Last month, a group of students at University of California at Irvine gathered to protest a screening of the film “Beneath the Helmet,” a documentary about the lives of recruits in the Israeli Defense Forces. Upset about the screening of a film they viewed as propaganda for a foreign military, the students were also protesting the presence of several IDF representatives who here holding a panel discussion at the screening.
That student protest has since become the subject of an intense controversy. The school’s chapter of Students for Justice in Palestine is now facing the possibility of being banned from the campus. In addition, a legal representative for some of the students involved in the protest, Tarek Shawky, told The Intercept that the students were informed by the university that their cases have been referred to the district attorney for criminal investigation.
The day after the event, the school’s chancellor released a statement accusing student protestors of “crossing the line of civility.” In his statement, posted on the school website, Chancellor Howard Gillman said that “while this university will protect freedom of speech, that right is not absolute,” adding that the school would examine possible legal and administrative charges against the protestors. News reports cited claims that attendees at the film had been intimidated and blocked from exiting the event.
The protestors at the event represented a wide range of student groups, including Students for Justice in Palestine, Jewish Voice for Peace, and the Black Student Union. Students who spoke with The Intercept denied that anyone had intimidated attendees at the event or blocked access. “We held our protest in a way that reflected university guidelines, we didn’t use amplified sound and we didn’t restrict anyone’s freedom of access to the event,” says Daniel Carnie, a member of Jewish Voice for Peace who took part in the protest.
Contacted for comment, a media relations representative at UC Irvine said that it was normal practice for cases like this to be referred to the District Attorney. “It is routine for UC Irvine Police Department, when called upon to investigate an incident on campus, to forward the investigation to the District Attorney’s office,” said Cathy Lawhon. “It’s then up to the DA’s office to determine if any charges are warranted.” Lawhon added that the school investigation into banning Students for Justice in Palestine was proceeding separately.
Reached for comment, the Orange County District Attorney stated that they have yet to receive a referral on the case from the school.
The incident is only the latest in which officials at UC Irvine and other major universities around the country have taken harsh measures against pro-Palestinian activists. “There is a really ugly history of targeting student groups advocating for Palestinian issues,” says Liz Jackson, a staff attorney with Palestine Legal, a group which provides legal advice and advocacy to individuals in the U.S. advocating for Palestinian rights. “It suppresses the really important debates about U.S. foreign policy that young people need to be having. Instead of being able to engage freely and voice opinions that challenge the status quo, one side of the debate is just being crushed.”
A report issued last year by Palestine Legal and the Center for Constitutional Rights documented 152 incidents of free-speech suppression on U.S. campuses in 2014. These incidents have included acts of censorship, threats of legal action and even accusations of support for terrorism. Citing the threat posed to the First Amendment by such acts, the report added that they were “undermin[ing] the traditional role of universities in promoting the free expression of unpopular ideas and encouraging challenges to the orthodoxies prevalent in official political discourse.”
Threats, punishment and intimidation are all being routinely used to stifle dissenting viewpoints on Israel-Palestine, says Omar Shakir a fellow at the Center for Constitutional Rights and a co-author of the report. “University officials are erecting bureaucratic actions to make it harder to hold certain events, imposing administrative sanctions and even firing and denying tenure to professors for their views on Israel-Palestine, efforts that collectively represent a grave threat to the First Amendment.”
For instance, Native American Studies Professor Steven Salaita lost his tenured faculty position at the University of Illinois in 2014 after being accused of incivility in his online comments on Israel-Palestine. After a public legal battle, last year the school settled a lawsuit filed by Salaita for financial compensation.
In the case of UC Irvine, Shakir adds that the university’s charge of “incivility” on the part of protestors is a particularly egregious attempt to stifle protected speech. “Accusations of incivility have always been used by those in power to justify attempts to suppress changes to the status quo,” Shakir says. “The term itself, ‘civility’ represents coded language that in the past has been used to try and suppress groups deemed ‘uncivilized,’ like Native-Americans and African-Americans in the United States. It has no place being used as a basis to silence student activists today.”
Those views were partly echoed by Ari Cohn, a lawyer with the Foundation for Individual Rights in Education, a campus free-speech organization. “If allegations that protestors at UC Irvine disrupted the event are substantiated that would not be protected speech, as it would impinge on the speech of others attending the event.” Cohn added, however, that “civility in itself cannot be mandated by schools. Incivility plays a fundamental role in much of the social activism on campuses.”
Threats to speech, have come not only from university administrations but from law enforcement as well. In 2010, Osama Shabaik was among a group of eleven students at UC Irvine who were arrested after protesting an appearance by then-Israeli ambassador Michael Oren at the school. Oren’s speaking event came roughly a year after Operation Cast Lead, a three-week Israeli military campaign against the Gaza Strip that killed hundreds of civilians. Intent on making a point about the inappropriate nature of Oren’s appearance following the attack, Shabaik and others organized a protest to disrupt the event.
In an incident that was captured on video, Shabaik and several other students repeatedly stood up in the crowd to interrupt Oren’s speech, chanting slogans against Israeli military abuses during Cast Lead. The students were detained and ejected from the event, something Shabaik says they had expected. But what came next was stunning. The school administration referred the students to the police, filing misdemeanor criminal charges against them for disrupting the event. The charges carried a maximum of one year in prison for each of those who protested.
The following year the case went to court, where Shabaik and nine other students were convicted and sentenced to three years probation.
“The administration was definitely sending a message and implicitly threatening our futures by having us charged as criminals for protesting,” reflects Shabaik today. “A lot of those who were charged were students planning to go on to medical school or law school, and they were worried that having a criminal record would prevent that from happening.”
Shabaik has since gone on to graduate from Harvard Law School, but is concerned about how his criminal record could affect his future employment prospects. Looking back at the incident, he believes it helped inaugurate a high-level campaign to silence dissent on Israel-Palestine in the United States, that has since extended to state legislatures.
Earlier this month, New York Governor Andrew Cuomo signed an executive order that would force public institutions in New York to divest funds from groups supporting the Boycott Divestment and Sanctions (BDS) movement. The executive order has been criticized as a form of political blacklisting. Shabaik believes Cuomo’s proposal echoes his own experience, where powerful institutions and public figures have sought to quash dissent on this issue.
“Its important to understand duality of responses when it comes to free speech. The whole essence of free speech is to challenge power and push back against government repression,” says Shabaik. “The move to stop debate on this issue is now leading to crackdowns at state-funded colleges and universities and even at the state legislature level. People are facing serious threats to their future for speaking out against the status quo.”
In recent years, a movement has built, mostly on the political right, which charges that free speech is being endangered on American college campuses. The most prominent voices on this issue have been conservative activists like Breitbart journalist Milo Yiannopoulos and Daily Wire’s Ben Shapiro. But liberal writers such as Jonathan Chait have also relentlessly fixated on the idea that “political correctness” is stifling free expression among a new generation of students.
Most of these protestations have focused on a specific type of speech: the right to “offend” by speaking against perceived left-wing orthodoxies on race, feminism and cultural issues. The charges of speech suppression in such cases have generally not been leveled at university administrators or law enforcement, but rather at students who view such speech as offensive. This differs markedly from the Israel-Palestine controversies, where state-funded bureaucracies and government officials have been involved with stifling speech on an issue directly related to American foreign policy.
“Its important to distinguish between the idea that certain views are not popular on campuses, something that may be worthy of discussion separately, and the phenomenon of public institutions and officials taking direct action to restrict speech about vital aspects of government policy,” says Shakir of the Center for Constitutional Rights. “The core of the First Amendment defends the right to free speech on campuses, and we should all be concerned when McCarthey-esque tactics are being used by those in positions of power to silence debate on issues of global importance.”
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Bundeskanzlerin Angela Merkel will die deutschen Militärausgaben massiv erhöhen. Nach den deutsch-polnischen Regierungskonsultationen bekannte sie sich am Mittwoch ausdrücklich zu dem NATO-Ziel, zwei Prozent des Bruttoinlandsprodukts (BIP) für Verteidigung auszugeben. Angesichts neuer Bedrohungen könne dieses Ziel „auf mittlere und längere Sicht nicht nur auf dem Papier stehen“, sagte die CDU-Chefin. Derzeit gibt Deutschland 1,2 Prozent des BIP für die Bundeswehr und ihre Ausrüstung aus – Washington fordert schon seit langem eine deutliche Erhöhung des deutschen Kriegsetats.
Die NATO hatte sich bei ihrem Gipfel in Wales im September 2014 zum Ziel gesetzt, die Verteidigungsausgaben jedes einzelnen Mitgliedsstaats in den nächsten zehn Jahren
Laut örtlichen Medienberichten musste sich die syrische Terrorgruppe Harakat Nour al-Din al-Zenki von einer besonders kostbaren Kriegsbeute trennen. Vor zwei Wochen hatten die Kämpfer der Gruppe im Norden Aleppos einen russischen T-90 Panzer von der syrischen Armee erobert, und die Trophäe anschließend stolz auf Twitter präsentiert. Russland hatte Ende vergangenen Jahres eine begrenzte Anzahl dieser modernen Panzer nach Syrien verlegt.
Doch nun soll die vom Westen als „moderat“ bezeichnete Terrorgruppe das Kriegsgerät der Nusra-Front, der syrische al-Qaida-Ableger, ausgehändigt haben, berichtete al-Masdar News. Die Übergabe sei aufgrund eines Urteils eines für die Region zuständigen Scharia-Gerichtes erfolgt. In den von den
Die Bundeswehr steht in der Kritik, nachdem beim „Tag der Bundeswehr“ Kinder mit Sturmgewehren und Maschinenpistolen hantiert haben sollen. „Die Bundeswehr hat dabei Grenzen überschritten“, erklärten die Deutsche Friedensgesellschaft DFG-VK und weitere Organisationen. Der SPD-Verteidigungsexperte Rainer Arnold verlangte Aufklärung von Bundesverteidigungsministerin Ursula von der Leyen.
Roland Blach von der DFG-VK sprach von einem erschreckenden Verhalten, Ralf Willinger von der gleichfalls an der Erklärung beteiligten Organisation Terres des Hommes bezeichnete das Vorgehen der Streitkräfte als „inakzeptabel“. Die Organisationen kritisierten zudem erneut, dass die Bundeswehr zu den wenigen Armeen zähle, die Jugendliche unter 18 Jahren als Soldaten aufnehme. Sie forderten Verteidigungsministerin von der Leyen auf, die Rekrutierung von 17-Jährigen zu beenden.
„Kriegswaffen sind keine Spielsachen“, sagte der SPD-Verteidigungsexperte Rainer Arnold den Zeitungen des Redaktionsnetzwerks Deutschland. Die Ministerin müsse dafür sorgen, dass bei öffentlichen PR-Veranstaltungen der Bundeswehr „Waffen nicht öffentlich auf Tischen herumliegen“.
Die Bundesregierung darf ihre Entscheidung über den Export von Bauteilen des Sturmgewehrs G36 nach Saudi-Arabien nicht länger hinauszögern. Das Verwaltungsgericht Frankfurt verurteilte das Bundesamt für Wirtschaft (Bafa) dazu, über den seit zweieinhalb Jahren unbearbeiteten Antrag des schwäbischen Waffenherstellers Heckler & Koch auf Ausfuhrgenehmigung zu entscheiden.
Mehr davon bei den Kollegen von n-tv.
ederal regulators earlier this month unveiled new rules aimed at reining in payday lenders and the exorbitant fees they charge. Now expect to hear a lot of what one payday lender named Phil Locke calls “the lies we would tell whenever we were under attack.”
The new rules announced by the Consumer Financial Protection Bureau are relatively straightforward, if not also a disappointment to some consumer advocates. A payday loan is typically a two-week advance against a borrower’s next paycheck (or monthly social security allotment, for that matter); lenders commonly charge $15 on every $100 borrowed, which works out to an annual interest rate of almost 400 percent. Under the CFPB’s proposal, lenders would have a choice. One option would require them to perform the underwriting necessary to ensure that a borrower, based on his or her income and expenses, can afford a loan. Another option requires them to limit the customer to no more than six of these loans per year (and no more than three in a row).
But floating new regulations is only one step in a drawn-out process. The CFPB’s announcement in Kansas City, Missouri, on June 2, at what it advertised as a “field hearing on small-dollar lending” (the agency also offered rules governing auto-title loans — loans using a car as collateral), begins a three-month comment period, which could lead to a congressional review phase challenging the rules. Payday and other small-dollar lenders spent more than $15 million on lobbyists and campaign contributions in 2013-14, according to a report by Americans for Financial Reform, “and I fully expect them to spend at least that much in the current election cycle,” said the group’s executive director, Lisa Donner. Already the House Appropriations Committee on June 9 approved an amendment that would delay implementation of any new rules that restrict payday loans. The coming months will offer lenders plenty of opportunity to try and derail the CFPB’s efforts.
Which is why the voice of Phil Locke is so critical at this moment, as policymakers debate the future of short-term lending in the U.S. Locke, who opened the first of his 40-plus payday stores in Michigan in 1999, figured he and his investors cleared $10 million in profits in his first 13 years as a payday lender. He built a $1.6 million home in a leafy suburb of Detroit and showered his wife with $250,000 worth of jewelry. For five years, he served as president of the Michigan Financial Service Centers Association, the statewide association formed to defend payday lending there. But by September 2012, he was calling himself “a Consumer and Anti-Predatory Lending Activist,” which is how he described himself in an email he sent to me that month. He had experienced a change of heart, he said, and had turned his back on the industry. He had sold everything to move into an RV with his wife and two young children, bouncing between mobile home parks in Florida. “I really feel my mission in life is to educate lawmakers on what predatory loans do to the working poor,” Locke told me at the time.
Locke’s speaking style is recursive — and he certainly harbors his share of grudges — but the details I was able to confirm almost always checked out. A stocky man with the lumpy face of an ex-boxer, Locke had tried out any number of businesses before turning to payday. He and a friend had opened a bar in Flint, where he grew up, but that only left him with a lot of credit card debt. He had tried — twice — to make it in what he demurely called the “adult entertainment industry.” He had then moved to Florida, where he tried getting into the reading-glasses business, but his first attempt, opening a mall kiosk, proved a failure. Somewhere along the way, he picked up a copy of Donald Trump’s The Art of the Deal — the only book he had ever read as an adult, he told me — but didn’t have the patience to finish it. In 1999, he declared bankruptcy, which meant using a local check casher in Orlando as his bank. Someone behind the counter at a shop offered to sell him a payday loan — and he started noticing these storefronts everywhere he looked.
Neither Locke nor his wife, Stephanie, had any money. But the ubiquity of payday in the Sunshine State made him wonder why they weren’t yet everywhere in a Rust Belt state like Michigan. Locke was soon back in Flint, where he says he convinced his in-laws to borrow $150,000 against their home. That would be the grubstake that let him build his payday business.
Locke was in his mid-30s when he opened his first store, which he called Cash Now, in a small strip mall across the street from a massive Delphi plant in Flint. He wasn’t the first payday lender in town — a check casher was already selling the loans, and one of the big national chains had gotten there first — but he had little competition in the early days. His rates were high — $16.50 on every $100 a person borrowed, which works out to an APR of 429 percent. His advertising campaign was nothing more than the hundred “Need Cash Now” lawn signs that he and a friend put up around town the night before the store’s grand opening. He figured it would take months before he reached $10,000 per week in loans, but he reached that goal after three weeks. Within the year, he was lending out $100,000 on a good week and generating roughly $50,000 a month in fees. Occasionally a customer failed to pay back a loan, but most did and the profits more than covered the few who didn’t.
“Payday was like the perfect business,” Locke said.
n the spring of 2000, Locke flew to Washington, D.C., to join one hundred or so other payday lenders for the inaugural gathering of the Community Financial Services Association of America (CFSA, the Alexandria, Virginia-based trade group the payday lenders created to fight any reform efforts. “I was there when they were making policy,” Locke said. “I was there at the strategy meetings where we talked about fighting back against people who said payday loans were a bad thing.”
Locke learned how payday had come about at that first meeting of the CFSA. Allan Jones, one of the gathering’s chief organizers, took credit for inventing the modern payday lending industry. Another organizer, Billy Webster, who had worked in the Clinton White House, helped give the business legitimacy. Together, the stories of Jones and Webster explain the extraordinary rise of payday — an industry with virtually no stores at the start of the 1990s that reached a count of 24,000 by the mid-2000s.
Allan Jones opened his first payday store in 1993. Back then, Jones, who had bought a debt collection agency from his father, charged $20 for every $100 someone borrowed — an annualized rate exceeding 500 percent. After opening a second store, he consulted with a big law firm in Chattanooga, where a lawyer told him that he saw nothing in Tennessee law expressly forbidding Jones from making the loans. He opened seven more stores around the state in 1994. That year, his stores generated nearly $1 million in fees. “It was like we was filling this giant void,” Jones told me back in 2009. Over time, Jones grew Check Into Cash into a 1,300-store chain. (Jones was unhappy with my characterization of him in a book I wrote called Broke, USA and refused to participate in the writing of this article.)
Deregulation proved critical to the spread of payday lending around the country. Most states have in place a usury cap, a limit on the interest rate a lender can charge, typically under 20 percent. So Jones placed lobbyists on retainer, as did the competition that invariably followed him into the business. Their generous campaign contributions to the right politicians secured them sit-downs with governors and meetings with key legislators. These were once-in-a-blue-moon emergency loans, the lenders claimed, for those who can’t just borrow from their Uncle Joe or put a surprise charge on a credit card; certainly interest caps weren’t put in place to prevent a working stiff from borrowing a few hundred dollars until the next payday. Throughout the second half of the 1990s and into the early 2000s, state after state granted them their carve-outs, exempting payday loans from local usury laws. At its peak, the payday industry operated legally in 44 states plus the District of Columbia.
Billy Webster brought clout and connections to the industry. In 1997, Webster had teamed up with George Johnson, a former state legislator, to create Advance America. Where Allan Jones relied on subprime loans from an Ohio-based bank to grow his chain, Webster and Johnson used their connections to secure lines of credit at some of the country’s largest banks, including Wells Fargo and Wachovia. “We basically borrowed 40 or 50 million dollars before we made anything,” Webster told me in 2009. “We had an infrastructure for 500 stores before we had a dozen.” Advance America was operating around 2,000 stores around the country when, in 2004, the investment bank Morgan Stanley took the company public on the New York Stock Exchange. (Advance America was sold in 2012 for $780 million to Grupo Elektra, a Mexico-based conglomerate.)
t wasn’t too long after Locke opened that first store in Flint that he started eyeing locales for a second or third. The problem was that since his bankruptcy a couple of years earlier, “no bank would give me even a dollar to grow my chain,” he said. He was making good money, but he also figured he would need somewhere around $150,000 in cash per store just to keep up with demand. The answer, he decided, was to find investors.
“Cash Cow, Working Partners Needed”: That’s how Locke began the classified ad that he says he ran multiple times in the Detroit Free Press starting in mid-1999. The agreement he offered potential partners had them working together to find a suitable site for a new Cash Now store — no difficult task in the customer-rich southeastern corner of Michigan, a stand-in for the bleak state of the working class in post-industrial America. He would take on building out the store and the initial advertising, which he admitted meant basically buying a decent sign. The partner would be responsible for the cash a store would need to start making loans. Under the agreement, Locke said he collected 27 percent of a store’s revenues into perpetuity.
Locke spoke with dozens of would-be partners about the wonders of a business that let people earn more than 400 percent interest while their money was out on the street. He heard from any number of trust funders and also father-and-son teams, which basically meant a father setting up a ne’er-do-well son in business and not incidentally padding his own bottom line. Then there were the random people who had come into a large chunk of money, including a forklift driver and a former bartender. One older couple, a pair of empty nesters he met at a Starbucks just outside Flint, had qualms about the business. “They ask me, ‘How can you take advantage of people like that?’” Locke said. “I thought they were weird.”
Locke ended up going into business with around 30 partners. Together, they opened more than 40 stores, all of them in southeastern Michigan. Five were in Flint and five were in Detroit. Most of the rest were scattered around the Detroit suburbs. “That’s where we made most of our money,” Locke said.
By the mid-2000s, Locke claims he was clearing around $1 million a year in profits. He began collecting watches, including a Cartier, and also vintage motorcycles. His fleet of cars included a pair of Range Rovers, a Cadillac Escalade, a Lexus, a BMW, and a Mercedes. He and Stephanie bought land in Bloomfield Hills, one of Detroit’s tonier suburbs, and hired an architect to design a house for them. Locke initially figured they’d need no more than 4,500 square feet but approved plans for a house twice that size.
“I felt like a modern-day gangster,” Locke said.
ayday lenders have long denied that their product is what critics (and, in 2015, the president) call a debt trap. Even before the start of the CFPB’s Kansas City field hearing, Dennis Shaul, currently CEO of the CFSA, denounced the “staggering blow to consumers” the bureau was about to deliver. In the industry’s telling, the typical customer is a hard-pressed mom (the archetypal payday customer, according to a 2012 study by the Pew Charitable Trusts, is a white woman between the ages of 25 and 44) who needs a quick bridge loan to get through the occasional emergency — an unexpected medical bill or to fix a car she needs to get to work.
But the researchers at Pew, who have been studying the payday industry since 2011 as part of the organization’s small-dollar loans project, believe the CFPB proposal doesn’t go far enough. “Proposed Payday Loan Rule Misses Historic Opportunity,” read the headline over a Pew press statement released on the morning of CFPB’s big announcement. Under the agency’s proposed underwriting provision, it would be hard to justify a $500 loan to someone taking home $1,200 a month if two weeks later the person would have to pay it back with a check for $575. Yet if the repayment terms required biweekly payments of $75 over 11 months, is that $500 loan really any more affordable?
“All these new rules are going to do is shift the market from 400 percent single-payment loans to 400 percent installment payday loans,” said Alex Horowitz, a senior officer at Pew. “We don’t see that as a consumer-friendly outcome.” According to Pew, an estimated 12 million Americans borrow money from a payday lender each year. In 2014, payday customers paid $8.7 billion in fees on $45 billion of loans.
Locke told me that a good store had between 400 and 500 customers at any given time — nearly all of them trapped in a loan they couldn’t repay. Eighty percent of his customers, he estimated, were in for a year or longer. “The cycle of debt is what makes these stores so profitable,” he said. There was Bobby, for instance, from a Detroit suburb. There was nothing special about Bobby; his file was in a batch Locke said he had grabbed randomly from a box of old records. (Locke let me browse through these records so long as I didn’t include anyone’s last name.) Bobby took out 113 loans between 2002 and 2004. A Detroit woman named Magdalene first showed up at one of Locke’s stores at the start of 2002. She paid $1,700 in fees over the next 12 months on the same $400 loan. Soon she was borrowing $500 every other week and eventually $800. In 2005 alone, she paid fees of more than $3,000 — and then several months later, she declared bankruptcy.
“I’ve had lots of customers go bankrupt,” Locke said —“hundreds” just at the two stores that he ran without a partner. These days, the dreams of millions hinge on a campaign to raise the minimum wage to $15 an hour. Based on a 40-hour week, that works out to about $30,000 a year — the annual earnings, Locke said, of his average customer.
“I ruined a lot of lives,” Locke said. “I know I made life harder for a lot of my customers.”
Even in his earliest days in the business, Locke recognized what he was doing was wrong. That was obvious when he told the story of a childhood friend who was a regular at his first store. The friend, who worked as a prison guard, was good for $500 every other week. He was a terrific customer, but Locke used to hide whenever he saw his friend coming in. “I’m embarrassed that I own this place,” Locke explained. “I’m embarrassed he’s paying me $82.50 every other week.” One day Locke confronted his old friend, telling him, “You can’t keep doing this. You’re a family man, you have kids.” Locke let him pay him back in small installments until he was all caught up.
ocke didn’t end up joining the CFSA, the payday trade group that Allan Jones and Billy Webster helped found. He was all in favor of its mission of fighting “any bills from Washington that put restrictions on what we could charge,” Locke said. But the dues were too steep in this organization dominated by the big chains. Like a lot of other smaller industry players, Locke joined the Check Cashers Association, which in 2000 renamed itself the Financial Service Centers of America, or FiSCA.
FiSCA encouraged its members to give $500 per store per year — for Locke, more than $20,000 a year. These contributions helped the group maintain a lobbying presence in Washington, among other activities. Locke was pleased when he was asked to join FiSCA’s board of directors but then realized the honor was an expensive one. “We’d get lists of PACs and individuals,” Locke said, and he was expected to write checks to all of them. They included the political action committees started by top names in Congress and also members of key legislative committees like House Financial Services. Locke told me he donated maybe $20,000 that first time, but he said he never gave anywhere near that amount again. (Records from the Center for Responsive Politics show he and his wife have given less than $10,000 total to members of Congress or FiSCA.) “I was much more focused on giving locally” to elected officials in Michigan, Locke said.
Locke took over as president of his state trade association in 2001, with his top priority to place payday on firmer legal footing. His five-year tenure was marked by a pair of bruising legislative battles in Lansing, the state capital. “I told a lot of lies in Lansing,” he said.
Michigan’s payday-loan trade existed then in a kind of netherworld. In other states, legislation had enabled payday lenders to operate legally within their borders, typically in exchange for a rate cap. In Michigan, though, Locke and every other payday lender operated via regulatory loopholes. State regulators looked the other way, and Michigan lenders were free to charge what they wanted. Locke’s rate was $16.50 per $100, but competitors were charging as much as $20 on every $100 loaned.
Locke and his allies hatched a plan in which they would trade enabling legislation for a rate cap of $15.27 per $100 (an APR of 397 percent) — or what he called the “27th strictest payday law in the country.” (Stated differently, by Locke’s calculation, 23 states allowed lenders to charge more than 400 percent.) They found a friendly legislator to introduce the bill in the state Senate in 2003.
Locke had always been a sweatshirt-and-jeans guy, even on the job. But he bought several suits in anticipation of the meetings he figured payday’s money would buy with members of the Michigan House and Senate. He told me he donated money to Jennifer Granholm, the state’s new Democratic governor, and also to Michigan’s new attorney general. (The Michigan secretary of state appears to have no record of these contributions.) Locke also encouraged his members to donate to key legislators. Both the House and Senate approved the bill, but Granholm, who had only recently taken office, vetoed it.
They tried again in 2005. In May of that year, Locke and others held a strategy session with several legislators, including a committee chair Locke described as a “friend.” “The thing we asked is, ‘What can we tweak to make sure she signs it this time?’” Locke said. They kept the same rate but made small changes in the bill’s language. Locke claimed his group also raised an extra $300,000 to help ensure passage. They already had a lobbyist on retainer, but the extra money allowed them to add five more, including the firms of former Attorney General Frank J. Kelley and an ex-speaker of the House, and hire a PR firm to help them hone their message.
Locke’s nemesis that legislative session proved to be not a consumer advocate or an ambitious liberal but Billy Webster, the Advance America co-founder. Several years earlier, Webster had helped champion a bill in Florida that capped payday lenders’ rates at $10 per $100 — and for his troubles, he had been slammed by his fellow payday moguls. But Webster didn’t care. Lenders could still make money in Florida on loans earning more than 250 percent interest — and maybe even quell a growing backlash among consumer groups. “The industry’s worst instinct is to confuse reform with prohibition,” Webster told me. “We should reform the industry where it’s necessary.” On behalf of the CFSA, he negotiated a slightly more consumer-friendly deal in Michigan than the one Locke was proposing.
The bill Webster backed allowed stores to charge customers $15 on the first $100 borrowed but $14 on the second $100, $13 on the third, down to $11 for every $100 above $500. That would mean Locke’s Cash Now, which once could charge $82.50 on a two-week $500 loan, now would earn only $65, which works out to an APR of about 340 percent. For Webster, a 20 percent drop in revenue would be the cost of doing business in Michigan. The smaller local players, however, felt betrayed, none seemingly more than Locke. “The CFSA came in and tried to force this law down my throat,” he said. The lower rate would translate into lost jobs, Locke complained in sit-downs with legislators. It would mean more boarded-up storefronts around a state that already had too many of them. “‘We need higher rates’ — that’s what we were all brainwashed to say,” he told me.
The ensuing battle, which took place in the second half of 2005, was like Godzilla versus King Kong. Like Locke’s organization, the CFSA had a battalion of lobbyists in its employ, as did several of the big out-of-state chains. “It was a nasty, nasty, ugly battle of politics and our state association didn’t have the deep pockets to keep donating money,” Locke said. Night after night, Locke claims he watched as the CFSA picked up the tab at yet another fancy restaurant in Lansing for any legislator wanting to eat and drink. A couple of legislators he says he knew well told him about the private jet the CFSA had sent to ferry them and their wives to Palm Springs for a CFSA conference.
Locke tried to fight back. He told me one of his lobbyists set up a dinner with an influential legislator from Detroit. The legislator chose five appetizers and then, for his main course, ordered the “most expensive fucking thing on the menu.” The legislator also chose a $300 bottle of wine that he barely touched and then, because he said he had to run, asked for a pair of crème brulées to go. During the meal, it became obvious that his guest had already sided with the CFSA. “The guy burned me for an $800 dinner when he knew there was nothing he was willing to do to help us,” Locke said.
Predictably, the legislature backed the slightly more consumer friendly CFSA bill, which Granholm signed into law at the end of 2005. Soon thereafter, Locke stepped down as head of his statewide association.
Despite his dire warnings, Locke and his partners continued to thrive in Michigan. But partners who were once clearing $100,000 or $120,000 per store were now worried about making even $75,000 a year, and they came to resent sharing their profits with the man who was seemingly in a position to protect them but didn’t. A group sued Locke, alleging “unfair and oppressive” conduct. The case eventually settled, but other suits followed.
“I took a forklift driver making $16 an hour to $300,000 a year,” Locke said, but the man sued him. The childhood friend he brought into the business didn’t take him to court, but the two no longer speak. Through it all, Locke blamed his woes on Granholm, who had refused to sign the 2003 bill he had worked so hard to pass. “I was lying in bed till 3 p.m. every day,” Locke said, “dreaming of killing Jennifer Granholm.” Eventually, he went to a psychologist. Mainly that meant talking, he said, about “my hatred for Jennifer Granholm.”
y the spring of 2012, Locke was fighting with his business partners, more than one of whom he suspected of stealing from him, and feeling more than fed up with an industry populated, he said, by the “greediest bunch of bastards I’ve ever seen.” He spoke, too, of the role religion played in his decision, in 2012, to turn on his old colleagues. He decided to become a whistleblower — a former insider who goes rogue to let the world know that rather than helping people, he was peddling a toxic product that left most of them decidedly worse off.
Locke not only abandoned the business, but he also sold most of his possessions, including his house and most of the jewelry. “We sold our grand piano,” he said. “We sold a lot of our artwork.” He even got rid of the suits he had bought to lobby in Lansing. “I said, ‘We’re freaking selling it all,’” Locke said. “I just wanted to rid myself of it.”
Locke wrote to Oprah Winfrey. He reached out to Howard Stern, Ellen DeGeneres, Nightline, and 60 Minutes. He contacted the Today Show and stressed his Flint roots when trying to contact fellow native Michael Moore. He flew to Hollywood in the hopes that someone would want to turn his life story into a movie or television show. But rather than fame and attention, he got a taste of life as a public-interest advocate. “Nobody cares about the poor,” he concluded. Locke wrote a short book he called Greed: The Dark Side of Predatory Lending that no one read. He claims he spent around $25,000 producing a hip-hop-style documentary few people watched. “It really was a waste of time. And money,” Locke said. “This whole effort has been … It’s got me back in depression.”
By the time Locke and I got together for a couple of days in early 2013, around a year after he had launched what he sometimes called his “crusade,” he was already feeling discouraged. He had imagined regular trips to Washington, D.C., where he would serve as a witness whenever his expertise was needed by members of Congress and others pursuing reform. His first trip to the nation’s capital, however, had proven a bust. He had contacted more than two dozen members of Congress, but only one agreed to meet with him: a Detroit-area Democrat who would serve a single term before being voted out of office. Locke spent $3,000 on a full-page ad in Politico. The idea was to draw the attention of legislative staffers, advocacy groups, journalists, and maybe even the White House with a promise to tell “the truth” about predatory lending. But the ad, Locke said, failed to elicit a single phone call or email message. He spent several thousand dollars attending the 2012 Democratic convention in Charlotte, North Carolina, only to be ignored.
Spending time with Locke in Michigan often meant listening to long rants about the lack of gratitude among the partners he had brought into the payday business, despite all the money he had made them. “Friends screwing me over,” Locke said. “Business partners screwing me over. People who begged me to get them into the business — screwing me over.” He’s kind of a human Eeyore who wears his disappointment as an outer garment. Of his customers, Locke said, “I feel bad for these people.” But he seemed to feel sorry mainly for himself.
rom the start, the payday industry recognized that a new financial protection agency posed an existential threat. Locke spoke of the “constant” warnings FiSCA and the CFSA sent out while Congress was debating Dodd-Frank, the financial reform package that created the Consumer Financial Protection Bureau. The CFSA’s annual lobbying bills underscore those fears. The CFSA spent $2.6 million on lobbyists in 2009 and another $2.4 million in 2010. It spent another $2.3 million on lobbyists in 2011, when the CFPB was still taking shape, and $2.6 million in 2012. Even so, in 2012 the CFPB announced its intention to investigate the payday lending industry. The bureau didn’t have the authority to set a nationwide rate cap, which would require congressional action, but under Dodd-Frank, it has broad powers to stop practices it deems “unfair, deceptive, or abusive.”
The payday lenders have turned to Congress for relief, as have the banks, subprime auto lenders, and other financial players now in the sights of the CFPB. Every year, more bills are introduced in Congress that either would weaken the bureau or thwart one of its rulings. For a while, Americans for Financial Reform kept a running tally of the industry-friendly bills, “but we stopped counting at 160,” said the group’s Lisa Donner.
The focus now, however, is on the proposed CFPB rules and the comment period. Between now and then, both the payday lenders and their opponents will share their disappointment. “Everyone wants the CFPB to be the savior,” said Nick Bourke, who directs Pew’s small-dollar loans project. “But while they’re improving the situation in some ways, without changes there will still be a lot of bad things happening in this market to the tune of billions of dollars of costs to consumers.”
That’s good news for Phil Locke. At the end of 2013, more than a year after dramatically switching sides in the fight over payday, Locke got back into the business. His wife missed the trappings of their old life. So did he. He was a working-class kid from Flint who had dropped out after a semester or two of college. He had only so much money in the bank and two young children. What else was someone like him supposed to do? And — despite his harsh words about the industry — it turned out he had been hedging his bets all along: He hadn’t actually sold or walked away from his stake in Cash Now but only had transferred ownership to his mother.
“I gave it a shot just to see what I could do,” Locke told me. “It didn’t work out. I had to return home.”
This article was reported in partnership with The Investigative Fund at The Nation Institute.
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Eine Rezension des Dokumentarfilms „A Good American“ -
Von HUBERT BEYERLE, 23. Juni 2016 -
Auch Hans-Christian Ströbele kann beim Thema Geheimdienste noch etwas lernen. „Wenn wir diesen Film vor der Anhörung im Bundestag gehabt hätten, hätten wir bessere Fragen gestellt.“ Der grüne Bundestagsabgeordnete befasst sich seit vielen Jahren mit dem Thema Geheimdienste. Aber diese Dokumentation hat auch ihn überrascht.
A Good American könnte treffender „A Good Agent“ heißen – ein guter Spion. Den gibt es, oder besser: es gab ihn einmal. Jetzt ist er im Ruhestand. Das ist die These des Films.Weiterlesen...
Congressional Democrats took the unprecedented step of conducting an actual sit-in on the floor of the House of Representatives on Wednesday, demanding that Republican leaders allow votes on gun control legislation.
But this unusually bold and moving tactic was undercut by the fact that its chief goal is a political gimmick that would do little to stop gun violence, while expanding the use of a deeply flawed anti-terror watchlist.
While sit-in participants are also advocating for expanded background checks and an assault weapons ban, their primary call to action is for a vote on a measure that would ban gun sales to people listed on a federal government watchlist – a move clearly designed more for its political potency than for its effectiveness.
And the government’s consolidated terrorist watchlist is notoriously unreliable. It has ensnared countless innocent Americans, including disabled war veterans and members of Congress. Nearly half of the people on these watch lists were designated as having “no recognized terrorist group affiliation,” according to documents obtained by The Intercept in 2014.
Indeed, many of those involved in today’s sit-in have themselves recognized these problems in the past. In a 2014 letter addressed to the Department of Homeland Security, lawmakers including Rep. John Lewis, D-Ga., the civil rights hero leading today’s sit-in, complained that the current process for appealing designation on the federal no-fly lists “provides no effective means of redress for unfair or incorrect designations.”
Some members exaggerated the measure’s potential impact. “If the laws had been in place that the Senate tried to pass in the horrific tragedy of Orlando, there would not be 49 dead. If the laws had been in place — no fly, no buy,” Rep. Sheila Jackson-Lee, D-Texas, said. “Let’s do this for the victims of the Pulse night club in Orlando,” intoned Rep. Suzanne Bonamici, D-Ore.
But even though Orlando shooter Omar Mateen was reportedly once on the terrorist watch list maintained by the FBI, he was removed from the list before the tragic mass shooting.
House Democrats can force a bill to come up for a vote on the floor if they are able to get 218 signatures from members on what is called a discharge petition. A discharge petition for New York Republican Rep. Peter King’s version of legislation to bar Americans on the terrorist watch list from purchasing firearms currently has 181 signatures. Ironically, King is notorious for targeting Muslims, having held hearings in 2011 accusing them of not properly cooperating with law enforcement to identify terrorists.
Democrats have no similar discharge petition on other gun legislation, such as Rhode Island Democratic Rep. David Cicilline’s bill to ban assault weapons.
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In the last, frantic days of campaigning before Britons vote in a referendum on Thursday to decide if they will remain in the European Union or leave, there seem to be Nazis everywhere — at least, that is, in the imaginations and rhetoric of those dreaming of a British exit.
The tone was set last month, when Boris Johnson, the former mayor of London who hopes a triumph of the Leave campaign will help him to depose Prime Minister David Cameron, the leader of the Remain camp, told The Telegraph that the ultimate aim of the European project was to unite Europe under a single government, a dream with dark historical resonances. “Napoleon, Hitler, various people tried this out, and it ends tragically,” Johnson said. “The EU is an attempt to do this by different methods.”
Nazis also appeared to be troubling the mind of a voter who confronted the prime minister on Sunday, asking him how his attempts to negotiate a better deal for Britain from its European partners were different from a predecessor’s failed attempts to appease Hitler. “Are you really a 21st-century Neville Chamberlain?” the voter demanded. “Waving a piece of paper in the air, saying to the public, this is what I have, ‘I have this promise, where a dictatorship in Europe can overrule it.’”
— BBC News (UK) (@BBCNews) June 19, 2016
Things reached something of a peak late Tuesday, when Michael Gove, the justice secretary and a leader of the Leave campaign, was asked during a radio interview why voters should trust him instead of a host of leading experts on the economy, including 10 Nobel Prize winners, who have warned that stepping out of the common market and into the unknown could severely damage the British economy and tip the country into recession.
— Stronger In (@StrongerIn) June 21, 2016
“The key thing here is to interrogate the assumptions that are made and to ask if these arguments are good,” Gove said. “I mean we have to be careful about historical comparisons, but Albert Einstein during the 1930s was denounced by the German authorities for being wrong, and his theories were denounced, and one of the reasons of course he was denounced was because he was Jewish.”
“They got 100 German scientists in the pay of the government to say that he was wrong,” Gove continued, “and Einstein said, ‘Look, if I was wrong, one would have been enough.’”
Gove was referring, imprecisely, to an anti-Einstein book published in Germany in 1931, 100 Authors Against Einstein, which was not a publication of the Nazi government that came to power two years later but did include contributions from a number of Nazi sympathizers.
So Gove is Einstein and experts are Nazis. Got it. #EUref
— Mark Bak (@MarkBakActor) June 22, 2016
Although Gove apologized for the analogy on Wednesday — while standing in front of a bus displaying a false statistic about Britain’s financial contribution to the EU — the Conservative politician’s remarks were important for two reasons. First, because they showed how much a complex debate over economic and social policy has devolved into something more like an argument in an online comments thread, where Godwin’s Law always applies. Second, because Gove himself has spent the last days of the campaign urging voters to ignore a chorus of experts who argue that the benefits of continued EU membership outweigh the costs to Britain and to trust instead their own instinct that there is something fishy about a project the Germans are so keen on.
Gove has been making this case openly for the past three weeks, since he stunned the politics editor of Sky News, Faisal Islam, by saying, “I think the people in this country have had enough of experts saying that they know what is best and getting it consistently wrong.”
“‘The people of this country have had enough of experts?’ What do you mean by that?” a shocked Islam asked. Shaking his head, he added that this strain of anti-intellectualism sounded like an import from the United States. “This is proper Trump politics, this, isn’t it?”
“No, it’s actually a faith,” Gove replied, “a faith, Faisal, in the British people … to make the right decision.”
“Blind faith,” Islam observed.
That exchange seemed to reveal a divide in Britain’s political culture that is familiar to Americans, between politicians who deploy facts and reason to try to convince voters of the wisdom of their policies and those, like Donald Trump, who make emotional appeals many of their supporters find more satisfying.
The depth of that cultural divide in Britain was affirmed by polling that followed Gove’s attack on expertise. According to research done last week by the British pollsters YouGov, while half of the voters who want the United Kingdom to remain part of the European Union say expert opinion matters on such a complex issue, an overwhelming majority of those who want to leave, 68 percent, agreed that it is “wrong to rely too much on so-called experts,” and “it’s often better to rely on the wisdom of ordinary people and a bit of common sense.”
— Joe Twyman (@JoeTwyman) June 15, 2016
As Faisal Islam noted, the same survey found that supporters of the Remain campaign said they would listen to academics, economists, people from well-known businesses, charities, the Bank of England, and international organizations, while supporters of the Leave campaign said they trusted, essentially, no one.
— Faisal Islam (@faisalislam) June 16, 2016
According to Leave fans on here, the very act of quoting someone knowledgeable, eg Nobel prize winners, is now inherent bias… #progress
— Faisal Islam (@faisalislam) June 20, 2016
A measure of how great the appetite is on the other side for reasoned argument can be seen in the unlikely viral success of a lecture on just how European law affects Britain delivered recently by an expert in the field, Professor Michael Dougan.
Dougan’s talk, which runs to 25 minutes, debunks many of the main arguments made by the Leave camp without flashy graphics or illustrations of any kind, but it has been viewed more than 5.6 million times since it was posted on the University of Liverpool’s Facebook page last week.
Before setting about destroying most of what the British public has been told about how the European Union holds Britain in legal bondage, Dougan, who is from Northern Ireland (where a border with the Republic of Ireland would have to be erected and patrolled again should the U.K. leave the EU), explained that he was moved to speak out because “although the Remain campaign haven’t exactly covered themselves in glory, at points, with their use of dodgy statistics, I think the Leave campaign has degenerated into dishonesty, really, on an industrial scale.”
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Deficit hawks often raise the specter of hyperinflation to scare people who disagree with them. And that’s exactly what Hillary Clinton did on Tuesday.
Speaking in Columbus, Clinton criticized Donald Trump for saying last month that the U.S. can never default on its debt obligations “because you print the money.”
“We know what happened to countries that tried that in the past, like Germany in the ‘20s and Zimbabwe in the ‘90s,” Clinton said. “It drove inflation through the roof and crippled their economies.”
But printing money — otherwise known as increasing the money supply – is a routine occurrence for governments that control their own currency. The Federal Reserve has increased its balance sheet by over $3 trillion since the financial crisis, explicitly to support the economy. (The Fed does this by buying stocks and bonds with electronic cash that didn’t exist before.)
In fact, an increasingly influential school of economics, known as Modern Monetary Theory, argues that deficit spending, including through money printing, is critical to promote full employment.
Even Alan Greenspan, former chair of the Federal Reserve, echoed Trump’s comments almost verbatim back in 2011, when the U.S. came close to reaching the debt limit. “The United States can pay any debt it has because we can always print money to do that,” Greenspan told “Meet the Press.”
“If you think about it, it is precisely this power that makes U.S. Treasuries [T-Bonds] so safe in the first place,” said Stephanie Kelton, an economics professor at the University of Missouri-Kansas City and a former chief economist to Bernie Sanders on the Senate Budget Committee. Kelton is one of the leading proponents of Modern Monetary Theory.
But deficit hawks – typically members of the economic elite who favor small government and correspondingly low taxes, and are terrified of the effect inflation would have on their investments and cash reserves — have repeatedly warned that these perfunctory monetary policy actions would lead to Weimar Germany-levels of chaos.
Senator Rand Paul, for instance, has tried to spook Americans with the thought of “wheelbarrows of cash” leading to the rise of another Hitler (which is not only ridiculous but historically inaccurate; Hitler didn’t rise to power in Germany until the country experienced deflation). Commentators like Peter Schiff have been predicting runaway inflation for seven straight years. House Speaker Paul Ryan warned of hyperinflation in a 2011 speech by taking out pieces of German and Zimbabwean currency from his wallet, which he claimed voters gave to him.
In reality, despite the Fed’s loose monetary policy, inflation remains below target in the United States, and has been so for at least 46 months. Nevertheless, the inflation cult continues to hype discredited fears of certain disaster from printing money.
Elsewhere in the speech, Clinton did reject “painful austerity that hurts working families and undercuts our long-term progress.” But her rhetoric on money printing and hyperinflation is the go-to tactic for those who favor austerity. It’s a transparent way to express budget limits and force cuts, even in economic downturns when more spending is needed.
Blaming prior crises in Germany and Zimbabwe solely on money printing neglects the disastrous circumstances surrounding these countries. The Weimar Republic had unsustainable reparations payments forced upon them by the Allied leaders after World War I. Germany defaulted on these debts, and French and Belgian forces retaliated by occupying the Ruhr, a key industrial area. Germans in the region went on strike, causing a rapid decrease in industrial output, yet the government paid workers to reward their “passive resistance.” These unusual factors generated hyperinflation.
In Zimbabwe, the collapse of food production following land reforms to reverse the inequities of whites owning all the productive agricultural plots created mass unemployment. The government tried to paper over this catastrophe through the printing press, with predictable results.
“What happened in Germany and Zimbabwe had more to do with the collapse of supply than anything else,” said Kelton.
Neither case bears any resemblance to the United States, even in a nightmare scenario of a Trump presidency. But invoking Germany and Zimbabwe isn’t meant to be literally true. It’s a shorthand designed to fearmonger about the dangers of deficits. By adopting such rhetoric, Clinton also adopts this fiscal straitjacket.
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A controversial amendment that would expand the FBI’s surveillance power was narrowly defeated in the Senate Wednesday.
The final tally was 58 to 38, two votes shy of the 60 needed for the amendment to move forward. The issue will likely surface again soon, however, as Majority Leader Senator Mitch McConnell, R-Ky., immediately filed for a motion to reconsider the amendment.
The amendment — lumped on last-minute to a criminal justice funding bill — would have expanded the scope of information the FBI can collect by sending technology and Internet companies what’s known as a national security letter—without getting any kind of court approval first.
The FBI would be able to access information about suspects’ online behavior including what websites someone visits and for how long, IP address, social media activity, email headers, and more.
Companies can’t talk about the requests because they come with a gag order. Only a handful of national security letters have been made public in the decades since the FBI started issuing them.
Privacy advocates and technology companies have protested the amendment as an intrusion on Fourth Amendment protections on sensitive personal information.
“The country wants policies that promote safety and liberty,” said Sen. Ron Wyden, D-Ore., on Wednesday. “Increasingly we’re getting policies that don’t do much of either.”
He pointed out that the USA Freedom Act, in a section he authored, would allow the FBI to get the records it seeks in an emergency immediately and seek judicial approval afterwards.
Advocates like Sen. John McCain, R-Ariz., the amendment’s sponsor, insist the FBI needs more power to combat “radicalization” on the Internet. “Every law enforcement agency in American supports this,” he insisted.
The vote comes shortly after Republican senators rallied around the recent tragedy at a night club in Orlando to push for expanded surveillance powers. Though the Chairman of the Intelligence Committee, Sen. Richard Burr, R-N.C., admitted on the floor before the vote that the amendment would not have prevented the mass shooting in Orlando, or the attacks in San Bernardino in December of last year.
Burr repeated FBI Director James Comey’s assertion that the expansion being discussed is really just fixing a “typo” in the law—because the FBI used to regularly seek those records before one company, whose identify remains unknown, “bucked the system” as Burr put it, and refused to hand them over because the language of the law was confusing.
In fact, the FBI has been trying to expand the power of its national security letters since 2008, when the George W. Bush Department of Justice interpreted those powers more narrowly than the FBI liked.
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This spring, text messages got a lot more private. In April, the world’s most popular messaging service, WhatsApp, announced it would use end-to-end encryption by default for all users, making it virtually impossible for anyone to intercept private WhatsApp conversations, even if they work at Facebook, which owns WhatsApp, or at the world’s most powerful electronic spying agency, the NSA. Then in May, tech giant Google announced a brand new messaging app called Allo that also supports end-to-end encryption.
Making the news even better from a privacy standpoint is that both WhatsApp and Allo use a widely respected secure-messaging protocol from Open Whisper Systems, the San Francisco-based maker of the messaging app Signal.
To recap, there are now at least three different instant-message services that implement robust encryption: WhatsApp, Signal, and Allo. How is someone who cares about their privacy and security to choose between them?
In this article, I’m going to compare WhatsApp, Signal, and Allo from a privacy perspective.
While all three apps use the same secure-messaging protocol, they differ on exactly what information is encrypted, what metadata is collected, and what, precisely, is stored in the cloud — and therefore available, in theory at least, to government snoops and wily hackers.
In the end, I’m going to advocate you use Signal whenever you can — which actually may not end up being as often as you would like.What’s up, WhatsApp?
With more than 1 billion users, WhatsApp is the world’s most popular messaging app. Which is why it was huge news among encryption advocates when the company a year and a half ago announced a partnership with Open Whisper Systems to integrate the Signal protocol into its product. The rollout was gradual, starting only on the Android version of WhatsApp and only for one-on-one text communication, but by this past April, WhatsApp was able to announce it was using the Signal protocol to encrypt all messages, including multimedia messages and group chats, for all users, including those on iOS, by default.
So if a government demands the content of WhatsApp messages, as in a recent case in Brazil, WhatsApp can’t hand it over — the messages are encrypted and WhatsApp does not have the key.
WhatsApp may retain date and time stamp information associated with successfully delivered messages and the mobile phone numbers involved in the messages, as well as any other information which WhatsApp is legally compelled to collect.
A WhatsApp spokesperson told the Committee to Protect Journalists, “WhatsApp does not maintain transaction logs in the normal course of providing its service.” However, the company makes no promises and could easily record and hand over metadata in response to a government request without violating its own policy.
When you first set up WhatsApp, you’re encouraged, but not required, to share your phone’s contact list with the app. This helps the WhatsApp service connect you with other users quickly and easily. A WhatsApp spokesperson confirmed to me that the company retains contact list data, which means that WhatsApp could also hand over your contact list in response to a government request.
Finally, online backups are a gaping hole in the security of WhatsApp messages. End-to-end encryption only refers to how messages are encrypted when they’re sent over the internet, not while they’re stored on your phone. Once messages are on your phone, they rely on your phone’s built-in encryption to keep them safe (which is why it’s important to use a strong passcode). If you choose to back up your phone to the cloud — such as to your Google account if you’re an Android user or your iCloud account if you’re an iPhone user — then you’re handing the content of your messages to your backup service provider.
By default, WhatsApp stores its messages in a way that allows them to be backed up to the cloud by iOS or Android. WhatsApp does let you remove your chats from these cloud backups if you go out of your way to do so, which I recommend you do, if you use WhatsApp to discuss anything sensitive.Allo, World
Google's decision to disable end-to-end encryption by default in its new #Allo chat app is dangerous, and makes it unsafe. Avoid it for now.
— Edward Snowden (@Snowden) May 19, 2016
The first thing to understand about Google’s forthcoming Allo app is that, by default, Google will be able to read all of your Allo messages. If you want end-to-end encryption via the Signal protocol, you need to switch to an “incognito mode” within the app, which will be secure but include fewer features.
It’s 2016. We should be moving toward a future where the conversations we have on our phones are private, but Allo’s lack of default encryption is clinging to the past. Google releasing a new messaging app without default end-to-end encryption is like Tesla announcing a brand new model that only lets you use the airbags when you’ve disabled the entertainment system. As NSA whistleblower Edward Snowden put it, Allo’s defaults are “dangerous” and “unsafe.”
On the other hand, Google is trying something brand new, applying so-called machine learning techniques directly to your conversations. Allo hooks into an artificial intelligence called Google Assistant, which will read all of your messages and offer suggested responses, in your own slang, that it thinks you would likely write yourself. It also brings Google search directly into your conversations — you and your friends could, for example, search for a restaurant, pick one out, and make a reservation without having to leave the app.
Allo’s machine learning features prevent Google from turning on end-to-end encryption for all messages, since Google needs to be able to ingest the content of messages for the machine learning to work, a Google spokesperson told me. The spokesperson also said Google isn’t ready, until Allo is released later this summer, to make any promises about where user data will be stored or for how long.
The technology behind Allo looks very cool, but it’s moving in the wrong direction with regard to privacy. If privacy is important to you, you should use a messaging app that encrypts messages by default instead.
Along with Allo, Google is also releasing a new video calling app called Duo. Unlike Allo, all video calls in Duo will be end-to-end encrypted by default. Google isn’t releasing details — how the encryption works, if it’s possible for users to independently verify that it’s secure, or if metadata of the calls will be retained on Google’s servers — until it’s publicly released.
The first thing that sets Signal apart from WhatsApp and Allo is that it is open source. The app’s code is freely available for experts to inspect for flaws or back doors in its security. Another thing that makes Signal unique is its business model: There is none. In stark contrast to Facebook and Google, which make their money selling ads, Open Whisper Systems is entirely supported by grants and donations. With no advertising to target, the company intentionally stores as little user data as possible.
Like WhatsApp, all messages sent over Signal are end-to-end encrypted, and Open Whisper Systems doesn’t have the keys to decrypt them. What about message metadata, your phone’s contact list, and cloud backups?
Signal users must share their contact list with the app in order to find other users — in WhatsApp, this is optional but recommended. But Signal doesn’t directly send your contact list to the server. Instead, it uses what’s known as a cryptographic hash function to obfuscate phone numbers before sending them to the server. (It also truncates the hashed phone numbers, if we’re being precise about things.) The server responds with the contacts that you have in common and then immediately discards the query, according to Marlinspike.
If you back up your phone to your Google or iCloud account, Signal doesn’t include any of your messages in this backup. WhatsApp’s gaping backup issue simply doesn’t exist with Signal, and there’s no risk of accidentally handing over your private messages to any third-party company.
Really happy with the Signal anti-forensics architecture: encrypted database excluded from backup, key in keychain. https://t.co/URipYdxnnI
— Frederic Jacobs (@FredericJacobs) February 24, 2016
Of course, this also means there’s no way to back up your Signal data to the cloud — a feature that some users find useful. If you lose your phone and restore a new one from backup, you simply lose all of your chat history. The Android version of Signal lets users locally export and import app data, for example if you’re switching to a new phone but still have your old one, but the iOS version of Signal does not support this.
In short, if a government demands that Open Whisper Systems hand over the content or metadata of a Signal message or a user’s contact list, it has nothing to hand over. And that government will have just as little luck requesting backups of Signal messages from Google or Apple.
From a user privacy perspective, Signal is the clear winner, but it’s not without its downsides.
Compared to WhatsApp’s 1 billion users, Signal’s user base is minuscule. Marlinspike said that they don’t publish statistics about how many users they have, but Android’s Google Play store reports that Signal has been downloaded between 1 and 5 million times. The iPhone App Store does not publish this data.
This means that if you install the Signal app, chances are you’ll have to convince your friends, family, and colleagues to install it as well before you can benefit from Signal’s top-grade privacy protection. If you install WhatsApp, chances are a lot of your contacts are already using it, and you can begin having encrypted conversations with minimal effort.
Signal also has fewer features and gets improved at a slower pace than its corporate competitors. For example, an early version of Signal Desktop has been available since the end of 2015, but it’s only available for Android users — iPhone support has not yet been developed, and it’s unclear when it will be finished. WhatsApp has a desktop version that works regardless of the type of phone you use.
Marlinspike told me that Open Whisper Systems has three full-time staff: two software developers and one person who handles user support and project management. With such incredibly limited resources, it’s surprising that they’ve accomplished as much as they have.
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In 1946, with Europe reeling from its second catastrophic war in a few decades, Winston Churchill addressed Zurich University in Switzerland to offer his own vision for how to keep peace on the continent. The solution, Churchill said, “is to recreate [a] European Family, or as much of it as we can, and to provide it with a structure under which it can dwell in peace, in safety and in freedom,” adding that “we must build a kind of United States of Europe.”
In the intervening decades, through a remarkable process of political and economic cooperation, the European Union came into existence. Though not without its faults, the project of European integration has led to an era of unprecedented peace and stability in a region once wracked by seemingly endless war. In recognition of this achievement, Nobel Committee awarded its annual Peace Prize to the European Union in 2012, stating that the organization had demonstrated how “historical enemies can become close partners.”
But that project could soon be on the path to unraveling. On Thursday, millions of Britons will go to the polls to vote in a referendum that could see Britain exit the EU, or “Brexit.” Not only would such a move deal a serious economic blow to the European Union, depriving it of its second largest economy and likely triggering an immediate recession, it could also set a dangerously compelling example for other anti-EU political parties on the continent, most of which are associated with the political far-right. While Brexit once seemed like an absurd proposition, polls now show the “Remain” and “Leave” camps roughly neck-in-neck in the final days before the referendum.
“Anything that weakens European integration is troubling, because the countries of Europe have traditionally been at odds with one another and the European Union has brought relative stability,” says Muddassar Ahmed, a former British government adviser and chairman of the U.K.-based political risk firm Unitas Risk. “In Britain it has been the most xenophobic parties and individuals who have been most strongly campaigning to leave the EU. If they successfully managed to pull Britain out of the European Union, it would fan the aspirations of far-right parties across the continent – many of which have already been in ascendance in recent years.”
Leaving the EU would be an almost guaranteed near-term economic disaster for Britain itself. Not only would Britain lose access to one of the largest and most lucrative shared markets in the world, European Union countries have already begun signaling that the terms of Britain’s disengagement would be punitive. Last week U.S. Federal Reserve Chairman Janet Yellen raised the alarm about economic ramifications of Brexit for the global economy, saying that it could have “serious economic repercussions.”
British advocates of leaving the EU have tended to skirt these irksome facts. Instead, they have focused more on the European Union as a threat to the sovereignty and ethnic homogeneity of Britain, due to its allowances for freedom of movement in the continent and shared legislation. The forthrightly xenophobic nature of the Leave campaign, expressed in a number of remarkable advertisements sponsored by the Leave camp, has led several politicians formerly on board with Brexit to change their positions.
“There’s a phenomenon we’re seeing across the world where large numbers of people are abandoning common ground and moderation and pursuing extreme solutions at the margins,” says Philip Rosenberg, a Labour Party councillor and activist with the Remain campaign. Analogizing the possibility of Brexit to America’s ongoing flirtation with Donald Trump, Rosenberg describes the anti-EU movement as representing, “a kind of primal scream towards simple solutions, solutions that suggest that if we could only get rid of a certain scapegoat, things would be different.”
Rosenberg says that a British exit from the EU would also have consequences for the United States. “Historically, Britain has been a kind of entry point for the United States to have its perspective reflected in the EU,” he says. “If Britain leaves the European Union that weakens American influence in the EU more broadly. And with the U.S. turning its sights towards Asia, its just another factor that could accelerate a decline in Europe, by making it a more difficult region to trade, travel and negotiate with, while power rises elsewhere.”
The forces of nationalism repeatedly tore apart Europe in the early 20th century. Though nationalist sentiment was made dormant by the project of integration, it has seemingly reawakened in recent years. Recent polls have shown that a significant number of French and Italians also want to have a referendum on their own countries EU membership, developments that French National Front Leader Marine Le Pen has described as “extremely encouraging.”
With Europe facing the collective challenges of the conflict in the Ukraine, the break-up of the state system in the Middle East and the refugee crisis, the timing for this resurgence of nationalist politics couldn’t be worse. In recent months, British Prime Minister David Cameron has speculated provocatively that Brexit could lead to a future of war in Europe. But others suggest that the more immediate threat is the diminution of the European Union’s ability to handle current crises.
“Europe’s periphery is violent,” says Sebastian Mallaby, a Senior Fellow at the Council on Foreign Relations. “The external threats and challenges that Europe is presently facing necessitate a collective response, but these threats to integration from nationalist movements are more likely to exacerbate those problems rather than solve them.”
“While there is still a significant gap between Brexit and the breakup of European Union as a whole, it would seriously weaken the institution,” Mallaby adds. “But, if a number of second-order events from Brexit lead to the EU’s demise down the road and a return to conflict, we might look back and say that it had been the trigger.”
Photo: A boat taking part in a protest over the Brexit campaign sails down the Thames River.
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Anyone venturing into a 3.3-square mile “event zone” surrounding next month’s Republican National Convention will be prohibited from carrying tennis balls, tape, rope, bike locks, sleeping bags, or any object they could stand on to rise above the crowd and speak. They won’t be allowed to carry swords or water guns. But if they have a license they’ll be permitted to openly carry real guns, including assault weapons.
As Cleveland gears up to host one of the most controversial GOP conventions in decades, Ohio’s permissive gun policy isn’t the only red flag raised by prospective protesters and civil rights advocates. Many also warn that the regulations put in place by the city place “unacceptable restrictions on free speech” and risk escalating conflict, rather than diffusing it, by forcing rival groups of demonstrators to share tight quarters and schedules while keeping them out of sight and earshot of delegates and the media.
The restrictions imposed on the large event zone drawn around Cleveland’s Quicken Loans Arena — known locally as “The Q”— have earned the city a lawsuit filed by the ACLU of Ohio and widespread criticism across the spectrum of groups planning to show up at the convention to make their voices heard.
The nearly 30 groups that have applied for permits to protest at the convention have been told marches can only take place between 9 a.m. and 4 p.m., with an hour off for lunch, while most action inside the convention hall is expected to take place in the evening. Marches are restricted to a one-mile route over a bridge where they can hardly be seen. “The route takes a sharp right away from the Quicken Loans Arena and kind of dumps people into an industrial wasteland,” Christine Link, the executive director of the ACLU of Ohio, told The Intercept. “There’s nowhere to get a bottle of water, and it’s a long way back to your car.”
Protesters fear they will be effectively silenced by the isolation, but also worry about the close scheduling of groups on polar opposites of the political spectrum. For instance, members of the radical leftist Revolution Books are set to share one of two small gathering places with Westboro Baptist Church, an anti-gay hate group best known for picketing high-profile funerals. “As you can imagine,” Link said, “these groups are not going to be very friendly to each other.”
The ACLU lawsuit was filed on behalf of three groups: Citizens for Trump; Organize Ohio, a coalition of grassroots organizations planning an anti-poverty march during the convention; and the Northeast Ohio Coalition for the Homeless, which is not planning to protest but argues that the broad event zone imposes an unfair burden on an area that includes three homeless shelters and two homeless encampments.
The groups that applied for permits are only a fraction of those expected to show up at the convention. “Anarchists don’t typically ask for permits,” Link observed. Those hoping to protest by the book have had to deal with malfunctioning electronic request forms, delays, and a lack of communication from the city. The restrictions now imposed on protesters are only going to push more people to rally without authorization.
“They have to know that most people will never go along with this,” said Larry Bresler, a member of Organize Ohio. “It’s like they have no understanding whatsoever of what can be expected to go on during a convention.”
Cleveland’s Division of Police referred all convention-related questions to the mayor’s office, which did not respond to requests for comment.Paramilitary Preparations
Cleveland received a $50 million federal grant to gear up for the RNC. A complete list of items the city has obtained has not been made public, but according to the National Lawyers Guild (NLG), which has been monitoring preparations, it includes 10,000 sets of flex cuffs, “nonlethal munitions” like bean bag pellets, pepper spray, 2,000 sets of riot gear, 2,000 retractable steel batons, 3.7 miles-worth of steel barriers, as well as body armor, including ballistic helmets, face visors and shields, and chest, arms, legs and groin protection. The list also includes video surveillance equipment, laptops, night vision devices, and 16 Pointer Illuminator Aiming Lasers, which a technology retailer describes as being used for “night direct-fire aiming and illumination.” The NLG also raised concerns that Cleveland may deploy Stingray cell phone tracking devices to track down activists, as well as a Long Range Acoustical Device (LRAD), a crowd control tool emitting painful sounds to force people to disperse.
The LRAD, which was designed after the al Qaeda bombing of the USS Cole in Yemen, in 2000, was originally intended for U.S. warships to warn off vessels approaching without permission. The device was used for the first time against protesters in 2009, during the G20 summit in Pittsburgh, and a bystander who suffered permanent hearing damage sued the city. Police departments across the country have continued to use the LRAD to disperse protests and rallies, including in Ferguson, Missouri, and New York City.
“That militarized equipment or any security equipment that they buy for the RNC remains there long after the delegates leave,” said Jocelyn Rosnick, a coordinator for the Ohio Chapter of the NLG. “We believe that people have a right to know what’s coming into their city.”
Cleveland also paid $1.5 million to an insurance broker to secure a $10 million policy for liabilities relating to the convention. “Protest insurance” has become common for cities hosting political conventions and is intended to protect the city and its employees, including officers, against any claims and losses arising from its role as RNC host, including its “law enforcement, safety and security services,” city officials wrote in a call for bids. But the implications of the insurance policy — that the city assumes it will be sued over its handling of protests – doesn’t sit well with civil rights advocates. “These policies go far beyond general slip and fall type coverage,” said Rosnick. “They also indemnify the city for lawsuits related to constitutional violations and other civil liberties concerns.”
While Cleveland’s police have mostly responded to protests with restraint, for instance during the rallies following the killing by an officer of 12-year-old Tamir Rice, a Department of Justice investigation found that the department has engaged in a pattern of excessive force in its regular operations. In a December 2014 report, the DOJ determined that “insufficient accountability, inadequate training, ineffective policies, and inadequate engagement with the community” contributed to Cleveland’s police’s “use of unreasonable force.” Following the report, a police monitor was brought in, and reforms were promised. “But there hasn’t been enough time to fix anything,” said the ACLU’s Link, who questioned the department’s preparedness to handle the large number or protesters coming to town for the convention. “That’s the worry we have: this is not a sophisticated, well-run, police department.”
The convention center itself is under the control of the Secret Service, which has imposed a separate set of restrictions, including a ban on weapons. An online petition to allow licensed owners to carry guns inside the convention center gathered nearly 55,000 signatures before it was revealed that it was set up as a parody by a gun-control advocate.
Protesters planning to rally outside — with or without permit — worry that poor planning by the city and the hateful rhetoric that has marked much of the Republican race may turn into a dangerous combination. Some have already elected to stay home out of fear of violence, leaving those choosing to protest at an even greater risk.
Bresler, of Organize Ohio, said he met with organizers of the pro-Trump camp and that both groups are committed to nonviolent protest. “But you don’t always know who’s going to come in and join, and what’s going to happen,” he added. Pensley, the career protester, predicts that only the more radical will show up in Cleveland, while both liberals and radicals will descend on Philadelphia, for the Democratic National Convention.
“A lot of people I know who usually would be protesting at both conventions are skipping out on Cleveland, because they are scared,” he said. “And I don’t blame them.”
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Michele Flournoy, the former Defense Department official whom Defense One calls “the woman expected to run the Pentagon under Hillary Clinton,” this week advocated for “sending more American troops into combat against ISIS and the Assad regime than the Obama administration has been willing to commit.” In an interview with that outlet, Flournoy “said she would direct U.S. troops to push President Bashar al-Assad’s forces out of southern Syria and would send more American boots to fight the Islamic State in the region.” She had previously “condemned the Obama administration’s ISIS policy as ineffectual,” denouncing it as “under-resourced.”
This week, Flournoy specifically advocated what she called “limited military coercion” to oust Assad. In August, 2014, Obama announced what he called “limited airstikes in Iraq” – and they’re still continuing almost two years later. Also note the clinical euphemism Flournoy created – “military coercion” – for creating a “no bomb zone” that would entail “a declaratory policy backed up by the threat of force. ‘If you bomb the folks we support, we will retaliate using standoff means to destroy [Russian] proxy forces, or, in this case, Syrian assets,'” she said. Despite DC conventional wisdom that Obama is guilty of “inaction” in Syria, he has sent substantial aid, weapons and training to Syrian rebels while repeatedly bombing ISIS targets in Syria.
Even U.S. military officials have said that these sorts of no-fly or no-bomb guarantees Flournoy is promising – which Hillary Clinton herself has previously advocated – would risk a military confrontation with Russia. Obama’s Defense Secretary, Ash Carter, told a Senate hearing last December that the policy Clinton advocates “would require ‘substantial’ ground forces and would put the US military at risk of a direct confrontation with the Syrian regime and Russian forces.” Nonetheless, the Pentagon official highly likely to be Clinton’s Defense Secretary is clearly signaling their intention to proceed with escalated military action. The carnage in Syria is horrifying, but no rational person should think that U.S. military action will be designed to “help Syrians.”
It’s long been beyond doubt that Clinton intends to embark upon a far more militaristic path than even Obama forged – which is saying a lot given that the 2009 Nobel Peace Prize winner has bombed seven predominantly Muslim countries in seven years. Repeatedly, Clinton has implicitly criticized Obama for excessive hostility toward Israel, and she has vowed more uncritical support for Israel and to move closer to Netanyahu. Just yesterday, Clinton surrogates battled Sanders’ appointees in the Democratic Platform Committee meeting over Israel and Palestine, with Clinton’s supporters taking an even more hard-line position than many right-wing Israeli politicians. Clinton was the leading voice that successfully convinced a reluctant Obama to involve the U.S. in the disastrous intervention in Libya.
Her past criticisms of Obama’s foreign policy were based overwhelmingly in her complaints that he did not use enough military force, including in Syria. As The New York Times put it in 2014: “That Mrs. Clinton is more hawkish than Mr. Obama is no surprise to anyone who watched a Democratic primary debate in 2008 . . . . She favored supplying arms to moderate Syrian rebels, leaving behind a somewhat larger residual military force in Iraq and waiting longer before withdrawing American support for President Hosni Mubarak of Egypt during the historic protests in Cairo.”
Pro-Clinton outlets recently manufactured an utterly stupid and misleading “scandal” (using shallow right-wing themes) over the fact that Bernie Sanders, by committing the crime of continuing his campaign against Hillary Clinton, is “costing the taxpayers” $38,000 a day. Maybe these same intrepid journalists could spend a little time calculating the “cost to American taxpayers” from the massive, bellicose, bloody wars and bombing campaigns their favorite candidate is explicitly advocating and, beyond that, the ones she’s likely – based on her “hawkish” history – to start. That might be worth doing given that the costs of Clinton’s military actions will be many, many magnitudes greater than the costs of Sanders’ security protection which has so upset their frugal fiscal sensibilities.
But the fact that Hillary Clinton has a history of advocating more war and killing and support for heinous regimes and occupations is the one thing Democratic pundits have, with remarkable message discipline, completely ignored. From Bernie Bros to Sanders’ Secret Service costs to Hillary’s kick-ass, mic-dropping, slay-queen tweets, they’ve invented the most embarrassingly childish and trivial distractions to ensure they don’t have to talk about it. But now Clinton’s almost-certain Defense Secretary is already – months before she’s in power – expressly advocating more war and bombing and dangerous interventions. That makes the costs of a Clinton foreign policy – at least for those who assign any value to lives outside of American soil – much harder, and more shameful, to ignore.
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