Friday, November 29, 2013

DOD Wraps Climate Change Response into Master Plans

By Cheryl Pellerin
American Forces Press Service

WASHINGTON, Nov. 26, 2013 - The effects of climate change are already evident at Defense Department installations in the United States and overseas, and DOD expects climate change to challenge its ability to fulfill its mission in the future, according to the first DOD Climate Change Adaptation Roadmap.

John Conger, the acting deputy undersecretary of defense for installations and environment told American Forces Press Service the roadmap was completed in 2012 and published early this year.

The document "had us do a variety of things," Conger said. "But the piece that I think is the crux of the report is, rather than creating a stovepipe within the DOD organizational structure to deal with climate change, [the document says] we are going to integrate climate change considerations into the normal processes, the day-to-day jobs of everybody."

Such language is going to be integrated into various guidance documents, he added, "and we've already started doing that."

The department's action is part of a federal government effort to address the global challenge. In June, President Barack Obama launched a Climate Action Plan to cut carbon pollution, prepare communities for climate change impacts and lead similar international efforts.

Across the United States, local communities and cities are updating building codes, adjusting the way they manage natural resources, investing in more resilient infrastructure and planning for rapid recovery from damage that could occur due to climate change.

And on Nov. 1, the president issued an executive order on climate preparedness directing federal agencies to modernize programs to support climate-resilient investments, manage lands and waters for climate change preparedness and resilience, and plan for climate-change-related risk, among other things.

The order also forms an interagency council on climate preparedness and resilience, chaired by the White House and composed of more than 25 agencies, including the Defense Department.

The foundation for DOD's strategic policy on climate change began with the defense secretary's publication in 2010 of the Quadrennial Defense Review. The QDR, produced every four years, translates the National Defense Strategy into policies and initiatives.

In 2010, the QDR for the first time linked climate change and national security. It said climate change may affect DOD by shaping the department's operating environments, roles and missions, have significant geopolitical impacts worldwide, and accelerate instability or conflict.

The QDR said DOD also would have to adjust to climate change impacts on its facilities, infrastructure, training and testing activities and military capabilities.

As the acting deputy undersecretary of defense for installations and environment, Conger also is the department's senior climate official, and his first job is to manage the installations and environment portfolio.

"That includes over 500 bases and 300,000 buildings and 2.2 billion square feet of space," he said. "The infrastructure has a plant replacement value on the order of $850 billion. There's a lot of stuff out there that is all going to be impacted by changes in the climate."

Conger said the department has to plan for the contingencies that climate change poses just as it would plan for any other contingency, driven by any other force in the world.

"As I look at managing the infrastructure, I have to think about risk as well in that context," he said. "What is climate change likely to do? What are the major changes that will occur that will affect that $850 billion real property portfolio?"

The obvious threats are things like a rise in sea-levels, storm surges and storm intensity, but there's also drought and thawing permafrost that affects bases in Alaska, the deputy undersecretary added.

"Similarly, on our installations we have over 400 endangered species," he said. "We manage those species through documents called integrated natural resources management plans and we manage [them] not through some degree of altruism ... but the fact is that if we don't manage those species effectively and they do appear more threatened, then other regulatory agencies will put limits on what we can do on our property and that will impact training."

Conger added, "We said, 'Take climate into account. Make sure you have planned for this. Make sure you have thought about it and addressed it in your [installation management] plans.'"

"These are all, in my mind, sensible, reasonable steps that don't cost very much money today and just require a little bit of forethought in order to reduce our exposure to risk tomorrow."

The president's June Climate Action Plan categorized recommendations for action in terms of mitigating or eliminating emissions that cause climate change, adapting to climate change, and working internationally on climate change, Conger said.

DOD has been looking at mitigation, or the energy problem, for a long time, the deputy undersecretary added.
Energy and climate are tied together, Conger said, because energy and emissions are tied together.

"We are working very hard and diligently to reduce our energy usage, to reduce our energy intensity and to increase the use of renewable energy, which doesn't have emissions," he said. "And we have done each of these things not because it is good for the climate or because it reduces emissions but because they provide mission and monetary benefits."

Conger says the department's $4 billion annual utility bill drives the search for energy-efficiency, renewable-energy development projects and more. All have benefits from a mission perspective first, he said, and also turn out to be good for the environment.

Saturday, November 23, 2013

Senate Hearing Targets Predatory Lending Practices

Senate Hearing Targets Predatory Lending Practices

By Terri Moon Cronk
American Forces Press Service

WASHINGTON, Nov. 21, 2013 - While programs are in place to combat predatory lending practices that target service members and their families, better rules and enforcement are needed, witnesses told a Senate Commerce, Science and Transportation Committee yesterday.

Predatory lending practices impact not only a service member's financial readiness, but also mission readiness, witnesses told lawmakers in a hearing about the lending practices targeted towards the military.

As a former military spouse and assistant director of the consumer financial protection bureau, office of service member affairs, Holly Petraeus recalled the history and subsequent changes of predatory lending.

"I've lived on or near military bases my entire life, and seen that strip outside the gates, offering everything from furniture to used cars to electronics to jewelry, and the high-cost credit to pay for them," Petraeus said. She said an "alarming increase" occurred in the early 2000s in businesses offering payday loans and corresponding increases in service members taking advantage of "easy money," often without the ability to repay what they borrowed.

"The Pentagon took note that indebtedness was beginning to take a serious toll on military readiness, as did the media," Petraeus added.

The Defense Department, she said, published a report in 2006 on predatory lending practices directed at service members and their families. It found that predatory lending "undermines military readiness, harms the morale of troops and their families, and adds to the cost of fielding an all-volunteer fighting force," Petraeus said.

The result was the Military Lending Act of 2006, which caps the rate on consumer credit to a covered member of the armed forces or a dependent of a covered member at 36 percent and creates other consumer protections, she said.

DOD wrote the MLA's regulations and defined "consumer credit" as only three types of loans that were narrowly defined, Petraeus said. They cover payday loans, closed-end loans with terms of 91 days or fewer for $2,000 or less; auto-title loans, closed-end loans with terms of 181 days or fewer; and tax refund anticipation loans which are closed-end credit, she testified.

"For those products that fall within [DOD's] definitions, the law has had a positive impact," she testified. "But the concern now is that lenders have easily found ways to get outside of the definitions."

The spouse of a wounded warrior who took out an auto title loan of $2,575 at an APR of 300 percent was one example Petraeus gave in her testimony.

"The finance charges on the loan were over $5,000. The loan was not subject to the MLA because it was longer than 181 days," she said.

She also acknowledged concerns about the existing rule's effectiveness, which has led to renewed interest from Congress.

"This morning, the bureau announced an enforcement action against a large national payday lender, Cash America, which had made loans in violation of the MLA to hundreds of service members or their dependents," Petraeus testified. "As part of the enforcement action, the lender refunded loan and loan-related fees for a total amount of approximately $33,550. It also put additional compliance mechanisms in place and agreed to increase training on the MLA for its customer service representatives."

She called that action "a great example of what can be achieved through the combined efforts of the bureau's supervisory and enforcement areas," and a significant change in a large payday lender's appreciation of and compliance with the MLA.

Petraeus said she still harbors "real concerns" about the ability of lenders to easily evade the existing MLA regulations.

"The original rule was effective for those products that it covered, but over the past six years, we have seen significant changes in the type of products offered and the contours of state law," she said. "And I think it's critically important to ensure that the MLA protections keep up."

Petraeus said she believes any approach with strict definitions that define individual products will fall victim to the same evasive tactics that are plaguing the existing rule.

"I also believe that from a military financial readiness point of view, it makes no difference whether the loan is made by a depository institution or a non-depository institution, nor does it matter whether the loan is structured and open- or closed-end," she said. "A loan with a sky-high interest rate and burdensome fees has the same adverse impact on military financial readiness no matter who offers it."

The underlying goals of protecting military and financial readiness that led to the MLA are as important today as they were when the act was originally passed, Petraeus said.

"I think we should all be indignant when we hear of service members trapped in outrageous loans and realize that there is little we can do under the current regulations because they are just longer than 91 days or structured as open-end credit," she testified. "We owe it to our service members and their families to do the best possible job of crafting rules that properly implement the intent of the Military Lending Act."
Dwain Alexander, legal assistant attorney at Naval Station Norfolk, Va., said the Navy is taking steps to educate its service members.

"Education will help avoid many debt traps," Alexander testified. "However, some problems like arbitration and the Servicemember Civil Relief Act waiver, and aggressive debt collection, are beyond education."

He said his office is working on videos to educate sailors and families on consumer issues while they're in waiting rooms and similar environments, in addition to providing education to those returning from deployments.
Alexander said other awareness measures to avoid predatory lending being used in the Navy include mandatory military training on payday loans.

However, he said, some issues cannot be addressed such as the service member's waiver and arbitration being in the contracts, because they are legal.

"We need help with that," he said.

Friday, November 22, 2013

Changing World Challenges U.S. Intelligence Community

Changing World Challenges US Intelligence Community
By Claudette Roulo

American Forces Press Service

WASHINGTON, Nov. 21, 2013 - In the past, intelligence personnel wouldn't be found participating in open forums, the director of the Defense Intelligence Agency said yesterday at a Brookings Institution discussion on defense intelligence.

"I think that's a sign of the times for the kinds of things that we are involved in, particularly ... [in] this open world," Army Lt. Gen. Michael T. Flynn said. "There's so much transparency going on between the intelligence community and all others, and there has to be. There has to be more of it."

The immense volume of open source information has increased commanders' intelligence needs and changed what sources they use, he said. Ten or 15 years ago, intelligence briefings were primarily composed of what is traditionally thought of as intelligence -- human intelligence, signals intelligence, imagery intelligence -- with a little bit of open source information thrown in.

"Today, it's almost 180 degrees flipped," Flynn said. "The open world -- and the knowledge that exists and is available to all of us at the push of a button -- [is] really smart. This is some really smart analysis that's out there that's being written by people that are on the ground, seeing it for how it is."

Whether that information is posted on a blog or on Twitter, he said, "We cannot sit idle ... and not pay attention to that."

Freely accessible information is just one of the two driving factors behind today's intelligence imperatives, Flynn said.

The international fiscal situation is forcing intelligence agencies to evaluate their priorities, including how they collaborate and how they invest in current capabilities versus the next generation of ideas and capabilities, he said.

Four "mega-trends" influence these factors: economic, resources, information and population, the general said. "For the most part ... these are trends that we can judge pretty accurately," he noted.

Of these four mega-trends, the rapid changes over the past 100 years in information and population trends are having the most impact, Flynn said.

Those changes were "stunning," the general said, and the world hasn't yet come to grips with many of them despite already being nearly 15 years into the 21st century.

Flynn said that about half of DIA personnel are working on the "edge" of the enterprise -- in combatant commands and forward environments -- and for him, the question is how to leverage those resources. "How do we make the edge the center?" he asked.  

It's important to understand what is happening at the edge, he said, and to make it the place where the best, most relevant and most timely knowledge can be gained. "Then you bring it back to help shape the conversations that are happening [in Washington, D.C.]," Flynn added.

The general said he expects that the nation's need for special operations forces, cyber capabilities and intelligence will only increase in the coming years.
Special operations forces will not only continue their counterterrorism mission, but will become increasingly involved in foreign internal defense operations and building the capacity of partner nations, he said.

In some defense communities there's still a belief that cyber is a function of intelligence, or that intelligence and cyber are the same, but that isn't at all the case, Flynn said.

"Cyber is a capability that allows us to understand an operational environment far better," he said. "It allows us to see each other. It allows us to communicate. It allows us to defend. It allows us to exploit. It allows so many other things."
And whenever possible, Flynn said, the United States' cyber capabilities should be used to help partner nations.

"I think there's a tendency to think [cyber] is all about war fighting or some negative," he said, "and we have to look at it as how it can be turned into a positive."

For the intelligence community to succeed, it must be agile and integrated with other agencies and partners, Flynn said, and it must have a firm grasp of the operational environment.

That includes developing an understanding of social issues, he said.
"Some of the regions that are out there in the world are facing extraordinary challenges, and we have to have a much deeper operational understanding of that. That means understanding the culture, understanding just the humanity that's out there," the general said.

"I think the last key to success is about technology," he said, "but it's not to lose sight of the human being in the loop."

If intelligence's role is to provide the kind of information leaders need to be able to make better decisions, the intelligence community must not let itself be pulled along by technology, Flynn said.

(Follow Claudette Roulo on Twitter: @RouloAFPS)
Army Lt. Gen. Michael T. Flynn

US Foreign Policy Shift to Pacific.

Rice Re-emphasizes Importance of U.S. Shift to Pacific

By Jim Garamone
American Forces Press Service

WASHINGTON, Nov. 21, 2013 - While there are many concerns around the world, the rebalancing to the Asia-Pacific remains a foreign policy priority for the Obama administration, Susan Rice, the president's national security advisor, said at Georgetown University yesterday.

Rice announced that President Barack Obama will travel to Asia in April, making up for a trip he had to cancel in October due to the government shutdown.

The United States is a Pacific power, and has used its influence, diplomacy, economic might and power to provide a safe and secure region where countries in the Asia-Pacific can thrive. America wants this to continue and this is the reason for the U.S. strategic shift, Rice said.

"Ultimately, America's purpose is to establish a more stable security environment in Asia, an open and transparent economic environment and a liberal political environment that respects the universal rights and freedoms of all," she said. "Achieving that future will necessarily be the sustained work of successive administrations."

Enhancing security in the region is the underpinning for all progress, Rice said.

"We are making the Asia-Pacific more secure with American alliances -- and an American force posture -- that are being modernized to meet the challenges of our time," Rice said. "By 2020, 60 percent of our fleet will be based in the Pacific and our Pacific Command will gain more of our most cutting-edge capabilities."

The resources shift will leave the United States better able to respond to provocations and better able to launch operations like Operation Damayan that is helping millions of people in the Philippines recover from the impact of Typhoon Haiyan/Yolanda.

"We are updating and diversifying our security relationships in the region to address emerging challenges as effectively as we deter conventional threats," Rice said. "We are urging our allies and partners to take greater responsibility for defending our common interests and values."

Rice said she expects to complete the first fundamental revision of the bilateral defense guidelines with Japan in more than 15 years.

"In South Korea, we're enhancing the alliance's military capabilities to ensure that our combined forces can deter and fully answer North Korea's provocations," she said.

U.S. Marines now are using rotational bases in Australia, and American and Australian officials are examining ways to work together to confront space and cyber security threats.

The United States also is working with all allies in the region to get them to work more closely together and to cooperate to solve mutual problems.

"When it comes to China, we seek to 'operationalize' a new model of major power relations," Rice said. "That means managing inevitable competition while forging deeper cooperation on issues where our interests converge -- in Asia and beyond."

There are many areas where Chinese and American interests converge, the national security advisor said. Both nations want nuclear weapons off the Korean Peninsula, both want a peaceful resolution to the Iranian nuclear issue, as well as a stable and secure Afghanistan, and both want an end to conflict in Sudan. China and the United States working together could make an immense difference in the world, Rice said.

Improving military-to-military ties between China and the U.S. plays a role, and the two nations have already cooperated in countering piracy and improving maritime security.

"Greater military engagement and transparency can help us manage the realities of mistrust and competition, while augmenting the high-level communication that has been a hallmark of this administration's approach to China," Rice said.

Thursday, November 21, 2013

Hagel Urges Senate Approval of Treaty on Disability Rights.

American Forces Press Service

WASHINGTON, Nov. 21, 2013 - Defense Secretary Chuck Hagel is urging the Senate to ratify a United Nations treaty that protects the rights of people with disabilities and extends to them full equality under the law in participating nations.

"On behalf of America's service members, [Defense Department] civilians, and military family members with disabilities, I urge the United States Senate to approve the Convention on the Rights of Persons with Disabilities," Hagel said in a statement issued yesterday.

The treaty opened for signature in 2007 and came into force in May 2008 after 20 parties had ratified it. The United States has signed the convention, but a Senate vote last year failed to ratify it.

One of the legacies of the past 12 years of war is that thousands of young Americans will carry physical wounds for the rest of their lives, Hagel said in his statement. "These wounded warriors deserve to have the same opportunities to live, work, and travel as every other American, and to participate fully in society whether at home or abroad," he added.

Joining the treaty will allow the United States to help in shaping international practices for people with disabilities that are consistent with the nation's high standards for access and opportunity, the secretary said. It also would help personnel who have family members with disabilities, he noted, who often have to choose between their families and their careers when considering assignments in other countries.

"Approving it would help all people fulfill their potential," he added. "That's why I strongly support swift Senate action."

"Treating people with respect and dignity is one of the fundamental values of the United States armed forces," Hagel said. "It is a value that our men and women in uniform fight for around the world. Failing to approve this treaty would send the wrong message to our people, their families, and the world.

For Profit Organizations in the Higher Education Landscape.

November 20, 2013

Lifting the Veil—For-Profits in the Higher Education Landscape

Rajashri Chakrabarti and John Grigsby

Higher education is pivotal in our society—yet, its landscape is changing. Over the past decade, the private, for-profit sector of higher education has seen unprecedented growth, and its market share is at an all-time high. While we know much about traditional four-year public and private non-profit institutions, the for-profit sector seems more opaque. What services does it provide? Who enrolls at for-profits, and how has their enrollment changed during the Great Recession? What are their tuition levels? How about their net prices and student loans? And do their students succeed? We shed some light on these important questions in today’s economic press briefing at the Federal Reserve Bank of New York, and in a new set of interactive maps and charts released today by the New York Fed.
• Who are the for-profits? The charts below indicate that the vast majority of for-profit institutions concentrate on short programs (two years or less), and offer certificates below bachelor’s and associate’s degrees.


        Thus, for-profits are more comparable to public community (two-year) colleges and public undergraduate certificate programs (less than two years) than to traditional four-year programs. Yet, while public community colleges and certificate programs often focus on academics or General Educational Development (GED) test preparation, for-profits are primarily trade schools, where enrollees can learn specific skills such as hairdressing, massage, welding, mechanics, or network and computer systems administration.

• Enrollment at for-profits has skyrocketed, especially during the Great Recession: Between 2000 and 2011, for-profit enrollment in less-than-two-year institutions more than doubled, with 52 percent of this growth taking place in the three years after the onset of the Recession. During the same period, enrollment in public less-than-two-year institutions actually fell by 3 percent. The post-recession increase was in part fueled by increasing enrollment of students aged twenty-five or older, suggesting that for-profits might have been utilized by displaced workers looking to retool their skillset after a job loss, and by young adults looking to gain a tradable skillset.

• Tuition and student loans are much higher at for-profits than publics:Although for-profit student entrants have relatively lower incomes, tuition at for-profits has also been on the rise. In 2012, the average sticker price of a for-profit program was more than $14,300, up almost 100 percent from 2000. Despite availing themselves of higher Pell Grants, students at for-profits pay considerably higher net prices than those at public colleges, partly due to theabsence of state and institutional grants. The high net price of for-profit programs has forced students to take out large loans to finance their education. In 2012, 60 percent of for-profit students not in four-year colleges took out subsidized student loans, at an average of $3,445 per loan; by contrast, just 15 percent of comparable public college students took out loans, with an average size of $3,096.

• What about student outcomes? Around 60 percent of students at for-profits complete their program within 150 percent of the normal time. But while graduation rates are respectable, graduates of for-profits are more likely to earn less, default more, and experience unemployment more than their counterparts at public and non-profit institutions.
        While student outcomes at for-profits have not been too rosy, and the gap in student loans with comparable publics has been a persistent source of concern and debate, it is too early to pass judgment on the sector. Their remarkable enrollment growth during the Great Recession suggests that for-profits have allowed laid-off workers to train in new skills, and young adults to receive a college degree, which they may not have otherwise accomplished. As the economy evolves and recovery takes hold, it remains to be seen how the increase in enrollment will affect human capital formation and, by extension, our economy. Stay tuned for future posts exploring this increasingly important part of the higher education landscape.

The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Rajashri Chakrabarti is an economist in the Federal Reserve Bank of New York’s Research and Statistics Group.

John Grigsby is a senior research analyst in the Group.

Prescott Ordered to Pay Restitution and Civil Penalty Totaling $1.8 Million.

       November 19, 2013
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained $455,098 in restitution for defrauded off-exchange foreign currency (forex) customers and a $1,365,294 civil monetary penalty in a federal court default judgment Order against Defendant David Prescott, individually and doing business asCambridge Currency Partners (Cambridge). The court’s Order stems from a CFTC civil Complaint filed on April 30, 2013, charging Prescott with fraudulently soliciting individuals to invest in Cambridge’s forex pool and then misappropriating their monies (see CFTC Press Release 6581-13).
The Order, entered by the Honorable Charles N. Clevert, Jr. of the U.S. District Court for the Eastern District of Wisconsin on October 31, 2013, requires Prescott to pay the restitution and civil monetary penalties, and permanently bars Prescott from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC.
Specifically, the Order finds that, from at least June 2010 through April 2013, Prescott fraudulently solicited individuals to invest in Cambridge’s off-exchange forex pool and misappropriated $455,098 of pool participants’ monies, using some of those funds for air travel, hotel accommodations, and gambling. According to the Order, Prescott defrauded pool participants and prospective pool participants by misrepresenting the risks involved in forex trading and executing demand promissory notes in their favor that promised the repayment of the note amount and monthly interest payments, knowing or recklessly disregarding that he could not make those payments by his forex trading.
The Order also finds that Prescott failed to inform participants and prospective participants that, under the name of David Weeks, he previously had been convicted of conspiracy to commit securities fraud, mail fraud and wire fraud, and perjury, had been ordered to pay restitution of over $1 million to defrauded investors, and was permanently enjoined from violating the anti-fraud provisions of the Securities Exchange Act.
CFTC Division of Enforcement staff members responsible for this case are Diane M. Romaniuk, Ava M. Gould, Mary Beth Spear, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner.
Release:  PR6779-13 
Media Contact 
Dennis Holden (202) 418-5086

Border Patrol acquires Department of Defense equipment for use on border protection.

CBP to Continue Evaluation of “Aerostats” in Rio Grande Valley  Re-Utilization of Military Equipment
Tuesday, November 05, 2013

Washington – Within the next few days, U.S. Customs and Border Protection (CBP) will begin the deployment of military-owned equipment for protection of the homeland in the Rio Grande Valley of Texas. The equipment is being evaluated in a key operational environment to assess its usefulness to CBP. The equipment could have significant benefits to the protection of the United States when deployed in a homeland security situation.