side. And the buy side would totally be taken advantage of because they got stuck with the bad trade . . . this happened over and over again.”

It also quotes a former Barclays director as saying: “There was a lot going on in the dark pool that was not in the best interests of clients. The practice of almost ensuring that every counterparty would be a high frequency firm, it seems to me that that wouldn’t be in the best interest of their clients . . . It’s almost like they are building a car and saying it has an airbag and there is no airbag or brakes.”…

The same day Barclays’ then-head of equities sales noted in reference to the analysis that some in the industry viewed Barclays’ dark pool as a “toxic landfill” and so “[i]f we can help ourselves we should[;] it’s in our control”.

The attorney-general alleges the bank’s “Liquidity Profiling” surveillance system failed to protect clients from predatory high-speed trading tactics…“Barclays has never prohibited a single firm from participating in its dark pool, no matter how toxic or predatory its activity was determined to be.”

Excerpts from John Aglionby, Lawsuit alleges Barclays misled dark pool clients, Financial Times, June 26, 2014

India as the Exception: the Geopolitics of Nuclear Weapons

NSG-India

The United States, Britain and others have argued that nuclear-armed India should join the secretive 48-nation Nuclear Suppliers Group (NSG) – established in 1975 to ensure that civilian atomic trade is not diverted for military purposes.  But other NSG states have voiced doubt about accepting a country that built up a nuclear arsenal outside a 189-nation treaty set up four decades ago to prevent states from acquiring such weapons of mass destruction.

Days ahead of the June 26-27 NSG meeting in Buenos Aires, India said it was ratifying an agreement, a so-called Additional Protocol, with the International Atomic Energy Agency to expand oversight over its civilian nuclear programme.  The United States said this marked another “important step in bringing India into the international non-proliferation mainstream”. But some critics questioned the step’s significance, as it would not affect India’s nuclear weapons programme and sensitive atomic fuel activities.  They said the Indian agreement was a much weaker version of a deal most other IAEA members have, giving the U.N. watchdog wide inspection powers to make sure there are no covert nuclear activities in a country.  “India’s version of the Additional Protocol is a paper tiger,” said Daryl Kimball of the U.S.-based Arms Control Association, a research and advocacy group….

The diplomatic tussle centres on whether the emerging power should be allowed into a key forum deciding rules for civilian nuclear trade, even though it never joined the 1970 Non-Proliferation Treaty (NPT), under which it would have to give up its nuclear weapons…

India – Asia’s third-largest economy – would need the support of all NSG states to join the cartel that has a pivotal role in countering nuclear threats and proliferation.  If India eventually were to become a member, it would boost its standing as an atomic power. It would be the only member of the suppliers group that has not signed up to the NPT.

Supporters say it is better if the country is inside than outside the NSG as it is already an advanced nuclear energy power and will in future become a significant exporter as well.  Those who are sceptical argue it could erode the credibility of the NPT, which is a cornerstone of global nuclear disarmament efforts.

Diplomats have said that China and some others have been doubtful. Beijing’s reservations are believed to be influenced by its ties to its ally Pakistan, India’s rival, which has also tested atomic bombs and is also outside the NPT, analysts say.

Excerpts,Nuclear Suppliers Group to discuss ties with India,Reuters, Jun 24, 2014

Texas is Thirsty for Nuclear Waste

Texas Compact Waste Facility (CWF) image from http://www.wcstexas.com/facilities/compact-waste-facility/

The company operating Texas’ only radioactive waste dump site is asking state regulators to allow disposal of depleted uranium and triple the capacity of a burial site that accepts waste from dozens of states.  Although Waste Control Specialists says the uranium stored at its West Texas site would have only low-level radioactivity, opponents say the proposal would get the company another step closer to handling more dangerous material that wasn’t part of the original license. The company has already been in talks with county officials about high-level waste disposal.

Meanwhile, the Dallas-based business has also asked the state to reduce the money it’s required to have available to fund potential liability at the site — to about $86 million from $136 million.”The public should be paying attention, but they’re not,” said state Rep. Lon Burnam, a Fort Worth Democrat who has taken an active role in monitoring how the state handles radioactive waste. “We have less and less financial assurances and greater threat for more harm.”…

Environmental groups have long worried about the local geology and contamination of underground water sources near the site, which can accept low-level waste from compact members Texas and Vermont as well as 36 other states.  The site could soon be the resting place for hotter material that’s being stored at Texas’ four commercial nuclear reactors.

In March, Texas Gov. Rick Perry asked lawmakers to explore establishing a location in Texas to store the high-level radioactive waste from these reactors. Two months earlier, House Speaker Joe Straus directed lawmakers to examine the economic impact of permitting such a site.  McDonald said the company has had conversations with Andrews County officials about high-level waste storage. Officials in Loving County, the nation’s least populous county, have interest in building a storage site there

Excerpts from BETSY BLANEY, West Texas site seeks to bury depleted uranium, Associated Press, June 14, 2014

The Battle Against Nuclear Waste in Australia

Muckaty Station in the Northern Territory [Australia] was nominated in early 2007 as a site to store low and intermediate radioactive waste under a deal negotiated with the Aboriginal Ngapa clan.

While Australia does not use nuclear power, it needs a site to store waste, including processed fuel rods from the country’s only nuclear reactor at Lucas Heights, on the outskirts of Sydney,…..Opponents have fought against the dump for years, with a trial starting in the Federal Court in Melbourn in June 2014 alleging Muckaty’s nomination was invalid due to a failure of the government and the land council to obtain the consent of all Aboriginal owners.  “What we’re here to say is ‘no more’ and that this process was so legally flawed that it is invalid,” Ron Merkel, who is representing traditional owners, told the court.  “The opposition is in no small part based on a spiritual affiliation to the land and that radioactive waste will poison the land,” he said in comments cited by Australian Associated Press

In Australian Federal Court, Aborigines continue the fight against radioactive waste dumping on their land, Agence France Presse, June 3, 2014

Fukushima Nuclear Waste and the Graves

tokyo dome,  is a 55,000-seat baseball stadium located in Bunkyo Ward of Tokyo.

The central government [of Japan] is compiling a generous compensation plan to overcome the reluctance of two towns to host intermediate storage facilities for radioactive waste from the Fukushima nuclear disaster.  Measures being considered for the municipalities of Okuma and Futaba include buying or renting properties at inflated real estate values and covering the costs to relocate the grave sites of relatives.

Okuma and Futaba are hosts to Tokyo Electric Power Co.’s crippled Fukushima No. 1 nuclear power plant. The two towns and the Fukushima prefectural government have not given their consent for the intermediate storage facilities, with many residents fearing the facilities will become permanent fixtures in their backyards.  The waste, expected to fill the equivalent of 23 Tokyo Domes, is currently being kept temporarily in various locations in Fukushima Prefecture where decontamination work has been conducted.

The government under then Prime Minister Naoto Kan announced in August 2011 that intermediate storage facilities would be needed to take in the waste from those locations.  However, little progress has been made on constructing intermediate storage facilities, and the government says the delay has affected further decontamination efforts and overall reconstruction in Fukushima.

Large parts of Okuma and Futaba continue to have high levels of radiation, and prospects are dim that residents who fled the areas can return to their homes in the near future. The radiation levels have also pushed down real estate values in the two municipalities.  Under the central government’s compensation plan, the real estate values will be calculated on the assumption that the land and buildings will one day be available for use after radiation levels have fallen far enough for the evacuation orders to be lifted.  Government compensation will be separate from the compensation that local residents can receive from TEPCO.

Residents have also raised concerns that they would be unable to visit graves in Okuma and Futaba if the intermediate storage facilities are constructed there.  The central government’s plan would not only cover the costs of moving the gravestones and remains away from the storage facilities, but it would also pay for memorial services that would be needed in line with the transfer. In addition, the government would provide support if the local communities decide to construct a new cemetery in a location where radiation levels are comparatively low.

For families that do not want to move the graves, the central government will consider allowing the graves to remain at their current sites. The intermediate storage facilities could be designed to avoid such grave sites, and family members would be allowed to visit the graves even after the facilities are completed.

Government sweetening the pot for storage of Fukushima radioactive waste, THE ASAHI SHIMBUN, May 18, 2014

NGO Sues CIA over Freedom of Information

foia

[T]he Central Intelligence Agency has a track record of holding itself apart from, and largely above, the Freedom of Information Act, consistently ignoring deadlines, refusing to work with requesters, and capriciously rejecting even routine requests for what should be clearly public information.  Additionally, we [MuckRock] are suing against the CIA’s general practice of rejecting requests for email records which do not include the time frame, subject, and to and from fields, regardless of what other information is including to help narrow the request. This practice replaces the required functional test for whether or not a request reasonably describes the records sought with a per se test that automatically rejects any request for email records based on whether or not it includes all four pieces of information, virtually ensuring that vast amounts of CIA email records go unprocessed and unreleased.

Excerpt, Michael Morisy, Why we’re suing the CIA: After 10,000 requests, MuckRock launches its first lawsuit, MuckRock Press Release, June 11, 2014