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At Least Six Millionaires to Take Senate Oaths Today
Tuesday, 06 January 2015 16:23

McCormick writes: "There's no shortage of statistics to show that Congress no longer reflects the demographics of the nation it represents. That's especially true when it comes to personal finances."

Joni Ernst appears at an election night rally in West Des Moines, Iowa, Nov. 4, 2014. (photo: Daniel Acker/Bloomberg)
Joni Ernst appears at an election night rally in West Des Moines, Iowa, November 4, 2014. (photo: Daniel Acker/Bloomberg)


At Least Six Millionaires to Take Senate Oaths Today

By John McCormick, Bloomberg

06 January 15

 

here's no shortage of statistics to show that Congress no longer reflects the demographics of the nation it represents. That's especially true when it comes to personal finances. Of the 13 newly elected members of the Senate to be sworn in Tuesday, at least six are millionaires. That's a conservative estimate and the proportion is almost certainly higher.

Their arrival in the Senate comes as the wealth gap between the nation's top 20 percent of earners—including many members of Congress—and every other income group in America has reached its widest point in at least three decades, according to a Pew Research Center study released in December. Pew also found in a report released in October that the issue of income inequality is of growing importance to the American public. Forty-six percent of respondents said it's a “very big problem,” while 32 percent said its a “moderately” big problem. 

While that might suggest Congress should make the issue a priority, underlying figures show why the gap between the public and its elected class on the need for action may actually grow: Only 19 percent of Republicans see income inequality as a major problem, compared with 59 percent of Democrats and 49 percent of independents. All but one of the incoming freshman senators are Republicans. 

To identify the wealthiest new senators, Bloomberg Politics reviewed the annual disclosures of financial assets and liabilities that are required of federal candidates. Those forms offer only broad ranges for valuation, making it impossible to determine exact figures.

To rank the new senators, Bloomberg Politics used the same methodology employed by the Center for Responsive Politics, a nonpartisan group in Washington that tracks money in politics. That method uses the midpoint of the range of net worth reported to produce these rankings.

  1. David Perdue

    Perdue, a former CEO of Dollar General Corp. and Reebok, funded much of his own Senate campaign against a crowded Republican primary field and Democrat Michelle Nunn. His assets fall between $16.9 million and $47.1 million, with a net worth midpoint of $31.6 million. His stock portfolio is broad and deep, ranging from Apple Inc., to Xylem Inc., a water technology company. The only liability Perdue lists is a $250,000 to $500,000 margin loan with Goldman Sachs Wealth Management. That suggests his multimillion-dollar home on Georgia's Sea Island is paid off. Going to Washington will mean a hit to Perdue's income stream. His $174,000 salary as a senator will only put a small dent in the $716,081 in compensation he'll lose from stepping down from board of director positions he's had with four companies, including Alliant Energy Corp. in Madison, Wis.

  2. Steve Daines

    Daines, who is moving from the House to the Senate, earned a chemical engineering degree from Montana State. He's had a varied career, including working for his father's construction business and Procter & Gamble. His assets fall somewhere in the range from $7.5 million to $33 million. By far, his biggest asset is the Genesis business park in Bozeman that he valued at between $5 million and $25 million. The midpoint of his net worth range is $18.7 million.

  3. Mike Rounds

    Rounds was South Dakota's governor for eight years and the majority leader of the state Senate for six years before that. He made his money in insurance and real estate. The midpoint of his net worth range is about half of Perdue's, but he still does quite well, with assets of between $5.7 million and $27 million. That kind of money goes a long way anywhere, including in South Dakota, which is roughly average for cost of living when compared to the 49 other states. Rounds lists just one liability worth more than $10,000: a line of credit for between $100,000 and $250,000 with First National Bank in Pierre, S.D.

  4. Thom Tillis

    Tillis, a former partner at business consultant PricewaterhouseCoopers, lists assets worth between $3.8 million and $14.2 million. His home and a life insurance policy are his two biggest assets, with each valued between $1 million and $5 million. The outgoing speaker of the North Carolina House has a bit more debt than his fellow senators-elect in the top wealth tier. Tillis has a mortgage and home equity line of credit—both at 2.75 percent interest—that combined are between $350,000 and $750,000.

  5. Gary Peters

    Peters, the only Democrat in the newly elected crop of senators, is a three-term House member. He's also been a financial adviser, lieutenant commander in the Naval Reserve and state lottery commissioner. He holds an expansive portfolio of stocks, bonds and certificates of deposit that includes Dow Chemical Co., AT&T Inc. and Bank of America Corp. The mid-point for his range of net worth is almost $3.2 million. Peters lists two mortgages totaling between $110,000 and $265,000 as his only liabilities. One is for a home equity loan and the other is for a “D.C. Co-Op.”

  6. Dan Sullivan

    Sullivan, Alaska's former state attorney general and natural resources commissioner, tends more toward investing in mutual funds than individual stocks. His only liability is a mortgage valued between $50,000 and $100,000. The mid-point of his net worth is almost $2.7 million.

  7. Shelley Moore Capito

    Capito, a congresswoman who will be the first female senator from West Virginia, has a net worth midpoint of $1.4 million. Her most valuable assets are shares in four 401(k) mutual funds, shares in Citigroup and a “residential rental” in Lexington, Va. Those assets are all each listed as worth between $100,000 and $250,000. She also lists an Edgewood Country Club membership valued at $1,000 to $15,000. Capito has nine liabilities, including a home equity loan of $50,000 to $100,000 and a mortgage on a Washington residence of $250,000 to $500,000. Her total liabilities fall somewhere between $870,000 and $1.8 million. That means she could technically have a negative net worth of about $500,000, if her assets fell at the low end of the range and her liabilities fell at the high end. Only one other incoming Senate freshman, Daines, lists a higher maximum liability total.

  8. Bill Cassidy

    Cassidy, an associate professor of medicine at Louisiana State University who joined the U.S. House in 2009, has a net worth midpoint of almost $1.4 million. Virtually all of his assets are in retirement accounts. He lists two mortgages totaling between $350,000 and $750,000 as his only liabilities.

  9. Ben Sasse

    Sasse, the outgoing president at Midland University and a former assistant secretary of health and human services under President George W. Bush, has a midpoint net worth just shy of $1.1 million. He lists mostly mutual funds, inside and outside of retirement accounts, and a rental property worth between $500,000 and $1 million in suburban Washington as his main assets. His only liability is a mortgage from an Omaha bank valued at between $250,000 and $500,000.

  10. Joni Ernst

    Ernst, a state lawmaker and lieutenant colonel in the Iowa National Guard, has a net worth midpoint of about $470,000. She lists mostly mutual funds inside and outside of retirement accounts as her main assets. The only liability Ernst lists is a $15,000 to $50,000 loan for a “camper” from a bank in Red Oak, Iowa.

  11. Tom Cotton

    Cotton, who will be moving from the House to the Senate, has a net worth between $115,000 and $300,000, with a midpoint of about $207,000. His disclosure report is just three pages long and shows his main financial asset is $100,000 to $250,000 in a checking account.

  12. James Lankford

    Lankford is a two-term congressman from Oklahoma who also is a Baptist minister. He hasn't gotten rich doing either, apparently. His net worth falls between negative $167,000 and positive $280,000, with a midpoint of about $56,000. Virtually all of his financial assets are in retirement accounts and he lists two liabilities, a mortgage for $100,000 to $250,000 and a car loan for $15,000 to $50,000.

  13. Cory Gardner

    Gardner, a former Colorado congressman and son of a tractor salesman, may very well have more debts than assets. His assets fall in a range from $94,000 to $410,000, while his liabilities are between $180,000 and $450,000. His debts include $15,000 to $50,000 for a federal student loan, as well as $165,000 to $400,000 in mortgages for a residence and condominium.

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Last Updated on Wednesday, 07 January 2015 16:15
 
New Senate GOP Chairmen Aim to Undo Obama's Policies
Saturday, 03 January 2015 16:20

Excerpt: "Republican senators poised to lead major committees when the GOP takes charge are intent on pushing back many of President Barack Obama's policies, setting up potential showdowns over environmental rules, financial regulations and national security."

Republican senator Pat Roberts, who has criticized efforts to make school lunches healthier as being too costly. 
(photo: J. Scott Applewhite/AP)
Republican senator Pat Roberts, who has criticized efforts to make school lunches healthier as being too costly (photo: J. Scott Applewhite/AP)


New Senate GOP Chairmen Aim to Undo Obama's Policies

By Stephen Ohlemacher and Donna Cassata, Associated Press

03 January 15

 

epublican senators poised to lead major committees when the GOP takes charge are intent on pushing back many of President Barack Obama's policies, setting up potential showdowns over environmental rules, financial regulations and national security.

The all-GOP Congress — Republicans also have a commanding majority in the House — gives the powerful Senate committee heads a newfound opportunity to steer legislation and help shape the national debate.

With Republicans winning control of the Senate in the November election, all the committees will get new leaders, though all have been around for years.

The heads of the 13 major committees and Veterans' Affairs are some of the most senior members of the Senate. Three are octogenarians and four are in their late 70s. Only one new leader will be a woman; Alaska Sen. Lisa Murkowski is in line to take over the Energy and Natural Resources Committee.

A look at the powerful senators and their issues:

AGRICULTURE

Kansas' Pat Roberts, 78, will consider renewal of child nutrition programs that have been pushed by the White House and expire next year. Roberts has criticized efforts to make school lunches healthier, calling for studies on the costs of the program and economic impact on schools.

Roberts has been a recent dissenter on the normally bipartisan panel, voting against the five-year farm bill that Congress passed in May. Roberts supported the bill's boost in crop insurance for farmers but said other subsidies needed more changes. He called the entire bill "a look in the rear-view mirror."

Like his Republican counterparts in the House, Roberts has championed cutting back spending for food stamps, saying the farm bill's estimated cut of $8 billion over 10 years was insufficient.

Roberts held the gavel of the House Agriculture Committee 20 years ago and during his tenure he helped write the 1996 farm bill.

APPROPRIATIONS

The gavel of the powerful panel responsible for drafting approximately one-third of the federal budget will return to Mississippi's Thad Cochran, who turned 77 in December and was just re-elected to a seventh term.

Cochran was in charge during the last two years of the previous GOP majority and was a driving force behind more than $100 billion in funding to help Gulf Coast states recover from Hurricane Katrina. He was also a big practitioner of earmarks, those home-state goodies such as highway projects, economic development grants and university research dollars.

GOP leaders have banned earmarking, but Cochran is sure to back Navy shipbuilding efforts. Ingalls Shipbuilding in Pascagoula, which makes a variety of Navy ships such as modern destroyers, is Mississippi's largest private employer.

Republicans are expected to use the 12 spending bills to challenge Obama on policy issues, such as health care, financial services, immigration and the environment.

ARMED SERVICES

Leading the committee has been a long-sought goal for 78-year-old John McCain of Arizona, the former Navy pilot, Vietnam prisoner of war and two-time presidential candidate who lost to Obama in 2008.

McCain, who has hinted he might seek a sixth term in 2016, stands as one of Obama's fiercest critics on national security, casting the administration as weak and ineffective in countering threats overseas. He has repeatedly called for arming and training moderate Syrian rebels and favors more U.S. forces in Iraq to battle Islamic State militants.

McCain has been critical of Pentagon contracting. Increased examination of defense manufacturers and acquisition policy is certain. The Pentagon can largely forget about scrapping the A-10 Warthog aircraft, which McCain heavily favors, and can expect close scrutiny of the costly F-35 fighter jet.

BANKING, HOUSING AND URBAN AFFAIRS

The wily Richard Shelby, 80, makes a return tour as head of the committee. High on his agenda will be changes to the financial overhaul law enacted in response to the 2008 crisis, known as Dodd-Frank. The 2010 law that brought stricter regulation of banks and Wall Street has been a burr in the side of Republican lawmakers, and the GOP-controlled House has passed numerous bills to unwind it.

Sen. Mitch McConnell, R-Ky., the next majority leader, put it plainly at his day-after-the-election news conference: "The Banking Committee is certainly going to look at Dodd-Frank." The big banks, he said, "are doing just fine under Dodd-Frank. The community bankers are struggling."

Besides bank rules, the committee under the Alabama senator also may focus on curbing the authority of the Consumer Protection Financial Bureau over auto lenders and credit card companies. The bureau was created by the financial law.

Also likely to get committee attention is legislation to reshape the housing finance system and wind down mortgage giants Fannie Mae and Freddie Mac.

Shelby succeeded as head of the panel from 2003 to 2007 in blocking bank regulation proposals.

BUDGET

In a surprise, Wyoming's Mike Enzi will become chairman of the Senate Budget Committee after Jeff Sessions of Alabama stepped aside. Sessions had been the top Republican on the committee the past four years.

Enzi, 70, said he will work to craft a budget "that cuts spending, targets executive overreach and reduces the size of government."

He will be called upon to craft a budget framework that could serve as a template for follow-up legislation to repeal Obama's health care law and, perhaps, tackle expensive benefit programs such as Medicaid and food stamps.

COMMERCE, SCIENCE AND TRANSPORTATION

South Dakota's John Thune, 53, faces a heavy workload — reauthorization of the Federal Aviation Administration and Amtrak, net neutrality and transportation.

The committee will have to address the auto safety portions of the highway bill in the aftermath of General Motors faulty ignition switch recalls, now linked to more than two dozen deaths, and the Takata air bag recalls, also linked to several deaths. Proposals to toughen federal oversight of the auto industry are likely. Some lawmakers have called for eliminating the $35 million cap on how much the government can fine automakers in such cases.

ENERGY AND NATURAL RESOURCES

An energy policy expert from an energy-producing state, the 57-year-old Murkowski wants to unlock as much of America's energy as safely possible.

Murkowski has argued for opening up the Arctic National Wildlife Refuge for drilling, as well as Alaska's offshore, and has opposed regulations that block energy production. She believes EPA regulations to curb coal-fired power plant pollution to deal with global warming will threaten the reliability and raise the costs of electricity.

She supports exporting U.S. natural gas and has led the charge on pressuring the administration to lift restrictions on exports of crude oil. She has backed the immediate approval of the Keystone XL oil pipeline, which McConnell has said will be first on the new agenda.

Murkowski, unlike others in the GOP, believes global warming is happening and that Alaskans are already experiencing the effects of rising water temperatures and thinning ice.

ENVIRONMENT AND PUBLIC WORKS

The likely ascent of Oklahoma's James Inhofe, 79, represents one of the biggest sea changes on a Senate committee with Republicans in charge.

Inhofe, one of Congress' most vocal deniers of the scientific consensus of climate change, wrote in a 2012 book that global warming was "a hoax." He will replace Californian Barbara Boxer, who introduced climate change legislation in 2009 and was an ally of the environmental community and Obama.

Inhofe, by contrast, is a thorn in the side of the Environmental Protection Agency and has argued that more regulation will kill the economy and jobs. Inhofe has called on the EPA to abandon stricter rules on refinery air pollution and to reject their own scientists' recommendation to tighten a standard for the main ingredient in smog. Inhofe is likely to boost oversight of the agency and try to thwart its agenda at a time when Obama wants to shore up his climate legacy.

FINANCE

The 2010 health care law is in the GOP's crosshairs, and Utah's Orrin Hatch, 80, is likely to use his position to take the first step at chipping away at it.

Hatch has called the law's tax on medical devices "stupid" and is determined to roll it back. He is likely to gain some Democratic support for the effort.

Hatch could be a free-trade ally for Obama if the president pushes more trade agreements.

Overhauling the nation's complicated tax laws also is a priority for Hatch. But it's a heavy lift.

Administration officials say Obama will offer new specifics in the coming year on how he would like to reshape corporate taxes, which now feature the highest rate in the industrialized world. But bridging the divide between Republicans and Democrats on major tax legislation would require a level of bipartisanship that has largely been absent during Obama's first six years as president.

Hatch has worked with Democrats in the past; his friendship with the late Sen. Edward Kennedy of Massachusetts is legendary. Hatch will need to work with Democrats again if he is to advance an overhaul of the tax code.

FOREIGN RELATIONS

Tennessee's Bob Corker, 62, has criticized Obama's foreign policy as tepid in dealing with Russia, Libya and Syria. Like several other Republicans on the committee, Corker has deep reservations about the administration's negotiations with Iran over its nuclear program. Some Republicans have said the GOP will push new penalties this month that target Tehran.

Secretary of State John Kerry has asked Congress for new war powers in the fight against the Islamic State group. Corker has raised the possibility that he could work with the administration on the issue.

Obama's ambassadorial picks and other nominees would face a rough outing before the committee.

HEALTH, EDUCATION, LABOR AND PENSIONS

Tennessee's Lamar Alexander, 74, is a former education secretary under President George H.W. Bush, governor and president of the University of Tennessee.

A lawyer by trade, he helped form a corporate childcare company in the private sector. Alexander said he wants to fix President George W. Bush's No Child Left Behind education law that's been due to be renewed since 2007 and update the Higher Education Act.

He's called the health care law a "historic mistake" and supports repealing it. He's also said modernizing the National Institutes of Health and Food and Drug Administration is a necessity, and he is seeking to examine the FDA's process for drug and device review. On workers' issues, he's sought to turn the National Labor Relations Board into what he says is more of an umpire role.

JUDICIARY

A farmer, not an attorney, Iowa's Charles Grassley, 81, has been on the Judiciary Committee since his 1980 election to the Senate. But this will be his first stint as its chairman.

In that post, many expect him to continue his long-running interest in protecting whistle-blowers who reveal details of alleged fraud by government contractors and others. He's also expected to continue oversight of programs like the Justice Department's bungled "Fast and Furious" operation, under which federal agents lost control of guns they were tracing to Mexican drug lords. Many also expect him to work on legislation easing federal regulations on businesses.

Grassley opposed last year's Senate-approved bipartisan immigration bill, arguing that it needed to do more to secure the country's borders before granting legal status to people in the U.S. illegally. He's also pressed for more information about the National Security Agency's ability to gather information on Americans, though he's cautioned that the agency must be able to protect national security.

A decade ago, Grassley spent time as chairman of the Senate Finance Committee and played a role in winning approval of President George W. Bush's 2001 tax cuts and the 2003 addition of prescription drug benefits to Medicare.

HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

Wisconsin's Ron Johnson, 59, has been a tough questioner of administration officials about the deadly 2012 attack on the U.S. diplomatic outpost in Benghazi, Libya. The question will be whether the panel's Permanent Subcommittee on Investigation opens another Benghazi inquiry in Congress as well as other reviews of the Democratic administration.

Under the leadership of Delaware Democrat Tom Carper, the committee focused primarily on the internal workings of the sprawling Homeland Security Department, including low morale ratings from rank-and-file employees and contracting issues.

Johnson has focused on those rankings in the past and led an investigation of complaints from whistle-blowers about the department's former acting inspector general. His report, co-authored with Missouri Democrat Claire McCaskill, prompted DHS Secretary Jeh Johnson to suspend the former top internal investigator.

While the committee has addressed immigration issues in the past, senators on this panel have not taken as prominent a role as their counterparts on the Senate Judiciary Committee. In the coming months, however, any administrative changes put in place by Obama are almost certain to be reviewed.

VETERANS' AFFAIRS:

Georgia's Johnny Isakson, 70, has stressed mental health needs of veterans and voted in favor a bill to provide two-year funding for veterans' benefits, so veterans would continue to receive benefits even in a government shutdown.

Aides say Isakson's priorities as chairman would include oversight of the new Veterans Access, Choice and Accountability Act of 2014, which was approved this past summer in response to a scandal over long wait times for veterans seeking health care and falsification of records to cover up delays.

Isakson strongly supports a provision in the law that makes it easier for veterans to seek Department of Veterans Affairs-paid care from local doctors. Bringing competition into the VA health care system will improve services, he says. Isakson also said the new law provides an opportunity for the VA to assess the quality of it leadership and management, and said underperforming executives and managers should be fired.

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Last Updated on Saturday, 03 January 2015 17:25
 
Israel Threatens to Prosecute Palestinian Leaders if They Join International Criminal Court
Saturday, 03 January 2015 16:13

Fisher-Ilan writes: "An Israeli official says Palestinian leaders 'ought to fear legal steps' in the U.S. and elsewhere in the wake of their bid to join the ICC."

Palestinian president Mahmoud Abbas (C) attends a Christmas mass at the Church of the Nativity in Bethlehem on December 25, 2014. (photo: AFP)
Palestinian president Mahmoud Abbas (C) attends a Christmas mass at the Church of the Nativity in Bethlehem on December 25, 2014. (photo: AFP)


Israel Threatens to Prosecute Palestinian Leaders if They Join International Criminal Court

By Allyn Fisher-Ilan, Haaretz

03 January 15

 

srael is looking at ways to prosecute senior Palestinians for war crimes in the United States and elsewhere in response to Palestinian steps to join t the International Criminal Court, an Israeli official said on Saturday.

The Palestinians delivered to UN headquarters in New York on Friday documents on joining the Rome Statute of the International Criminal Court and other global treaties, saying they hoped to achieve "justice for all the victims that have been killed by Israel, the occupying power."

The Hague-based court looks at cases of severe war crimes and crimes against humanity such as genocide.

The Israeli official said Palestinian leaders "ought to fear legal steps" after their decision to sign onto the Rome Statute.

"Israel is weighing the possibilities for large-scale prosecution in the United States and elsewhere" of Palestinian President Mahmoud Abbas and other senior Palestinians, the official said.

Israel would probably press these cases via non-governmental groups and pro-Israel legal organizations capable of filing lawsuits abroad, a second Israeli official said, explaining how the mechanism might work.

Israel sees the heads of the Palestinian Authority in the occupied West Bank as collaborators with Hamas militant Islamists in Gaza because of a unity deal they forged in April, the first official said.

Prime Minister Benjamin Netanyahu has previously warned that unilateral moves by the Palestinian Authority at the United Nations would expose its leaders to prosecution over support for Hamas, viewed by Israel as a terrorist organization.

"(Hamas) ... commits war crimes, shooting at civilians from civilian populated areas," the official said, alluding to a war in Gaza last summer in which more than 2,100 Palestinians and more than 70 Israelis died.

Palestinians seek a state in Gaza, the West Bank and East Jerusalem - lands Israel captured in the 1967 Middle East War.

Momentum to recognize a Palestinian state has built since Abbas succeeded in a bid for de facto recognition of Palestinian statehood at the UN General Assembly in 2012, which made Palestinians eligible to join the ICC.

The United States, Israel's main ally, supports an eventual independent Palestinian state, but has argued against unilateral moves like Friday's, saying they could damage the peace process.

Washington sends about $400 million in economic support aid to the Palestinians every year. Under U.S. law, that aid would be cut off if the Palestinians used membership in the ICC to press claims against Israel.

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Last Updated on Saturday, 03 January 2015 18:06
 
Despite Experts' Doubts, Obama Sanctions North
Saturday, 03 January 2015 16:18

Hall writes: "The Obama administration imposed sanctions Friday on three entities and 10 individuals tied to the North Korean government in what it called the first step in a proportional response to the devastating cyberattack on Sony Pictures Entertainment."

U.S. President Barack Obama, center left, uses binoculars as he looks at North Korea from Observation Post Ouellette in the Demilitarized Zone (DMZ) in the inter-Korean truce village of Panmunjom, South Korea. (photo: Pool/Yonhap News)
U.S. President Barack Obama, center left, uses binoculars as he looks at North Korea from Observation Post Ouellette in the Demilitarized Zone (DMZ) in the inter-Korean truce village of Panmunjom, South Korea. (photo: Pool/Yonhap News)


Despite Experts' Doubts, Obama Sanctions North

By Kevin G. Hall, McClatchy

03 January 15

 

he Obama administration imposed sanctions Friday on three entities and 10 individuals tied to the North Korean government in what it called the first step in a proportional response to the devastating cyberattack on Sony Pictures Entertainment.

In a lengthy call with reporters, several senior administration officials said the entities and people sanctioned under Friday’s executive order by President Barack Obama weren’t directly involved with the Sony data breach.

But they confirmed that the sanctions, designed to isolate North Korea from the global financial system, are the first issued in direct response to a cyberattack on a U.S. corporation, and they said North Korea was to blame.

The executive order signed by Obama cites, among other things such as North Korea’s nuclear program and human-rights abuses, that nation’s “destructive, coercive cyber-related actions during November and December 2014.”

The administration alleges that North Korea or people acting on its behalf hacked into Sony’s emails and private data to avenge the planned Christmas Day release of “ The Interview,” a movie comedy about a plot to kill North Korean dictator Kim Jong Un.

Sony initially canceled the film’s release after major theater chains balked at showing it following threats to theatergoers, a step Obama criticized at a news conference before starting his holiday vacation in Hawaii two weeks ago. Sony then allowed a smaller number of theaters to show the film and released it widely on the Internet and through on-demand services.

The Obama administration’s assertion of a North Korean connection to the Sony hack remains controversial in some quarters, with some cybersecurity experts saying there’s compelling evidence that the break-in was the work of a disgruntled former Sony employee. An official of Norse Corp., a San Mateo, Calif., cybersecurity firm, told the Los Angeles Times this week that it believed the hack was an inside job.

Another security expert, Marc Rogers, summed up the sentiment with a widely circulated Dec. 21 blog post in which he concluded that “we don’t have any solid evidence that implicates North Korea, while at the same time we don’t have enough evidence to rule North Korea out.”

On Friday, Jeffrey Carr, the chief executive officer of Seattle-based Taia Global, a cybersecurity consultancy, said in an email that the Obama administration’s evidence was “very flimsy.”

“I’m sure that the White House also believes that it’s flimsy based upon the wording of the executive order. It specified sanctions for human rights abuses and threw in the Sony attack almost as an afterthought,” Carr said. “This sets a terrible precedent and will open the door to much worse attacks than Sony in the future, because the FBI and the White House didn’t wait to discover who was actually responsible.”

Administration officials remained adamant that the North Korean government was responsible, and they called the sanctions the “first step in our proportional response.”

That’s a curious distinction, because the administration was vague when it was asked last week whether it was behind an Internet outage in North Korea that knocked websites offline. The administration’s language Friday implied that the outage was not the first step in a proportional U.S. response.

On Friday, officials neither confirmed nor denied U.S. involvement, adding that there were a number of possible explanations for the outage, including that the North Korean government itself knocked out its Internet capabilities.

The new sanctions came a day after a New Year’s Day speech by Kim Jong Un in which he appeared to offer direct talks about unification with South Korea, peppered with blistering hostile rhetoric aimed at the United States. South Korea quickly proposed preparatory talks to explore a summit.

“One way to interpret this is that the North Koreans have finally gotten the message that the road to Washington runs through Seoul,” said Marcus Noland, one of the nation’s foremost experts on North Korea and executive vice president of the Peterson Institute for International Economics.

The three entities sanctioned Friday were already under other sanctions tied to rights abuses and North Korea’s successful nuclear weapons program. They are the spy agency known as the Reconnaissance General Bureau, the state procurement company Korea Tangun Trading Corp. and the Korea Mining Development Trading Corp., known by its acronym Komid.

While these agencies are already treated as international pariahs, the senior administration officials, who briefed only on the condition of anonymity under rules imposed by the White House, said the new executive order made it easier in the future to go after government entities, representatives or members of the ruling Workers’ Party of Korea.

“What this does is really expand the aperture of our authorities” to sanction, one administration official said.

Eight of the 10 individuals sanctioned were Komid representatives: one in Russia, two in southern Africa, two in Iran, two in Syria and one who serves as an external affairs officer for Pyongyang. The Treasury Department, implementing the executive order, also targeted a North Korean government official and sanctioned Kim Kwang Chun, a regime official and representative of the trading company in the Chinese city of Shenyang, near the North Korean border.

“In some sense, this is a game of whack-a-mole,” said Noland, the North Korea expert. “We go after the North Korean individuals and entities, the North Koreans respond by expanding” the number of front companies.

There’s also a practical reason for making it easier to sanction North Korean companies and representatives, he said. Since taking power in late 2011, Kim Jong Un has moved aggressively to replace his late father’s loyalists at the tops of state agencies with his own confidants.

“He does just seem to go through people quickly. He’s been through four defense ministers,” said Noland, adding that all the rotation means “the U.S. would have to add names to keep current.”

Even with the new sanctions, the administration has yet to identify any individuals tied to the Sony hack. That’s helped fuel speculation about other potential sources of the cyberattack.

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Last Updated on Saturday, 03 January 2015 16:29
 
Economist Thomas Piketty Refuses France's Highest Honor
Friday, 02 January 2015 16:38

Excerpt: "France's influential economist Thomas Piketty, author of 'Capital in the 21st Century,' on Thursday refused to accept the country's highest award, the Legion d'honneur, to criticise the Socialist government in power."

French economist Thomas Piketty says it is not for the government to decide who is 'honorable.' (photo: AFP)
French economist Thomas Piketty says it is not for the government to decide who is "honorable." (photo: AFP)


Economist Thomas Piketty Refuses France's Highest Honor

By Agence France-Presse

2 January 15

 

rance's influential economist Thomas Piketty, author of "Capital in the 21st Century", on Thursday refused to accept the country's highest award, the Legion d'honneur, to criticise the Socialist government in power.

"I refuse this nomination because I do not think it is the government's role to decide who is honourable," Piketty told AFP.

"They would do better to concentrate on reviving (economic) growth in France and Europe," added Piketty, who was once close to the Socialist Party but has distanced himself from the policies of President Francois Hollande.


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