Filed under: crime

Bad Apple

We love our iPhones and iPads.

We love the prices of our iPhones and iPads.

We love the super-high profit margins of Apple, Inc., the maker of our iPhones and iPads.

And that's why it's disconcerting to remember that the low prices of our iPhones and iPads — and the super-high profit margins of Apple — are only possible because our iPhones and iPads are made with labor practices that would be illegal in the United States.

And it's also disconcerting to realize that the folks who make our iPhones and iPads not only don't have iPhones and iPads (because they can't afford them), but, in some cases, have never even seen them.

This is a complex issue. But it's also an important one. And it's only going to get more important as the world's economies continue to become more intertwined.

Last week, NPR's "This American Life" did a special on Apple's manufacturing. The show featured (among others) the reporting of Mike Daisey, the man who does the one-man stage show "The Agony and the Ecstasy of Steve Jobs," and The NYT's Nicholas Kristof, whose wife is from China.

You can read a transcript of the whole show here. Here are some details:

  • The Chinese city of Shenzhen is where most of our "crap" is made. 30 years ago, Shenzhen was a little village on a river. Now it's a city of 13 million people — bigger than New York.
  • Foxconn, one of the companies that builds iPhones and iPads (and products for many other electronics companies), has a factory in Shenzhen that employs 430,000 people.
  • There are 20 cafeterias at the Foxconn Shenzhen plant. They each serve 10,000 people.
  • One Foxconn worker Mike Daisey interviewed, outside factory gates manned by guards with guns, was a 13-year old girl. She polished the glass of thousands of new iPhones a day.
  • The 13-year old said Foxconn doesn't really check ages. There are on-site inspections, from time to time, but Foxconn always knows when they're happening. And before the inspectors arrive, Foxconn just replaces the young-looking workers with older ones.
  • In the first two hours outside the factory gates, Daisey meets workers who say they are 14, 13, and 12 years old (along with plenty of older ones). Daisey estimates that about 5% of the workers he talked to were underage.
  • Daisey assumes that Apple, obsessed as it is with details, must know this. Or, if they don't, it's because they don't want to know.
  • Daisey visits other Shenzhen factories, posing as a potential customer. He discovers that most of the factory floors are vast rooms filled with 20,000-30,000 workers apiece. The rooms are quiet: There's no machinery, and there's no talking allowed. When labor costs so little, there's no reason to build anything other than by hand.
  • A Chinese working "hour" is 60 minutes — unlike an American "hour," which generally includes breaks forFacebook, the bathroom, a phone call, and some conversation. The official work day in China is 8 hours long, but the standard shift is 12 hours. Generally, these shifts extend to 14-16 hours, especially when there's a hot new gadget to build. While Daisey is in Shenzhen, a Foxconn worker dies after working a 34-hour shift.
  • Assembly lines can only move as fast as their slowest worker, so all the workers are watched (with cameras). Most people stand.
  • The workers stay in dormitories. In a 12-by-12 cement cube of a room, Daisey counts 15 beds, stacked like drawers up to the ceiling. Normal-sized Americans would not fit in them.
  • Unions are illegal in China. Anyone found trying to unionize is sent to prison.
  • Daisey interviews dozens of (former) workers who are secretly supporting a union. One group talked about using "hexane," an iPhone screen cleaner. Hexane evaporates faster than other screen cleaners, which allows the production line to go faster. Hexane is also a neuro-toxin. The hands of the workers who tell him about it shake uncontrollably.
  • Some workers can no longer work because their hands have been destroyed by doing the same thing hundreds of thousands of times over many years (mega-carpal-tunnel). This could have been avoided if the workers had merely shifted jobs. Once the workers' hands no longer work, obviously, they're canned.
  • One former worker had asked her company to pay her overtime, and when her company refused, she went to the labor board. The labor board put her on a black list that was circulated to every company in the area. The workers on the black list are branded "troublemakers" and companies won't hire them.
  • One man got his hand crushed in a metal press at Foxconn. Foxconn did not give him medical attention. When the man's hand healed, it no longer worked. So they fired him. (Fortunately, the man was able to get a new job, at a wood-working plant. The hours are much better there, he says — only 70 hours a week).
  • The man, by the way, made the metal casings of iPads at Foxconn. Daisey showed him his iPad. The man had never seen one before. He held it and played with it. He said it was "magic."

Importantly, Shenzhen's factories, as hellish as they are, have been a boon to the people of China. Liberal economist Paul Krugman says so. NYT columnist Nicholas Kristof says so. Kristof's wife's ancestors are from a village near Shenzhen. So he knows of what he speaks. The "grimness" of the factories, Kristof says, is actually better than the "grimness" of the rice paddies.

So, looked at that way, Apple is helping funnel money from rich American and European consumers to poor workers in China. Without Foxconn and other assembly plants, Chinese workers might still be working in rice paddies, making $50 a month instead of $250 a month (Kristof's estimates. In 2010, Reuters says, Foxconn workers were given a raise to $298 per month, or $10 a day, or less than $1 an hour). With this money, they're doing considerably better than they once were. Especially women, who had few other alternatives.


 

But, of course, the reason Apple assembles iPhones and iPads in China instead of America, is that assembling them here or Europe would cost much, much more — even with shipping and transportation. And it would cost much, much more because, in the United States and Europe, we have established minimum acceptable standards for the treatment and pay of workers like those who build the iPhones and iPads.

Foxconn, needless to say, doesn't come anywhere near meeting these minimum standards.

If Apple decided to build iPhones and iPads for Americans using American labor rules, two things would likely happen:

  • The prices of iPhones and iPads would go up
  • Apple's profit margins would go down

Neither of those things would be good for American consumers or Apple shareholders. But they might not be all that awful, either. Unlike some electronics manufacturers, Apple's profit margins are so high that they could go down a lot and still be high. And some Americans would presumably feel better about loving their iPhones and iPads if they knew that the products had been built using American labor rules.

In other words, Apple could probably afford to use American labor rules when building iPhones and iPads without destroying its business.

So it seems reasonable to ask why Apple is choosing NOT to do that.

(Not that Apple is the only company choosing to avoid American labor rules and costs, of course — almost all manufacturing companies that want to survive, let alone thrive, have to reduce production costs and standards by making their products elsewhere.)

The bottom line is that iPhones and iPads cost what they do because they are built using labor practices that would be illegal in this country — because people in this country consider those practices grossly unfair.

That's not a value judgment. It's a fact.

So, next time you pick up your iPhone or iPad, ask yourself how you feel about that.

By Henry Blodget

Government Says Hezbollah Profits From U.S. Cocaine Market Via Link to Mexican Cartel

 

Hezbollah fighters parade during a rally to mark the Hezbollah Martyrs Day in a southern suburb of Beirut, Lebanon, on Nov. 11, 2011

U.S. authorities are building a politically explosive case that Hezbollah, the Lebanese militant group, finances itself through a vast drug-smuggling network that links a Lebanese bank, a violent Mexican cartel and U.S. cocaine users.

Federal prosecutors Tuesday charged Ayman Joumaa, an accused Lebanese drug kingpin and Hezbollah financier, of smuggling tons of U.S.-bound cocaine and laundering hundreds of millions of dollars with the Zetas cartel of Mexico.

 

 

“Ayman Joumaa is one of top guys in the world at what he does: international drug trafficking and money laundering,” a U.S. anti-drug official said. “He has interaction with Hezbollah. There’s no indication that it’s ideological. It’s business.”

The indictment in Virginia results from a continuing investigation by the U.S. Drug Enforcement Administration targeting Hezbollah, which has a bloody history of terror attacks against the United States and Israel.

Now a powerful partner in Lebanon's government, Hezbollah presents itself as a legitimate political party and rejects allegations of terrorism. But Tuesday's case reflects increasing concern that Hezbollah and its ally, Iran's intelligence service, are expanding their presence in Latin America as conflict with the West intensifies over Iran's nuclear program.

Hezbollah allegedly uses the cocaine trade to develop revenue and build foreign networks, according to U.S., European and Israeli officials. In October, the Justice Department charged an Iranian-American resident of Texas and two Iranian intelligence officers with plotting to hire Mexican cartel gunmen to assassinate the Saudi ambassador in Washington.

Acting in February under the Patriot Act, the U.S. Treasury Department publicly identified [1] the Lebanese Canadian National bank of Beirut, Lebanon's eighth-largest bank, as a “financial institution of primary money laundering concern” linked to Hezbollah. Authorities alleged that the bank facilitated the financing of Hezbollah by Joumaa, a 47-year-old businessman who speaks excellent Spanish and resided many years in Colombia. About eleven years ago, he shifted his base to Lebanon because of law enforcement pressure, according to U.S. anti-drug officials.

The DEA described him earlier this year [2] as the hub of a sophisticated operation that has smuggled cocaine from South America to Africa and Europe, and laundered profits via money exchange houses, used-car businesses and other companies in the United States, Latin America, Africa and Southeast Asia.

The indictment unveiled Tuesday focuses on a different piece of the puzzle: U.S.-bound cocaine trafficking.

 

Ayman Joumaa (DEA)

Ayman Joumaa (DEA)

Joumaa allegedly coordinated the smuggling of at least 85 tons of Colombian cocaine through Central America and Mexico in partnership with the Zetas, the brutal Mexican cartel founded by former commandos, according to the indictment. Between 1997 and 2010, Joumaa's mafia laundered hundreds of millions of dollars for the Zetas and their Colombian and Venezuelan suppliers, regularly picking up southbound bulk cash shipments of $2 million to $4 million in Mexico City, the indictment says.

“Ayman Joumaa is accused of facilitating the shipments of huge amounts of cocaine for the United States while laundering the proceeds all over the globe,” said DEA Administrator Michele Leonhart. “According to information from sources, his alleged drug and money laundering activities facilitated numerous global drug-trafficking organizations, including the criminal activities of the Los Zetas Mexican drug cartel.”

Filed by the U.S. Attorney in the Eastern District of Virginia, the indictment does not mention Hezbollah. But U.S. officials say the alliance with the Zetas was part of the already targeted network linked to the Lebanese militant group.

“The indictment does not reflect all of the information that the government has,” said a Justice Department official. “It's accurate that Treasury's previous statement connected Mr. Joumaa to Hezbollah. The investigation is ongoing.”

Antidrug officials cautioned that the connection between Hezbollah and the Zetas is indirect, with Joumaa’s drug and money network as the hub that does business with both organizations.

“It’s not like there’s a sit-down between the leaders of Hezbollah and the Zetas,” one official said.

The investigation is politically sensitive because views of Hezbollah — and its alleged involvement in the drug trade — differ around the world and even in the U.S. government.

The Shiite militia killed hundreds of people in terror strikes in the 1980s and 1990s, from the car-bombing of the U.S. Marine barracks in Beirut to attacks on Jewish targets in Argentina. In recent years, though, Hezbollah has curbed attacks outside of the Middle East, focusing on its bitter military struggle with Israel and growing role in Lebanese politics. The group is seen in Lebanon, the Arab world and parts of the West as a legitimate resistance organization.

As Iran pursues its nuclear ambitions, Hezbollah and Iran are locked in a worsening shadow conflict with the United States and Israel. This week, Hezbollah leaders claimed that they had identified clandestine CIA officers working in Lebanon.

International sanctions have hurt Iran, which helps fund, train and direct Hezbollah. As a result, antiterror officials say the militant group has relied more heavily on longtime ties to criminal rackets involving members of the far-flung Lebanese diaspora. The DEA has pursued several cases in which Hezbollah operatives allegedly teamed up with or taxed Lebanese-connected traffickers of South American cocaine.

The Joumaa case is the biggest so far. The network described in U.S. documents encompasses Joumaa relatives and associates who own money exchanges, stores and other businesses in Colombia, Panama, Lebanon, Benin and the Democratic Republic of the Congo.

Joumaa allegedy has overseen flows of cocaine from Colombia and Venezuela through two smuggling pipelines: north through Mexico to the United States and east through Africa to Europe and the Middle East.

The organization charged its partners in Mexico and elsewhere between 8 percent and 14 percent for using its sophisticated apparatus to launder the huge cash proceeds, the indictment says. It accuses Joumaa of laundering more than $250 million out of at least $850 million in drug-related proceeds.

“Hezbollah derived financial support from the criminal activities of Joumaa's network,” says a Treasury Department document that laid out allegations about the Lebanese Canadian Bank in February. “Additionally, LCB managers are linked to Hezbollah officials outside Lebanon. For example, Hezbollah's Tehran-based envoy Abdallah Safieddine is involved in Iranian officials' access to LCB and key LCB managers, who provide them banking services.”

A money exchange house in Joumaa's network used a branch of the Lebanese bank to deposit “bulk proceeds of drug sales” and then wire them to “U.S.-based used car dealers,” the document says. The cars were sold and sent to Africa in suspiciously structured transactions, U.S. officials say.

The Lebanese bank denied the U.S. charges in February. In the wake of the Treasury allegations, however, Lebanon's Central Bank announced that a Lebanese subsidiary of Societe Generale would acquire the assets and liabilities of Lebanese Canadian Bank, which had 35 branches and $5 billion in assets.

 

 

via propublica.org

 

Time to end the war on drugs

  • Time to end the war on drugs

Visited Portugal, as one of the Global Drug Commissioners, to congratulate them on the success of their drug policies over the last 10 years.

Ten years ago the Portuguese Government responded to widespread public concern over drugs by rejecting a “war on drugs” approach and instead decriminalized drug possession and use. It further rebuffed convention by placing the responsibility for decreasing drug demand as well as managing dependency under the Ministry of Health rather than the Ministry of Justice. With this, the official response towards drug-dependent persons shifted from viewing them as criminals to treating them as patients.

Now with a decade of experience Portugal provides a valuable case study of how decriminalization coupled with evidence-based strategies can reduce drug consumption, dependence, recidivism and HIV infection and create safer communities for all.

I will set out clearly what I learned from my visit to Portugal and would urge other countries to study this:

In 2001 Portugal became the first European country to officially abolish all criminal penalties for personal possession of drugs, including marijuana, cocaine, heroin and methamphetamines.

Jail time was replaced with offer of therapy. (The argument was that the fear of prison drives addicts underground and that incarceration is much more expensive than treatment).

Under Portugal’s new regime, people found guilty of possessing small amounts of drugs are sent to a panel consisting of a psychologist, social worker, and legal adviser for appropriate treatment (which may be refused without criminal punishment), instead of jail. 

Critics in the poor, socially conservative and largely Catholic nation said decriminalizing drug possession would open the country to “drug tourists” and exacerbate Portugal’s drug problem; the country has some of the highest levels of hard-drug use in Europe. The recently realised results of a report commissioned by the Cato Institute, suggest otherwise.

The paper, published by Cato in April 2011, found that in the five years after personal possession was decriminalized, illegal drug use among teens in Portugal declined and rates of new HIV infections caused by sharing of dirty needles dropped, while the number of people seeking treatment for drug addiction more than doubled.

It has enabled the Portuguese government to manage and control the problem far better than virtually every other Western country does.

Compared to the European Union and the US, Portugal drug use numbers are impressive.

Following decriminalization, Portugal has the lowest rate of lifetime marijuana use in people over 15 in the EU: 10%. The most comparable figure in America is in people over 12: 39.8%, Proportionally, more Americans have used cocaine than Portuguese have used marijuana.

The Cato paper reports that between 2001 and 2006 in Portugal, rates of lifetime use of any illegal drug among seventh through ninth graders fell from 14.1% to 10.6%. Drug use in older teens also declined.  Life time heroin use among 16-18 year olds fell from 2.5% to 1.8%.

New HIV infections in drug users fell by 17% between 1999 and 2003.

Death related to heroin and similar drugs were cut by more than half.

The number of people on methadone and buprenorphine treatment for drug addiction rose to 14,877 from 6,040, after decriminalization, and the considerable money saved on enforcement allowed for increase funding of drug – free treatment as well.

Property theft has dropped dramatically (50% - 80% of all property theft worldwide is caused by drug users).

America has the highest rates of cocaine and marijuana use in the world, and while most of the EU (including Holland) has more liberal drug laws than the US, it also has less drug use.

Current policy debate is that it’s based on “speculation and fear mongering”, rather than empirical evidence on the effect of more lenient drug policies. In Portugal, the effect was to neutralize what had become the country’s number one public health problem.

Decriminalization does not result in increased drug use.

Portugal’s 10 year experiment shows clearly that enough is enough. It is time to end the war on drugs worldwide. We must stop criminalising drug users. Health and treatment should be offered to drug users – not prison. Bad drugs policies affect literally hundreds of thousands of individuals and communities across the world. We need to provide medical help to those that have problematic use – not criminal retribution.

Traces of Illicit Drugs Found in Public Air

We’ve all seen those color-coded air-quality charts on the news — warnings about smog, ozone, and pollen. Now it may be time to add a new alert to the list: illegal drugs. Researchers have found that regions with greater cocaine and marijuana use have higher levels of these drugs in the surrounding atmosphere.

A few studies since the mid-1990s have shown that illicit drugs make their way into the atmosphere. In 2007, for example, analytical chemist Angelo Cecinato and colleagues at the Institute of Atmospheric Pollution Research in Rome, detected small amounts of cocaine in the air of Rome and the city of Taranto on the coast of southern Italy. “We considered it a curiosity,” Cecinato says.

But further research revealed that atmospheric concentrations of certain drugs were higher wherever drug use was presumed to be more prevalent — leading Cecinato and co-workers to wonder if they had found a better way to estimate the extent of drug abuse in a given area. Currently, authorities must rely on indirect information, such as communitywide surveys or questionnaires and police records. These methods can be time consuming and expensive, Cecinato explains. Measuring the amount of drugs in the air, his group suspected, might be accurate, fast, and cheap.

To find out, Cecinato and colleagues analyzed the air in 20 spots in eight regions of Italy in winter and 39 sites in 14 regions in summer. The investigators collected air samples, extracted the contaminants, and analyzed the results, checking for cocaine and cannabinoids (the active ingredients in marijuana). To rule out false positives caused by other compounds, the team also tested for common pollutants including hydrocarbons, ozone, and nitric oxide.

Relationships were evaluated with the so-called Pearson regression coefficient (represented by the symbol R2), which shows how strongly two factors correlate when plotted on a graph. An R2 of 1 means the two essentially coincide. When the researchers compared their results against records of drug-related criminal activity, they found that airborne concentrations of cocaine correlated with the amount of drugs seized by police; R2 values were 0.54 for cocaine seizures and 0.73 for the total amount of illicit substances.

Average concentrations of cocaine also correlated strongly with users’ requests for detoxification treatment (R2 exceeding 0.94), the team reports in today’s issue of Science of the Total Environment.

The data also showed possible associations between air levels of cocaine and some types of crime, such as robbery. Statistical relationships between cocaine levels and some cancers, and between cannabinoid levels and mental disorders, also turned up. But Cecinato cautions that it’s not clear what — if anything — those correlations mean. The study could be a starting point for future research, he says.

Epidemiologist Wilson Compton of the National Institute on Drug Abuse, Bethesda, Maryland, calls the work innovative. “We’re always looking for more accurate ways to gauge the amount of drug use in communities,” he says, adding that better information could lead to improved treatment, education, and policing.

Regarding the possible health risks to non-users, Compton said “I wouldn’t sound any alarm bells based on this one study. But the researchers did find this link, and it’s worth further exploration. Second-hand cigarette smoke wasn’t considered a health threat either, until comparatively recently.”

This story provided by ScienceNOW, the daily online news service of the journal Science.

Gangs and Politicians in Chicago: An Unholy Alliance

In some parts of Chicago, violent street gangs and pols quietly trade money and favors for mutual gain. The thugs flourish, the elected officials thrive—and you lose. A special report.

A gang member and a politician

A few months before last February’s citywide elections, Hal Baskin’s phone started ringing. And ringing. Most of the callers were candidates for Chicago City Council, seeking the kind of help Baskin was uniquely qualified to provide.

Baskin isn’t a slick campaign strategist. He’s a former gang leader and, for several decades, a community activist who now operates a neighborhood center that aims to keep kids off the streets. Baskin has deep contacts inside the South Side’s complex network of politicians, community organizations, and street gangs. as he recalls, the inquiring candidates wanted to know: “Who do I need to be talking to so I can get the gangs on board?”

Baskin—who was himself a candidate in the 16th Ward aldermanic race, which he would lose—was happy to oblige. In all, he says, he helped broker meetings between roughly 30 politicians (ten sitting aldermen and 20 candidates for City Council) and at least six gang representatives. That claim is backed up by two other community activists, Harold Davis Jr. and Kublai K. M. Toure, who worked with Baskin to arrange the meetings, and a third participant, also a community activist, who requested anonymity. The gang representatives were former chiefs who had walked away from day-to-day thug life, but they were still respected on the streets and wielded enough influence to mobilize active gang members.

The first meeting, according to Baskin, occurred in early November 2010, right before the statewide general election; more gatherings followed in the run-up to the February 2011 municipal elections. The venues included office buildings, restaurants, and law offices. (By all accounts, similar meetings took place across the city before last year’s elections and in elections past, including after hours at the Garfield Center, a taxpayer-financed facility on the West Side that is used by the city’s Department of Family and Support Services.)

At some of the meetings, the politicians arrived with campaign materials and occasionally with aides. The sessions were organized much like corporate-style job fairs. The gang representatives conducted hourlong interviews, one after the other, talking to as many as five candidates in a single evening. Like supplicants, the politicians came into the room alone and sat before the gang representatives, who sat behind a long table. “One candidate said, ‘I feel like I’m in the hot seat,’” recalls Baskin. “And they were.”

The former chieftains, several of them ex-convicts, represented some of the most notorious gangs on the South and West Sides, including the Vice Lords, Gangster Disciples, Black Disciples, Cobras, Black P Stones, and Black Gangsters. Before the election, the gangs agreed to set aside decades-old rivalries and bloody vendettas to operate as a unified political force, which they called Black United Voters of Chicago. “They realized that if they came together, they could get the politicians to come to them,” explains Baskin.

The gang representatives were interested in electing aldermen sympathetic to their interests and those of their impoverished wards. As for the politicians, says Baskin, their interests essentially boiled down to getting elected or reelected. “All of [the political hopefuls] were aware of who they were meeting with,” he says. “They didn’t care. All they wanted to do was get the support.”

Baskin declined to name names, but Chicago has learned, through other sources at the meetings, the identities of some of the participants. They include: Aldermen Howard Brookins Jr. (21st Ward), Walter Burnett Jr. (27th), Willie Cochran (20th), and Freddrenna Lyle (6th). Alderman Pat Dowell (3rd) attended a meeting; upon realizing that the participants had close gang ties, she objected but stayed. Also attending were candidates who would go on to win their races, including Michael Chandler (24th) and Roderick Sawyer (6th). Darcel Beavers, the former 7th Ward alderman who would wind up losing her race, and Patricia Horton, a commissioner with the Metropolitan Water Reclamation District who lost her bid for city clerk, also met with the group.

Chandler, Brookins, and Burnett told Chicago they did not attend such a meeting. Sawyer and Horton did not return several calls seeking comment. A spokesman for Dowell confirmed that she attended the meeting after she objected. Beavers, Cochran, and Lyle, who was recently appointed as a Cook County judge, said they attended but were not told beforehand that former gang chiefs would be there, nor that the purpose involved gang-backed political support. “It, basically, was no different than sitting in front of any other panel that asks you questions relative to constituent issues,” said Cochran.

During the meetings, the politicians were allotted a few minutes to make their pitches. The former gang chiefs then peppered them with questions: What would they do about jobs? School safety? Police harassment? Help for ex-cons? But in the end, as with most things political in Chicago, it all came down to one question, says Davis, the community activist who helped Baskin with some of the meetings. He recalls that the gang representatives asked, “What can you give me?” The politicians, most eager to please, replied, “What do you want?”

Street gangs have been a part of Chicago politics at least since the days of the notorious First Ward bosses “Bathhouse John” Coughlin and Michael “Hinky Dink” Kenna, who a century ago ran their vice-ridden Levee district using gangs of toughs armed with bats and pistols to bully voters and stuff ballot boxes. “Gangs and politics have always gone together in this city,” says John Hagedorn, a gang expert and professor of criminal justice at the University of Illinois at Chicago. It’s a shadowy alliance, he adds, that is deeply ingrained in Chicago’s political culture: “You take care of them; they’ll take care of us.”

To what extent do street gangs influence—and corrupt—Chicago politics today? And what are the consequences for ordinary citizens? To find out, Chicago conducted more than 100 interviews with current and former elected officials and candidates, gang leaders, senior police officials, rank-and-file cops, investigators, and prosecutors. We also talked to community activists, campaign operatives, and criminologists. We limited our scope to the city (though alliances certainly exist in some gang-infested suburbs) and focused exclusively on Democrats, since they are the dominant governing party in Chicago and in the statehouse. Moreover, we looked at the political influence of street gangs only, not of traditional organized crime—a worthy subject for another day.

Our findings:

• While they typically deny it, many public officials—mostly, but not limited to, aldermen, state legislators, and elected judges—routinely seek political support from influential street gangs. Meetings like the ones Baskin organized, for instance, are hardly an anomaly. Gangs can provide a decisive advantage at election time by performing the kinds of chores patronage armies once did.

• In some cases, the partnerships extend beyond the elections in troubling—and possibly criminal—ways, greased by the steady and largely secret flow of money from gang leaders to certain politicians and vice versa. The gangs funnel their largess through opaque businesses, or front companies, and through under-the-table payments. In turn, grateful politicians use their payrolls or campaign funds to hire gang members, pull strings for them to get jobs or contracts, or offer other favors.

• Most alarming, both law enforcement and gang sources say, is that some politicians ignore the gangs’ criminal activities. Some go so far as to protect gangs from the police, tipping them off to impending raids or to surveillance activities—in effect, creating safe havens in their political districts. And often they chafe at backing tough measures to stem gang activities, advocating instead for superficial solutions that may garner good press but have little impact.

The paradox is that Chicago’s struggle to combat street gangs is being undermined by its own elected officials. And the alliances between lawmakers and lawbreakers raise a troubling question: Who actually rules the neighborhoods—our public servants or the gangs?

 

 

The police officers were in a squad car in October 2007, patrolling a section of Uptown some call a walking pharmacy, where drugs are sold openly. When they saw a silver Chevy Cavalier roll through a stop sign, they ran a check on the plates and discovered that there was a warrant for the arrest of the owner. They approached the car. One passenger turned out to be Rahiem Ali, a 29-year-old Gangster Disciple with a criminal record dating back to 1995 and a rap sheet with nearly 40 arrests. Ali and his twin brother, Rahmon, were well known to police. The two ran a lucrative Uptown drug spot and were notorious for being among the biggest, baddest gangbangers in the neighborhood. According to the officers’ report, they saw Ali shove a hand into his pants pocket and pop something into his mouth.

When they ordered him out of the car, Ali shoved the police aside and ran. It took four officers to subdue him. One suffered a cracked tooth when Ali hit him with his elbow. Two officers doused Ali with pepper spray before he coughed out two plastic bags filled with 23 smaller bags containing what was suspected to be crack cocaine.

Later, at the police station, two lawyers arrived to see Ali. In any other neighborhood, the officers might not have noticed them. But not in Uptown, not when one of the lawyers was Brendan Shiller, the son of Helen Shiller, the 46th Ward alderman.

The 46th Ward is one of Chicago’s most diverse communities, home to the well-heeled and the downtrodden. Throughout her career, from 1987 until she stepped down last year, Helen Shiller was known as a fierce advocate for the latter. Few aldermen on the City Council have been more resistant to gentrification or more likely to embrace social welfare programs. In Uptown, large public housing complexes were a source of pride for Shiller, who trumpeted how they added diversity to the ward and provided a rare commodity on the North Side’s lakefront: affordable housing.

Her critics, meanwhile, argued that the complexes bred and fostered a criminal population, and they accused her of not doing enough to stop the drug and gang violence that dominated specific buildings. During meetings with the police department’s command staff, says a high-ranking police source, Shiller “never [made] a big push to go after any kind of organized narcotic operation.”

Officers working in the 23rd District say Shiller and her chief of staff, Denice Davis, frequently came into the station after certain Uptown residents were arrested to try to defuse things. Police say Davis’s interference on behalf of gangbangers and the Alis—whose mother, Aqueela, was part of the alderman’s political organization—had a chilling effect on their policing efforts. What was the point of making an arrest when it brought trouble from the alderman’s office? “Certain officers would get the message: ‘Maybe I shouldn’t make this stop’ or ‘Maybe I shouldn’t investigate this,’” says Joe Cox, a veteran officer from the district who retired in 2010.

Shiller says she “didn’t have a relationship” with either of the Ali twins, nor did she offer any assistance to them. “My relationship was with their mom. I knew she had sons that had difficulties. I didn’t interact with them. I didn’t know them.”

As the Ali brothers collected thousands a week running the drug spot around Lawrence Avenue and Sheridan Road, word spread among the police to treat the two with kid gloves. A police source says that during arrests, the twins would say, “I’ll have your job. Do you know who my lawyer is? Do you know who his mama is?” The source adds, “They would mention the alderman by name. They would mention Brendan Shiller by name.”

Police and Shiller’s political opponents suspected that the alderman deliberately turned a blind eye to gang activity in order to bring the gang element into the fold and build up her voting base. “It’s what I like to call the exchange game,” says Sandra Reed, who twice lost elections to Shiller, in 1999 and 2003. “She protects the kids, even when they are doing wrong. She helps the parents. They think she is going to protect them, so they all work for her.”

Some speculate that Shiller helped Aqueela Ali fend off multiple attempts to have her and her sons evicted from their apartment at 920 West Lakeside Place, where rules prohibit criminal behavior by residents. (Shiller acknowledges she helped Ali with “housing issues.”) While it’s not entirely clear what her role was in Shiller’s political organization, Ali served as a poll watcher, an election judge, and a Shiller campaign worker since at least 2002, campaign records show. Records also show that she gathered petition signatures to get Shiller on the ballot in 2003 and 2007.

But it may have been Ali’s choice of residence that provided her with the most political firepower. Her building is one of the largest Section 8 facilities in Uptown, home to between 800 and 1,000 residents. Ali had clout and the ability to sway public opinion. She was the leader of the building’s tenants’ association board and, perhaps most important, the mother of Rahiem and Rahmon. “You’re talking about the mother of the most well-known gangbangers in the neighborhood,” one officer says. “When she knocks on someone’s door, do you think those people are going to say no?” (Ali did not respond to requests for comment.)

In a ward where the difference between winning and losing can be a few hundred votes, an election can turn on a campaign’s ability to win particular blocks or buildings. For example, when Shiller was first elected alderman in 1987, she won by just 498 votes. In 2007, her last election, she beat the challenger, James Cappleman, by a mere 700 votes, fewer than the number of residents living at 920 West Lakeside.

Rahiem Ali died on March 23, 2010, after ingesting a plastic bag of narcotics during an arrest and falling into a coma. (As he lay in the hospital, Brendan Shiller represented him in court on charges of aggravated battery to a police officer and resisting arrest.) Ali’s death was ruled an accident by the Cook County medical examiner. Helen Shiller, still the alderman of the 46th Ward, reached out to the family, giving $200 to his mother the day before services were held at a West Side funeral home. The official record categorizes the expenditure as “community outreach–funeral expenses” from Citizens for Shiller, her campaign fund.

 

 

That a sitting alderman would help pay for the funeral of a notorious gangster shows how the interests of politicians and gangs can intertwine. For the Ali twins, the connection conferred an above-the-law aura. For their mother, it offered the opportunity to work in the community as part of the alderman’s inner circle. For Shiller, the relationship seems to have brought street cred and political muscle that helped her fend off tough challenges at the ballot box.

Because campaign disclosure rules are vague, such relationships aren’t usually reported, nor are they easy to track through the paperwork on campaign contributions and expenditures that candidates are required to file. Assessing how pervasive the alliances are, or how much back scratching actually takes place, is difficult. Oversight is virtually nonexistent. Thus, the relationships are usually hidden from public scrutiny.

Even so, there’s no rule prohibiting aldermen from forming such relationships. State lawmakers are similarly unconstrained. Compliance with Illinois’s ethics act, which contains the code of conduct for legislators, is voluntary. As it’s put in the law, the ethical principles “are intended only as guides to legislator conduct, and not as rules meant to be enforced with disciplinary action.” (Many elected officials in Chicago and Springfield have also been stalwart opponents of rules designed to shed more light on potentially questionable conduct or to make their offices and political operations more transparent.)

Allowed such free rein, our lawmakers operate in an ambiguous moral universe that seems as lawless as some of the street corners in their districts. “No wonder corrupt pols here fear only one person: U.S. Atty. Patrick Fitzgerald,” said a Chicago Tribune editorial a few years ago.

Many forms of political corruption—taking bribes, rigging elections, engaging in pay-to-play deals—are plainly unethical, if not illegal. But forming political alliances with gangs isn’t a clear matter of right or wrong, some say. In many Chicago neighborhoods, it’s virtually impossible for elected officials and candidates for public office not to have at least some connection, even family ties, to gang members. “People try to paint this picture of bad versus good—it’s not like that,” says a veteran political organizer based in Chicago who specializes in getting out the vote in minority areas. “Everybody lives with each other, grew up with each other. Just because somebody goes this way or that way, it doesn’t mean you’re just gonna write them off automatically.”

For better or worse, gang members are constituents, the same as businesspeople in the Gold Coast. Says Aaron Patterson, an imprisoned gang member: “It ain’t like gangs come from another planet.”

For some politicians, gang members can be a source of political strength—all the more so given that the once-formidable City Hall–Cook County patronage system, the lifeblood of the old Machine, is mostly gone. In the heyday of the Machine, recalls Wallace Davis Jr., a former 27th Ward alderman, political chieftains could simply snap their fingers and marshal a large cadre of city workers to go door-to-door with “a pint of wine and a chicken” to turn out the vote.

Few politicians nowadays have such armies at their beck and call. To win elections, many officeholders and candidates—especially those who represent parts of the city with high concentrations of street gangs—turn to those gangs as their de facto political organizations. “It went from wine and a chicken to hiring a gangbanger,” says Davis, who served from 1983 to 1987. “It’s unfortunate.”

Though estimates vary, most authorities and criminologists agree that there are 70,000 to 125,000 gang members in the city. In the numbers game of Chicago politics—in which, as the old joke goes, a one-vote victory constitutes a landslide—a constituency of that size gets noticed. (Keep in mind that in Illinois convicted felons can vote once they are released from prison.)

And though gangs are anything but a monolithic voting bloc, they can, and sometimes do, offer enormous numbers come election time, especially when you count their relatives, friends, and those they muscle at the polls. “An alderman ain’t nothing without the backing of the neighborhood,” says a top-level Gangster Disciple from the South Side. “Without the gangs, it’s hard [for politicians] to exist.”

A Latin King, interviewed at Cook County Jail, recalls how the top leader of his gang, the Corona, ordered every member in his area to vote for Ricardo Muñoz, the 22nd Ward alderman. “Every chapter had to vote for that guy, anyone who was eligible to vote,” says the Latin King. “That was a direct order. That means you can’t say no. If you do, you face a violation”—typically a beating, or worse.

He estimates that the gang delivered hundreds of votes, maybe even a thousand or more, in one of Muñoz’s elections in the 1990s. Moreover, he says, members were also directed—under the threat of punishment—to pass out campaign flyers for Muñoz and walk around carrying his signs. They were instructed to wear their Sunday best: ties, khakis, trench coats. “No thug clothes,” he recalls.

Muñoz says he does not seek out gang support: “There is no coordinated effort in any way, shape, or form.”

Many politicians who enlist gang members try to cloak the relationship in the rhetoric of political empowerment or social activism. They’ll say they want to get troubled youth involved in the political process in constructive ways: doing things like circulating nominating petitions, passing out campaign literature, or registering voters. They’ll say that for many of these men and boys, participating in politics is one of the few positive things they’ve done in their lives.

Some gang members seem to welcome the chance to leave the thug life, if only temporarily, and use the political system to better their lot. They say they have grown tired of gangbanging, realizing that it typically ends in one of two ways: death or prison. But honest jobs, they quickly point out, are few and far between where they live. “We don’t just all want to sell drugs,” says a Vice Lord leader from the West Side who is in Cook County Jail. “Some people [are] trying to do right.”

UIC’s Hagedorn and others who study gangs say that as long as the gangs don’t cross a line of illegal behavior, they should be political forces in their communities. “It’s a good idea to bring gangs into politics,” Hagedorn says. “Co-opt them, get them to go legit. It worked for the Irish, right?”

But law-and-order absolutists say today’s street gangs are much different from the Irish gangs of old: They are not just a bunch of toughs who brawl in the streets. “Gangs drive all of the crime in Chicago, and it’s shocking that some of these [public servants] want to align themselves with them simply for political gain,” says Jody Weis, the former Chicago police superintendent. “It’s kind of like selling your soul to the devil.”

Weis’s predecessor, Phil Cline, agrees: “If they think that they can use the gangs and the gangs aren’t going to want something in return, they are wrong. Once you start lying down with dogs, you are going to get fleas.”

 

 

The West Side Vice Lord at Cook County Jail speaks with a raspy voice about his own experiences with politicians. The leader of his gang, he says, had struck a deal with an alderman who was giving the Vice Lords extra money to buy heroin and high-grade marijuana. It was a win-win for everybody, by his account; the whole operation raked in $50,000 a day. Most of the money went to the gang, but the alderman took a nice cut, he says.

Before he was charged with shooting a rival gang member, the jailed Vice Lord says, he regularly met with the alderman in parking lots or at a Mexican restaurant to pick up and deliver envelopes of money. In time, the alderman—whom the Vice Lord refused to name but described as heavyset and middle-aged—grew more comfortable with these meetings and began asking to be introduced to young women who hung around the gang.

In return, the Vice Lord recalls, the alderman would sometimes give the gang a heads-up about what was discussed at CAPS meetings, where police and residents talked about neighborhood crime and other issues. The alderman, he says, would tell them which corners or gang members were receiving police attention. That way, the gang would “know how to move around” to avoid police, he explains. (Many aldermen wield considerable influence over the police commanders in their districts. In some respects, the commanders unofficially report to the aldermen.) He says that the alderman would also let them know about jobs at particular construction sites in the ward.

The Vice Lord and five other top gang members—all of whom requested anonymity out of concern for their safety—described how gangs and public officials use each other in ways legal and illegal. Though they are from different areas of the city, their stories are similar. Generally speaking, they say, the relationships grow out of activities related to Election Day, when politicians can offer dozens of temporary jobs to those willing to do the get-out-the-vote work or, if necessary, intimidate voters, tear down signs, or vandalize an opponent’s campaign office, among other misdeeds. From there, the relationships can, and do, get seedier.

A high-ranking Latin King claims that a Latino elected official, still in office, and a member of his staff routinely buy drugs from the gang. “They do PCP, coke, smoke weed, drink, everything,” he says. Several gang members call such actions common. “That shit that goes on behind closed doors is outrageous,” says a Latin King from another part of the city.

Two police sources—a former gang investigator and a veteran detective—bluntly acknowledge that even if the police know of dubious dealings between an alderman and a gang leader or drug dealer, there is little, if anything, they can do, thanks to what they say is the department’s unofficial rule: Stay away from public officials. “We can’t arrest aldermen,” says the gang investigator, “unless they’re doing something obvious to endanger someone. We’re told to stand down.” The detective concurs: “It’s the unwritten rule. There’s a two-tier justice system here.”

Meanwhile, the city’s inspector general can’t—by design of the City Council—investigate council members. (In May 2010, the council, under pressure to curb its corruptible ways, created its own inspector general. The job went unfilled for more than 18 months, until last November, when the council picked a New York lawyer for the part-time position, which has a minuscule budget and no staff and which critics have decried as window-dressing.)

Beyond providing protection from police—the gangs’ number one request—public officials can help in other ways. Gang leaders, particularly the most powerful, are usually looking to build on the riches they already have. Knowing an alderman or a state legislator—or even a congressman—can help. Traditionally, aldermen have almost total say over what gets built and what sorts of businesses open in their wards. They also have considerable sway over city contracts, which can mean tens of thousands to millions of dollars for gang-owned businesses.

By many accounts, state legislators and, to a lesser extent, the lawmakers in Washington can, and do, steer state or federal contracts or grant money to gang-backed businesses and gang-friendly nonprofit fronts. This isn’t always as simple as a direct contract. Sometimes officials and other political insiders encourage gang leaders to form minority subcontractor companies and hook them up with reputable city contractors. It solves problems for everyone: Gang leaders who want to get on the straight and narrow, or perhaps launder their profits from their criminal enterprises, can form legitimate businesses that won’t draw scrutiny; contractors get a minority-owned company to work with (the city requires that 25 percent of all contract payments go to minority firms and 5 percent to female-owned firms); the political go-betweens get political support or just goodwill that they can draw on later—and maybe even a cut of the profits.

Consider the case of Radames DeJesus. A convicted cocaine dealer who was sentenced to seven years in prison for shooting and seriously wounding three rival gang members in 1989, DeJesus, 45, is currently active in the Latin Kings, according to three Chicago gang investigators and a well-placed Humboldt Park gang member. At his 1990 trial, a gang investigator testified that DeJesus was an enforcer in the gang. DeJesus admitted he was a gang member but not an enforcer, according to court documents.

Sometime around 2006, sources say, a political insider told DeJesus he could start up a minority-owned business and reap lucrative city contracts. He then opened SewerTech Services, a sewer maintenance company on the city’s West Side. SewerTech has received a total of $31.1 million in subcontracts from Kenny Construction, the politically connected firm that has won hundreds of millions of dollars in sewer lining and repair business under the Daley administration. DeJesus also hit the taxpayer trough in March and July 2010 for nearly $300,000 in grants from TIF Works, a program that awards tax increment financing to companies for job training in TIF districts. (City records show that SewerTech has been paid about $94,000 so far.)

The law enforcement sources, who closely monitor the Latin Kings in Chicago and beyond, say DeJesus has been “laying low” but maintains an “active connection to the organization”—an allegation confirmed by the Humboldt Park gang member.

In a statement to Chicago, DeJesus said: “I am not affiliated with any street gang. I left that destructive life behind two decades ago.” He added that he tries to help other former gang members, hiring them to work at SewerTech and offering them Bible study classes to support their efforts to turn their lives around. “I believe in second chances,” he said. In a separate statement, Kenny Construction said SewerTech was the lowest bidder on their two projects and added that the company has done a good job.

When Chicago asked a spokeswoman for the city for comment, she said the city had not been aware of DeJesus’s criminal background or his alleged current gang involvement. While all city contractors must disclose whether their businesses’ owners have felony convictions—they can be ineligible for contracts if they’ve been convicted of bribery, fraud, theft, or other so-called crimes of deceit—subcontractors aren’t required to file felony disclosures with the city.

 

 

No account of city politics and gangs would be complete without mentioning the federal case against the former 20th Ward alderman Arenda Troutman. When Troutman pleaded guilty in 2008 to tax fraud and taking payoffs from developers, the case made for lurid headlines. It wasn’t necessarily because of her crimes—bribe-taking and tax-cheating aldermen have been a dime a dozen in the City Council. Rather, it was because of Troutman’s romantic relationship with Donnell Jehan, a leader of the Black Disciples, one of the city’s most ruthless and feared gangs, which ran a $300,000-a-day drug operation on the South Side.

Troutman’s case serves as a vivid example of how gangs and public officials can be a toxic mix. The six-year federal investigation unearthed evidence that Troutman had helped Jehan and the reputed king of the Black Disciples, Marvel Thompson, acquire properties and allowed them to rehab buildings without permits. She had also helped them get jobs for young gang members, either through city-run programs or by threatening builders to hire gang crews on job sites. Authorities further suspected that Troutman, or others in her office, may have alerted the gang to police operations. Thompson and Jehan, meanwhile, mobilized their members to do political work for Troutman. Records show that they had also given her thousands in cash, from drug profits and the gang’s street tax.

Through it all, Troutman insisted that she thought she was dealing with legitimate businessmen. “They talked like businessmen,” she told reporters. “They were dressed like businessmen. They had business to discuss.” (Chicago’s request for comment from Troutman, who is still incarcerated, went unanswered.)

Troutman was not the only politician to get into bed with the Black Disciples. Calvin Omar Johnson, a former gang leader and a friend of Thompson’s, who testified on Thompson’s behalf at his sentencing hearing, says every politician on the South and Near West Sides—from the aldermen up to the congressmen—tried to woo Thompson. “Everybody in that area, everybody in that neighborhood, every elected official in that community asked Marvel for help,” says Johnson. “And Marvel helped them.”

Further, three law enforcement sources involved in the federal probe of the gang confirm that two other local politicians besides Troutman—a sitting alderman and an unsuccessful aldermanic candidate—became ensnared in the government’s investigation. The two were interviewed by federal investigators but were never charged.

* * *

“Bienvenidos a Little Village” reads the sign on the large Spanish-tiled arch at the eastern end of 26th Street, the entranceway to the neighborhood. On this evening, Raul Montes Jr., a community activist there, is in a car giving a tour of the bustling 26th Street commercial corridor—one of the city’s busiest. Montes, 37, points out taquerías, bakeries, and small shops lining the street, as well as the carts that offer an assortment of Mexican street food.

To Montes, the scene is a source of pride. “But some people are scared to come here now,” he says. Driving along this 29-block stretch, from Sacramento to Kostner Avenues, the western edge of the commercial district, one can’t miss the clusters of hoodie-wearing teenagers flashing gang signs. The 2-6ers, whose turf is along the western portion of this stretch, wear tan caps; the Latin Kings, in the east, don gold ones. Everywhere in between, Montes notes, are the miqueros, street-corner hawkers who openly sell counterfeit IDs and fraudulent Social Security cards. Vice is all around—and in plain sight.

Indeed, crime in the heart of Little Village is higher than in much of the rest of the city. Statistics show that the police district that covers 26th Street and nearby parts of the 22nd Ward had the ninth-highest number of reported violent crimes and the fifth-highest number of homicides citywide in 2011.

But, as Montes points out, there are no surveillance cameras posted anywhere along 26th Street. He blames Ricardo Muñoz, the alderman for Little Village. Muñoz, an admitted ex–gang member, has served on the City Council since 1993. Critics cite the alderman’s well-established ties to the Latino gangs in Little Village and also note that Muñoz’s father and his nephew were, on separate occasions, arrested for trafficking fake IDs.

Montes, a gadfly who frequently holds protests to focus attention on the lack of police blue-light cameras in his ward, suspects that Muñoz has intentionally kept cameras out to help protect the gangs—a position shared by several law enforcement sources and Muñoz’s various political opponents. (The installation of surveillance cameras at high-crime corners, according to police figures, has cut drug-related crime by 76 percent and so-called quality-of-life crime by 46 percent. Aldermen can pay for the cameras out of the more than $1 million in discretionary funds they receive every year. Muñoz, however, hasn’t bought one.)

Over time, Montes has gathered more than 1,500 signatures of Little Village residents and business owners supporting the installation of cameras on 26th Street. “My question is: Why does [Muñoz] oppose cameras so much?” Montes says. “Why would you oppose these cameras when you have high crime in your area? You’re the alderman. You see crime going on. Why does he ignore it?”

Muñoz says 26th Street doesn’t need taxpayer-funded cameras: “The business strip should fend for themselves.” He adds that cameras should mostly go around schools and parks. As for the suspicions that he deliberately keeps cameras out to protect street gangs, he answers, “I grew up in the neighborhood, and these statements are coming from haters. They’re just rumors.”

Anti-gang activists, police, and political insiders say that elected officials show how serious they are about tackling the gang problems in their districts by the public safety actions they take or don’t take and by the services or favors they provide. For example, many politicians in high-crime districts regularly offer help to ex-offenders who want to get their criminal records expunged—treating such favors as a constituent service, like garbage pickup, rather than a legal process best left to practicing lawyers. Gang leaders we interviewed told stories of how aldermen put off installing or fixing streetlights to keep the streets dark for criminal activity and how gangs can hold picnics or block parties without the required permits.

Sympathetic lawmakers can also help gangs by doing little to stop their illicit activities or by accepting bribes to ignore them entirely. “We call it look-the-other-way pay,” says the Gangster Disciple. Indeed, several police sources say most aldermen rarely file complaints about the open drug markets that operate so freely in their wards—unless the action gets too close to their offices or homes. Then they want the police to move in immediately.

A brief survey of the City Council’s recent actions on gangs reveals mostly empty posturing and symbolic gestures, some worthy of a Second City sketch. Other than an anti-loitering law that’s been on the books for nearly two decades and various gun restrictions that apply to all city residents, the city’s efforts to combat gangs have gotten increasingly absurd. Over the years, the council has targeted pagers and telephone booths, which are the street offices of choice for drug dealers, and banned the sale of spray paint, which Alderman Edward Burke once called “weapons of terror,” to cut back on graffiti. In 1997, aldermen considered cracking down on residents who put up basketball hoops in their alleys, saying they were magnets for gang members. Soon afterward, Mayor Daley proposed an ordinance making it a crime simply to shout the words “rock,” “blow,” or “weed”—street slang for crack cocaine, heroin, and marijuana.

But the absurdity of the City Council’s efforts to deal with gangs reached a zenith in early 2008, when aldermen considered banning the tiny plastic bags commonly used in drug sales. As silly as this proposal was to many people—“Our elected officials are addicted to symbolism,” wrote Neil Steinberg in the Sun-Times—the reaction by opponents was equally ridiculous. Aldermen Freddrenna Lyle and Helen Shiller, for instance, argued that little girls or women who used the bags to carry small beads for their braids could be arrested. Ditto for someone caught with a bag holding spare buttons for clothing, said Alderman Walter Burnett.

* * *

Come March, Chicago’s powerful political bosses, the Democratic ward committeemen—more than half of whom are sitting aldermen—will be up for reelection. So too will a slate of state representatives, state senators, judges, Cook County officials, and members of Congress. The old rituals will start again, and you can bet that Hal Baskin’s phone will be buzzing. “The reality is, [candidates] are looking for any advantage they can get,” says Baskin. “If they don’t use gangs, someone else will.”

Baskin operates his neighborhood center in an old church in Englewood, one of the most violent, gang-filled communities in Chicago. The church, like the neighborhood, has seen better days. Recently, as a light rain dripped through the leaky roof, Baskin tended to a makeshift system of buckets and tarps to minimize the damage. The basketball court and a theatre stage on the top floor are nearly ruined. “There are parts of this city where there are no legal jobs and the drug dealer and the gang leader are the biggest employers in the community,” Baskin says. “The politicians know it; people in the community know it. That’s the social dynamic that plays out in these meetings.”

By the looks of this scene, it would seem as if Baskin’s efforts to get politicians to pay attention to the problems in his community haven’t worked. Baskin doesn’t disagree. “It don’t bother me,” he says, adding that it won’t stop him from taking politicians’ calls. “I still believe in the process.” Better to have a seat at the table than no seat at all.

 

Pentagon’s War on Drugs Goes Mercenary


An obscure Pentagon office designed to curb the flow of illegal drugs has quietly evolved into a one-stop shop for private security contractors around the world, soliciting deals worth over $3 billion.

The sprawling contract, ostensibly designed to stop drug-funded terrorism, seeks security firms for missions like “train[ing] Azerbaijan Naval Commandos.” Other tasks include providing Black Hawk and Kiowa helicopter training “for crew members of the Mexican Secretariat of Public Security.” Still others involve building “anti-terrorism/force protection enhancements” for the Pakistani border force in the tribal areas abutting Afghanistan.

The Defense Department’s Counter Narco-Terrorism Program Office has packed all these tasks and more inside a mega-contract for security firms. The office, known as CNTPO, is all but unknown, even to professional Pentagon watchers. It interprets its counternarcotics mandate very, very broadly, leaning heavily on its implied counterterrorism portfolio. And it’s responsible for one of the largest chunks of money provided to mercenaries in the entire federal government.

CNTPO quietly solicited an umbrella contract for all the security services listed above — and many, many more — on Nov. 9. It will begin handing out the contract’s cash by August. And there is a lot of cash to disburse.

The ceiling for the “operations, logistics and minor construction” tasks within CNTPO’s contract is $950 million. Training foreign forces tops out at $975 million. “Information” tasks yield $875 million. The vague “program and program support” brings another $240 million.

That puts CNTPO in a rare category. By disbursing at least $3 billion — likely more, since the contract awards come with up to three yearlong re-ups — the office is among the most lucrative sources of cash for private security contractors. The largest, from the State Department’s Bureau of Diplomatic Security, doles out a $10 billion, five-year deal known as the Worldwide Protective Services contract.

CNTPO is “essentially planning on outsourcing a global counternarcotics and counterterrorism program over the next several years,” says Nick Schwellenbach, director of investigations for the Project on Government Oversight, “and it’s willing to spend billions to do so.”

For the vast majority of people who’ve never heard of CNTPO, the organization answers to the Pentagon’s Special Operations Low-Intensity Conflict Directorate, within the Counternarcotics and Global Threats portfolio. It’s tucked away so deep, bureaucratically speaking, that it doesn’t actually have an office at the Pentagon.

The organization, run by a civilian named Mike Strand, has been around since 1995. In 2007, it made a big push into contracting, hiring the Blackwater subsidiary U.S. Training Center as well as defense giants Lockheed Martin, Northrop Grumman, Raytheon and ARINC for “a wide range of Defense counternarcotics activities,” according to a statement provided to Danger Room by the agency. That award, which has doled out $4.3 billion so far, is the precursor to the current bid.

Maybe that’s why an “Industry Day” last week at a Fredericksburg, Virginia hotel to introduce CNTPO to would-be contractors attracted “approximately 180 companies,” CNTPO boasts.

CNTPO might not be well-known. But in some circles, it’s infamous.

In 2009, a bureaucratic shift plucked the responsibility for training Afghanistan’s police out of the State Department’s hands. Suddenly, the contract — worth about $1 billion — landed with CNTPO. CNTPO quietly chose Blackwater for the contract, even though Blackwater guards in Afghanistan on a different contract stole hundreds of guns intended for those very Afghan cops.

The incumbent holder of the contract, Blackwater competitor DynCorp, protested. It didn’t help that a powerful Senate committee discovered Blackwater’s gun-stealing antics. In December, DynCorp finally received the contract — administered by an Army office, not CNTPO.

But that hasn’t stopped CNTPO’s expansion. In its new contract, the office explicitly stakes out a broad definition of its mandate: “to disrupt, deter, and defeat the threat to national security posed by illicit trafficking in all its manifestations: drugs, small arms and explosives, precursor chemicals, people, and illicitly-gained and laundered money.” It declares its practices “beyond traditional DoD acquisition and contracting scopes.”

How broad is that in practice? Tasks contained in the CNTPO contract range from “airlift services in the trans-Sahara region of Africa” to “media analysis and web-site development consultation to officials of the Government of Pakistan.”

The small agency is “worldwide,” the contract says, as “the primary regional areas of interest include Central and Western Asia, Sub-Sahara Africa, and Central and South America.” But its contracting oversight efforts are comparatively local.

According to CNTPO, oversight for its contracts are themselves outsourced to an Army Contracting Command outfit in Hunstville, Alabama. CNTPO “provides all contracting support for this effort, with 10 contracting officers/contracting specialists and legal/policy review of all contracts and task orders,” CNTPO’s statement reads, with “program management and customer support requirements” provided by CNTPO itself. That’s 10 bureaucrats to review billions of dollars in private security contracts, spent all over the world.

A member of the Wartime Contracting Commission, created by Congress to stop war profiteering, came away from an interaction with CNTPO concerned about that level of oversight.

“The overriding consideration tends to be helping the military with their mission,” says commissioner Charles Tiefer, a law professor at the University of Baltimore who interviewed CNTPO officials about the Afghanistan police contract. “Economies for tight supervision of private security activities take a back seat.”

CNTPO’s rise underscores an emerging trend in private security contracting: a move into some of the most sensitive missions the military performs. Mercs protect the bases in Afghanistan where U.S. Special Operations Forces live and work. When soldiers are taken prisoner, hired guns are entrusted to rescue them. Their tracking technology finds terrorists for U.S. commandos to kill. Now they’re training foreign commando forces.

“These are special-forces operations, and they’re best left in hands of our SF folks,” Schwellenbach says. “This stuff isn’t delivering paper clips or even fuel or bullets. It’s complex, sophisticated services, and there’s a reason we have Special Forces do this kind of training, not the regular Army. This is something you really want to keep a tight lid on.”

The Late, Great, $14 Million iTunes Clickjacking Scheme

Seven Eastern European men have been charged in New York with operating a clickjacking scheme that infected more than 4 million computers in order to hijack surfers trying to get to the iTunes store or the IRS. The enterprise allegedly netted the crooks more than $14 million.

The scam appears to have begun in 2007 and involved six Estonians and one Russian, all residing in Eastern Europe, who allegedly used multiple front companies to operate their intricate scam, which included a bogus internet advertising agency, according to the 62-page indictment (.pdf), unsealed Wednesday in the Southern District of New York.

The bogus agency contracted with online advertisers who would pay a small commission each time users clicked on their ads, or landed on their website.

To optimize the payback opportunities, the suspects then infected computers in more than 100 countries with malicious software called DNSChanger to ensure that users would visit the sites of their online advertising partners. The malware altered the DNS server settings on target machines in order to direct victims' browsers to a DNS server controlled by the defendants, which then directed browsers to sites that would pay a fee to the defendants.

For example, users who clicked on a link on a search results page would have their browsers directed not to the legitimate destination page but to a different page designated by the defendants.

An infected user who searched for Apple's iTunes store and clicked on the legitimate Apple link at the top of the page would be directed instead to www.idownload-store-music.com, a site purporting to sell Apple software. Users trying to access the government's Internal Revenue Service site were redirected to a web site for H & R Block, a top tax preparation business in the U.S. The suspects received a fee for every visitor directed to the site.

At least half a million machines in the U.S. were infected with the malware, including ones belonging to the National Aeronautics and Space Administration (NASA) and other unnamed government agencies.

In addition to redirecting the browsers of infected users, the malware also prevented infected machines from downloading security updates to operating systems or updates to antivirus software that might have helped detect the malware and stop it from operating. When an infected user's machine tried to access a software update page, that person would get a message saying the site was currently unavailable. In blocking the updates, infected users were also left open to infections from other malware as well.

Vladimir Tsastsin, Timur Gerassimenko, Dmitri Jegorow, Valeri Aleksejev, Konstantin Poltev and Anton Ivanov of Estonia and Andrey Taame of Russia have been charged with 27 counts of wire fraud and other computer-related crimes.

The Federal Bureau of Investigation has provided a handout to users (.pdf) to help them determine if their system might be infected with the malware. Individuals who think they might be infected are being asked to submit an online form to the Bureau.

The Internet Systems Consortium has also been tasked with operating a DNS server that replaces the defendants' rogue DNS server. The ISC will be collecting IP addresses that contact this server in order to determine which systems might be infected. According to a protective order submitted to the court by the government, however, ISC is not authorized to collect any other data from the computers, such as the search terms that led them to the DNS server.

The FBI Announces Gangs Have Infiltrated Every Branch Of The Military

Military-gang

The FBI has released a new gang assessment announcing that there are 1.4 million gang members in the US, a 40 percent increase since 2009, and that many of these members are getting inside the military (via Stars and Stripes).

The report says the military has seen members from 53 gangs and 100 regions in the U.S. enlist in every branch of the armed forces. Members of every major street gang, some prison gangs, and outlaw motorcycle gangs (OMGs) have been reported on both U.S. and international military installations.

 

From the report:

Through transfers and deployments, military-affiliated gang members expand their culture and operations to new regions nationwide and worldwide, undermining security and law enforcement efforts to combat crime. Gang members with military training pose a unique threat to law enforcement personnel because of their distinctive weapons and combat training skills and their ability to transfer these skills to fellow gang members.

The report notes that while gang members have been reported in every branch of service, they are concentrated in the U.S. Army, Army Reserves, and the Army National Guard.

Many street gang members join the military to escape the gang lifestyle or as an alternative to incarceration, but often revert back to their gang associations once they encounter other gang members in the military. Other gangs target the U.S. military and defense systems to expand their territory, facilitate criminal activity such as weapons and drug trafficking, or to receive weapons and combat training that they may transfer back to their gang. Incidents of weapons theft and trafficking may have a negative impact on public safety or pose a threat to law enforcement officials.

The FBI points out that many gangs, especially the bikers, actively recruit members with military training and advise young members with no criminal record to join the service for weapon access and combat experience.

The full assessment is definitely worth checking out

 

Anonymous Threatens Mexico’s Murderous Drug Lords

A ruthless campaign of killing, extortion and kidnapping by Mexico’s powerful Zetas drug cartel has created plenty of enemies, from the Mexican government to paramilitary vigilantes to rival cartels. But now the Zetas have a new adversary: the hacker collective Anonymous.

In a video uploaded Oct. 6, an Anonymous spokesperson said that unless the Zetas release one of the group’s members, the group will reveal the photos, names and addresses of Zetas-affiliated cops and taxi drivers. (The member was allegedly kidnapped in the western coastal city of Veracruz during an “Operation Paperstorm” demonstration.) Anonymous also threatened to out journalists accused of “crapping on honest authorities like the army and the navy,” the spokesperson said.

“For the time being, we won’t post photos or the names … of the taxi drivers, the journalists or the newspapers nor of the police officers, but if needed, we will publish them including their addresses, to see if by doing so the government will arrest them,” the spokesperson added.

Anonymous started out as a decentralized network of online griefers. But they’ve grown increasingly political, targeting websites ranging from Visa and Mastercard (for their alleged financial blockade of WikiLeaks) to a consultancy firm linked to the U.S. military. In October, they took aim at the underground child pornography network Lolita City, and hackers linked to the group leaked personal information from the servers of the International Association of Chiefs of Police and the Boston Police Patrolmen’s Association. Perhaps most importantly, Anonymous has provided support to the Occupy movement.

Last week, Anonymous followed up its threat to the Zetas by defacing the website of former Tabasco state prosecutor Gustavo Rosario Torres, accused by anti-crime activists three years ago of discussing a $200,000 cocaine deal with a deputy on audio tape. With a Halloween background, a message splashed above the group’s signature on Rosario’s homepage read: “Gustavo Rosario is Zeta.”

This wasn’t the first time Anonymous weighed in on the shady and rumor-filled world of Mexican political corruption. One month ago, the group launched a distributed denial-of-service attack on the state of Veracruz’s official website following speculation the recent election campaign of Veracruz governor Javier Duarte received funding from the Zetas.

Revealing Zetas associates, however, is a different matter than flooding a state website. And the Zetas have a history of making their online critics pay.

In September, the Zetas hanged two people from a pedestrian overpass in the border city of Nuevo Laredo with threats against bloggers written on a nearby banner. A week later, a contributor to social media site Nuevo Laredo en Vivo was found decapitated.

According to private intelligence firm Stratfor: “Loss of life will be a certain consequence if Anonymous releases the identities of individuals cooperating with cartels. Whether voluntarily or not, cooperating with criminal cartels in Mexico comes with the danger of retribution from rival cartels.”

This is a problem. At the very least, it’s worth noting that taxi drivers working as lookouts or mules for the cartels does not mean the drivers do so willingly. As targets for extortion, exposing their identities could mean deadly reprisal attacks, such as what occurred during a wave of violence in the resort city of Acapulco in February that left a dozen taxi drivers and their passengers dead — some decapitated by machete-wielding assassins as their cars were set ablaze.

Even worse, provoking the Zetas could lead to further attacks against social media users unrelated to Anonymous.

“Anonymous activists can threaten to reveal information about cartels or launch cyberattacks,” Stratfor says. “But even if the cartels cannot track down the individuals directing cyberattacks or releasing information, the cartels will continue to commit acts of violence meant to warn the online community about such activities.”

In other words, if Anonymous follows through (assuming they’re not just bluffing) then writing about the drug war could become even more dangerous for Mexican bloggers — and wearing a Guy Fawkes mask on a Mexican street might just become a death warrant.

Wynn Las Vegas sues $700,000 craps winners

Wynn Las Vegas says a group of craps players who won $700,000 in July cheated the system, and the resort is suing them.

According to reports on Onlinepoker.net and elsewhere, the upscale casino took notice when Leonardo Fernandez and Veronica Dabul of Argentina won $145,000 on seven throws of the dice on July 17. On reviewing surveillance tapes, Wynn accused them and accomplices of "dice sliding," or holding dice in a position with winning numbers face up and pretending to randomly throw them out against the back of the table, leading to big-money wins.

The two, who had played at Wynn regularly, were arrested, Onlinepoker says, and Nevada Gaming Control Board enforcement chief Jerry Markling said that "it's not a common form of cheating because it involves a considerable amount of skill and practice." In the court papers, the two are described as playing at different craps tables as part of different teams, with accomplices attempting to distract casino employees at the table during the alleged slides. That would be difficult because craps -- a complicated table game with many possible bets thrown down by many players -- is generally well-policed by more than one staffer.

In the alleged conspiracy to cheat by sliding, defendants left Wynn Las Vegas with "over $700,000" in losses, the lawsuit says.

Vegasinc.com says Wynn surveillance tapes show Dabul and Fernandez playing craps from 10:37 p.m. to midnight, with Fernandez sliding the dice at least seven times without betting, according to its lawsuit. "During the same seven slides in the two hour and 15 minute span, Dabul and/or two unidentified men place bets using Dabul's chips," the lawsuit said. "Defendants won a total of $145,000 from these seven slides alone." Other reports speculate that cheating at craps can happen when a pretty woman exposes cleavage to distract the croupier and other staffers or when staff is in on the con, neither of which has been shown to have happened in this case. Other reports say sliding is difficult because dice are supposed to bounce off the back wall of the table.

Alan Mendelson, who has covered gaming issues and now runs a consumer finance website, told the Las Vegas Review-Journal that "dice sliding is so obvious that it is easy to stop. It makes no sense they could get away with that much money unless they had inside help."

Posterous theme by Cory Watilo