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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. [1] (The flash dri­ve includes the anti-fas­cist books avail­able on this site.)

Lis­ten: MP3

Side 1 [2]  Side 2 [3]

[4]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 [5] and 759 [6], 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 [7] has been infil­trat­ed by the Under­ground Reich to such an extent [8] that it is lit­tle more than a Nazi/fascist front at this point [9].

Note that the GOP is de-fund­ing sci­en­tif­ic and tech­no­log­i­cal devel­op­ment to such an extent that it fun­da­men­tal­ly threat­ens the Amer­i­can high-tech econ­o­my [10], 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 [11]. 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: 

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 [22] 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. [22]

[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 [11] 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. [11]

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. [23]

. . . . 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. [24]

. . . .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. . . .

[25]

Peter Thiel

3. Face­book CEO Mark Zucker­berg artic­u­lat­ed the con­cerns of the U.S. tech indus­try at a recent con­fer­ence. In FTR #718 [26], 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. [27]

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. [13]

“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 [28]: “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 [29] (£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 [30].

...

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. [31]

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. [32]

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. [14]

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. [15]

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 [16] of the Under­ground Reich.

“Analy­sis: Despite Fears, NSA Rev­e­la­tions Help­ing U.S. Tech Indus­try” by Joseph Menn; Reuters; 9/15/2013. [17]

. . . . 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 [18] 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 [19], per­haps delib­er­ately.

“Microsoft Seeks Calm On Ger­man Secu­rity Pan­ic Over Win­dows 8” by Tom Brew­ster; Tech­week Europe; 8/23/2013. [18]

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. [33]

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 ) .

AN ALTERNATIVE EXISTS

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.

MICROSOFT’S FUTURE

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. [20]

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’;  [21]Wikipedia. [21]

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 [5] and 759 [6], 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 [7] has been infil­trat­ed by the Under­ground Reich to such an extent [8] that it is lit­tle more than a Nazi/fascist front at this point [9].

Note that the GOP is de-fund­ing sci­en­tif­ic and tech­no­log­i­cal devel­op­ment to such an extent that it fun­da­men­tal­ly threat­ens the Amer­i­can high-tech econ­o­my [10], 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. [10]

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. [34]

. . . .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. . . . .