NY regulator says financial firms could face bans over money laundering

By Emily Stephenson

WASHINGTON Wed Mar 19, 2014 3:39pm EDT

State financial regulator Benjamin Lawsky listens to testimony at a hearing in New York January 29, 2014.

Credit: Reuters/Eric Thayer

WASHINGTON (Reuters) – New York state’s top financial regulator on Wednesday said his office, as part of efforts to crack down further on Wall Street misdeeds, is considering banning certain banks from specific businesses.

The New York Department of Financial Services has taken an increasingly hard line on financial institutions that have violated U.S. sanctions laws through their U.S. dollar clearing operations, imposing steep fines on them.

But the head of that office, Benjamin Lawsky, said in a speech in Washington he could envision moving beyond fines to penalties that could hurt the institutions in more severe ways.

“You could say no dollar clearing for a month or for a year or for six months,” Lawsky said, adding that he is still thinking through the potential repercussions of such steps.

Last year Lawsky’s office blocked Deloitte LLP’s financial advisory unit from working with New York state-regulated banks for a year as part of a settlement related to its review of money laundering controls at Standard Chartered Bank.

“We’re considering some new, similar ideas when it comes to our investigations into banks that used their dollar-clearing operations to launder money, but we have not come to any firm conclusions on that issue yet,” Lawsky said.

Lawsky, who has worked to establish a reputation as a tough enforcer, did not name firms and told reporters after his speech that his office is still thinking through how they could keep banks out of certain businesses.

U.S. regulators, including Lawsky’s office, are looking at whether French banks Credit Agricole and Societe Generale violated anti-money laundering rules and economic embargoes on countries like Iran, Reuters has reported.

Lawsky’s office has reached settlements with Bank of Tokyo-Mitsubishi, which is owned by Mitsubishi UFJ Financial Group Inc, and Standard Chartered over similar allegations.

Lawsky said regulators also need to go after more individuals as they figure out new ways to punish financial firms that break the rules.

“Ultimately, when Wall Street executives face real, serious consequences for breaking the rules – it helps deter future misconduct,” Lawsky said.

(Reporting by Emily Stephenson; Editing by Leslie Adler)

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Reuters: Business News

NY regulator says financial firms could face bans over money laundering

US firms in China look to services, survey shows

US companies in China are shifting their focus to the service sector in line with China’s transition from being the world’s factory floor to a knowledge-driven economy, a survey has found.

For the first time, services accounted for more than half, or 52 percent, of US companies’ revenue in China in 2013, up 11 percentage points from the previous year.

This is according to the annual China Business Report released on Tuesday by the American Chamber of Commerce in Shanghai.

The survey, which tracks performance and confidence of the largest US business community in China, shows that companies are continuing to move beyond purely manufacturing for exports as costs surge and markets mature.

The growing importance of services contrasts sharply with manufacturing, which dropped by 10 percent to comprise 37 percent of companies’ revenues in 2013, the survey shows.

“It is important to keep in mind that China’s leadership has prioritized the development of the country’s service sectors, and American businesses are world leaders in these areas,” said Kenneth Jarrett, president of AmCham Shanghai.

Tim Huang, chief operating officer of Bank of America Merrill Lynch in Shanghai, said, “I’ve seen a growing number of our clients in the service sector in the past five years and I expect this trend to continue.”

The study interviewed 399 member companies that run operations in first-tier cities including Shanghai and Beijing, the Yangtze River Delta region, as well as central and western powerhouses of China. Fifty-four percent of them have been in the country for more than 10 years.

The service sector accounted for 46.1 percent of China’s gross domestic product in 2013, outpacing manufacturing for the first time in the country’s economic output, according to the National Bureau of Statistics. Shanghai has the largest proportion of the service sector, with more than 62.6 percent.

Buoyancy in the sector is backed by the increasing presence of small and medium-sized US enterprises, thanks to growing transparency in China and lingering economic struggles in the home market, the survey found.

Thirty-seven percent of companies identified themselves as small and medium-sized enterprises in 2013, or firms with 500 or fewer employees worldwide, up from about 25 percent a year ago.

The first wave of SMEs to settle in China arrived in early 2000, largely to adjust to demands by multinational corporations that invested in the country earlier, said Chris Wingo, founder of China Sage Consultants (Shanghai) Co. His firm helped SMEs from the United States to prepare and manage their businesses in China.

But as more SMEs became interested in China’s growth, and the US economy remained lackluster, China has been on the radar for many smaller US firms since the late 2000s,Wingo added.

Robert Theleen, who chairs AmCham Shanghai and is chief executive officer of merchant bank China-Vest, which is based in the city, said that with China demonstrating its ongoing commitment to economic liberalization through initiatives like the Shanghai Free Trade Zone, it is only natural that more firms are setting up in the country.

“When you combine this improving infrastructure with the decades of experience that American businesses now have in this market, it’s easier for US companies to profit from China’s growth, regardless of their size,” he said.

China has continued to act as a key profit center for US companies, with 74 percent of respondents reporting profits in 2013. Three out of four saw positive cash flows in their China operations, up by 3 percentage points from a year ago.

Eighty-six percent of the firms surveyed said they remain “optimistic or slightly optimistic” about forecasts for China’s business prospects in the next five years.

But only 65 percent of the firms reported making additional investment in China, down from 74 percent the previous year.

In addition, as a top-three investment priority China fell by 8 percentage points among respondents to 46 percent.

Kent Kedl, managing director for China and North Asia at Control Risks, a business consultancy, said this suggests a healthy rebound in developed economies, meaning that China is no longer the only “bright spot”.

This trend is reflected in companies’ efforts to integrate China further into their global operations.

Forty-three percent of firms said they conduct their research and development for China-specific products in both the US and China, with only 7 percent relying on US headquarters as their R&D hubs for designing products for the Chinese market.

The firms surveyed cited rising costs, constraints on human resources, and intensifying competition as the top three challenges hindering business performance in 2013.

For the third consecutive year, surging costs ranked the top business hurdle, with 89 percent of companies reporting increases in primary costs from labor to tax and materials.

Last year, companies also became increasingly concerned about complying with China’s laws and regulations following efforts by the central government to target firms for corruption investigations.

US firms in China look to services, survey shows

Chinese prefer buying German, British firms

BERLIN — Germany and Britain are by far the most popular investment destinations of Chinese investors, a study showed on Friday.

According to the study of the economic consultancy Ernst & Young published Friday in Dusseldorf, Chinese investors have made 25 acquisitions in 2013 in Germany and Britain respectively.

Overall, buyers from the Chinese mainland and Hong Kong have taken over 120 companies and shareholdings in Europe in the past year, said the study.

According to the study, the interest of Chinese companies in Europe has increased significantly over the past 10 years, as the number of transactions has more than tripled.

In 2004, only 34 investments from China in Europe were counted, whereas, the number with 119 acquisitions in 2012 is almost as high as in 2013.

The study also said that Chinese investors has preferences for certain industries in Europe.

Buyers from China are particularly interested in consumer goods industry with 21 percent in 2013, while the automotive industry accounts for 13 perecnt.

They also made investments in the areas like real estate industry with 10 percent and 8 percent in energy supply, 7 percent in trade and technology, 6 percent in financial industry and 5 percent in metal processing as well as transport and logistics.

In other industries, Chinese investors carried out a total of 24 acquisitions in Europe.

Chinese investors are interested in Germany primarily for industrial companies, in particular for machine manufacturers and automotive suppliers.

China is the second largest non-European investor in Germany after the United States, and came in sixth place of foreign investors in Germany after the United States, Britain, Switzerland,France and Austria, the study said.

Chinese prefer buying German, British firms

Food Firms Trim Trillions Of Calories From Packaged Treats

i i

hide captionTo make a more healthful version of Edy’s Grand Ice Cream, Nestle developed a technology that could cut half the fat and two-thirds of the calories from the frozen treat.

Erik S. Lesser/Getty Images

To make a more healthful version of Edy’s Grand Ice Cream, Nestle developed a technology that could cut half the fat and two-thirds of the calories from the frozen treat.

Erik S. Lesser/Getty Images

It sounds impressive: Major food companies have slashed 6.4 trillion calories from packaged foods they sold in 2012, compared to 2007, a study reported Thursday.

But for each American, that number translates to about 78 fewer calories purchased each day, or the equivalent of cutting out one apple or 3 1/2 Hershey kisses.

The cut in calories is part of an effort by the nation’s giant food producers, such as General Mills, Hershey Foods Corp. and Kraft Foods, to curb the childhood obesity epidemic by getting more healthful items on grocery shelves.

But could cutting out 78 calories each day really make a difference in your waistline or the obesity problem in the U.S.?

The Salt

Candy Sales Are Flat; The Industry Blames The Weather

“The range of calories that we need to stop obesity is about 130 to 170, approximately, per person per day,” says Kathrine Thompson of the Robert Wood Johnson Foundation, a nonprofit that funded the study. “If these companies are helping to take out 78 calories per day, that’s an important contribution toward reaching the goal.”

But the findings aren’t that clear-cut. The study looked only at sales of packaged foods and beverages. It’s still unknown how this translates to calories consumed by Americans, especially given that about 40 percent of all food in the U.S. is wasted.

Also the study didn’t consider foods eaten in restaurants, where American’s get about a third of their calories.

Back in 2010, 16 of the nation’s major food companies pledged to remove 1 trillion calories from their products in grocery stores by 2012, and 1.5 trillion calories by 2015. To reach that goal, the corporations — which produce a third of all packaged foods sold in the U.S. — started selling smaller portion sizes and introducing low-calorie versions of their snacks and beverages.

For instance, Nestle developed an ice cream with half the fat and one-third of the calories as the original, The New York Times reported. General Mills introduced a 100-calorie Greek yogurt, while Campbell’s launched a “light” line of calorie-reduced soups. Jimmy Dean put out a more healthful version of its sausages made with turkey.

So did any of these efforts change what we bought last year?

To figure that out, researchers at the University of North Carolina in Chapel Hill tracked the items scanned through checkout lines around the country. The team’s full report isn’t published yet. But the Robert Wood Johnson Foundation released the overall numbers on its website Thursday.

In 2012, the participating companies sold about 54 trillion calories, compared to 60.4 trillion in 2012, the study found. So the companies crushed their goal —with a 10 percent drop in calories.

But some health researchers don’t think the companies should get all the credit for the progress.

“It’s great to see companies selling fewer calories and reformulating their products to reduce fat and sugar, but it’s hard to know how much is due to the proactive efforts of the industry rather than changes in Americans’ eating habits, ” Margo Wootan, at the Center for Science in the Public Interest, told The New York Times.

Thomas at the Robert Wood Johnson Foundation agrees that Americans’ preferences are helping to drive the low-calorie food trend in grocery stores.

“There’s a little bit of a virtuous cycle going on here,” she tells The Salt. “Demand for these healthier products is going up. And the industry probably wouldn’t have stepped forward to make this pledge if there wasn’t a market demand for this change.”

Companies that are doing more to make these products,” she adds, “are doing better financially.”

News

Food Firms Trim Trillions Of Calories From Packaged Treats

Whistleblower Describes How Private Equity Firms Flagrantly Violate SEC Broker-Dealer Requirements

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Whistleblower Describes How Private Equity Firms Flagrantly Violate SEC Broker-Dealer Requirements

FBI gives telecom firms spying devices

The Federal Bureau of Investigation (FBI) is secretly pressurizing telecommunications providers into installing spying devices inside internal networks of companies in order to facilitate espionage programs.

Citing the authorization of the move under the Patriot Act, FBI officials have been discussing with carriers in their effort to deploy government-supplied software, which will enable intercepting and analyzing all communications streams, CNET reported.

The software, now identified as “port reader”, used to be known internally as the “harvesting program.”

The FBI spokesman has said the agency has the legal authority to use alternate methods to collect Internet metadata. “In circumstances where a provider is unable to comply with a court order utilizing its own technical solution(s), law enforcement may offer to provide technical assistance to meet the obligation of the court order.”

But, police cannot intercept the contents of real-time communication streams, including email bodies, Facebook messages or streaming video unless a wiretap order from a judge is obtained.

Notwithstanding, “The statute hasn’t caught up with the realities of electronic communication,” says Colleen Boothby, a partner at the Washington, D.C. firm of Levine, Blaszak, Block & Boothby who represents technology companies and industry associations.

Boothby said judges cannot always comprehend how technology has outpaced the law.

In the past, judges drew this conclusion that they have no ability to reject pen register and trap and trace requests as a federal magistrate judge in Florida, in reference to pen register law, wrote “The court under the Act seemingly provides nothing more than a rubber stamp.”

“If magistrates knew more, they would approve less,” said an industry participant, adding, it’s “an interception device by definition”.

The participant, who spoke on condition of anonymity, said carriers are “extra-cautious” resisting installation of the software, as they say it poses privacy and security risks against a sensitive internal network.

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FBI gives telecom firms spying devices

Dollar firms up, shares sag after Bernanke

1 of 7. An employee of the Tokyo Stock Exchange (TSE) works at the bourse in Tokyo June 13, 2013.

Credit: Reuters/Toru Hanai

By Dominic Lau

TOKYO | Wed Jul 17, 2013 11:53pm EDT

TOKYO (Reuters) – Asian shares fell on Thursday, as concerns over financing available to property developers weighed on Chinese markets, although overall sentiment was supported by Federal Reserve Chairman Ben Bernanke’s pledge to keep monetary policy easy for the foreseeable future.

Regional tech-related stocks were hurt by U.S. Intel Corp’s (INTC.O) dismal annual revenue forecast and capital spending cuts, citing softer personal computer sales and weakness in China, one of its biggest markets.

The dollar held on to modest overnight gains after Bernanke stuck to a timeline that he first outlined in June to wind down the Fed’s $ 85 billion a month bond-buying program, but he went out of his way to stress that nothing was set in stone.

China’s CSI300 share index .CSI300 shed 1.1 percent, hitting a one-week low and lately forming a “death cross” – a bearish signal – with the 50-day moving average breaking below the 200-day moving average.

The pace of the monthly rise in China’s home prices slowed slightly in June for a third straight month, though the year-on-year gains were the strongest this year, underlining challenges faced by Beijing in its fight to tame housing inflation.

“Fears are growing that the liquidity shock a few weeks ago may be starting to trickle into the sector,” said Lee Wee Liat, BNP Paribas head of Asia property.

China’s frothy property market is seen by analysts as one of the biggest financial risks to the world’s second-largest economy, along with the run-up of debt by local governments and the explosive growth of the opaque “shadow banking” system.

While China’s money market rates have since moderated the central bank allowed short-term borrowing costs to spike to record levels on June 20, sending a blunt message to overstretched lenders that it was determined to bring risky credit expansion under control.

Asian shares, as measured by the MSCI Asia-Pacific ex-Japan index .MIAPJ0000PUS, slipped 0.3 percent, reversing early rise to hover near a five-week high touched on Wednesday.

Seoul shares .KS11 fell 0.6 percent, with index heavyweight Samsung Electronics Co Ltd (005930.KS) down 1.5 percent partly on the back of Intel’s grim outlook, while Taipei’s share index .TWII dropped 0.9 percent.

Underscoring worries over China’s economic slowdown, Japanese manufacturers’ mood worsened in July for the first time in eight months, a Reuters poll showed.

Tokyo’s Nikkei .N225 gained 0.5 percent, however, helped by a 4.5 percent rise in SoftBank Corp (9984.T) after China’s e-commerce Alibaba Group, of which the Japanese mobile operator owns about 30 percent, nearly tripled its net income in the first three months of the year.

DOLLAR STEADY

The dollar was steady against a basket of major currencies .DXY, holding on to overnight gains after Bernanke’s remarks.

The U.S. currency was up 0.2 percent at 99.790 yen, extending the previous session’s 0.5 percent rise versus the yen, while the euro was steady at $ 1.3111.

“There is something in these comments for everybody,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. “Bernanke has done a good job of leaving himself plenty of maneuver room in terms of policy.”

Bernanke’s remarks came as the Fed’s Beige Book report of anecdotal information on business activity showed the U.S. economy continued to grow at a modest to moderate pace in June and early July, but U.S. housing data was disappointing.

In the commodity markets, gold stabilized after falling 1.3 percent on Wednesday, while copper prices gained 0.3 percent but remained below $ 7,000 a metric ton (1.1023 tons) after falling 1.5 percent in the previous session.

Brent crude prices dipped 0.1 percent to around $ 108.50 a barrel after gaining 0.6 percent on Wednesday after data from U.S. Energy Information Administration showed a fall in American crude stocks.

(Additional reporting by Clement Tan in HONG KONG, Ian Chua in Sydney and Tomo Uetake in Tokyo; Editing by Eric Meijer and Simon Cameron-Moore)

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Dollar firms up, shares sag after Bernanke

Jailed Journalist Barrett Brown Faces 105 Years for Reporting on Hacked Private Intelligence Firms

Journalist Barrett Brown spent his 300th day behind bars this week on a range of charges filed after he used information obtained by the hacker group Anonymous to report on the operations of private intelligence firms. Brown faces 17 charges ranging from threatening an FBI agent to credit card fraud for posting a link online to a document that contained stolen credit card data. But according to his supporters, Brown is being unfairly targeted for daring to investigate the highly secretive world of private intelligence and military contractors. Using information Anonymous took from the firm HBGary Federal, Brown helped discover a secret plan to tarnish the reputations of WikiLeaks and journalist Glenn Greenwald of The Guardian. Brown similarly analyzed and wrote about the millions of internal company emails from Stratfor Global Intelligence that were leaked in 2011. We speak to Peter Ludlow, professor of philosophy at Northwestern University, whose article “The Strange Case of Barrett Brown” recently appeared in The Nation. “Considering that the person who carried out the actual Stratfor hack had several priors and is facing a maximum of 10 years, the inescapable conclusion is that the problem is not with the hack itself but with Brown’s journalism,” Ludlow argues. He adds that the case against Brown could suggest criminality “to even link to something or share a link with someone.”

This is a rush transcript. Copy may not be in its final form.

JUAN GONZÁLEZ: As NSA leaker Edward Snowden remains at a Moscow airport, Army whistleblower Bradley Manning is on trial, and WikiLeaks founder Julian Assange is holed up in the Ecuadorean embassy in London, today we look at the strange story of another man tied to the world of cyber-activism who faces over a hundred years in prison. His name is Barrett Brown. He’s an investigative reporter with ties to the hacking collective Anonymous. He has spent the past 300 days in jail and has been denied bail. He faces 17 charges, ranging from threatening an FBI agent to credit card fraud for posting a link online to a document that contained stolen credit card data. But according to his supporters, Brown is being unfairly targeted for daring to investigate the highly secretive world of private intelligence and military contractors.

AMY GOODMAN: Before Brown’s path crossed with the FBI, he frequently contributed to Vanity Fair, The Huffington Post, The Guardian and other news outlets. In 2009, Brown created Project PM, which was, quote, “dedicated to investigating private government contractors working in the secretive fields of cybersecurity, intelligence and surveillance.” He was particularly interested in the documents leaked by WikiLeaks and Anonymous. In the documentary We Are Legion, Barrett Brown explains the importance of information obtained by hackers.

BARRETT BROWN: Some of the most important things that have been—have had the most far-reaching influence and have been the most important in terms of what’s been discovered, not just by Anonymous, but by the media in the aftermath, is the result of hacking. That information can’t be obtained by institutional journalistic process, or it can’t be obtained or won’t be obtained by a congressional committee or a federal oversight committee. For the most part, that information has to be, you know, obtained by hackers.

AMY GOODMAN: In 2011, the group Anonymous hacked into the computer system of the private security firm HBGary Federal and disclosed thousands of internal emails. Barrett Brown has not been accused of being involved in the hack, but he did read and analyze the documents, eventually crowdsourcing the effort through Project PM. One of the first things he discovered was a plan to tarnish the reputations of WikiLeaks and sympathetic journalist Glenn Greenwald of The Guardian. Brown similarly analyzed and wrote about the millions of internal company emails for Stratfor Global Intelligence that were leaked on Christmas Eve 2011. Shortly thereafter, the FBI acquired a warrant for Brown’s laptop and authority to seize any information from his communications—or, in journalism parlance, his sources. In September 2012, a troupe of armed agents surged into Brown’s apartment in Dallas, Texas, and handcuffed him face down on the floor. He has been in prison ever since.

JUAN GONZÁLEZ: Well, for more, we’re joined by Peter Ludlow, professor of philosophy at Northwestern University. He has written extensively on hacktivist actions against people—against private intelligence firms and the surveillance state. His recent article for The Nation is called “The Strange Case of Barrett Brown.”

Peter Ludlow, welcome to Democracy Now!

PETER LUDLOW: Hi. Thank you very much.

JUAN GONZÁLEZ: Talk to us about Barrett Brown, the importance of his case, given all the others that we’ve been dealing with on this show now for many years.

PETER LUDLOW: Well, yeah, it’s important for two reasons. First of all, it’s showing that, to some extent, all of us could be targets, because the principal reasons that they’re going after him with this sort of claim that he was involved in credit card fraud or something like that, I mean, that’s completely fallacious. I mean, in effect, what he did was take a link from a chat room and copied that link and pasted it into the chat room for Project PM. That is, he took a link that was broadcast widely on the Internet, and it was a link to the Stratfor hack information, and he just brought it to the attention of the editorial board of Project PM. And because there were, for whatever reason, unencrypted credit card numbers and validation codes among those five million other emails, the government is claiming that he was engaged in credit card fraud. They’re claiming that Project PM was a criminal enterprise. And so, basically, for our interest, why this is interesting to us is basically it makes this dangerous to even link to something or to share a link with someone.

JUAN GONZÁLEZ: And—

PETER LUDLOW: Go ahead, yeah, please.

JUAN GONZÁLEZ: Well, one of the things that you raise is, in some of your writings on this, is the incestuous relationship between the Justice Department, the government and these private firms that are being now targeted by cyber-activists. And could you talk about that, as well?

PETER LUDLOW: Well, sure. A lot of these private intelligence companies are started by ex-CIA, NSA people. Some people come from those agencies and rotate back into the government. I mean, you even see, with the case of Snowden, he was actually a contractor for a private intelligence company, Booz Allen. And, I mean, people think about the NSA, FBI, CIA, and they think of—those are the people that are doing the surveillance of you and doing this intelligence work, but really, if you look at how much the United States spends on intelligence, 70 percent of that is actually going to these private intelligence contractors. So, you know, if you add up CIA, NSA, FBI, that’s just a tip of the iceberg. So there’s all this sort of spook stuff going on in the private realm. And, yeah, right, a lot of it is very incestuous. There’s a revolving door. And no one is investigating it or even talking about it, as far as I can tell.

AMY GOODMAN: Let’s go to Barrett Brown in his own words. In March 2012, Democracy Now! spoke with Barrett soon after his house was raided.

BARRETT BROWN: On March 5th, I received a tip that I was about to be raided by the FBI. I left my apartment here in Dallas, went to my mom’s residence here in the same city. Next morning, three FBI agents arrived at my mom’s place. I went out and talked to them. They said my apartment had just been raided. The door was damaged. They would take care of that. And that they also asked me if I had any laptops with me that I wanted to give them. I said no.

A few hours later, the FBI returned to my mom’s house with another warrant, this time for her house, and detained the both of us for three hours while they searched the residence. They found several laptops I had stashed somewhere in the house and left the search warrants and left another one in my apartment, which I got when I came back here a little after, the next day or so.

The warrants themselves refer to the information that they’re seeking as regarding Anonymous, of course, a few other things of that nature, and also two companies: HBGary and Endgame Systems. Both of these are intelligence contracting companies that Anonymous had a run-in with in February of 2011, during which a number of emails were taken from HBGary, in particular, which themselves revealed a number of conspiracies being perpetuated by those companies in conjunction with Justice Department and several other institutions, including Bank of America, against WikiLeaks and against several journalists.

The time since, I’ve spent a lot of time going over those emails, researching them, conducting other research, otherwise trying to expose a number of things that have been discovered by virtue of those emails from HBGary having been taken. I sincerely believe that my activities on that front contributed to me being raided the other day and will no doubt contribute to any further action that the FBI decides to take. I would just also note the Justice Department itself is very much intertwined with this issue, and has been for a while, and in no way can conduct a fair investigation against me, based on what I’ve revealed, what I’ve helped to sort of emphasize about them.

AMY GOODMAN: That was Barrett Brown in his own words just after the raid.

PETER LUDLOW: Yeah.

AMY GOODMAN: Peter Ludlow, talk about what he had released. Talk about what he got from HBGary and how this links to Glenn Greenwald.

PETER LUDLOW: Sure. Well, what they uncovered was—I mean, it’s actually a little bit subtle, right? Because it begins with the Bank of America being concerned that WikiLeaks had information on it. Bank of America goes to the United States Department of Justice. The Department of Justice leads them to Hunton & Williams, the big law fix-it firm in the D.C. area, who in turn hooks them up with a group of private intelligence contractors that went under the umbrella Team Themis. And Team Themis had a number of proposals and projects that were exposed in all of this. They included running kind of a PSYOPs operation against the Chamber Watch, which is a group that sort of monitors the Chamber of Commerce, and it was an attempt to undermine it and Glenn Greenwald and other individuals. And, I mean, there were many, many plans that they had, many, many things, but some of the documents released showed that they were saying they were going to create fake documents, leak them to Greenwald, and then, when Greenwald eventually released them, they would expose it as a fraud and attempt to undermine him in that way. And they had a similar plan for Chamber Watch, as well.

JUAN GONZÁLEZ: And their concern with Greenwald was that he was giving—that his defense of WikiLeaks was giving legitimacy to WikiLeaks—

PETER LUDLOW: That was—yeah. That was the concern.

JUAN GONZÁLEZ: —it didn’t deserve.

PETER LUDLOW: That was the concern, yeah. And they actually said in there, “Well, he’s just a professional journalist, and he’ll fold under pressure immediately. I mean, apparently they were wrong about that. So, yeah.

JUAN GONZÁLEZ: There were also emails found where these private security firms were assessing the damage that Jeremy Scahill’s books had done to Blackwater?

PETER LUDLOW: Well, actually, those—I ran across that in the Stratfor leaks, and that was kind of interesting, because they were monitoring—they were monitoring this because they were concerned that Blackwater was going to get into the private intelligence business themselves. And they were commenting on Scahill. They go, “Well, yeah, Scahill, you know, I don’t care much for his politics, but he’s really got these guys figured out, yeah?” So that was a little compliment for Scahill, I think.

JUAN GONZÁLEZ: But the amazing thing in all of this is the degree to which these private security firms are engaging in attempts to influence what’s going on in the public debate on—

PETER LUDLOW: Oh, yeah.

JUAN GONZÁLEZ: —on intelligence.

PETER LUDLOW: Oh, yeah, yeah. I mean, one of the most crazy things in the whole thing was when Coca-Cola approached Stratfor, and they were concerned about PETA, you know, People for the Ethical Treatment of Animals. And why, I’m not entirely sure, but one of the people in Stratfor said, “Well, the FBI has a classified file on PETA. I’ll see if I can get it for you.” Now, that little story sums up a lot of stuff that’s wrong about this. First of all, why are private—why is Coca-Cola going to a private intelligence company for this? Why is—why did the private intelligence company feel that they had immediate access to a classified file by the FBI? And why did the FBI have a classified file, to begin with? I mean—but, to me, the creepiest part of that very creepy little story is the fact that the guy at Stratfor felt that he had access to this classified file by the FBI. And the Barrett Brown case revealed something like this, as well. It’s almost like the FBI has become just another private security firm, that it’s become like a private cop for these companies, as it were. And, I mean, that’s part because of the revolving door. It’s part because they get pressed into service for companies that want inside information on activist organizations like PETA.

AMY GOODMAN: We’re going to take break—

PETER LUDLOW: Yeah.

AMY GOODMAN: —and then come back to this conversation. We’re talking to Peter Ludlow, professor of philosophy at Northwestern University, has written extensively on hacktivist actions against private intelligence firms. The piece he most recently wrote is for The Nation, and it’s called “The Strange Case of Barrett Brown.” When we come back, I want to ask you how it’s possible he faces a hundred years in prison.

PETER LUDLOW: Yeah.

AMY GOODMAN: It makes us think about Aaron Swartz.

PETER LUDLOW: Yeah.

AMY GOODMAN: He didn’t face anything like that, but he faced decades in prison.

PETER LUDLOW: Yeah.

AMY GOODMAN: He ultimately committed suicide—

PETER LUDLOW: Yeah, yeah.

AMY GOODMAN: —before prosecution. Stay with us.

[break]

AMY GOODMAN: Peter Ludlow is our guest, a professor of philosophy at Northwestern University, has been tracking the case of Barrett Brown and wrote a Nation piece about him, “The Strange Case of Barrett Brown.” So, the FBI raids his home, and he ultimately is arrested. He faces 100 years in prison?

PETER LUDLOW: Yeah, if you add up all the charges and if he serves them sequentially, it will be 105 years in prison. Yeah, that’s right.

JUAN GONZÁLEZ: And the decision for no bail?

PETER LUDLOW: That’s a mystery to me.

AMY GOODMAN: He’s been in jail now for 300 days.

PETER LUDLOW: Three hundred days, yeah, over 300 days, no bail. For a while they were—they had frozen his—the contributions to his legal fund, too.

AMY GOODMAN: Well, that sounds like WikiLeaks.

PETER LUDLOW: Yeah.

AMY GOODMAN: Meaning that’s what happened to Wiki—well, WikiLeaks, they had all these different corporations like PayPal refuse to allow money to go to them.

PETER LUDLOW: Yeah, right.

AMY GOODMAN: Let’s go to an interview Barrett Brown did with NBC’s Michael Isikoff serving as a spokesperson for Anonymous.

BARRETT BROWN: Our people break laws, just like all people break laws. When we break laws, we do so in the service of civil disobedience. We do so ethically. We do it against targets who have asked for it.

MICHAEL ISIKOFF: You go against targets that have asked for it.

BARRETT BROWN: Yes.

MICHAEL ISIKOFF: What do you mean?

BARRETT BROWN: Targets who have engaged in a manner that is either unethical and contrary to the—sort of the values of this age, information freedom. Just, I mean—and sometimes just plain common sense, in the case of them going after journalists, going after WikiLeaks, in the way that they were planning to do so.

MICHAEL ISIKOFF: But you can attack websites.

BARRETT BROWN: Yes, we can attack websites. We can DDoS them. We can sometimes hack them. We can sometimes take over the websites themselves, put messages up, as we did today with Westboro and as we did with—with the company HBGary and other federal contractors during that attack.

MICHAEL ISIKOFF: You can—you can—

BARRETT BROWN: Take it over, debase it.

MICHAEL ISIKOFF: —take over the websites of government contractors.

BARRETT BROWN: And governments, of course. In Tunisia and in Libya, Algeria and Egypt and Iran, we either took down or replaced government websites. We replaced them with messages from us to the people of those nations, explaining what we’re doing and why and what we’ll provide if they choose to revolt.

MICHAEL ISIKOFF: Are you worried you’re going to get prosecuted?

BARRETT BROWN: I’m not worried about it, but I am going to get prosecuted at some point, yes.

MICHAEL ISIKOFF: Because you’re involved in hacking activity.

BARRETT BROWN: Because they could do whatever they want to anyone they want.

MICHAEL ISIKOFF: But you’re not worried?

BARRETT BROWN: No, because, again, like I said, I’m well protected right now.

MICHAEL ISIKOFF: What do you mean, well protected?

BARRETT BROWN: I’ve got a lot of lawyers. I’ve got a lot of higher-up people. I’ve got people to talk to who will—who support us. And if they come after me, they’re going to find that they’re not going to like everything that they see.

AMY GOODMAN: That’s Barrett Brown talking to NBC’s Michael Isikoff. Well, the fact is, Barrett Brown has been in prison now for 300 days, and he faces decades in prison. Can you explain—that’s when he was an Anonymous spokesperson—what Anonymous is? And then also talk about the groups he exposed, like Endgame and others, though he wasn’t the only one to do that.

PETER LUDLOW: Sure. I have to think he was a little bit optimistic there in his claims about how he was all lawyered up there. But he was a—he was related to Anonymous, which is—it’s not a group, per se. You know, you or I could claim to be members of Anonymous. It’s more like a flag that you fly if you choose to. And so, there was a loosely knit group of hacktivists. Some of them were intersecting. They carried out hacks against—as he says, against various private intelligence contractors and other kinds of targets. He’s quite right that during the Arab Spring and the Tunisian uprising and so forth, members of Anonymous did a lot of work in keeping protesters online and in minimizing the effectiveness of the governments in the Middle East in that time.

And then you asked about—

AMY GOODMAN: Endgame.

PETER LUDLOW: —things like Endgame Systems, for example. Yeah, Endgame is a very interesting thing. I mean, Endgame is this kind of very secretive private intelligence company. And you even see in the HBGary hack, you see these messages where someone from Endgame says in an email, “We don’t ever want to see our name in a press release from you guys.” And what makes it particularly interesting is, if you read the search warrant that’s issued to Barrett when he’s busted, it says, “Well, we’re looking for stuff related to HBGary and Endgame Systems.” You know, like, why Endgame Systems?

And this is a corporation that’s involved in what are called “zero-day exploits.” Now, what’s a zero-day exploit? Basically, what that means is that there are certain security flaws in the software that we have and that we use, and sometimes the company doesn’t know about it. Sometimes it’s known about it for seven days, and they’ve had seven days to work on it. A zero-day exploit is one that the software company doesn’t know about. And Endgame Systems packages these things and sells them. So, for example, they have one where you get—it’s a subscription for like $ 2.5 million a year, and you get these exploits. So it’s things that a hacker would do, but because they’re a business and they’re making money for it, it’s—apparently it’s OK, right? And it seems that the Justice Department is kind of running interference for these guys. And there’s a—I mean, you don’t have to take my word for it. There’s a great article in Businessweek on this in which they talk about the guys from Endgame, you know, running—setting up slides and showing you targets in airports, telling you what the computers are running there, and what kind of the—what the vulnerabilities are and so forth.

JUAN GONZÁLEZ: And who runs Endgame? Where are they based?

PETER LUDLOW: They’re based in Atlanta, Georgia, I believe. Someone recently posted a video on YouTube in which he walked into the place and—just to see what was going on there. And the people—I think it’s an ex—it’s started by an ex-intelligence person and by a security guy at IBM.

AMY GOODMAN: And, very quickly, Project PM?

PETER LUDLOW: Yeah. Project PM is basically Barrett’s—I mean, one of the genius things about Barrett was that he wanted to crowdsource all this information, because you get a hack of Stratfor and it’s five million emails, and how do you sort through all that? So he had a number of friends and acquaintances, including Michael Hastings, by the way, who were members of Project PM.

AMY GOODMAN: Michael Hastings, the reporter who just died in a fiery car crash.

PETER LUDLOW: The reporter who just died in the suspicious car accident, yeah, exactly right. And so, they would—he would basically crowdsource this. And so, the case where he copied that link, he was basically notifying the members of Project PM where they could find the information from the Stratfor hack.

AMY GOODMAN: So, what’s the schedule of—we just have 30 seconds—

PETER LUDLOW: Yeah.

AMY GOODMAN: —of what will happen to Barrett Brown right now? He’s in jail in Texas.

PETER LUDLOW: Yeah. I mean, he’s got a great legal team. Charles Swift is one of them, the guy from the judge advocate general’s thing that took that Gitmo case all the way to the Supreme Court.

AMY GOODMAN: From the JAG.

PETER LUDLOW: Ahmed Ghappour, who’s at University of Texas Law School. There’s a group of individuals with freebarrettbrown.org who are raising money for him there, and they’re available if you have questions and so forth.

AMY GOODMAN: Well, we’ll certainly follow this case, Peter Ludlow, professor of philosophy at Northwestern University. He’s written extensively on hacktivist actions against private intelligence firms and the surveillance state. His most recent piece is in The Nation; it’s called “The Strange Case of Barrett Brown.” We will link to it at democracynow.org.

Truthout Stories

Jailed Journalist Barrett Brown Faces 105 Years for Reporting on Hacked Private Intelligence Firms

Jailed Journalist Barrett Brown Faces 105 Years for Reporting on Hacked Private Intelligence Firms

Journalist Barrett Brown spent his 300th day behind bars this week on a range of charges filed after he used information obtained by the hacker group Anonymous to report on the operations of private intelligence firms. Brown faces 17 charges ranging from threatening an FBI agent to credit card fraud for posting a link online to a document that contained stolen credit card data. But according to his supporters, Brown is being unfairly targeted for daring to investigate the highly secretive world of private intelligence and military contractors. Using information Anonymous took from the firm HBGary Federal, Brown helped discover a secret plan to tarnish the reputations of WikiLeaks and journalist Glenn Greenwald of The Guardian. Brown similarly analyzed and wrote about the millions of internal company emails from Stratfor Global Intelligence that were leaked in 2011. We speak to Peter Ludlow, professor of philosophy at Northwestern University, whose article “The Strange Case of Barrett Brown” recently appeared in The Nation. “Considering that the person who carried out the actual Stratfor hack had several priors and is facing a maximum of 10 years, the inescapable conclusion is that the problem is not with the hack itself but with Brown’s journalism,” Ludlow argues. He adds that the case against Brown could suggest criminality “to even link to something or share a link with someone.”

This is a rush transcript. Copy may not be in its final form.

JUAN GONZÁLEZ: As NSA leaker Edward Snowden remains at a Moscow airport, Army whistleblower Bradley Manning is on trial, and WikiLeaks founder Julian Assange is holed up in the Ecuadorean embassy in London, today we look at the strange story of another man tied to the world of cyber-activism who faces over a hundred years in prison. His name is Barrett Brown. He’s an investigative reporter with ties to the hacking collective Anonymous. He has spent the past 300 days in jail and has been denied bail. He faces 17 charges, ranging from threatening an FBI agent to credit card fraud for posting a link online to a document that contained stolen credit card data. But according to his supporters, Brown is being unfairly targeted for daring to investigate the highly secretive world of private intelligence and military contractors.

AMY GOODMAN: Before Brown’s path crossed with the FBI, he frequently contributed to Vanity Fair, The Huffington Post, The Guardian and other news outlets. In 2009, Brown created Project PM, which was, quote, “dedicated to investigating private government contractors working in the secretive fields of cybersecurity, intelligence and surveillance.” He was particularly interested in the documents leaked by WikiLeaks and Anonymous. In the documentary We Are Legion, Barrett Brown explains the importance of information obtained by hackers.

BARRETT BROWN: Some of the most important things that have been—have had the most far-reaching influence and have been the most important in terms of what’s been discovered, not just by Anonymous, but by the media in the aftermath, is the result of hacking. That information can’t be obtained by institutional journalistic process, or it can’t be obtained or won’t be obtained by a congressional committee or a federal oversight committee. For the most part, that information has to be, you know, obtained by hackers.

AMY GOODMAN: In 2011, the group Anonymous hacked into the computer system of the private security firm HBGary Federal and disclosed thousands of internal emails. Barrett Brown has not been accused of being involved in the hack, but he did read and analyze the documents, eventually crowdsourcing the effort through Project PM. One of the first things he discovered was a plan to tarnish the reputations of WikiLeaks and sympathetic journalist Glenn Greenwald of The Guardian. Brown similarly analyzed and wrote about the millions of internal company emails for Stratfor Global Intelligence that were leaked on Christmas Eve 2011. Shortly thereafter, the FBI acquired a warrant for Brown’s laptop and authority to seize any information from his communications—or, in journalism parlance, his sources. In September 2012, a troupe of armed agents surged into Brown’s apartment in Dallas, Texas, and handcuffed him face down on the floor. He has been in prison ever since.

JUAN GONZÁLEZ: Well, for more, we’re joined by Peter Ludlow, professor of philosophy at Northwestern University. He has written extensively on hacktivist actions against people—against private intelligence firms and the surveillance state. His recent article for The Nation is called “The Strange Case of Barrett Brown.”

Peter Ludlow, welcome to Democracy Now!

PETER LUDLOW: Hi. Thank you very much.

JUAN GONZÁLEZ: Talk to us about Barrett Brown, the importance of his case, given all the others that we’ve been dealing with on this show now for many years.

PETER LUDLOW: Well, yeah, it’s important for two reasons. First of all, it’s showing that, to some extent, all of us could be targets, because the principal reasons that they’re going after him with this sort of claim that he was involved in credit card fraud or something like that, I mean, that’s completely fallacious. I mean, in effect, what he did was take a link from a chat room and copied that link and pasted it into the chat room for Project PM. That is, he took a link that was broadcast widely on the Internet, and it was a link to the Stratfor hack information, and he just brought it to the attention of the editorial board of Project PM. And because there were, for whatever reason, unencrypted credit card numbers and validation codes among those five million other emails, the government is claiming that he was engaged in credit card fraud. They’re claiming that Project PM was a criminal enterprise. And so, basically, for our interest, why this is interesting to us is basically it makes this dangerous to even link to something or to share a link with someone.

JUAN GONZÁLEZ: And—

PETER LUDLOW: Go ahead, yeah, please.

JUAN GONZÁLEZ: Well, one of the things that you raise is, in some of your writings on this, is the incestuous relationship between the Justice Department, the government and these private firms that are being now targeted by cyber-activists. And could you talk about that, as well?

PETER LUDLOW: Well, sure. A lot of these private intelligence companies are started by ex-CIA, NSA people. Some people come from those agencies and rotate back into the government. I mean, you even see, with the case of Snowden, he was actually a contractor for a private intelligence company, Booz Allen. And, I mean, people think about the NSA, FBI, CIA, and they think of—those are the people that are doing the surveillance of you and doing this intelligence work, but really, if you look at how much the United States spends on intelligence, 70 percent of that is actually going to these private intelligence contractors. So, you know, if you add up CIA, NSA, FBI, that’s just a tip of the iceberg. So there’s all this sort of spook stuff going on in the private realm. And, yeah, right, a lot of it is very incestuous. There’s a revolving door. And no one is investigating it or even talking about it, as far as I can tell.

AMY GOODMAN: Let’s go to Barrett Brown in his own words. In March 2012, Democracy Now! spoke with Barrett soon after his house was raided.

BARRETT BROWN: On March 5th, I received a tip that I was about to be raided by the FBI. I left my apartment here in Dallas, went to my mom’s residence here in the same city. Next morning, three FBI agents arrived at my mom’s place. I went out and talked to them. They said my apartment had just been raided. The door was damaged. They would take care of that. And that they also asked me if I had any laptops with me that I wanted to give them. I said no.

A few hours later, the FBI returned to my mom’s house with another warrant, this time for her house, and detained the both of us for three hours while they searched the residence. They found several laptops I had stashed somewhere in the house and left the search warrants and left another one in my apartment, which I got when I came back here a little after, the next day or so.

The warrants themselves refer to the information that they’re seeking as regarding Anonymous, of course, a few other things of that nature, and also two companies: HBGary and Endgame Systems. Both of these are intelligence contracting companies that Anonymous had a run-in with in February of 2011, during which a number of emails were taken from HBGary, in particular, which themselves revealed a number of conspiracies being perpetuated by those companies in conjunction with Justice Department and several other institutions, including Bank of America, against WikiLeaks and against several journalists.

The time since, I’ve spent a lot of time going over those emails, researching them, conducting other research, otherwise trying to expose a number of things that have been discovered by virtue of those emails from HBGary having been taken. I sincerely believe that my activities on that front contributed to me being raided the other day and will no doubt contribute to any further action that the FBI decides to take. I would just also note the Justice Department itself is very much intertwined with this issue, and has been for a while, and in no way can conduct a fair investigation against me, based on what I’ve revealed, what I’ve helped to sort of emphasize about them.

AMY GOODMAN: That was Barrett Brown in his own words just after the raid.

PETER LUDLOW: Yeah.

AMY GOODMAN: Peter Ludlow, talk about what he had released. Talk about what he got from HBGary and how this links to Glenn Greenwald.

PETER LUDLOW: Sure. Well, what they uncovered was—I mean, it’s actually a little bit subtle, right? Because it begins with the Bank of America being concerned that WikiLeaks had information on it. Bank of America goes to the United States Department of Justice. The Department of Justice leads them to Hunton & Williams, the big law fix-it firm in the D.C. area, who in turn hooks them up with a group of private intelligence contractors that went under the umbrella Team Themis. And Team Themis had a number of proposals and projects that were exposed in all of this. They included running kind of a PSYOPs operation against the Chamber Watch, which is a group that sort of monitors the Chamber of Commerce, and it was an attempt to undermine it and Glenn Greenwald and other individuals. And, I mean, there were many, many plans that they had, many, many things, but some of the documents released showed that they were saying they were going to create fake documents, leak them to Greenwald, and then, when Greenwald eventually released them, they would expose it as a fraud and attempt to undermine him in that way. And they had a similar plan for Chamber Watch, as well.

JUAN GONZÁLEZ: And their concern with Greenwald was that he was giving—that his defense of WikiLeaks was giving legitimacy to WikiLeaks—

PETER LUDLOW: That was—yeah. That was the concern.

JUAN GONZÁLEZ: —it didn’t deserve.

PETER LUDLOW: That was the concern, yeah. And they actually said in there, “Well, he’s just a professional journalist, and he’ll fold under pressure immediately. I mean, apparently they were wrong about that. So, yeah.

JUAN GONZÁLEZ: There were also emails found where these private security firms were assessing the damage that Jeremy Scahill’s books had done to Blackwater?

PETER LUDLOW: Well, actually, those—I ran across that in the Stratfor leaks, and that was kind of interesting, because they were monitoring—they were monitoring this because they were concerned that Blackwater was going to get into the private intelligence business themselves. And they were commenting on Scahill. They go, “Well, yeah, Scahill, you know, I don’t care much for his politics, but he’s really got these guys figured out, yeah?” So that was a little compliment for Scahill, I think.

JUAN GONZÁLEZ: But the amazing thing in all of this is the degree to which these private security firms are engaging in attempts to influence what’s going on in the public debate on—

PETER LUDLOW: Oh, yeah.

JUAN GONZÁLEZ: —on intelligence.

PETER LUDLOW: Oh, yeah, yeah. I mean, one of the most crazy things in the whole thing was when Coca-Cola approached Stratfor, and they were concerned about PETA, you know, People for the Ethical Treatment of Animals. And why, I’m not entirely sure, but one of the people in Stratfor said, “Well, the FBI has a classified file on PETA. I’ll see if I can get it for you.” Now, that little story sums up a lot of stuff that’s wrong about this. First of all, why are private—why is Coca-Cola going to a private intelligence company for this? Why is—why did the private intelligence company feel that they had immediate access to a classified file by the FBI? And why did the FBI have a classified file, to begin with? I mean—but, to me, the creepiest part of that very creepy little story is the fact that the guy at Stratfor felt that he had access to this classified file by the FBI. And the Barrett Brown case revealed something like this, as well. It’s almost like the FBI has become just another private security firm, that it’s become like a private cop for these companies, as it were. And, I mean, that’s part because of the revolving door. It’s part because they get pressed into service for companies that want inside information on activist organizations like PETA.

AMY GOODMAN: We’re going to take break—

PETER LUDLOW: Yeah.

AMY GOODMAN: —and then come back to this conversation. We’re talking to Peter Ludlow, professor of philosophy at Northwestern University, has written extensively on hacktivist actions against private intelligence firms. The piece he most recently wrote is for The Nation, and it’s called “The Strange Case of Barrett Brown.” When we come back, I want to ask you how it’s possible he faces a hundred years in prison.

PETER LUDLOW: Yeah.

AMY GOODMAN: It makes us think about Aaron Swartz.

PETER LUDLOW: Yeah.

AMY GOODMAN: He didn’t face anything like that, but he faced decades in prison.

PETER LUDLOW: Yeah.

AMY GOODMAN: He ultimately committed suicide—

PETER LUDLOW: Yeah, yeah.

AMY GOODMAN: —before prosecution. Stay with us.

[break]

AMY GOODMAN: Peter Ludlow is our guest, a professor of philosophy at Northwestern University, has been tracking the case of Barrett Brown and wrote a Nation piece about him, “The Strange Case of Barrett Brown.” So, the FBI raids his home, and he ultimately is arrested. He faces 100 years in prison?

PETER LUDLOW: Yeah, if you add up all the charges and if he serves them sequentially, it will be 105 years in prison. Yeah, that’s right.

JUAN GONZÁLEZ: And the decision for no bail?

PETER LUDLOW: That’s a mystery to me.

AMY GOODMAN: He’s been in jail now for 300 days.

PETER LUDLOW: Three hundred days, yeah, over 300 days, no bail. For a while they were—they had frozen his—the contributions to his legal fund, too.

AMY GOODMAN: Well, that sounds like WikiLeaks.

PETER LUDLOW: Yeah.

AMY GOODMAN: Meaning that’s what happened to Wiki—well, WikiLeaks, they had all these different corporations like PayPal refuse to allow money to go to them.

PETER LUDLOW: Yeah, right.

AMY GOODMAN: Let’s go to an interview Barrett Brown did with NBC’s Michael Isikoff serving as a spokesperson for Anonymous.

BARRETT BROWN: Our people break laws, just like all people break laws. When we break laws, we do so in the service of civil disobedience. We do so ethically. We do it against targets who have asked for it.

MICHAEL ISIKOFF: You go against targets that have asked for it.

BARRETT BROWN: Yes.

MICHAEL ISIKOFF: What do you mean?

BARRETT BROWN: Targets who have engaged in a manner that is either unethical and contrary to the—sort of the values of this age, information freedom. Just, I mean—and sometimes just plain common sense, in the case of them going after journalists, going after WikiLeaks, in the way that they were planning to do so.

MICHAEL ISIKOFF: But you can attack websites.

BARRETT BROWN: Yes, we can attack websites. We can DDoS them. We can sometimes hack them. We can sometimes take over the websites themselves, put messages up, as we did today with Westboro and as we did with—with the company HBGary and other federal contractors during that attack.

MICHAEL ISIKOFF: You can—you can—

BARRETT BROWN: Take it over, debase it.

MICHAEL ISIKOFF: —take over the websites of government contractors.

BARRETT BROWN: And governments, of course. In Tunisia and in Libya, Algeria and Egypt and Iran, we either took down or replaced government websites. We replaced them with messages from us to the people of those nations, explaining what we’re doing and why and what we’ll provide if they choose to revolt.

MICHAEL ISIKOFF: Are you worried you’re going to get prosecuted?

BARRETT BROWN: I’m not worried about it, but I am going to get prosecuted at some point, yes.

MICHAEL ISIKOFF: Because you’re involved in hacking activity.

BARRETT BROWN: Because they could do whatever they want to anyone they want.

MICHAEL ISIKOFF: But you’re not worried?

BARRETT BROWN: No, because, again, like I said, I’m well protected right now.

MICHAEL ISIKOFF: What do you mean, well protected?

BARRETT BROWN: I’ve got a lot of lawyers. I’ve got a lot of higher-up people. I’ve got people to talk to who will—who support us. And if they come after me, they’re going to find that they’re not going to like everything that they see.

AMY GOODMAN: That’s Barrett Brown talking to NBC’s Michael Isikoff. Well, the fact is, Barrett Brown has been in prison now for 300 days, and he faces decades in prison. Can you explain—that’s when he was an Anonymous spokesperson—what Anonymous is? And then also talk about the groups he exposed, like Endgame and others, though he wasn’t the only one to do that.

PETER LUDLOW: Sure. I have to think he was a little bit optimistic there in his claims about how he was all lawyered up there. But he was a—he was related to Anonymous, which is—it’s not a group, per se. You know, you or I could claim to be members of Anonymous. It’s more like a flag that you fly if you choose to. And so, there was a loosely knit group of hacktivists. Some of them were intersecting. They carried out hacks against—as he says, against various private intelligence contractors and other kinds of targets. He’s quite right that during the Arab Spring and the Tunisian uprising and so forth, members of Anonymous did a lot of work in keeping protesters online and in minimizing the effectiveness of the governments in the Middle East in that time.

And then you asked about—

AMY GOODMAN: Endgame.

PETER LUDLOW: —things like Endgame Systems, for example. Yeah, Endgame is a very interesting thing. I mean, Endgame is this kind of very secretive private intelligence company. And you even see in the HBGary hack, you see these messages where someone from Endgame says in an email, “We don’t ever want to see our name in a press release from you guys.” And what makes it particularly interesting is, if you read the search warrant that’s issued to Barrett when he’s busted, it says, “Well, we’re looking for stuff related to HBGary and Endgame Systems.” You know, like, why Endgame Systems?

And this is a corporation that’s involved in what are called “zero-day exploits.” Now, what’s a zero-day exploit? Basically, what that means is that there are certain security flaws in the software that we have and that we use, and sometimes the company doesn’t know about it. Sometimes it’s known about it for seven days, and they’ve had seven days to work on it. A zero-day exploit is one that the software company doesn’t know about. And Endgame Systems packages these things and sells them. So, for example, they have one where you get—it’s a subscription for like $ 2.5 million a year, and you get these exploits. So it’s things that a hacker would do, but because they’re a business and they’re making money for it, it’s—apparently it’s OK, right? And it seems that the Justice Department is kind of running interference for these guys. And there’s a—I mean, you don’t have to take my word for it. There’s a great article in Businessweek on this in which they talk about the guys from Endgame, you know, running—setting up slides and showing you targets in airports, telling you what the computers are running there, and what kind of the—what the vulnerabilities are and so forth.

JUAN GONZÁLEZ: And who runs Endgame? Where are they based?

PETER LUDLOW: They’re based in Atlanta, Georgia, I believe. Someone recently posted a video on YouTube in which he walked into the place and—just to see what was going on there. And the people—I think it’s an ex—it’s started by an ex-intelligence person and by a security guy at IBM.

AMY GOODMAN: And, very quickly, Project PM?

PETER LUDLOW: Yeah. Project PM is basically Barrett’s—I mean, one of the genius things about Barrett was that he wanted to crowdsource all this information, because you get a hack of Stratfor and it’s five million emails, and how do you sort through all that? So he had a number of friends and acquaintances, including Michael Hastings, by the way, who were members of Project PM.

AMY GOODMAN: Michael Hastings, the reporter who just died in a fiery car crash.

PETER LUDLOW: The reporter who just died in the suspicious car accident, yeah, exactly right. And so, they would—he would basically crowdsource this. And so, the case where he copied that link, he was basically notifying the members of Project PM where they could find the information from the Stratfor hack.

AMY GOODMAN: So, what’s the schedule of—we just have 30 seconds—

PETER LUDLOW: Yeah.

AMY GOODMAN: —of what will happen to Barrett Brown right now? He’s in jail in Texas.

PETER LUDLOW: Yeah. I mean, he’s got a great legal team. Charles Swift is one of them, the guy from the judge advocate general’s thing that took that Gitmo case all the way to the Supreme Court.

AMY GOODMAN: From the JAG.

PETER LUDLOW: Ahmed Ghappour, who’s at University of Texas Law School. There’s a group of individuals with freebarrettbrown.org who are raising money for him there, and they’re available if you have questions and so forth.

AMY GOODMAN: Well, we’ll certainly follow this case, Peter Ludlow, professor of philosophy at Northwestern University. He’s written extensively on hacktivist actions against private intelligence firms and the surveillance state. His most recent piece is in The Nation; it’s called “The Strange Case of Barrett Brown.” We will link to it at democracynow.org.

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