“In one shoot-out, the KGB found themselves up against men from the interior ministry, as the security services were effectively privatised, each arm guarding a different client.”

Toby Clements reviews McMafia: Crime without Frontiers by Misha Glenny –

By the Mafia, Misha Glenny means any group of organised criminals, not just those with their roots in Sicily. Balkan cigarette smugglers, Nigerian internet phishers, Russian oligarchs, Chinese snakehead people-traffickers, South African drug lords, Bombay extortion-racketeers, Israeli money-launderers and Brazilian cyber-thieves are among the many who play their part in a complex network of links that the author estimates makes up nearly 20 per cent of global trade.

… Where did all this money come from? In a word, Russia.

… Stark differences in wealth is one thing that typically excites criminal activity, but as … traders grew luridly wealthy, the state institutions collapsed around them, and services such as the KGB found themselves without prestige, money or purpose.

A supply of bored young men with guns is the other stimulus to crime, and soon the oligarchs needed bodyguards. In one shoot-out, the KGB found themselves up against men from the interior ministry, as the security services were effectively privatised, each arm guarding a different client.

Toby Clements @ The Telegraph : Link.

Via The Day They Tried to Kill Me: Link.

McMafia: Crime Without Frontiers, by Misha Glenny: Amazon: Link.

“There’s something perverse about a member of Congress having one of the people who is trying to persuade him what the right answer is raise $100,000 for his campaign.”
- Lawrence Lessig

Stanford professor Lawrence Lessig hates corruption. And he’s trying to do something about it:

I don’t want a world where there are no lobbyists — I think lobbyists are essential. I think the message of lobbyists and the training of lobbyists is essential. Just like I think that what lawyers do before the Supreme Court is essential. But just as I think everybody would think it weird if a lawyer before the Supreme Court would send $100,000 to the Justice Roberts Retirement Fund or $100,000 to the Renovate Justice Roberts’s Office Fund, I think we better recognize there’s something perverse about a member of Congress having one of the people who is trying to persuade him what the right answer is raise $100,000 for his campaign. That’s the link we’ve got to break.

- Lawrence Lessig, interview by Mark Hemingway @ National Review Online: March 7, 2008: Link.

Via Slashdot: Link.

Lawrence Lessig blog: Link.

Wikipedia states:

Lawrence Lessig (born June 3, 1961) is an American academic. He is a professor of law at Stanford Law School and founder of its Center for Internet and Society. He is founder and CEO of the Creative Commons and a board member of the Electronic Frontier Foundation and of the Software Freedom Law Center, launched in February 2005. He is best known as a proponent of reduced legal restrictions on copyright, trademark and radio frequency spectrum, particularly in technology applications.

At the iCommons iSummit 07 Lessig announced that he will stop focusing his attention on copyright and related matters, and will instead work on corruption in the political system.

- Wikipedia: Link.

“An analysis of Diebold’s source code shows that a hacker with access to a single voting machine could use a virus to affect an election.”

Diebold Election Systems Inc. voting machines are not secure enough to guarantee a trustworthy election, and an attacker with access to a single machine could disrupt or change the outcome of an election using viruses, according to a review of Diebold’s source code.

… “An attack could plausibly be accomplished by a single skilled individual with temporary access to a single voting machine. The damage could be extensive — malicious code could spread to every voting machine in polling places and to county election servers,” it said.

… “A virus could allow an attacker who only had access to a few machines or memory cards, or possibly to only one, to spread malicious software to most, if not all, of a county’s voting machines,” the report said. “Thus, large-scale election fraud in the Diebold system does not necessarily require physical access to a large number of voting machines.”

The report warned that a paper trail of votes cast is not sufficient to guarantee the integrity of an election using the machines. “Malicious code might be able to subtly influence close elections, and it could disrupt elections by causing widespread equipment failure on election day,” it said.

[Sumner Lemon, IDG News Service - August 02, 2007 - Link]

The report: Source Code Review of the Diebold Voting System.

Via Slashdot.

SlashDot comment: “As someone who had been contracted by Diebold, the machines are running Windows, the software is written in Visual Basic, and the database is Access. And no, this isn’t a troll.” Link.

“Through the end of June [2007], there were nearly 1,000 incidents of scrap metal theft on farms, causing more than $2 billion in losses …”

[T]hieves … have been stripping the copper wires out of irrigation systems throughout California. The rampant thefts have left farmers without functioning water pumps for days and weeks at a time, creating financial loss and occasional crop devastation in a region still smarting from a spectacular freeze last winter.

… “They go out and take a farm pump in the middle of nowhere,” said Sgt. Walt Reed, head of county’s rural crime task force. “And they can pull the copper wire strands from the electrical wire box and get 60 feet of wire, remove the insulation and take it to the scrap yard for $2 to $3 a pound.”

… Copper thieves cut the wires in the conduit that runs to the power source, tie the wires to the back of a pickup truck and drive away, pulling the wire behind them and generally making off with roughly 75 pounds of scrap metal.

Over the last 18 months, copper prices have hovered over $3.50 a pound, hitting $4 at one point, the highest price the metal has reached in recent memory …. By comparison, copper fetched 65 cents a pound in 2001.

[Link]

“The Mob was in charge of garbage and, it seemed, no one could stop them.”

Since the mid-1950s, when local officials handed over commercial waste collection to private haulers, New York City’s garbage industry had been dominated by a Mafia-led cartel. (The city government’s Department of Sanitation has continued to collect residential garbage) …. The Mob was in charge of garbage and, it seemed, no one could stop them. Some of the Big Apple’s trash carting businesses were more directly Mafia-connected … but many were not; yet if they wanted to run their collection trucks down New York City streets, they had to join the cartel. The payoff for being a member was guaranteed customers and a healthy income — in other words protection against the market forces that might drive prices down and companies out of business. Estimates put the amount that the cartel overcharged its customers in the hundreds of millions of dollars each year.

All this ended rather abruptly in the mid-1990s when the Mafia’s New York City garbage monopoly was destroyed. The confluence of forces behind the cartel’s demise included a police crackdown on Mob activity and, perhaps more significantly, a major restructuring in the garbage industry. No longer was refuse treatment simply a service municipalities conducted themselves or contracted out to quaint mom-and-pop hauling companies. Multinational trash corporations, started in the 1970s and 1980s by a handful of innovative refuse firms, were seizing control of the garbage trade.

[Heather Rogers, “The Power of Garbage “: Link]

Personal anecdote: in college (circa the mid-eighties), I took a course in Land Use Ecology. The professors (two of them) asserted that it was common knowledge, in some circles, that New York City’s garbage disposal was run by organized crime, and that anyone who made too much fuss was liable to end up as part of the garbage stream. They said it laughingly, but it was clear to me that they were serious.

Is the US economy based on gambling? Observations by Einar Stefferud:

The double taxing of dividends makes it stupid for any company to pay dividends to shareholders, because up to 60% of dividend money goes to the US Govt as income taxes. This provides a strong incentive for companies to not pay dividends. It hurts their stockholder inventors and it hurts their stock price too.

But, long term, since stocks do not pay dividends because doing so is stupid, how can anyone ever get any return on any stock investment. Any per share money payment is classed as a dividend in any case! And taxed both before and after disbursement.

Now, I ask: What is the incentive for buying any stock that does not pay a dividend?

Right! You got it! Buy low, sell high!

You have to sell it to get your return, and to get your capital back! You just bought a pseudo .com or tulip bulb lottery ticket.

This creates the Investment Rule that is called the “Greater Fool Theory“! “Buy at some price and later sell it to some fool who thinks it is worth more than you paid for it! This is the only way anyone can gain any return on non-dividend stocks. Some buyer has to buy it later AT A HIGHER price.

Now, this reminds me of an old basic idea from Economics. No one (in their right mind) ever pays more for anything than they believe it is worth at the time of buying. Buy High, Sell Low is a well known bad idea.

So, this is now the foundation of our stock market. Shades of the Tulip Bubble. The entire game is just an extension of Las Vegas and Atlantic City or our state lotteries or our vast array of Indian Casinos.

And this is the capital investment foundation of our economy! Who would have thought we could collectively be so stupid?

From: Einar Stefferud
Date: Fri, 07 Mar 2003 14:46:43 -0800

[Interesting People mailing list]

Stock Market as Big Con: “Enron even had show-rooms filled with fake traders that they staffed when the press came on tours” –

In traditional “Big Con” grifts, the roper and the inside man work to convince the mark that by participating in some bit of harmless larceny, he will become immensely wealthy. The mark gets sucked into the scam and is eventually fleeced of every cent he can lay hands on.

… Analysts, bankers, VCs and snake-oil salesmen created an enormous con — Enron even had show-rooms filled with fake traders that they staffed when the press came on tours — that led millions to believe that there really was money to be had in playing the markets. And there was — their money. They got had, and the grifters did the having.

[Boing Boing]

Rio Body Count:riobodycount.com.br

In Rio de Janeiro, 76 people have been killed in the past 7 days. The city is experiencing a spike in violent crime, much of it related to gangs and drug trafficking — 6,000 people were murdered there last year.

Two Rio residents have launched a website to track the ongoing deaths … co-creators of Rio Body Count, 25 year old systems analyst Vinicius Costa, and 32 year old cartoonist André Dahmer, say they want to raise awareness of the “war zone” their city has become. Link, and more here: Link.

[Xeni Jardin: BoingBoing]

Brazil’s slums face a new problem: vigilante militias

RIO DE JANEIRO - Homicides claimed more than 6,000 victims in Rio de Janeiro last year, many of them in gang violence fought by organized crime gangs seeking to control the sale of marijuana and cocaine in the city’s favelas, or shantytowns.

As if inter-gang violence were not enough, there is now a new element in the mix. Militias formed by off-duty and former cops, prison guards, and firefighters are moving in to oust the drug gangs and install their own brand of extortion.

“The militias are unquestionably criminal groups,” says Marcelo Freixo, a former human rights activist who studied the phenomenon before being elected to Congress in October. “They push out the traffickers and they charge residents a security tax they are obliged to pay. They control through force but it is not to provide security, it is to make money. One group makes money by selling drugs, the other through terror.”

[Andrew Downie: Christian Science Monitor - February 08, 2007 edition]

Favela da Rocinha, Rio de Janeiro

See Also

Rio de Janeiro @ Wikipedia

Press Release

Our dearest friend, our brother, the editor in chief of AGOS newspaper Hrant Dink has been assasinated ruthlessly.

There are no words to explain our pain.

Our deepest condolences for those who can still feel themselves as human beings.

[AGOS Members]

Three Arrested in Turkey for Murder of Outspoken Journalist Hrant Dink

Istanbul governor Muammer Guler said three people were arrested in connection with the murder of journalist Hrant Dink earlier on Friday, CNN-Turk television reported.

No further information was provided on the arrests. Earlier in the day, two people were arrested, only to be released when officials decided they had no connection to the crime. Dink was one of the most prominent voices of Turkey’s Armenian community, and a frequent target of nationalist anger.

[FoxNews.com]

Prominent Turkish-Armenian journalist Hrant Dink murdered

Journalist Hrant Dink, one of the most prominent voices of Turkey’s Armenian community, was killed by a gunman Friday [January 16, 2007] at the entrance to his newspaper’s offices, police said.

Dink, a 53-year-old Turkish citizen of Armenian descent, had gone on trial numerous times for speaking out about the mass killings of Armenians by Ottoman Empire at the beginning of the 20th century. He had received threats from ultra-nationalists, who viewed him as a traitor.

Dink was a public figure in Turkey, and as the editor of the bilingual Turkish-Armenian newspaper Agos, one of its most prominent Armenian voices.

In his last column for Agos, Dink complained that he had become famous as an enemy of Turks and wrote of threats against him. He said he had received no protection from authorities despite his complaints.

… Turkey’s relationship with its Armenian community is fraught with tension, controversy and painful memories of a brutal past. Much of Turkey’s once-sizeable Armenian population was driven out beginning around 1915.

During World War I, as the Ottoman Turkish empire fought Russian forces, some of the Armenian minority in eastern Anatolia sided with the Russians.

In May 1915, the Armenian minority, one or two million strong, was forcefully deported and marched from the Anatolian borders towards Syria and Mesopotamia (now Iraq). Many died en route.

Armenia says 1.5 million Armenians were killed in this period, either through systematic massacres or through starvation.

It alleges that a deliberate genocide was carried out by the Ottoman Turkish empire.

Turkey acknowledges that many Armenians died, but says Turks died too, and that massacres were committed on both sides as a result of inter-ethnic violence and the wider World War.

Dink had been convicted of trying to influence the judiciary in 2005 after Agos ran stories criticizing a law making it a crime to insult Turkey, the Turkish government or the Turkish national character.

The conviction was rare even in a country where trials of journalists, academics and writers have become common. Most of the cases, including that of Nobel Prize-winning novelist Orhan Pamuk last year, were either dropped on a technicality or lead to acquittals.

… A colleague at Dink’s newspaper, Aydin Engin, said Dink had attributed the threats to elements in the “deep state,” a Turkish term used for alleged shadowy, fiercely ultra-nationalist and powerful elements embedded in the government and security establishment.

Turkey’s Foreign Ministry released a statement quickly after the shooting Friday saying it was deeply saddened by the killing.

“The actor or actors will be caught in the shortest possible time and delivered to justice,” the statement vowed. The Foreign Ministry offered condolences to the people of Turkey, its press, and particularly to the Armenian community and Dink’s family.

[New Anatolian]

Hrant Dink Received Threatening Messages

“We are in deep sorrow due to the murder of Hrant Dink, editor of Agos newspaper. We strongly condemn this cruel act. Dink, a Turkish citizen of Armenian origin, wrote in his column on January 10th that he was receiving threatening messages,” says the press release of ARI MOVEMENT NGO received by PanARMENIAN.Net. In the words Director Rana Birden, he also wrote that he felt like a fearful dove but “knew that the people of this country would not hurt a dove”.

“Unfortunately, he was wrong. We call for restraint in social reactions at this sensitive time and relate our condolences to Dink’s family, his loved ones, and the staff of Agos Newspaper,’ the release says.

[/PanARMENIAN.Net/]

FACTBOX: Turkish journalist Hrant Dink

• Dink, born in Malatya, southeast Turkey in 1954, was a member of Turkey’s small ethnic Armenian community, and a Turkish citizen.
• He was editor-in-chief of the bilingual Turkish and Armenian weekly Agos (www.agos.com.tr).
• Dink had been convicted of insulting Turkishness — under the controversial article 301 of Turkey’s penal code — and handed a six-month suspended sentence in 2005. The case was prompted by an article he wrote in which he referred to an Armenian nationalist idea of ethnic purity. The European Union has repeatedly called on Ankara to change the law and the government has promised to revise it.
• Of his conviction, Dink told Reuters: “I may be paying the price for this, but Turkish democracy will gain from it, I hope.”

[Reuters.com]

See Also

• Hrant Dink @ Armenipedia

On the one hand, law and order is better than crime. On the other hand, massive federal databases make some people fear for their liberty.

The Justice Department is building a massive database that allows state and local police officers around the country to search millions of case files from the FBI, Drug Enforcement Administration and other federal law enforcement agencies, according to Justice officials.

The system, known as “OneDOJ,” already holds approximately 1 million case records and is projected to triple in size over the next three years, Justice officials said. The files include investigative reports, criminal-history information, details of offenses, and the names, addresses and other information of criminal suspects or targets, officials said.

… Eventually, the department hopes, the database will be a central mechanism for sharing federal law enforcement information with local and state investigators, who now run checks individually, and often manually, with Justice’s five main law enforcement agencies: the FBI, the DEA, the U.S. Marshals Service, the Bureau of Prisons and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Within three years, officials said, about 750 law enforcement agencies nationwide will have access.

[T]he information available in the database already is held individually by the FBI and other federal agencies. Much information will be kept out of the system, including data about public corruption cases, classified or sensitive topics, confidential informants, administrative cases and civil rights probes involving allegations of wrongdoing by police, officials said.

[Washington Post]

Via Slashdot.

Department of Justice - Using e-Government to Fight Crime and Terrorism

Using innovative e-Government technologies, DOJ will help transform the capabilities of law enforcement agencies at all levels of government. The focal point of this transformation is the Law Enforcement Information Sharing Program (LEISP), a strategy for DOJ to share information readily to the entire law enforcement community and to guide the investment of resources in information systems that will further this goal. Here is some of the progress accomplished in FY 2005:

DOJ developed the OneDOJ information sharing policy for electronically exchanging open- and closed-case investigation information with state, local and other federal law enforcement partners. During the summer of 2005, this policy was uniformly implemented across five investigative components at DOJ (ATF, BOP, DEA, FBI and USMS). At the same time, the FBI’s R-DEx project was identified and leveraged to become DOJ’s single sharing repository (OneDOJ) for free-text case information and an open interface standard was developed for electronic sharing. Staring in August 2005, a pilot was established and DOJ’s case information is now being shared with the Northwest Law Enforcement Information Exchange (Northwest LInX), which includes the Naval Criminal Investigative Service (NCIS) and law enforcement agencies across the State of Washington.

[PDF: Department of Justice]

The FBI Learns to Share - April 2005

Sharing of law enforcement information is a national mandate and ordered by the President. The FBI as an integral arm of the Justice Department is implementing the Justice Department “Law Enforcement Information Sharing Program” (LEISP) through the FBI National Information Sharing Strategy (NISS). An early capability of the NISS has been the Regional Data Exchange Program, which is targeted to bring added search and analysis capabilities to regional law enforcement groups.

[fbi.gov]

DOJ in Competition with Homeland Security - February 2005

One area slated for a significant boost is the Justice Information Sharing Technology project, which falls under the Law Enforcement Information Sharing Program.

… Justice is pursuing the program under the aegis of Executive Order 13356, Strengthening the Sharing of Terrorism Information to Protect Americans, and last year’s intelligence reform law, known as the Intelligence Reform and Terrorism Prevention Act of 2004, as well as the National Criminal Intelligence Sharing Plan, an interagency agreement.

Justice plans to use the FBI’s Regional Data Exchange, or R-DEx system, as a format for sharing full-text crime information and to build a National Data Exchange, or N-DEx, to provide nationwide criminal reporting and terrorism information-sharing functions. “N-DEx and R-DEx are elements of the FBI’s National Information Sharing Strategy, a component piece of LEISP Strategy designed to improve the FBI’s information-sharing throughout the nation,” according to the Justice memo.

One feature of N-DEx and R-DEx will be consistent data-tagging protocols for information about crimes and terrorism, sources inside the department said.

Justice formerly identified the JIST account as the Identification Integration Systems Account, which included spending for the Joint Automated Booking System, the IDENT/IAFIS Integration project to merge fingerprint databases, and other projects.

Justice’s 2006 budget proposal states that JIST will help provide secure data communication, design a common case management system and fund the department’s office automation projects. Justice is cooperating with the Homeland Security Department to design the Federal Investigative Case Management System, which likely will replace the FBI’s foundering Virtual Case File system for case management.

[Government Computer News]

DOJ readies regional exchange - April 2005

Justice Department officials are readying an operational pilot to test the Regional Data Exchange, an FBI-led effort to share crime information between federal, state and local law enforcement organizations.

… Regional pilots of the National Data Exchange, an effort to create a central data repository of law enforcement incident and event reports also led by the FBI, are already underway ….

Both the national and regional data projects form part of the department’s Law Enforcement Information Sharing Program (LEISP), an effort to distribute nationwide data captured by all levels of law enforcement. Full implementation of LEISP projects will require an ongoing series of pilots ….

Although the data exchanges are FBI-directed projects, funding in fiscal 2006 will come from a centralized account for information sharing technology in the Justice CIO shop.

[FCW Media Group]

Hotel Minibar Keys Open Diebold Voting Machines –

The key that controls access to a standard Diebold voting machine is a common key that can be ordered from the Internet, also used to open hotel minibars.

The access panel door on a Diebold AccuVote-TS voting machine — the door that protects the memory card that stores the votes, and is the main barrier to the injection of a virus — can be opened with a standard key that is widely available on the Internet…

[Ed Felten: Link]

Via Boing Boing.

September 14, 2006:
Russian Central Bank reformer Andrei Kozlov gunned down —

Andrei Kozlov, who had spearheaded the campaign against fraudulent banks and money laundering as the No. 2 official at the Central Bank, died of gunshot wounds early Thursday.

Kozlov, 41, the bank’s first deputy head, and his driver, Alexander Semyonov, 54, were shot by two gunmen with automatic pistols Wednesday evening as Kozlov was exiting the Spartak sports complex.

… A longtime Central Bank official, Kozlov oversaw the closure of 44 banks accused of improper activities this year alone. He had also pushed for mandatory deposit insurance for banks, which was particularly important to millions of Russians who lost their savings in financial crises in the 1990s.

Most recently, he had lobbied for a permanent ban on those convicted of tax evasion from working in the banking sector.

Kozlov’s killing has raised concerns among many in the banking sector that these reforms and others could be stalled.

While the investigation has just begun, several senior government officials and banking sector experts said Kozlov died because of his work.

“He was a very brave and honest man, and through his activity he repeatedly encroached on the interests of unprincipled financiers,” Finance Minister Alexei Kudrin said in a statement Thursday.

Born in Moscow on Jan. 6, 1965, Kozlov, started his career at the State Bank of the Soviet Union in 1989. He joined the Central Bank after the 1991 Soviet collapse, reaching the bank’s highest echelons by the mid-1990s and becoming first deputy head in 1997.

From 1999 to 2001, Kozlov took a break from government. During that time, he served as board chairman of the Russky Standard bank and also worked for a subsidiary of Aeroflot.

Kozlov is survived by his wife, Yekaterina, and three children.

[Moscow Times: Link]

Andrew Osborn reports from Moscow –

Russian President Vladimir Putin has warned that his country’s battle with organised crime has entered a dangerous new phase after the assassination of a top anti-money-laundering official.

Putin called [Kozlov’s] murder “a manifestation of the intensifying situation in the struggle against crime” and ordered a special task force be established to staunch the rivers of dirty money that flow through Russia every day.

… It is no exaggeration to say that Kozlov’s slaying was the most high- profile murder of a senior official since Putin came to power six years ago; his rank was close to that of a government minister. Senior politicians called the attack an assault on the government itself and said it shattered an unspoken truce between the Kremlin and the Russian mafia, a catch-all phrase for scores of highly organised criminal groupings that have sprung up since the collapse of the Soviet Union.

In the chaotic 1990s, the Mafia routinely “eliminated” awkward politicians and officials, but since the tough- talking Putin took the reins of power it had backed away from such terror tactics and was thought to have opted instead for a veneer of respectability.

That “truce” now appears to have been torn up overnight.

Kozlov … had shut down dozens of “dirty” banks after revealing that they were fronts for money launderers.

Perhaps more significantly, he planned to shut down dozens of others in the months and years ahead and kept a blacklist of financial institutions he suspected were “compromised” which he was working his way through.

… Kozlov had become adept at “following the money” and closing down such banks by withdrawing their licences and publicising their wrongdoing.

His most high-profile case came in 2004 when he took on the aptly named Sodbiznesbank, ironically a large contributor to Putin’s re-election campaign.

Kozlov accused the bank of accepting ransom money to the value of $1m (£532,000) from a well-known criminal group. The money was purportedly extorted from a Russian truck-maker called Kamaz, whose general director Viktor Faber was kidnapped along with the company’s chief economist Natalia Starodubtseva.

The kidnapping went badly wrong: both were abducted in May 2003 and found dead in September but the hostage-takers got their money nonetheless.

Kozlov suggested that the bank was implicated in the crime, said over 80% of its capital was fictitious, and ordered it to hand back its banking licence.

Sodbiznesbank’s defence mechanism was crude. It blocked access to its central Moscow office for two weeks during which time it allegedly spirited away millions of dollars of assets. In the end, Kozlov ordered in the riot police who stormed the offices ending the standoff.

Powerful vested interests were clearly upset though and the affair caught up with Alexander Slesarev, the 37-year-old owner of Sodbiznesbank bank, last October.

He was executed with his wife and daughter in a contract drive-by shooting just outside Moscow.

[Sunday Herald: Link]

Flashback 1997:
Business Week praises Andrei Kozlov for creating “Russia’s most liquid, clean, and efficient securities market” –

In 1992, Russia’s economy was in chaos. Inflation was 2,000%. Industrial output was falling. Trust in Boris N. Yeltsin’s radical reformers was nil.

But in the bowels of the Central Bank of Russia, Andrei A. Kozlov, 32, saw a way out. A staffer in the securities department, he heard a group of American bankers, including then New York Federal Reserve Bank President Gerald E. Corrigan, describe how the U.S. government finances its operations by borrowing money on capital markets. Kozlov vowed to develop Russia’s own government securities program. Says Kozlov: ‘’The attitude of the majority of higher-level government officials was, ‘Let these young guys play with their toys.”’

Five years later, Kozlov, is First Deputy Chairman of the Central Bank, and his ‘’toys'’ are bringing billions of dollars to the Russian budget. Using Corrigan’s advice, he created Russia’s most liquid, clean, and efficient securities market. Now, Russian and foreign investors feel confident enough to put over $50 billion in Russian Treasury bonds. Russia qualified for an international rating in September, 1996. Since then, Russians have sold more than $6.5 billion in Eurobonds. Says David Boren, Salomon Brothers’ emerging- markets research president: ‘’Kozlov was there early, he’s going to stay around a long time, and he’s clean.'’

[Link]

“A Microsoft security person reports that a new breed of malware seeks to take over your characters in online worlds and steal their virtual gold and other loot” —

Using malware or software designed to infiltrate a computer system, hackers steal account information for users of MMO games and then sell off virtual gold, weapons and other items for real money.

“Those of you who are working on massively multiplayer online games, organized crime is already looking at you,” said Dave Weinstein, a Microsoft security development engineer at the company’s Gamefest video game development conference…

“The police are really good at understanding someone stole my credit card and ran up a lot of money. It’s a lot harder to get them to buy into ’someone stole my magic sword.”‘

[Link]

Via Boing Boing.

Interpol holds ‘Supernote’ summit to address US dollar counterfeiting –

LYON, France (26 July 2006) - Representatives from the US Secret Service, law enforcement and security printing industries met at Interpol’s General Secretariat in Lyon on 26 July to discuss how to deal with a highly-deceptive form of counterfeit US currency known as the ‘Supernote’.

Reported to be manufactured in the Democratic People’s Republic of Korea (North Korea), the Supernote is a high-quality counterfeit of the 50-dollar and 100-dollar note, also known as a Superdollar. The notes are produced using similar processes and materials as genuine US currency.

First detected back in 1989, concerns over the Supernote have increased recently with media reports, law enforcement publications, and industry journals indicating that the government of the Democratic People’s Republic of Korea was responsible for the production and distribution. The US National Security Council has indicated that government officials from North Korea were engaged in distributing the notes.

The notes are highly deceptive, but are detectable. They circulate mostly outside the United States.

Of the $753 billion dollars worth of banknotes in circulation, some 60% circulate overseas. To date, some $50 million of this family of false notes have been found.

[Link]

Slate: “What Are Supernotes? The best fake money that money can buy” –

Supernote production requires uncommon equipment and skilled engineers. At first, investigators thought they originated in Lebanon. Another theory from the 1990s held that Iran produced them on equipment purchased by the Shah two decades earlier and then shipped the bills to Lebanon via Syria. The real source of the bills has not been found, but a member of the Congressional Research Service reported that the government of North Korea produces millions of dollars a year with intaglio presses. In the meantime, the government ordered an extensive redesign of U.S. currency in 1996. (Supernote versions of the new $100 bills have been discovered.)

[Daniel Engber @ Slate: Link]

U.S. Treasury, How to Detect Counterfeit Money –

The public has a role in maintaining the integrity of our currency. You can help guard against the threat from counterfeiters by becoming more familiar with United States currency.

Look at the money you receive. Compare a suspect note with a genuine note of the same denomination and series, paying attention to the quality of printing and paper characteristics. Look for differences, not similarities.

[Link]

Nova: Secrets of Making Money (October 1996) –

ROBERT LEUVER: Ninety percent of the presses that are used to print security paper come from one company, De la rue Giori in Switzerland. And, Iran has these presses. They obtained them in the 1970s, as many other countries throughout the world. Anybody that has this equipment has the same equipment the United States has, so it’s not unthinkable that another country has these presses and is capable of using them if they want to subvert the US economy. Whether that’s Iran or some other Middle Eastern country, I don’t know. But the possibility exists.

STACY KEACH: In the world of money making, even a paper mill is a fortress guarding national secrets. Crane & Co. has made special paper for US currency since 1879, and has never before allowed cameras to document this process. Their paper is unlike any other in the world. And for the new currency, Crane redesigned it to be even more secure against counterfeiting.

[Nova: Link]

De La Rue Giori –

De La Rue is the world’s largest commercial security printer and papermaker, involved in the production of over 150 national currencies and a wide range of security documents such as travellers cheques and vouchers. Employing over 6,000 people across 31 countries, the company is also a leading provider of cash handling equipment and software solutions to banks and retailers worldwide helping them to reduce the cost of handling cash. We are also pioneering new technologies including tailored solutions to protect the world ’s brands through to government identity solutions in secure passports, identity cards and driver’s licences.

[Link]

KBA Acquires De La Rue Giori to Consolidate Pole Position in Security Printing –

Lausanne/Würzburg. On 30 May [2001] KBA in Würzburg acquired a 100% interest in Lausanne-based De La Rue Giori S.A., a leading supplier and consultant in the international security printing industry. Renamed KBA-GIORI S.A. with effect from 11 June, the company will progressively adapt its corporate image to the new ownership structure.
[Link]
[KBA-Giori: Home Page]

Unrelated to counterfeiting, but an interesting look at the power of wealth –
Indian Airlines Flight 814: Roberto Giori’s ordeal [December 1999]

At one point during the eight-day hijacking of Indian Airlines Flight 814, the abductors demanded $200 million from the Indian government. Little did they know that one of the hostages sitting in economy class could have effortlessly written them a check for that amount. Roberto Giori, owner of the Lausanne-based company De La Rue Giori, boarded Flight 814 after a holiday in Katmandu with his companion Cristina Calabresi. De La Rue Giori, which Giori inherited from his father, happens to control 90% of the world’s currency-printing business. The 50-year-old Giori, who holds dual Swiss and Italian nationality, is one of Switzerland’s richest men.

After the plane landed in Kandahar, southern Afghanistan, where it would remain for seven days, Switzerland sent a special envoy to the airport to deal with the abduction of its “currency king,” his companion and two other Swiss nationals. It also put pressure on New Delhi to come to a solution that ensured their safe release.

[Time Asia: Link]
[See also Wikipedia: Indian Airlines Flight 814]

“U.S. Repatriates Historical Artifact to the Iraqi People”
- Press release: U.S. Embassy, Iraq

On Tuesday, July 25, 2006, U.S. Ambassador to Iraq Zalmay Khalilzad, Secretary for Homeland Security Michael Chertoff, and Iraqi Prime Minister Noori al-Maliki participated in a ceremony marking the repatriation of the diorite statue of Entemena to the Iraqi Government, at the Embassy of the Republic of Iraq.

Recovered this year by the U.S. Immigration and Customs Enforcement wing of the Department of Homeland Security, the statue of Entemena is deemed one of INTERPOL’s most significant recoveries.

Around April 2003, Iraqi cultural institutions and archaeological sites, including the Iraq National Museum, suffered extensive losses of invaluable cultural artifacts. Among the objects illegally taken from the Museum was the Statue of Entemena — a headless, statue of the 4th king in the dynasty of Lagash (modern al-Hiba, Iraq), ca. 2400 BC, excavated at Ur, Iraq.

The Statue of Entemena is the oldest known representation of a king of ancient Iraq. The statue is made of diorite (a rare hard black imported stone), stands approximately 30 inches high, and weighs approximately 300 pounds. The king is standing in the pose of a worshipper, hands folded in front, wearing a fleece skirt. Cuneiform inscriptions on his back and right upper arm tell us that the name of the statue is “Entemena Whom the God Enlil Loves” and that the statue was placed before the god in a temple.

The statue was excavated in the early 20th century in the temple precinct at Ur in southern Iraq by the joint expedition of the University of Pennsylvania and the British Museum, working under a permit from the Iraq Department of Antiquities. Since the text says it stood in Lagash, it must have been taken to Ur at a later time, perhaps as a war trophy.

In late 2005, confidential informants overseas notified DHS of the whereabouts of the statue. Around May 2006, the statue was recovered and shipped to the United States. The statue was authenticated around June 5 and remained in DHS custody.

[Link]

Interpol has pictures and case notes: Link.

Iraq Museum International reports: “Manhattan Art Dealer Helps Recover Priceless Iraq Museum Statue” –

Lebanese antiquities dealer Hicham Aboutaam believes this is a good time to consider investing in antiquities, but his refusal to handle the sale of an important statue stolen from the Iraq Museum led to its return to the people of Iraq.

After the looting of the Baghdad Museum in 2003, Aboutaam was approached in Lebanon by black market dealers offering to sell the headless statue of King Entemena.

Worth millions of dollars to collectors of illicit antiquities, the statue had made its way to Syria, and onto the FBI top 10 list of art heists.

Aboutaam, who sells antiquities to museums and collectors from his galleries in Geneva and New York, did the right thing and cooperated last year with agents from the U.S. Immigration and Customs Enforcement (ICE) wing of the Department of Homeland Security.

Information supplied by Aboutaam helped INTERPOL track down the whereabouts of the statue, and just 2 months ago, it was recovered and shipped to the United States for authentication.

[Link]

The above article is favorable to Aboutaam specifically, and the collecting of antiquities generally. Note, Iraq Museum International (baghdadmuseum.org) is not to be confused with the National Museum of Iraq.

Hicham Aboutaam’s site.

The brothers Aboutaam have their critics, and a reputation for controversy: Aboutaam Brothers in the news

See also Museum-Security.org

FBI Top Ten Art Heists — Although the FBI apparently was not directly involved in the Entemena case, the Bureau does maintain an Art Crimes Team:

Art and cultural property crime — which includes theft, fraud, looting, and trafficking across state and international lines — is a looming criminal enterprise with estimated losses running as high as $6 billion annually.

To recover these precious pieces–and to bring these criminals to justice — the FBI uses a dedicated Art Crime Team of 12 Special Agents to investigate, supported by three Special Trial Attorneys for prosecutions…and it mans the National Stolen Art File, a computerized index of reported stolen art and cultural properties for the use of law enforcement agencies across the world.

[FBI: Link.]

Not breaking news, but interesting:

Money for Nothing: Billions of dollars have disappeared, gone to bribe Iraqis and line contractors’ pockets.
by Philip Giraldi - The American Conservative - October 24, 2005

When the final page is written on America’s catastrophic imperial venture, one word will dominate the explanation of U.S. failure—corruption. Large-scale and pervasive corruption meant that available resources could not be used to stabilize and secure Iraq in the early days of the Coalition Provisional Authority (CPA), when it was still possible to do so. Continuing corruption meant that the reconstruction of infrastructure never got underway, giving the Iraqi people little incentive to co-operate with the occupation. Ongoing corruption in arms procurement and defense spending means that Baghdad will never control a viable army while the Shi’ite and Kurdish militias will grow stronger and produce a divided Iraq in which constitutional guarantees will be irrelevant.

The American-dominated Coalition Provisional Authority could well prove to be the most corrupt administration in history, almost certainly surpassing the widespread fraud of the much-maligned UN Oil for Food Program. At least $20 billion that belonged to the Iraqi people has been wasted, together with hundreds of millions of U.S. taxpayer dollars. Exactly how many billions of additional dollars were squandered, stolen, given away, or simply lost will never be known because the deliberate decision by the CPA not to meter oil exports means that no one will ever know how much revenue was generated during 2003 and 2004.

… The 15-month proconsulship of the CPA disbursed nearly $20 billion, two-thirds of it in cash, most of which came from the Development Fund for Iraq that had replaced the UN Oil for Food Program and from frozen and seized Iraqi assets. Most of the money was flown into Iraq on C-130s in huge plastic shrink-wrapped pallets holding 40 “cashpaks,” each cashpak having $1.6 million in $100 bills. Twelve billion dollars moved that way between May 2003 and June 2004, drawn from accounts administered by the New York Federal Reserve Bank. The $100 bills weighed an estimated 363 tons.

Once in Iraq, there was virtually no accountability over how the money was spent. There was also considerable money “off the books,” including as much as $4 billion from illegal oil exports. The CPA and the Iraqi State Oil Marketing Board, which it controlled, made a deliberate decision not to record or “meter” oil exports, an invitation to wholesale fraud and black marketeering.

… The only certified public-accounting firm used by the CPA to monitor its spending was a company called North Star Consultants, located in San Diego, which was so small that it operated out of a private home. It was subsequently determined that North Star did not, in fact, perform any review of the CPA’s internal spending controls. Today, no one can account for billions of those dollars or even suggest how the money was spent. And as the CPA no longer exists, there is also little interest in re-examining its transparency or accountability.

[Link]

The article further notes: “Halliburton, Vice President Dick Cheney’s former company, has a no-bid monopoly contract with the Army Corps of Engineers that is now estimated to be worth $10 billion.”

Kellogg, Brown and Root (KBR), a Halliburton subsidiary, has it fingers in a wide variety of pies:

Detention Camps: The Next Generation

Failing to Rebuild Iraq

Wikipedia: Coalition Provisional Authority (CPA)

The Coalition Provisional Authority (CPA) was established as a transitional government following the invasion of Iraq by the United States, United Kingdom and the other members of the multinational coalition which was formed to oust the government of Saddam Hussein in 2003. Citing UN Security Council Resolution 1483 (2003), and the laws of war, the CPA vested itself with executive, legislative, and judicial authority over the Iraqi government from the period of the CPA’s inception on April 21, 2003, until its dissolution on June 28, 2004.

[Wikipedia: Link]

SourceWatch casts a critical eye upon CPA:

Following the establishment of limited Iraqi sovereignty: June 30, 2004, the CPA is scheduled to cease existence. In its stead will be the US Mission to Iraq.

None the less, “A comprehensive examination of the U.S.-led agency that oversaw the rebuilding of Iraq has triggered at least 27 criminal investigations and produced evidence of millions of dollars’ worth of fraud, waste and abuse, according to a report by the Coalition Provisional Authority’s inspector general,” Stuart W. Bowen Jr. : Link

[C]ontractors accused of fraud in the fulfillment of CPA contacts have been claiming that the United States Federal Court system does not have juristiction in deciding these cases. (see David Phinney, “Iraq Contractor Claims Immunity From Fraud Laws: Seized Oil Assets Paid For Offshore Overbilling”, CorpWatch, December 23rd, 2004: Link

A study publishd by the Congressional Research Service (CRS), authored by L. Elaine Halchin, Analyst in American National Government Government and Finance Division: “The Coalition Provisional Authority (CPA): Origin, Characteristics, and Institutional Authorities”, April 29, 2004 - [FAS Hosted PDF file: Link) discovered that there was a great deal of murkiness surrounding the conception of the CPA, and that documents offered by the Bush Administration have served to increase the cloudiness …

[SourceWatch: Link]