Federal Reserve Board Governor Sarah Bloom Raskin (Reuters)

A top ranking member of the United States Federal Reserve cautioned economists this week that growing inequality within the US was worsening the odds of a quick return to the conditions of the pre-recession days.

Fed Board of Governors member Sarah Bloom Raskin was in Washington, DC on Thursday, and during an address before the Society of Government Economists and the National Economists Club she said the widening gap between the rich and poor is just one of the issues being investigated as attempts are made to rebound from the financial crisis of 2009.

“In my view, the large and increasing amount of inequality in income and wealth, which has been an ongoing development for decades, may have exacerbated the crisis and I think more research is required to determine whether it may also pose a significant headwind to the recovery from the crisis for years to come,” Raskin told the crowd. “So, while I am hopeful that pressures will ease further as home prices continue to rebound, I also believe that some of the restraints on the recovery may be quite long-lasting.”

When the Pew Research Center released their findings on inequality last month, they concluded that the wealthiest 7 percent of Americans saw their average net worth surge by 28 percent when the great recession ravaged a majority of US households. In that same span between 2009 and 2011, those on the bottom 93 percent saw their net worth drop 4 percentage points.

“It has been a very good recovery for those at the upper end of the wealth distribution,” Paul Taylor of the Pew Research Center wrote of his report, “But there has been no recovery for the lower 93, which is nearly everybody.”

And as that trend is obvious to pollsters, economists are worrying that a widening gap between sectors will reduce the likelihood of a rebound anytime soon. Before Raskin touched on inequality during this week’s address, she admitted that the recovery process in the post-recession years has been “a very weak one.”

According to Raskin, the problem stems from massive lay-offs in the wake of the recession’s start that primarily had an impact on workers of certain sectors that have been unable to find employment elsewhere. Raskin said “currents of globalization and technological change” meant that many Americans fired in 2009 have been unable to adopt for the jobs that are in demand today.

“About two-thirds of all job losses in the recession were in middle-wage occupations — such as manufacturing, skilled construction, and office administration jobs — but these occupations have accounted for less than one-fourth of the job growth during the recovery. By contrast, lower-wage occupations, such as retail sales, food service and other lower-paying service jobs, accounted for only one-fifth of job losses during the recession but more than one-half of total job gains during the recovery. As a result of these trends in job creation, which could well have been exacerbated by the severe nature of the crisis, the earnings potential for many households likely remains below what they had anticipated in the years before the recession,” she said.

“The increase in economic activity and the decline in the unemployment rate are, of course, welcome, but we still have a long way to go to reach what feels like a healthy economy. In fact, the pace of recovery has been slower than most had expected. The gap between actual output and the economy’s potential remains quite large, according to estimates from the Congressional Budget Office, and the unemployment rate today remains well above levels seen prior to the recession, and well above the level that the Committee thinks can be sustained once a full recovery has been achieved,” added Raskin.

Thursday’s remarks by the Fed board member was actually the third time in as many months that she warned of what widening inequality was doing to America. During an event in New York City last month, Raskin said, “Of course, it is not part of the Federal Reserve’s mandate to address inequality directly, but I want to explore these issues today because the answers may have implications for the Federal Reserve’s efforts to understand the recession and conduct policy in a way that contributes to a stronger pace of recovery.”

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US President Barack Obama. (AFP Photo / Mandel Ngan)

United States President Barack Obama is encouraging Congress to take up a media shield law that was abandoned at the start of his administration, but critics of the bill say it might make it even easier for journalists to be subpoenaed by the government.

After the Associated Press revealed on Monday that they are the target of a US Department of Justice probe, Obama asked lawmakers to consider a would-be media shield law that fell apart in Washington after the start of his first presidency in 2009.

The AP wrote this week that the Justice Department subpoenaed two months of phone records likely in an attempt to try and find out with whom the news agency spoke with before publishing a May 2012 article that exposed a Yemeni terror plot foiled by the Central Intelligence Agency. Attorney General Eric Holder called the disclosure of classified information to the AP one of the biggest leaks ever suffered by the US and said publically that it put the American people at risk. On Thursday, Pres. Obama commented that “leaks related to national security can put people at risk,” but suggested that reviving a media shield law that died in Congress could perhaps strike the balance between the public’s right to know and the safety of the nation.

“So the whole goal of this media shield law that was worked on, and largely endorsed by folks like the Washington Post editorial page and prosecutors, was finding a way to strike that balance appropriately,” said the president. “And to the extent this case … has prompted renewed interest about how do we strike that balance properly, I think now is the time for us to go ahead and revisit that legislation. I think that’s a worthy conversation to have and I think that’s important.”

Now as the White House shifts focus from one scandal to another, free speech advocates are concerned that the shield law, as written, wouldn’t do much more than current legislation in terms of thwarting future subpoenas sent to journalists. Trevor Timm, an activist with the Electronic Frontier Foundation and a board member of the Freedom of the Press Foundation, wrote in a blog post this week that the media shield law touted by Pres. Obama during his days as a senator in Illinois failed to take shape after he secured his spot in the Oval Office.

“As a Senator, Obama was a vocal supporter of a robust shield law; he co-sponsored a bill in 2007 and campaigned on the issue in 2008,” Timm wrote. “But when the Senate moved to pass the bill as soon as Obama came into office, his administration abruptly changed course and opposed the bill, unless the Senate carved out an exception for all national security reporters.”

When Obama entered the White House in early 2009, he walked away from a Senate where a shield law he advocated for had just started to take shape. Before long, though, his own administration asked for Congress to make adjustments before it ended up on the president’s desk. That original law would, in theory, put in place safeguards that would help prevent journalists from being compelled to testify who their sources are. Once in the White House, though, Obama did an about face.

In September 2009, Charlie Savage wrote for the New York Times that those safeguards “would not apply to leaks of a matter deemed to cause ‘significant’ harm to national security.”

“Moreover, judges would be instructed to be deferential to executive branch assertions about whether a leak caused or was likely to cause such harm, according to officials familiar with the proposal,” Savage wrote.

One of the bill’s authors, Sen. Charles Schumer (D-New York), had sharp words for the president at the time. “The White House’s opposition to the fundamental essence of this bill is an unexpected and significant setback. It will make it hard to pass this legislation,” the senator said. Sen. Arlen Specter (D-Pennsylvania), a co-sponsor, called the changes “totally unacceptable.”

“If the president wants to veto it, let him veto it,” Sen. Specter told the Times in 2009. “I think it is different for the president to veto a bill than simply to pass the word from his subordinates to my subordinates that he doesn’t like the bill.”

Ultimately, the Senate Judiciary Committee approved the shield law after some minor tweaking in December 2009, but as Savage explained in the Times this week, “a furor over leaking arose after WikiLeaks began publishing archives of secret government documents, and the bill never received a vote.”

Speaking to the Washington Post about what the passing of that version would have done in regards to the AP probe, Sen. Schumer said, “at minimum, our bill would have ensured a fairer, more deliberate process in this case.”

“While it is unclear whether the bill would change the outcome in the AP phone records case since a national security exception may have applied, the bill would have set up a legal process for approving the subpoenas that would guarantee consideration of the public’s interest in protecting the freedom of the press,” Schumer weighed in. “Prosecutors would have to convince a judge that the information at issue would “prevent or mitigate an act of terrorism or harm to national security.”

For the Freedom of the Press Foundation, Timm wrote this week that the latest version of the shield law wouldn’t do much more. Under the Sept. 2009 request sent from the White House, the shield law once supported by Pres. Obama would include an exception where journalists could be subpoenaed if it means national security is at risk.

“Now, it’s important to remember: virtually the only time the government subpoenas reporters, it involves leak investigations into stories by national security reporters. So it’s hard to see how this bill will significantly help improve press freedom,” wrote Timm. “Worse, there’s a strong argument that passing the bill as it ended in 2010 will weaken rights reporters already have and make it easier for the government to get sources from reporters.”

“The difference is that instead of DOJ unilaterally making that determination,” the Justice Department would “have to convince a judge that this was the case,”University of Minnesota Law Professor Jane Kirtley explained to the Post.

On Thursday, Sen. Schumer and Sen. Lindsey Graham (R-South Carolina) announced they would co-sponsor a media shield bill — but that the national security exemption ordered by Obama in 2009 was once again present.

“The government has a legitimate interest in preventing and investigating leaks of classified information,” Graham and Schumer wrote. “At the same time, the public has a legitimate interest in a robust free press.”

“This bill strikes a fair and reasonable balance between those interests, and we urge you to join us in advancing it,” they wrote

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Photo from traildays.us

Dozens of people have been injured after a 1997 Cadillac plowed into a crowd at the Trail Days Parade in the US state of Virginia.

An emergency official told local news channel WCYB that 50-60 people were injured and 12-15 patients were taken to hospitals by ambulance or helicopters. There have been no reports of fatalities and none of the injuries was believed to be life-threatening.

The car was driven by an elderly man who may have lost consciousness or “had some medical issue” and drove into the crowd, Reuters reports citing volunteer fire department chief Ben Sanders.

According to witness accounts, the car had a handicapped parking sticker. “He was hitting hikers,” said Vickie Harmon, a witness.“I saw hikers just go everywhere.”

The driver told the authorities afterward he did not remember what had happened.

“[The driver is] a previous hiker…he also had a couple of other vehicles that were in the parade – at the front of the parade,” Damascus Police Chief, Bill Nunley told the channel.

The incident occurred in the town of Damascus, VA, at around 2:10pm local time Saturday, during the annual celebration of the Appalachian Trail, a famous hiking trail in the northeast of the United States.

“The vehicle went into a crowd of about 1,000 people – it was on a bridge and they didn’t have anywhere to go, and several people including hikers and a firefighter were able to open the door on the vehicle and reach in and turn the ignition off while it was in motion,” Nunley continued, stating that the crash resulted in multiple injuries.

The car had bored into the crowd at car about 25 mph. Lucky escapees pitched in to offer assistance to the wounded.

“We didn’t know how many we had…hikers were able to pick up a 1997 Cadillac and pull individuals from underneath it – I’ve never seen anything like that before,” said Nunley.

One young child, who turned up at the parade to squirt water-guns at hikers, said that one of his potential targets saved his life.

“We heard screams behind us, and [a hiker] sort of pushed us out of the way from it, and me, and all of us, we looked back and saw…misery. Hikers on top, hikers under the bottom of the car, and it just kept going,” said Dalton Thompson, describing accompanying screams.

“It was unreal…like, nothing could be as scary as that. I couldn’t find my dad or anyone,” he told WCYB.

The injured were taken to area hospitals, including seven to Johnston Memorial in Abingdon and one flown to the Johnston City Medical Center, according to the channel. Bristol Regional Medical Center had two patients flown in, but were prepared for a considerably worse scenario. One of those two has already been discharged.

“In 27 years of this, we’ve never had anything of this magnitude,” Mayor Jack McCrady told AP.

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As the Guantanamo hunger strike enters its 100th day, the number of voices, both in the US and around the world, to close the facility are growing stronger and louder.

Lawyers acting for prisoners in Guantanamo say the real figures may be higher, but officially of the 166 inmates in Guantanamo, 102 are currently on hunger strike. Of these, 30 are being force-fed through a nasal tube and three are in hospital.

Follow RT’s day-by-day timeline of the Gitmo hunger strike.

The 166 prisoners have been there eleven and a half years and 90 per cent of them haven’t been charged with a crime.

A view of a common area at the medium security prison inside Camp IV at the detention facility in Guantanamo Bay U.S. Naval Base (Reuters / Deborah Gembara)

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Reuters / Rebecca Cook

Native Americans are entitled to free and subsidized medical care at some federally-funded health clinics, but ‘Obamacare’ will soon force many of them to buy insurance or else face hefty fines if they are not “Indian enough”.

“A lot of folks are going to get stuck with the bill,” Jay Stiener of the National Council of Urban Indian Health told the Associated Press.

Members of federally-recognized American Indian tribes have received government-funded health services since 1787. Throughout the US, there are 33 hospitals and 59 health centers that provide services including prenatal care, baby well-checks, dentistry and eye glasses to Native Americans.

The US government has treaty obligations to care for the well-being of Native Americans, but may soon abandon many of its legal responsibilities. President Obama’s health care reform will force thousands of Native Americans to purchase their own health insurance or pay a minimum fine of $695 to the Internal Revenue Service. Indian health advocacy groups estimate up to 480,000 people will be affected, AP reports.

Only those who can prove that they are “Indian enough” will be exempt from the mandate. Native Americans will have to show documentation that they belong to one out of 560 tribes that are federally recognized by the US Bureau of Indian Affairs.

There are more than 100 US tribes that are recognized by states, but not the federal government. Members of these tribes would no longer receive the free or subsidized healthcare that they are guaranteed by the Indian Health Service (IHS), which is a division within the US Department of Health and Human Services.

“This could lead to some tribal citizens being required to purchase insurance or face penalties even though they are covered by the HIS,” Rep. Tom Cole, a Republican congressman and member of the Chickasaw Nation tribe, told AP.

Additionally, Native Americans who do not have documentation of their tribe membership will be forced to purchase insurance or pay a fine. This becomes particularly troublesome for Native Americans under the age of 18, since many tribes only provide official membership to adults. Even if both parents of the minors are members, their healthcare coverage may not apply to their children unless they also have the proper documentation.

The health care reform would also complicate the situation for Native Americans who live in metropolitan areas or suburbs. Some tribal governments require members to live on the reservation to gain documentation, which few people do. Nearly two-thirds of American Indians and Alaska Natives currently live in cities, which hinders their ability to receive membership cards from their tribes.

News of the restrictions that Obamacare will impose upon American Indians has sparked outrage, particularly among those who will face financial consequences due to something that is out of their control.

“I’m no less Indian than I was yesterday, and just because the definition of who is Indian got changed in the law doesn’t mean that it’s fair for people to be penalized,” Liz DeRouen, a Native American who usually receives healthcare at a government-funded clinic in North Carolina, told AP. “If I suddenly have to pay for my own health insurance to avoid the fine, I won’t be able to afford it.”

DeRouen is a former tribal administrator for the Dry Creek Rancheria Band of Pomo Indians, but she lost her membership due to an argument with other members. But even though she lost documentation as a tribe member, she is still genetically considered a Native American.

The Obama administration currently has no solution to the hardships the Affordable Care Act will inflict upon the Native American population, but the IRS and the US Treasury have jointly scheduled a public hearing forMay 29to discuss establishment of who qualifies for the exemption from the insurance coverage requirement.

Nearly 30 percent of all Native Americans live below the poverty line, and forcing them to pay fines or purchase insurance would likely just increase this number.

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Ryan Ackroyd (Reuters/Stefan Wermuth)

Members of the British LulzSec hacking group were sentenced for a series of global cyber-attacks in 2011. Two of the hacktivists have received prison terms, one will be sent to a young offenders’ institution and another received a suspended sentence.

Ryan Ackroyd, Jake Davis, Mustafa Bassam and Ryan Cleary had all pleaded guilty to hacking offenses prior to sentencing on Thursday.

Cleary, 21, who also pleaded guilty to possession of images showing child abuse, was sentenced to 32 months, of which he will serve half.

Ackroyd, 26, was sentenced to a 30 month sentence of which he is expected to serve 15 months.

Davis, 20, was sentenced to two years in a young offenders’ institute.

Bassam, 18, was handed down a 20 month sentence which was suspended for two years, as well as 300 hours of community service.

DETAILS TO FOLLOW GoTo: http://RT.com

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Just hours after the AP reported on Monday that the Justice Department secretly obtained two months of telephone records of reporters and editors employed by the news agency, White House Press Secretary Jay Carney said, “Other than press reports, we have no knowledge of any attempt by the Justice Department to seek phone records of the AP.”

“We are not involved in decisions made in connection with criminal investigations, as those matters are handled independently by the Justice Department,” said Carney. “Any questions about an ongoing criminal investigation should be directed to the Department of Justice.”

Meanwhile, US Attorney General Eric Holder defended the probe during a Tuesday afternoon press conference, but said he recused himself from the investigation because he was interviewed earlier by the FBI on the matter and didn’t want to provoke a conflict of interest.

“I don’t know all that went into the formulation of the subpoena,” Holder said, adding that actions were taken after a leak was of great severity was discovered that “put the American people at risk.”

“I’m confident that people involved in this investigation…did all things according to DOJ rules,” said Holder, although he admitted that some matters regarding the probe were beyond his knowledge. Holder also admitted that a deputy attorney general approved of the probe. Later on Tuesday, US Deputy Attorney General James Cole declined a request made by the AP to return the seized phone records.

According to the AP, Cole told the agency that the records were “limited to a reasonable period of time” and did not seek the content of any calls.

“These records have been closely held and reviewed solely for the purposes of this ongoing criminal investigation,” Cole wrote.

U.S. Attorney General Eric Holder (Win McNamee/Getty Images/AFP)

The remarks from both the Justice Department and the White House were made after the AP sent a letter to the attorney general lashing out at the latest revelation. In it, AP President and Chief Executive Officer Gary Pruitt condemned the probe as a “massive and unprecedented intrusion” into how news organizations operate.

“There can be no possible justification for such an overbroad collection of the telephone communications of The Associated Press and its reporters,” Pruitt wrote.

Before the Justice Department weighed in on the scandal, lawmakers from both sides of the aisle were up in arms over the news. Even as the administration attests that the White House and Justice Department weren’t in cahoots, politicians that are peeved by the matter are making it known that the Obama administration isn’t off the hook. Regardless of who approved the probe, many are saying the blame ultimately falls on the president, who campaigned on a promise of transparency yet oversees an administration that investigates journalists.

Senator Rand Paul (R-Kentucky), a staunch constitutionalist, told Fox News on Monday, “This sounds like a president somewhat drunk on power, not cautious about how he uses power.”

Obama, Paul told Fox host Sean Hannity, is “using the power of his government to investigate his enemies, he’s tapping the phones of the press, and it turns out last year he signed legislation that allows him to detain an American without a trial and send them to Guantanamo Bay.”

The White House is indeed currently fighting a lawsuit filed by Pulitzer Prize-winning journalist Chris Hedges and others that challenges that law, the 2012 National Defense Authorization Act. Under Section 1021 of the NDAA, the president can authorize the indefinite detention of US citizens based off of vaguely defined associations with terrorists. Hedges said the NDAA puts him at risk of being sent to a facility like Guantanamo because his line of work regularly requires him to correspond with persons considered terrorists by the US government.

Senator Rand Paul of Kentucky.(Reuters / Kevin Lamarque)

“I met regularly with leaders of Hamas and Islamic Jihad in Gaza. I used to visit Palestine Liberation Organization leaders, including Yasser Arafat and Abu Jihad, in Tunis when they were branded international terrorists. I have spent time with the Revolutionary Guard in Iran and was in northern Iraq and southeastern Turkey with fighters from the Kurdistan Workers’ Party. All these entities were or are labeled as terrorist organizations by the U.S. government,” Hedges wrote in protest last year. “I have had dinner more times than I can count with people whom this country brands as terrorists. But that does not make me one.”

The Obama administration’s attorneys have fought relentlessly to keep the NDAA on the books, even filing appeals to petition a federal judge after Section 1021 was deemed unconstitutional. Now with the AP’s latest revelation, though, members of the same Congress that approved of that bill only a year-and-a-half ago are attacking the White House.

“This is obviously disturbing,” House Oversight and Government Reform Chairman Darrell Issa (R-California) told reporters. “Coming within a week of revelations that the White House lied to the American people about the Benghazi attacks and the IRS targeted conservative Americans for their political beliefs, Americans should take notice that top Obama administration officials increasingly see themselves as above the law and emboldened by the belief that they don’t have to answer to anyone.”

In a tweet, Issa added that he found the revelation “disturbing.”

“Whether it is secretly targeting patriotic Americans participating in the electoral progress or reporters exercising their First Amendment rights, these new revelations suggest a pattern of intimidation by the Obama Administration,” weighed in Douglas Heye, a spokesman for House Majority Leader Eric Cantor (R-Virginia).

Michael Steel, a representative for House Speaker John Boehner (R-Ohio), said, “The First Amendment is first for a reason. If the Obama Administration is going after reporters’ phone records, they better have a damned good explanation.”

Even members of Obama’s own Democratic Party were disturbed by the AP’s report.

“The burden is always on the government when they go after private information – especially information regarding the press or its confidential sources,” Senate Judiciary Committee Chairman Patrick Leahy (D-Vermont) told reporters. “I want to know more about this case, but on the face of it, I am concerned that the government may not have met that burden. I am very troubled by these allegations and want to hear the government’s explanation.”

Sen. Richard Blumenthal (D-Connecticut) told the AP the Justice Department “must be forthcoming with the facts as soon as possible.”

The AP reported that the investigation is likely in regards to a May 2012 exclusive the agency published in which a covert CIA operation was exposed. Earlier this year, CIA Director John Brennan told Congress that the FBI asked him if he was the source for the AP article. Brennan denied the allegation and said the release of information pertaining to a terror plot was an “unauthorized and dangerous disclosure of classified information.”

The AP wrote Monday that the letter notifying the agency of the investigation arrived last Friday, and acknowledged that subpoenas were used to obtain phone records from reporters and editors.

Matthew Miller, a former top spokesman for Holder, defended the department’s actions to reporters for the Huffington Post.

“This is how leaks get investigated,” Miller said. “Leaking classified information is a crime, and there are usually only two parties who know who committed the crime, the leaker and the reporter. Getting access to phone records allows investigators to see who the possible source might have been and confront them with evidence of a crime.”

During Tuesday’s press conference at the White House, Carney fielded a handful of questions on the probe by repeatedly differing journalists to a statement summarizing the president’s thoughts.

“I can tell you that the president feels strongly that we need the press to be able to be unfettered in its pursuit of investigative journalism,” Carney said. “He also believes strongly as a citizen and president on the need to ensure classified information is not leaked.”

Journalist Afshin Rattansi spoke to RT, expressing his disturbance at how fewer and fewer outlets exist in the US for people to reveal information or expose wrongdoings, as they are being systematically removed one way or another in line with an age-old US tradition:

“Let’s face it – no whistle-blower or source is now going to call the AP desk in New York or Washington DC.”

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Story and photos by Pat Krause

The Inaugural “New Beginnings” gala was presented by the Palm Springs Police Officers Association. The gala was held to benefit the Shelter From the Storm charity on May 4th at the Palm Springs Convention Center.

Superior Court Judge Victoria Cameron and former Executive Director of Shelter from the Storm, Lynn Moriary were honored for their continued support of the Shelter. The Shelter provides aid to women and children of spousal physical and mental abuse.

A video was shown where victims of abuse told their stories and how the shelter helped them escape from the abuse. The shelter gave them refuge and support when they were most in need of help. Sometime women were fleeing for their lives and the lives of their children. The shelter is a safe haven that can help with counseling, Legal and social services and everything a women needs to get the courage to leave a bad situation.

Live It Up Productions performed songs and danced for the crowd. It was great entertainment and they have performed recently several times in our Desert.

The Riverside county police department gets over 20,000 Calls of domestic violence each year. The Shelter has a hot line that operates 24/7, 365 days a year. Each year more than 900 women seek aid thru the shelter. The Shelter thanked the Police Department, Law Enforcement agencies and the city of Palm Springs for all their support and for sponsoring this gala.

This is an ever present problem and needs the support of the community with dollars and volunteers. The Shelter is the Primary Center for abused women and children in Riverside County.

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Story and photos by Pat Krause

The 3rd annual Palm Springs Chamber of Commerce luncheon honored philanthropist Harold Matzner with the Richard M. Milanovich Community Service Award. The Palm Springs Police and Fire Appreciation Luncheon was held at the Palm Springs Convention Center Primrose Room on May 2nd.

Palm Springs Chamber President Andrew Starke gave the welcoming speech and introduced the Color guard. Mayor Steve Pougnet served as Master of Ceremonies along with KESP Local Channel 2 anchor, Brooke Beare.

Members of the Milanovich Family, Melissa and Tristan presented the Award. Tristan told of her fathers friendship with Harold Matzner over many years. She told of the many accomplishments Richard M. Milanovich and Harold Matzner did together for the Aqua Calinte Band of Cahuilla Indians.

Matzner has received many awards but considered this one special. He said he thought of Richard M. Milanovich every day and felt a great loss when Milanovich passed away. Matzner is Chairman of the Palm Springs International Film Festival and is on the Board of Many Charities in the Valley. He has a large involvement in our community.

Fire Chief John Allen told the guests the volume of fires and the pride of the Fire Department in all they do to keep the valley safe. Police Chief Al Franz also spoke of the accomplishments of its officers and staff, the amount of calls they handled, the service to the community and its goals. Chief Franz announced its officer appreciation and dedication with the promotions given during the year.

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Reuters/Kacper Pempel

The United States government is investing tens of millions of dollars each year on offensive hacking operations in order to exploit vulnerabilities in the computers of its adversaries, Reuters reports.

According to an in-depth article published Friday by journalist Joseph Menn, the US and its Department of Defense contractors are increasingly pursuing efforts to hack the computers of foreign competitors, in turn exposing a rarely discussed aspect of the nation’s clandestine cyber operations.

In a time when the government continues to prosecute alleged domestic computer criminals — so much so that demands for technology law reform have been rampant as of late — Menn says the US is guilty of spending millions on discovering, identifying and exploiting previously unknown security flaws, often gaining unfettered access to the systems and networks of international targets.

As a result, the US has become one of the world’s top players in regards to wreaking havoc over the Internet — even as calls to investigate foreign hackers increase in Congress.

On Tuesday, a bipartisan supported proposal was introduced in Congress specifically to protect US commercial data from being compromised by foreign hackers. According to Menn, however, the American government is just as guilty of cybercrimes as the countries it warns against in introducing the “Deter Cyber Theft Act.”

“Even as the US government confronts rival powers over widespread Internet espionage, it has become the biggest buyer in a burgeoning gray market where hackers and security firms sell tools for breaking into computers,” Menn wrote.

In his report, Menn explained that a large chunk of the country’s current cyber endeavors does not rely on defensive strategy as one might imagine, but instead involves offensive operations launched with the intent of causing harm on the computers of adversaries.

Menn wrote defense contractors “spend at least tens of millions of dollars a year” on simply researching exploits that, if pursued, could put the eyes and ears of the American intelligence company essentially anywhere in the world.

And although the US has not officially gone on the record to acknowledge these shadowy operations, Menn wrote that the nation’s most well-known cyber endeavor — the Stuxnet worm that targeted Iranian nuclear plants — is just one example of the budding attempts to attack foreign entities.

“Computer researchers in the public and private sectors say the US government, acting mainly through defense contractors, has become the dominant player in fostering the shadowy but large-scale commercial market for tools known as exploits, which burrow into hidden computer vulnerabilities,” he wrote.

“In their most common use, exploits are critical but interchangeable components inside bigger programs. Those programs can steal financial account passwords, turn an iPhone into a listening device or, in the case of Stuxnet, sabotage a nuclear facility.”

Menn cited several defense contractors and government officials — many speaking on condition of anonymity — who admitted the increasingly dominant role the US government has in pursuing research on these exploits and using them to attack rival networks.

According to the report, “Reuters reviewed a product catalogue from one large contractor, which was made available on condition the vendor not be named. Scores of programs were listed. Among them was a means to turn any iPhone into a room-wide eavesdropping device. Another was a system for installing spyware on a printer or other device and moving that malware to a nearby computer via radio waves, even when the machines aren’t connected to anything.”

These contractors, he wrote, spend upwards of $100,000 on licensing single operations to governments, including the US. The result has been the development of a thriving industry, largely underground, where exploits are bought and sold before patches are developed to protect against intrusions. These “zero-dayexploits”— labeled as such because developers are unaware of the flaw until it’s announced — fetch big bucks from contractors, governments and hackers.

And as the demand for these exploits increases, so do the players in the game. One example cited by Menn is Atlanta-based Endgame Inc., which recently brought in $23 million in funding courtesy of Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers. But as early as 2011, Endgame and similar entities have been on the radar of hacktivists hell-bent on exposing the largely unknown doings of defense contractors.

When the loose-knit hacking collective Anonymous investigated security consultants HBGary in 2011, they uncovered only the tip of an intricate iceberg made up of former federal employees and other intelligence workers being paid boatloads to give governments exploits that could be used to their advantage. Project PM, the open-source online think tank started by former Anonymous collaborator Barrett Brown, discussed Endgame and its associates in great detail.

From a Business Week article cited by Brown:

“Endgame executives will bring up maps of airports, parliament buildings and corporate offices. The executives then create a list of the computers running inside the facilities, including what software the computers run, and a menu of attacks that could work against those particular systems. Endgame weaponry comes customized by region — the Middle East, Russia, Latin America and China — with manuals, testing software and ‘demo instructions.’ There are even target packs for democratic countries in Europe and other US allies.”

Last year Brown was arrested on unrelated counts and remains in custody six months later with an eventual trial still a ways before him. The US government has since subpoenaed Internet host Cloudflare for records pertaining to Project PM, and has equated the website as a criminal enterprise.

“Project PM served as a forum through which defendant Brown and other individuals sought to discuss their joint and separate activities and engage in, encourage, or facilitate the commission of criminal conduct online,” the government alleged when it fought back attempts from the current Project PM administrator to quash that subpoena.

Brown fired back from prison: “It makes it much more obvious that this investigation and the charges against me has to do with our successful research into what may be criminal activities by firms close to the government.”

If convicted on all counts — more than one dozen includingthreatening a federal agent and sharing a hyperlink — Brown could be sentenced to 100 years in prison.

“It is virtually impossible to conclude that the obscenely excessive prosecution he now faces is unrelated to that journalism and his related activism,” Glenn Greenwald wrote earlier this year for The Guardian.

Meanwhile, Menn admitted that other investigative computer work — specifically discovering exploits like the one Endgame thrives off of — is an endeavor that discourages people outside of the government and defense industry from entertaining.

“Most companies, including Microsoft, Apple Inc. and Adobe Systems Inc, on principle won’t pay researchers who report flaws, saying they don’t want to encourage hackers,” he wrote. “Those that do offer ‘bounties,’ including Google Inc. and Facebook Inc., say they are hard-pressed to compete financially with defense-industry spending.”

Andrew Auernheimer, a 26-year-old independent security researcher, was recently sentenced to 41 months in prison for identifying and disclosing a harmless exploit on the servers of AT&T that allowed anyone with the know-how to collect the email addresses of thousands of Apple iPad users. After he was convicted, Auernheimer wrote for Wired that the selective prosecution of some security researchers will deter future hackers from ever disclosing exploits, even critical ones that effect national security.

“In an age of rampant cyber espionage and crackdowns on dissidents, the only ethical place to take your zero-day is to someone who will use it in the interests of social justice. And that’s not the vendor, the governments, or the corporations — it’s the individuals,” he wrote. “In a few cases, that individual might be a journalist who can facilitate the public shaming of a web application operator. However, in many cases the harm of disclosure to the un-patched masses (and the loss of the exploit’s potential as a tool against oppressive governments) greatly outweighs any benefit that comes from shaming vendors. In these cases, the antisec philosophy shines as morally superior and you shouldn’t disclose to anyone.”

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