Dear **************

Yesterday, a federal jury ruled against POGO in the DOJ's civil case that alleged we unlawfully supplemented a government employee's salary.

This case began a decade ago when POGO shared with two government whistleblowers our lawsuit recovery that resulted from POGO's suit against fifteen of the world's biggest oil companies. We shared the lawsuit proceeds as a public service award for the whistleblowers' long-time efforts to expose the oil industry's ripping off the taxpayer when drilling on public land.


The DOJ's case was based on a philosophical disagreement between it and POGO about whether organizations such as ours can have whistleblowers act as shadow relators in litigation to fight government fraud. During the trial, the DOJ argued that under no circumstances can federal employees accept an award for their work as a federal employee and that DOJ has discretion in pursuing such violations.

Ironically, the DOJ accused POGO of keeping our sharing with the whistleblowers a secret. In fact, at the time DOJ asked POGO not to hold a press conference (so we did not), and indicated no concern with our sharing with the whistleblowers.POGO continues to believe that we did the right thing in sharing the settlement, and certainly did not violate the law.

We believe that the DOJ's case mischaracterized the facts and misinterpreted the law. In addition, the jury was not allowed to consider the fact that POGO had notified the Justice Department of our intentions before we presented a share of the lawsuit recovery as a public service award; nor the fact that oil industry-funded Members of Congress wrote to DOJ demanding an investigation of POGO; nor was POGO allowed to explain our intent in sharing with the whistleblowers. POGO plans to present additional arguments to the Court related to the assessment of civil damages.

Further, we are considering an appeal.So this morning, we had to laugh when we opened the Washington Post Express: There before us was a half-page ad for the Partnership for Public Service "Service to America Medals" award for "extraordinary federal employees" and each award is accompanied by a cash prize from $3,000 to $10,000. The ad asks readers to "Honor America's Unsung Heroes. Nominate a fed who is doing remarkable work for a Service to America Medal." Hmmm. We love this idea, and are glad the Partnership is doing this, but why has DOJ spent ten years harassing POGO for doing essentially the same thing? Could it be that DOJ is more comfortable with awards that are sponsored by such government contractors as CH2MHill and Acquisition Solutions, and, drum roll please--CHEVRON--than when it is the work of POGO and whistleblowers?

At any rate, all of us at POGO would like to thank all of our friends who sent emails, calls, and even a few notes cheering us on during this pretty grueling process. We've been touched by those who have encouraged us to stand up against the government's harassment. Now, we at POGO can get back to work full-steam.

Warm regards, Danielle Brian
Executive DirectorProject On Government Oversight

P.S. For more details on the case, be sure to check out POGO's blog.

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From The New York Times

February 12, 2008
Senate Passes Bill to Expand U.S. Spying Powers
By ERIC LICHTBLAU

WASHINGTON — After more than a year of heated political wrangling, the Senate handed the White House a major victory Tuesday by voting to broaden the government’s spy powers after giving legal protection to phone companies that cooperated in President Bush’s warrantless eavesdropping program.

The Senate rejected a series of amendments that would have restricted the government’s surveillance powers and eliminated immunity for the phone carriers, and it voted in convincing fashion — 69 to 29 — to end debate and bring the issue to a final vote. That vote on the overall billwas an almost identical 68 to 29.

The House has already rejected the idea of immunity for the phone companies, and Democratic leaders reacted angrily to the Senate vote. But Congressional officials said it appeared that the House would ultimately be forced to accept some sort of legal protection for the phone carriers in negotiations between the two chambers this week.
The Senate debate amounted to a proxy vote not only on the president’s warrantless wiretapping program, but also on a range of other issues that tested the president’s wartime authority, from secret detentions to wiretapping issues. The discussion in effect presaged the debate over national security that will play out this year in the presidential and congressional elections.

Senator Christopher J. Dodd of Connecticut, who spoke on the Senate floor for more than 20 hours in an unsuccessful effort to stall the wiretapping bill, said the vote would be remembered by future generations as a test of whether the country heeds “the rule of law or the rule of men.”

But with Democrats defecting to the White House plan, he acknowledged that the national security issue had won the day in the Senate, even among many of his Democratic colleagues. “Unfortunately, those who are advocating this notion that you have to give up liberties to be more secure are apparently prevailing,” Mr. Dodd said. “They’re convincing people that we’re at risk either politically, or at risk as a nation.”

With resistance led by Mr. Dodd and Senators Russ Feingold of Wisconsin, critics of the administration’s plan argued that it effectively rewarded phone companies by providing them with legal insulation for actions that violated longstanding law and their own fiduciary responsibilities to their customers. Immunity would protect the phone companies from some 40 lawsuits now pending that charge the firms broke the law by taking part in the program.

But supporters of the plan said the phone carriers acted out of patriotism after the Sept. 11 attacks in complying with what they believed in good faith was a legally binding order from the president. Republicans were able to garner the support of 19 Democrats and Senator Joseph I. Lieberman of Connecticut. Democratic leaders charged that the tactics the Republicans used smacked of fear-mongering.

“This, I believe, is the right way to go for the security of the nation,” said Senator John D. Rockefeller IV, the West Virginia Democrat who leads the intelligence committee and who was a pivotal supporter of the White House-backed plan approved Tuesday.
Beyond the immunity provision, the Senate measure would also widen the executive branch’s surveillance powers by allowing the National Security Agency and intelligence agencies to use broad orders — without getting court orders in advance — to eavesdrop on groups of overseas targets, rather than using individualized warrants.

Now that it appears the unraveling of many corrupt little empires is beginning to accelerate, I wonder how these people stand in their acceptance of contributions from Defense and Other Contractors? Anyone know if they have any involvement in the Abramson or Cunningham Corruption Scandals? I would like to believe that there are some honest and ethical people out there in politics, but know better than to trust that is the case. I’d be very pleased to her your perspectives. -VM
----------------------------------------------------------------------

House Republicans Approach Record Departures
By Rob Hotakainen
McClatchy Newspapers
Sunday 10 February 2008
Washington - In the last week of January, five members of Congress joined the hottest demographic group on Capitol Hill: Republicans who are heading for the exits.
Reps. Tom Davis of Virginia, Kenny Hulshof of Missouri, Ron Lewis of Kentucky, Dave Weldon of Florida and James Walsh of New York are among 25 Republican members of the House of Representatives who've announced their resignations or retirements. The party is closing in quickly on its record of 27 House retirements, set in 1952.
Hulshof is running for governor; the others are retiring.
"It's become an epidemic," said David Johnson, a Republican consultant and strategist based in Atlanta.
While some members, such as Hulshof, are leaving to pursue new political opportunities, most observers say that the mass departures are the result of the loss of Republican control in the 2006 elections, lackluster fundraising and low morale.
So far, only five House Democrats have announced that they're leaving, either to retire or to run for Senate seats.
Prospects look equally bright for Democrats in the Senate, where five Republican veterans - John Warner of Virginia, Pete Domenici of New Mexico, Chuck Hagel of Nebraska, Larry Craig of Idaho and Wayne Allard of Colorado - are ready to hang it up.
It adds up to a tough year for Republicans, who at a minimum will face a big loss of seniority and experience when the 111th Congress convenes next January. Analysts predict that the party will be hard-pressed to keep Democrats from expanding their 232-199 House majority.
"It means that whatever little chance there was - and it always was a little chance - that they could take back the House is pretty much gone.... Open seats are always easier to win," said Robert Smith, a professor of political science at San Francisco State University. He said that many retiring Republicans had discovered that after running the House for more than a decade, "it's not as satisfying to go to the other side."
Much of the Democratic excitement is focused on the party's ability to attract big-time cash.
Outgunning Republicans in the money chase for the first time in at least two decades, Democrats raised a record $67.5 million for House races last year and finished the year with more than $35 million in cash.
"The American people are energized and inspired by Democrats' agenda of change and the strong candidates we've recruited across the country," said Democratic Rep. Chris Van Hollen of Maryland, the chairman of the Democratic Congressional Campaign Committee.
At least 10 of the retiring House members belong to the centrist Republican Main Street Partnership, veterans such as Virginia's Davis, New York's Walsh and Minnesota's Jim Ramstad. Some observers predict that the Republican candidates who are nominated to replace them are likely to be more conservative.
Johnson, who worked on Republican former Kansas Sen. Bob Dole's 1996 presidential campaign and has overseen numerous congressional races, said that four more House Republicans could step aside this year. That would break the party's record.
"I would say there's a good possibility, depending on how the polls continue to look," Johnson said. "The Republican brand right now is damaged. Voters are not blaming the Democratic Congress, even though the polls show that Congress is held in such low esteem. Voters are blaming Republicans more than they're blaming the Democrats who are in power.... All of a sudden we're playing defense."
Only 33 percent of Americans gave Congress a positive job rating in an ABC-Washington Post poll conducted last week. However, an earlier poll by the same organizations found that 54 percent of respondents still want Democrats to control Congress next year, compared with 40 percent who want Republicans back in charge. The findings were nearly identical to those of a USA Today-Gallup poll in December.
Republicans acknowledge that they face an uphill fight this year, but their leaders are trying to put the best face on their situation.
Julie Shutley, the deputy communications director for the National Republican Congressional Committee, predicted that the party will be in a good position to replace all 25 of its departing members with Republicans. "We feel like we have a very good Republican bench of candidates in the districts that are going to be open seats," she said.
Some analysts regard the exodus of Republicans as normal, the result of natural rhythms that occur in a two-party system, particularly after a watershed election such as 2006, when Democrats won control of both houses of Congress. Under this theory, the party that wins control often will consolidate its power in elections two years later.
Democrats, of course, are hoping for a sweep next November: winning back the White House and strengthening their majorities on Capitol Hill. Or at least winning 60 Senate seats so they have a veto-proof majority if a Republican wins the White House. They're hoping that increased turnout and grass-roots energy in the presidential race will bolster their congressional candidates.
The Republicans' money problems are compounded by an unpopular war in Iraq, an economy that's quickly going south and President Bush's low approval ratings, Smith said.
Johnson said Republicans "haven't adapted to life in the minority" and that the party lacked a cohesive strategy to rebound. He gave credit to House Speaker Nancy Pelosi, a California Democrat who offers a very different public image from that of Newt Gingrich, the former Georgia congressman who led the House after Republicans won control in 1994. That's the last time the parties traded control.
"Part of the Republican problem right now that I see as a strategist is our communications effort," Johnson said. "We don't have any good communicators. We don't seem to stay on message. We come across as grumpy old men. I hate to say it, but that's part of the problem. We're not telegenic on TV. We're going against Nancy Pelosi, who could be damaged but - I have to take my hat off to her - she's done an excellent job with the media. Nothing seems to stick on her like everything stuck on Newt Gingrich."
House Seats Opening Up
Representative...............Reason for leaving
Tom Lantos, D-Calif. ........Retiring
Mark Udall, D-Colo. ..........Running for Senate
Tom Allen, D-Maine...........Running for Senate
Tom Udall, D-N.M. ............Running for Senate
Michael McNulty, D-N.Y. ...Running for Senate
Terry Everett, R-Ala. ..........Retiring
Rick Renzi, R-Ariz. .............Retiring
John Doolittle, R-Calif. .......Retiring
Duncan Hunter, R-Calif. .....Retiring
Tom Tancredo, R-Colo. .....Retiring
Dave Weldon, R-Fla. ..........Retiring
Jerry Weller, R-Ill. ...............Retiring
Ray LaHood, R-Ill. ..............Retiring
Ron Lewis, R-Ky. ................Retiring
Jim McCrery, R-La. .............Retiring
Richard Baker, R-La. ...........Resigned
Jim Ramstad, R-Minn. .........Retiring
Kenny Hulshof, R-Mo. .........Running for governor
Charles "Chip" Pickering, R-Miss. Retiring
James Saxton, R-N.J. ..............Retiring
Mike Ferguson, R-N.J. ........Retiring
Heather Wilson, R-N.M. ......Running for Senate
Steve Pearce, R-N.M. .........Running for Senate
James Walsh, R-N.Y. ..........Retiring
David Hobson, R-Ohio ........Retiring
Deborah Pryce, R-Ohio .......Retiring
Ralph Regula, R-Ohio .........Retiring
John Peterson, R-Pa. ..........Retiring
Tom Davis, R-Va. ................Retiring
Barbara Cubin, R-Wyo. .......Retiring
--------
Source: Cook Political Report
-------

Now here is another cozy relationship. Can anyone else see a problem with this? Anybody? -VM
---------------------------------------------------------------------

New spy chief consulted for some of those he'll supervise
Full story: http://seattletimes.nwsource.com/html/nationworld/2003549374_webspy31.html

By Ted Bridis
The Associated Press

WASHINGTON -- President Bush's choice to be the nation's new spy chief worked as a $2 million-a-year private consultant with some of the same senior military and intelligence officials he would supervise as director of national intelligence.

Retired Vice Adm. Mike McConnell could face an unusually daunting challenge avoiding ethical entanglements after a decade working with Booz Allen Hamilton Inc., a large defense and intelligence consulting company with sales of $3.7 billion worldwide, according to an extensive Associated Press review of McConnell's finances and business deals.

McConnell's Senate confirmation hearing is to begin Thursday.

A Senate Intelligence Committee member, Sen. Ron Wyden, D-Ore., said he already has urged McConnell to be prepared to discuss his work as a consultant and its implications on the job of chief over all U.S. intelligence agencies. Those agencies rely heavily on work by outside consultants, who often are hired under contracts kept secret for national security reasons.

"I'm going to bring it up," Wyden said. "I made it clear that I was going to be asking questions about issues relating to his work with contractors."

In May, for example, McConnell and other company executives met privately in San Antonio with Major Gen. Craig Koziol, a top Air Force intelligence officer in charge of information operations and cryptology, according to records obtained by the AP under the Freedom of Information Act. The company bid months later on a related contract from the Air Intelligence Agency, part of the U.S. intelligence community that McConnell would oversee as the national director.

More than half Booz Allen Hamilton's sales come from such government contracts. McConnell's closest colleagues at the company anticipate intense scrutiny over its future relationship with him as the overseer of the nation's 16 spy agencies.

"I will never be able to go in and see him in his office," said Richard Wilhelm, a Booz Allen Hamilton senior vice president who has worked with McConnell for more than 30 years. "He's said, 'Unfortunately, I'll not be able to talk to you guys anymore.' We'll have to be very careful."

Efforts to reach McConnell through the White House and through Booz Allen Hamilton were unsuccessful. Presidential nominees routinely do not speak publicly or with reporters before Senate confirmation hearings.

The White House promised that McConnell would divest any financial holdings in Booz Allen Hamilton if he is confirmed as intelligence chief. In addition to his $1,999,840 salary, McConnell owns $1 million to $5 million in company stock, plus up to $1.15 million more in other investment funds owned through the company, according to financial reports he submitted to the White House.

McConnell would earn $186,600 annually as director of national intelligence.

"There has to be the highest level of oversight within the agency and Congress to make sure any appearance of impropriety is totally investigated and erased," said Scott Amey, general counsel for the Project on Government Oversight, a Washington-based whistleblowers group. Amey said public scrutiny over classified intelligence contracts is limited because of secrecy.

Booz Allen Hamilton and the intelligence director's office separately said each will vigorously enforce ethics rules related to McConnell and the company.

In a statement, the agency pledged to refer potential business conflicts to ethics officers inside federal agencies.

A Booz Allen Hamilton spokesman, George Farrar, said the company will establish contracting firewalls to avoid conflicts with McConnell. "That has to be the case," Farrar said. "You have to maintain absolutely by-the-rules contracting."

McConnell's nomination comes in the midst of a broad, government-wide review by the intelligence director's own office about the role of private contractors in U.S. spy agencies. That report, which will examine whether the government hires too many such contractors, is nearly finished but has not yet been sent to Congress.

McConnell, a former director of the National Security Agency until 1996, is described by those who have worked with him as an affable and well-respected intelligence expert. He is credited with recognizing more than a decade ago the risks from electronic attacks by foreigners against important U.S. computer networks -- years ahead of many other government officials.

McConnell is still expecting an unspecified lump-sum retirement payment, an unspecified bonus and an unspecified payment to his retirement account from Booz Allen Hamilton, according to his financial records. The company also will continue to pay for his medical and dental insurance.

Separately, McConnell draws $90,944 annually from his Navy retirement and owns smaller amounts of stock in other companies that also work extensively with the U.S. government, including Halliburton Co., Boeing Co., L-3 Communications Holdings Inc., Cisco Systems Inc., Oracle Corp., Microsoft Corp. and others. He also earns $16,000 as a board member for CompuDyne Corp., which sells security systems to the federal government, and $30,000 as chairman of the Intelligence and National Security Alliance, a trade group that lobbies the government on intelligence matters.

It was unclear how much McConnell's finances have changed since he left U.S. government work in 1996. The National Security Agency, which he led, told the AP it could not locate McConnell's financial records from that period in its files. It suggested the records might have been destroyed because so much time had passed since he worked there.

Associated Press Writer Sharon Theimer contributed to this report.

From: USDOJ-Office of Public Affairs [mailto:USDOJ-Office.of.Public.Affairs@usdoj.gov]
Sent: Monday, February 11, 2008 12:56 PM
To: USDOJ-Office of Public Affairs
Subject: CHINA: ECONOMIC ESPIONAGE IN THEFT OF SPACE SHUTTLE SECRETS
A copy of the indictment is attached below.

_______________________________________________________________________
FOR IMMEDIATE RELEASE NSD
MONDAY, FEBRUARY 11, 2008 (202) 514-2007
WWW.USDOJ.GOV TDD (202) 514-1888
FORMER BOEING ENGINEER CHARGED WITH ECONOMIC ESPIONAGE
IN THEFT OF SPACE SHUTTLE SECRETS FOR CHINA
WASHINGTON, D.C. — A former Boeing engineer was arrested this morning after being indicted last week on charges of economic espionage and acting as an unregistered foreign agent of the People's Republic of China (PRC), for whom the engineer stole Boeing trade secrets related to several aerospace programs, including the Space Shuttle.
Dongfan "Greg" Chung, 72, of Orange, Calif., who was employed by Rockwell International from 1973 until its defense and space unit was acquired by Boeing in 1996, was arrested without incident at his residence by special agents with the Federal Bureau of Investigation and investigators with NASA. Chung, who is expected to make his initial court appearance here this afternoon, was named in an indictment returned last Wednesday by a federal grand jury.
The indictment accuses Chung of eight counts of economic espionage, one count of conspiracy to commit economic espionage, one count of acting as an unregistered foreign agent without prior notification to the Attorney General, one count of obstruction of justice, and three counts of making false statements to FBI investigators.
Chung, a native of China who is a naturalized United States citizen, held a Secret security clearance when he worked at Rockwell and Boeing on the Space Shuttle program. He retired from the company in 2002, but the next year he returned to Boeing as a contractor, a position he held until September 2006. The indictment alleges that he took and concealed Boeing trade secrets relating to the Space Shuttle, the C-17 military transport aircraft and the Delta IV rocket. Chung allegedly obtained the materials for the benefit of the PRC.
"Certain foreign governments are committed to obtaining the American trade secrets that can advance the development of their military capabilities. Today's case demonstrates that the Justice Department is equally committed to foiling those efforts through the arrest and prosecution of those who conduct economic espionage at the expense of our economic and national security," said Assistant Attorney General for National Security, Kenneth L. Wainstein.
United States Attorney Thomas P. O'Brien stated: "Mr. Chung is accused of stealing restricted technology that had been developed over many years by engineers who were sworn to protect their work product because it represented trade secrets. Disclosure of this information to outside entities like the PRC would compromise our national security."
The case against Chung is related to an investigation into another engineer who worked in the United States and obtained sensitive military information for the PRC. The man, Chi Mak, and several of his family members were convicted last year of providing defense articles to the PRC (see: www.usdoj.gov/usao/cac/pressroom/pr2007/074.html). Mak is scheduled to be sentenced on March 24.
According to the indictment that was unsealed this morning, individuals in the Chinese aviation industry began sending Chung "tasking" letters as early as 1979. Over the years, the letters directed Chung to collect specific technological information, including data related to the Space Shuttle and various military and civilian aircraft. Chung allegedly responded in one letter indicating a desire to contribute to the "motherland."
In various letters to his handlers in the PRC, Chung referenced engineering manuals he had collected and sent to the PRC, including 24 manuals relating to the B-1 Bomber that Rockwell had prohibited from disclosure outside of the company. According to the indictment, between 1985 and 2003, Chung made multiple trips to the PRC to deliver lectures on technology involving the Space Shuttle and other programs, and during those trips he met with officials and agents of the PRC government. The indictment alleges that Chung and PRC officials exchanged letters that discussed cover stories for Chung's travel to China and recommended methods for passing information, including suggestions that Chung use Chi Mak to transmit information.
The indictment describes a May 2, 1987 letter from Gu Weihao, an official in the Ministry of Aviation and China Aviation Industry Corporation, which discussed the possibility of inviting Chung's wife, who is an artist, to visit an art institute so that Chung could use the cover of traveling with his wife as an excuse to travel to the PRC. This same letter suggested that passing information to the PRC through Chi Mak would be "faster and safer" and concluded with the statement: "It is your honor and China's fortune that you are able to realize your wish of dedicating yourself to the service of your country." The indictment describes a second letter from Gu Weihao, dated April 12, 1988, which asked Chung to provide information on "advanced technologies." This letter stated that Rebecca Mak was in the PRC and she had reported that Chung and the Maks had a good relationship.

"The FBI is committed to protecting America's assets from foreign thievery," said Salvador Hernandez, Assistant Director in Charge of the FBI's Los Angeles Field Office. "The arrest and indictment of Mr. Chung should serve as a reminder to those who would compromise the economic and physical security of the United States by stealing proprietary information. The FBI will continue to work with NASA, the defense community and other federal agencies to safeguard our nation's technology."
Each charge of economic espionage carries a maximum possible penalty of 15 years in prison and a $500,000 fine. The charges of acting as an agent of a foreign government without prior notification to the Attorney General and obstruction of justice each carry a maximum penalty of 10 years imprisonment and a $250,000 fine. The charges of conspiracy to commit economic espionage and making a false statement to federal investigators each carry a maximum possible penalty of five years imprisonment and a $250,000 fine.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt
The investigation in this case was conducted jointly by the FBI and NASA Counterintelligence. The case is being prosecuted by Assistant United States Attorneys Greg Staples and Ivy Wang, from the Central District of California.
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