Vendor Misinformation in the E-Voting World

Go to Original
By Dan Wallach

This article was posted at Ed Felten’s Freedom to Tinker Blog and is reposted here with permission of the author.

Last week, I testified before the Texas House Committee on Elections (you can read my testimony). I’ve done this many times before, but I figured this time would be different. This time, I was armed with the research from the California “Top to Bottom” reports and the Ohio EVEREST reports. I was part of the Hart InterCivic source code team for California’s analysis. I knew the problems. I was prepared to discuss them at length.

Wow, was I disappointed. Here’s a quote from Peter Lichtenheld, speaking on behalf of Hart InterCivic:

Security reviews of the Hart system as tested in California, Colorado, and Ohio were conducted by people who were given unfettered access to code, equipment, tools and time and they had no threat model. While this may provide some information about system architecture in a way that casts light on questions of security, it should not be mistaken for a realistic approximation of what happens in an election environment. In a realistic election environment, the technology is enhanced by elections professionals and procedures, and those professionals safeguard equipment and passwords, and physical barriers are there to inhibit tampering. Additionally, jurisdiction ballot count, audit, and reconciliation processes safeguard against voter fraud.

You can find the whole hearing online (via RealAudio streaming), where you will hear the Diebold/Premier representative, as well as David Beirne, the director of their trade organization, saying essentially the same thing. Since this seems to be the voting system vendors’ party line, let’s spend some time analyzing it.

Did our work cast light on questions of security? Our work found a wide variety of flaws, most notably the possibility of “viral” attacks, where a single corrupted voting machine could spread that corruption, as part of regular processes and procedures, to every other voting system. In effect, one attacker, corrupting one machine, could arrange for every voting system in the county to be corrupt in the subsequent election. That’s a big deal.

At this point, the scientific evidence is in, it’s overwhelming, and it’s indisputable. The current generation of DRE voting systems have a wide variety of dangerous security flaws. There’s simply no justification for the vendors to be making excuses or otherwise downplaying the clear scientific consensus on the quality of their products.

Were we given unfettered access? The big difference between what we had and what an attacker might have is that we had some (but not nearly all) source code to the system. An attacker who arranged for some equipment to “fall off the back of a truck” would be able to extract all of the software, in binary form, and then would need to go through a tedious process of reverse engineering before reaching parity with the access we had. The lack of source code has demonstrably failed to do much to slow down attackers who find holes in other commercial software products. Debugging and decompilation tools are really quite sophisticated these days. All this means is that an attacker would need additional time to do the same work that we did.

Did we have a threat model? Absolutely! See chapter three of our report, conveniently titled “Threat Model.” The different teams working on the top to bottom report collaborated together to draft this chapter. It talks about attackers’ goals, levels of access, and different variations on how sophisticated an attacker might be. It is hard to accept that the vendors can get away with claiming that the reports did not have a threat model, when a simple check of the table of contents of the reports disproves their claim.

Was our work a “realistic approximation” of what happens in a real election? When the vendors call our work “unrealistic”, they usually mean one of two things:

1. Real attackers couldn’t discover these vulnerabilities
2. The attackers can’t be exploited in the real world.

Both of these arguments are wrong. In real elections, individual voting machines are not terribly well safeguarded. In a studio where I take swing dance lessons, I found a rack of eSlates two weeks after the election in which they were used. They were in their normal cases. There were no security seals. (I didn’t touch them, but I did have a very good look around.) That’s more than sufficient access for an attacker wanting to tamper with a voting machine. Likewise, Ed Felten has a series of Tinker posts about unguarded voting machines in Princeton.

Can an attacker learn enough about these machines to construct the attacks we described in our report? This sort of thing would need to be done in private, where a team of smart attackers could carefully reverse engineer the machine and piece together the attack. I’ll estimate that it would take a group of four talented people, working full time, two to three months of effort to do it. Once. After that, you’ve got your evil attack software, ready to go, with only minutes of effort to boot a single eSlate, install the malicious software patch, and then it’s off to the races. The attack would only need to be installed on a single eSlate per county in order to spread to every other eSlate. The election professionals and procedures would be helpless to prevent it. (Hart has a “hash code testing” mechanism that’s meant to determine if an eSlate is running authentic software, but it’s trivial to defeat. See issues 9 through 12 in our report.)

What about auditing, reconciliation, “logic and accuracy” testing, and other related procedures? Again, all easily defeated by a sophisticated attacker. Generally speaking, there are several different kinds of tests that DRE systems support. “Self-tests” are trivial for malicious software to detect, allowing the malicious software to either disable and fake the test results, or simply behave correctly. Most “logic and accuracy” tests boil down to casting a handful of votes for each candidate and then doing a tally. Malicious software might simply behave correctly until more than a handful of votes have been received. Likewise, malicious software might just look at the clock and behave correctly unless it’s the proper election day. Parallel testing is about pulling machines out of service and casting what appears to be completely normal votes on them while the real election is ongoing. This may or may not detect malicious software, but nobody in Texas does parallel testing. Auditing and reconciliation are all about comparing different records of the same event. If you’ve got a voter-verified paper audit trail (VVPAT) attachment to a DRE, then you could compare it with the electronic records. Texas has not yet certified any VVPAT printers, so those won’t help here. (The VVPAT printers sold by current DRE vendors have other problems, but that’s a topic for another day.) The “redundant” memories in the DREs are all that you’ve got left to audit or reconcile. Our work shows how this redundancy is unhelpful against security threats; malicious code will simply modify all of the copies in synchrony.

Later, the Hart representative remarked:

The Hart system is the only system approved as-is for the November 2007 general election after the top to bottom review in California.

This line of argument depends on the fact that most of Hart’s customers will never bother to read our actual report. As it turns out, this was largely true in the initial rules from the CA Secretary of State, but you need to read the current rules, which were released several months later. The new rules, in light of the viral threat against Hart systems, requires the back-end system (”SERVO”) to be rebooted after each and every eSlate is connected to it. That’s hardly “as-is”. If you have thousands of eSlates, properly managing an election with them will be exceptionally painful. If you only have one eSlate per precinct, as California required for the other vendors, with most votes cast on optical-scanned paper ballots, you would have a much more manageable election.

What’s it all mean? Unsurprisingly, the vendors and their trade organization are spinning the results of these studies, as best they can, in an attempt to downplay their significance. Hopefully, legislators and election administrators are smart enough to grasp the vendors’ behavior for what it actually is and take appropriate steps to bolster our election integrity.

Until then, the bottom line is that many jurisdictions in Texas and elsewhere in the country will be using e-voting equipment this November with known security vulnerabilities, and the procedures and controls they are using will not be sufficient to either prevent or detect sophisticated attacks on their e-voting equipment. While there are procedures with the capability to detect many of these attacks (e.g., post-election auditing of voter-verified paper records), Texas has not certified such equipment for use in the state. Texas’s DREs are simply vulnerable to and undefended against attacks.

Bush's Dollar Drop Maps Loss of U.S. Clout at Final G-8 Summit

Go to Original
By James G. Neuger

When President George W. Bush went to his first Group of Eight summit in 2001, a dominant issue was the dollar -- the strong dollar, that is. The U.S. currency was on a record-setting streak, and the free-marketeering president wasn't going to stand in the way.

On the eve of Bush's last G-8 appearance, the dollar's gyrations are again in the crossfire. This time, it is a weak currency, upended by slumping growth, a housing recession and record gas prices, that is gnawing away at the world economy.

The dollar's 41 percent drop against the euro during Bush's term writes the economic epitaph of an administration that set out to restore American preeminence. Instead, Bush heads to Japan next week for his final international summit with diminished leverage as Russian and Chinese influence grows.

``Between the economic duress facing the United States and the global community at large and the fact that the clock is running out on the Bush administration, Bush does not hold a good hand,'' said Charles Kupchan, an international-relations professor at Georgetown University in Washington. He called the summit a ``damage-limitation'' exercise to show the world that governments are trying to contain food and oil prices.

Global economic-confidence building crowds the agenda at the three-day summit starting July 7 in Toyako, on the northern Japanese island of Hokkaido, that was meant to tackle climate change, recommit the rich world to development aid for Africa and strengthen nuclear non-proliferation controls.

Growth Lags

Bush represents the worst-performing economy in the G-8 after Italy, with growth of 0.5 percent this year set to lag behind 1.6 percent in the U.K., 1.4 percent in the euro area, 1.4 percent in Japan and 1.3 percent in Canada, according to International Monetary Fund forecasts.

Russia, brought into the G-8 by Bill Clinton in 1998, will eclipse the rest of the club with growth of 6.8 percent this year, the IMF says. Russia's oil and commodity wealth puts it at odds with the western goal of cutting reliance on fossil fuels. China, seen expanding 9.3 percent, has also frustrated the fight against global warming by locking up energy deals in Africa to slake its economic thirst. China will be among eight non-G-8 members that take part on the summit's last day.

America's economic woes with $4-a-gallon gasoline prices will stiffen Bush's opposition to European and Japanese calls for binding, quantifiable targets for cutting greenhouse-gas emissions, blamed by scientists for pushing up global temperatures.

Global Warming

Bush took a baby step at last year's G-8 by acknowledging the need to do something about global warming, edging the U.S. away from the laissez-faire approach that he championed after pulling the U.S. out of the Kyoto climate-protection protocol in a move that met international condemnation in 2001.

With the countdown under way to the presidency of Barack Obama or John McCain, the most the summit can do is set up a framework for pollution-cutting agreements that replace Kyoto when it expires in 2012, said Reginald Dale, a senior fellow at the Center for Strategic and International Studies in Washington.

``Most of Bush's partners are looking to the next president,'' Dale said. European leaders will ``be trying to pin Bush further down on the nature of commitments that the United States might undertake to reduce emissions in the shorter term.''

Europe's Bind

Europe is caught in a bind of its own. Soaring fuel prices and a chorus of protests put pressure on leaders to offer relief instead of weaning consumers away from fossil fuels. French President Nicolas Sarkozy, holder of the 27-nation European Union's six-month presidency, is pressing for fuel-tax cuts.

Oil prices continued climbing after pressure by European leaders including Britain's Gordon Brown led Saudi Arabia, the world's biggest oil exporter, to announce for July the third straight monthly increase in production.

``There's no hope for new achievements or concrete results regarding crude-oil prices or the shortage of food or global warming,'' said Koichi Kato, a senior member of Japan's ruling Liberal Democratic Party.

Spiraling food and fuel costs are hitting poorer countries the hardest, increasing the pressure on the G-8 to make good on a 2005 pledge to double development aid to Africa to $50 billion annually by 2010 and to implement last year's promise to invest $60 billion worldwide to combat deadly diseases.

Price Surge

G-8 finance ministers last month identified surging commodities prices as a bigger threat than the credit squeeze to the world economy. Prices for 19 commodities in the Reuters/Jefferies CRB Index rose 29 percent in the first half, the most since 1973. Rice, corn and wheat futures have all touched records this year.

Sagging faith in the dollar -- it now makes up 63 percent of global currency reserves, down from 71 percent when Bush took office -- complicates efforts to tame commodity prices because they are primarily denominated in the U.S. currency.

America's dependence on imported capital to finance a $9.5 trillion debt -- up from $5.7 trillion when Bush took office -- has driven down the currency. The decline was accelerated by the subprime crisis that plunged the U.S. into an economic tailspin.

``If Bush could get others at the G-8 summit to demand a stronger dollar he'd have done a final good after a lot of negatives over the years,'' said Uwe von Parpart, chief Asia strategist at Cantor Fitzgerald LP in Hong Kong. ``Dollar strengthening appears to be the only thing capable of containing or pushing back oil prices.''

Speaking at the White House yesterday, Bush tried to give the markets a nudge: ``We're strong dollar people in this administration and have always been for the strong dollar.''

Hitchens Gets Waterboarded, Withdraws from Iraq in 11 Seconds

Go to Original
By John Dolan

Stop the presses! Christopher Hitchens just noticed that waterboarding is torture!

Hitchens announced the news like he’d brought it down from Mount Sinai, in a Vanity Fair article. "Believe me," he told a waiting nation, "it’s torture." Well, yeah. It usually is, when it happens to you. When it happens to somebody else, it’s "extreme interrogation." I thought everybody over the age of 5 knew that, but as usual, I misoverestimated the media. Hitchens’ tame little torture session is the biggest S&M video on the web since "9½ Weeks."

Hitchens’ video is totally fake -- there’s even soft-rock background music playing on the video, better music than you usually get at the dentist’s office, and his "interrogators" treat him more like a client getting a mud pack at a spa than a real suspect in Iraq. That makes it even more disgusting that Hitch caved in after only 11 seconds of having water poured over a towel on his face. Eleven seconds! Think about the timeline here: For five long years he supported this stuff when it was happening to other people. Once it happened to him, he needed exactly 11 seconds to see the light.

Of course if Hitchens had been a real Iraqi suspect, they’d never have had to waterboard him at all. They do that to tough suspects, not wimps like him. In a real torture cell, everything would be a lot tougher from the start. For example, Chris wouldn’t be in the nice dress shirt and slacks he’s wearing on the video. He’d be naked -- a gross image, what a lifetime of booze and lying does to the body, but we have to be hard-nosed here -- because keeping the prisoner naked is basic interrogation strategy, especially with a culture as horrified of gettin’ nekkid as Arabs are. You’ll recall that in those Abu Ghraib pictures, the prisoners were naked.

So that’s fake already, and the video gets faker as it goes. The guys "interrogating" him are fat, middle-aged, mild-mannered dudes. They don’t even yell at him. A real suspect in Iraq would be snatched off the street, smacked around until he passes out, stripped and dumped into a cell with a hood over his head. He wouldn’t be able to sleep off his misery, either, because sleep deprivation is one of the oldest, most effective tortures. The interrogators would maintain this schedule for hours, days, weeks, depending on how well and how soon the victim breaks down. When they think he’s ready -- like, they notice with satisfaction that he screams like a steam whistle every time he hears footsteps in the corridor -- they drag him out of his cell and strap him onto that waterboarding table.

Well, Chris is a busy man and didn’t have time for all that background research, so what you see in this video is a guy who hasn’t been so much as slapped or yelled at. Who probably just finished a 10-martini lunch at some upscale restaurant. That’s ridiculous enough, but the interrogators make it even more ridiculous with their little introduction to the torture session. One guy says, "All right, listen up, I’m going to give you some instructions ..." Then he tells the fat man on the table, "We’re going to place metal objects in each of your hands," and if he feels "unbearable stress" at any time, all he has to do is drop the objects and they’ll stop.

I’ve had dentists who did root canals on me without being that nice; they stuck to "this is going to hurt." More to the point here, putting the victim in "unbearable stress" is, uh, the whole point of torture, or "extreme interrogation," or whatever you want to call it. The last thing you’d ever do is give the victim a sense of power, like he can stop the process by dropping a "metal object" on the floor.

That kind of etiquette is what you get from those expensive dominatrixes English dudes like to get whipped by, or those nerf BDSM sites that talk about "consensual power exchanges." What reminded me most of those BDSM sites is the "code word" they tell Hitchens he can use to stop the waterboarding: "That word is red, R-E-D." They ask him if he understands and he says, "Yes, sir." That "sir" only added to the ridiculous porn feel here, like Hitchens was paying a hundred pounds an hour to have Baron Whipsong or Lady Cruella, whichever way he likes it, wear out their riding crop on his eager little bum.

The real thing isn’t nearly so nice. After you’ve been beaten on bruises (which hurt more each time) for a few days, they slam the cell door open, screaming abuse at you, kick you to your feet and take you down the corridor, slamming your head into the walls as often as they feel like it, and strap you down. And all the time they’re screaming: "OK, you worthless (Arabic obscenity here) -- We’re through with you! We don’t even want you any more! Ever drown before, (obscenity)? Ever go swimming head-first, (obscenity)?"

If you remember "The Big Lebowski," you can get a better idea of what waterboarding is like by remembering the scene where the Dude walks into his bungalow, where Jackie Treehorn’s yuppie thugs are waiting for him. The blond one grabs the Dude’s hair and runs him headfirst into the toilet, screaming, "Where’s the money, Lebowski? Where’s the money, shithead?" See, the point is to show overwhelming, terrifying power over the suspect, not give him little safety words.

But all that niceness doesn’t matter once the torturer’s helper takes a plastic milk container full of water and pours it, bit by bit, over a towel covering Hitch’s face. The "metal object," whatever it is, drops after 11 seconds. And of course these fake interrogators are all over Hitch, making sure he’s OK. That’s also totally fake, but why bother listing any more fake features of this nonsense? The truth is that anybody who’s been through as much dentistry as I have knows that nobody holds out under torture. It’s not just the pain, it’s the fear of the pain. I used to try to be a hero like the ones in my war books every time I went to have a root canal from the mean old Armenian who did our dental work. He scrimped on the Novocain, so I had plenty of scope to practice. And I learned the same thing any sane person knows by the time they grow up: Nobody can resist torture. Just like anybody knows what having water poured over a towel on your face is like: It’s like drowning. Duh. Anybody who wanted to know that already knew it.

So why does Hitchens make such a big show of just realizing it now, after five years of supporting it? To me, the answer’s easy: He’s withdrawing from Iraq, making a big Jesus-on-the-cross demonstration, like a public punishment, for supporting the war all this time. By getting himself tortured in this half-assed way, he gives himself a reason to see the light, desert from the Neocon forces before it’s too late. Karl Rove won’t be happy, though, because the last thing the GOP wants is for people to start realizing what we’re actually doing in Iraq. Reminds me of the debate about abolishing flogging with the cat-o’-nine-tails in the British Navy. The first time the bill was introduced, everybody laughed at how ridiculous a notion that was. Then somebody thought of having a real cat-o’-nine-tails introduced to the House of Commons, a bloody old Exhibit A. Nobody said a thing; they just voted unanimously to forbid it.

That’s all it takes to change anybody’s mind about torture, getting one little 11-second whiff of it, even if it’s nowhere close to the real thing. The interesting thing is not that Hitchens changed his mind; it’s the strategic thinking that made him decide to do it now. The timing of this little martyr is the key here, and what it tells you is that Hitchens is declaring martyrdom and getting out. He just unilaterally withdrew from Iraq, and in only 11 seconds.

Global food price rises exacerbate famine in Ethiopia and Somalia

Go to Original
By Barry Mason

It is not unusual for Ethiopia and Somalia to be hit by drought and food shortages, but this year the rise in food costs makes an already disastrous situation worse.

In Ethiopia, the area affected is in the triangle of land in the east and southeast bordering Kenya and Somalia, comprising the Somalia, Oromiya and Amhara regions. According to Reuters, a NASA earth observatory picture taken from space shows the “eastern half of the country withered in drought.”

Around 4.5 million Ethiopians are in need of food aid, with as many as 75,000 children facing acute malnutrition and illness.

Ken Caldwell, international operations director for the charity Save the Children, explained, “Hunger hits children first and hits them hardest. Ethiopian children, who are going hungry because their parents can’t afford to feed them, will be among the first victims of the global food price rises.”

As in previous years the impact of a poor belg rainfall (the belg rains fall March to May) has left the area to be classified by FEWSNET (famine early warning network) as either “highly” or “extremely” food-insecure.

A Reuters report of June 13 quoted Elisabeth Byrs, of the United Nations Office for the Coordination of Humanitarian Affairs.

“Seasonal rains have been poor or have failed in many parts of Ethiopia with dramatic effects on harvests in crop-producing areas,” she explained, and the effects of the drought had doubled the numbers needing food aid.

All the NGOs working in Ethiopia repeat the danger to children. The American-based CHF International explains how the drought’s effect on livestock means that milk production has almost ceased, and that this is having a marked impact on children’s nutrition.

The medical charity Medecins Sans Frontieres (MSF), in a press release of June 5, said, “Since MSF started its intervention in this region on 13 May, over 700 children with complicated severe malnutrition...have been admitted to its three stabilisation centres. In addition more than 1,500 other malnourished children are being treated as outpatients in eight clinics around the region. In Ethiopia around 7 million people routinely rely on food aid—malnutrition is nothing new. However, this year, the situation is much worse.... An MSF emergency nutritional project will generally be started if a rate of 3 percent severe acute malnutrition is found in a certain area. In some places in Ethiopia, recent assessments revealed a rate of 11 percent.”

The UN has launched an appeal for US$325 million to provide 400,000 tonnes of food aid in Ethiopia. The fact that just two months ago the UN estimated around US$70 million was needed shows the rapidly increasing severity of the situation.

One indication of the impact of rising food prices and the weakening of the Ethiopian currency is a statement by the UN that staple food costs nearly four times more than a year ago.

The NGOs, as well as pointing to the longer term factors—the impact of climate change making droughts more frequent and the reduced agricultural output resulting from IMF-World Bank economic programmes—also highlight massive food price rises.

Care International on its website comments: “The situation in Ethiopia is not only due to the current drought but a combination of additional factors including dwindling natural resources and agricultural productivity due to the effects of climate change.... For millions of people, there just isn’t food available, but in many cases even food is for sale on local markets, the price is so exorbitant that poor people simply can’t afford to pay”.

Francois Calas, MSF head of mission, explained that whilst the failure of the early belg rains had initiated the famine, “other factors such as high rates of inflation and an increase in food prices have also played a part. For most people life here is a daily struggle and for many of them this year that struggle became too much to bear.”

In Ethiopia, as in most African countries, agriculture has been seriously set back over the last three decades by IMF-World Bank free-market policies as well as by the influx of subsidised US and European Union food production after local markets have been forced open by the World Trade Organisation’s Agreement on Agriculture.

A recent article entitled “Destroying African Agriculture” by Walden Bello in Foreign Policy in Focus is an indictment of the impact of Western policies. He writes, “African agriculture is a case study of how doctrinaire economics serving corporate interests can destroy a whole continent’s productive base. At the time of decolonisation in the 1960s, Africa was not just self-sufficient in food but was actually a net food exporter... Today the continent imports 25 percent of its food, with almost every country being a net food importer.... [S]tructural adjustment saddled Africa with low investment, increased unemployment, reduced social spending, reduced consumption, and low output, all combining to create a vicious cycle of stagnation and decline.”

He continues, “According to Oxfam, the number of Africans living on less than a dollar a day more than doubled to 313 million people between1981 and 2001.... [S]tructural adjustment [has had the effect of] severely weakening the continent’s agricultural base and consolidating import dependency.”

Neighbouring Somalia has also been hit by drought, but here the situation is made seriously worse by the invasion of US-backed Ethiopian troops coming to the rescue of the Transitional Federal Government (TFG). For the last year and a half, they have attempted to drive out the Islamic Courts Union (ICU) that ruled the capital Mogadishu and large parts of Somalia during 2006. The ICU drove out the warlords that preyed on the civilian population, many of whom are allied to the TFG. Washington, which claimed that the ICU contained Al Qaeda members, has justified the invasion and subsequent atrocities on the grounds of pursuing the “war on terror.”

The UN has warned that the number of people needing emergency food relief in Somalia is likely to increase by nearly a third to 3.5 million in the next three months.

Few NGOs now risk working in Somalia. Medecins Sans Frontieres had four of its aid workers killed this year but continues to operate in 12 locations through local people. Its latest report on the situation in Hawa Afdi, on the road between Mogadishu and Afgooye where many have fled the fighting in the capital, reports a 400 percent increase in the number of children under five suffering malnutrition.

“Between 13 and 19 June, over 500 children under five years’ old were admitted to this nutritional programme [in Hawa Afdi], suffering from acute malnutrition,” MSF reports. In the Mogadishu-to-Afgooye corridor, more than 250,000 people are now living in extremely crowded conditions, with their number steadily increasing as they flee the fighting in the capital.

MSF states that in all its 12 locations, “we have seen a drastic deterioration in the health situation over the last year, and increases in malnutrition over the last three months.” It also points to the issue of the increasing prices of staple foods, explaining that “Some items have risen by up to 200 percent since the beginning of this year.” Food price rises have been compounded by the devaluation of the currency by 80 percent between April 2007 and 2008.

Bush administration settles Hatfill suit, buries anthrax investigation

Go to Original
By Patrick Martin

The Bush administration agreed June 27 to pay nearly $6 million to biological-weapons expert Steven J. Hatfill in return for ending a lawsuit against the Justice Department. Hatfill filed the suit after top government officials named him a “person of interest” in the FBI investigation into the anthrax attacks that killed five people and spread panic in the wake of the terrorist attacks of September 11, 2001.

The agreement does not free the scientist of suspicion, although it makes it highly unlikely that he could ever be prosecuted if he actually had any connection to the attacks. The Department of Justice admitted no liability in relation to Hatfill, and a spokesman said that the settlement was agreed “in the best interests of the United States.”

Hatfill was the subject of intense media attention for more than a year, and was fired from a job at Louisiana State University because of FBI pressure. He will receive a lump-sum payment of $2.825 million, as well as an annuity that will pay him another $3 million, or $150,000 a year over the next 20 years.

One consequence of the deal is that the ongoing federal case against former USA Today journalist Toni Locy is likely to be quashed. Locy was subpoenaed by Hatfill’s attorneys, who demanded to know the sources for several articles she had written about the case. Locy refused to comply, citing journalistic confidentiality, but was facing $5,000 per day fines imposed by US District Judge Reggie Walton. The fines were stayed while Locy’s appeal worked its way through the courts.

Hatfill also sued the New York Times and columnist Nicholas Kristof, who wrote extensively on the case in 2002 and was the first to report Hatfill’s identity, but that case was thrown out by the courts last year.

Judge Walton has been increasingly critical of the government case against Hatfill, declaring at a hearing earlier this year, after he had reviewed still-secret internal FBI memos about the anthrax investigation, “There is not a scintilla of evidence that would indicate that Dr. Hatfill had anything to do with this.”

One of Hatfill’s lawyers, Mark Grannis, told the press, “The good news is that we still live in a country where a guy who’s been horribly abused can go to a judge and say ‘I need your help,’ and maybe it takes a while, but he gets justice.”

Actually, the United States is not such a country. The cash windfall for the former “person of interest” is in sharp contrast to the treatment the Bush administration routinely deals out to terrorism suspects who are not, like Hatfill, veterans of Green Beret training with ultra-right political associations and reported connections to US intelligence services.

If Hatfill had been a Muslim or an immigrant from the Middle East, he would have been arrested, imprisoned in solitary confinement, and denied access to a lawyer or to the media. Instead, he walks away with one of the biggest financial awards ever issued for government misconduct.

The US government has not paid a dime in compensation to innocent victims of the CIA’s rendition program, like Khaled al-Masri, a German citizen of Kuwaiti descent who was kidnapped by the CIA while on vacation in Macedonia, shipped to Afghanistan, abused for five months, then released when the agency realized it had seized the wrong man. Nor has anything been paid to Maher Arar, a Canadian citizen of Syrian origin, grabbed at Kennedy International Airport while changing planes, transported to Syria and tortured there for months, also eventually released without any charges against him.

Instead of paying them millions of dollars, the Bush administration invoked the “state secrets” privilege to bar either victim from suing in US courts over their kidnapping, illegal imprisonment and torture.

Then there is the example of Ali Marri, a Qatari national and US resident, studying at Bradley University in Peoria, Illinois, where he lived with his wife and five children. Marri has been held in a Navy brig in Charleston, South Carolina since 2003 on unspecified terrorism charges. The Bush administration maintains that it has the power to seize an immigrant living legally in the United States, and hold him indefinitely in a military prison without any legal recourse whatsoever.

All three cases have one thing in common: there is far less evidence against any of the prisoners, one still held by the US government, than there was against Hatfill, who was never arrested and has not spent a single day behind bars.

The anthrax investigation is reputedly one of the largest and most wide-ranging ever conducted by the FBI, with thousands of interviews and inquiries, dozens of searches, and zero progress. The dead end is all the more remarkable because independent scientific experts have maintained that the anthrax used in the deadly mailings in the fall of 2001 could only have been obtained by someone with biological warfare expertise and access to US biological weapons testing facilities, particularly the lab at Ft. Detrick, Maryland, where Hatfill once worked. The universe of possible suspects has been estimated at between 20 and 250 people.

Hatfill came to the attention of the Justice Department, and ultimately of the media, because of several curious facts in his career. After US military service, he attended the University of Zimbabwe when the country was still under white minority rule, taking a medical degree.

Kristof raised some logical questions in his New York Times column in 2002, where he referred to Hatfill as “Mr. Z.” He wrote (in the form of questions to the government investigators): “Have you examined whether Mr. Z. has connections to the biggest anthrax outbreak among humans ever recorded, the one that sickened more than 10,000 black farmers in Zimbabwe in 1978-80? There is evidence that the anthrax was released by the white Rhodesian Army fighting against black guerrillas, and Mr. Z. has claimed that he participated in the white army’s much-feared Selous Scouts. Could rogue elements of the American military have backed the Rhodesian Army in anthrax and cholera attacks against blacks? Mr. Z’s resume also claims involvement in the former South African Defense Force; all else aside, who knew that the US Defense Department would pick an American who had served in the armed forces of two white-racist regimes to work in the American biodefense program with some of the world’s deadliest germs?”

While in Zimbabwe, moreover, Hatfill had lived near a Greendale School, the fake return address used in the anthrax mailings to Congress. He had a grievance against the government because the Pentagon had revoked his security clearance on August 23, 2001, and he was later fired from his job at a defense contractor as a result. Investigators also discovered that Hatfill had penned an unpublished novel that centers on a lone terrorist attacking Congress using plague bacteria. These may just be strange coincidences, but they are many.

Even more significant is the evident right-wing political motivation behind the anthrax attacks. They served two purposes: in general, to spread fear and panic after the terrorist attacks of September 11, 2001; and in particular, to intimidate the leadership of the Democratic Party in Congress, and sections of media demonized by the far-right as “liberal,” such as NBC News.

The mailings went to the offices of Senate Majority Leader Tom Daschle and Senate Judiciary Committee Chairman Patrick Leahy, as well as to the office of NBC anchorman Tom Brokaw, and to the company that owns the National Enquirer tabloid. As the WSWS wrote at the time, after the source of the anthrax was positively identified: “The Democratic Party leadership was targeted for assassination using weapons produced by (or stolen from) the American military itself. The whole affair exudes the stench of an attempted political coup.”

Sections of the ultra-right media, particularly the Wall Street Journal, sought to dismiss the significance of the targeting of congressional Democrats, claiming that the FBI was mistaken in concluding that the attack was of domestic origins and suggesting that Al Qaeda or Saddam Hussein were responsible. The Journal continues to take this line today, depicting the payoff to Hatfill as a vindication of its initial criticism.

The Journal makes no mention of another curious fact, uncovered by the right-wing Judicial Watch group, in the course of a Freedom of Information Act suit against the Bush administration: the White House staff were all issued tablets of Cipro, which protects against anthrax, on September 11, 2001—more than three weeks before the first mailings arrived in Florida and on Capitol Hill. Larry Klayman of Judicial Watch declared, in a press statement, “We believe that the White House knew or had reason to know that an anthrax attack was imminent or underway.”

Not only the investigation into the anthrax attacks, but the settlement with Hatfill itself has a politically compromised character. Besides ensuring that the former military bioweapons expert has an incentive to keep silent on whatever he may know about the 2001 events, the payoff may be an effort to dispose of the case before a change of administration in Washington.

Former senator Daschle, one of the main targets of the anthrax mailings, is a leading figure in the Obama campaign, and many of his former staffers, including those who were in the office the day the anthrax letter arrived, could take key positions in an Obama administration.

Despite the spineless response of the Democratic leadership on the entire range of political issues summed up in the label “war on terror,” there are undoubtedly those in the Bush White House who are nervous about allowing the anthrax case to carry over to a new administration in which former targets of the attacks play a significant role.

Job losses mount as US economy heads into virtual freefall

Go to Original
By Jerry White

Job losses in the US are mounting as inflation, the credit crunch, plunging home values and tighter family budgets are combining to produce a perfect storm of economic malaise, which is threatening the livelihoods of tens of millions of working people.

The private sector eliminated 79,000 jobs from May to June, according to a survey of nearly 400,000 US businesses released Wednesday by Automatic Data Processing, Inc. The ADP National Employment Report said the decline was “broad based across industrial sectors and suggests continued weakness in employment.”

The goods-producing sector slashed 76,000 jobs last month, ADP reported, with manufacturing employment falling by 44,000, marking their nineteenth and twenty-second consecutive monthly declines, respectively. Service jobs also declined by 3,000, the first fall-off since November 2002.

Construction and financial services related to home sales and lending are the two sectors of the economy hardest hit by the housing and mortgage crises. In June, ADP reported, construction employment dropped by an additional 34,000 jobs, marking the nineteenth straight monthly decline. A staggering 349,000 construction jobs have been lost since the peak of August 2006. Three thousand jobs in financial services were also lost in June.

“It’s clear that the housing downturn and credit crunch are still very much under way,” Andrew Tilton, an economist with Goldman Sachs told the New York Times. Clearly, there are more jobs to be lost in housing, finance and construction—hundreds of thousands of more jobs to be lost collectively.”

The US Bureau of Labor Statistics will release its monthly jobs report on Thursday, with economists predicting a loss of as many as 60,000 jobs in June. This would be the sixth consecutive month of employment declines.

Meanwhile, the Chicago-based job placement firm Challenger, Gray & Christmas Inc., which tracks job cutting announcements by employers, said planned layoffs rose to 81,755 last month, up 47 percent from June 2007.

“Downsizing in the financial sector has remained heavy, but now we’re seeing increased job cuts in other non-housing-related industries, mostly due to the added burden of skyrocketing oil prices,” chief executive officer John A. Challenger said in a statement released Wednesday. “The overall economy could continue to experience net losses for several months to come.’ ’

So far this year, Challenger said, companies have announced 475,948 cuts, up 21 percent from the first six months of 2007.

The financial sector led in announced reductions, with 19,227 job cuts. Last week, Bank of America, the second biggest US bank, announced plans to cut 7,500 jobs after its purchase of home lender Countrywide Financial. Year-to-date, Challenger reported, the financial industry has announced 85,258 positions will be eliminated.

The second highest sector was federal, state and local governments, which are being pressed by falling property values and tax revenues. Government entities have announced 10,797 job cuts, Challenger reported. This was followed by telecommunications, which announced 10,342 cuts.

Last month the official unemployment rate jumped half a point to 5.5 percent, the biggest single month rise in 22 years. Goldman Sachs recently forecast the jobless rate would rise to 6.4 percent by late 2009 before any improvement occurred.

Official government figures routinely underestimate the actual unemployment rate, since they do not count those who have given up looking for work and those reduced to part-time hours. If those workers were added, the “under-employment rate” in the US would rise to 9.7 percent, up from 8.3 percent in May 2007, according to the Labor Department.

“It’s a slow-motion recession,” Ethan Harris, chief US economist for the Wall Street firm Lehman Brothers told the New York Times. “In a normal recession, things kind of collapse and get so weak that you have nowhere to go but up. But we’re not getting the classic two or three negative quarters. Instead, we’re expected two years of sub-par growth. Growth that’s not enough to generate jobs. It’s kind of a chronic rather than acute pain.”

The massive loss of jobs in the US is part of an international trend fueled by the worldwide credit crisis, economic slowdown and spiking commodity prices. On Wednesday, the Paris-based Organization of Economic Co-operation and Development (OECD)—which includes 23 European states as well as the US, Australia, Turkey, New Zealand, Canada, Mexico, Japan and South Korea—warned that joblessness in industrialized countries would rise by 9 percent to 34.8 million, reversing the downward trend of recent years.

In the face of spreading unemployment, the OECD noted, “the growth in real compensation per employee should slow down in 2008 in the majority of the 30 OECD countries and be broadly in line or below productivity gains.”

From the standpoint of the world’s corporate and financial elite, this is the positive side of the growing economic insecurity felt by masses of working people. Citing the OECD figures on slowing job growth the Financial Times of London noted, “Rising unemployment, however, should dampen fears of inflationary pay rises as workers worry more about retaining their job than using their bargaining power to increase real pay.”

Meltdown of the US auto industry

Job cuts, higher prices and crushing levels of debt all threaten to slow US consumer spending, which accounts for 70 percent of the country’s economic activity. In a sign of the impact this is having on retailers, Starbucks, the world’s largest coffee chain, said Tuesday it would close 600 stores in the US—in addition to 100 already announced—laying off more than 12,000 employees.

American Airlines—which, like several other carriers, has cut back routes in the face of the high cost of fuel and fewer air travelers—announced Wednesday it would furlough 900 flight attendants.

UnitedHealth, the largest US health insurer, also announced it would lay off 4,000 workers, due to falling profits and rising health care costs.

The auto industry has been particularly devastated, with vehicle sales hitting a 10-year low, down 18 percent in June. Detroit automakers continued to see sharply declining sales, with Chrysler’s June sales down 36 percent compared to a year ago, Ford down 28 percent and General Motors falling 18 percent. Japanese automaker Toyota was also hit hard, with US sales down 21 percent.

Analysts predict automakers will sell well below 15 million new vehicles in the US this year, far fewer than the 16 million typical sold throughout the decade.

The decline—driven by high gas prices and falling demand, including from contractors and construction workers, for SUVs and pickups, upon whose high profit margins the US automakers depend —has now raised the prospect of the financial failure of one or more of Detroit’s famed “Big Three.”

GM, which is reportedly burning up $1 billion in cash reserves each month, could face bankruptcy, according to Merrill Lynch analyst John Murphy, who lowered his outlook for GM stock to $7 a share in a note to investors Wednesday. “The key change in our outlook is a much lower forecast for US auto sales that is driving higher cash burn necessitating a much larger raise than the market is currently anticipating,” Murphy wrote in reference to GM’s need to quickly borrow money.

Other analysts say GM must raise as much as a $10 billion as early as this quarter to keep operating. The company says it has liquidity and flexibility to meet its financial requirements. However, it could find raising additional cash difficult, if not impossible, because of the unfavorable rates in the tight credit market.

The threatened collapse of the once mighty icon of US industrial supremacy underscores the historic decline in the world position of American capitalism and the virtual takeover of the US economy by various forms of financial parasitism. Wall Street has carried out a deliberate policy of deindustrialization, in order to free up capital from unprofitable industries and invest it in more lucrative and speculative ventures, including the dot-com boom, the housing bubble and the new frenzy in oil, corn and other commodity future markets.

GM stock has fallen to a 50-year low, plummeting from $43 last November to close at $9.98 Wednesday. The total value of GM stock is the least of all companies traded on the Dow Jones Industrial Average. By contrast, the Internet company Google is selling at $527 per share and has a market capitalization 28 times the size of GM.

“What’s GM worth now—$7 billion?”, Bruce Birger, managing director of Birger Capital Management asked the Detroit News. “People can write checks for that amount.”

Ford, which has borrowed heavily against its assets, is not much better off, with shares of its stock selling at $4.36, roughly equivalent, the newspaper noted, to the price of gas in some major American cities.

Both companies are reportedly scrambling to sell off assets or use overseas divisions as collateral for new loans, which could mean selling them off to raise cash.

Another candidate for bankruptcy is privately-held Chrysler, which was bought by the private equity firm Cerberus. “They’re a limited liability company—when they run out of money, they’ve run out of money,” Steven Davidoff, a law professor at Wayne State University told the Detroit News. “Cerberus may push for the nuclear option and go into bankruptcy to restructure the organization,” he added, suggesting that the company could follow the lead of auto parts maker Delphi, which used the bankruptcy court to tear up its labor agreements and impose 50 percent wage cuts on its workers.

The News reported that there was “talk” of the automakers reopening union contracts, less than a year after the four-year agreement signed by the United Auto Workers bureaucracy, which handed over massive wage and benefit concessions in return for what have proven to be worthless “job guarantees.” All three of the companies have since carried out mass layoffs.

The burgeoning economic crisis is taking place in the middle of an election campaign that is remarkable for the lack of any serious proposals to meet what is increasingly becoming a catastrophe for tens of millions of working people in the US. The economic stimulus checks Washington sent out to the public have long since been eaten up by rising gas and food prices, and neither party nor their respective presidential candidates—Democrat Barack Obama and Republican John McCain—has any proposal to provide relief to workers facing the loss of their jobs and their homes.

The Exxon Valdez ruling: the Supreme Court once again defends big business

Go to Original
By Ed Hightower

On June 25, the next-to-last day of the current term, the United States Supreme Court slashed the punitive damages judgment for the 1989 Exxon Valdez oil spill, which devastated Alaska’s Prince William Sound. The award was reduced from $2.5 billion to only $507.5 million—an amount equivalent to a few days’ profit for the giant oil company..

Exxon Mobil Corporation paid more than $1 billion to settle state and federal claims for environmental damages. The company went to trial in 1994, however, against a class action suit by over 32,000 individuals and small businesses devastated by the accident, predominantly commercial fishermen, native Alaskans and local landowners, who claimed that Exxon’s reckless conduct caused the accident.

Exxon conceded fault, and the compensatory damages for the class were set at $507.5 million. The trial then proceeded on the issue of punitive damages only.

The evidence showed that on March 23, 1989, the tanker left port carrying 53 million barrels of crude oil from the Trans-Alaska pipeline. Its captain, Joseph Hazlewood, had recently completed an alcohol rehabilitation program. His superiors knew about Hazlewood’s problem, learned that he had relapsed recently, and even drank with him.

Witnesses testified that before leaving port Hazlewood consumed five double-vodka drinks, an amount that would have rendered any non-alcoholic unconscious. When tested by the Coast Guard 11 hours after the accident Hazlewood still had a blood-alcohol level of .061, meaning that during the wreck his level was about three times the legal limit for driving a car.

As the ship approached a well-known reef, Hazlewood set the autopilot, increased speed and turned the ship over to a subordinate unlicensed to perform the maneuver necessary to avoid running aground. The Exxon Valdez hit the reef, spilling crude oil into Prince William Sound. Hazlewood then tried to “rock” the ship free, a procedure that spewed more oil and risked killing the crew.

The result was the largest oil spill in US history: 11 million gallons covering 11,000 square miles, including 1,300 miles of pristine shoreline. The spill devastated the local economy as well as the environment. Estimated losses in the sport fishing industry alone were almost $600 million over the two years following the accident. Within days an estimated 250,000 seabirds perished, along with thousands of otters and seals. Despite billions of dollars in cleanup, the environmental effects of the spill still linger. Much of the oil seeped below the surface of affected beaches, decaying at a rate of about three to four percent per year. Animals that dig in the sand for their food continue to be contaminated.

After hearing this evidence, the jury awarded the 32,000 plaintiffs a total of $5 billion in punitive damages. In 2007 the United States Court of Appeals for the Ninth Circuit reduced the amount to $2.5 billion. The Supreme Court decision reduces the award to $507.5 million, effectively fashioning a rule under federal maritime law that limits punitive damages to the amount of compensatory damages awarded, a so-called one-to-one ratio.

The punitive award must be viewed in light of Exxon Mobil’s enormous profits. The jury’s original $5 billion award amounts to less than the company’s profits for 1990 alone. In just the final quarter of 2007 Exxon made nearly $12 billion in profits, for an annual total of $40.61 billion. The Supreme Court’s reduced award represents a mere 1.25% of Exxon Mobil’s 2007 profits.

The ruling in Exxon Shipping Company v. Baker is the latest in a series of blatantly pro-business decisions by the Roberts Court, overturning jury verdicts based on established state-law principles. Others just this term include Stoneridge Investment v. Scientific-Atlanta, limiting shareholders’ ability to sue for corporate fraud, and Riegel v. Medtronics, which eliminated the rights of injured patients to sue the manufacturers of faulty medical devices.

The Exxon decision, authored by associate Justice David Souter, a member of the so-called liberal bloc, is the high court’s latest response to the hue and cry of big business over the size of some punitive awards, assessed by local juries to deter and punish corporate wrongdoing. Through a number of decisions, the Supreme Court effectively overruled its 1989 decision in BFI v. Kelco Disposal, where a punitive award 120 times larger than compensatory damages, $6 million to $51,146, was upheld.

In Pacific Mutual Life Insurance Company v. Haslip (1991), the court upheld a large punitive damage award, but suggested for the first time that such awards could violate the Due Process clause of the Fourteenth Amendment, resurrecting the rationale of early twentieth-century cases that struck down reformist labor laws because they interfered with the “substantive due process” rights of big businesses to make profits.

Next, State Farm Mutual Insurance Co. v. Campbell (2003) fashioned from whole cloth a supposed constitutional rule that in cases with substantial compensatory damages, a ratio of punitive to compensatory damages should not exceed nine-to-one. This rule circumscribed the court’s oft-repeated dictum from previous cases that no “mathematical bright line” could determine the constitutionality of a punitive award.

In Exxon the court has come full circle, at least as regards maritime law cases involving catastrophic damages, by limiting the ratio to one-to-one.

Souter’s opinion admits that big business allegations that punitive damages have “run wild” are untrue. The opinion cites a study of punitive awards showing the median ratio of punitive to compensatory damages to be 0.62:1 and the mean to be only 2.90:1.

Punitive damages are awarded in less than one percent of all civil actions. First, a jury must be sufficiently outraged by the conduct to award them, then the trial judge and appellate court may reduce them. Under such circumstances, punitive damages wind up being assessed in only the most egregious cases.

Dissents by associate justices John Paul Stevens, Ruth Bader Ginsburg and Stephen Bryer agreed that Exxon’s behavior was so repugnant that traditional punitive damages doctrine was preferable. They made much of the fact that the majority decided on the need for the 1:1 ratio after citing the evidence that punitive damages were not in fact out of control.

The essence of this ruling is that it drastically reduces the power of punitive damages to deter the most harmful conduct of big business and makes it much more difficult for plaintiffs’ lawyers to finance costly and protracted litigation like the Exxon Valdez case. The court has taken what was once considered a big club for plaintiffs and their attorneys and whittled it into a toothpick.