Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #769 The Adventures of Eddie the Friendly Spook, Part 12: Blitzkrieg on American Internet and Electronics Business

Dave Emory’s entire life­time of work is avail­able on a flash drive that can be obtained here. (The flash drive includes the anti-fascist books avail­able on this site.)

Listen: MP3

Side 1  Side 2

Introduction: This program continues the analysis and coverage of the intelligence operation being led by “Eddie the Friendly Spook” Snowden.

A recent editorial in The San Jose Mercury News (Tues. September 10, 2013, p. A9) opined: “Revelations that the National Security Agency has cracked the encryption technology that was supposed to protect Internet users’ privacy is a nightmare for Silicon Valley. . .”

The concerns expressed by The Mercury News and echoed by Silicon Valley CEO’s at a recent high tech conference go to the thrust of the main part of what we feel is the primary goal of Snowden’s multi-layered psy-op: to do to the Silicon Valley and the U.S. electronic business what the German and Japanese automobile industry’s capture of much of the U.S. market did to the city of Detroit.

In FTR #’s 758 and 759, we noted that Snowden and the forces around and behind him are the same elements that were jeopardizing the U.S. and global economies in the government shutdown crisis last fall. In numerous posts and programs, we have discussed the fact that the GOP has been infiltrated by the Underground Reich to such an extent that it is little more than a Nazi/fascist front at this point.

Note that the GOP is de-funding scientific and technological development to such an extent that it fundamentally threatens the American high-tech economy, the Silicon Valley in particular. (See text excerpts below.) Of particular interest in this regard is the fact that the leading budget cutters are the Paulistinian “libertarian” elements of the GOP. The possibility that this may be a deliberate act on the part of an Underground Reich Fifth Column is one to be seriously considered.

In this context, the GOP/German “op” might be seen as a pincers movement.

Of paramount importance in our analysis is German Chancellor Angela Merkel’s maneuvering in this context. She is deliberately delaying the implementation of EU data privacy regulains in favor of pushing for the inclusion of Germany’s intelligence service into the “Five Eyes” club. In effect, it may well be that U.S. tech industry is being held hostage to BND’s inclusion in the Five Eyes club.

Program Highlights Include: 

  • Leaking journalist Glenn Greenwald stated that Snowden’s goal in leaking this information was to alert people that the software they were using was being accessed by NSA without their knowledge–a consideration that is almost certain to damage U.S. internet companies. (See text excerpts below.)
  • Fear around the world about the NSA spying coverage is believed to be damaging U.S. internet companies. (See text excerpts below.)
  • German and EU officials have been explicit in warning about using U.S. cloud providers.
  • One German minister floated the idea of banning U.S. tech corporations in Europe.
  • Bertelsmann appears to be acting in accord with the pronouncements of German and EU officials.
  • A recent story in the German periodical Die Zeit claimed that the German government warned against using Windows 8 (and also Chromebook, a Google product) because the TPM chip had been equipped with a “back door” to permit the NSA to clandestinely access information. Although the German government denied that they had actually said that, it appears that damage may have already been done, perhaps deliberately. (See text excerpts below.)
  • As it happens, the leading maker of TPM chips is a German firm, Infineon, suggesting the distinct possibility that BND may be doing what the Die Zeit article accuses the NSA of doing. Note that BND has been doing exactly what the NSA has been doing for many, many years. (See text excerpts below.)
  • In an update (9/26/2013), we learn that Infineon is a spinoff of Siemens AG, one of the German core corporations, a key element of the Bormann capital network and inextricably linked with the BND! (See text excerpts below.)

1a. Beginning with review of material covered years ago on For The Record, the program notes that the information about NSA and GCHQ hoovering up electronic communications is not new. (Mr. Emory has been discussing this for years, referencing the analysis from open sources.) A New York Times article from 9/6/2001 highlights a European Parliament report that was compiled over the course of a year. The report notes, among other things, that several European countries were doing similar things.

“World Brief­ing | Europe: Report On U.S. Spy Sys­tem” by Suzanne Daley; The New York Times; 9/6/2001.

[Notice when this was published–9/6/2001.–D.E.] . . . The United States-led spy­ing sys­tem known as Ech­e­lon can mon­i­tor vir­tu­ally every com­mu­ni­ca­tion in the world — by e-mail, phone or fax — that bounces off a satel­lite, the Euro­pean Par­lia­ment was told. But in report­ing on a year­long study of the sys­tem that was prompted by con­cern that Amer­i­can com­pa­nies were using data from the sys­tem to gain a com­pet­i­tive edge, Ger­hard Schmid, a Ger­man mem­ber of the Par­lia­ment, said that many Euro­pean coun­tries had sim­i­lar abil­i­ties . . .

1b. A revealing article in Der Spiegel notes two VERY important things: the same Angela Merkel who is “shocked, shocked” at what the NSA is doing has not only put roadblocks in European data privacy rules designed to guard against unwarranted government surveillance, but is actively seeking admittance to the “Five Eyes” club, which dates to World War II!

She’s not “shocked, shocked” at all! She wants access to the Five Eyes, which means–DUH–that she APPROVES of this very thing!

What a hypocrite she is! And what a sick spectacle this whole bloody mess is, with a bunch of nitwits caterwauling about “civil liberties,” “human rights,” “the constitution,” and so forth.

“Appear­ances and Real­ity: Merkel Balks at EU Pri­vacy Push” by Gre­gor Peter SchmitzDer Spiegel10/28/2013.

Chan­cel­lor Merkel has put on a good show of being out­raged by Amer­i­can spy­ing. But, at the same time, she has impeded efforts to strengthen data secu­rity. Does she really want more pri­vacy, or is she more inter­ested in being accepted into the exclu­sive group of info-sharing coun­tries known as the ‘Five Eyes’ club?

One par­tic­u­lar point of clar­i­fi­ca­tion was espe­cially impor­tant to Angela Merkel dur­ing the EU sum­mit in Brus­sels last week. When she com­plained about the NSA’s alleged tap­ping of her cell­phone, the Ger­man chan­cel­lor made clear that her con­cern was not for her­self, but for the “tele­phones of mil­lions of EU cit­i­zens,” whose pri­vacy she said was com­pro­mised by US spying.

Yet at a work­ing din­ner with fel­low EU heads of state on Thurs­day, where the agenda included a pro­posed law to bol­ster data pro­tec­tion, Merkel’s fight­ing spirit on behalf of the EU’s cit­i­zens seemed to have dissipated.

In fact, inter­nal doc­u­ments show that Ger­many applied the brakes when it came to speedy pas­sage of such a reform. Although a num­ber of EU mem­ber states — includ­ing France, Italy and Poland — were push­ing for the cre­ation of a Europe-wide mod­ern data pro­tec­tion frame­work before Euro­pean Par­lia­ment elec­tions take place in May 2014, the issue ended up tabled until 2015.

Great Britain, itself sus­pected of spy­ing on its EU part­ners, and Prime Min­is­ter David Cameron, who has for­mer Google CEO Eric Schmidt as one of his advi­sors, put up con­sid­er­able resis­tance. He pushed instead for the final sum­mit state­ment to call sim­ply for “rapid” progress on a solid EU data-protection framework.

A Set­back for  ‘Europe ‘s Dec­la­ra­tion of Independence ’

Merkel also joined those apply­ing the brakes. Over the week­end, SPIEGEL ONLINE gained access to inter­nal Ger­man For­eign Min­istry doc­u­ments con­cern­ing the EU lead­ers’ final sum­mit state­ment. The “track changes” fea­ture reflects a cru­cial pro­posed change to item No. 8 under the sub­ject head­ing “Dig­i­tal Econ­omy” — the sug­ges­tion that the phrase “adop­tion next year” be replaced with “The nego­ti­a­tions have to be car­ried on intensively.”

Ulti­mately, the offi­cial ver­sion of the final sum­mit state­ment sim­ply called for “rapid” progress on the issue — just as Great Britain was hop­ing for.

This amounts to a set­back for pro­po­nents of the pro­posed data-protection law, which EU Jus­tice Com­mis­sioner Viviane Red­ing has called “Europe’s dec­la­ra­tion of independence.”

The Euro­pean Par­lia­ment recently began draft­ing stricter reg­u­la­tions in this area, includ­ing poten­tial fines run­ning into the bil­lions of euros for any Inter­net com­pany caught ille­gally pass­ing pri­vate data to US intel­li­gence agen­cies. Such pro­posed leg­is­la­tion has the sup­port even of some of Merkel’s fel­low con­ser­v­a­tives in the Euro­pean Par­lia­ment, includ­ing Man­fred Weber of the Chris­t­ian Social Union (CSU), the Bavar­ian sis­ter party to Merkel’s Chris­t­ian Demo­c­ra­tic Union (CDU), who says: “We need to finally sum­mon the polit­i­cal will for more data protection.”

Amer­i­can tech cor­po­ra­tions could hardly believe their luck at hav­ing Merkel’s sup­portNow they’re hop­ing for more lee­way to water down the data-protection law as soon as the furor over the lat­est spy­ing scan­dal has sub­sided. One high-ranking Amer­i­can tech-company exec­u­tive told the Finan­cial Times: “When we saw the story about Merkel’s phone being tapped … we thought we were going to lose.” But, he added: “It looks like we won.” [Yeah, the tech companies are “shocked, shocked” too–D.E.]

Indeed, the EU lead­ers’ anger was already start­ing to dis­si­pate dur­ing their ses­sions in Brus­sels. Sum­mit par­tic­i­pants say lead­ers pointed out that Europe is not exactly on the side of the angels when it comes to gov­ern­ment spy­ing. Luxembourg’s prime min­is­ter, Jean-Claude Juncker, cau­tioned his fel­low lead­ers, ques­tion­ing whether they were cer­tain their own intel­li­gence agen­cies had never vio­lated data pri­vacy themselves.

Code of Con­duct for Intel­li­gence Agencies

The con­cerns of the tech indus­try, in par­tic­u­lar, received an atten­tive ear among Europe’s lead­ers. One sum­mit par­tic­i­pant relates that restruc­tur­ing data-protection laws was por­trayed as a “labo­ri­ous” task that would require more time to com­plete, and that Merkel did not push for speed on the mat­ter, to the sur­prise of some of her counterparts. [!–D.E.]

Accord­ing to sum­mit par­tic­i­pants, the Ger­man chan­cel­lor seemed far more inter­ested in the “Five Eyes” alliance among the US, the UK, Aus­tralia, New Zealand and Canada. The top-level allies within this exclu­sive group, which began in 1946 as a pact between Lon­don and Wash­ing­ton, have agreed not to spy on one another, but instead to share infor­ma­tion and resources. In Brus­sels, Cameron stressed to his fel­low lead­ers how many ter­ror­ist attacks had been pre­vented by suc­cess­ful intel­li­gence work.

Merkel, mean­while, stated: “Unlike David, we are unfor­tu­nately not part of this group.” Accord­ing to the New York Times, Ger­many has sought mem­ber­ship in the “Five Eyes” alliance for years, but has been turned down due to oppo­si­tion, includ­ing from the Obama admin­is­tra­tion. But this could now change, the paper speculates.

1c. One of the major considerations with regard to “The Adventures of Eddie the Friendly Spook” concerns L’Affaire Snowden as an assault on U.S. internet business. We suggest the possibility of U.S. corporations being, in effect, held hostage.

In the context of the Spiegel story above, we note that Germany is far more interested in being admitted to the “Five Eyes” club than assuring data privacy. Again, we suggest that U.S. internet firms are being held hostage in this affair.

Obama appears to be over a barrel in this regard, having to chose between security and the profitability and success of U.S. internet business abroad.

“Obama Weighing Security and Privacy in Deciding on Spy Program Limits” by David E. Sanger; The New York Times; 12/20/2013; p. A18.

. . . . The pressure to rein them in is coming from industry, which fears that the N.S.A.’s abilities to crack data encryption and bore into foreign computer systems and the cloud will scare away business across Europe and Asia. Mr. Obama must now make a choice: to keep building the world’s most sophisticated cyberarsenal, or pare back for fear of harming American competitiveness.

2. One of the statements made by Nazi fellow-traveler Citizen Greenwald is revealing. He stated that Snowden’s goal was to alert people to the fact that U.S. internet software was compromised. This would necessarily hurt U.S. competitiveness.

“About the Reuters Article” by Glenn Greenwald; The Guardian; 7/13/2013.

. . . .A: Snowden has enough information to cause more damage to the US government in a minute alone than anyone else has ever had in the history of the United States. But that’s not his goal. [His] objective is to expose software that people around the world use without knowing what they are exposing themselves without consciously agreeing to surrender their rights to privacy. [He] has a huge number of documents that would be very harmful to the US government if they were made public. . . .

Peter Thiel

3. Facebook CEO Mark Zuckerberg articulated the concerns of the U.S. tech industry at a recent conference. In FTR #718, we lookd a Facebook as a major intruder on people’s privacy, as well as its links to Underground Reich elements.

“Zuckerberg Says U.S. ‘Blew it’ on NSA Spying” by Brandon Bailey; San Jose Mercury News; 9/11/2013.

Facebook CEO Mark Zuckerberg lashed out at the U.S. government Wednesday, saying that authorities have hurt Silicon Valley companies by doing a poor job of explaining the online spying efforts of U.S. intelligence agencies.

“Frankly I think the government blew it,” Zuckerberg complained during an onstage interview at the tech industry conference known as Disrupt, a weeklong event where Yahoo (YHOO) CEO Marissa Mayer and other prominent tech executives also spoke out publicly and expressed frustration in person, for the first time, since a series of news leaks revealed the government’s controversial surveillance programs.

“It’s our government’s job to protect all of us and also protect our freedoms and protect the economy, and companies,” Zuckerberg told interviewer Michael Arrington, “and I think they did a bad job of balancing those things.”

He went on to say: “They blew it on communicating the balance of what they were going for.”

Facebook and other Internet companies have been under intense pressure in recent months after a series of news reports that suggest U.S. intelligence agencies have gained access to the online activities and communications involving users of Facebook and other popular services. Some of those reports have suggested that unnamed companies have cooperated with the U.S. efforts, although the details are unclear.

Analysts say those reports could hurt the companies financially, especially overseas, if if consumers and business customers believe their sensitive information isn’t safe from government prying. . . . .

4a. A recent Guardian/Observer article underscored the fears of U.S. business.

“After Edward Snowden’s Rev­e­la­tions, Why Trust US Cloud Providers?: The NSA’s Activ­i­ties Are a Mas­sive Blow for US Com­puter Businesses” by John Naughton [The Observer]; The Guardian; 9/14/2013.

“It’s an ill bird,” runs the adage, “that fouls its own nest.” Cue the US National Secu­rity Agency (NSA), which, we now know, has been busily doing this for quite a while. As the Edward Snow­den rev­e­la­tions tum­bled out, the scale of the foul­ing slowly began to dawn on us.

Out­side of the United States, for exam­ple, peo­ple sud­denly began to have doubts about the wis­dom of entrust­ing their con­fi­den­tial data to cloud ser­vices oper­ated by Amer­i­can com­pa­nies on Amer­i­can soil. As Neelie Kroes, Euro­pean Com­mis­sion vice pres­i­dent respon­si­ble for dig­i­tal affairs, put it in a speech on 4 July: “If busi­nesses or gov­ern­ments think they might be spied on, they will have less rea­son to trust the cloud and it will be cloud providers who ulti­mately miss out. Why would you pay some­one else to hold your com­mer­cial or other secrets, if you sus­pect or know they are being shared against your wishes? Front or back door – it doesn’t mat­ter – any smart per­son doesn’t want the infor­ma­tion shared at all. Cus­tomers will act ratio­nally and providers will miss out on a great oppor­tu­nity.“

Which providers? Why, the big US inter­net com­pa­nies that have hith­erto dom­i­nated the mar­ket for cloud ser­vices – a mar­ket set to dou­ble in size to $200bn (£126bn) over the next three years. So the first own goal scored by the NSA was to under­mine an indus­try that many peo­ple had regarded as the next big thing in cor­po­rate com­put­ing.

4b. Some observers feel the Internet may be Balkanized.

“Why NSA Sur­veil­lance Will Be More Dam­ag­ing Than You Think” by James Fallows; The Atlantic; 7/30/2013.

This col­umn over the week­end, by the British aca­d­e­mic John Naughton in the Guardian, takes us one more step in assess­ing the dam­age to Amer­i­can inter­ests in the broad­est sense– com­mer­cial, strate­gic, ide­o­log­i­cal — from the panop­ti­con approach to “secu­rity” brought to us by NSA-style mon­i­tor­ing programs.

Naughton’s essay doesn’t tech­ni­cally tell us any­thing new. For instance, see ear­lier reports like this, this, and this. But it does sharpen the focus in a use­ful way. Who­ever wrote the head­line and espe­cially the sub­head did a great job of cap­tur­ing the gist:

Edward Snowden’s not the story. The fate of the inter­net is.

The press has lost the plot over the Snow­den rev­e­la­tions. The fact is that the net is fin­ished as a global net­work and that US firms’ cloud ser­vices can­not be trusted.

In short: because of what the U.S. gov­ern­ment assumed it could do with infor­ma­tion it had the tech­no­log­i­cal abil­ity to inter­cept, Amer­i­can com­pa­nies and Amer­i­can inter­ests are sure to suf­fer in their efforts to shape and ben­e­fit from the Internet’s con­tin­ued growth.

* Amer­i­can com­pa­nies, because no for­eign­ers will believe these firms can guar­an­tee secu­rity from U.S. gov­ern­ment sur­veil­lance;
* Amer­i­can inter­ests, because the United States has gravely com­pro­mised its plau­si­bil­ity as world-wide admin­is­tra­tor of the Internet’s stan­dards and advo­cate for its open, above-politics goals.

Why were U.S. author­i­ties in a posi­tion to get at so much of the world’s dig­i­tal data in the first place? Because so many of the world’s cus­tomers have trusted* U.S.-based firms like Google, Yahoo, Apple, Ama­zon, Face­book, etc with their data; and because so many of the world’s nations have tol­er­ated an info-infrastructure in which an out­sized share of data flows at some point through U.S. sys­tems. Those are the con­di­tions of trust and tol­er­a­tion that likely will change.

The prob­lem for the com­pa­nies, it’s worth empha­siz­ing, is not that they were so unduly eager to coop­er­ate with U.S. gov­ern­ment sur­veil­lance. Many seem to have done what they could to resist. The prob­lem is what the U.S. gov­ern­ment — first under Bush and Cheney, now under Obama and Biden — asked them to do. [This, by the way is wrong. It predates both Bush/Cheney and Obama Biden. I discussed this on air, from open sources, well before either team assumed power. This highlights my statement that; “Journalists are like a flock of birds. When one lands, they all land. When one flies away, they all fly away.”–D.E.] As long as they oper­ate in U.S. ter­ri­tory and under U.S. laws, com­pa­nies like Google or Face­book had no choice but to com­ply. But peo­ple around the world who have a choice about where to store their data, may under­stand­ably choose to avoid leav­ing it with com­pa­nies sub­ject to the way Amer­ica now defines its secu­rity interests.

Here’s Naughton’s ver­sion of the implications:

The first is that the days of the inter­net as a truly global net­work are num­bered. It was always a pos­si­bil­ity that the sys­tem would even­tu­ally be Balka­nised, ie divided into a num­ber of geo­graph­i­cal or jurisdiction-determined sub­nets as soci­eties such as China, Rus­sia, Iran and other Islamic states decided that they needed to con­trol how their cit­i­zens com­mu­ni­cated. Now, Balka­ni­sa­tion is a certainty….

5. A Forbes analyst highlighted the damage that may be done to U.S. tech industry.

“How The Snowden Leaks And NSA Surveillance Are Bad For Business” by Dave Thier; Forbes; 7/9/2013.

Reddit general manager Erik Martin noticed something strange when he was at a conference in Latvia last month. There was a contest held, with a prize of one year’s free web-hosting for a small business — a decent value, a fairly normal prize. But when it came time to award it, nobody in the audience wanted it. It was from a U.S.-based company, and this was just days after Edward Snowden’s landmark leaks about the NSA’s PRISM program hit the press. With that hanging over them, people at the conference would have preferred to go with a different country.

There’s a general sense of unease about the U.S. government’s relationship to the internet right now, and it’s starting to affect how international consumers choose their web services. I talked with Christian Dawson, head of hosting company Servint and co-founder of the Internet Infrastructure Coalition, a group founded to inform the public and lawmakers about, as he puts it, how the internet works. He says that while it’s hard to put together any true statistics at this point, he’s heard a lot of anecdotal data about U.S.-based hosting and other web service companies losing business to overseas competitors since the Snowden leaks.

“We have a great fear that we are going to see a big exodus for US-based businesses over the information that’s been leaked,in part because there’s this tremendous lack of transparency, and lack of transparency is the absolute worst thing for these situations,” he says. “We’re competing on a global scale, and if people don’t have a reason to trust the host they’re using, they can go elsewhere in just a couple of clicks.”

Dawson stresses that the problem isn’t just with the program itself. He has little comment on what the government should or should not be doing to protect the country from terrorism. His problem is with the lack of open discussion surrounding these efforts. The U.S. may not have the most restrictive or the most repressive policies surrounding internet surveillance, but U.S. news is big news all over the world. According to Dawson, fear of the Patriot Act had already been dogging U.S. hosting companies for years, and the Snowden leaks just added fuel to the fire. In a global market as fluid as something like web hosting, a lot of consumers would just as soon prefer to take their business elsewhere.

“The lack of clear, intelligent language has put us at a tremendous marketing disadvantage,” he says. “These days, we’re finding that significant portion of our clientele values privacy. It is not simply the customer who has something­ to hide.” . . .

6a. The German government has been stoking the fires of global outrage.

Shun U.S. Web Services, Top German Minister Urges Privacy-Minded Citizens” by David Meyer; Gigaom; 7/3/2013.

Germany’s interior minister has suggested that people should stop using Google and Facebook if they fear interception by U.S. spies.

According to the AP, Hans-Peter Friedrich said on Wednesday that “whoever fears their communication is being intercepted in any way should use services that don’t go through American servers.” His call comes in the wake of Edward Snowden’s PRISM revelations, which showed how the NSA can easily access even supposedly private data on U.S. cloud services, at mass scale.

Friedrich is one of the first senior European politicians to explicitly urge privacy-minded citizens to avoid using U.S. services, although EU Digital Agenda Commissioner Neelie Kroes said a couple of weeks ago that “the PRISM debate will definitely increase calls for a European cloud, with a range of possible consequences for American companies.”

However, shunning Google and Facebook may not be a cure-all for keeping private communications private. Snowden also exposed a British program called Tempora, which allegedly involves the tapping of the fiber-optic cables that constitute the backbone of the internet – if that is the case, then all communications may be intercepted, regardless of where the service provider is located.

German data protection officials have urged the federal government to “do everything to protect the people in Germany against access to their data by third parties,” and have also called for explanations around how much the German government knew about PRISM and Tempora before the scandal broke. . . .

6b. More about the German government’s propaganda offensive:

NSA Blowback: German Minister Floats US Company Ban; Der Spiegel; 8/5/2013.

With the NSA spying scandal continuing to make headlines in Europe, the German Justice Minister, Sabine Leutheusser-Schnarrenberger, has raised the possibility of new, tangible measures to punish corporations that participate in American spying activities. In an interview with Die Welt, the liberal Leutheusser-Schnarrenberger called for the creation of EU-wide rules to regulate the protection of information, and said that, once those rules are in place, “United States companies that don’t abide by these standards should be denied doing business in the European market.”

Leutheusser-Schnarrenberger said that a package of EU measures is required in order to fight “the widespread spying of foreign spy services” and that German data protection laws should be a yardstick for the rest of the European Union — German privacy laws are considerably tighter than those of the United States and much of Europe.

German Interior Minister Hans-Peter Friedrich also raised corporate accountability in July, when he suggested requiring European firms to report any data they hand over to foreign countries. Leutheusser-Schnarrenberger, who is running for reelection in September as part of the pro-business Free Democratic Party, did not further specify which kinds of penalties she would like American companies to face, though it seems unlikely that Europe would completely ban companies like Google, which dominate the online search market, or Facebook from doing business. Both of those companies were implicated in the documents leaked by former intelligence worker Edward Snowden.

It is the latest development in a German election season that has come to be dominated by online privacy issues. Chancellor Angela Merkel has faced widespread criticism from the opposition for her handling of the NSA scandal and Peer Steinbrück, the Chancellor candidate of the opposition SPD party, recently told German television channel ZDF that Merkel should demand written assurances from the Americans they will respect German laws and interests and not engage in industrial espionage . . . .

6c. Germany’s largest media firm is going with the rhetorical directives from German government officials. Bertelsmann was the publisher for the SS in World War II and appears to be a fundamental part of the Underground Reich.

“Analy­sis: Despite Fears, NSA Rev­e­la­tions Help­ing U.S. Tech Industry” by Joseph Menn; Reuters; 9/15/2013.

. . . . Politi­cians in Europe and Brazil have cited the Snow­den doc­u­ments in push­ing for new pri­vacy laws and stan­dards for cloud con­tracts and in urg­ing local com­pa­nies to steer clear of U.S. vendors.

“If Euro­pean cloud cus­tomers can­not trust the U.S. gov­ern­ment, then maybe they won’t trust U.S. cloud providers either,” Euro­pean Com­mis­sion Vice Pres­i­dent Neelie Kroes told The Guardian. “If I am right, there are multibillion-euro con­se­quences for Amer­i­can companies.”

There have indeed been some con­tract cancellations.

Charles Mount, chief exec­u­tive of busi­ness file-sharing ser­vice One­Hub, told Reuters that an auto­mated sys­tem that asks cus­tomers why they have dropped the One­Hub ser­vice elicited this reply from an unspec­i­fied Ber­tels­mann unit in Austria:

“Head­quar­ters is ban­ning stor­age of com­pany data in the U.S. or with U.S. com­pa­nies alto­gether because of the NSA data-mining and indus­trial espi­onage. You should watch out for that. Maybe you should think about host­ing in Ice­land, Swe­den or some other place known for com­ply­ing with their own pri­vacy legislation.”

Ber­tels­mann spokesman Chris­t­ian Stein­hof said the com­pany couldn’t con­firm that the exchange had occurred and there­fore wouldn’t comment. . . .

7. A recent story in the Ger­man peri­od­i­cal Die Zeit claimed that the Ger­man gov­ern­ment warned against using Win­dows 8 (and also Chrome­book, a Google prod­uct) because the TPM chip had been equipped with a “back door” to per­mit the NSA to clan­des­tinely access infor­ma­tion. Although the Ger­man gov­ern­ment denied that they had actu­ally said that, it appears that dam­age may have already been done, per­haps delib­er­ately.

“Microsoft Seeks Calm On Ger­man Secu­rity Panic Over Win­dows 8” by Tom Brewster; Techweek Europe; 8/23/2013.

Claims that there is a back­door in Win­dows 8 giv­ing access to all ver­sions of the oper­at­ing sys­tem to US intel­li­gence have been gen­tly rebuffed by Microsoft.

A reporter in Zeit had sug­gested the back­door stemmed from the Trusted Plat­form Mod­ule, or TPM chip, which seeks to improve secu­rity by pow­er­ing the Secure Boot process that checks for and ignores mali­cious low-level code when a machine starts up. It does this through cryp­to­graphic keys that ensure code can­not be tam­pered with on load­ing and that the code is legitimate.

The Zeit writer had sug­gested the TPM could give the man­u­fac­turer of a device con­trol over it.

He said that in light of the leaks from Edward Snow­den, it would not be a sur­prise if TPM 2.0, the ver­sion used by Win­dows 8, was actu­ally a back­door the National Secu­rity Agency (NSA) could eas­ily exploit. As the chips pow­er­ing TPM are man­u­fac­tured in China, the Chi­nese could eas­ily access Win­dows 8 machines too, the report alleged.

The reporter attained doc­u­ments from the Ger­man gov­ern­ment that led him to reach his sup­po­si­tion. But the Ger­man gov­ern­ment has not said there is a back­door in the OS.

The Office for Infor­ma­tion Secu­rity (BSI) later clar­i­fied the government’s posi­tion, and did say the use of TPM 2.0 and Win­dows 8 (TPM is used in other non-Windows machines, includ­ing Chrome­books, mak­ing the claims even more ques­tion­able) meant the user had to deal with “a loss of con­trol over the oper­at­ing sys­tem and the hard­ware used”. This could lead to greater risk for the fed­eral gov­ern­ment and crit­i­cal infra­struc­ture, it said.

But the body said it had not warned the gen­eral pub­lic nor gov­ern­ment bod­ies against using Win­dows 8.

It said “the newly estab­lished mech­a­nisms can also be used for sab­o­tage by third par­ties”, but appeared only to be talk­ing gen­er­ally about vul­ner­a­bil­ity exploita­tion. There was no sug­ges­tion of a pur­pose­ful back­door, as Zeit had hypoth­e­sised, even if the BIS does have prob­lems with TPM.

Microsoft has responded to the ker­fuf­fle first by deny­ing it has ever pro­vided such access to users’ data and by talk­ing up the secu­rity ben­e­fits of TPM 2.0. It sug­gested gov­ern­ment depart­ments would be wise to use the secu­rity pro­tec­tions it pro­vides by default. But for those gov­ern­ments who want to gain back con­trol of their machines, they can go with OEMs who make Win­dows PCs with­out TPM. . . .

8. More about the TPM controversy.

Can Hewlett-Packard Capitalize on Microsoft’s Missteps? by Joshua Bondy; The Motley Fool; 8/28/2013.

With major industrial giants like Siemens, Germany is no small fry. As of 2012, it was the fourth-largest economy in the world. The German government’s recent announcement [that Windows 8 is unsafe due a backdoor called the Trusted Platform Module], is a dangerous omen for Microsoft (NASDAQ: MSFT ) .


The growth of open-source computing is causing major headaches for Microsoft, and this situation is no different. Linux is open source, and generally has fewer security vulnerabilities than Windows. Government and corporate IT departments are starting to realize that they can make their operations more secure and cut costs by switching from Windows to Linux. Using open-source alternatives to Microsoft Office is yet another way to lower costs. The City of Munich recently moved 14,000 desktop PCs to Linux and plans to save $13 million by using LibreOffice.


European Union austerity is making governments look for cost savings wherever possible. Microsoft is already feeling the pain in its bottom line. In 2013, operating income for the Windows division fell to $9.5 billion from $12.3 billion in 2011, and falling PC sales paint a grim future. . . .

9. Note that the Die Zeit story is disinformation! Note also that the leading maker of TPM chips is Infineon, a spin-off of Siemens.

“Don’t Let Para­noia over the NSA and TPM Weaken Your Security” by Ed Bott; ZDNet; 8/23/2013.

The unin­tended by-product of Edward Snowden’s NSA doc­u­ment dump is a bull mar­ket in para­noid con­spir­acy theories.

The lat­est exam­ple is the breath­less report out of Ger­many that Microsoft and the NSA have con­spired to give Amer­i­can spies access to every copy of Win­dows 8, enforced by a mys­te­ri­ous chip called the Trusted Plat­form Mod­ule, or TPM. “It’s a back­door!” scream the con­spir­acy theorists.

Appar­ently, Microsoft is so pow­er­ful that it is able to influ­ence even its most bit­ter ene­mies.

. . . .The point is, a TPM is a platform-neutral device. It pro­vides a secure way to encrypt data so that it can’t be accessed by any­one except you, and it pro­tects your device from being tam­pered with. Both of those fea­tures are highly desir­able these days.

But who knows what’s going on in that chip? I mean, they say it’s just a secure place to store encrypted keys, but who knows what else it can do? Obvi­ously the Amer­i­can gov­ern­ment or maybe the Chi­nese have intim­i­dated the chip’s man­u­fac­turer, right?

Uh, maybe not. The most pop­u­lar maker of TPM tech­nol­ogy is Infi­neon Tech­nolo­gies AG , which is based in … Neu­biberg, Ger­many. Per­haps those intre­pid Ger­man jour­nal­ists could, you know, hop on a train and head down to Infi­neon to see for themselves.

10. The corporate heritage of Infineon. Note that Siemens serves as something of a quartermaster for BND, German intelligence.

“Infineon Technologies’; Wikipedia.

Infineon Technologies AG is a German semiconductor manufacturer founded on 1 April 1999, when the semiconductor operations of the parent company Siemens AG were spun off to form a separate legal entity. As of 30 September 2010, Infineon has 25,149 employees worldwide. In fiscal year 2010, the company achieved sales of €3.295 billion. . . .

11. In FTR #’s 758 and 759, we noted that Snowden and the forces around and behind him are the same elements that were jeopardizing the U.S. and global economies in the government shutdown crisis last fall. In numerous posts and programs, we have discussed the fact that the GOP has been infiltrated by the Underground Reich to such an extent that it is little more than a Nazi/fascist front at this point.

Note that the GOP is de-funding scientific and technological development to such an extent that it fundamentally threatens the American high-tech economy, the Silicon Valley in particular. Of particular interest in this regard is the fact that the leading budget cutters are the Paulistinian “libertarian” elements of the GOP. The possibility that this may be a deliberate act on the part of an Underground Reich Fifth Column is one to be seriously considered.

In this context, the GOP/German “op” might be seen as a pincers movement.

“The GOP Plan to Crush Sil­i­con Val­ley: What Will Become of Steve Jobs’s Angel?” by John B. Judis; The New Republic; 8/20/2013.

When Con­gress returns from its sum­mer recess in early Sep­tem­ber, it will have exactly nine leg­isla­tive days to agree on a bud­get or the gov­ern­ment will shut down. House Repub­li­cans are seek­ing far greater cuts in non-defense spend­ing than Sen­ate Democ­rats, and some mem­bers of the GOP are threat­en­ing to hold up any bud­get agree­ment until the Obama admin­is­tra­tion aban­dons the Afford­able Care Act. It’s going to be a slog, with all sorts of unseemly com­pro­mises. But let me sug­gest an area where Democ­rats should allow exactly zero more dol­lars to be excised from the fed­eral bud­get: gov­ern­ment research for sci­ence and tech­nol­ogy. We’ve already seen a 13 per­cent drop in this area over the last two years, and it’s hard to over­state just how dam­ag­ing to the country’s future fur­ther reduc­tions would be.

Many peo­ple still cling to the idea that gov­ern­ment is, with­out excep­tion, a drag upon the pri­vate econ­omy. Con­ser­v­a­tives “know that when it comes to eco­nomic progress,” Arthur Brooks, the pres­i­dent of the Amer­i­can Enter­prise Insti­tute, wrote last year in National Review, “the best gov­ern­ment phi­los­o­phy is one that starts every day with the ques­tion, ‘What can we do today to get out of Amer­i­cans’ way?’ ” They imag­ine the United States as a land of plucky inventor-entrepreneurs (“We built it!” they cry) who work out of garages and depend solely on their wits. The prob­lem is that this vision of Amer­i­can inven­tive­ness is pure myth.

Steve Jobs, who has nearly been beat­i­fied in his role as inde­pen­dent busi­ness­man, excelled at design­ing prod­ucts based on government-funded inven­tions. Some of Apple’s most vaunted achievements—the mouse, a graph­i­cal user inter­face, the touch-screen, even Siri—were all devel­oped in part with fed­eral finances. Or take Google. Its search engine came out of a $4.5 mil­lion digital-libraries research grant from the National Sci­ence Foun­da­tion (NSF). You can also look at the phar­ma­ceu­ti­cal indus­try. Accord­ing to a Con­gres­sional Bud­get Office study, 16 of the 21 “most influ­en­tial drugs” intro­duced between 1965 and 1992 depended on fed­er­ally funded research.

The list goes on. Fed­eral money helped sup­port the inven­tion of lasers, tran­sis­tors, semi­con­duc­tors, microwave ovens, com­mu­ni­ca­tion satel­lites, cel­lu­lar tech­nol­ogy, and the Inter­net. Now, the feds are prime back­ers of the Human Genome Project (which could trans­form med­i­cine) and nan­otech­nol­ogy (which could trans­form man­u­fac­tur­ing). Sub­tract these kinds of inno­va­tions from America’s future, and you have an econ­omy depen­dent on tourism, the tot­ter­ing super­struc­ture of big finance, and the export of raw mate­ri­als and farm prod­ucts. More to the point, you have a weaker country—not just in com­par­i­son with its com­peti­tors, but also in its abil­ity to pro­vide its cit­i­zens with richer, longer, more imag­i­na­tive lives. . . .

12. In a 1950 circular letter distributed by the Nazi government in exile in Madrid, a U.S. economic failure was forecast.

Germany Plots with the Kremlin by T.H. Tetens; Henry Schuman [HC]; 1953; p. 231.

. . . .Economic difficulties will one day plunge the United States down from its present dizzy heights. Such a catastrophe can be brought about through crafty manipulations and through artificially engendered crises. Such maneuvers are routine measures which have already been employed in international power struggle and will be used again and again as long as economic rivals fight for power positions and markets in the world.

It is quite conceivable that America, weakened by a depression, will one day seek support from a resurrected Germany. Such a prospect would open tremendous possibilities for the future power position of a bloc introducing a new order in the world. . . . .


10 comments for “FTR #769 The Adventures of Eddie the Friendly Spook, Part 12: Blitzkrieg on American Internet and Electronics Business”

  1. While it doesn’t look Germany will get the coveted “No-Spy Agreement”, there still might be an investigation. According to Germany’s top prosecutor, there’s already enough evidence to open an investigation into Merkel’s phone-hack:

    Der Spiegel
    Probing America: Top German Prosecutor Considers NSA Investigation

    January 20, 2014 – 05:49 PM

    Germany and the US appear to be edging closer to political confrontation. The Federal Prosecutor says there is sufficient evidence to open a politically explosive investigation into NSA spying on Chancellor Angela Merkel’s mobile phone.

    Last Tuesday, on the sidelines of an Social Democrat party caucus in Berlin, German Justice Minister Heiko Maas ran into Foreign Minister Frank-Walter Steinmeier. Maas pulled his fellow SPD member aside and warned him about what could become a difficult matter. “Something may be coming our way,” Maas whispered, and noted that the foreign minister could be affected as well. Germany’s federal prosecutor, Maas intimated, is currently considering opening an investigation into the scandal surrounding the surveillance of Chancellor Angela Merkel’s mobile phone by US intelligence. It’s a step that would undoubtedly be considered an affront by the Americans.

    Steinmeier listened attentively and nodded several times, but he didn’t say much. At the start of his second posting as foreign minister (he previously served for four years from 2005-2009), Steinmeier is facing the extremely tricky problem of new discord in German-American relations.

    The current difficulties got their start in October, when SPIEGEL reported that US intelligence services were interested in Merkel’s mobile phone. When the magazine published its report, the National Security Agency’s curiosity suddenly became an open act of provocation.

    Merkel Fights Back

    In short, US President Barack Obama allowed Angela Merkel, his “friend,” to be eavesdropped upon. It didn’t go uncommented either. “We’re no longer living in the Cold War,” Merkel’s spokesman countered. The chancellor also complained personally to Obama. Merkel staffers said Obama’s reaction had been contrite, that he said he would quickly rectify the situation and that he offered far-reaching concessions. But Germany has been waiting in vain ever since.

    The Americans may be primarily to blame for the delay, but it is nevertheless becoming a problem for Merkel — not least because the revelations from the archive of former spy Edward Snowden continue to flow. The risk is high that she will appear as powerless in the face of US obstinancy as her former interior minister, Hans-Peter Friedrich, did last summer. After his fruitless trip to Washington, he was ridiculed in the press and became the butt of numerous jokes.

    It is a scenario Merkel would like to avoid. But a showdown is not in her interests either — and formel investigative proceedings would mark the next step toward escalation. In conflicts like this, there are often many losers, but seldom winners.

    Avoiding Further Mistakes

    Chancellor Merkel has recognized the dimensions of her problem. After missteps last year, she strengthened the Chancellery’s role in addressing the spying scandal. She has assigned the task to her new chief of staff, former environment minister Peter Altmeier, and Klaus-Dieter Fritsche, a former deputy minister in the Interior Ministry. She expects the two to finally make headway on the issue.

    In the close to eight months that have passed since the first reports were published about the National Security Agency’s massive spying operations, the only things Germany has been given by the US are well-meaning assurances. Last summer, the German government sent a list of questions about their surveillance programs to the Americans and the British, whose GCHQ intelligence agency has likewise been accused of conducting espionage against European Union member countries. To this day, neither has provided complete answers. Instead, ever more threads are becoming visible in the global spying network. It is also slowly dawning on the Germans that the parameters of a No-Spy Agreement announced by the NSA will never become a reality. German government representatives last week denied media reports claiming that negotiations were close to collapsing. At the same time, hopes are no longer high.

    Merkel’s staff sensed as far back back as November that a full-fledged No-Spy Agreement might not be possible. Pointing to Germany’s privacy of correspondence, posts and telecommunications law, which is anchored in the constitution, Gerhard Schindler, the head of the country’s foreign intelligence agency, the Bundesnachrichtendienst (BND), demanded concrete commitments, but the Americans fought over demands they said would be equivalent to sacrificing any espionage at all.

    Germans Seek Clarity

    Few view that as true peacemaking, and voices within the German government calling for a tougher approach are growing more numerous. Domestic policy experts have been openly placing their hopes on German Federal Public Prosecutor Harald Range, who has spent months looking into a possible official investigation into the NSA for spying on German soil.

    Michael Hartmann, a domestic policy expert with the SPD, says he expects “clarity as soon as possible.” His colleague Clemens Binninger of the CDU, recently elected as chairman of the Parliamentary Control Panel, the body in parliament responsible for supervision of the intelligence services, concluded, “It seems quite clear to me that the law was violated on German soil.” He says it would be understandable if an investigation were opened.

    The official line at the Public Prosecutor’s Office is that it remains unclear what will become of the allegations against the NSA. The office is treating the surveillance as two separate instances. One is the allegation that the NSA spied on the data of Germans millions of times. The other is the allegation that it eavesdropped on the chancellor’s mobile phone. Thus far, the Prosecutor’s Office has told parliament that there isn’t yet enough evidence to pursue a formal investigation.

    It’s a position that Hans-Christian Ströbele, a member of parliament with the Green Party who gained global headlines by visiting Edward Snowden in Moscow in late 2012, considers absurd. “They’re just looking for reasons to shirk responsibility because the issue is too controversial for them,” he says. Gregor Gysi, the head of the parliamentary group of the far-left Left Party, rails against what he describes as government “yes-men” when it comes to America. “The fact that the German government and the Federal Prosecutor isn’t acting shows that their fear of the US government is greater than their respect for our legal system.”

    However, one person is giving serious consideration to doing just the opposite: Prosecutor Range himself. He already signaled to Merkel’s last government that there was sufficient evidence for him to launch an investigation into the issue of the chancellor’s mobile phone. It’s an assessment he has since shared with the new leadership inside the Justice Ministry, despite some concerns within his own agency. “Who’s going to spring into action like a tiger if they know they will wind up a bedside rug?” posits one source close to the proceedings.

    The new government seems split on the issue. Justice Minister Maas is sympathetic to the idea of opening an investigation. Both Foreign Minister Steinmeier and Chancellor Merkel haven’t taken positions yet. Under German law, the justice minister has the right to order the federal prosecutor to either open legal proceedings or to prevent the agency from doing so. But it’s a discretionary power used by the justice minister only very rarely. In this case, it would likely prove highly controversial.

    In addition, the chancellor and her two ministers are concerned about potential consequences if the federal public prosecutor does take action. Indeed, they don’t see much practical use in Range doing so. One of Merkel’s driving principles as a politician has always been to not announce things publicly when it isn’t clear if she can deliver.

    And most people involved are relatively certain that any investigation into the mobile phone scandal will eventually fizzle out. For one, it is virtually guaranteed that any request for legal assistance from the Americans will remain unanswered. In addition, it’s not as if one can just interrogate whistleblower Edward Snowden in Russia. One of the few relevant witnesses who could give testimony is Elmar Brok, a member of the European Parliament with Merkel’s conservatives. He said after a visit to Washington that he asked NSA chief Alexander if the chancellor’s mobile phone would be spied on. “Not anymore,” he claims Alexander told him.

    One can only comprehend the Americans’ obstinacy if one understands the lengths US intelligence agencies go to keep their operations secret. Efforts to spy on partners and their leaders are among the most classified of the operations carried out by the US as a document from the Snowden trove, which SPIEGEL has been able to see, demonstrates. The document notes that Germany was a US surveillance target from 1946 to 1967. NSA operations from this period, the document shows, were classified for an especially long period of time due to the negative consequences to be feared if were those operations to be made public. Instead of being kept secret for the standard period of 25 years, information pertaining to spying operations on European countries like Belgium, France and Italy were to be classified for 75 years.

    ‘Serious Harm’

    The document which discusses the length of classification is dated Dec. 21, 2011 and is signed by the female head of technical surveillance at the NSA. It states, in a rather circuitous manner, that, if communications systems similar to the ones used then were deployed today, it could lead to intelligence targets taking defensive action — an eventuality, the document notes, which has not yet taken place only because “they simply do not appreciate how well their signals are currently being exploited by NSA/CSS.”

    The fact that the NSA has run and continues to run secret surveillance operations out of US embassies and consulates is to remain classified for 75 years. Otherwise, it “would cause serious harm to relations between the US and a foreign government or to ongoing diplomatic activities of the US.”

    The German government faces a dilemma. Should an investigation be launched, it could trigger an ice age in German-American relations — just at a time when the two countries are in the middle of a difficult withdrawal from Afghanistan and are negotiating over the trans-Atlantic free trade agreement.

    Furthermore, German intelligence officials are concerned that an open conflict could result in the reduction in the amount of information the US is willing to share. In recent years, German intelligence has broadened its cooperation with the US and would like to intensify it even further. Intelligence officials have made it clear they are concerned about aggravating Washington so as not to endanger joint operations, such as those aimed at counterterrorism or the illicit arms trade. “They could simply shut off the faucet,” says one high-ranking intelligence official. That could also make it more difficult to keep an eye on Islamists who may be planning attacks on German soil.

    Rocky Relations with Obama

    On the other hand, however, an investigation would send a clear signal that Germany isn’t willing to simply accept everything the US does. Merkel isn’t a big fan of such muscle flexing, but she has no illusions anymore regarding her relationship to Obama. It has had its ups and downs from the very beginning.

    Following an initial period of skepticism, Merkel managed to establish solid ties with the charismatic American president, with the apex coming when she was awarded the Medal of Freedom in the Rose Garden at the White House. Obama held a sappy speech praising Merkel and the chancellor was touched. It has been downhill from there, though. Her disappointment with Obama, his hesitance and his failures only grew — and then came the revelations about her mobile phone being tapped.

    As such, confrontation seems inevitable, and not just between Merkel and Obama. The future of the Internet is also at stake and it remains unclear who exactly is going to stand in the way of US intelligence’s grab for total access. Is it perhaps time to transfer Internet administration from the US-based Internet Corporation for Assigned Names and Numbers (ICANN) to the United Nations? And how forceful does a country like Germany need to get in order to be taken seriously in this debate?

    As the article points out, the international debate over NSA spying is intertwined with the debate over how the internet should be governed so it will be interesting to see how the NSA spying scandal ends up shaping the debate over the future of the internet.

    Posted by Pterrafractyl | January 21, 2014, 9:47 am
  2. There could be one big winner in the US tech sector as a result of all this: the newly proposed ‘third partythat will presumably be much more trustworthy than the government with our private data:

    Upstart Business Journal
    Who will be Obama’s ‘third party?’

    Michael del Castillo
    Technology & Innovation Editor
    January 21, 2014, 12:30pm EST

    The UpTake: Citizens of the world who were tired of how much of their personal data the U.S. government controlled may soon have to get used to a different dilemma: That same information being controlled by a private company.

    There’s a startup in the rafters that’s just been waiting for this moment.

    Last Friday, President Barack Obama announced sweeping changes to the way the government stores and analyzes information about telephone calls both in the United States and around the world.

    Though he made it very clear that the National Security Agency will soon cease keeping a store of all those ones and zeros, he left his options open as to whether the new gatekeepers will be the telecommunications companies themselves, or some mysterious “third party.”

    From the moment he said those two words I couldn’t get one word out of my head: Palantir.

    Cofounded in 2004 by PayPal cofounder Peter Thiel, who is also an investor through his Founders Fund venture capital firm, the Palo Alto, California-based company that raised $605 million in venture capital according to Crunchbase, took its seed round of funding from In-Q-Tel, the venture capital branch of the U.S. intelligence community.

    Since then, Palantir’s technology, which the Times called “the most effective tool to date to investigate terrorist networks,” has been used to “detect and eliminate sophisticated criminal activity,” to “harness massive-scale cyber data to understand network activity, limit exposure and harden security against cyber security threats,” and to “efficiently, effectively, and securely exploit and analyze data to drive more informed operation of planning and strategic decision making,” according to the company’s own site.

    With employees like former CIA and FBI “counterterrorist” Nada Nadim Prouty, who served the government until it was discovered she wasn’t in the country legally, former U.S. Representative Glenn Nye, and former U.S. ambassador to Greece and Belarus Daniel Speckhard all listed as current employees of Palantir on LinkedIn, the company would likely have few problems serving as a bridge between the private sector and the public.

    But what perhaps makes Palantir most interesting as a potential “third party” to hold the telecommunications industry’s metadata is the company’s founders’ stated libertarian leanings.

    Palantir’s biggest rival, I2, was acquired by IBM in 2011, leaving private defense contractors and a handful of other In-Q-Tel-funded big data startups as what we consider top contenders for the “third party” position.

    Unless of course, the government (and those who elected the government) don’t mind having IBM or another massive conglomerate holding onto their private data.

    Either way, some company, or group of companies, is about to take center stage in the privacy debate in a pretty big way.

    Perhaps the single most important question in the entire debate is this: Who would we really prefer holds onto all that metadata that paints a personal picture of our lives, but can also be used to protect us? The government, the phone companies, old-school big data firms, or a newby to the game with some serious startup cred?

    We reached out to Palantir for comment and will keep you posted as we learn more.

    LOL, yes, let’s give the guy that can barely hide his contempt for humanity even more power over everyone’s safety and welfare.

    Posted by Pterrafractyl | January 23, 2014, 10:39 am
  3. Snowden just gave an interview for German TV where he charged that the NSA engages in industrial espionage, grabbing any intelligence it can get its hands on:

    Snowden says NSA engages in industrial espionage: TV

    By Erik Kirschbaum

    BERLIN Sun Jan 26, 2014 8:25am EST

    (Reuters) – The U.S. National Security Agency is involved in industrial espionage and will grab any intelligence it can get its hands on regardless of its value to national security, former NSA contractor Edward Snowden told a German TV network.

    In text released ahead of a lengthy interview to be broadcast on Sunday, ARD TV quoted Snowden saying the NSA does not limit its espionage to issues of national security and he cited German engineering firm, Siemens as one target.

    “If there’s information at Siemens that’s beneficial to U.S. national interests – even if it doesn’t have anything to do with national security – then they’ll take that information nevertheless,” Snowden said, according to ARD, which recorded the interview in Russia where he has claimed asylum.

    Snowden also told the German public broadcasting network he no longer has possession of any documents or information on NSA activities and has turned everything he had over to select journalists.

    He said he did not have any control over the publication of the information, ARD said.

    You gotta wonder if the NSA was using the infamous TPM Chip backdoor to hack into those Siemens networks.

    It’s also noteworthy that this interview comes just days after Russia extended its asylum offer to Snowden because going on German TV and asserting that the NSA is engaging industrial espionage of major German firms seems like a pretty damaging new allegation. So you also have to wonder if there were any other revisions to Snowden’s initial asylum agreement.

    Posted by Pterrafractyl | January 26, 2014, 4:02 pm
  4. Another tidbit from Snowden’s recent German TV interview: Snowden reiterated that he doesn’t have possession of the documents but claims that the documents – held by trustworthy journalists – are acting as “life insurance”. So it sounds like someone has their finger on Snowden’s “Dead Man’s Switch” again.

    Raw Story
    Snowden in German TV interview said he believes the U.S. government wants him dead
    By George Chidi
    Sunday, January 26, 2014 18:43 EST

    Fugitive NSA whistleblower Edward Snowden believes American spies want him dead.

    “These people, and they are government officials, have said they would love to put a bullet in my head or poison me when I come out of the supermarket, and then watch as I die in the shower,” Snowden said in an interview televised Sunday by German public broadcaster ARD in his first TV interview since being granted asylum in Russia, as translated by Deutche Welle.

    Snowden charged in the interview that the NSA conducts industrial espionage against international corporations, an act that goes beyond the NSA’s anti-terrorism role. “If there is information at [German industrial giant] Siemens that they think would be beneficial to the national interests, not the national security, of the United States, they will go after that information and they’ll take it,” Snowden said.

    A post on the ARD TV site notes that the video can only be viewed online in Germany “due to legal reasons.”

    Snowden made note of his objections to the Five Eyes alliance between the intelligence services of English-speaking countries, which he said subverts the prohibition against domestic spying by exchanging surveillance data, with Britain spying on Americans and America spying on the British.

    Snowden is living in Russia under temporary asylum. He is wanted on charges of treason for stealing as many as 1.7 million documents from the National Security Agency while working as an IT contractor in Hawaii, a charge he denies. “I have given everything to the United States,” he said. adding during the interview that he no longer has any of the documents, which have been parceled out to “trustworthy” journalists around the world. Their possession of the Snowden files are the “life insurance” keeping him from being killed, he said.

    Also, regarding Snowden’s opposition to the ‘Five Eyes’ agreement because it subverts prohibitions against domestic spying via intelligence sharing agreements, the Five Eyes agreement is supposed to restrict spying on fellow members’ citizens. As the Snowden documents showed, there is indeed spying on UK citizens by the NSA (which can then be shared with the UK government), but it’s very unclear from those documents that you can actually blame that spying on the Five Eyes agreement. The insight on Snowden’s thinking helps explain why so much of the Snowden Affair reporting has involved international intelligence sharing agreements. But with Snowden calling for international regulations on state surveillance program, it’s going to be interesting to see what types are agreements are deemed acceptable.

    Posted by Pterrafractyl | January 26, 2014, 7:34 pm
  5. The great escape doesn’t have a clear destination:

    January 27, 2014
    The great escape: How the NSA is driving companies out of U.S. clouds
    Europeans may leave behind U.S. cloud companies all the faster after the most recent espionage revelations, but where they could go is a tough question
    By Serdar Yegulalp | InfoWorld

    The latest wave of revelations about NSA spying may leave U.S. cloud providers with a black eye if many of their European customers decide to bail.

    Edward Snowden’s most recent claim, via an interview given for German television, is that the NSA conducts industrial espionage, routinely collecting information from non-U.S. companies that have little apparent intelligence value.

    Such things are likely to make non-U.S. companies all the more skittish about storing their data in clouds run by U.S. companies. In fact, such a backlash may already be well underway to move to non-U.S. cloud companies whenever possible.

    In the interview, Snowden was asked if German engineering conglomerate Siemens AG was one of the NSA’s espionage targets. Snowden’s reply, according to International Business Times, was that “the agency would take information even though it was not related to national security concerns.”

    It’s possible Siemens did constitute a legitimate intelligence-gathering target in the NSA’s eyes — especially after many of its customers were hit with the Stuxnet worm, which seemed specifically designed (by whom, is another story) to target Siemens’s industrial automation software. (Siemens did not respond immediately to a request for comment.)

    Some cloud companies are already girding to avoid losing business, if they have any say in the matter. Microsoft’s top counsel, Brad Smith, stated that Microsoft plans to let its customers choose the country where their data is stored. (Microsoft was invited to comment directly for this article, but declined.)

    But defraying worries about spying can’t be accomplished by something as simple as moving data offshore. U.S. law requires that any service provider that falls under U.S. jurisdiction must comply with NSA data requests, no matter where the data is held geographically. Consequently, European regulators have expressed concern that U.S. legislation, such as FISA, might pose a greater risk to data protection than any of Europe’s own policies.

    The long-term answer for non-U.S. customers, then, may be cloud firms founded and run by non-U.S. companies. But that raises even more questions: who to replace them with, and where would they be from? Mikko Hypponen of Finnish security firm F-Secure has pointed out how in such a situation it’s “good to be a solution provider coming from a fairly neutral country” — that is, not the U.S., nor Europe, and also not China, Russia, or Israel either. That narrows the list a great deal.

    I can think of all sorts of nations that would be more than happy to dedicate their entire economies to secure data warehousing and little else. Granted, these nations don’t actually exist. Yet.

    Posted by Pterrafractyl | January 27, 2014, 2:55 pm
  6. So…does this mean Merkel no longer wants in on the Five Eyes?

    Merkel rebukes US and UK over spying

    Published: 29 Jan 2014 14:40 GMT+01:00
    Updated: 29 Jan 2014 14:40 GMT+01:00

    Chancellor Angela Merkel issued a strong rebuke to the United States and Britain on Wednesday over sweeping surveillance and spying activities reported by fugitive IT contractor Edward Snowden.

    In a major speech to parliament ahead of talks with US Secretary of State John Kerry on Friday, Merkel said that Western powers sacrificing freedom in the quest for security were sending the wrong signal to “billions of people living in undemocratic states”.

    “Actions in which the ends justify the means, in which everything that is technically possible is done, violate trust, they sow distrust,” she said. “The end result is not more security but less.”

    Merkel, whose own mobile phone was allegedly monitored by the US National Security Agency (NSA), is planning to travel to Washington in coming months for talks with President Barack Obama.

    On Friday, she will hold talks with Kerry “on the transatlantic partnership and global political issues”, her spokesman Steffen Seibert said.

    Merkel stressed that “Germany could not wish for a better partner than the United States” but also conceded that the allies remain “far apart” on the “ethical question” of freedom versus security in state surveillance.

    “Is it right that our closest partners such as the United States and Britain gain access to all imaginable data, saying this is for their own security and the security of their partners?” asked Merkel.

    “Is it right to act this way because others in the world do the same?” she added before also touching on alleged British spying at international talks.

    “Is it right if in the end this is not about averting terrorist threats but, for example, gaining an advantage over allies in negotiations, at G20 summits or UN sessions?

    “Our answer can only be: No, this can’t be right. Because it touches the very core of what cooperation between friendly and allied countries is about: trust.”

    Merkel said the reported revelations by Snowden, the fugitive former NSA contractor who remains in hiding in Moscow, had hit “with great force” half a year ago.

    The chancellor, who grew up under communism in the former East Germany, reiterated that Berlin was now driving efforts for a European no-spying agreement and new rules to safeguard data privacy.

    But she played down expectations for a similar deal with Washington, which has been reluctant to set a precedent fearing other countries would demand similar agreements.

    “Many say the attempts for such an agreement are doomed to failure from the outset, an unrealistic endeavour. That may be,” Merkel said. “Certainly the problem won’t be solved by just one visit.”

    But she vowed she would continue to argue the case strongly.

    As Snowden recently asserted on German TV, the BND doesn’t just have the software the NSA uses like XKeyScore for use in building its own database. The BND also has access to NSA’s XKeyScore database itself, contrary to the BND’s claims that they were only testing it out. So presumably this access will be cut off by the BND and all other EU intelligence agencies once they form the EU-Eyes club. Or maybe not. We’ll just have to wait see.

    Posted by Pterrafractyl | January 29, 2014, 2:28 pm
  7. It’ll be interesting to see how far this one goes:

    Monday, Feb 3, 2014 04:30 AM CST
    Hackers sue German government over NSA spying
    Associated Press, Associated Press

    BERLIN (AP) — A group of computer hackers and human rights campaigners in Germany say they are suing their government for allegedly breaking the law by aiding foreign spies.

    The Chaos Computer Club and the International League for Human Rights said they submitted a criminal complaint Monday claiming that Chancellor Angela Merkel and her government tolerated spying and effectively even helped members of the U.S. National Security Agency and Britain’s GCHQ to spy on German citizens.

    The groups point to documents released by NSA leaker Edward Snowden as evidence.

    In a statement they say the criminal complaint is meant to spark a “long-overdue investigation by federal prosecutors” into alleged lawbreaking by German officials and foreign spies.

    Federal prosecutors have been considering for months whether to open an investigation of alleged NSA activities.

    No doubt they were just searching through the XKeyScore database to find Merkel’s old deleted emails. She’s only human!

    German government faces legal action over NSA spying
    Details about the complaint will be shared later, one of the complainants said

    Loek Essers (IDG News Service)
    29 January, 2014 10:57

    The German government and the German Federal Intelligence Service are facing legal action because they allegedly aided the U.S. National Security Agency (NSA) data collection program.

    “We will send the legal action to the authorities next Monday,” said Constanze Kurz, a German computer scientist and spokeswoman for the Chaos Computer Club (CCC), in an email on Wednesday.

    “There are several persons as well as organizations which are suing our government and other named persons in charge,” she said, adding that one of them is the International League for Human Rights, a German section of the International Federation for Human Rights.

    The complainants will bring charges over the alleged involvement of the German government in the NSA spying programs, she said. “That is one reason,” she said, adding that the action was also started “because they did not even try to stop them from tapping into phones, hacking and spying on computers and collecting massive amounts of data although we have clearly laws that forbid foreign espionage.”

    Kurz said the legal complaint will comprise more than 50 pages, and will be published Monday.

    The German government and the German Federal Intelligence Service (BND) have been cooperating closely with the NSA and have used spy software provided by the NSA, according to a July report from Der Spiegel based on documents leaked by Edward Snowden.

    According to those documents, the BND, the German Federal Office for the Protection of the Constitution (BfV) and the German Federal Office for Information Security (BSI) played a central role in the exchange of information among intelligence agencies referred to by the NSA as “key partners”, Der Spiegel reported.

    The NSA also provided the BfV with a spying tool called XKeyscore, according to the report. The XKeyscore tool is a surveillance program that the NSA uses to collect data sets and allows analysts to search through vast numbers of emails, online chats and browsing histories without prior authorization, according to the Guardian newspaper. The BfV has admitted to another German publication, Bild, that it is using an NSA program, but said it is only testing it.

    Kurz is also one of the complainants that is challenging the legality of Internet surveillance programmes operated by U.K. intelligence agency GCHQ.

    Posted by Pterrafractyl | February 3, 2014, 1:46 pm
  8. Greetings Dave,

    Is it Bertelsmann following the EU’s dictates, or could it be the other way around, a case of Bertelsmann laying down agendas for the EU? Some weeks ago, I caught a Saturday morning French radio political programme in the car. The host was veteran French journalist Christine Ockrent and her guest was a consumately articulate and professional gentleman from the Bertelsmann Foundation. While I wasn’t fully paying attention – I’ve come to the point frankly where family time trumps paying attention to snakes, any time, especially on Saturday mornings – one thing struck me: Ockrent was lapping it all up, “religiously” as the adverb would be used in French. I was stunned, she was completely aligned with the German view, without reservations, and did not say one word in support of possible French views or interests, or any other European nation’s for that matter. The Bertelsmann guy was all about how Europe had to do Germany’s bidding, or there could be no Europe.

    Also, this small nugget from a recent entry in Jon Rappoport’s blog.
    “NOVAK (the reporter): Is it true that a private [Trilateral committee] led by Henry Owen of the US and made up of [Trilateral] representatives of the US, UK, West Germany, Japan, France and the EEC is coordinating the economic and political policies of the Trilateral countries [which would include the US]?

    COOPER: Yes, they have met three times.

    NOVAK: Yet, in your recent paper you state that this committee should remain informal because to formalize ‘this function might well prove offensive to some of the Trilateral and other countries which do not take part.’ Who are you afraid of?

    KAISER: Many countries in Europe would resent the dominant role that West Germany plays at these [Trilateral] meetings.”

    I’ve never looked much into Trilateral Commission theories and can’t assess them but I thought the information to be significant. A “dominant role” by Germany at such meetings is interesting to say the least. Wasn’t the German ex-SS Prince Bernhardt involved in the creation of that body? When most people think about nazis escaping after the war, it conjures up images of tanned Germans roughing it up in South American jungles. Whether the TC is/was significant as a center of power or not, it is all too clear that many of them transitioned almost seamlessly from war suit to business suit, into companies, banks (such as the very powerful, and understudied BIS, about which there is now an excellent recent book by Adam Lebor), and perhaps such convenient arenas of political power such as the TC for a country that could not assert power openly.

    Great show as always.
    All the best,

    Posted by goelette | February 7, 2014, 1:14 am
  9. We’re one step closer to the mush anticipated EU-Snowden investigation. It also sounds like Jan-Phillip Albrecht is going to push for Snowden to make a trip to the EU “for a later in-depth testimony”:

    The Hill
    February 07, 2014, 01:46 pm
    Snowden has new chance to spill secrets

    By Kate Tummarello

    Former government contractor Edward Snowden has agreed to participate in the European Parliament’s inquiry into government surveillance.

    Last month, the European Parliament’s Civil Liberties Committee voted to invite Snowden to testify about government surveillance via video conference. Over the last several months, the committee has been examining U.S. government surveillance, sparked by Snowden’s leaked information about the National Security Agency (NSA).

    On Friday, the committee said Snowden will answer its questions either in writing or in a recorded video.

    In a statement, committee member Jan Phillip Albrecht — who represents Germany’s Greens party and has been a vocal critic of U.S. surveillance of European citizens — said Snowden’s input would be “a significant and positive development” in the European Parliament’s inquiry into government surveillance.

    “To conclude the inquiry without testimony from its key witness would render the process clearly incomplete,” he said, calling on skeptical committee members to “drop their resistance.”

    Albrecht also said he hopes the committee will vote next week to call on European Union governments to grant Snowden protection.

    “It is clear that Edward Snowden will only be able to give us comprehensive information if he can be guaranteed a safe stay in Europe for a later in-depth testimony,” he said.

    Posted by Pterrafractyl | February 7, 2014, 12:28 pm
  10. European Commission vice-president, Viviane Reding, floated the idea of “United States of Europe” with full fiscal and political integration, although not necessarily at the same time:

    Eurozone countries should form United States of Europe, says EC vice-president
    Viviane Reding calls for full fiscal and political union for 18 eurozone countries but says UK should remain apart

    Nicholas Watt, chief political correspondent
    The Guardian, Monday 17 February 2014 16.37 EST

    A celebrated call by Winston Churchill for the creation of a “United States of Europe” was revived on Monday by a leading member of the European commission who said the 18 eurozone countries should form a full fiscal and political union.

    Viviane Reding, a vice-president of the commission, told Cambridge University’s law faculty that “bold reforms” were needed to avoid tensions across Europe as new governance arrangements were introduced to stabilise the single currency.

    Delivering the Mackenzie Stuart Lecture, named after the first British judge to serve as president of the European court of justice, the European justice commissioner endorsed Churchill’s view in a famous speech in Zurich in 1946 that Britain should remain apart from the United States of Europe.

    Reding said: “There is a strong case for a true fiscal and ultimately political union. In my personal view, the eurozone should become the United States of Europe. Like Winston Churchill, I believe that the UK will not be part of this, but it should remain a close ally with the federated eurozone, with which it would continue to share a common market, a common trade policy and hopefully a common security agenda.”

    Foreign Office sources described Reding’s speech as “a mixed bag of a lecture from an unrepentant federalist”. But the Foreign Office sources welcomed the acknowledgment by a senior European commission figure of the extent of reforms needed to create new governance arrangements for the eurozone that would require treaty change.

    Reding did not touch explicitly on treaty change. But José Manuel Barroso, the president of the European commission, did call for major treaty change in his 2012 state of the union address in which he called for “a federation of nation states”.

    David Cameron insists he will be able to table major reforms to the EU if he wins the 2015 general election, on the grounds that treaty change to introduce new eurozone governance arrangements, which would require the UK’s agreement, will be inevitable. The prime minister has pledged to hold an in/out referendum – following a renegotiation of Britain’s membership terms – by the end of 2017.

    Oh wow, so “there is a strong case for a true fiscal and ultimately political union”…sounds like the idea is for a fiscal union first and later a political union. How might that work?

    Another question raised by this possible “United States of Europe” proposal: Will all the EU nations ditch their own intelligence agencies at that point? Reding was calling for the creation of an EU intelligence agency by 2020 last November. So, once they politically merge, will all the national intelligence agencies get collapsed into once big agency? Or was Reding’s proposed EU intelligence agency not intended to replace national spy agencies at all but merely coordinate their spying(like an EU Eyes spy-ring)? And when there’s a fiscal but not yet political union, will the troikas get to set spending levels for the national spy agencies? These are just some of the fun questions in store for the “United States of Europe”.

    Posted by Pterrafractyl | February 27, 2014, 12:10 pm

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