PRISM Targets Hong Kong
By Yoichi Shimatsu
HONG KONG NSA cyber-espionage against this tiny territory has zero value in terms of military or anti-terrorism intelligence since Hong Kong hosts only a miniscule Chinese garrison and lacks strategic assets such as nuclear stockpiles, missile bases or even an air-defense system, and also because its port inspection program has been jointly run with the U.S. since soon after 9.11.
Why then did the National Security Agency focus its PRISM computer-hacking system on this little island, as exposed by whistleblower Edward Snowdon? The more tempting target than imaginary terrorists or phantasmagoric nuclear smugglers is Hong Kong’s role as a global financial center and conduit for international funds from mainland China interests.
Rated by the Heritage Foundation as the “world’s freest economy,” Hong Kong offers a well-regulated yet traditional approach to privacy in financial matters, reasonably free of undue government intrusion. Banking heavyweights here include HSBC, Standard Chartered, Bank of China, and the Industrial and Commercial Bank of China. Also of interest to Washington are the Vatican Bank and Catholic charities suspected of shuttling illicit funds through Hong Kong and Macau.
The territory’s stock exchanges are plied by high-stakes players like the China Investment Corporation (CIC), Morgan Stanley, Goldman Sachs and a host of hedge funds, including the Soros Management Fund, often acting on behalf of Chinese investors as well as international institutions. Along with these major financial players, smaller businesses in Hong Kong have also been subject to spying and analysis. These include tech companies, shippers, trading companies, insurance firms, universities and the HKSAR government. Money grubbers, though they may be, these business interests hardly comprise a threat to global capitalism; more often than not they are saviors of the world economy from American scams and mismanagement.
Contravening the 1997 Handover’s priority on protecting the rule of law in Hong Kong, the NSA wiretaps were done illegally without seeking warrants from the courts under minimal standards of reasonable or probable cause. Unwarranted seizure of personal data and proprietary information means that the U.S government is now liable not only for charges of privacy intrusion but also for billions of dollars in civil damages and, the criminal felony of grand larceny. Federal officials involved in felonious crimes, therefore, face long prison sentences, stiff fines and restitution for the millions of victims.
Marchers protesting U.S. cyber-spying are squeezed on the narrow pavement by anti-terrorist concrete barriers at the U.S. Consulate in Hong Kong.
It is no surprise then that unsavory characters like Dick Cheney, who directly supervised the National Security Council, are unleashing their dogs to snuff the fugitive spy and, short of that, accuse him of treason. The former vice president can howl for blood, but his wailing and whimpering will not stop the class-action lawsuits now being initiated or prepared against the rogue intelligence agencies involved in such sordid spying against innocent civilians. While American citizens muster evidence for admission to the federal courts, people outside of the U.S. should launch legal action in overseas jurisdictions against violations of their national laws.
Cheney and his UStasi ilk belong behind bars for spying on the public so that justice can prevail and also for their own safety, because the moment is soon arising for torch-bearing mobs to hunt down the Frankenstein monsters known as the CIA, NSA and Treasury Department.
Global Financial Warfare
The fugitive Snowden focuses on the technical means of exploiting weaknesses in computer security. His releases to the press have yet to disclose details of the intelligence hierarchy that issued the orders to hack Hong Kong finance and why.
Decisions to crack the financial sector come from the top, specifically the Executive Branch of the President, acting through the little-known but all-powerful intelligence arms of the Treasury Department. The overriding objective is not to combat terrorism but to inflate that threat as a scare tactic to guise a long-range strategy to extend American dominance over the global economy. The foes of Washington and Wall Street are not wild-eyed fanatics in beards and robes, who are mere puppets of the CIA.
The real enemy of the White House, its Treasury Department, and the Federal Reserve Bank has always been any financial power or combination of economies that might supplant the Almighty Dollar as the world’s only reserve currency and medium of trade. The dollar’s supremacy enables the federal government to avoid an apocalyptic economic collapse by ceaselessly print money, run up the national debt beyond any intention of repayment, and sell worthless Treasury bonds and Wall Street stocks to foreign investors eager to dump the increasingly debased currency.
Japan Inc. serves as an abject example of an economic rival that dared challenge the arbitrariness of the U.S. financial order. Under the Clinton administration, Treasury Secretary Lawrence “Larry” Summers, a financial charlatan and minion of Sen. Charles Schumer, pressured Tokyo to stimulate its economy with wasteful and ineffective spending, a policy that extended the economic slide, thereby undermining Japan as a financial rival.
The Asian financial crisis is another case of U.S. duplicity and sabotage. In the late 1990s, the U.S. Treasury flexed its muscles against the Asian Development Bank to block Japanese and Chinese proposals for currency swaps under the Chiang Mai Accords, to stabilize and underwrite the Southeast Asian “tiger economies”, then under attack from U.S.-based hedge funds led by George Soros. The collapse of the Thai baht and Indonesian rupiah wrecked regional cooperation and guaranteed U.S. dominance over the emerging markets.
The euro crisis, too, is another example of the dirty war on financial markets. Treasury officials, and their henchmen in the hedge funds, led the assault on the rival euro currency, again with over-stimulus of the Southern European property markets, which eventually ended in a currency collapse. The covert operation to entrap and tarnish French finance official Dominique Strauss Kahn was a classic case from the NSA-CIA tool kit. Interception of his credit card charges at disreputable establishments and hacking to identify his online porn preferences enabled his foes at the Fed to set him up for a sex scandal.
The singling out of HSBC for punishment showed how the Treasury tactics are not always to the attack, but whenever necessary become defensive in nature. Even before the outbreak of 2008 Wall Street crisis, Treasury leaned heavily on the U.S. division of HSBC for halting its investments in the North American subprime property market. Furious at U.S. banks being left holding the bag in unsecured real-estate mortgages, federal agencies under then-Treasury Secretary Tim Geithner threw the kitchen sink at HSBC. The bank’s Mexico branch was accused of laundering money for drug traffickers.
Never mind the thousand fingers of U.S. banking in cartelized Panama or the frauds being perpetrated by Lehman or Bernie Madoff; HSBC had to be guilty of something and anything would do. In December, the Justice Department forced a record punitive fine of $1.6 billion and regulatory restrictions in a “settlement” with HSBC USA.
The Vatican came up next on the hit list. The Treasury turned its all-seeing eye on to the Institute for the Works of Religion, better known as the Vatican Bank, accusing it of money laundering for the Italian mafia through dodgy real-estate investments in Spain and Ireland. American pressure led to the coerced resignation of Pope Benedict XVI, followed by secret Paris negotiations with top cardinals during Secretary of State John Kerry’s first foreign tour. A diplomatic full-court press led to the appointment of new pope and the Vatican Bank’s signing of an agreement in May to report its financial transactions to the Treasury.
All along, China has been tarred-and-feathered as a “currency manipulator”, as if the dollar isn’t being manipulated by Treasury. Never mentioned in the business media is the fact that Beijing regulators have been cooperating with U.S. proposals for banking reform. The Treasury Department and the People’s Bank of China have for many years worked closely on a data-sharing program and development of a common set of rules. Violations, for instance, curbs on the Kunlun Bank in its financial dealings with blacklisted Iranian companies, go unheralded by the lapdog media.
PRISM is used to dig up dirt on rival financial powers so that Treasury choose from the right tool from its dirty-tricks kit: sanctions, trial by media, blackmail of bank officials and threats of prosecution. The unilateralism and gangbuster are in violation of the international framework of oversight by global institutions, including the Bank of International Settlements, IMF, World Bank and the Egmont Group. The U.S .as member-nation is a wolf in sheep’s clothing.
A second key point is that the U.S. aim is often not reform of aberrant banking practices; rather it is the destruction of rival centers of financial power, including the EU, Japan, ASEAN and Arab states. Washington and New York are at total financial war with other economies, and in its pathologically warped logic, the winner takes all and the winner is always the same.
And so, at last, it was Hong Kong’s turn to be crushed under, since Beijing and Shanghai are still too hard to crack.
Obama’s Strategic Pivot
To train their electronic guns on Hong Kong, the levers are pulled in Honolulu. For that purpose Edward Snowden was transferred to the Honolulu offices of defense contractor Booz, Allen and Hamilton, which is nicknamed “NSA Hawaii.” Only scant details of his work there have emerged in the mainstream media, which is pathetically obedient to the current White House-ordered damage-control operation.
Booz Allen’s primary client in Hawaii is the U.S. Pacific Command (PACOM). Most of its contractors work at military facilities including Pearl Harbor, Hickam Air Force Base, Scofield Barracks and Camp Smith in Oahu, the Pacific Missile Range on Kaui and the Pacific Warfighting Center on Ford Island. The technical experts from Booz Allen provide experience and training to the rookie servicemen who intercept and decipher encrypted data, and vet the sought-after messages.
Hawaii is the key node for undersea telecom cables and satellite transmissions from across the Asia-Pacific region, which in military jargon is the Pacific Theater with its 15 time zones and 36 nations. Undersea cables that do not pass through Hawaii are routinely monitored through electronic pick-ups installed by U.S. Navy submarines, and the data streams are forwarded to Honolulu. The massive information flow is sorted out, tagged and sent on to relevant destinations for review, including the White House, State, Treasury and the Pentagon.
The prison-like consulate building is an icon of paranoiac state power with its compulsion to spy on everyone and therefore the exact opposite of what America is supposed to stand for.
The Obama administration’s “strategic pivot” to Asia, aimed at containing China, spurred a rapid build-up of intelligence personnel at Booz Allen offices in Alaska, Guam, South Korea, Japan-Okinawa and Australia. The modernist office tower of AIG in the Central District and its AIA affiliates were once the listening post for China. Before its construction and after the collapse of AIG in the 2008 debacle, the hole in intelligence gathering was patched with an expansion of NSA hacking of routers in Hong Kong, including the node at Chinese University in Shatin.
Snowden worked at Booz Allen in Hawaii and Japan for only a mere three months. Prior to that, he was assigned to a joint NSA-CIA project in Geneva, where a covert operations team was cracking Swiss banking secrecy. His term there, starting in 2007, coincided with repeated attempts to entrap a Swiss bank executive, which easily could have resulted in his death by car accident. Those years in Switzerland sheds light on the dirty war against foreign banks.
Dead Bankers Society
A spate of suspicious deaths of banking executives rocked the financial world in the wake of the 2008 Wall Street crisis. The victims of reported “suicides” included:
- Rene-Thierry Magon-Villehuchet of the Luxalpha fund;
- Alex Widmer, CEO of Bank Julius Baer;
- Hubert Boumeester, CFO of ABN Amro who supervised the RBS buyout; and
- HSBC executive Christen Schnor.
Then in 2010, Neil McCormick who headed the UBS investment operations in Hong Kong fell from a balcony in London after “friends” reportedly urged him into a drug binge. More recently, last summer, HSBC veteran Michael Foreman plunged to his death from the Tate Modern gallery. In the weird light of Hong Kong’s soap-opera media, however, these banker deaths were overshadowed by Nancy Kissell’s fatal bludgeoning of her banker husband.
The question naturally arises whether these violent deaths were actually “assisted suicides” brought on by threats of prosecution and sexual blackmail or outright murder. The term “defenestration” means to throw someone from a height, and if any institution has a defenestrating motive to cover its own misdeeds, it is the U.S. Treasury.
In cases when it becomes inconvenient to rub out an insider, then a sex scandal will do nearly as well to ensure silence. In circumstances similar to the DSK affair and the entrapment of Eliot Spitzer, UBS executive Juerg Buergin was arrested last year in Singapore for hiring a 17-old prostitute. Also snared in that Singaporean sweep was Howard Shaw, grandson of Runme Shaw who founded the family-owned media group in Singapore. The sweet honey pot, who claimed to be of legal age, was advertised through an online vice website, a perfect medium for a sting operation.
More Holes than Swiss Cheese
The Snowden case provides a rare look into how undercover agents from the NSA and CIA plan and implement blackmail against bankers in situations of high-risk to the target’s life. Former NSA staffer Wayne Madsen, who publishes an online intelligence report, has disclosed details of a preplanned “accident” arranged in 2008 to coerce a Geneva banker to turn over the passwords to his clients’ accounts.
The secret project against the Swiss banking sector involved a joint NSA-CIA team, which conducted computer hacking and field operations against their quarries. The clandestine group was run by the Special Collections Service (SCS), under the code-name F6, headquartered inside the State Department’s communications annex in Beltsville, Maryland.
Snowden was assigned to maintaining network security at the SCS office located inside the U.S. Mission to the United Nations in Geneva. Part of his duties was to embed Trojan horses into computer networks that allow the NSA to bypass firewalls and encryption software of servers inside Swiss banks.
On the HUMINT or human intelligence side, Madsen explains: “The SCS is also used to recruit foreign nationals who would be helpful in providing access to government and commercial networks and databases. Chief targets for such recruitment are database managers, systems administrators, and computer security technicians. Even Swiss bankers with access to secret accounts would be targeted by the SCS to provide system passwords and remote access techniques to banking networks.”
In Geneva, CIA agents from the SCS team befriended a targeted Swiss banker, frequently plying him with alcohol and then encouraging him to drive home. After one such drinking bout, the banker was arrested on drunk-driving charges, but his record was erased on condition that he agreed to be an agent for the CIA. That the banker could have suffered injuries or a fatal collision with a car or telephone pole indicates the American agents’ blatant disregard for human rights, life and liberty.
The SCS, which is embedded also inside Canadian diplomatic facilities, planted 27 eavesdropping devices in the Boeing-767 ordered for President Jian Zemin in 2001. SCS was involved in a surveillance operation in Abbottabad, Pakistan, location of the so-called Obama bin Laden compound. One of its secret team was also implicated in the satellite phone data leak to Moscow, which led to the assassination of Chechen leader Dzhokhar Dudayev in 1996 by a signal-homing missile.
The SCS is merely the executioner, carrying out orders from higher-up officials. Spy operations and covert action against financial centers like Hong Kong and Geneva are authorized and directed by a U.S. Treasury agency that goes by the generic title Office of Intelligence and Analysis (OIA).
A Fistful of Dollars
The Treasury Department has a clean-cut image as tax collectors and federal accountants, but nothing could be further from the facts. Treasury is the world’s only finance ministry authorized to run its own independent intelligence services. This low-profile bureaucracy controls the presidential guard called the Secret Service and the notorious ATF or Bureau of Alcohol, Tobacco and Firearms until it was transferred to the newly created Department of Homeland Security. In the early 1990s, while still an arm of the Treasury, the ATF falsified evidence that led to the Ruby Ridge siege and later a ruthless military-style assault on the Branch Davidian sect’s compound in Waco, Texas.
Following the 9.11 attacks, Treasury’s paperwork-based Office of Terrorist Financing and Intelligence (OTFI) created a special sub-unit to launch more proactive and robust operations against banking insiders on the White House hit list. The Office of Intelligence and Analysis is, in effect, an uber-agency with sweeping powers to act without warrants, suborn other federal agencies and military units, borrow CIA and NSA operatives, and embed covet operations under cover of diplomatic outposts and those hundreds of business corporations that cooperate with the CIA Non-Official Covert (NOC) in-house spy program. The OIA modus operandi is similar to that of the John Travolta character in the thriller “Operation Swordfish”, that is, thievery and assassination with a license to kill.
The current head of OIA is a 25-year CIA veteran agent Leslie Ireland, who serves as Treasury’s Assistance Secretary for Intelligence and Analysis. Her mission is: “to safeguard the international financial system from abuse and to combat threats to U.S. national security.” During a stint at the Executive Office of the President, Ireland spoon-fed the daily intelligence briefings to President Obama and his inner circle. Despite her commendations for patriotic service as deputy director of Central Intelligence, her career included the portfolios for Iran, Kuwait and weapons of mass destruction, all remarkable as intelligence fiascos hatched by CIA disinformation.
Ireland’s nominal supervisor, actually more of a rubber stamp, is Treasury Secretary Jack Lew, an odd choice for the post. He was the Citibank executive who during the 2008 financial meltdown invested heavily in Ugland House, a front for investment funds located in the tax haven of the Cayman Islands. Whether these funds were used to hide assets away from loss-hit American investors or to park secret government-controlled funds has never been investigated or reported. Ugland House is the U.S. equivalent of Banco Delta, the North Korean conduit in Macau, which was targeted by OTFI investigators.
Bankers and brokers, a timid lot who prefer the safety and predictability of the bond market, have avoided confrontation with an agency known for its double standards and gang-busters approach to foreign-owned banks. OIA is truly the proud gun-toting progeny of the old ATF. It’s no wonder that so many bankers have been culled, while the survivors run scared.
A Speck of Sanity
With a reign of murder and mayhem at the helm, one cannot blame Edward Snowden for jumping ship on to this speck of sanity on the other shore. Desertion is the only remaining defense against the bureaucratic insanity, short of the last resort of munity, which will undoubtedly arise at the appropriate moment.
Until that day of reckoning, Dick Cheney is risking heart failure with his foaming at the mouth about some “traitor and possible spy.” If Snowden had instead fled to Israel, of course, all would be forgiven, our dear lad.
Just spare what little is left of your manhood for a minute, Mr. Cheney, instead of firing blanks. What is the “worst possible outcome” of the Snowden affair for U.S. interests? Upgraded computer security in Hong Kong and, gasp, China is hardly a threat to American national interests. If anything, a reduction in espionage activity might actually lead to trust-building and closer cooperation between Washington and Beijing on issues that really matter, for example, a global economic recovery creating more jobs, more orderly financial flows that spur industrial investment, joint peacekeeping along the troubled Asian sea lanes, a crack-down on drug trafficking, cooperation on the environment and a freer Internet on both sides of the Pacific.
From Protest to Political Realignment
The voices in favor of Snowden far outnumber his critics. In California, more than 80 percent of adults oppose government spying on computer networks. The protests in Hong Kong, epicenter of pro-Snowden sentiment, are gaining the support of young people from all around the world. Information freedom and privacy rights comprise the cross-cutting issue that promises to realign the rotten system of two-party deal-making, hopefully with the rise of a broad movement opposed to bureaucratic totalitarianism.
The Arab Spring, which was inspired, orchestrated and eventually lost by the twitterati in the State Department was a false start. The kick-off for a political realignment leading to a new political coalition, as opposed to Barack Obama’s vacuous hype, is happening in Hong Kong. However it goes in the weeks and years ahead, Edward Snowden will be remembered as the first harbinger of the Electronic Spring.
Author: Yoichi Shimatsu, former editor of The Japan Times Weekly in Tokyo, was a founding faculty member of the Journalism and Media Studies at The University of Hong Kong.
2. The prison-like consulate building is an icon of paranoiac state power with its compulsion to spy on everyone and therefore the exact opposite of what America is supposed to stand for.
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