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New Bank Investigations: Real Action, or More of the Same? Print
Friday, 09 August 2013 14:30

Taibbi writes: "I'm skeptical it will turn into a real criminal investigation. All of the stories that broke in the last day or two noted the same detail, that Chase has beefed up its estimates for litigation/settlement costs."

Matt Taibbi. (photo: Current TV)
Matt Taibbi. (photo: Current TV)


New Bank Investigations: Real Action, or More of the Same?

By Matt Taibbi, Rolling Stone

09 August 13

 

lot of interesting things happening on the white-collar enforcement front. Evil hedge fund SAC Capital and its villainous ruler Stevie Cohen were run through the gauntlet, Goldman Sachs patsy Fabulous Fab took a beating in civil court (I love the detail that emerged, that Goldman executives now call him "the poor kid"), and now, apparently, a pair of high-profile investigations have been launched against Bank of America and J.P. Morgan Chase for subprime mortgage fraud. The latter investigations seem to be designed to answer criticisms that nobody is going after the real doers of evil systemic crimes.

The Chase case apparently involves a criminal investigation, which is indeed interesting. The company admitted as much yesterday, saying federal investigators out West have "preliminarily concluded" that Chase brazenly violated securities laws when it sold subprime mortgage-backed instruments in 2005-2007.

But I'm skeptical it will turn into a real criminal investigation. All of the stories that broke in the last day or two noted the same detail, that Chase has beefed up its estimates for litigation/settlement costs:

As the investigations drag on, the bank is racking up significant legal costs. To help cushion against potentially hefty payouts to the authorities, JPMorgan recorded a $678 million expense for additional litigation reserves in the second quarter, up from $323 million in the same period a year ago, according to the filing on Wednesday.

The bank also estimated it could incur up to $6.8 billion in losses beyond its reserves, nearly $1 billion more than the first quarter of the year.

The government may very well decide to go after Chase in what it considers a big way. It may do the same for Bank of America, and then it may keep going on down the line to other banks, until it has collected a billion dollars or so from all the usual suspects, who were virtually all engaged in the same kinds of schemes, gathering and selling to customers radioactive mortgage bonds they knew were likely to explode, or were ridden with fraud and faulty underwriting.

But to me, these investigations will be meaningless unless one of two things happens, once they reach the inevitable stage of concluding painstakingly-crafted settlements with the inevitable teams of high-priced lawyers for the offending firms:

  1. Someone goes to jail.

  2. The company is ordered to break itself up into smaller pieces.

As to point one, here's the thing. If criminal laws were violated, then the government certainly has discretion to exercise mercy and seek non-criminal sanctions against the individuals responsible. But they can really only do that and not be total hypocrites if they also simultaneously implement leniency programs for ordinary street criminals at the same time.

Just yesterday, for instance, a federal judge in Mississippi handed down a six-month sentence to a man and ordered him to pay $8,282 in restitution for food stamp fraud - one Stanley Jones apparently lied in an application about whether or not anyone in his household had ever been convicted of a felony drug charge when he applied for food stamps.

Stanley Jones is going to do six months in jail for fraud in a case brought by the same Justice Department now sniffing around Chase and Bank of America. I would be shocked if $8,282 didn't represent the entire amount of value "taken" via Jones's fraud. I spent a lot of time with people targeted for welfare fraud for my upcoming book, The Divide, and the state never settles for anything less than every last dollar in these cases. Incidentally, you can find cases like this pretty much every day in every state in the country. Guaranteed, someone somewhere in America right now is drawing jail time for some form of welfare fraud.

Meanwhile, S.E.C. target Fab Tourre - the Goldman exec who joked about selling bad bonds to "widows and orphans" - will not do a day in jail for his part in a fraud that caused two banks in Europe to lose over a billion dollars. And Fab's restitution will range from $30,000 to $780,000, depending upon how much judge Katherine Forrest decides to ding him for each of his six counts of civil fraud. (It will be very interesting to see where she lands on that decision). Fab's bank, Goldman, Sachs, has already settled for $550 million for the same case, which is a lot of money, but again less than the total amount of the damage. And nobody went to jail.

This isn't about throwing bankers in jail for the sake of it. It's about making things fair. If we're going to keep throwing people in jail for food stamp fraud, then bankers who commit systematic securities fraud also have to go to jail. Either that, or we have to come up with alternative punishments for both types of nonviolent criminal. I'm not opposed to that, either. There are powerful arguments to be made against jail for many nonviolent offenders. The punishments for rich and poor just have to match, that's all.

As to point two - if we're not putting people in jail, we at least have to insist the companies break themselves up - this is in response to the argument made by the likes of Attorney General Eric Holder and former Department of Justice criminal division chief Lanny Breuer last winter after settlements involving HSBC (for money laundering) and UBS (for mass rate-fixing in the LIBOR scandal). The justification in those cases for deferred and or non-prosecution agreements coupled with huge fines as punishments for sweepingly destructive offenses was that the companies in question were too large and too systemically important to risk indicting criminally.

Well, let's say that's true. It's an argument not completely without merit. Nobody wants to see a repeat of the Arthur Andersen case, when the federal government indicted on a single count, the company went under, and 28,000 jobs were lost.

But if that's true, then the state can't simply accept that reality every time a huge company starts committing serial fraud or theft. If these companies commit crimes but are too big to prosecute, well, then, in lieu of indictments of the firm, or jail terms for executives, they have to become smaller, so that they can safely be prosecuted the next time. The state has the power to make that happen, but it would be a shock if they ever exercised that power.

That won't happen, however. Almost guaranteed, these investigations will end with huge cash settlements. We'll keep the jails filled with food-stamp thieves, while the bank execs who knowingly hawked doomed mortgage bonds to "widows and orphans" all over the world will almost certainly get off. At worst, their shareholders will cough up another billion or two in settlement money.

All of this is stuff that has to be kept in mind when news of such investigations leaks. It may sound like tough action. But it could just as easily be more of the same cost-of-doing-business, for-appearances-only non-regulation of the looking-busy genus. Wake me up when someone goes to jail.

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The Public-Private Surveillance Partnership Print
Friday, 09 August 2013 14:26

Schneier writes: "If the National Security Agency required us to notify it whenever we made a new friend, the nation would rebel. Yet we notify Facebook Inc."

(photo: file)
(photo: file)


The Public-Private Surveillance Partnership

By Bruce Schneier, Bloomberg News

09 August 13

 

magine the government passed a law requiring all citizens to carry a tracking device. Such a law would immediately be found unconstitutional. Yet we all carry mobile phones.

If the National Security Agency required us to notify it whenever we made a new friend, the nation would rebel. Yet we notify Facebook Inc. (FB) If the Federal Bureau of Investigation demanded copies of all our conversations and correspondence, it would be laughed at. Yet we provide copies of our e-mail to Google Inc. (GOOG), Microsoft Corp. (MSFT) or whoever our mail host is; we provide copies of our text messages to Verizon Communications Inc. (VZ), AT&T Inc. (T) and Sprint Corp. (S); and we provide copies of other conversations to Twitter Inc., Facebook, LinkedIn (LNKD) Corp. or whatever other site is hosting them.

The primary business model of the Internet is built on mass surveillance, and our government's intelligence-gathering agencies have become addicted to that data. Understanding how we got here is critical to understanding how we undo the damage.

Computers and networks inherently produce data, and our constant interactions with them allow corporations to collect an enormous amount of intensely personal data about us as we go about our daily lives. Sometimes we produce this data inadvertently simply by using our phones, credit cards, computers and other devices. Sometimes we give corporations this data directly on Google, Facebook, Apple Inc.'s iCloud and so on in exchange for whatever free or cheap service we receive from the Internet in return.

The NSA is also in the business of spying on everyone, and it has realized it's far easier to collect all the data from these corporations rather than from us directly. In some cases, the NSA asks for this data nicely. In other cases, it makes use of subtle threats or overt pressure. If that doesn't work, it uses tools like national security letters.

The Partnership

The result is a corporate-government surveillance partnership, one that allows both the government and corporations to get away with things they couldn't otherwise.

There are two types of laws in the U.S., each designed to constrain a different type of power: constitutional law, which places limitations on government, and regulatory law, which constrains corporations. Historically, these two areas have largely remained separate, but today each group has learned how to use the other's laws to bypass their own restrictions. The government uses corporations to get around its limits, and corporations use the government to get around their limits.

This partnership manifests itself in various ways. The government uses corporations to circumvent its prohibitions against eavesdropping domestically on its citizens. Corporations rely on the government to ensure that they have unfettered use of the data they collect.

Here's an example: It would be reasonable for our government to debate the circumstances under which corporations can collect and use our data, and to provide for protections against misuse. But if the government is using that very data for its own surveillance purposes, it has an incentive to oppose any laws to limit data collection. And because corporations see no need to give consumers any choice in this matter - because it would only reduce their profits - the market isn't going to protect consumers, either.

Our elected officials are often supported, endorsed and funded by these corporations as well, setting up an incestuous relationship between corporations, lawmakers and the intelligence community.

The losers are us, the people, who are left with no one to stand up for our interests. Our elected government, which is supposed to be responsible to us, is not. And corporations, which in a market economy are supposed to be responsive to our needs, are not. What we have now is death to privacy - and that's very dangerous to democracy and liberty.

Challenging Power

The simple answer is to blame consumers, who shouldn't use mobile phones, credit cards, banks or the Internet if they don't want to be tracked. But that argument deliberately ignores the reality of today's world. Everything we do involves computers, even if we're not using them directly. And by their nature, computers produce tracking data. We can't go back to a world where we don't use computers, the Internet or social networking. We have no choice but to share our personal information with these corporations, because that's how our world works today.

Curbing the power of the corporate-private surveillance partnership requires limitations on both what corporations can do with the data we choose to give them and restrictions on how and when the government can demand access to that data. Because both of these changes go against the interests of corporations and the government, we have to demand them as citizens and voters. We can lobby our government to operate more transparently - disclosing the opinions of the Foreign Intelligence Surveillance Court would be a good start - and hold our lawmakers accountable when it doesn't. But it's not going to be easy. There are strong interests doing their best to ensure that the steady stream of data keeps flowing.

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FOCUS | Email Service Used by Snowden Shuts Itself Down Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=7181"><span class="small">Glenn Greenwald, Guardian UK</span></a>   
Friday, 09 August 2013 10:46

Greenwald writes: "What is particularly creepy about the Lavabit self-shutdown is that the company is gagged by law even from discussing the legal challenges it has mounted and the court proceeding it has engaged."

Edward Snowden speaking to the South China Morning Post. (photo: South China Morning Post)
Edward Snowden speaking to the South China Morning Post. (photo: South China Morning Post)


Email Service Used by Snowden Shuts Itself Down

By Glenn Greenwald, Guardian UK

09 August 13

 

Texas-based encrypted email service recently revealed to be used by Edward Snowden - Lavabit - announced yesterday it was shutting itself down in order to avoid complying with what it perceives as unjust secret US court orders to provide government access to its users' content. "After significant soul searching, I have decided to suspend operations," the company's founder, Ladar Levinson, wrote in a statement to users posted on the front page of its website. He said the US directive forced on his company "a difficult decision: to become complicit in crimes against the American people or walk away from nearly ten years of hard work by shutting down Lavabit." He chose the latter.

CNET's Declan McCullagh smartly speculates that Lavabit was served "with [a] federal court order to intercept users' (Snowden?) passwords" to allow ongoing monitoring of emails; specifically: "the order can also be to install FedGov-created malware." After challenging the order in district court and losing - all in a secret court proceeding, naturally - Lavabit shut itself down to avoid compliance while it appeals to the Fourth Circuit.

This morning, Silent Circle, a US-based secure online communication service, followed suit by shutting its own encrypted email service. Although it said it had not yet been served with any court order, the company, in a statement by its founder, internet security guru Phil Zimmerman, said: "We see the writing on the wall, and we have decided that it is best for us to shut down Silent Mail now."

What is particularly creepy about the Lavabit self-shutdown is that the company is gagged by law even from discussing the legal challenges it has mounted and the court proceeding it has engaged. In other words, the American owner of the company believes his Constitutional rights and those of his customers are being violated by the US Government, but he is not allowed to talk about it. Just as is true for people who receive National Security Letters under the Patriot Act, Lavabit has been told that they would face serious criminal sanctions if they publicly discuss what is being done to their company. Thus we get hostage-message-sounding missives like this:

"I wish that I could legally share with you the events that led to my decision. I cannot. I feel you deserve to know what's going on - the first amendment is supposed to guarantee me the freedom to speak out in situations like this. Unfortunately, Congress has passed laws that say otherwise. As things currently stand, I cannot share my experiences over the last six weeks, even though I have twice made the appropriate requests."

Does that sound like a message coming from a citizen of a healthy and free country? Secret courts issuing secret rulings invariably in favor of the US government that those most affected are barred by law from discussing? Is there anyone incapable at this point of seeing what the United States has become? Here's the very sound advice issued by Lavabit's founder:

"This experience has taught me one very important lesson: without congressional action or a strong judicial precedent, I would strongly recommend against anyone trusting their private data to a company with physical ties to the United States."

As security expert Bruce Schneier wrote in a great Bloomberg column last week, this is one of the key aspects of the NSA disclosures: the vast public-private surveillance partnership. That's what makes Lavabit's stance so heroic: as our reporting has demonstrated, most US-based tech and telecom companies (though not all) meekly submit to the US government's dictates and cooperative extensively and enthusiastically with the NSA to ensure access to your communications.

Snowden, who told me today that he found Lavabit's stand "inspiring", added:

"Ladar Levison and his team suspended the operations of their 10 year old business rather than violate the Constitutional rights of their roughly 400,000 users. The President, Congress, and the Courts have forgotten that the costs of bad policy are always borne by ordinary citizens, and it is our job to remind them that there are limits to what we will pay.
"America cannot succeed as a country where individuals like Mr. Levison have to relocate their businesses abroad to be successful. Employees and leaders at Google, Facebook, Microsoft, Yahoo, Apple, and the rest of our internet titans must ask themselves why they aren't fighting for our interests the same way small businesses are. The defense they have offered to this point is that they were compelled by laws they do not agree with, but one day of downtime for the coalition of their services could achieve what a hundred Lavabits could not.
"When Congress returns to session in September, let us take note of whether the internet industry's statements and lobbyists - which were invisible in the lead-up to the Conyers-Amash vote - emerge on the side of the Free Internet or the NSA and its Intelligence Committees in Congress."

The growing (and accurate) perception that most US-based companies are not to be trusted with the privacy of electronic communications poses a real threat to those companies' financial interests. A report issued this week by the Technology and Innovation Foundation estimated that the US cloud computing industry, by itself, could lose between $21 billion to $35 billion due to reporting about the industry's ties to the NSA. It also notes that other nations' officials have been issuing the same kind of warnings to their citizens about US-based companies as the one issued by Lavabit yesterday:

"And after the recent PRISM leaks, German Interior Minister Hans-Peter Friedrich declared publicly, 'whoever fears their communication is being intercepted in any way should use services that don't go through American servers.' Similarly, Jörg-Uwe Hahn, a German Justice Minister, called for a boycott of US companies."

The US-based internet industry knows that the recent transparency brought to the NSA is a threat to their business interests. This week, several leading Silicon Valley and telecom executives met with President Obama to discuss their "surveillance partnership". But the meeting was - naturally - held in total secrecy. Why shouldn't the agreements and collaborations between these companies and the NSA for access to customer communications not be open and public?

Obviously, the Obama administration, telecom giants, and the internet industry are not going to be moved by appeals to transparency, privacy and basic accountability. But perhaps they'll consider the damage being done to the industry's global reputation and business interests by constructing a ubiquitous spying system with the NSA and doing it all in secret.

It's well past time to think about what all this reflects about the US. As the New York Times Editorial Page put it today, referencing a front-page report from Charlie Savage enabled by NSA documents we published: "Apparently no espionage tool that Congress gives the National Security Agency is big enough or intrusive enough to satisfy the agency's inexhaustible appetite for delving into the communications of Americans." The NYT added:

"Time and again, the NSA has pushed past the limits that lawmakers thought they had imposed to prevent it from invading basic privacy, as guaranteed by the Constitution."

I know it's much more fun and self-satisfying to talk about Vladimir Putin and depict him as this omnipotent cartoon villain. Talking about the flaws of others is always an effective tactic for avoiding our own, and as a bonus in this case, we get to and re-live Cold War glory by doing it. The best part of all is that we get to punish another country for the Supreme Sin: defying the dictates of the US leader.

[Note how a country's human rights problems becomes of interest to the US political and media class only when that country defies the US: hence, all the now-forgotten focus on Ecuador's press freedom record when it granted asylum to Julian Assange and considered doing so for Edward Snowden, while the truly repressive and deeply US-supported Saudi regime barely rates a mention. Americans love to feign sudden concern over a country's human rights abuses as a tool for punishing that country for disobedience to imperial dictates and for being distracted from their own government's abuses: Russia grants asylum to Snowden --> Russia is terrible to gays! But maybe it's more constructive for US media figures and Americans generally to think about what's happening to their own country and the abuses of the own government, the one for which they bear responsibility and over which they can exercise actual influence.]

Lavabit has taken an impressive and bold stand against the US government, sacrificing its self-interest for the privacy rights of its users. Those inclined to do so can return that support by helping it with lawyers' fees to fight the US government's orders, via this paypal link provided in the company's statement.

One of the most remarkable, and I think enduring, aspects of the NSA stories is how much open defiance there has been of the US government. Numerous countries around the world have waved away threats, from Hong Kong and Russia to multiple Latin American nations. Populations around the world are expressing serious indignation at the NSA and at their own government to the extent they have collaborated. And now Lavabit has shut itself down rather than participate in what it calls "crimes against the American people", and in doing so, has gone to the legal limits in order to tell us all what has happened. There will undoubtedly be more acts inspired by Snowden's initial choice to unravel his own life to make the world aware of what the US government has been doing in the dark.


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Republicans' Desperate Plan to Hide Its Clowns Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=23807"><span class="small">Alex Pareene, Salon</span></a>   
Wednesday, 07 August 2013 14:25

Pareene writes: "The entire Republican primary system is broken, and embarrassing debates really number among the least of their problems, but it is easier for Priebus to preemptively cancel embarrassing debates than it is for him to fundamentally alter the makeup of the Republican primary electorate."

Republican National Committee chairman Reince Priebus rallies volunteers at a Romney campaign office in Virginia. (photo: Chris Maddaloni/CQ Roll Call/Getty Images)
Republican National Committee chairman Reince Priebus rallies volunteers at a Romney campaign office in Virginia. (photo: Chris Maddaloni/CQ Roll Call/Getty Images)


Republicans' Desperate Plan to Hide Its Clowns

By Alex Pareene, Salon

08 August 13

 

Party begs for fewer primary debates, so candidates won't embarrass themselves on TV anymore. It will backfire

eince Priebus, the head of the Republican National Committee, has told NBC and CNN that they will not be allowed to have any Republican presidential debates in 2016 if they go ahead and air planned films about Hillary Clinton, who will likely be the front-runner for the Democratic presidential nomination. That is the reason he gave them, at least, but it is not the actual reason Priebus wants to not have any debates on those two channels. The real reason, everyone knows and sort of acknowledges, is that debates were a disaster for the party in 2012, an endless circus made up entirely of clowns on a national tour of shame.

These debates were on TV, people watched (and mocked) them, and the real candidates, the ones the money people were counting on to win the stupid race, were forced to say unacceptable things to appeal to raging loons. Furthermore, the serious candidates looked less serious simply by sharing a stage with Newt Gingrich and Herman Cain. So: Fewer debates, next time, is the plan, and these Hillary movies are a convenient reason to cancel on two of the big networks. (Do you know how I know that the Hillary Clinton movies aren't the real reason? Media Matters' David Brock would also like the networks to cancel these movies, because, let's be honest, they probably won't be entirely flattering.)

The entire Republican primary system is broken, and embarrassing debates really number among the least of their problems, but it is easier for Priebus to preemptively cancel embarrassing debates than it is for him to fundamentally alter the makeup of the Republican primary electorate, a small and largely angry group who demand ideological fealty to a political philosophy that most Americans abhor. Unfortunately for Priebus, threatening to cancel debates is going to be much easier than actually preventing them from happening.

Maybe one of the Republican Party's primary malfunctions these days is that the interests of the party as a whole are frequently in opposition to the interests of individual Republican politicians. Preibus wants there to be fewer debates, because the debates are hugely embarrassing to the party and damaging to the eventual nominee. The candidates, though, need the debates, because there is nothing so precious as free airtime, and saying stupid things on television and then losing elections is a surprisingly lucrative career move these days. The debate problem is like the Ted Cruz problem: He acts against the long-term best interests of his party because in the shorter term, being an ultra-conservative is likely to make him rich and beloved. When 2015 rolls around a half-dozen would-be presidents and tryouts for the conservative speaking circuit are going to want free airtime, and the networks will happily provide it. The only question is whether the eventual "serious" nominee, if that's Jeb Bush or Chris Christie, is going to join them or not.

Cruz may well be among those jokers, along with Marco Rubio, Rand Paul, Scott Walker, Peter King, Rick Perry and various other figures adored by "the base" but sort of terrifying and confusing to everyone else. These guys are going to go on television if they are given the opportunity to go on television. You either finish your presidential campaign as the president or as a person who isn't the president but who is much more famous than before, and conservative movement fame means well-compensated positions at nonprofits or think tanks, speeches, maybe even television or radio jobs. Mike Huckabee is doing so well for himself he couldn't be bothered to run in 2012, and he would've probably beaten Mitt if he had.

So boycotting NBC and CNN isn't going to prevent another string of embarrassing debates from happening. But it may still be useful. Priebus wants to avoid those two channels in part because they're hostile to conservatives, and the moderators they select will likely actively seek to embarrass the candidates. Republicans are still mad that in 2007, NBC allowed Chris Matthews to co-moderate a Republican debate. They sort of have a point - he's a shouty Democrat, and likely had no respect for the people onstage - but the problem isn't liberal bias, it's "nonpartisan" journalist idiocy. Nonpartisan television news personalities are generally ill-informed about policy and hostile to politics in general. Bob Schieffer was utterly useless as a debate moderator. Partisan journalists are, by and large, more engaged with the issues and much more likely to ask interesting questions. There's really no reason why conservative journalists shouldn't be moderating, or at least co-moderating, Republican debates. Byron York and Rich Lowry would do a fine job.

If there are going to be another hundred primary debates, and there probably will be, the party would most likely prefer most of them to be on Fox. And that'd be fine: The candidates will be trying to appeal to Fox's audience for votes, after all. And liberals ought to be fine with it too, because the candidates will be just as likely, or maybe even more likely, to say dumb and embarrassing things on Fox as they would be on CNN or NBC. So boycott away, Reince Priebus.

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Spying for Us Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=6396"><span class="small">Tom Engelhardt, TomDispatch</span></a>   
Wednesday, 07 August 2013 14:17

Engelhardt writes: "The recent conviction of Manning on six charges under the Espionage Act for releasing secret military and government documents should be a reminder that we Americans are in a rapidly transforming world."

(photo: unknown)
(photo: unknown)


Spying for Us

By Tom Engelhardt, TomDispatch

08 August 13

 

ey, let's talk spying! In Surveillance America, this land of spookery we all now inhabit, what else is there to talk about?

Was there anyone growing up like me in the 1950s who didn't know Revolutionary War hero and spy Nathan Hale's last words before the British hanged him: "I only regret that I have but one life to give for my country"? I doubt it. Even today that line, whether historically accurate or not, gives me a chill. Of course, it's harder these days to imagine a use for such a heroically solitary statement - not in an America in which spying and surveillance are boom businesses, and our latest potential Nathan Hales are tens of thousands of corporately hired and trained private intelligence contractors, who often don't get closer to the enemy than a computer terminal.

What would Nathan Hale think if you could tell him that the CIA, the preeminent spy agency in the country, has an estimated 20,000 employees (it won't reveal the exact number, of course); or that the National Geospatial-Intelligence Agency, which monitors the nation's spy satellites, has a cast of 16,000 housed in a post-9/11, almost $2 billion headquarters in Washington's suburbs; or that our modern Nathan Hales, multiplying like so many jackrabbits, lack the equivalent of a Britain to spy on. In the old-fashioned sense, there really is no longer an enemy on the planet. The modern analog to the British of 1776 would assumedly be… al-Qaeda?

It's true that powers friendly and less friendly still spy on the U.S. Who doesn't remember that ring of suburban-couples-cum-spies the Russians planted here? It was a sophisticated operation that only lacked access to state secrets of any sort and that the FBI rolled up in 2010. But generally speaking, in a single-superpower world, the U.S., with no obvious enemy, has been building its own system of global spying and surveillance on a scale never before seen in an effort to keep track of just about everyone on the planet (as recently released NSA documents show). In other words, Washington is now spy central. It surveils not just potential future enemies, but also its closest allies as if they were enemies. Increasingly, the structure built to do a significant part of that spying is aimed at Americans, too, and on a scale that is no less breathtaking.

Spies, Traitors, and Defectors in Twenty-First-Century America

Today, for America's spies, Nathan Hale's job comes with health and retirement benefits. Top officials in that world have access to a revolving door into guaranteed lucrative employment at the highest levels of the corporate-surveillance complex and, of course, for the spy in need of escape, a golden parachute. So when I think about Nathan Hale's famed line, among those hundreds of thousands of American spies and corporate spylings just two Americans come to mind, both charged and one convicted under the draconian World War I Espionage Act.

Only one tiny subset of Americans might still be able to cite Hale's words and have them mean anything. Even when Army Private First Class Bradley Manning wrote the former hacker who would turn him in about the possibility that he might find himself in jail for life or be executed, he didn't use those words. But if he had, they would have been appropriate. Former Booz Allen employee Edward Snowden didn't use them in Hong Kong when he discussed the harsh treatment he assumed he would get from his government for revealing the secrets of the National Security Agency, but had he, those words wouldn't have sounded out of whack.

The recent conviction of Manning on six charges under the Espionage Act for releasing secret military and government documents should be a reminder that we Americans are in a rapidly transforming world. It is, however, a world that's increasingly hard to capture accurately because the changes are outpacing the language we have to describe them and so our ability to grasp what is happening.

Take the words "spying" and "espionage." At a national level, you were once a spy who engaged in espionage when, by whatever subterfuge, you gathered the secrets of an enemy, ordinarily an enemy state, for the use of your own country. In recent years, however, those being charged under the Espionage Act by the Bush and Obama administrations have not in any traditional sense been spies. None were hired or trained by another power or entity to mine secrets. All had, in fact, been trained either by the U.S. government or an allied corporate entity. All, in their urge to reveal, were freelancers (a.k.a. whistleblowers) who might, in the American past, have gone under the label of "patriots."

None was planning to turn the information in their possession over to an enemy power. Each was trying to make his or her organization, department, or agency conform to proper or better practices or, in the cases of Manning and Snowden, bring to the attention of the American people the missteps and misdeeds of our own government about which we were ignorant thanks to the cloak of secrecy thrown over ever more of its acts and documents.

To the extent that those whistleblowers were committing acts of espionage, surreptitiously taking secret information from the innards of the national security state for delivery to an "enemy power," that power was "we, the people," the governing power as imagined in the U.S. Constitution. Manning and Snowden each believed that the release of classified documents in his possession would empower us, the people, and lead us to question what was being done by the national security state in our name but without our knowledge. In other words, if they were spies, then they were spying on the government for us.

They were, that is, insiders embedded in a vast, increasingly secretive structure that, in the name of protecting us from terrorism, was betraying us in a far deeper way. Both men have been termed "traitors" (Manning in military court), while Congressman Peter King called Snowden a "defector," a Cold War term no longer much in use in a one-superpower world. Such words, too, would need new definitions to fit our present reality.

In a sense, Manning and Snowden could be said to have "defected" - from the U.S. secret government to us. However informally or individually, they could nonetheless be imagined as the people's spies. What their cases indicate is that, in this country, the lock-'em-up-and-throw-away-the-key crime of the century is now to spy on the U.S. for us. That can leave you abused and mistreated in a U.S. military prison, or trapped in a Moscow airport, or with your career or life in ruins.

In terms of the national security state, "spying" now has two preeminent meanings. It means spying on the world and spying on Americans, both on a massive scale. In the process, that burgeoning structure has become Washington's most precious secret, ostensibly from our enemies, but actually from us and, as we've learned recently, even from our elected representatives. The goal of that state, it seems, is to turn the American people into so much absorbable, controllable intelligence data, our identities sliced, diced, and passed around the labyrinthine bureaucracy of the surveillance world, our bytes stored up to be "mined" at their convenience.

Government of the Surveillers, by the Surveillers, for the Surveillers

If Edward Snowden's documents reveal anything, it's that the frenzy of construction - from new headquarters to new data centers - that has been the mark of the intelligence world since 9/11 has been matched by a similar frenzy of construction in the world of online and telephonic communications. We undoubtedly don't know the full scope of it yet, but it's already obvious that from PRISM to XKeyscore the U.S. Intelligence Community has been creating a labyrinth of redundant surveillance mechanisms that mimics the vast growth and redundancy of the intelligence world itself, of the 17 organizations and agencies in that "community" and all the little outfits or offices not even counted in that staggering figure.

The truth is that, thanks to our "spies," we know a great deal more about how our American world, our government, really works, but we still don't know what this thing that's being built really is. Even its creators may be at sea when it comes to what exactly they are in the process of constructing. They want us to trust them, but we the people shouldn't put our trust in the generals, high-level bureaucrats, and spooks who don't even blink when they lie to our representatives, pay no price for doing so, and are creating a world that is, and is meant to be, beyond our control. We lack words for what is happening to us. We still have to name it.

It is at least clearer that our world, our society, is becoming ever more imperial in nature, reflecting in part the way our post-9/11 wars have come home. With its widening economic inequalities, the United States is increasingly a society of the rulers and the ruled, the surveillers and the surveilled. Those surveillers have hundreds of thousands of spies to keep track of us and others on this planet, and no matter what they do, no matter what lines they cross, no matter how egregious their acts may be, they are never punished for them, not even losing their jobs. We, on the other hand, have a tiny number of volunteer surveillers on our side. The minute they make themselves known or are tracked down by the national security state, they automatically lose their jobs and that's only the beginning of the punishments levied on them.

Those who run our new surveillance state have not the slightest hesitation about sacrificing us on the altar of their plans - all for the greater good, as they define it.

This, of course, has nothing whatsoever to do with any imaginable definition of democracy or the long-gone republic. This is part of the new way of life of imperial America in which a government of the surveillers, by the surveillers, for the surveillers shall not perish from the Earth.

Those who watch us - they would undoubtedly say "watch over," as in protect - are no Nathan Hales. Their version of his line might be: I only regret that I have but one life to give for my country: yours.

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