Glenn Greenwald
Politics • Writing • Culture
Leaked Ukraine War Docs: What’s really going on? Plus: Dems Urge Biden to Ignore Court Rulings
Video Transcript: System Update #67
April 13, 2023
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A very strange leak of top-secret documents in the U.S. government has made its way onto the Internet, though these documents have been on obscure corners online for at least a couple of months, U.S. media outlets led by the New York Times and NBC News have noticed them only now and continue to use quite a dramatic language to describe them. NBC, for example, warns, “It could represent the most serious breach of U.S. Intelligence secrets since the contractor for the NSA, Edward Snowden, passed on thousands of classified documents to journalists about U.S. electronic surveillance in 2013.” 

Despite that melodramatic language, almost nothing is known about who leaked this archive or why. Many of these documents pertain to the U.S. proxy war in Ukraine, though many pertained to other topics. And while corporate media outlets keep insisting that these materials contain embarrassing revelations for the U.S. government, none has really been identified, at least none that wasn't already widely known, leading some in the region of that war to speculate that they may be intended as a disinformation campaign from American officials themselves. We'll examine all these competing theories and developments and some of the documents themselves to explain what can be done and what can't and how to think about this leak. 

Then, last week, a Texas federal judge ruled that the U.S. FDA, the Food and Drug Administration, acted illegally when it approved the use of the so-called abortion drug, used in more than half of abortions performed in that state. While the Biden administration immediately announced it will appeal the ruling, which is what citizens and government entities do when they disagree with a court ruling, some leading elected Democrats, including Sen. Ron Wyden of Oregon and Congresswoman Alexandria Ocasio-Cortez of New York, began urging Joe Biden to simply ignore the ruling – just ignore the order of the court. What are the implications of national Democrats now advocating that the president of the United States simply ignores court rulings with which he disagrees on the ground, as Andrew Jackson put it, the court has no army and therefore let them enforce it. 

Then finally, today, Republican House Speaker Kevin McCarthy expressed his full-throated support for President Biden's policy of pursuing an endless proxy war in Ukraine. McCarthy, who sent signals before the 2022 midterms that agreed with growing portions of the public that more constraints are needed on war spending by the United States, now basically says he didn't really mean anything by that, and instead decided that it was the greatest importance that Ukraine and the world win the war against Russia and that the United States must do everything to make that happen. We'll look at those comments in the House speaker today, 

As a reminder, System Update is available in podcast version 12 hours after we air, live, here on Rumble. Simply follow us at System Update on Spotify, Apple, and every other major podcasting platform and you'll be able to listen to the show that way as well. 

For now, welcome to a new episode of System Update, starting right now.

 


 Large-scale leaks of documents have become really the only way for Americans to learn what their government in general and what the U.S. Security State in particular, are doing in their name. For decades now, but particularly in the wake of 9/11, the CIA, the FBI, Homeland Security and the NSA have constructed such a large and impenetrable wall of secrecy behind which they operate that characterizes almost everything that they do, that American citizens, even members of Congress, really have very little idea – really no idea – what these agencies are doing in the name of our democracy, except when people inside these agencies decide to leak documents to journalists or others that enable those who get the documents to tell their fellow citizens what their government is doing in their name. 

Perhaps the first of these modern-day large-scale leaks occurred in 1971, when Daniel Ellsberg, who had worked inside the Defense Department and then for the RAND Corporation with very high levels of secrecy, leaked the Pentagon Papers to The New York Times and The Washington Post. And the purpose of the Pentagon Papers, which was a gigantic volume of top secret classified documents - was not to reveal – not to reveal –specific, war plans that the United States had in prosecuting its war in Vietnam. Such details were never published, either by the papers or by Ellsberg, because that wasn't the purpose of the leak. The purpose of the leak instead was to prove to the American people that the government, the Pentagon and the CIA had been lying to them for over a decade about their views of the Vietnam War, in public. Leading Pentagon officials and leading officials of the Johnson administration were telling the public that they believed and in fact knew that the U.S. was on its way to winning the war in Vietnam, that all that was needed was another offensive around the corner, another 10,000-troop collapse. They were constantly insisting that they were winning the war and believed that they would win. Internally, though, in private, they were saying exactly the opposite. They were admitting that the most that they could hope for was a stalemate, that they would never really be able to conquer Vietnam, to install the rule of the South Vietnamese allies of theirs in North Vietnam, that essentially the most that they could hope for was simply having the war continue on and on and on with no resolution in sight - that the Vietcong would fight forever - and there was no way American power could be brought to bear to win the war. In other words, they were lying to the American public by telling the American people the exact opposite of what they were saying in private. And Daniel Ellsberg, when he saw that thought: I know I'm going to go to jail probably for life if I do this, but I, in my good conscience, cannot allow my fellow citizens to continue to believe this lie about the Vietnam War. I need to expose what Pentagon officials are really saying in secret so that Americans can decide whether they want to support this war or not, based not on the lives that were being fed through the media, but based on the truth. Ellsberg would have gone to prison for doing that had it not been for the fact that the Nixon administration broke into his psychoanalyst’s office to try and steal his psychoanalyst’s records, to reveal his psychosexual secrets and discredit him and distract attention away from the leaks which caused the court to rule that that misconduct warranted dismissing the espionage charges against him. But had it not been for that – and Daniel Ellsberg himself says that to this very day – he would have gone to prison for life. It was almost impossible to beat an espionage charge when the United States brings it under the Espionage Act of 1917, which was a law that Woodrow Wilson implemented to criminalize dissent into the U.S.'s participation in that first World War in Europe.  

Those are the kinds of leaks that illuminate and that allow us to know what the government is doing. Those are the kinds of leaks that WikiLeaks has repeatedly published beginning in 2010 when they revealed the realities of what the United States government was doing in Afghanistan and Iraq and as well as what its allies around the world were doing, particularly our tyrannical and despotic partners in the Middle East. And it's also what Edward Snowden did when he decided to leak documents to journalists, including myself, not that revealed the names of agents overseas, which none of those documents did, nor to reveal specific plans of how the U.S. was spying on its enemies like China or al-Qaida. That was something Snowden was adamant about not to be disclosed. Instead, it was to reveal to the American people that the NSA, unbeknownst to almost every member of Congress and the American people, was spying not on al-Qaida or the Chinese, but instead, primarily, domestically, on our conversations, on our telephone calls and our email activities, on our browsing records and the like, a program that we were able to expose because Edward Snowden allowed us to do so was ultimately ruled a violation of the American Constitution and relevant statutes by a circuit court of appeals. Those are the kinds of leaks that are constructive and that shed a gigantic light on the U.S. Security State, even though they need to be done with care. You don't just dump all the documents onto the Internet. WikiLeaks never did that. They redacted documents carefully. We certainly did the same in the Snowden case. We ended up not publishing a majority of the documents, only publishing the ones necessary to inform the public debate about what the NSA was doing in secret against their privacy and against people's privacy around the world. So, these kinds of leaks are crucial to journalism because if you don't have them, what you have instead are leading media outlets like The New York Times, The Washington Post, NBC News and CNN, doing the bidding of the U.S. Security State. They get secrets past them all the time and they publish those but they’re secrets the CIA wants you to hear. They're the secrets the Pentagon wants you to hear. So, it basically just states media feeds you constantly leaks that seem like they're unauthorized because they come from anonymous sources. So, they have that feeling of something edgy and radical. But that's all that is, feeding you guys the propaganda and deceit that they want to give the veneer of some sort of journalistic achievement to. That's how Russiagate was constantly propagated. The CIA would go to Ken Dilanian, ABC News, or Natasha Bertrand, who worked at MSNBC and then worked her way up to The Atlantic and CNN and Politico. She's now at CNN. And every one of the reports would say, “Intelligence officials tell us…” The Washington Post and The New York Times won Pulitzers for that kind of reporting that in reality was just propaganda on behalf of the U.S. Security State. The only counterweight to that is when we get these giant leaks of the kinds I just reviewed that allow us to shed light on what the U.S. Security State is doing in secret. 

There's a current claim that we have a similar leak of that kind, namely a kind where someone inside the U.S. government leaked top secret documents in order to expose secrets of the American government that supposedly are very embarrassing to the American government. And yet there's something extremely strange, many things extremely strange about this claim that we have a new Snowden-type leak or a new WikiLeaks-type leak or a new Pentagon Papers-leak. For one thing, we have no idea who leaked this material. We don't even know. The category of person is that we don't know their name. We don't even know where they supposedly work. We don't have confirmation they worked inside the U.S. government. We have no idea who did that. We also have no idea what the motive is because they didn't bring these materials to journalists and asked journalists to curate them and report on them, nor did they bring them to places like WikiLeaks, which might be willing to, in a very high profile and prominent way, leak them all or publish them all or most of them. Nor did they publish these documents in a way that would be noticed. They started instead appearing back in January or February on very obscure places on the Internet, including Discord servers, which are used for people who play video games. They can often be private. The first time they appeared reportedly, is in a Discord server used only by a dozen people or so. And only from there did they make the leap to a more populated forum on the Internet. And then only in the last week did they start to appear in places like Telegram and more popular Discord channels and now the media has noticed them. But there's no guarantee that these would have leaked, nor was there any attempt to direct how they ended up being disclosed or even what kinds of information is being covered in the way the media is talking about this is very odd. I think it raises more questions than it answers. So, let's first look at what the media is telling you about this leak. Let's look at some of the documents themselves. We've picked the ones that we think are worth looking at, and then let's try and examine them. 

So, we have the first story, which is from The New York Times. It is entitled “How the Latest Leaked Documents Are Different from Past Breaches.” That's an article from The New York Times today: “The freshness of the documents – some appear to be barely 40 days old – and the hints they hold for operations to make them particularly damaging, officials say.” This is how the New York Times frames so often what they do. They state something and then at the end, they add “officials say”. So, they're not really technically affirming the veracity of this claim, but it sounds to the reader as though they are. They're stating something, namely the freshness of the documents – “some appear to be barely 40 days old” and “the hints they hold for operations to come to make them particularly damaging – comma – “, officials say”. So, The New York Times is not saying that anonymous officials are enabling us. Officials want you to believe this, which is why they told this to The New York Times. This is by David Sanger, today. He's a journalist who has all kinds of ties to the CIA, to the U.S. Security State; he has spent years, decades, publishing authorized leaks from sources inside the intelligence community. That's what he does. This is what the article says, 

 

When WikiLeaks spilled a huge trove of State Department cables 13 years ago, it gave the world a sense of what American diplomats do each day, the sharp elbows, the doubts about wavering allies and the glimpses of how Washington was preparing for North Korea's eventual collapse and Iran's nuclear breakout (The New York Times. April 9, 2023).

 

Let me just stop there. It is unbelievable to describe WikiLeaks' disclosures that way. He's doing it on purpose to make it seem like it was a completely unjustified and banal leak that didn't really tell you anything about the world other than giving you a “sense of what American diplomats do”. This is just the business of diplomats. They throw sharp elbows. They have some doubts about wavering allies. And you got some glimpses about how Washington was preparing for North Korea's eventual collapse and Iran's nuclear breakout. So, they pick the things that they know you're fine with the State Department doing in order to make this leak sound like it was something that told you nothing important – but at the same time was incredibly dangerous. 

This eventual collapse of North Korea, I don't think we have that yet. This is 13 years later. So, there's no collapse in North Korea, maybe “eventually” means 100 years now. And Iran has not broken out in the sense that it has nuclear weapons. Nobody claims that. But these are things that you would want the government to be doing and that's why The New York Times purposely described the WikiLeaks releases in this way to make you think these WikiLeaks releases told you nothing but endanger the public. In reality, the exact opposite was true. They revealed all kinds of secrets about tens of thousands of people, innocent civilians, that the United States government, the military, had killed in Afghanistan and Iraq; they had revealed a video showing the U.S. government, the U.S. military, gunning down innocent people, including journalists who work for Reuters when they were on the ground and scrambling to try and leave. They revealed widespread, rampant corruption among all kinds of U.S. allies in Saudi Arabia in Bahrain, Jordan and Egypt, and all kinds of lies about a whole range of issues that the U.S. government told the public. But it's bizarre, although not really, that David Sanger, who is an ally of the intelligence services, started his article trying to demean WikiLeaks’ releases knowing Julian Assange is in prison. This is the way that a CIA agent who hates Julian Assange would describe those releases, not the way a journalist would. So already you know that he's serving an agenda that is the U.S. Security State's agenda. That's what he always does. But this is the first clue. Now here's the second one. 

This paragraph enrages me. It's full of lies, as I will document in a minute once I show you what this article says about these newly leaked documents but here is what it says about the Snowden leaks: 

 

When Edward Snowden swept up the NSA's secrets three years later, Americans suddenly discovered the scope of how the digital age had ushered in a remarkable new era of surveillance by the agency [This is what he says the NSA's Snowden reporting revealed] enabling [the NSA] to pierce China's telecommunication industry and to drill into Google’s servers overseas to pick up foreign communications (The New York Times. April 9, 2023). 

 

So, David Sanger is saying the only thing that Snowden reportedly did was reveal that the NSA was spying on China, something that every American would be okay with them doing and drilling into Google servers to pick up foreign communications, which most people would probably be fine with as well. A complete lie. The crux of the Snowden report showed how the NSA was spying on the conversations of American citizens and the telephone activities of Americans to the point that courts were able to rule them unconstitutional, as I said earlier. But again, if you work for the NSA, this is what you would want people to think the Snowden report was about. He's counting on the fact that it's been ten years and people don't remember. So, he's just rewriting history. And I will show you that the only people who ever revealed any secrets about how the NSA spies on China are The New York Times itself, not any of the other journalists who actually worked with Edward Snowden. So, we'll get to that in a minute. The New York Times goes on:

 

The cache of 100 or so newly leaked briefing slides of operational data on the war in Ukraine is distinctly different. The data revealed so far is less comprehensive than those vast secret archives, but far more timely (The New York Times. April 9, 2023). 

 

I'm not sure that's even true. There were Snowden documents that we began reporting on, engaged in, in June – that was only three months old. Snowden gave us the archive only a couple of months before we began reporting. There were some that were only two or three months old. So that's not even true anyway. 

 

And it is the immediate salience of the intelligence that worries White House and Pentagon officials. 

Some of the most sensitive material – maps of Ukrainian air defenses and a deep dive into South Korea’s secret plans to deliver 330,000 rounds of much-needed ammunition in time for Ukraine's spring counteroffensive – is revealed in documents that appear to be barely 40 days old. It is the freshness of the “secret” and “top secret” documents and the hints they hold for operations to come that make these disclosures particularly damaging, administration officials say. On Sunday, Sabrina Singh, Pentagon spokeswoman, said U.S. officials had notified congressional committees of the leak and referred the matter to the Justice Department, which had opened an investigation. 

The 100-plus pages of slides and briefing documents leave no doubt about how deeply enmeshed the United States is in the day-to-day conduct of the war, providing the precise intelligence and logistics that help explain Ukraine's success thus far. While President Biden has barred American troops from firing directly on Russian targets and blocked sending weapons that could reach deep into Russian territory, the documents make clear that a year into the invasion, the United States is heavily entangled in almost everything else (The New York Times. April 9, 2023). 

 

Didn't we know that already - that the United States is heavily involved in the war in Ukraine with everything except combat troops on the ground? I mean, the Biden administration boasts of how much it's done for Ukraine. Republican members of Congress, including Kevin McCarthy today, demanded that the Biden administration do everything possible to ensure Ukraine wins this war. So, what exactly is it that these documents have revealed that is so bothersome to the United States? Nothing, really. I mean, you could look at them in a certain way and say, well, the United States doesn't want it known how they have special services stationed and deployed in Ukraine. And there are some documents that reveal how the U.S. government even spies on its own allies, something that was widely known during the Snowden report. You may recall that a major controversy erupted between the United States and Germany when it was reported – not as part of the Snowden files, but from a different source – that the United States is spying under Angela Merkel and Obama had to call her and apologize. And she compared the United States to the Stasi of East Germany, where she grew up. And there was a similar diplomatic scandal between the United States and Brazil – we did a report based on the Snowden materials – that the Obama administration was spying on the personal cell phone calls of Brazilian President Dilma Rousseff, the Brazilian oil company, Petrobras, all kinds of economic conferences. So, all of this has been known for a long time. I don't even feel like, let alone can point to anything specific, that makes this seem like the kind of leak, like the Pentagon Papers or the Snowden reporting or WikiLeaks that it is really bothersome to the United States in the sense that it would cause scandal and disrepute for American leaders. The Pentagon Papers show that the American government lied to the American people about the war in Vietnam for a decade, the Snowden reporting showed that the U.S. government was spying on its own citizenry in violation of the Constitution and the law, WikiLeaks showed all kinds of hidden war crimes. What do these documents show that is similar to what would really be upsetting and destabilizing to the United States? We keep hearing that they're like those other cases. We keep hearing from the U.S. government about how disturbing this leak is. I haven't really seen anything in these documents yet that would be comparable. 

Let's look at NBC News's version of events and of course, it's very similar because they're talking to the same people and serving the same agenda: “Leaked secret Pentagon documents lift the lid on U.S. spying and Russia's war in Ukraine.” NBC News obtained more than 50 of the leaked documents, many of them labeled ‘top secret’.” They say they obtained them. So, this is their story, this is their work – when they're all over the Internet, everyone can just get them. That's all they did was they obtained them not by having sources that gave them to them, but just by going on the Internet like everybody else and looking at them. They have four journalists on this story, including Kendall Jenner, notorious for serving the agenda of the CIA. And there you see the framing, which is very similar to The New York Times. This is what they say, 

 

Dozens of leaked Defense Department classified documents posted online reveal details of U.S. spying on Russia's war machine in Ukraine and secret assessments of Ukraine's combat power, as well as intelligence gathering on America's allies, including South Korea and Israel. NBC News obtained more than 50 of the leaked documents, many of them labeled top secret the highest level of classification. 

The documents first appeared online in March, and a senior U.S. official said Saturday that the government's “working theory” is that they are real, although some of them could have been altered (The New York Times. April 9, 2023). 

 

 

These are government documents taken right from the files of the Pentagon or the intelligence community, they can't know whether they're real. They only have a working theory that they are real. Of course, they can look in their own files and know.

 The full impact of the leak remains unclear [I would say so] but it could represent the most serious breach of U.S. intelligence secrets since a contractor for the NSA, Edward Snowden, passed on thousands of classified documents to journalists about U.S. electronic surveillance in 2013. In this case, the scale of the disclosure is much smaller [much, much smaller] involving dozens instead of thousands of documents. 

The documents include repeated references to information based on secret signals intelligence – electronic eavesdropping – a crucial pillar of U.S. intelligence gathering. A former U.S. intelligence official said the disclosure of some signals intelligence reporting about Russia and its spy agencies could cause significant damage if Moscow is able to cut off those sources of information (The New York Times. April 9, 2023). 



So, again, I see a lot of speculation about how this leak could be very damaging, but I don't see any specific revelations that are causing any problems for Joe Biden or the Biden White House or any leaders of America's foreign policy or its defense and intelligence community. Do you? I don't. 

 

That fact has led some in the region, in Ukraine, including some Ukrainian officials, some Russian officials, some prominent journalists in the region, to speculate that this might actually be a disinformation campaign by the United States to demoralize Russia, because a lot of it claims that Russia is suffering in the war, that Russia might even be losing the war. And by letting people in Russia, including potential troops, think this is a real leak from the United States government that shows intelligence that Russia is suffering grave losses in the war. It could be an attempt to demoralize the Russians. That is possibly not at all affirming that that's true. But I do, again, think it's odd that U.S. intelligence officials are so hellbent on claiming to the public these documents are real and that they're very damaging. They go right to their favorite reporters to do that – David Sanger of The New York Times. The media outlets always serve their agenda and write down whatever they tell them to say. As I just showed you, they did duly and loyally, but I don't actually see anything that is so disturbing. 

The Economist today has an article, “A leak of files could be America's worst intelligence breach in a decade.” You see, they're all using similar languages, but they have a paragraph that caught my attention because it supports that hypothesis that I just expressed that others in the region are claiming, namely, that it's actually intended to suggest that the Russians are losing the war, to embolden European governments to continue to provide aid and encouraged the American public to be willing to do so as well. This is what this paragraph says from The Economist: 

 

However, the leaked documents hardly paint a rosy view of Russia's armed forces, though it has devastated the eastern city of Bakhmut – the situation there was, “catastrophic” by February 28, according to Ukraine's military-intelligence chief, who was quoted in one report – its combat power is crippled. America's Defense Intelligence Agency reckons that 35,000 to 43,000 Russian troops have died, twice the number of Ukrainian casualties, with over 154,000 wounded, around 40 times the Ukrainian figure (the agency acknowledges that these numbers are ropey). Russia has lost more than 2,000 tanks and now fields only 419 “in theater”. Another slide says that Russia’s “grinding campaign of attrition” in the East is “heading toward a stalemate” and that the result is likely to be a “protracted war beyond 2023” (The New York Times. April 9, 2023). 

 

So, get ready. We're being told through these scary, unauthorized documents that Russia cannot win this war, that they're heading toward a stalemate and we should expect a “protracted war beyond 2023”. And that's what the Russians are to understand as well. 

I'm not at all suggesting this was a disinformation campaign planted by U.S. operatives. I'm generally not suggesting that. But I'm also not ready to buy into this narrative that the media is feeding us at the behest of the intelligence community, that these documents are confirmed to be authentic and are somehow so destabilizing to the U.S. government. Let's look at the ones that would most plausibly be described as damaging to the U.S. government. These are the ones the media is touting. 

Here is a document that purports to show that native countries have special forces deployed to specific parts of Ukraine, and it actually details the specific countries that have special forces in Ukraine, including the United States and purports to show their location. Again, we're not showing anything that hasn't been all over the Internet and that isn't being talked about in every journalistic outlet. The slide shows the number of NATO's special forces in Ukraine. And it says the U.S. has 14 14 Special forces; Germany, 50; France 15; Latvia 17; The Netherlands, one; for a total of 97 purportedly here to show their locations in terms of what their bases are in those native countries. And I guess that's something that is supposed to be incriminating to the United States, as though people didn't know that the U.S. likely has covert operations in Ukraine. Of course, they do. We've given them all kinds of weapons. They can't operate on their own. It's been repeatedly reported that we give them real-time intelligence on the ground that they use to target Russian forces and where to activate their air defenses. It would be almost impossible for us not to have U.S. special forces on the ground, in fact, early in the war, one of the reasons the Biden administration gave for why it wouldn't provide some of these weapons systems to Ukraine is because they couldn't be operated without having special forces on the ground to show them how to do it and help them do that. We've given those systems to them. They're in use in theater. So of course, everybody already knew that special forces were on the ground in Ukraine. 

So, this is the big revelation that's supposed to be so incriminating to the Biden administration. I would suggest, again, this leak is nothing of the kind. Virtually everyone in Washington – with the exception of seven dozen Republicans or so – supports this policy, as we're about to show you. Kevin McCarthy, the Republican House speaker, came out today and basically said exactly that we need to do everything we can to ensure Ukraine wins the war. No one in Washington is going to care that we have special forces in Ukraine. That's an open secret. This is not some shocking revelation of the kind of Daniel Ellsberg or WikiLeaks or Snowden. 

Here is a second document that suggests different ways that Israel might provide lethal aid to Ukraine. Israel has been very reluctant to involve itself in the war in Ukraine because their relations with Russia are an important part of its national security plan. They bomb Syria at will and need Russia not to do that. They have all kinds of relations with Russia and there are a lot of influential Russian Jews in Israel. They have ties to that country and they've really tried hard to stay out of this war because they don't want to alienate the Russians. They obviously can't side with Russia because they would alienate their biggest benefactor, the United States. So, neutrality has essentially been their only option. That's the one they more or less have chosen. And yet this suggests different ways Israel might be able to provide lethal arms to Ukraine, although it doesn't suggest that Israel has yet done so. These are just ways that the U.S. government might propose to Israel that they would do so. I don't really consider these documents particularly interesting, let alone incriminating at all. But those are the second set of ones that are being cited as proof that this is some sort of devastating leak. And then there is the document that purports to reflect the “status of the conflict as of March 1,” which is one of the things that they're so alarmed about, supposedly, that these documents are so new. March 1 is only 40 days ago, as The New York Times said over and over and tried to convince you that this was something so damaging. And here's what they're pointing to as the thing that is so damaging. 

This is one of the documents, I believe the only one, where the claim is being made that it was altered. The original document, according to the U.S. government, purported to show that the Ukrainians have lost double the number of soldiers as Russia, and that twice as many Ukrainian soldiers have been killed in this war as Russians. This document here, the version that ended up online, purports to show that, in fact, Ukraine has suffered five times more, killed in action. There you see it's something like 61 to 71,000 troops, whereas the Russians are estimated to have lost 16 to 17000. This is the document they claim has been altered, that the original one shows double the number of Ukrainian troops killed. Again, the fact that Ukraine is losing a huge number of people in this war is well known. In fact, Zelenskyy recently, again, had to increase the penalties for desertion because Ukrainian men actually don't want to fight in this war. They know they're being used as cannon fodder. So, while Kevin McCarthy and Joe Biden and Bill Kristol and David Frum feel proud and strong because we're fighting this glorious war, the people who are actually dying in the war and fighting in the war, as usual, don't actually want to be fighting and dying in this war. They're being forced to Zelenskyy. He's using a conscript army, not a volunteer one. So, if this, again, is the most incriminating document or the most destabilizing document, I just don't find this leak particularly threatening to the United States government. I find it very odd that they're insisting through their media outlets that they manipulate and control what it is. I can see how these documents might concern Russia and Russians and Russian troops by claiming that this whole thing is a stalemate. They're never going to win. They have to fight at least another year throughout 2023. I can see how that would be beneficial to convincing the American public to get ready for another $100 billion in authorizations to support this war beyond 2023. As this document says, I just don't see what is supposedly so scandalous about this from the perspective of the CIA, the Pentagon, or the Biden White House. And, in fact, there is no scandal being generated by these documents, even though we keep being told it's the most damaging leak in at least a decade. 

I mentioned earlier – I do want to show you this because it's just such a perfect example of how The New York Times lies all the time. I showed you that paragraph: this is how they described the Snowden reporting. This is what they wanted you to think about what Edward Snowden, the reporting from Edward Snowden revealed. This is David Sanger’s article:

 

When Edward Snowden swept up the NSA's secrets three years later, Americans suddenly discovered the scope of how the digital age had ushered in a remarkable new era of surveillance […] (The New York Times. April 9, 2023).

 

So, we learned about a remarkable new era of surveillance. What did they spy on? Here is what The New York Times says:

 

[…] enabling it to pierce China's telecommunication industry and to drill into Google’s servers overseas to pick up foreign communications (The New York Times. April 9, 2023). 

 

According to The New York Times, the only thing you learned from Snowden was that the NSA spied on China and its telecommunications infrastructure and that they were using Google to spy on foreign nationals and their communications. 

That is just an outright lie. Here's the very first article that I published in The Guardian that kicked off the Snowden report. And there you see the headline, NSA collecting phone records of millions of Verizon customers daily. That was on June 6, 2013. And the subheadline was – and this is one of the articles cited by the Pulitzer Committee – “Top secret court order requiring Verizon to hand over all call data shows the scale of domestic surveillance under Obama.” Isn't it odd that the New York Times, 10 years later, wants to rewrite the history of what the Snowden story showed by claiming it was only about how they spied on China and how they spied on foreign nationals and not what it was actually about, which is NSA spying on Americans? And it wasn't just that they were spying on Americans. The high court, the highest court to rule on it, ruled that spying was unconstitutional, that it violated your constitutional rights. “NSA surveillance exposed by Snowden was illegal, court rules seven years on.”– that from The Guardian, in 2020, reporting on a ruling from the Court of Appeals that that surveillance program I just showed you – that we exposed that domestic spying – was in violation of the Constitution. 

Here's what The Guardian reported about that ruling, “Seven years after the former NSA contractor Edward Snowden blew the whistle on the mass surveillance of American's telephone records, an Appeals court has found that that program was unlawful and that the U.S. intelligence leaders who publicly defended it were not telling the truth.” Why would the New York Times just lie about what this reporting showed? 

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Rep. Jim McGovern (D-MA) Falls Into Michael Tracey

You never know who you may run into at an inaugural ball...

Watch Michael Tracey's interview with Jim McGovern (D-MA) at the progressive, anti-war themed "Peace Ball":

00:06:13
Listen to this Article: Reflecting New U.S. Control of TikTok's Censorship, Our Report Criticizing Zelensky Was Deleted

For years, U.S. officials and their media allies accused Russia, China and Iran of tyranny for demanding censorship as a condition for Big Tech access. Now, the U.S. is doing the same to TikTok. Listen below.

Listen to this Article: Reflecting New U.S. Control of TikTok's Censorship, Our Report Criticizing Zelensky Was Deleted

So. . . X has been down for 7 hours, and now Rumble is down. I have Rumble up and running, but if I open another window & try to access it, I get a 502 Bad Gateway notice. Apparently, they don't want us following the peace negotiations for the proxy war in Ukraine -- or maybe they just don't want us discussing it.😉
Globalist scum are striking back, y'all!

March 10, 2025

Brilliant show with Jeffery Sachs, Measles and RFK smear campaign excellently cleared up by Jimmy and Team. Trump and Iran explained. So much truth tonight! Excellent show…..

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Glenn, Can you address the expansion of War on Terror policies to Americans and on American soil as it relates to Trump designating attacks on Tesla Sales Lots as domestic terrorism? Thanks.

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UK Pressures Apple to Break Encryption in Major Privacy Clash; How Dems Can Win Back the Working Class, with Former Bernie Sanders Campaign Manager Faiz Shakir
System Update #419

The following is an abridged transcript from System Update’s most recent episode. You can watch the full episode on Rumble or listen to it in podcast form on Apple, Spotify, or any other major podcast provider.

System Update is an independent show free to all viewers and listeners, but that wouldn’t be possible without our loyal supporters. To keep the show free for everyone, please consider joining our Locals, where we host our members-only aftershow, publish exclusive articles, release these transcripts, and so much more!

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I’m Lee Fang and I'm your host of System Update. Glenn is away this week. 

Today on System Update, we look at a variety of issues. We’re talking to Sean Vitka about the brewing fight between Apple and the British government. The British government – in order to comply with some of its new surveillance laws – has demanded that Apple break its very strong end-to-end encryption, changing Apple products really globally by providing a back door for the government. This is a demand that has been made by the FBI and other law enforcement agencies in the past. Now the British government is making it. We talk a little bit about what this means for users, what this means for encryption, and where the Trump administration stands on these issues. 

Later, I speak to Faiz Shakir. He previously managed Bernie Sanders' presidential campaign. He's advised a variety of Democratic politicians, he's worked in the new media space, currently advising a more perfect union, this new media startup that lifts up working-class voices. We talk about the Democratic Party where it stands today, why it's become a party that's associated with the elites, with the billionaire class, with the kind of professional managerial elite. We talk a little bit about how the party can reconnect with everyday Americans and kind of champion the old school democratic values of a strong social safety net, of meeting the basic needs for middle class and working-class Americans. 

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I want to welcome our guest, Sean Vitka. He is the executive Director of Demand Progress, he is a tireless advocate for privacy rights, and he's fought for a very long time on these issues, fought to reform the NSA, fought to reform the FBI; he's worked with members of Congress, he's worked in other venues in the policy arena.

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Lee Fang Reacts to Trump's Speech to Congress; Will DOGE Tackle Military Waste?
SYSTEM UPDATE #418

The following is an abridged transcript from System Update’s most recent episode. You can watch the full episode on Rumble or listen to it in podcast form on Apple, Spotify, or any other major podcast provider.

System Update is an independent show free to all viewers and listeners, but that wouldn’t be possible without our loyal supporters. To keep the show free for everyone, please consider joining our Locals, where we host our members-only aftershow, publish exclusive articles, release these transcripts, and so much more!

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Hey, this is Lee Fang. I'm your host of System Update, coming to you live from a very foggy San Francisco. Glenn Greenwald is out this week. 

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Last night, Trump gave his fifth State of the Union address. The president doubled down on tariffs, called for an end to the war in Ukraine, and touted his many executive orders, especially on DEI. And yes, there were moments of theatrics between Trump and the Democrats in the audience. 

But Trump did something special that I think deserves greater scrutiny. Unlike recent administrations, including his own, he dedicated a big part of his speech to his quest to root out wasteful spending. Let's watch a clip: 

Video. Donald Trump, Joint Address to Congress. March 4, 2025.

This is an important topic and one that really cuts across ideological and partisan lines. Or at least it should. Corruption is a soul-sucking force not only because it bloats government debt and deficits. We all suffer from waste – for every fraudulent contract, for every misallocated dollar, that's a loss of resources that could have been spent making America more educated, more secure, healthy, and prepared for the future. It's also a problem that fuels alienation. We lose faith in our elected officials, and our entire system of governance, when we can't count on basic accountability for how our tax dollars are spent. 

Where I live, in San Francisco, the government has one of the largest per capita local budgets in the world, yet problems never seem to go away, no matter how much money gets spent, housing gets more expensive, there are rampant overdose deaths, a growing homeless population despite the highest level of spending on homeless outreach programs in the nation, out of control property crime, empty storefronts, and programs that seem like a parody of municipal waste. 

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$1.7 million spent building a single toilet in Noe Valley? (The New York Times. January 24, 2024) $2 billion on a small expansion of the Muni subway, which was over budget, which blew through deadlines, and is now shutting down just after opening because of faulty construction? And the more the city spends, the more questions are raised as NGO and private contractors keep getting busted with their hands in the cookie jar – we've had repeated FBI raids of city workers and city contractors, scandal after scandal about missing funds and kickback schemes. The problems seem endless and given that so many Democratic leaders – from Nancy Pelosi to Kamala Harris to Gavin Newsom – got their political start in this city, it’s no wonder that many Americans question whether these Californians are fit to lead. (The San Francisco Standard. April 12, 2024.)

But as bad as the problems of San Francisco have become, the city pales in comparison to the federal government. The Government Accountability Office estimated that between 2018 and 2022, taxpayers lost somewhere between $233 billion and $521 billion due to fraud. 

Much of that money was lost during the pandemic, when a gusher of nearly $2 trillion went out with little accountability. Both Democrats and Republicans are to blame for the lack of oversight. 

But this is not a phenomenon that is limited to the emergency actions taken around COVID-19, not even close. The most pernicious, systemic fraud can be found throughout the system, especially in health care and defense spending. 

President Donald Trump, to his credit, has made it a focal point of his administration. His new Department of Government Efficiency, also known as DOGE, helmed in part by Elon Musk, has rapidly deployed in agency after agency, slashing private contracts and cutting the workforce. In particular, he has moved to scale down the entire USAID budget. 

Like a lot of the Trump administration, it's a mix of good and bad, of bold action that no other administration would take, alongside reckless actions that could do real harm. In many cases, they're missing the window of opportunity to go after real waste embedded in our system and have instead cut self-funding agencies like the CFPB. 

First, let's talk a little bit about the good around USAID cuts. I've reported for years on USAID money going to groups that work to overthrow foreign governments, undermine democratic elections, and indeed, censor even Americans over bogus claims of "misinformation." Congressional Democrats have claimed that USAID simply, in the words of Senator Chris Murphy, "supports freedom fighters" all over the globe. 

That reality, however, is much murkier. USAID has funded the Zinc Network, an anti-disinformation contractor that has targeted reporter Max Blumenthal, politician Vivek Ramaswamy, and Congressman Andy Biggs. USAID also funded a pesticide industry public relations effort known as v-Fluence, which dug up dirt about American food journalists such as Michael Pollan and Mark Bittman. But most troubling, the foreign assistance agency has financed a network of groups in Ukraine that have spread unsubstantiated claims that Americans in favor of peace are part of a dangerous misinformation network tied to the Kremlin. 

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The controversial agency provides backdoor ways for the American government to finance propaganda against American citizens. 

In Ukraine, USAID, through its contractor Internews, supports a network of social media-focused news outlets, including the New Voice of Ukraine, VoxUkraine, Detector Media, and the Institute of Mass Information. 

These news outlets have produced a series of videos and reports targeting economist Jeffrey Sachs, commentator Tucker Carlson, journalist Glenn Greenwald, and Professor John Mearsheimer, as figures within a "network of Russian propaganda".

(Lee Fang. Substack. February 4, 2025.)

In other words, American taxpayers have been funding a defamatory smear campaign against other American citizens, all in order to build out support for another forever war. 

But let's not forget, USAID also helps administer global health programs which have been widely touted for saving millions of lives. USAID helps administer PEPFAR, a program to distribute HIV AIDS medications, and the agency also funds the distribution of medicine and preventative care for malaria, polio, tuberculosis, and a variety of programs for maternal and child health care in developing countries. 

There's a pause in these programs as the administration reviews them, but it seems clear that there's a real risk that they may be cut. These programs might not be perfect, but they've generally impacted the world in profound and positive ways. Given how much other waste, fraud and abuse exists in our system, these global health programs should be a low priority, if not even a not a priority at all, when it comes to cuts. 

Where should we be cutting? To prepare the segment, I just looked back at my own reporting over the last decade. I've written for years about Pentagon waste that is far beyond the dollar figure for any silly sounding science grant or health program that was discussed last night at the State of the Union. 

In 2015, a military blimp broke free from its harness in suburban Maryland and dragged a cable through homes, causing destruction and property damage. Where did this thing come from? 

Video. WMAR-2 News. November 4, 2015

The project was called JLENS, or "Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System." Produced by Raytheon at nearly $3 billion cost to the Army, the project was intended to defend against cruise missiles. Theoretically, it was supposed to track objects over an area the size of Texas. But these blimps kept getting destroyed in weather events and faced chronic technical issues. Frankly, they didn't seem to serve any useful purpose. Finally, former Joint Chief of Staff James Cartwright rescued the program, and had it deployed to Afghanistan, where it again failed to provide any real protection to U.S. troops. But Cartwright, after securing the deal, joined Raytheon's board of directors, a job that paid him nearly $900,000 a year. Inevitably JLENS ended up in Maryland, where it eventually untethered and caused random destruction. 

This phenomenon is actually not unique. There are dozens of failed missile defense and radar systems that get re-funded year after year by Congress under the influence of defense lobbyists and the allure for politicians and staff to one day become defense lobbyists. 

Let's take a look at a few quick examples. 

Ground-Based Missile Defense System Has Serious Flaws, Experts Say

 

Despite billions of dollars invested in technology development, Coyle said, the basic architectures of both anti-missile systems “are in doubt because so many parts don’t work, don’t exist, or aren’t achievable.” (AAAS. June 19, 2013)

The government has spent $40 billion on the Ground-based Midcourse Defense system, managed by Raytheon and Boeing. That program, which was carefully with was carefully scripted with conditions in which the system operators knew the exact location, trajectory, speed, and dimensions of test missiles, even under those conditions, the GMD intercept systems failed to consistently produce any interceptions. 

There's the Kinetic Energy Interceptor, a project from North of Grumman in Raytheon, that also failed missile interception systems and was canceled after Navy officials found multiple problems, including its limited range. That program costs $1.7 billion. (Bloomberg. August 2, 2011.)

Or what about "The Multi-Object Kill Vehicle," developed by Raytheon and Lockheed Martin at a cost of $700 million. This program was canceled after military officials found that the anti-missile program faced insurmountable technical challenges. 

Or finally, the Sea-Based X-Band Radar, a floating radar designed to detect enemy missile launches, which failed after tests found that the radar had a limited field of vision and was highly vulnerable to corrosion at sea. The program, managed by Boeing and Raytheon, cost $2.2 billion. 

The Pentagon’s $10-billion bet gone bad Los Angeles Times

Trying to fashion a shield against a sneak missile attack, military planners gambled on costly projects that flopped, leaving a hole in U.S. homeland defense.

(Los Angeles Times. April 5, 2025.)

I could go on and on, just on the failed missile defense and radar systems. And I could spend another hour talking about faulty logistics systems, corrosive and fraudulent work on submarines that leave them completely ineffective and inoperable, billions of dollars of waste on MRAPs and tanks and the list keeps going on and on. Where's the watchdog? Who's keeping this accountable? 

There are a few champions in Congress – people like Rand Paul and Bernie Sanders, who consistently call out military waste, but they are in the minority. The defense industrial lobby largely keeps Congress and any administration, Democrat or Republican, completely subdued and subservient. 

We heard reports initially that DOGE was crossing the Potomac and planning to tackle military fraud and waste. But so far, we've only heard about canceled military DEI contracts. I have no problem cutting the DEI contracts. But let's be honest, that is small potatoes compared to the big fraudulent and wasteful contracts from the defense industrial base. 

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The Interview: Danielle Brian

Project on Government Oversight is a non-profit in Washington D.C. that investigates waste, fraud, and abuse. As a journalist, I've relied on POGO's investigations for a very long time. They've investigated Pentagon waste of all types, everything from the $500 hammer that went kind of viral back in the 1980s to more recent failed radar systems, the F-22, the F-35, a lot of issues around the Abrams tanks. They've also investigated other. Federal contracts, the waste, fraud and abuse that occurred during the pandemic and a lot of those multi-billion-dollar rescue packages. They've been around for 40 years doing really vital work and since the topic du jour in Washington is waste, fraud and abuse, I thought it would be great to talk to POGO today. 

Danielle Brian is the executive director of POGO. She's an award-winning journalist really doing cutting-edge work in this guard! 

Lee Fang:  Danielle, welcome to the program. 

Danielle Brian: Thanks so much, Lee. It's lovely to be here. 

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The Growing Threat of Corporate Censorship Under the Trump Administration; Former CFPB Director Rohit Chopra on Protecting Consumers, Debanking, and More
SYSTEM UPDATE #417

The following is an abridged transcript from System Update’s most recent episode. You can watch the full episode on Rumble or listen to it in podcast form on Apple, Spotify, or any other major podcast provider.

System Update is an independent show free to all viewers and listeners, but that wouldn’t be possible without our loyal supporters. To keep the show free for everyone, please consider joining our Locals, where we host our members-only aftershow, publish exclusive articles, release these transcripts, and so much more!

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This is Lee Fang. I'm your host of System Update, coming to you from San Francisco. Glenn's out this week, so I'm filling in. 

Donald Trump sailed into office, in part, by harnessing anger against censorship on private platforms. Political correctness, allegations of misinformation and hate speech, and other forms of political pressure have led to private platforms – such as social media networks and even banks – kicking users off, effectively silencing them from the public debate. But we're two months into the new administration. Do we have new protections for free speech rights and who is setting the agenda for the movement? 

For today's episode, I want to talk about the tension between political free speech rights and corporate speech rights. 


The best place to begin is just after the election. In a widely watched interview on Joe Rogan, last November, billionaire investor Mark Andreessen took on the mantle of the First Amendment and claimed that the Biden administration had “debanked in the past four years” many of his tech startup friends. “Tech founders had lost bank access,” he said, in the same way that the government had squeezed sex workers and drug dealers out of the system. “This was a form of censorship,” Andreessen said, and that explained his support for Donald Trump. Andreessen named the Consumer Financial Protection Bureau as the chief culprit for this pernicious form of silencing the political opposition. 

Video. Marc Andreessen, Joe Rogan Experience. November 26, 2024.

The cause was almost immediately embraced by President Donald Trump, whose supporters have been similarly silenced and kicked off social media platforms for years. Trump mentioned the issue repeatedly after the election and at the World Economic Forum in Davos. Let's watch a clip. 

Video. Donald Trump, World Economic Forum. January 23, 2025.

And who could blame him? Trump was himself removed from multiple social media platforms following the January 6 Capitol Riot, and his campaign faced government-influenced censorship during the 2020 election over misinformation allegations from a variety of partisan sources. So, from the conservative MAGA perspective, allegations around debanking certainly struck a nerve. It is seen as yet another government violation of our cherished speech rights – and the fight against debanking quickly became a rallying cry to root out Beltway malfeasance. 

But what is actually happening in the name of free speech? In short order, allies of the president have taken to a radical dismantling of financial watchdogs such as the CFPB. But a close look at the details of the policy upheaval over the last two months reveals an upside down series of events. We're not getting new protections for bank customers or users of social media concerned with censorship. The new administration has in fact made it easier for financial platforms to kick off users for political expression, including a push to repeal CFPB rules that were designed to protect free speech. The most immediate impact, though, is a coup for Andreessen's portfolio, with any hope of crypto regulations having evaporated almost overnight. Corporate interests, meanwhile, are citing the First Amendment to roll back regulations designed to protect the environment and everyday consumers. 

You may have missed it, just as the casual observer loses sight of the magician's card tucked underneath his sleeve. Andreesen is the latest to pull off a masterful sleight of hand in the free speech wars. His argument was little more than an elaborate hat trick designed to convince those enraged about censorship to join a niche campaign to unwind protections against fraud, specifically in the crypto industry, of which he is one of the biggest investors in Silicon Valley. 

According to reports, Andreessen Horowitz, his VC firm, has raised nearly $7.6 billion for its portfolio of blockchain and crypto related startups.

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The firm raised a $4.5 billion crypto fund in 2022, bringing its total amount raised for crypto and blockchain investments to $7.6 billion.

Andreessen conflated two unrelated issues for his own financial benefit. In a worrying global trend, a wide array of people – from Canadian truckers protesting the vaccine mandate, to Brexit supporters and Palestinian activists – have all been removed from financial platforms without due process in an attempt to silence them. 

Video. Bloomberg. February 17, 2022.

Unrelatedly, regulators concerned with keeping crypto startups in compliance with banking rules have taken steps to crack down. Some executives involved in the crypto trade have said that they have had difficulty opening traditional bank accounts simply because they were flagged by the system. The former is debanking; the latter is not. 

Consider the viewpoint of regulators. In just the last few years, crypto brokerages and emerging cryptocurrencies have imploded overnight and left ordinary customers with nothing. Regulators have also repeatedly cited crypto startups – including those backed by Andreessen – for a variety of alleged financial crimes, from undermining rules on money laundering and defrauding customers. Take, for example, Wise, formerly known as TransferWise, which is now publicly traded but was previously backed by Andreessen Horowitz, which funded it at a $58 million round. Wise was allegedly facilitating transfers to organizations with links to terrorist organizations. 

It's not entirely surprising that those entrusted with safeguarding the financial system view these schemes with extreme suspicion. 

One could argue, possibly with merit, that the regulators at times took steps too far in pressuring ordinary banks from taking on crypto clients. But even if the regulators were entirely wrong to remove and move aggressively against crypto and attempt to firewall the industry from traditional banks, these were actions taken to police business decisions – not the expression of political or religious views. This is a critical distinction with the type of debanking we've seen as a backdoor for controlling speech.

 Andreessen’s actions are hardly unique. As free speech has become a battleground for everyday Americans – waged on college campuses, over political correctness in the workplace, and on social media platforms – a simultaneous legal revolution has taken shape. Corporate actors seeking to eviscerate rules and restrictions on business conduct have attempted to conflate commercial action with free expression. In other words, the business elite is skillfully wielding the entire free speech debate into a sword for its own selfish purposes. 

For much of the last few decades, lawyers have poked and prodded, attempting to find new legal maneuver for classifying business behavior as protected speech. 

Corporations are weaponizing the First Amendment to argue that they do not have to comply with regulations they oppose. At issue here is the compelled-speech principle in the First Amendment, which states that the government cannot force people to say something they disagree with. In other words, virtually any regulation, they claim, is government compelled speech and a violation of free speech rights. 

Look at the airline industry. Southwest and Spirit Airlines have repeatedly litigated to vacate a regulation that requires airlines to display the full price of tickets, including hidden fees, and they claim this is an abrogation of airline free speech rights. 

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Similarly, private rating agencies responsible for falsely certifying toxic mortgage-backed securities in the lead up to the 2008 financial crisis. They similarly went to court, arguing that they were simply expressing their First Amendment protected speech and thus were exempt from fraud lawsuits. 

Now, these efforts have largely failed in court, but other similar arguments have increasingly prevailed. 

In the Supreme Court ruling Sorrell v. IMS Health Inc., Justice Anthony Kennedy struck down laws against health firms mining and selling patient data to pharmaceutical companies. The patient data laws, Kennedy wrote, were a violation of commercial speech laws and “burdened a form of protected expression.” Kennedy similarly knocked down public employee union dues, citing the First Amendment, as a form of coerced financial speech. 

And most famously, Kennedy wrote the majority opinion in Citizens United, the 2010 decision that allowed unlimited corporate and independent spending in elections. The court ruling ushered in our current era of billions of dollars of SuperPAC and dark money spending, all under the rubric of expanding the First Amendment. The decade of campaign finance laws unraveled, the century of campaign finance laws unraveled by the decision, Kennedy wrote, had unduly restricted “corporate political speech.”

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 The flood of challenges to corporate regulations and ethics laws and consumer safety rules under the banner of free speech continues at a swift pace. 

Corporate attorneys are threatening to overturn the few existing laws restricting robo-calls and automated texts using the First Amendment. 

Interest groups funded by Google and Facebook have claimed that antitrust enforcement would increase censorship and stifle free speech. 

And state bans on lobbyists giving gifts to legislators are continually under threat, as lawyers for special interests have argued that it is merely a form of free expression for influence peddlers and lobbyists to lavish politicians with luxury gifts like wine or luxury cars. 

Sixth Circuit Upholds Kentucky Campaign Contribution and Gift Restrictions 

 

Kentucky state legislators and their spouses may not accept gifts from state lobbyists and lobbyist principal. Lobbyists and lobbyist principals also may not provide gifts to state legislators, legislative candidates, and their families.

(Wiley. April 4, 2022.)

The clash may threaten some of the most consumer-friendly reforms promised by even this new administration. Processed food industry lobbyists have threatened to use the First Amendment and litigation to strike down the FDA's new updated guidelines on what foods can be labeled as healthy – a priority championed by recently appointed Secretary Robert F. Kennedy, Jr. Efforts to minimize pharmaceutical advertisements on television, another promise by President Trump, will also face a related court challenge over corporate free speech rights. 

None of these matters, however, relate to the most pressing issue that constitutes a free and open society. How do we petition our government for redress? How do we openly debate controversial rules? How do we guarantee religious freedom? Banks are still free to arbitrarily remove customers, college students continue to face coercion over free speech rights, and social media platforms still have virtually no limitations on censoring users over political expression. 

While corporations have harnessed an expansive view of the First Amendment to rapidly expand power, ordinary Americans are increasingly left on the sidelines, just as vulnerable to government and corporate censorship. 

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The Interview: Rohit Chopra

Our guest today is Rohit Chopra. He's a career consumer advocate. Earlier in his career, he helped prosecute the predatory for-profit college industry. He was later a commissioner on the Federal Trade Commission, where he supported investigations of the Big Tech companies. And over the last four years, he served as the director of the CFPB, where he returned billions of dollars back to consumers by cracking down on abuses from banks, fintech companies and other financial institutions. 

Lee Fang: Rohit, thank you so much for joining us today. 

Rohit Chopra: Thanks for having me.

Lee Fang: Well, I invited you to speak about free speech and these issues around debanking at the CFPB and we'll get to that in a second. But first, I was very interested in the talk you gave last year at the Federalist Society, where you talked a little bit about the disappearing distinction between government and private power. The question of who actually governs us. 

Can you talk about this tangled web of private and public regulations and how America's financial systems, in some ways, are heading in the direction of China's society, where just a few super powerful apps control our everyday commerce, that act as surveillance and our conduct. Please, can you just talk a little bit about that? 

Rohit Chopra: Well, one of the things that I always like to challenge everyone on is what are the threats to us living our life really to the fullest? And oftentimes you hear about political discourse about threats by government and, of course, we should check abuses and make sure our government is accountable. But more and more the rules that govern our lives are actually dictated by a small set of firms that dominate a particular industry, we're so now numb to agreeing to the terms and conditions and small font. When we click through on our phone or when we are dealing with our utility bill or telecom bill, so much of it is dictated for us. And I think that raises some questions about what is the way in which we create a free society. It's not just making sure government is accountable to people, it's also making sure that big private monopolies are also held to account. 

Lee Fang: You know, this administration harnessed very justified anger around censorship, you know, for a lot of conservative supporters for supporters of the president. They saw the campus free speech wars, they saw, you know, their own supporters, their own president kicked off social media platforms, they saw this coercion around speech around the pandemic and they have been, there's been justified anger around this crisis around debanking. We have seen it particularly in other Anglo countries, you know, the Canadian truckers who are protesting the COVID mandate, who were being removed from their bank accounts, you saw supporters of Brexit, who could elect, who lost access to bank accounts as well. And this, these concerns are creeping into our system. But, you know, with the Twitter files, we got a little bit of a look under the hood of where these decisions are coming from. But I think for everyday Americans, they have no idea. This is a black box. Are these private decisions? Are these government decisions? In many cases, this is the public square. Can you engage on social media? Can you engage in the banking system? Can you talk a little bit about what you were proposing at the CFPB to help protect against debanking, whether you're on the left or on the right. 

Rohit Chopra: Well, you know, when I was an FTC commissioner, one of the things that really struck me was how much Big Tech platforms were looking to enjoy all the liability shields under the law, while also controlling the flow of information. Usually, it was because they wanted to monetize user behavior and we've seen this. There was a big shift when all of a sudden Facebook changed from a timeline into an algorithmically curated news feed and it became more and more about monetizing behavior, driven by their business incentives. 

And I think it becomes really tricky that when you have these platforms where so much of the public discourse is taking place, to what extent should the corporate overlord be able to control what gets elevated and what gets suppressed and really to ask some questions and what are they responsible or accountable for? You know, we would never think that we should be able to cut off the power to a particular household or a particular business that is following the law. 

I think when it comes to cutting someone out of the banking system to take away their account and then really lead to blacklist them, and that's exactly what happens for a lot of low-income Americans. They get put on a list and they can't open a bank account anywhere. There has to be some real accountability around that. So, what we did was we proposed a set of policies to make it easier, one, to make sure that you actually can get a bank account, and two, to prohibit explicitly debanking someone based on whatever it may be, their religion, their political speech – things that have nothing really to do with the business of their payments or their transactions. 

So, it's interesting. We saw some real efforts to promote more access to banking, but time after time we see the large banks and their lobbies fight the CFPB and others to make sure that they have the power to turn off or turn on whoever they want. 

Lee Fang: You know, in the free speech wars, a lot gets conflated. We've seen the last few years the big airline industries, the big banks and many other big corporate actors champion the First Amendment. And they say, “We're using the First Amendment because we're fighting compelled government speech.” And what that means in practice is that they're getting rid of any regulations on hidden fees, on SEC regulations, on all kinds of forms of fraud that the government has attempted to fight. And they say that they're doing so under the mantle of the First Amendment, which, you know, they're fighting to protect. 

At the same time, you look at the rules that you've proposed at the CFPB on debanking, and who's fighting that? It's the banks. The banks went to the Northern District of Texas, and they were litigating to prevent your efforts to give regular consumers more rights. And it's not just on the debanking issue, it's the inoperability, your ability to move your money from bank to bank over and over again. It's actually these same corporate actors that claim to champion free speech and the First Amendment who are fighting to make sure that everyday Americans don't have these rights. Can you talk a little bit about that? 

Rohit Chopra: Yeah, I think that we see some of this being weaponized against individuals and their rights. I'm a big believer that regulation should really try to give more power to the consumer, to vote with their feet, to fire a company that is giving them bad service at bad pricing. 

I remember in the '90s, Lee, there was a regulation that the FCC put into place that said, “If you want to change your mobile carrier, you get to take your number with you.” Some people might remember you used to actually need to change your number to switch mobile carriers. We've been trying to do a lot of those initiatives to just make it easier to do business with someone you want to and to not feel trapped. But we do see all the time free speech and other legal protections for individuals weaponized by some of the most powerful players in the industry and I think in some ways they want to have it both ways.

In 2019, I had talked a lot about how the Big Tech companies' business model had transformed from like a passive bulletin board, like the old Prodigy and CompuServe, into something that is really algorithmic content curation and creation. That means that they too should have some accountability, but of course, abuse of section 230 and abuse of free speech rights has been something that has been used to evade accountability of basic disclosures and fair dealing.

Lee Fang: You know, on that point, I want to talk a little bit about what kind of set off a lot of the dominoes leading for the Trump administration to go after your former agency, the CFPB. You know, Mark Andreessen, very famous investor, venture capitalist here in Silicon Valley, the New York Times has described him as a lifelong Democrat who was so enraged by the anti-tech, pro-censorship policies of the Biden administration that he finally flips to being Republican, to supporting Trump. That's not quite true. You know, he was a big donor to Mitt Romney, big donor to other Republicans. This kind of switch happened, I think, actually a long time ago. But he was on Joe Rogan back in November. He really singled out your agency, claimed that you were debanking his crypto friends, his startup friends and because of his lifelong interest in free speech, that's why he's really against the CFPB and, you know, many others. Elon Musk and folks in the tech community who are supporting the president, they've really championed this cause, calling for abolishing the entire agency. 

Could you just talk a little bit about this controversy? Do you think there are some financial incentives at play? Mark Andreessen, of course, is a big investor in crypto businesses and other fintech businesses that you've investigated. Can you talk a little bit about that? 

Rohit Chopra: Well, it was interesting when he made that allegation, I want to always give grace. Maybe he slipped up. He was very quickly corrected by even those on the right to say that, of course, the CFPB has never been involved in trying to take away people's accounts. I think, if anything, it's been the total opposite. 

What I think he didn't talk about is the fact that one of the portfolio companies of his venture capital firm had gotten into trouble with the law multiple times under multiple directors of the agency crossing multiple administrations across party lines, including repeated offenses in the Military Lending Act. So, I get it that people don't want their companies that they invest in to be subject to law enforcement actions, but these are grownups. They take calculated risks, and they should accept when their bets go badly. 

So, look, I don't think it's the case at all that when it came to predatory lending or other violations of the law, it seems like they're not disputing the facts of that, but instead they're simply using an amorphous argument potentially to appeal to certain constituencies, and maybe they can use that to their gain. 

Lee Fang: You know, from a lot of Trump supporters and conservatives in Congress, there's a, I think a very justified concern that we don't want a government that's policing and kind of micromanaging every part of the private sector. You got to have certain freedoms to let commercial activity flourish. But, you know, I've listened to some of your interviews, and you've made a very important distinction around the difference between bank lending and bank deposits and how banks play just such a vital role in every community and the freedom not to be debanked that you fought for, is a real distinction that actually encourages greater liberty in our society. And I was wondering if you could just kind of elaborate on that. We can talk about that a little bit. 

Rohit Chopra: Yeah, I'm from outside Philadelphia, and it's fair to say it's not a very big agricultural area where I'm from. And so, if the local bank doesn't really have expertise or doesn't have the ability to lend to avocado farmers, I mean, there's no avocado farms there, and that seems reasonable when it comes to lending. But if there was an avocado farmer in the community, or maybe they retired there, I don't know, it does seem strange that the bank would not maybe accept their deposits. Because a deposit is really fundamentally different. It's a place where our laws have provided for people to store their money. And banks issue deposits, but you can really get your money back at any time. And because of deposit insurance and because of discount window lending, you know your money is always going to be there, and the bank can then use that to lend into the community. 

Similarly, there may be a rural bank who may not necessarily know how to issue loans for parking garages. So again, I do think there's a big difference about lending and deposit taking. There have been companies that say they have a tough time getting a loan for their project. I think sometimes they might say they're being debanked. I'm not sure that's always the case, but I do think we need much more affirmative rights for people, individuals, and families especially, to have access to a deposit account because when you do not have access to that account, you are functionally exiled for much of society and your commercial life. 

And I think banks right now are algorithmically closing lots and lots of bank accounts every day. You hear from some of these CEOs, they say “The government made us do it.” The government did not make them do it. They have made their own business decisions; they're often closing accounts that they don't want to deal with or that are not profitable or whatever their own boardroom and executives’ views are. So, I do think we have to put into place more affirmative rights for people to have access to those accounts, otherwise it could be weaponized against them. 

Lee Fang: I'd be remiss not to bring this up, especially given the news events for today, the financial markets and just every day we've seen the new administration dismiss or get rid of the investigations that you kind of initiated under your watch at the CFPB. Are we seeing some type of analogy of abolishing the police on financial regulators? We saw what happened in cities like San Francisco and Portland when there was kind or curtailing of police powers or police budgets where there was a lack of deterrence, where we did see a spike in violent crime and property crime and other forms of crime. And now we're seeing a kind of a mass rollback of financial policing powers. 

Are you concerned about the spillover effect? How this could affect financial stability? Could this fuel a new financial crisis? What happens when crypto or some of these more unregulated schemes seep into the traditional banking market? 

Rohit Chopra: Well, here's what happened today. The CFPB pardoned Wells Fargo, Bank of America, JP Morgan Chase for very significant allegations of wrongdoing around how fraud festered on Zelle. And they barely lift a finger to fix it. And here's what's interestingly, it's not unusual for cases to be litigated across administrations, and certainly they may be different policy views on how to settle or to continue prosecuting. What we're seeing is what amounts to pardons, where they're issuing a notice, no press release, no real notification to Capital One, to TransUnion and an ex-top executive, I mean real damning evidence of wrongdoing including where the litigation has proceeded and there has been findings or initial findings that the case should go forward and then it suddenly dropped, and it wasn't just cases that I brought, it was also cases brought by my Trump predecessor which is raising all sorts of questions, even in the business community about don't I just need to prove that I didn't do this, But apparently there is some other avenue where I can just get it wiped away and pardoned? And how do I get that? Who do I need to call? Who do I need to talk to? This is really not how law enforcement should work. This makes me really concerned that there is just an effort, as you said, for there to be no oversight and no detection of crime against consumers. 

Look, I've spent my job a lot in civil law enforcement, and I can tell you that when the law enforcers are not aggressively looking at consumer complaints and potential fraud. It just runs wild. We saw it in the opioid crisis, we saw it in the subprime mortgage crisis. Agencies looked the other way and our whole society paid the price for it. 

Lee Fang: On that note, that cheery note, I want to thank you so much for your time, Rohit, and thank you for the work you do. I really appreciate it. 

Rohit Chopra: Thanks so much, Lee. 

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