FBI Never Saw CrowdStrike Unredacted or Final Report on Alleged Russian Hacking Because None was Produced

The FBI relied on CrowdStrike’s “conclusion” to blame Russia for hacking DNC servers, though the private firm never produced a final report and the FBI never asked them to, as Ray McGovern explains.

By Ray McGovern
Special to Consortium News

CrowdStrike, the controversial cybersecurity firm that the Democratic National Committee chose over the FBI in 2016 to examine its compromised computer servers, never produced an un-redacted or final forensic report for the government because the FBI never required it to, the Justice Department has admitted.

The revelation came in a court filing by the government in the pre-trial phase of Roger Stone, a long-time Republican operative who had an unofficial role in the campaign of candidate Donald Trump. Stone has been charged with misleading Congress, obstructing justice and intimidating a witness.

The filing was in response to a motion by Stone’s lawyers asking for “unredacted reports” from CrowdStrike in an effort to get the government to prove that Russia hacked the DNC server. “The government … does not possess the information the defandant seeks,” the filing says.

In his motion, Stone’s lawyers said he had only been given three redacted drafts. In a startling footnote in the government’s response, the DOJ admits the drafts are all that exist. “Although the reports produced to the defendant are marked ‘draft,’ counsel for the DNC and DCCC informed the government that they are the last version of the report produced,” the footnote says.

In other words CrowdStrike, upon which the FBI relied to conclude that Russia hacked the DNC, never completed a final report and only turned over three redacted drafts to the government.

These drafts were “voluntarily” given to the FBI by DNC lawyers, the filing says. “No redacted information concerned the attribution of the attack to Russian actors,” the filing quotes DNC lawyers as saying.

In Stone’s motion his lawyers argued: “If the Russian state did not hack the DNC, DCCC, or [Clinton campaign chairman John] Podesta’s servers, then Roger Stone was prosecuted for obstructing a congressional investigation into an unproven Russian state hacking conspiracy … The issue of whether or not the DNC was hacked is central to the Defendant’s defense.”

The DOJ responded: “The government does not need to prove at the defendant’s trial that the Russians hacked the DNC in order to prove the defendant made false statements, tampered with a witness, and obstructed justice into a congressional investigation regarding election interference.”

Thousands of emails from the DNC server were published by WikiLeaks in July 2016 revealing that the DNC interfered in the Democratic primary process to favor former Secretary of State Hillary Clinton over Senator Bernie Sanders for the party’s presidential nomination. The U.S. indicted 12 Russian military intelligence agents in 2018 for allegedly hacking the DNC server and giving the emails to WikiLeaks.

Comey Can’t Say Why

At a time of high tension in the 2016 presidential campaign, when the late Sen. John McCain and others were calling Russian “hacking” an “act of war,” the FBI settled for three redacted “draft reports” from CrowdStrike rather than investigate the alleged hacking itself, the court document shows.

Then FBI Director James Comey admitted in congressional testimony that he chose not to take control of the DNC’s “hacked” computers, and did not dispatch FBI computer experts to inspect them, but has had trouble explaining why.

In his testimony, he conceded that “best practices” would have dictated that forensic experts gain physical access to the computers. Nevertheless, the FBI decided to rely on forensics performed by a firm being paid for by the DNC.

Suspicions grew as Comey started referring to CrowdStrike as the “pros that they hired.” Doubts became more intense when he referred to CrowdStrike as “a high-class entity.” In fact the company had a tarnished reputation for reliability and objectivity well before it was hired by the DNC.

Dimitri Alperovitch, a CrowdStrike co-founder, is an opponent of Russian President Vladimir Putin and a senior fellow at the anti-Russian Atlantic Council think tank in Washington. CrowdStrike said it determined that Russia had hacked the DNC server because it found Cyrillic letters in the metadata, as well as the name of the first Soviet intelligence chief—clues an amateur might leave.

CrowdStrike was forced to “revise(d) and retract(ed) statements it used to buttress claims of Russian hacking during last year’s American presidential election campaign,” Voice of America reported in March 2017. 

CrowdStrike’s Early Role

In a Memorandum for the President on July 24, 2017, Veteran Intelligence Professionals for Sanity referred prominently to this instructive time sequence:

June 12, 2016: Julian Assange announces WikiLeaks is about to publish ‘emails related to Hillary Clinton.’

June 14, 2016: DNC contractor CrowdStrike, (with a dubious professional record and multiple conflicts of interest) announces that malware has been found on the DNC server and claims there is evidence it was injected by Russians.

June 15, 2016: ‘Guccifer 2.0’ affirms the DNC statement; claims responsibility for the ‘hack;’ claims to be a WikiLeaks source; and posts a document that the forensics show was synthetically tainted with ‘Russian fingerprints.’

VIPS does not believe the June 12, 14, & 15 timing was pure coincidence. Rather, it suggests the start of a pre-emptive move to associate Russia with anything WikiLeaks might have been about to publish and to “show” that it came from a Russian hack.  

Bill Binney, a former NSA technical director and a VIPS member, filed an affidavit in Stone’s case. Binney said: “WikiLeaks did not receive stolen data from the Russian government. Intrinsic metadata in the publicly available files on WikiLeaks demonstrates that the files acquired by WikiLeaks were delivered in a medium such as a thumb drive.”

Preferring CrowdStrike; Splaining to Congress

Why did FBI Director James Comey not simply insist on access to the DNC computers? Surely he could have gotten the appropriate authorization. In early January 2017, reacting to media reports that the FBI never asked for access, Comey told the Senate Intelligence Committee there were “multiple requests at different levels” for access to the DNC servers.“Ultimately what was agreed to is the private company would share with us what they saw,” he said. Comey described CrowdStrike as a “highly respected” cybersecurity company.

Asked by committee Chairman Richard Burr (R-NC) whether direct access to the servers and devices would have helped the FBI in their investigation, Comey said it would have. “Our forensics folks would always prefer to get access to the original device or server that’s involved, so it’s the best evidence,” he said.

Five months later, after Comey had been fired, Burr gave him a Mulligan in the form of a few kid-gloves, clearly well-rehearsed, questions:

BURR:And the FBI, in this case, unlike other cases that you might investigate — did you ever have access to the actual hardware that was hacked? Or did you have to rely on a third party to provide you the data that they had collected?

COMEY:In the case of the DNC, … we did not have access to the devices themselves. We got relevant forensic information from a private party, a high-class entity, that had done the work. But we didn’t get direct access.

BURR:But no content?

COMEY:Correct.

BURR:Isn’t content an important part of the forensics from a counterintelligence standpoint?

COMEY:It is, although what was briefed to me by my folks — the people who were my folks at the time is that they had gotten the information from the private party that they needed to understand the intrusion by the spring of 2016.

More telling was earlier questioning by House Intelligence Committee member, Rep. Will Hurd (R-TX), who had been a CIA officer for a decade.On March 20, 2017 while he was still FBI director, Comey evidenced some considerable discomfort as he tried to explain to the committee why the FBI did not insist on getting physical access to the DNC computers and do its own forensics:

HURD:So there was about a year between the FBI’s first notification of some potential problems with the DNC network and then that information getting on — getting on Wikileaks.

COMEY:Yes, sir.

HURD:… when did the DNC provide access for — to the FBI for your technical folks to review what happened?

COMEY:Well we never got direct access to the machines themselves. The DNC in the spring of 2016 hired a firm that ultimately shared with us their forensics from their review of the system. …

HURD:… So, Director FBI notified the DNC early, before any information was put on Wikileaksand when — youhave still been — never been given access to any of the technical or the physical machines that were — that were hacked by the Russians.

COMEY: That’s correct although we got the forensics from the pros that they hired which — again, best practice is always to get access to the machines themselves, but this — my folks tell me was an appropriate substitute.

Comey Spikes Deal With Assange

Director Comey’s March 20, 2017 testimony to the House Intelligence Committee came at the same time he was scuttling months-long negotiations between Assange and lawyers representing the DOJ and CIA to grant some limited immunity for the WikiLeaks founder. In return, Assange offered to: (1) redact “some classified CIA information he might release in the future,” and (2) “provide technical evidence and discussion regarding who did not engage in the DNC releases.”

Investigative journalist John Solomon, quoting WikiLeaks’ intermediary with the government, broke this story, based on “interviews and a trove of internal DOJ documents turned over to Senate investigators.” It would be a safe assumption that Assange was offering to prove that Russia was not WikiLeaks’ source of the DNC emails, something Assange has repeatedly said.

That, of course, would have been the last thing Comey would have wanted.

On March 31, 2017 WikiLeaks released the most damaging disclosure up to that point from what it called “Vault 7” — a treasure trove of CIA cybertools leaked from CIA files. This disclosure featured the tool “Marble Framework,” which enabled the CIA to hack into computers, disguise who hacked in, and falsely attribute the hack to someone else by leaving so-called tell-tale signs — like Cyrillic, for example.

The CIA documents also showed that the “Marble” tool had been employed in 2016.

Two weeks later, then CIA Director Mike Pompeo branded WikiLeaks a “non-state hostile intelligence service,” and the U.S. put pressure on Ecuador, which had given Assange asylum, to expel him from its London embassy. He was on April 11 when British police arrested him. On the same day he was convicted of skipping bail on a Swedish investigation that had since been dropped. Assange was sentenced to 50 weeks in London’s max-security Belmarsh prison.

Comey, it seems a safe bet, still worries that Assange or one of his associates, will provide “technical evidence” enough to prove “who did not engage in the DNC releases.”

What Were They Thinking?

At the March 20, 2017 House Intelligence Committee hearing, Congressman Trey Gowdy heaped effusive praise on then-FBI Director Comey, calling him “incredibly respected.” At that early stage, no doubt Gowdy meant no double entendre. He might now.

As Russia-gate transmogrifies into Deep State-gate, the DOJ is launching a probe into the origins of Russia-gate and the intelligence agencies alleged role in it. It remains to be seen whether U.S. Attorney for the District of Connecticut John Durham, who is leading the probe, will interview Assange, unlike Special Counsel Robert Mueller, who did not. 

It is proving very difficult for some of my old FBI friends and others to believe that Comey and other justice, intelligence, and security officials at the very top could have played fast and loose with the Constitution and the law and lived a lie over the past few years.

How did they ever think they could get away with it?” they ask. The answer is deceivingly simple. Comey himself has explained it in a moment of seemingly unintentional candor in his pretentious book, “A Higher Loyalty.” He wrote, “I was making decisions in an environment where Hillary Clinton was sure to be the next president.”

There would be no problem, of course, if Mrs. Clinton had won the election. That’s what they all thought; and that probably explains their lack of care in keeping their activities off the written record and out of computers. Elementary tradecraft goes out the window with these upper-echelon, “high-class-entity” officials, when they are sure that she, and they, are going to be the inevitable winners — with promotions, not indictments in store for them.

Additional reporting by Joe Lauria

Background Reading on Deep State-Gate

https://www.investmentwatchblog.com/doj-admits-fbi-never-saw-crowdstrike-report-on-dnc-russian-hacking-claim/

https://www.thegatewaypundit.com/2019/06/figures-fbi-doj-never-obtained-the-unredacted-crowdstrike-reports-on-russian-hack-of-dnc-server/

https://consortiumnews.com/2019/03/13/vips-muellers-forensics-free-findings/

https://consortiumnews.com/2019/04/16/vips-fault-mueller-probe-criticize-refusal-to-interview-assange/

https://consortiumnews.com/2019/05/03/orwellian-cloud-hovers-over-russia-gate/

https://consortiumnews.com/2017/07/24/intel-vets-challenge-russia-hack-evidence/

http://raymcgovern.com/2017/05/17/beneath-the-corporate-mediadeep-state-campaign-to-remove-trump-and-thwart-detente-with-russia/

https://consortiumnews.com/2019/06/13/ray-mcgovern-doj-bloodhounds-on-the-scent-of-john-brennan/

https://consortiumnews.com/2018/11/14/clappers-credibility-collapses/

https://raymcgovern.com/2019/01/06/transcript-when-clapper-was-asked-real-questions/

http://www.baltimoresun.com/news/opinion/oped/bs-ed-hacking-intelligence-20170105-story.html

http://www.baltimoresun.com/news/opinion/oped/bs-ed-trump-russia-phony-20170517-story.html

Ray McGovern works with Tell the Word, a publishing arm of the ecumenical Church of the Saviour in inner-city Washington. During his 27-year career as a CIA analyst, he led the Soviet Foreign Policy Branch and prepared the President’s Daily Brief for three presidents. He is co-founder of Veteran Intelligence Professionals for Sanity.




Assange to Face 5-Day Extradition Hearing in February 2020

Decision on Assange’s fate will not come for at least another eight months.

By Joe Lauria
Special to Consortium News

A decision on whether Julian Assange will be extradited to the United States to face charges under the Espionage Act will not come until the end of February 2020 at the earliest, the Westminster Magistrate’s Court ruled on Friday.

Tristan Kirk, the London Evening Standard‘s courts reporter, tweeted:

Kirk said he argued his way into the court room after he and the rest of the media had been barred by a security guard from entering the public hearing that lasted under 30 minutes.

Reuters reported:

As Ben Brandon, the lawyer representing the United States, ran through a summary of the accusations against him including that he had cracked a U.S. defence network password, Assange said: “I didn’t break any password whatsoever.”

The WikiLeaks publisher told the court that “175 years of my life is effectively at stake,” according to Sky News. He addressed the judge as Lady Arbuthnot, saying: “WikiLeaks is nothing but a publisher.”  Mark Summers, a lawyer representing Assange, told the court there are a “multiplicity of profound issues” with the extradition case, Sky News reported. 

“We say it represents an outrageous and full-frontal assault on journalistic rights,” he said.

Assange spoke to the court via video link from Belmarsh prison where he is serving a 50-week sentence for skipping bail on a Swedish sexual assault investigation.  Assange sought refuge in the Ecuadorian embassy in London in June 2012 to avoid onward extradition from Sweden to the United States. He was arrested on April 11 when Ecuador allowed British police to enter the embassy.

The British home secretary signed the extradition request from the U.S. on Wednesday. Sajiid Javid said Thursday: “I want to see justice done at all times and we’ve got a legitimate extradition request, so I’ve signed it, but the final decision is now with the courts.”

Both sides in the extradition battle will now have about eight months to prepare their case.

Assange’s Belmarsh sentence will end at the end of March 2020, meaning he will remain in the maximum security prison until the extradition hearing. 




RAY McGOVERN: DOJ Bloodhounds on the Scent of John Brennan

With Justice Department investigators’ noses to the ground, it should be just a matter of time before they identify Brennan as fabricator-in-chief of the Russiagate story, says Ray McGovern.

By Ray McGovern
Special to Consortium News

The New York Times Thursday morning has bad news for one of its favorite anonymous sources, former CIA Director John Brennan.

The Times reports that the Justice Department plans to interview senior CIA officers to focus on the allegation that Russian President Vladimir Putin ordered Russian intelligence to intervene in the 2016 election to help Donald J. Trump. DOJ investigators will be looking for evidence to support that remarkable claim that Special Counsel Robert Mueller’s final report failed to establish.

Despite the collusion conspiracy theory having been put to rest, many Americans, including members of Congress, right and left, continue to accept the evidence-impoverished, media-cum-“former-intelligence-officer” meme that the Kremlin interfered massively in the 2016 presidential election.

One cannot escape the analogy with the fraudulent evidence of weapons of mass destruction in Iraq. As in 2002 and 2003, when the mania for the invasion of Iraq mounted, Establishment media have simply regurgitated what intelligence sources like Brennan told them about Russia-gate.

No one batted an eye when Brennan told a House committee in May 2017, “I don’t do evidence.”

Leak Not Hack

As we Veteran Intelligence Professionals for Sanity have warned numerous times over the past two plus years, there is no reliable forensic evidence to support the story that Russia hacked into the DNC. Moreover, in a piece I wrote in May, “Orwellian Cloud Hovers Over Russia-gate,” I again noted that accumulating forensic evidence from metadata clearly points to an inside DNC job — a leak, not a hack, by Russia or anyone else.

So Brennan and his partners, FBI Director James Comey and National Intelligence Director James Clapper were making stuff up and feeding thin but explosive gruel to the hungry stenographers that pass today for Russiagate obsessed journalists.

Is the Jig Up?

With Justice Department investigators’ noses to the ground, it should be just a matter of time before they identify Brennan conclusively as fabricator-in-chief of the Russiagate story. Evidence, real evidence in this case, abounds, since the Brennan-Comey-Clapper gang of three were sure Hillary Clinton would become president. Consequently, they did not perform due diligence to hide their tracks.

Worse still, intelligence analysts tend to hang onto instructions and terms of reference handed down to them by people like Brennan and his top lieutenants. It will not be difficult for CIA analysts to come up with documents to support the excuse: “Brennan made me do it.”

The Times article today betrays some sympathy and worry over what may be in store for Brennan, one of its favorite sons and (anonymous) sources, as well as for those he suborned into making up stuff about the Russians.

The DOJ inquiry, says the Times, “has provoked anxiety in the ranks of the C.I.A., according to former officials. Senior agency officials have questioned why the C.I.A.’s analytical work should be subjected to a federal prosecutor’s scrutiny.” Attorney General William Barr is overseeing the review but has assigned the U.S. attorney in Connecticut, John Durham, to conduct it.

No Holds Barred

Barr is approaching this challenge with a resoluteness and a calm candor rarely seen in Washington — particularly when it comes to challenging those who run the intelligence agencies.

The big question, once again, is whether President Donald Trump will follow his customary practice of reining in subordinates at the last minute, lest they cross the vindictive and still powerful members of the Deep State.

Happily, at least for those interested in the truth, some of the authors of the rump, misnomered “Intelligence Community Assessment” commissioned by Obama, orchestrated by Brennan-Clapper-Comey, and published on January 6, 2017 will now be interviewed. The ICA is the document still widely cited as showing that the “entire intelligence community agreed” on the Russia-gate story, but this is far from the case. As Clapper has admitted, that “assessment” was drafted by “handpicked analysts” from just three of the 17 intelligence agencies — CIA, FBI, and NSA.

U.S. Attorney Durham would do well to also check with analysts in agencies — like the Defense Intelligence Agency and State Department Intelligence, as to why they believe they were excluded. The ICA on Russian interference is as inferior an example of intelligence analysis as I have ever seen. Since virtually all of the hoi aristoi and the media swear by it, I did an assessment of the Assessment on its second anniversary. I wrote:

“Under a media drumbeat of anti-Russian hysteria, credulous Americans were led to believe that Donald Trump owed his election victory to the president of Russia, whose “influence campaign” according to theTimesquoting the intelligence report,helped “President-elect Trump’s election chances when possible by discrediting Secretary Clinton.”

Hard evidence supporting the media and political rhetoric has been as elusive as proof of weapons of mass destruction in Iraq in 2002-2003. This time, though, an alarming increase in the possibility of war with nuclear-armed Russia has ensued — whether by design, hubris, or rank stupidity. The possible consequences for the world are even more dire than 16 years of war and destruction in the Middle East. …

The Defense Intelligence Agency should have been included, particularly since it has considerable expertise on the G.R.U., the Russian military intelligence agency, which has been blamed for Russian hacking of the DNC emails. But DIA, too, has an independent streak and, in fact, is capable of reaching judgments Clapper would reject as anathema. Just one year before Clapper decided to do the rump “Intelligence Community Assessment,” DIA had formally blessed the following heterodox idea in its “December 2015 National Security Strategy”:

“The Kremlin is convinced the United States is laying the groundwork for regime change in Russia, a conviction further reinforced by the events in Ukraine. Moscow views the United States as the critical driver behind the crisis in Ukraine and believes that the overthrow of former Ukrainian President Yanukovych is the latest move in a long-established pattern of U.S.-orchestrated regime change efforts.”

Any further questions as to why the Defense Intelligence Agency was kept away from the ICA drafting table?

Ray McGovern works with Tell the Word, a publishing arm of the ecumenical Church of the Saviour in inner-city Washington. During his 27 years as a CIA analyst, he was Chief of the Soviet Foreign Policy Branch, and preparer/briefer of the President’s Daily Brief. He is co-founder of Veteran Intelligence Professionals for Sanity (VIPS).




Swedish Court Injects Some Sense into the Assange Case

Eight years late, the request for a European Arrest Warrant for Assange was finally put to the appropriate authority, writes Craig Murray.

By Craig Murray
CraigMurray.org.uk

When, eight years late, the European Arrest Warrant request for Julian Assange was finally put before a Swedish court, the court refused to issue it.

Readers of this blog are amongst the very few people who have had the chance to learn that the original European Arrest Warrant for Julian Assange from Sweden was not issued by any court but by a prosecutor; that this was upheld in the U.K. Supreme Court despite the court’s open acknowledgement that this was not what the U.K. Parliament had intended by the phrase that the warrant must come from a “judicial authority;” and that the law had been changed immediately thereafter so it could not be done again.

Consequently, in seeking a new European Arrest Warrant against Assange, Swedish prosecutors had finally, eight years on, to ask a court for the warrant. And the court looked at the case and declined, saying that the move would be disproportionate. It therefore remains the case that there is no Swedish extradition warrant for Assange. This is a desperate disappointment to the false left in the U.K., the Blairites and their ilk, who desperately want Assange to be a rapist in order to avoid the moral decision about prosecuting him for publishing truths about the neocon illegal wars that they support.

Weak Evidence

The problem is that the evidence of sexual crimes was always extremely, extremely weak to anybody who took the trouble to examine it — which is why the same false left were desperate to convince us that it was wrong to examine the evidence as the “victim” must always be believed, a strange abandonment of the entire principle of justice.

In the lesser charge, which fell through the statute of limitations, Anna Ardin claimed that during the act of sex Julian Assange had deliberately torn the condom with his fingers. But the torn condom she produced to police had none of Assange’s DNA on it, a physical impossibility.

In the remaining charge of “rape, less serious,” Sofie Wilen alleges the following. She had consensual sex with Assange in her bed. She then dozed and was “half asleep” when Assange started having sex with her again. He states that she was fully awake and responsive through a series of sexual acts.

I have looked Julian Assange in the eye when he explained what happened, and believed him. I have not had the same opportunity with Sofie Wilen, and quite possibly she is equally honest in her account of events and I would believe her too. They had both been drinking. The difficulty is that this scenario is incapable of proof. A private sexual act that everybody agrees started and was consummated as fully consensual, but then continues or resumes as one partner is drifting off or has drifted off, but the other partner says they were still awake, absent a recording is quite simply incapable of proof either way.

Seeking DNA Test, Not Rape Charge 

What is beyond doubt true is that Sofie Wilen had no thought she had been raped when she met police to ask if Assange could be compelled to take a DNA test — a visit to the police which had been encouraged by Anna Ardin (she of the faked condom evidence). Ardin was present during Wilen’s police interview.

At the police station, Wilen texted a friend at 14.25 “did not want to put any charges against JA but the police wanted to get a grip on him.”

At 17.26 she texted that she was “shocked when they arrested JA because I only wanted him to take a test.”

The next evening at 22.22 she texted “it was the police who fabricated the charges.”

Despite this, Wilen’s lawyer is adamant that she now does wish a prosecution to proceed. The problem is that question of proof. As the court has seen, there is none.

Willing to Be Interviewed

Julian Assange was interviewed in detail in Sweden before he was given permission to leave the country when the case was dropped by the chief prosecutor of Stockholm. When it was reopened by another prosecutor (possibly in Sweden), who issued the European Arrest Warrant, Assange at all times during his detention in the U.K. declared his willingness to be interviewed again, and eventually was interviewed over two days in the Ecuadorian Embassy in November 2016.

Julian Assange has never tried to avoid the investigation in Sweden. His concern was always that the whole thing was cooked up as a ruse to get him into custody for extradition to the U.S.A. Events have proved this to be true.

To return to Sweden, the remaining question at issue is a very simple one. Was Sofie Wilen awake and responsive when sex was resumed, as Julian Assange insists, or was she “half-asleep” as Sofie says? Exhaustive questioning both in Stockholm and London has failed to produce an answer which could convince a court to issue a warrant. Prosecutor Eva-Marie Persson is now going to apply to interview Assange again. I genuinely cannot see what she feels this is going to achieve, unless she hopes to harass an ill man into a false confession.

The Swedish courts have finally injected a note of realism. The evidence Assange broke any law in Sweden has never stacked up. At some point, this poisonous farrago of prosecutorial grandstanding and Swedish sexual politics needs to be brought to a close.

Craig Murray is an author, broadcaster and human rights activist. He was British ambassador to Uzbekistan from August 2002 to October 2004 and rector of the University of Dundee from 2007 to 2010. This article is from his website.




‘No One is Above the Law’ (Except the U.S.A.)

Julian Assange’s Australian lawyer and a European human rights attorney argue that the conduct of the U.S. regarding the WikiLeaks publisher blatantly disregards numerous laws.

By Greg Barns and Lisanne Adam
Special to Consortium News

On 11 April 2019, UK Prime Minister Theresa May informed that nation’s Parliament about the arrest of Julian Assange and thanked the Ecuadorian government and Metropolitan Police for their actions and collaboration contributing to the WikiLeaks publisher’s arrest and subsequent detention. In her statement, May said: “This goes to show that, in the United Kingdom, no one is above the Law.” By making this statement, May was referring to Assange’s actions relating to breaching bail and his arrest that day by the UK authorities, after Ecuador withdrew Assange’s asylum claim.

However, May’s statement can be construed in a broader sense, in it that refers to the Law as a whole, including the fundamental rights that the UK must honor in accordance with international human rights standards. May’s statement is accurate and true, no government or person should be above these laws.

Keeping May’s statement in mind, think about the fact that in her own backyard, on May 20 we had the extraordinary spectacle of U.S. law enforcement agencies being invited by Ecuador to walk into its Embassy and steal Assange’s belongings. Four days later, the U.S. loaded up the indictment it had filed against Assange by adding seventeen additional U.S. charges including; espionage, criminal conspiracy and computer hacking.

It was to be expected that Assange’s prosecution, extradition requests and other legal matters would be extraordinary. However, the cavalier disregard by the U.S., aided and abetted by Ecuador and the UK in the past month, is setting a truly dangerous precedent.

Globally, there are fundamental rights, embedded in the 1945 United Nations Charter and the 1954 International Covenant on Civil and Political Rights (ICCPR) and designed to protect individuals against mistreatment by governments and non-state actors. Fundamental rights are there to protect any individual irrespective of who they are, or where they are.

Careful consideration was given to the formulation of these fundamental rights in international treaties and, these days, these important rights have been enshrined in international and domestic legislation. The overarching and universal principle of fairness is what underpins respect for these rights. Hence, fundamental fairness has been enshrined in domestic-and international laws in the UK, the U.S. and other nations which purport to subscribe to the rule of Law.

Stripped of His Rights

But in Assange’s case, fairness is an endangered species if not, completely extinct.

The Ecuadorian government completely ignored Assange’s fundamental rights in facilitating the confiscation of Assange’s personal property. Personal property including confidential documents, his legal defense strategy, medical records and electronic equipment. Assange’s seized property was subsequently handed over to the U.S.

The disregard for fairness shown by the U.S. towards Assange means materials, unlawfully seized by prosecutors and law enforcement, will be used to inform the case against him. If Assange is extradited to the U.S. and faces a trial there, there will be no respect to procedural equality of arms as Assange will have no reasonable opportunity of presenting his case under conditions that do not disadvantage him as against other parties to the proceedings.

The shredding of fairness in Assange’s case must be resisted and stopped. If the UK decides to proceed with his extradition to the U.S., Assange faces life imprisonment based upon proceedings that have been tainted with fundamental breaches of fairness and prosecutorial misconduct. A fair trial in the U.S. is simply not possible.

Moreover, the conduct relating to the proceedings against Assange are anything but legal; it is a political witch-hunt without merit. The gathering of evidence in such an unlawful way indicates the desperation of the U.S. prosecutor to build a case against Assange. A case that has nothing to do with the Law, Assange is supposed to serve as an example; a precedent and a warning that no whistle-blower, organization or person should disclose information about U.S. intelligence, no matter how gruesome this information may be.

Worse still, the high human cost of this biased and tunnel vision persecution is ignored by the UK, the U.S. and let’s face it the country of which he is a citizen, Australia. Assange is suffering prolonged exposure to psychological torture and his condition is worsening by the day. Professor Nils Melzer, the UN’s special rapporteur on torture, reported last week that Assange has no prospect of a fair trial in the U.S.

One can wonder, why do fundamental rights exist if we allow certain countries to ignore and breach them when it suits them? Theresa May was right: no one should be above the Law. Let’s be clear: ‘No one’ should include the U.S. ’ government.

Greg Barns is a barrister in Australia and Adviser to the Australian Assange campaign and Lisanne Adam is a consultant on EU human rights law based in Melbourne Australia.




After Assange’s Espionage Act Indictment, Police Move Against More Journalists for Publishing Classified Material

Less than two months after the arrest of journalist Julian Assange, and two weeks after his indictment under the Espionage Act, emboldened governments have sent the police after journalists who’ve challenged the state.  Joe Lauria reports.

By Joe Lauria
in Sydney, Australia

Special to Consortium News

Following the arrest and Espionage Act indictment of Julian Assange a number of police actions against journalists for publishing classified information and other journalistic activity  has heightened fears among mainstream journalists  that they could be next.  

Police in Sydney, Australia on Wednesday raided the offices of the taxpayer-funded Australian Broadcasting Corporation, copying thousands of files related to a 2017 ABC broadcast that revealed allegations of war crimes by Australian special forces in Afghanistan.  

Three Australian Federal Police officers and three police technicians entered ABC’s Sydney headquarters with a search warrant that named two ABC investigative journalists and the network’s news director.  The police demanded to look through the journalists’ emails, ABC reported.

David Anderson, the ABC managing director, said it was “highly unusual for the national broadcaster to be raided in this way”.

“This is a serious development and raises legitimate concerns over freedom of the press and proper public scrutiny of national security and Defence matters,” he said. “The ABC stands by its journalists, will protect its sources and continue to report without fear or favour on national security and intelligence issues when there is a clear public interest.”  John Lyons, ABC’s executive editor and head of investigative journalism, tweeted:

Lyons said the federal police were going through dozens of emails with the authority to delete or even change their content. Protagonist Winston Smith’s job in Orwell’s 1984 was to rewrite news archives.

“I recall writing ages ago about Australian legislation giving the Australian govt power to ‘add, alter or delete’ targeted material,” Australian psychologist and social critic Lissa Johnson told Consortium News. “The msm barely batted an eyelid at the time. Now that power is being wielded against the ABC.”

Gaven Morris, ABC’s news director, said: “Journalism is not a crime.”

“Our journalists do a really difficult job, I’m proud of what they do, they do it in the public’s interest,” he said. “I’d say to all the journalists at the ABC and all the journalists across Australia, don’t be afraid of the job you do.”

Marcus Strom, president of Australia’s journalists’ union, the Media, Entertainment and Arts Alliance, called the raid  “disturbing.”

“It should chill the public as well as journalists,” he said.”These raids are all about intimidating journalists and intimidating whistle blowers so that mistakes made by the Government, including potential crimes, by the military, remain covered up, remain secret, and don’t fall in to the public domain.”

Political Editor’s Home Raided

On Tuesday morning in an unrelated case, Canberra police entered the home of the political editor of the Murdoch-owned Daily Telegraph “Journalist Annika Smethurst opened her front door to find seven AFP officers waiting for her. All because she dared to do her job and keep the nation informed on what its government was doing,” the Telegraph said in an editorial.

Ironically, the Smethhurst article in April 2018 that raised the ire of the government “revealed the departments of Defence and Home Affairs were considering new powers allowing Australians to be monitored for the first time,” The  Telegraph reported. “Her original article included images of top secret letters between Home Affairs Secretary Mike Pezzullo and Defence Secretary Greg Moriarty.”

French Journalists Arrested 

Assange was arrested in London on April 11. Police in Paris arrested two journalists who were covering Yellow Vest protests on April 20.  One of the journalists, Alexis Kraland, said he was taken into custody after refusing to be searched and to turn his camera over to police at Gare du Nord train station. The largest journalism union in France demanded an explanation from police.

SF Police Raid Journalists’ Home

And on May 10 in San Francisco, police using sledgehammers to break down the door, raided the home of Bryan Carmody, a freelance journalist, to get him, while handcuffed, to reveal the source who leaked him a police report into the sudden death of the city’s elected public defender. Police took away computers, cameras, mobile phones and notes.

San Francisco Police Chief William Scott said initially that Carmody had “crossed a line” with his report.  After a public outcry and demands that Scott resign, the police chief issued an apology.

Fears Justified

While there is no direct connection between Assange’s arrest and indictment for possessing and disseminating classified material and these subsequent police actions, a Western taboo on arresting or prosecuting the press for its work has clearly been weakened. One must ask why Australian police acted on a broadcast produced in 2017 and an article published in April only after Assange’s arrest and prosecution.

Within hours of Assange’s Espionage Act indictment on May 23, major publications and media figures, who have harshly treated Assange, began lining up in his defense out of self-interested concern that the government could apply the same prosecutions to them for also routinely publishing classified information.

Their fears are beginning to be realized.

 

Joe Lauria is editor-in-chief of Consortium News and a former correspondent for The Wall Street Journal, Boston GlobeSunday Times of London and numerous other newspapers. He can be reached at joelauria@consortiumnews.com and followed on Twitter @unjoe .

 




More Good News for Assange: Swedish Court Blocks Extradition; US Says No Vault 7 Indictment

A Swedish court has blocked prosecutors’ request for a European Arrest Warrant forcing an interview with Assange in London, and Politico reports there will be no indictment of Assange on Vault 7.

By Joe Lauria
Special to Consortium News

Imprisoned WikiLeaks publisher Julian Assange scored two legal victories on Monday when a Swedish court refused prosecutors’ request to have Assange arrested and extradited from Britain to Sweden, while the U.S. Justice Dept. said it would not prosecute Assange for the publication of the CIA Vault 7 files, according to a report in Politico. 

The Uppsala District Court rejected a request for a European Arrest Warrant for Assange based on a reopened 2010 investigation into sexual assault allegations that has been twice dropped before. Without the warrant Assange cannot be extradited to Sweden to be questioned. 

Eva-Marie Persson, Sweden’s deputy director of public prosecutions, who last month announced the reopening of the probe and Sweden’s extradition request to Britain, said she is deciding whether to appeal the ruling. In the meantime, Persson said she’d seek a European Investigation Order, which would allow her to travel to Belmarsh prison in London and interview Assange there.

“I think it is a big victory for Julian Assange, the first one in a long time, and a well-deserved one,” said Assange’s Swedish lawyer, Per Samuelson. “It is also a victory for Sweden, who upheld the rule of law and it’s a defeat for the prosecutors, who were once again punished for not having conducted the case in a correct way. It’s a step in the right direction.”

Pressure on Britain

The pressure is now fully back on Britain alone to decide whether to extradite Assange to the United States to face espionage charges for the conduct of investigative journalism, as the U.S. indictment itself describes

The sexual assault allegations against Assange, which followed months after the Iraq War Logs and Afghan War diaries were released,  were first dismissed in 2010 by then Swedish chief prosecutor Eva Finne, just a day after the allegations were made on Aug. 20, 2010.

An arrest warrant was canceled on Aug. 21.   Finne said that day: “I don’t think there is reason to suspect that he has committed rape.”

Assange then left Sweden for Britain with Sweden’s permission in September.  When he arrived in Britain an international arrest warrant was issued for him on Nov. 18, 2010.

Assange turned himself in on Dec. 7 and was released on bail. He fought Sweden’s extradition requests after Sweden refused to give his lawyers an assurance he would not be then extradited to the U.S., where he now faces extradition and  prosecution under the Espionage Act.

When his final appeal was lost, Assange asked for and received political asylum in Ecuador’s London embassy where Assange had lived from June 2012 to April 11 this year. That day Ecuador lifted his asylum and allowed British police to enter the embassy to arrest him.  

Under intense British pressure, Sweden’s prosecutor Marianne Ny declined to drop the case for a second time and refused for years to travel to London to interview Assange, at Assange’s request. However, six days after the Nov. 8, 2016 U.S. presidential election, an election Assange was accused of interfering with through his journalistic work, Ny relented and questioned Assange in the embassy. Six months later, for the second time, the investigation was indeed dropped.

Assange is serving a 50-week sentence at Belmarsh prison in London for skipping bail when he entered the embassy.  

Meanwhile in the United States, the online news site Politico reported that the Justice Department has decided not to charge Assange in the release of Vault 7, which exposed some of the CIA’s most closely held secret spying methods. Politico cited “a U.S. official and two other people familiar with the case.”

Politico said the decision surprised former U.S. officials and national security “experts” given the anger it aroused in the CIA, whose director at the time of the release, Mike Pompeo, then labelled WikiLeaks a “non-state hostile intelligence service.”  

The DOJ may have decided it had just run out of time to bring the new indictment since it has a June 12 deadline to present to Britain all the charges it wants to bring against Assange before the UK can decide on the U.S. extradition request.

“There is a comfort level within the national security establishment of where the charges ended up,” the U.S. national security official told Politico.

Joe Lauria is editor-in-chief of Consortium News and a former correspondent for The Wall Street Journal, Boston GlobeSunday Times of London and numerous other newspapers. He can be reached at joelauria@consortiumnews.com and followed on Twitter @unjoe .

 




For Tech Giants, a Cautionary Tale From 19th Century Railroads on the Limits of Competition

The tech monopoly giants have a lot to learn from the railroad monopolies of the 19th Century during the First Gilded Age, writes Richard White. 

Southern Pacific steam engine No. 1364 in 1891. (Wikimedia Commons)

By Richard White 
Stanford University

Late 19th-century Americans loved railroads, which seemed to eradicate time and space, moving goods and people more cheaply and more conveniently than ever before. And they feared railroads because in most of the country it was impossible to do business without them.

Businesses, and the republic itself, seemed to be at the mercy of the monopoly power of railroad corporations. American farmers, businessmen and consumers thought of competition as a way to ensure fairness in the marketplace. But with no real competitors over many routes, railroads could charge different rates to different customers. This power to decide economic winners and losers threatened not only individual businesses but also the conditions that sustained the republic.

An 1882 political cartoon portrays the railroad industry as a monopolistic octopus, with its tentacles controlling many businesses. (G. Frederick Keller) 
That may sound familiar. As a historian of that first Gilded Age, I see parallels between the power of the railroads and today’s internet giants like Verizon and Comcast. The current regulators – the Federal Communications Commission’s Republican majority – and many of its critics both embrace a solution that 19th-century Americans tried and dismissed: market competition.

Monopolies as Natural and Efficient

In the 1880s, the most sophisticated railroad managers and some economists argued that railroads were “natural monopolies,” the inevitable consequence of an industry that required huge investments in rights of way over land, constructing railways, and building train engines and rail cars.

Competition was expensive and wasteful. In 1886 the Atchison, Topeka and Santa Fe Railway and the Missouri Pacific Railroad both built railroad tracks heading west from the Great Bend of the Arkansas River in Kansas to Greeley County on the western border, roughly 200 miles away.

The tracks ran parallel to each other, about two miles apart. Charles Francis Adams, president of the Union Pacific Railroad, called this redundancy the “maddest specimen of railroad construction of which” he had ever heard. And then his own railroad built new tracks into western Kansas, too.

After ruinous bouts of competition like this, rival railroad companies would agree to cooperate, pooling the business in certain areas and setting common rates. These agreements effectively established monopolies, even if more than one company was involved.

Monopolies as Unfairly Subsidized

Anti-monopolists who opposed the railroads’ power argued that monopolies originated not as a result of efficient investment strategies, but rather from special privileges afforded by the government. Railroads had the ability to condemn land to build their routes. They got subsidies of land, loans, bonds and other financial aid from federal, state and local governments. Their political contributions and favors secured them supporters in legislatures, Congress and the courts.

As stronger railroads bought up weaker companies and divided up markets with the remaining competitors, the dangers of monopoly became more and more apparent. Railroad companies made decisions on innovation based on the effects on their bottom line, not societal values.

For instance, the death toll was enormous: In 1893, 1,567 trainmen died and 18,877 were injured on the rails. Congress enacted the first national railroad safety legislation that year because the companies had insisted it was too expensive to put automatic braking systems and couplers on freight trains.

But a monopoly’s great economic and societal danger was its ability to decide who succeeded in business and who failed. For example, in 1883 the Northern Pacific Railway raised the rates it charged O.A. Dodge’s Idaho lumber company. The new rates left Dodge unable to compete with the rival Montana Improvement Company, reputedly owned by Northern Pacific executives and investors. Dodge knew the game was up. All he could do was ask if they wanted to buy his company.

For anti-monopolists, Dodge’s dilemma went to the heart of the issue. Monopolies were intrinsically wrong because they unfairly influenced businesses’ likelihood of success or failure. In an 1886 report on the railroad industry, the U.S. Senate Select Committee on Interstate Commerce agreed, stating clearly that the “great desideratum is to secure equality.”

Turning to Regulators for Help

To achieve equality, anti-monopolists wanted more government regulation and enforcement. By the late 1880s, some railroad executives were starting to agree. Their efforts at cooperation had failed because railroads treated each other no better than they did their customers. As Charles Francis Adams put it, his own industry’s “method of doing business is founded upon lying, cheating, and stealing: all bad things.”

The consensus was that the railroads needed the federal government to enforce the rules, bringing greater efficiency and ultimately lower rates. But Congress ran into a problem: If an even, competitive playing field depended on regulation, the marketplace wasn’t truly open or free.

The solution was no clearer then than it is now. The technologies of railroads inherently gave large operators advantages of efficiency and profitability. Large customers also got benefits: John D. Rockefeller of Standard Oil, for example, could guarantee large shipments and provide his own tank cars – so he got special rates and rebates. Newcomers and small enterprises were left out.

Some reformers suggested accepting monopolies, so long as their rates were carefully regulated. But the calculations were complex: Charges by the mile ignored the fact that most costs came not from transport but rather from loading, unloading and transferring freight. And even the best bookkeepers had a hard time unraveling railway accounts.

Managing Power

The simplest solution, advanced by the Populist party and others, was the most difficult politically: nationalize the railroad routes. Turning them into a publicly owned network, like today’s interstate highway system, would give the government the responsibility to create clear, fair rules for private companies wishing to use them. But profitable railroads opposed it tooth and nail, and skeptical reformers did not want the government to buy derelict and unprofitable railroads.

The current controversy about the monopolistic power of internet service providers echoes those concerns from the first Gilded Age. As anti-monopolists did in the 19th century, advocates of an open internet argue that regulation will advance competition by creating a level playing field for all comers, big and small, resulting in more innovation and better products. (There was even a radical, if short-lived, proposal to nationalize high-speed wireless service.)

However, no proposed regulations for an open internet address the existing power of either the service providers or the “Big Five” internet giants: Apple, Amazon, Facebook, Google and Microsoft. Like Standard Oil, they have the power to wring enormous advantages from the internet service providers, to the detriment of smaller competitors.

The most important element of the debate – both then and now – is not the particular regulations that are or are not enacted. What’s crucial is the wider concerns about the effects on society. The Gilded Age’s anti-monopolists had political and moral concerns, not economic ones. They believed, as many in the U.S. still do, that a democracy’s economy should be judged not only – nor even primarily – by its financial output. Rather, success is how well it sustains the ideals, values and engaged citizenship on which free societies depend.

When monopoly threatens something as fundamental as the free circulation of information and the equal access of citizens to technologies central to their daily life, the issues are no longer economic.The Conversation

Richard White, is Professor of American History, at Stanford University

This article is republished from The Conversation under a Creative Commons license. Read the original article.




Reclaiming Billionaires’ Wealth

Looking beyond classical economic models, Vince Taylor sees vast, private fortunes that belong mostly to society at large.

By Vince Taylor
Znet

Hundreds of commentators have warned that extreme concentration of wealth threatens democracy and social stability. Not a day goes by without a new article with details on the unprecedented growth in income inequality and its dire consequences.

Something is missing, though. No one is proposing measures that would take away wealth from the 600 or so U.S. billionaires and the 20,000 families with hundreds of millions. Why not? Apparently, there is some tacit agreement that even the very richest earned their money, and therefore it would be immoral and un-American to take it away. Certainly, the wealthy promote this idea, but why is it so universally accepted?

One suggestion is because our economic models don’t provide any alternative explanation for wealth accumulation. The classic models view output as a function of capital, labor and technical change. There is no room in these models for gigantic, undeserved bonanzas going to the few. It follows logically from these models that those who acquire vast fortunes must have exceptional gifts. They deserve their fortunes.

When one looks beyond the classical models, one sees clearly that those who have accumulated large fortunes did not in any sense earn them. They captured for themselves wealth that mostly belongs to society at large. There is a strong, logical case for the government to tax all huge fortunes down to the level that society considers acceptable.

Potential Wealth and Surpluses

What the standard models miss is that in the real world, major economic disturbances, innovations, new resources and new markets all create huge amounts of potential wealth where the costs of transforming the potential into actual wealth are far less than the wealth produced. When these wealth surpluses are captured by individuals rather than spread widely across the population, large fortunes are created.

To clarify these concepts, consider a concrete example: an oil fieldthat contains oil worth a billion dollars on the open market. The oil field is not yet discovered. Its potential wealth is a billion dollars. Suppose the costs of exploration, drilling, and all other costs of delivering all the oil to market (actualization costs) were $400 million. The wealth surplus gained from actualizing the wealth of the oil field would be $600 million — one billion dollars (potential wealth) minus $400 million (actualization costs).

Who should get the wealth surplus? The oil field developer has no special moral or economic claim to it. The actualization costs of $400 million, which include a market rate of return on capital, fully compensate the developer for all costs incurred.  If the oil field were part of a “commons,” it would belong to all members of the commons. Government would appropriately collect the wealth surplus and use it for the good of all members of the common.

Under the legal rules of capitalism as currently practiced, all the wealth surplus from the oil field goes to private interests (the developers and financiers). None goes to the public. This is neither equitable nor socially desirable.

As will be shown, the concepts used to explain the oil field example apply equally to potential wealth that is not tangible, for example, unrealized wealth opportunities in finance and technology.

There is no room in standard economic models for fortunes derived from wealth surpluses. In a world of perfect competition, where prices reflect the costs of production, there are no large wealth surpluses to be captured by an individual. The real world is very different. History shows that in times when huge wealth surpluses come into being, large portions of these often have been captured by a few individuals.

The Gilded Age

The Gilded Age of the 1800s exemplifies the appropriation of wealth surpluses by a few individuals — the railroad, steel, and oil monopolists, to cite the most prominent examples. They didn’t create the railroad, steel and oil refining technologies. These grew out of a large body of evolving knowledge developed by many scientists, engineers, and individuals over many years. The monopolists simply got “legal” titles to the wealth that arose from the new technologies. If these particular owners hadn’t gained these legal titles, others would have. In a more perfect society, the steel and railroad and oil refining technologies, would have been considered social assets, belonging to all of the people. The wealth that arose from their development would have been broadly distributed, not flowing disproportionately to a few.

As an example, look more closely at railroads. The introduction of railroad technology transformed transportation. Prior to the railroads, all transportation not by water was by animal-drawn wagons, which were slow and uncomfortable for people and slow and expensive for goods. Suddenly, it became possible to move goods and people incredibly faster and cheaper. This was an economic discontinuity even greater than those created by the automobile and the internet. The wealth surpluses created by the introduction of railroad technology were enormous, unprecedented in magnitude.

The huge wealth surpluses created by railroads attracted every major entrepreneur and speculator of the era. Railroads were the perfect vehicle for accumulating fortunes. Not only did the first railroads create large wealth surpluses, they were natural and completely unregulated monopolies. Owners could charge whatever the traffic would bear, allowing them to appropriate much of the wealth surpluses that the railroads actualized.

According to standard economic models, the introduction of railroads should have increased the wealth of Midwest farmers. Suddenly, the cost of transporting their wheat and corn to market would have fallen precipitously; so their income should have risen accordingly. This did not happen. The railroads set their rates at levels far above the true costs, keeping the farmers in poverty and capturing the created wealth surpluses for themselves.

The wealth surpluses appropriated by the railroad owners made them incredibly wealthy. In a listing of the seventy-five richest people in recorded history, twelve acquired their wealth primarily through ownership of U.S. railroads.

Is anyone willing to argue that the railroad millionaires (billionaires in today’s dollars) created the wealth they accumulated? They didn’t create the technology. They didn’t do the physical labor or produce the materials needed to build the railroads. All that they did was to acquire legal title to the railroads, ownership that allowed them to transfer the wealth surpluses to themselves.

The Robber Barons of the Gilded Age were ruthless businessmen, single-minded in their pursuit of riches, without legal or moral scruples, and gifted with a political and legal environment where greed and survival of the fittest were guiding principles. In a real and concrete sense, they stole most of their fortunes from the general public by establishing monopolies that allowed them to set unfairly high prices.

Grabbing Surplus Wealth

When major innovative technologies emerge, they bring with them major wealth surpluses. What appears to be a repeating pattern is that early pioneers use their quickly generated wealth to establish market dominance, if not complete monopoly, by buying up or crushing competitors. They then are able to capture a large share of the wealth surplus for themselves. When there is a surge in wealth surpluses such as occurred in the late 1800s, a further dynamic seems to be that the courts and Congress come to reflect the interests of the rich and powerful. 

In the United States in recent decades, most fortunes have arisen from micro-chip technology, globalization of trade, innovations in financial markets and, most recently, by capturing a large share of the wealth surpluses arising from the internet.

As was true in earlier eras, the recent entrepreneurs who have reaped large fortunes from wealth surpluses have no economic or inherent right to retain them.

The Internet Age

The internet provides the most compelling and significant example of fortunes arising from private appropriation of wealth surpluses. For the sake of brevity, only the internet example is examined here is detail, but examining fortunes derived from financial innovations and trade globalization would lead to similar conclusions.

From an economic viewpoint, the emergence of the internet can be compared to the discovery of a hugely valuable, virgin, unowned land. The sudden ability to transmit vast volumes of information virtually instantaneously at almost no cost created a myriad of hugely valuable wealth opportunities. The costs of transforming these potential wealth opportunities into actualized wealth have been relatively small. Huge amounts of wealth surplus have been created. Individuals, investors, and corporations, have taken title to much of the wealth surplus, creating a new generation of ultra rich.

There is no valid argument that the individuals who gained fortunes from the internet have a “right” to keep them because they “created” the wealth they gained. That internet billionaires didn’t do so is obvious when considering what would have happened, if Mark Zuckerberg and his backers hadn’t developed Facebook. Absent Zuckerberg, does anyone doubt that something essentially identical would have come into existence at about the same time? Others would be the billionaires, but the functionality would be essentially the same. It is the capitalist system of ownership that has allowed private individuals and corporations to capture the vast surplus wealth of the internet.

Why Internet Wealth Should Belong to Society

It needs to be emphasized again that wealth surplus is the excess of actualized wealth over all the actualization costs (which include a market return on invested capital). Actualization costs fully and fairly compensate the actualizers for their services. Wealth surpluses are windfalls that arise from external factors, not from the labor, capital, and other resources used to transform potential into actual wealth. 

Arguably, the potential wealth of the internet should be treated as residing in a commons. No individual or company created more than a minuscule fraction of the complex web of knowledge and equipment that constitute the internet. No individual or single company developed de novo the technology of the internet. The internet is a consequence of fifty years of inventions, innovations, development and marketing carried out by innumerable individuals; private and publicly funded colleges and research institutes; and corporations.

The activities that brought into being and sustain the internet were and are inextricably interwoven into the web of our society. Society as a whole has a just claim to all of the wealth surpluses arising from the internet.

Other Fortunes However Acquired

We have only looked at the internet in detail, but the same reasoning and findings apply to major fortunes however acquired. Those that gained huge fortunes did not create their wealth. External conditions created huge wealth surpluses, and through luck, skill, or influence, certain individuals were able to transfer a major share to themselves.

Upon close examination, all wealth-generating activities are seen to be dependent on society’s infrastructure, and thus society has a just claim on all wealth surpluses privately appropriated.

Rate of Return

The rate of return on capital equals the amount of annual profit as a percentage of the amount of invested capital. In a perfectly operating, competitive free-market economy, the returns to capital wherever invested will tend to cluster around a “normal market rate of return,” adjusted for risks of individual investments. Shortages and market dislocations may raise rates of returns, but the rises will be temporary.

In contrast, investments that capture substantial wealth surplus will have rates of return on capital that are substantially greater than the normal market rate of return.

Consider Google and Facebook, two quintessential internet companies. Google’s profit in 2017 was $34.9 billion, compared to total capital invested in property and equipment of $42.3 billion, yielding a one-year rate of return of 81percent. Facebook did even better. Its 2018 profit was $24.3 billion compared to invested capital of $13.7 billion, a one-year rate of return of 177 percent.

There is room for disagreement on what constitutes a normal rate of return on capital, but there is no question that Google and Facebook had rates of return that are multiples of a normal rate of return. Arguably a normal rate of return is around 8 percent. This is the average return on investments for the very wealthy, but using a higher value would not change the conclusion that Google and Facebook are capturing huge amounts of wealth surplus.

Rates of return on capital combine the financial benefits of wealth surpluses and monopoly pricing. Google and Facebook have captured such large amounts of wealth surplus because they are unregulated monopolies. Both bought up or crushed all significant competitors.

A Progressive Tax on Excessive Profits

Rates of return on capital far above normal are concrete proof a company is transferring to itself wealth that rightfully belongs to others.  

There is a strong case for a progressive tax on such excess profits. It could start at zero on profits providing a normal rate of return. Marginal rates would rise along with rates of return. For rates of return unarguably above a normal return, a marginal tax rate of 90 percent or even higher is socially and economically justified.

Actual implementation of a tax on such excess profits would need to address numerous practical issues, many of which are common to any tax on company profits, but some of which are specific to this type of tax. One specific issue is setting a value for a “normal” rate of return. Various approaches will yield different values. Those affected will weigh in heavily, and the value chosen will be arrived at through negotiation. Still, history provides some guide. During World War I and World War II the U.S. and England imposed excess profits taxes based on the rate of return on investment. The values chosen were in the range of 6 percent to 10 percent, with 7 percent and 8 percent being most common.

Some other issues are: How are capital investments to be valued? How to allow for depreciation, and obsolescence? How to deal with fluctuations in profits?

While complex and challenging, issues related to implementing an excess profits tax seem no more so than those related to the existing taxation of corporate profits.

Taxation of Wealth

Because those with large fortunes did not create the wealth they hold, they have no inalienable right to keep it. When individuals gain so much wealth that their economic and political power threatens democracy or harms the general wellbeing, society is fully justified in taking away that wealth. Although an excess profits tax and a sharply progressive tax on all sources of income would greatly reduce individuals’ ability to join the ranks of the ultrawealthy, these would not affect existing fortunes.

Individual wealth in the billions of dollars (and arguably, considerably lower levels) creates a threat to social stability and to the continuation of our democracy. A way to reduce socially excessive wealth holdings is through a tax on such holdings that exceeds the return on that wealth. High wealth holders earn an average annual return of about 8 percent on their wealth; thus the tax rate on excessive wealth holdings would need to exceed 8 percent.  It would need to be significantly greater than 8 percent on extreme levels of wealth in order to bring them down to an acceptable level in a reasonable period of time.

Progressive taxes for the purpose of reducing excessive wealth holdings would be revolutionary and vigorously resisted by the wealthy. Because they address a critical need, they deserve careful consideration.

Vince Taylor is an economist, entrepreneur, and activist. He is currently focused on developing public support for taxation to reduce holdings of wealth that threaten democracy. An earlier version of this article appeared on Znet.




Tide of Public Opinion is Turning in Assange’s Favor

Corporate media & some politicos who opposed Assange after the 2016 election have radically changed their tune, favorably influencing public opinion after the Espionage Act indictment of the WikiLeak‘s founder, reports Joe Lauria.

By Joe Lauria
Special to Consortium News
The indictment of Julian Assange under the Espionage Act has profoundly affected press coverage of the WikiLeaks founder, with much of the media turning suddenly and decisively in his favor after  years of vilifying him.

The sharp change has also come from some politicians, and significantly, from two Justice Department prosecutors who went public to express their dissent about using the Espionage Act to indict Assange.

To the extent that public opinion matters, the sea-change in coverage could have an effect on the British or Swedish governments’ decision to extradite Assange to the United States to face the charges.

Used to Be a Russian Agent

Since the 2016 U.S. presidential election establishment media, fueled by the Mueller probe, has essentially branded Assange a Russian agent who worked to undermine American democracy.

Focusing on his personality rather than his work, the media mostly cheered his arrest by British police on April 11 after his political asylum was illegally revoked by Ecuador in its London embassy.

Assange’s initial indictment for conspiracy to intrude into a government computer was portrayed by corporate media as the work of a “hacker” and not a journalist, who doesn’t merit First Amendment protection.

But the superseding indictment under the Espionage Act last Thursday has changed all that. 

Rather than criminal activity, the indictment actually describes routine journalistic work, such as encouraging sources to turn over sensitive information and hiding a source’s identity.  

Since the Trump administration has crossed the red line criminalizing  what establishment journalists do all the time, establishment journalists have come full-square against the indictment and behind Assange.

Leading liberal outlets, who until Wednesday openly despised  Assange, began on Thursday to make 180 degree turns in their editorials, commentaries and news reports.

An editorial in The New York Times called the indictment “a marked escalation in the effort to prosecute Mr. Assange, one that could have a chilling effect on American journalism as it has been practiced for generations. It is aimed straight at the heart of the First Amendment.”

“The new charges focus on receiving and publishing classified material from a government source. That is something journalists do all the time. … This is what the First Amendment is designed to protect: the ability of publishers to provide the public with the truth.”

The Times praised Assange’s work:

“Mr. Assange shared much of the material at issue with The New York Times and other news organizations. The resulting stories demonstrated why the protections afforded the press have served the American public so well; they shed important light on the American war effort in Iraq, revealing how the United States turned a blind eye to the torture of prisoners by Iraqi forces and how extensively Iran had meddled in the conflict.”

‘Profoundly Disturbing’

Former Guardian editor Alan Rusbridger wrote:

” I find the Trump administration’s use of the Espionage Act against him profoundly disturbing. … Whatever Assange got up to in 2010-11, it was not espionage. … Imagine the precedent if the Trump administration gets away with this. Israel and India have extensive nuclear weapons programmes – each protected by ferocious domestic official secrets acts. Think of the outcry if the Netanyahu or Modi governments attempted to extradite a British or US journalist to face life in jail for writing true things about their nuclear arsenals. …

Assange is accused of trying to persuade a source to disclose yet more secret information. Most reporters would do the same. Then he is charged with behaviour that, on the face of it, looks like a reporter seeking to help a source protect her identity. If that’s indeed what Assange was doing, good for him.” 

The New Yorker‘s Masha Gessen, wrote: “The use of the Espionage Act to prosecute Assange is an attack on the First Amendment. … It stands to reason that an Administration that considers the press an ‘enemy of the people’ would launch this attack. In attacking the media, it is attacking the public.’ 

MSNBC’s Rachel Maddow, the Democratic Party booster, who probably had more influence than any commentator in drumming up the Russiagate conspiracy and Assange’s alleged role in it, on Thursday launched into an astounding defense of the imprisoned publisher.  On her program she said:

“The Justice Department today, the Trump administration today, just put every journalistic institution in this country on Julian Assange’s side of the ledger. On his side of the fight. Which, I know, is unimaginable. But that is because the government is now trying to assert this brand new right to criminally prosecute people for publishing secret stuff, and newspapers and magazines and investigative journalists and all sorts of different entities publish secret stuff all the time. That is the bread and butter of what we do.”

Nick Miller, writing in The Sydney Morning Herald, said:

“On the face of it this indictment covers a lot of practices that are standard to investigative journalism: appealing for information, encouraging a source to provide documents that are not publicly available, reporting classified information you believe is in the public interest and the public has a right to know. …It may be that prosecutors can argue Assange was not acting as a journalist. But they would, by doing so, make the line separating journalism from espionage wafer-thin, and much more dangerous to approach, even in the public interest.”

Politicians Too

The indictment for espionage also caused a number of politicians to back Assange. Two U.S. candidates for president and another senator spoke out in his favor. Sen. Bernie Sanders (I-VT) tweeted:

Sen. Elizabeth Warren (D-MA) said in a statement: “Trump should not be using this case as a pretext to wage war on the First Amendment and go after the free press who hold the powerful accountable everyday.”

“This is not about Julian Assange,” Sen. Ron Wyden (D-OR) said in a statement. “This is about the use of the Espionage Act to charge a recipient and publisher of classified information. I am extremely concerned about the precedent this may set and potential dangers to the work of journalists and the First Amendment.”

In Assange’s native Australia, Sen. Rex Patrick said: 

“The United States government’s decision to charge Australian citizen and publisher Julian Assange with new espionage offences relating to receiving and publishing classified US government information raises a grave threat to freedom of the press worldwide, and must be viewed so by the Australian government,” he said.

“The Australian government should be active not only in providing consular support to Mr Assange, who is an Australian citizen, but also outspoken in making representations to the British government against allowing Mr Assange to be extradited to the United States on charges that so obviously constitute a grave threat to press freedom.”

Bob Carr, a former Australian foreign minister, said:  “While it appears capital punishment does not apply in this case, the US, by seeking extradition for offences that might attract a 175 years imprisonment, could be testing the tolerance of its allies and partners. I think this changes the game almost as much as if capital punishment were the penalty.”

Carr said Australian Foreign Minister Marise Payne, “needs to protect herself from the charge that she’s failed in her duty to protect the life of an Australian citizen.

“Therefore I would imagine that Dfat (the Department of Foreign Affairs and Trade) will provide her with talking points to conversations with her British, Swedish and indeed American counterparts.

“Not to do so would leave the minister exposed to withering criticism that they did not take all appropriate action that might have made a difference, mainly before the British court makes a decision.”  

Extradition Made Harder

The Trump administration appears to have gone too far in its Espionage Act indictment, eliciting not only media pushback, but perhaps complicating its extradition case.  The British home secretary may now not want to been seen sending a suspect to a country that has clearly criminalized journalism.  

Miller, in the Herald, wrote:

“By bringing espionage into the picture the US have also made their extradition work much, much harder. Assange’s lawyers may try to argue that he is being extradited for his political opinions (which is not allowed), or for conduct that would not be a crime in the UK (ditto). This last is a very interesting question. The UK’s Official Secrets Act may be even harder to stretch to cover Assange’s actions then the US Espionage Act.”

The Intercept reported:

“The uproar could make it easier for Assange’s lawyers in the U.K. — where he is currently serving a 50-week jail term for violating bail — to argue that he is wanted in the United States primarily for embarrassing the Pentagon and State Department, by publishing true information obtained from a whistleblower, making the charges against him political in nature, rather than criminal.”

It is not clear why the U.S. released its superseding indictment when it did. It had until a June 12 deadline to do so. The U.S. government also had the option of a loophole in its extradition treaty with Britain, providing for a waiver to the “doctrine of speciality.”

That would have allowed the U.S. to ask Britain to waive the provision that the UK would have to know all the charges against a suspect before an extradition decision would be made, thereby not permitting the U.S. to add more charges once Assange was on U.S. soil. One possibility is that the U.S. asked Britain for the waiver and it was refused. 

Personal Attacks Continue

The liberal news outlets who are now finally defending Assange’s activity because the indictment opens themselves to legal jeopardy could not, however, refrain from taking potshots at him.

The Times, for instance, admitted its role in cooperating with WikiLeaks, and thus its potential criminal liability, given the new circumstances.  But the paper tried to wriggle out of it by calling Assange “a source” rather than “a partner.”  

If Assange were merely a “source” he would not deserve the protection the Times implies he now merits as a journalist when they compared his activity to “something journalists do all the time.”  Either he is a source or a reporter. If he’s a reporter then the Times is  just using another reporter’s work but treating him as a source. If he’s only a source then he does not merit First Amendment protection.  

Maddow said: 

“Despite anyone’s feelings about this spectacularly unsympathetic character at the center of this international drama, you are going to see every journalistic institution in this country, every First Amendment supporter in this country, left, right and center, swallow their feelings about this particular human and denounce what the Trump administration is trying to do here. Because it would fundamentally change the United States of America.”

And  Gessen added:

“Assange is a fundamentally unappealing protagonist. He keeps terrible political company. He is, apparently, terrible company himself. In his writing and interviews, he comes across as power-crazed and manipulative. Most important, when he published leaked classified documents, he shared information that exposed people to danger. He is the perfect target precisely because he is unsympathetic. One has to hold one’s nose while defending Assange—and yet one must defend Assange.”  

Senator Warren also found it necessary to blast Assange. She said, “Assange is a bad actor who has harmed U.S. national security — and he should be held accountable.” 

Unmasking Informants

Rusbridger said: “We fell out, as most people eventually do with Assange. I found him mercurial, untrustworthy and dislikable: he wasn’t keen on me, either.” Significantly, Rusbridger pointed out that, “All the collaborating editors disapproved of him releasing unredacted material from the Manning trove in September 2011.”  

First, Assange’s revelation of the names of sources and informants in its publications forms a major part of the superseding indictment.  But the indictment does not spell out any law that Assange violated by doing this. It is illegal in the U.S. to unmask a covert intelligence agent, as happened in the Valerie Plame case, but not to reveal a source or informant.

Second, there is no evidence that anyone was ever harmed by the uncovering of these names.

Third, most importantly as far as Rusbridger is concerned, is that he completely omits his newspapers’ role in the affair. Rusbridger was the Guardian editor when two of his reporters, David Leigh and Luke Harding, in their February 2011 book WikiLeaks: Inside Julian Assange’s War on Secrecy, published a password to unpublished and un-redacted WikiLeaks files containing the names of informants in files that only intelligence agencies and governments could decrypt. That led Assange to publish the files with their names in September 2011 so that the sources could seek safety. 

The personal attacks on Assange and what kind of person he is has never been relevant. What is relevant is that he’s a journalist who has been persecuted and now indicted for practicing journalism, a fact that mainstream journalists have finally woken up to.

Joe Lauria is editor-in-chief of Consortium News and a former correspondent for The Wall Street Journal, Boston GlobeSunday Times of London and numerous other newspapers. He can be reached at joelauria@consortiumnews.com and followed on Twitter @unjoe .