Secretary Michael R. Pompeo at the IISS Manama Dialogue

Michael R. Pompeo, Secretary of State

Washington, D.C.

SECRETARY POMPEO: Thank you so much. Thanks, John, and thanks for that introduction and the thoughtful words at the beginning of your remarks. And I do remember our dinner back when my life was a little less busy, and sadly, the set of issues that we were discussing that night – the challenge of Iran’s nuclear program – still remains in front of us.

I want to say greetings to His Majesty King Hamad, the Government of Bahrain, the IISS Manama Dialogue participants, esteemed ministers, and everybody joining all around the world both online and in person. Thanks for giving me this opportunity.

It is truly an honor to open the 16th Manama Dialogue – my first time speaking to this distinguished audience.

This forum’s ongoing success speaks enormous volumes about your institute’s reach and the powerful role that Bahrain plays in advancing peace and prosperity around the world. And I’ll come back to that topic.

Look, just this week, our two countries launched an important and comprehensive Strategic Dialogue. I was happy to chair that.

Today, John asked me to talk about a number of things, including the Trump administration’s approach to foreign policy more broadly, our achievements with our partners in the Middle East, which I believe are truly historic, and a few lessons learned perhaps as well.

And after that, we’ll have a good conversation, a robust Q&A.

I want to spend my opening moments by briefly laying out some bedrock principles that have guided the work of our administration.

I delivered a speech last year titled “A Foreign Policy From the Founding.” And that has a particular meaning in the United States, but it ought to have meaning to all of us today. I explained how this administration has anchored our efforts in the tradition of America, our first principles.

It was James Madison who wrote in Federalist 41 that “ is an avowed and essential object of Union,” of the American Union. Our founders understood that our government’s primary duty is to put America’s security first. We believe that’s true for every sovereign nation.

They also favored – our founders – a prudent and restrained foreign policy. They knew that in spite of the fact that our country was powerful, our resources weren’t infinite. But even when our nation was young, they also knew the true value of American leadership abroad and what we could accomplish for our people and for the world. And the Trump administration has tried to get that balance just right.

Look, our signature successes in the Middle East demonstrate what happens when we get it right.

Four years ago almost exactly, this administration saw that the true cause of conflict in the Middle East wasn’t the Israel-Palestinian conflict, but ISIS and the leadership in the Islamic Republic of Iran, the world’s largest state sponsor of terror.

We started our approach to the Middle East by leading the fight against ISIS. We had 82 partners, eliminating the caliphate in relatively short order.

This was a remarkable multilateral victory. It deserves more attention, in my judgment. We did this well, we did this right, and the world remains safer today as a result of that enormously good collective effort.

On Iran, we simply saw the regime for what it is: an anti-Western, anti-Semitic government that terrorizes its neighbors and its own people – period, full stop.

We learned the lessons from the prior administration’s appeasement. Sending pallets of cash didn’t change Iran’s behavior; rather, it funded and supercharged their terror campaigns.

We understood that a democratic Israel should be a partner, not a problem, for countries in the region.

And so we flipped the switch. We took a different approach. We rejected appeasement and put security and deterrence, not dialogue for dialogue’s sake, at the very front – a very realistic approach.

So what have we achieved at this point?

We got out of the JCPOA, which traded cash and immunity for Tehran’s malign behavior in exchange for unverifiable nuclear pledges that put us all at risk.

And with the help of our Gulf allies, our maximum pressure campaign isolated Iran diplomatically, militarily, and economically.

We’ve now leveled 77 rounds of sanctions targeting close to 1,500 individuals and entities. We have deprived the regime, according to their own words, of some $70 billion for terror.

Proxies like Hizballah and Hamas are now in deep austerity mode.

We’re standing with Iraqi prime minister, my friend Khadimi, in his push against the Iranian-backed militias, and with the people of Lebanon as they reject Hizballah’s corrupt rule.

In fact, we have seen multiple countries designate Hizballah as a terrorist organization and refuse landing rights to Mahan Air – Iran’s terror airline.

Look, we also took the regime’s chief terrorist, Qasem Soleimani, off the battlefield. It showed what a real red line looks like.

And we know too, we know our campaign is working because now the Iranians are desperately signaling their willingness to return to the negotiating table to get sanctions relief.

This effort in the Middle East isn’t just about countering Iran – as vital as that is.

American strength and resolve have given the leaders in the region the space and, importantly, the confidence to pursue peace and prosperity.

The signing of the Abraham Accords at the White House in September wouldn’t have been possible without the maximum pressure campaign and our active diplomacy with strong partners in the region.

We’re not done. We continue to build on that progress. Goods and people are now crisscrossing the region along entirely new routes.

It was an honor to be in Israel and greet my friend, Bahraini foreign minister, a few weeks ago. He and I together convened the first trilateral meeting of our governments, and I am confident that more countries will make the right decisions. They’ll do so because it’s the right decision for their people.

They (inaudible) follow the UAE and Bahrain and Sudan’s courageous examples in turning the “Three Nos” of the Khartoum Declaration in 1973 into the “Three Yeses” of the Abraham Accords. They will do so because it’s right for their people.

Four years ago, John, a lot of influential people in the world would have said that even hoping for these achievements was pure fantasy. But we’ve shown that the real fantasy was the bankrupt conventional wisdom that said there couldn’t be progress until the conflict between Israel and the Palestinians was solved. We could see it was nonsense, and we acted on the fact that we knew that reality would bring peace and prosperity. Our new approach continues to bring the possibility of a better future for all of the peoples in the Middle East, including the Palestinians.

And indeed, that’s the bar against which all future actions should be measured, not the failures of outdated policies – you talked about this, not the failures of outdated policies based on flawed assumptions, but based on the reality of our times.

This is the same fact, the same truth, of our policy towards the Chinese Communist Party. And while I won’t go into detail here, I hope to in – we have time together to talk. But for decades, the world had hoped that economic integration would lead to political liberalization – the China fantasy.

It didn’t happen. The Chinese Communist Party never wanted to behave like a normal regime, because at its core it’s not one. Like Iran, the party is a revolutionary relic. That’s why they work together so much.

So, again, we stepped back. We looked at reality. We remembered first principles and reorganized our policy around a security framework and simple common sense. The good news is we’re rallying other nations to our side, because this isn’t about America vs. China. It’s about freedom vs. tyranny. We all have a stake – including where you sit, in the Middle East. This is important to get right.

I want to close with one final thought on the Middle East that shows the good that happens when we get this balanced perfectly. As you said, I returned home from a trip to Israel and the Gulf just a couple weeks ago now. I was optimistic because of what we have managed to accomplish together. I was encouraged by the level of renewed hope I witnessed – especially among the younger generation. That’s as it should be, given the success of the Abraham Accords.

But there was another noteworthy agreement: an MOU that we signed with Bahrain in October. We agreed to combat “all forms of anti-Semitism, including anti-Zionism and the delegitimization of the State of Israel.”

This was the first time, the first time our Arab partners formally joined in this effort. It’s one way that the Abraham Accords are more than just a peace on paper or between palaces, but among people, people of the Book who share warmth and respect. The descendants of Ishmael are standing with the descendants of Isaac.

As an American, I am proud of that accomplishment. My country was founded on religious freedom and respect for unalienable rights, and those are ideals that we all should uphold. And we know this: When America stands confidently for our founding values – certain that they are exceptional, good, and true – our friends benefit enormously as well.

So let’s keep at it. Let’s not return to the fantasies, the fictions that emboldened our enemies, weakened our friends, and undermined our collective security. Let’s keep pressing Iran, standing with our allies, and building on our gains.

The last 48 months have proven that a foreign policy grounded on reality and our proudest traditions actually works for the benefit of all of us.

Thanks for having me.

May God bless you. And I look forward to our conversation. (Applause.)

MR CHIPMAN: Mr. Secretary, thank you very much, indeed. And I hope you can hear a round of applause in the room. We look forward to the conversation just now.

One little housekeeping point for the many people we have here gathered in Bahrain in this room and the neighboring room. If you want to seek the floor, and I hope a number will, just press your microphone. Your microphone will turn green. That doesn’t mean it’s on. It just means that you’re on my list. And I’ll call on you, and then your microphone will turn red, and then you’ll be able to speak and pose your question. And I’ve got three or four people already, but let me please perhaps take the clichéd privilege of the chair and ask Secretary Pompeo the first question.

You spoke a great deal about the challenges posed by the Islamic Republic of Iran. And last year, as I mentioned in my opening remarks, we produced a major 180-page dossier that analyzed all of the various groups with which Iran engages in the Middle East – dozens and dozens of different groups that are part of Iran’s influence networks.

And our judgment at the time, and the conclusion of the report, is that the Islamic Republic of Iran considers their influence networks in the Middle East as their most important strategic asset, possibly even more important than their nuclear program or their ballistic missile program. And the reason they consider their influence networks as their most important strategic asset is that it is those networks day in, week out, month by month, that actually change the effective balance of power in the Middle East.

And the implicit conclusion of that is that if it is their most prized strategic asset, it won’t be a strategic asset that will be easily negotiated away or easily sanctioned away. Might have to be fought. So if you agree with that analysis, what is the strategy to deal with Iran’s influence networks in the Middle East?

SECRETARY POMPEO: So I think their security framework, the leadership’s security framework, actually depends on all three of the things you described – their capacity to continue the capabilities, their nuclear capabilities; their capacity to project those weapon systems and threaten the Middle East with short-range and medium-range ballistic missiles and to continue to refine that program; and then you described it, their capacity to have influence operations, including not only militarily – that is, their military proxy forces – but their capacity to have influence through other means as well, political means as well.

So yes, we have to attack all three of those. This was one of the central shortcomings of the JCPOA. It got some verification. It got them to stop turning some centrifuges for a little while, but it underwrote this network of activity that you described, the very influence and proxies that you described.

The regime’s behavior must change. In May of 2018, I laid out 12 simple points, and I’ve seen in the international world I’ve been ridiculed just a bit for that and just a touch here at home too. I challenge anyone in the audience today to go back and read those 12 points and tell me which one of those you would find satisfactory if Norway or Sweden engaged in that behavior. All we’re asking is for the regime in Iran to behave like a normal nation, and that includes, John, to your point – it includes ceasing this malign activity that takes place through their external influence operations as well.

I couldn’t tell you if they’ll cede that voluntarily. We’ve seen in life before that things that one thought couldn’t be negotiated can when the stakes are right and the costs are sufficient. But in the event that they choose not to do that, in the event that they come to the table and are only willing to talk about turning off a few centrifuges for a few months or a few years, the world should find that unsatisfactory. The Middle East countries I assure you will find that unsatisfactory, whether it’s Iraq, whether it’s Israel, or whether the Gulf states. I would tell you that the good people of Syria who are now living in Turkey or in Lebanon who were forced to flee because the previous administration’s policies appeased the Syrian regime could tell you that appeasement of Iran will fail the people of their country as well.

We have an obligation, a collective obligation to ensure that we get this right. We ought not cut short a negotiation. We ought not reduce the driver that creates the need for the Iranians to negotiate and be satisfied with the simple idea that we’ll get some verification and the capacity for us to stare at some centrifuges and verify every day that they’re turned off for just a little while. Look, we’ve seen what happens. The moment they want to turn them back on, they can do it. Doesn’t take very long to spin up a centrifuge, and we see that. Today they’re at 3.67. They passed a law in the last 48 hours saying they were going to go to 20 percent enrichment.

This tells you that the failure of that agreement was centrally understood by the fact that they can continue to enrich inside of the country, and as long as they have that capacity, they hold the world hostage. We can’t permit that to happen. Our administration was clear about this. I hope the entire world will remain clear about the need to truly push back against the broad threat that the regime in Iran poses today, not only from its nuclear program and missile program, but as you spoke about, the other tools that they use to influence and to undermine other nations.

MR CHIPMAN: Superb. So we now have, as you can imagine, lots of questions from the floor and also coming in internationally. What I propose, Mr. Secretary, is I take three questions here very crisply and then you can answer those as a group. Could I first ask Giselle Khoury? Your microphone is on.

QUESTION: Yes, thank you. Good evening, Mr. Pompeo. I want to ask you about your outgoing administration is – why your administration does keep achieving the reconciliation between Saudi Arabia and Qatar?

MR CHIPMAN: Good, thank you very much for that. There’s a lot of questions actually coming in internationally on the Saudi-Qatar relationship, so that’s one to park and to come back to. And now I’d like to call on General Amos Yadlin from Israel, who’s with us here in Bahrain, partly as a consequence of the new diplomatic relations. Amos, your microphone is on.

QUESTION: Thank you, Mr. Secretary, for your speech, and even thank you more for the foreign policy you have led that brought finally a peace to the Middle East after 25 years that we didn’t pay attention to the fact that peace is not here. And this is a different peace, a warm peace.

I want to ask about the maximum pressure. How you assess your achievement in the maximum pressure? Since unfortunately we see the Iranians closer to the threshold with more enriched uranium and more centrifuges, and just today they announced that they will have another two centrifuges in the tunnel under the mountain in Fordow. What can you do in the 50 days that left to your administration and what is your recommendation for the next administration? Thank you.

MR CHIPMAN: Thank you, and also here in Bahrain, John Raine.

QUESTION: Thank you, Mr. Secretary, for your comments. I noted the connection that you made between your foreign security policy and the Founding. There’s another founding with which, of course, the U.S. is intimately connected, which is the founding of the post-World-War-II international order. You gave a very good example of successful collective action in the coalition which the U.S. led against Daesh. I just wanted to ask you, as you look to leaving office, what would you advise constitutes the elements of good collective security and multilateralism, with particular reference to this region?

MR CHIPMAN: And the fourth question, before we go back to the Secretary, I’ll read out because it’s from the editor of The National in the UAE, Mina al-Oraibi: “Mr. Secretary, does the drawdown of troops and diplomats in Baghdad not undercut the Iraqi Government and Mr. Khadhimi, who need U.S. support at this time? Won’t Iran be emboldened by this U.S. decision?”

So those are four questions for you, Mr. Secretary. Over to you.

SECRETARY POMPEO: I’ll try to do them, and at least two or three of them are actually connected, so great that they were presented in a group.

First, look, we are very hopeful that the dispute between the Saudis and the Qataris can be resolved. We hope so because we think that’s important for peace throughout the Middle East, but most importantly we think it’s the right thing for the people of each of those countries. We’re going to keep working to do our – what we can to facilitate conversations and dialogue where we can help. We’re anxious to be helpful.

I get asked all the time, “Well, when do you think this will end,” or “When do you think the next country will sign the Abraham Accords?” Goodness gracious, I am out of the prediction business in terms of timing. Yeah. It will – it’ll be resolved when the parties conclude that it’s in their best interest to do so, that it makes sense for their people. This is the central idea.

And you talked about going back to founding principles. Every country has its own founding traditions. John, you spoke to this as well. Each country has a history and a tradition and a culture which drives not only its domestic politics, but its place in the world as well, and how they interact with other nations. In this case, these two countries often have different histories, different reflections on the actual history, and the view from the United States is that this conflict is – it’s time to be resolved, that the region will be better off, more prosperous, and more peaceful when it is in fact resolved. And so my team, our team at the White House, Mr. Kushner, all of us have been engaged in trying to find a good, solid path forward for them which they can both be happy with, and which won’t be just a piece of paper or ephemeral or temporary, but in fact will be built on a foundation that is lasting.

Amos, you asked about the maximum pressure campaign and what we might do in the next 50 days. Look, I know everyone’s staring at January 20th. We’re just continuing to do the good work. We started as quickly as we could when we built it. I remember when I was the CIA director, when we first started our understanding of the Middle East, I remember reading from around the world that American sanctions alone wouldn’t deliver. And so we worked to try and build out coalitions that would join with us. In some cases, we were successful; in other cases, much less so. But the sanctions themselves have been incredibly effective. When I say effective, we can see that the regime in Iran is having to make difficult choices, difficult choices about whether to invest in their space program or underwrite militias that are in the southern part of Iraq. They’re having to make decisions about whether to work on a new technology, that it might have a dual use; in fact, it might have a valid civil use, but also might be connected to a nuclear weapons program, or potentially the technology used in a nuclear weapons program, or to underwrite the efforts to destabilize the government in Lebanon and prevent it from being reformed in a way that could deliver good outcomes for the Lebanese people.

So in that sense, it has worked tremendously. It has now put the Iranian leadership in a very difficult place where they’ve got to make these hard choices, and they are looking to see if they can’t convince the world that, “No, the Trump administration had this wrong, you should fund us, you should underwrite us, you should appease us, you should let us have money, you should let European companies come back into our country so that we can build out on all of these terror programs and these malign activities around the world.” I think it’s fundamentally the wrong direction.

You asked my wisdom for the next administration. They’re plenty smart enough; they’ll figure their way through this. What I would say is to the world, that can’t be the right direction. It cannot be that the right direction is to allow Iran to continue to buy and sell weapons again. It can’t be the case that the right direction is to allow Iran to have access to Western technology and Western capital again. Those are the things we have seen that destabilize the Middle East, that make it riskier for people, whether they’re in Egypt or Kuwait or in Bahrain – it makes them less able to live their lives in ways that aren’t under threat from this theocratic terrorist regime. That would – down that path lies what we have all seen: a real risk to the stability of the region.

The third question was an interesting one about – referenced our founding and the founding of the international order and the history of multilateralism. I recall giving a speech in Brussels early on in my time as Secretary of State. I believe I walked off stage without so much as two people clapping. It was because I went there that day to talk about our view of how multilateralism can work and when it ultimately fails the very mission that it is set out to do. And so we talked about how America was going to think about it.

There have been multilateral institutions which we have supported, expanded, made better. I would argue NATO is in a much better place today than it was four years ago. We had a NATO foreign ministers’ meeting this past week. I listened. I listened to a talk about the threats of the day, from space, from cyber, from China, the threats that continue from Russia. These were conversations that weren’t being had, and there are resources available for NATO today that wouldn’t have been had without the hard work that America did to convince every nation that it was in its own collective best interest to be part of that important, critical, transatlantic, multilateral institution.

There have been others that we just simply concluded wouldn’t work. I’ll give you a couple of examples. The World Health Organization – the World Health Organization miserably failed each and every one of the countries that you all represent and allowed the Chinese Communist Party to obfuscate what took place. It allowed it to cover up; it didn’t ring the bell. Its systems failed to prevent a virus from traveling from Wuhan around the world that has now undermined every economy and killed tens of thousands of people. This is tragic. This is a failure of a multilateral institution. There are three significant reforms that have taken place over the last dozens of years. They all failed. And so we concluded we were going to find another place, another way that the international community could come together to do pandemic prevention. This has to work. We want to be part of that. The United States wants to be part of that. But the World Health Organization became a political tool instead of a science-based effort to actually deliver security and safety from these pandemics across the world.

It’s how we think about it. Does it get real results? Does it deliver good outcomes? Is the organization fit for purpose? If it is, we’ll reinforce, we’ll invest our resources, and we will be a strong partner for every member of the multilateral institution. If it doesn’t, we should either fix it or forget it, and that’s how we have thought about this.

On final question, I’ll be brief about this. We’re trying to get our force posture right and our diplomatic posture right in Iraq and in Baghdad. We have been committed there for a long time. President Trump made two purposes very clear, two missions very clear. One is to continue the campaign to make sure that ISIS doesn’t raise its ugly head again, and second, to work to make sure that the leadership in Iraq was on the right mission, was focused on its independence and sovereignty and the freedom to be out from under the jackboot of the Iranian regime. I think the things that we have done there to date have made that more likely, more probable. We’ve welcomed all the efforts that the Gulf states have made to help Prime Minister Khadhimi be successful, and the United States is committed to trying to do that.

But Iraq’s leadership has a responsibility to my team, to our diplomatic team, and to those of you who have embassies in the Green Zone as well, to do the hard work to make sure that those diplomatic posts are safe and secure. And when they can do that, we’re happy to be present and to work. When they can’t, we’re going to do the right thing for our own security posture, all the while making sure that we are fully committed to the sovereignty and independence of Iraq.

MR CHIPMAN: That’s superb. With your permission, we’ll take three or four, a second round, and I’ll ask everybody to be crisper.

From Germany, Bastian Giegerich.

QUESTION: Thank you very much, Secretary, for your remarks. You spoke about China and the actions that countries in this region and in other regions should take to put up defenses against that expanding influence, which the director of national intelligence just – U.S. director of national intelligence just characterized as being ultimately about dominating the planet economically, militarily, and technologically. A lot of countries, when they take action, take up action to protect themselves – investment screening, supply chain diversification, those kinds of things. What would you advise countries in this region and elsewhere to do beyond those protective measures to put a counterpoint to that development that the U.S. has described? Thank you.

MR CHIPMAN: And from Korea, also here in Bahrain, Chung Min Lee.

QUESTION: Thank you, John. Mr. Secretary, thank you for your speech. My question is: President Trump emphasized that he wanted to end America’s long wars in Afghanistan, and I guess to a more limited degree in Syria. As you think about the most important military achievements of the Trump administration, how confident are you, Mr. Secretary, that the U.S. will continue to become the indispensable military power in the region and to project power – military power – effectively? Thank you.

MR CHIPMAN: And we have a young leadership program here, as I mentioned, and we’re delighted to have from Morocco Imru Al Qays Talha Jebril. Your microphone is on.

QUESTION: Hello. Thank you, Mr. Secretary of State. I would like to ask you a very brief and direct question: What is the current administration’s U.S. stance on Morocco’s recent skirmishes or clearing of the way of the Polisario protests in the Western Sahara region? And secondly, what is, in your personal capacity, your opinion in dealing with this issue? What diplomatic efforts would it take from the U.S. and other actors to actually deal with this issue and remove the security threat this issue has been creating for the long term? Thank you very much.

MR CHIPMAN: And finally, also on Afghanistan – and we take note that Afghanistan’s National Security Advisor Mohib will address the dialogue this weekend – your colleague Zalmay Khalilzad – this is a question asked by Antoine Leveque based in London – Zalmay welcomed two days ago a three-page agreement codifying rules and procedures for their negotiations on a political roadmap and a comprehensive ceasefire. How does this development newly help overcome structural challenges to the road to peace?

So that’s your gang of four questions to conclude, Mr. Secretary. Over to you.

SECRETARY POMPEO: All right. Let me – I’m going to take these in reverse order because my memory is short. Look, the agreement that was reached a couple days back setting the roadmap for the discussions was a preliminary agreement for sure, but an important one, a hurdle that had to be crossed in the same way that we had to cross a hurdle back in February when we got the parties together for the first time. It was a truly historic moment where the Afghans came together and agreed that they would sit across the table from each other and begin to resolve what is, depending on your start point, 20 or 40 years of conflict.

I think those of us who have been at this for a while recognize that these things take time to resolve. There’s a deep-seated history. There’s lots of challenges, different views, not just two – we talk about the Afghan Government or the Taliban – this is a diverse society, and we’re working to bring every element of that society to the table so that all of those voices are heard. To get this right, to get this process right enabled us to move on to the substantive conversation. We know that that substantive conversation will take some time.

We also know that today that the violence that’s taking place in Afghanistan is unacceptably high, and we need to begin to have this conversation against a backdrop of much lower violence levels. I am optimistic. I was in Doha, goodness, now two weeks ago or three weeks ago, met with the Afghan negotiating team and the Taliban negotiating team. In each case, they demonstrated a willingness, they had lots of different views, making clear that this was going to be something that would have to be a hard-fought negotiation. But to a person, I made clear to them that the violence levels can’t continue while these negotiations go on. It won’t work. And so we’ve asked all of them to stand back and indeed stand down. In that respect, I hope we can begin to start to address some of the front-end issues about a ceasefire here before too long.

The next to last question was about Morocco. Well look, we’ve put a statement about Morocco – our policy hasn’t frankly changed very much from where we were six months or even 24 months ago. We hope that the Moroccans can find a way through this. We, just like in most conflicts in the world – our view is that it ought not be resolved through military means but through a set of conversations that can deliver good outcomes.

The third – the second question was about power projection and about our military power projection in particular. Yes, President Trump’s made very clear he wants fewer American young men and women in harm’s way. That’s good if you’re a secretary of state, because it says that he’s counting on you to figure out how to resolve these problems. We know that we can do this when we have a strong military. We’ve built it up. We spent $750 billion a year to build out the world’s finest military with the most capable set of structures to deliver good outcomes for when we need to do that.

But President Trump’s made clear he wants us to have to do that less often, and so the burden falls to those of us in the diplomatic world to go deliver that. It doesn’t mean we’re not going to have – we have our – our Fifth Fleet’s there in Bahrain, we’ve got forces throughout many places in the Middle East. I think those things are enduring and important. We’ve got forces in Saudi Arabia. We’ve got lots of activities all throughout not just the Middle East, but in the Indian Ocean and – these are important places, important places for America to be so that our deterrence posture can do what President Trump described, which is to put fewer of our young men and women in actual harm’s way.

And then the first question, and where I’ll wrap up, is this idea of what should Middle Eastern countries do about China. I don’t think it’s any different for countries in the Middle East than it is for any of the rest of us. Every country has deep commercial ties inside of China, and that has blinded us, including the United States for decades, to the malign activity of the Chinese Communist Party. This is not accidental. This is deeply intentional on the part of the Chinese Communist Party’s leadership. But as the DNI said yesterday, his basis for believing China’s desire for hegemony is that this is what the Chinese Communist Party says, it’s what they tell us.

So every country needs to be mindful of that. So we can’t have Chinese equipment in our telecommunications infrastructure. We can’t have the Chinese showing up with a commercial veneer for PLA – as PLA cover entities. We have to take those risks seriously and that may well mean that China will threaten certain commercial activities in your country. Walk through the fire, get it right, keep your people safe, do not let the Chinese Communist Party come to treat your country as a vassal state.

MR CHIPMAN: Mr. Secretary, thank you very much for these opening remarks. Thank you even more for the conversation in which you’ve so vigorously engaged. And thank you even more for getting our 16th Manama Dialogue on to such a great start. Many thanks.

SECRETARY POMPEO: Thank you, sir. You all have – hope you have a great rest of your conference.

MR CHIPMAN: Thank you. (Applause.)

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    According to Federal Aviation Administration (FAA) data for 2017 through 2019, over 50 helicopter operators conducted approximately 88,000 helicopter flights within 30 miles of Ronald Reagan Washington National Airport (D.C. area), though limited data on noise from these flights exist. According to operators, these flights supported various missions (see table below). While the number of flights has decreased slightly over the 3 years reviewed, it is unknown whether there has been a change in helicopter noise in the area. For example, most stakeholders do not collect noise data, and existing studies of helicopter noise in the area are limited. D.C. area airspace constraints—such as lower maximum altitudes near urban areas—combined with proximity to frequently traveled helicopter routes and operational factors may affect the noise heard by residents. Federal Aviation Administration (FAA)-Reported Helicopter Flights Conducted in the Washington, D.C. Area by Operator Mission, 2017–2019 Operator mission Number of flights Military 32,890 (37.4 percent) Air medical 18,322 (20.9 percent) Other aviation activity 13,977 (15.9 percent)a State and local law enforcement 12,861 (14.6 percent) Federal law enforcement and emergency support 5,497 (6.3 percent) News 4,298 (4.9 percent) Source: GAO analysis of FAA data. | GAO-21-200 Note: In this table, we refer to the Washington, D.C. area as including the area within 30 miles of Ronald Reagan Washington National Airport. aIncludes 666 flights for which FAA could not identify an operator or mission based on available historical records. FAA and operators reported taking steps to address public concerns about helicopter noise in the D.C. area. FAA receives and responds to complaints on helicopter noise from the public through its Noise Ombudsman and has recently developed online forms that improve FAA's ability to identify and respond to helicopter noise issues. Operators reported using FAA-recommended practices, such as flying at maximum altitudes and limiting night flights, to address helicopter noise in the D.C. area, but such practices are likely not feasible for operators with military, law enforcement, or air medical evacuation missions. FAA's and operators' approach to addressing these issues in the D.C. area is impeded because they do not consistently or fully share the information needed to do so. According to nearly all the operators we interviewed, FAA has not communicated with operators about helicopter noise or forwarded complaints to them. Similarly, operators often receive noise complaints from the public—some complaints are not directed to the correct operator—but do not typically share these complaints with FAA. As a result, operators have not consistently responded to residents' inquiries about helicopter noise and activity. By developing a mechanism for FAA and operators to share information, FAA could help improve responses to individual helicopter noise concerns and determine what additional strategies, if any, are needed to further address helicopter noise. Helicopter noise can potentially expose members of the public to a variety of negative effects, ranging from annoyance to more serious medical issues. FAA is responsible for managing navigable U.S. airspace and regulating noise from civil helicopter operations. Residents of the D.C. area have raised concerns about the number of helicopter flights and the resulting noise. GAO was asked to review issues related to helicopter flights and noise within the D.C. area. Among its objectives, this report examines: (1) what is known about helicopter flights and noise from flights in the D.C. area, and (2) the extent to which FAA and helicopter operators have taken action to address helicopter noise in the D.C. area. GAO reviewed statutes, regulations, policies, and documents on helicopter noise. GAO analyzed (1) available data on helicopter operations and noise in the D.C. area for 2017 through 2019, and (2) FAA's approach to responding to helicopter complaints. GAO also interviewed FAA officials; representatives from 18 D.C. area helicopter operators, selected based on operator type and number of flights; and 10 local communities, selected based on factors including geography and stakeholder recommendations. GAO recommends that FAA develop a mechanism to exchange helicopter noise information with operators in the D.C. area. FAA agreed with GAO's recommendation. For more information, contact Heather Krause at (202) 512-2834 or KrauseH@gao.gov.
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  • Chinese Energy Company, U.S. Oil & Gas Affiliate and Chinese National Indicted for Theft of Trade Secrets
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    A federal grand jury has returned an indictment alleging corporate entities conspired to steal technology from a Houston-area oil & gas manufacturer, announced U.S. Attorney Ryan K. Patrick and Assistant Attorney General John C. Demers of the Department of Justice’s National Security Division. Jason Energy Technologies Co. (JET) in Yantai, People’s Republic of China; Jason Oil and Gas Equipment LLC (JOG) USA and Chinese national Lei Gao aka Jason Gao, 45, are charged with conspiracy, theft of trade secrets and attempted theft of trade secrets. 
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    A Somerset County, New Jersey, man admitted today that he concealed his attempts to provide material support to Hamas, Assistant Attorney General John C. Demers of the U.S. Department of Justice’s National Security Division, U.S. Attorney Craig Carpenito, FBI-Newark Special Agent in Charge George M. Crouch Jr., and FBI Assistant Director for Counterterrorism Jill Sanborn announced.
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  • Thirteen Charged in Federal Court Following Riot at the United States Capitol
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  • Husband Sentenced to 188 Months in Prison for Human Trafficking Convictions Related to Forced Labor of Foreign Nationals
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    The Justice Department today announced that former Stockton, California resident Satish Kartan, 46, was sentenced today to188 months in prison for forced labor violations. In addition, U.S. District Judge Morrison C. England Jr. ordered $15,657 be paid in restitution to three victims, in part to cover their back wages and other losses.
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    Rodney Allen, 43, of Beaufort, South Carolina, was sentenced today in federal court in Jacksonville, Florida, to 24 months in prison. Allen previously pleaded guilty to one count of intimidating and interfering with the employees of an abortion clinic by making a bomb threat and one count of making false statements to a Special Agent with the FBI.
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    A complaint and arrest warrant were unsealed today in federal court in Brooklyn charging Xinjiang Jin, also known as “Julien Jin,” with conspiracy to commit interstate harassment and unlawful conspiracy to transfer a means of identification.  Jin, an employee of a U.S.-based telecommunications company (Company-1) who was based in the People’s Republic of China (PRC), allegedly participated in a scheme to disrupt a series of meetings in May and June 2020 held to commemorate the June 4, 1989 Tiananmen Square massacre in the PRC.  The meetings were conducted using a videoconferencing program provided by Company-1, and were organized and hosted by U.S-based individuals, including individuals residing in the Eastern District of New York.  Jin is not in U.S. custody.
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  • Anti-Money Laundering: FinCEN Should Enhance Procedures for Implementing and Evaluating Geographic Targeting Orders
    In U.S GAO News
    To combat money laundering, the Financial Crimes Enforcement Network (FinCEN) issued a geographic targeting order (GTO) in 2016 that required title insurers to report information on certain all-cash purchases of residential real estate by legal entities in specified areas. According to FinCEN analysis, the use of legal entities to purchase high-value real estate, particularly in certain U.S. cities, was prone to abuse. FinCEN determined that imposing the real estate GTO reporting requirements on title insurers would cover a large number of transactions without unnecessary complexity. FinCEN renewed the real estate GTO multiple times—finding it has yielded information useful to law enforcement investigations—and periodically expanded the types of monetary instruments and geographic areas included and decreased the price reporting threshold (see fig.). Issuance and Renewals of the Real Estate Geographic Targeting Order (GTO) Unlike prior GTOs, which FinCEN officials said they issued at the request of and with the involvement of law enforcement agencies, FinCEN issued the real estate GTO on its own initiative. Thus, FinCEN had to take the lead in implementing and evaluating the GTO but lacked detailed documented procedures to help direct the GTO's implementation and evaluation—contributing to oversight, outreach, and evaluation weaknesses. For example, FinCEN did not begin examining its first title insurer for compliance until more than 3 years after issuing the GTO and did not assess whether insurers were filing all required reports. Similarly, while FinCEN initially coordinated with some law enforcement agencies, it did not implement a systematic approach for outreach to all potentially relevant law enforcement agencies until more than 2 years after issuing the GTO. FinCEN also has not yet completed an evaluation of the GTO to determine whether it should address money laundering risks in residential real estate through a regulatory tool more permanent than the GTO, such as a rulemaking. Strengthening its procedures for self-initiated GTOs should help FinCEN more effectively and efficiently implement and manage them as an anti-money laundering tool. Bad actors seeking to launder money can use legal entities, such as shell companies, to buy real estate without a loan. Doing so potentially can conceal the identities of bad actors and avoid banks' anti-money laundering programs. To better understand this risk and help law enforcement investigate money laundering, FinCEN issued its real estate GTO. Although GTOs are limited to 180 days, they may be renewed if FinCEN finds reasonable grounds for doing so. Because of concerns about the potential for bad actors to exploit regulatory gaps to launder money through the U.S. real estate market, GAO was asked to review FinCEN's real estate GTO. This report examines, among other things, the GTO's issuance and renewal, oversight, outreach, and evaluation. GAO reviewed FinCEN's records, orders, and policies and procedures; laws and regulations; and studies and other related materials. GAO also interviewed FinCEN, federal law enforcement agencies, and other stakeholders. GAO recommends that FinCEN provide additional direction for self-initiated GTOs, including how to plan for oversight, outreach, and evaluation. FinCEN concurred with GAO's recommendation. For more information, contact Michael E. Clements, (202) 512-8678, ClementsM@gao.gov.
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  • Federal Tactical Teams: Characteristics, Training, Deployments, and Inventory
    In U.S GAO News
    Within the executive branch, GAO identified 25 federal tactical teams, and the characteristics of these teams varied. The 25 tactical teams were across 18 agencies, such as agencies within the Departments of Homeland Security, Justice, Energy, and the Interior. The number of reported team members per team ranged from two to 1,099. More than half (16 of 25) of the teams reported that they are composed of team members working for the team on a collateral basis. Most teams (17 of 25) had multiple units across various locations. Photos of Federal Tactical Teams in Action Tactical teams generally followed a similar training process, with initial training, specialty training, and ongoing training requirements. Nearly all teams (24 of 25) reported that new team members complete an initial tactical training course, which ranged from 1 week to 10 months. For example, potential new team members of the Federal Bureau of Investigation's Hostage Rescue Team complete a 10-month initial training that includes courses on firearms; helicopter operations; and surveillance, among others. Nearly all teams (24 of 25) reported offering specialized training to some team members, such as in sniper operations and breaching. Nearly all teams (24 of 25) also reported having ongoing training requirements, ranging from 40 hours per year to over 400 hours per year. The number and types of deployments varied across the 25 tactical teams for fiscal years 2015 through 2019. The number of reported deployments per tactical team during this time period ranged from 0 to over 5,000. Teams conducted different types of deployments, but some types were common among teams, such as: supporting operations of other law enforcement entities, such as other federal, state, and local law enforcement (16 of 25); providing protection details for high-profile individuals (15 of 25); responding to or providing security at civil disturbances, such as protests (13 of 25); and serving high-risk search and arrest warrants (11 of 25). Four teams reported that they had deployed in response to the Coronavirus 2019 (COVID-19) pandemic, and 16 teams reported deployments related to nationwide civil unrest and protests in May and June 2020. Tactical teams reported having various types of firearms, tactical equipment, and tactical vehicles in their inventories. Team members generally have a standard set of firearms (e.g., a pistol, a backup pistol, and a rifle), but some may also have specialized firearms (e.g., a shotgun designed to breach doors). Tactical teams also have a variety of tactical equipment, such as night vision devices to maintain surveillance of suspects or tactical robots that can go into locations to obtain audio and video information when team members cannot safely enter those locations. Tactical teams may also have tactical vehicles, such as manned aircraft (e.g., helicopters) and armored vehicles to patrol locations. The figure below identifies the number of tactical teams that reported having such items in their inventories. Number of Federal Tactical Teams That Reported Having Firearms, Tactical Equipment, and Tactical Vehicles in Their Inventories, as of January 2020 Appendix I of the report provides details on each of the 25 tactical teams, such as each team's mission; staffing; types and frequency of training; and number and types of deployments from fiscal years 2015 through 2019. This is a public version of a sensitive report issued in August 2020. Information deemed to be sensitive by the agencies in this review, such as the quantities of firearms, tactical equipment, and tactical vehicles in team inventories, has been omitted from this report. Many federal agencies employ law enforcement officers to carry out the agency's law enforcement mission and maintain the security of federal property, employees, and the public. Some of these agencies have specialized law enforcement teams—referred to as federal tactical teams in this report—whose members are selected, trained, equipped, and assigned to prevent and resolve critical incidents involving a public safety threat that their agency's traditional law enforcement may not otherwise have the capability to resolve. This report provides information on the (1) federal tactical teams and their characteristics; (2) training team members receive; (3) deployments of such teams from fiscal years 2015 through 2019; and (4) firearms, tactical equipment, and tactical vehicles in team inventories, as of January 2020. To identify federal tactical teams, GAO contacted executive branch agencies with at least 50 federal law enforcement officers. GAO administered a standardized questionnaire and data collection instrument to the identified teams to gather information on team missions, staffing, training, deployments, and inventories. GAO reviewed team documents, such as standard operating procedures, and interviewed agency officials. GAO collected descriptive information on reported deployments as of June 2020 in response to COVID-19 and nationwide civil unrest, which were ongoing during the review. GAO incorporated agency technical comments as appropriate. For more information, contact Gretta L. 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  • Disaster Recovery: COVID-19 Pandemic Intensifies Disaster Recovery Challenges for K-12 Schools
    In U.S GAO News
    Local education officials in natural disaster-affected areas told us the Coronavirus Disease 2019 (COVID-19) pandemic has exacerbated mental health issues and contributed to lost instructional time, staff burnout, delays in recovery projects, and financial strain in their communities. These officials explained that after the natural disaster, restoring students' mental health was a top priority. Many local education officials said that the services needed to treat trauma and other disaster-related mental health issues were not readily available in their areas, and some noted that providing mental health services has been especially difficult during the pandemic. For example, one official said that because half of her students live in poverty, they usually access mental health services through the school, and were cut off from those services during the pandemic. Some local education officials said they were also particularly worried about the effects of the pandemic on their low-income and other at-risk students, noting that these students are especially vulnerable to learning loss. The COVID-19 pandemic has also affected districts by slowing progress on some disaster recovery projects. For example, an official in a district affected by wildfire said that an effort to restore running water to damaged school buildings was delayed due the pandemic. The U.S. Department of Education (Education) supported school recovery efforts by awarding nearly $1.4 billion to assist schools in over 30 states and U.S. territories with recovery from presidentially-declared major disasters occurring between 2017 and 2019, although some local education officials reported difficulty in using these grant funds during the pandemic. Education provided this funding through the Immediate Aid to Restart School Operations (Restart) and the Project School Emergency Response to Violence grant programs, among others. Local education officials from several districts and counties said that they are using or planning to use Education disaster grants to provide mental health services to students and cover other costs associated with re-opening, such as additional transportation services, but that during the pandemic this was sometimes challenging. For example, officials in two counties said that timeframes for using Restart funds, which expire after 2 years, were too short for long-term recovery needs such as mental health services, particularly with the compounding effects of the pandemic. Education officials said that grantees may request waivers to extend the end dates of these grants and that as of October 2020, no Restart grantees who experienced a 2018 disaster had done so. With regard to oversight, Education officials said they paused on-site monitoring efforts for recent disaster grants as a result of the pandemic, but have continued to hold quarterly phone calls with Restart grantees. These grantees have noted some challenges related to the grant program but have not discussed specific technical assistance needs, according to Education officials. More than 260 presidentially-declared major disasters have occurred since 2017, affecting every state and several U.S. territories, according to the Federal Emergency Management Agency (FEMA). Many of these natural disasters have had devastating effects, including rendering K-12 school facilities unusable for lengthy periods of time. These schools are now experiencing the compounding challenge of recovering from natural disasters while managing effects of the COVID-19 pandemic. Social distancing practices and building closures are meant to keep staff and students safe, but may also complicate recovery efforts for disaster-affected districts. The Additional Supplemental Appropriations for Disaster Relief Act of 2019 provided funds for GAO to audit issues related to presidentially-declared major disasters that occurred in 2018. We reviewed (1) how the COVID-19 pandemic has affected schools recovering from recent natural disasters; and (2) support Education has provided to help school recover from recent natural disasters and how the COVID-19 pandemic has affected schools' use of these resources. We interviewed 29 local education officials representing over 50 school districts in California, Commonwealth of the Northern Mariana Islands, Florida, and Hawaii, which were selected because they were affected by a diverse set of major natural disasters in 2018 that occurred in a mix of populated and less-populated areas. In addition, through a national school superintendents association, we convened a discussion group of superintendents who have experienced natural disasters and mentor other affected districts. Finally, we reviewed federal guidance and interviewed Education officials. For more information, contact Jacqueline M. Nowicki at (617) 788-0580 or nowickij@gao.gov.
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  • Climate Change: A Climate Migration Pilot Program Could Enhance the Nation’s Resilience and Reduce Federal Fiscal Exposure
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    GAO identified few communities in the United States that have considered climate migration as a resilience strategy, and two—Newtok, Alaska, and Isle de Jean Charles, Louisiana—that moved forward with relocation. Newtok, for example, faced imminent danger from shoreline erosion due to thawing permafrost and storm surge (see figure). Literature and experts suggest that many more communities will need to consider relocating in coming decades. Shoreline Erosion at Newtok, Alaska, from July 2007 to October 2019. Federal programs provide limited support to climate migration efforts because they are designed to address other priorities, according to literature GAO reviewed and interviews with stakeholders and federal officials. Federal programs generally are not designed to address the scale and complexity of community relocation and generally fund acquisition of properties at high risk of damage from disasters in response to a specific event such as a hurricane. Unclear federal leadership is the key challenge to climate migration as a resilience strategy. Because no federal agency has the authority to lead federal assistance for climate migration, support for climate migration efforts has been provided on an ad hoc basis. For example, it has taken over 30 years to begin relocating Newtok and more than 20 years for Isle de Jean Charles, in part because no federal entity has the authority to coordinate assistance, according to stakeholders in Alaska and Louisiana. These and other communities will rely on post-disaster assistance if no action is taken beforehand—this increases federal fiscal exposure. Risk management best practices and GAO's 2019 Disaster Resilience Framework suggest that federal agencies should manage such risks before a disaster hits. A well-designed climate migration pilot program that is based on project management best practices could improve federal institutional capability. For example, the interagency National Mitigation Investment Strategy—the national strategy to improve resilience to disasters—recommends that federal agencies use pilot programs to demonstrate the value of resilience projects. As GAO reported in October 2019, a strategic and iterative risk-informed approach for identifying and prioritizing climate resilience projects could help target federal resources to the nation's most significant climate risks. A climate migration pilot program could be a key part of this approach, enhancing the nation's climate resilience and reducing federal fiscal exposure. According to the 13-agency United States Global Change Research Program, relocation due to climate change will be unavoidable in some coastal areas in all but the very lowest sea level rise projections. One way to reduce the risks to these communities is to improve their climate resilience by planning and preparing for potential hazards related to climate change such as sea level rise. Climate migration—the preemptive movement of people and property away from areas experiencing severe impacts—is one way to improve climate resilience. GAO was asked to review federal support for climate migration. This report examines (1) the use of climate migration as a resilience strategy; (2) federal support for climate migration; and (3) key challenges to climate migration and how the federal government can address them. GAO conducted a literature review of over 52 sources and interviewed 12 climate resilience experts. In addition, GAO selected and interviewed 46 stakeholders in four communities that have considered relocation: Newtok, Alaska; Santa Rosa, California; Isle de Jean Charles, Louisiana; and Smith Island, Maryland. Congress should consider establishing a pilot program with clear federal leadership to identify and provide assistance to communities that express affirmative interest in relocation as a resilience strategy. The Departments of Homeland Security and Housing and Urban Development provided technical comments that GAO incorporated as appropriate. For more information, contact Alfredo Gómez at (202) 512-3841 or gomezj@gao.gov.
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    In GAO's opinion, the Internal Revenue Service's (IRS) fiscal years 2020 and 2019 financial statements are fairly presented in all material respects, and although certain controls could be improved, IRS maintained, in all material respects, effective internal control over financial reporting as of September 30, 2020. GAO's tests of IRS's compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements detected no reportable instances of noncompliance in fiscal year 2020. Limitations in the financial systems IRS uses to account for federal taxes receivable and other unpaid assessment balances, as well as other control deficiencies that led to errors in taxpayer accounts, continued to exist during fiscal year 2020.These control deficiencies affect IRS's ability to produce reliable financial statements without using significant compensating procedures. In addition, unresolved information system control deficiencies from prior audits, along with application and general control deficiencies that GAO identified in IRS's information systems in fiscal year 2020, placed IRS systems and financial and taxpayer data at risk of inappropriate and undetected use, modification, or disclosure. IRS continues to take steps to improve internal controls in these areas. However, the remaining deficiencies are significant enough to merit the attention of those charged with governance of IRS and therefore represent continuing significant deficiencies in internal control over financial reporting related to (1) unpaid assessments and (2) financial reporting systems. Continued management attention is essential to fully addressing these significant deficiencies. The CARES Act, enacted in March 2020, and other COVID-19 pandemic relief laws contained a number of tax relief provisions to address financial stress caused by the COVID-19 pandemic. For example, the Economic Impact Payments provisions in the CARES Act provided for direct payments for eligible individuals to be implemented through the tax code. Implementing the provisions related to these Economic Impact Payment required extensive IRS work, and resulted in it issuing approximately $275 billion in payments as of September 30, 2020. IRS faced difficulties in issuing these payments as rapidly as possible, such as in identifying eligible recipients, preventing improper payments, and combating fraud based on identity theft. IRS discusses the challenges in carrying out its responsibilities under the CARES Act in its unaudited Management's Discussion and Analysis, which is included with the financial statements. As part of monitoring and oversight of the federal government's efforts to prepare for, respond to, and recover from the COVID-19 pandemic, GAO has issued a number of reports on federal agencies' implementation of the CARES Act and other COVID-19 pandemic relief laws, including reports providing information on, and recommendations to strengthen, IRS's implementation of the tax-related provisions. In accordance with the authority conferred by the Chief Financial Officers Act of 1990, as amended, GAO annually audits IRS's financial statements to determine whether (1) the financial statements are fairly presented and (2) IRS management maintained effective internal control over financial reporting. GAO also tests IRS's compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements. IRS's tax collection activities are significant to overall federal receipts, and the effectiveness of its financial management is of substantial interest to Congress and the nation's taxpayers. Based on prior financial statement audits, GAO made numerous recommendations to IRS to address internal control deficiencies. GAO will continue to monitor, and will report separately, on IRS's progress in implementing prior recommendations that remain open. Consistent with past practice, GAO will also be separately reporting on the new internal control deficiencies identified in this year's audit and providing IRS recommendations for corrective actions to address them. In commenting on a draft of this report, IRS stated that it continues its efforts to improve its financial systems controls. For more information, contact Cheryl E. Clark at (202) 512-3406 or clarkce@gao.gov.
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  • Critical Infrastructure Protection: Treasury Needs to Improve Tracking of Financial Sector Cybersecurity Risk Mitigation Efforts
    In U.S GAO News
    The federal government has long identified the financial services sector as a critical component of the nation's infrastructure. The sector includes commercial banks, securities brokers and dealers, and providers of the key financial systems and services that support these functions. Altogether, the sector holds about $108 trillion in assets and faces a variety of cybersecurity-related risks. Key risks include (1) an increase in access to financial data through information technology service providers and supply chain partners; (2) a growth in sophistication of malware—software meant to do harm—and (3) an increase in interconnectivity via networks, the cloud, and mobile applications. Cyberattacks that exploit risks can occur against either public or private components of the sector. For example, in February 2016, hackers were able to install malware on the Bangladesh Central Bank's system through a service provider, which then directed the Federal Reserve Bank of New York to transfer money to accounts in other Asian countries. This attack resulted in the theft of approximately $81 million. Several industry groups and firms are taking steps to enhance the security and resilience of the U.S. financial services sector through a broad range of cyber risk mitigation efforts. These efforts include coordinating within the sector through groups such as the Financial Services Sector Coordinating Council and the Financial Systemic Analysis and Resilience Center, conducting industrywide incident response exercises, sharing threat and vulnerability information, developing and providing guidance in conducting risk assessments, and offering cybersecurity-related training. The Departments of Homeland Security and the Treasury and federal financial regulators are also taking multiple steps to support cybersecurity and resilience through risk mitigation efforts. Among other things, federal agencies provide cybersecurity expertise and conduct simulation exercises related to cyber incident response and recovery. Treasury, as the designated lead agency for the financial sector, plays a key role in supporting many of the efforts to enhance the sector's cybersecurity and resiliency. For example, Treasury's Assistant Secretary for Financial Institutions serves as the chair of the committee of government agencies with sector responsibilities, and Treasury coordinates federal agency efforts to improve the sector's cybersecurity and related communications. However, Treasury does not track efforts or prioritize them according to goals established by the sector for enhancing cybersecurity and resiliency. Treasury also has not fully implemented GAO's previous recommendation to establish metrics related to the value and results of the sector's risk mitigation efforts. Further, the 2016 sector-specific plan, which is intended to direct sector activities, does not identify ways to measure sector progress and is out of date. Among other things, the sector-specific plan lacks information on sector-related requirements laid out in the 2019 National Cyber Strategy Implementation Plan . Unless more widespread and detailed tracking and prioritization of efforts occurs according to the goals laid out in the sector-specific plan, the sector could be insufficiently prepared to deal with cyber-related risks, such as those caused by increased access to data by third parties. For decades, the federal government has taken steps to protect the nation's critical infrastructures. The financial services sector's reliance on information technology makes it a leading target for cyber-based attacks. Recent high-profile breaches at commercial entities have heightened concerns that data are not being adequately protected. Under the Comptroller General's authority, GAO initiated this review to (1) describe the key cyber-related risks facing the financial sector; (2) describe steps the financial services industry is taking to share information on and address risks to its sector; and (3) assess steps federal agencies are taking to enhance the security and resilience of the sector. GAO analyzed relevant reports and information to determine risks and mitigation efforts and compared agency efforts against federal policies and guidance. GAO also interviewed officials at 16 private sector entities, two self-regulatory organizations, and eight federal agencies, including the Department of the Treasury. GAO is making recommendations to Treasury to track and prioritize the sector's cyber risk mitigation efforts, and to update the sector's plan with metrics for measuring progress and information on how sector efforts will meet sector goals and requirements, including those contained within the National Cyber Strategy Implementation Plan. Treasury generally agreed with the recommendations. For more information, contact Nick Marinos at (202) 512-9342 or marinosn@gao.gov or Michael Clements at (202) 512-7763 or ClementsM@gao.gov.
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  • Conflict Minerals: Actions Needed to Assess Progress Addressing Armed Groups’ Exploitation of Minerals
    In U.S GAO News
    The Securities and Exchange Commission (SEC) disclosure rule broadly requires that certain companies submit a filing that describes their efforts to conduct a reasonable country-of-origin inquiry (RCOI), and depending on the preliminary determination, perform due diligence to determine the source and chain of custody of their conflict minerals—gold and specific ores for tantalum, tin, and tungsten. After conducting RCOI, an estimated 50 percent of companies filing in 2019 reported preliminary determinations as to whether the conflict minerals came from the Democratic Republic of the Congo (DRC) or adjoining countries (covered countries) or from scrap or recycled sources. The percentage of companies able to make such preliminary determinations increased significantly between 2014 and 2015, and has since leveled off, as shown below. Source of Conflict Minerals in Products as Determined by Companies' Reasonable Country-of-Origin Inquiries, Reporting Years 2014-2019 However, fewer companies reported such determinations after conducting due diligence. In 2019, an estimated 85 percent of companies made preliminary determinations that required them to then perform due diligence. Of those companies, an estimated 17 percent determined that the minerals came from covered countries—a significantly lower percentage of companies making that determination than the 37 percent reported in 2017 or the 35 percent in 2018. Since 2014, companies have noted various challenges they face in making such determinations; however, SEC staff told GAO that they did not know what factors contributed to the decrease in 2019. We will examine this issue during our future review. While the Department of State (State) and U.S. Agency for International Development (USAID) have implemented the U.S. conflict minerals strategy since 2011, they have not established performance indicators for all of the strategic objectives. For example, they have no such indicators for the objectives of strengthening regional and international efforts and promoting due diligence and responsible trade through public outreach. Without performance indicators, the agencies cannot comprehensively assess their progress toward achieving these objectives or the overall goal of addressing armed groups' exploitation of conflict minerals. Armed groups in eastern DRC continue to commit severe human rights abuses and to profit from the exploitation of “conflict minerals,” according to State. Provisions in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act required, among other things, that State, USAID, and the SEC take certain actions to promote peace and security. In 2011, State created the U.S. conflict minerals strategy in consultation with USAID to address armed groups' exploitation of conflict minerals. In 2012, the SEC also promulgated regulations containing disclosure and reporting requirements for companies that use conflict minerals from covered countries. The act also included a provision for GAO to annually assess, among other things, the SEC regulations' effectiveness in promoting peace and security. In this report, GAO examines, among other things, how companies responded to the SEC conflict minerals disclosure rule when filing in 2019 and the extent to which State and USAID assessed progress toward the U.S. conflict minerals strategy's objectives and goal. GAO analyzed a generalizable sample of SEC filings, reviewed documents, and interviewed U.S. officials State, in consultation with USAID, should develop performance indicators for assessing progress toward the strategic objectives and goal of the U.S. conflict minerals strategy. State and USAID concurred with GAO's recommendation. For more information, contact Kimberly M. Gianopoulos at (202) 512-8612 or gianopoulosk@gao.gov.
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    In Crime News
    Strachans SA in Liquidation pleaded guilty yesterday to conspiring with U.S. taxpayers and others to hide income and assets in offshore entities and bank accounts from the IRS, and was sentenced in accordance with the guilty plea, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Nicola T. Hanna, and Chief James Lee of the Internal Revenue Service, Criminal Investigation (IRS-CI).
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  • Six Additional Individuals Indicted On Antitrust Charges In Ongoing Broiler Chicken Investigation
    In Crime News
    A federal grand jury in the U.S. District Court in Denver, Colorado, returned a superseding indictment charging six additional defendants for their roles in a previously indicted conspiracy to fix prices and rig bids for broiler chicken products, and containing additional allegations against the previously charged defendants in the same conspiracy, the Department of Justice announced today.  The superseding indictment also charges one defendant with making false statements and obstruction of justice. 
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  • GAO Audits Involving DOD: Status of Efforts to Schedule and Hold Timely Entrance Conferences
    In U.S GAO News
    GAO began 37 new audits that involved the Department of Defense (DOD) in the fourth quarter of fiscal year 2020. Of GAO's 37 requested entrance conferences for those audits, DOD scheduled 33 within 14 days and held 34 within 30 days of GAO's notification. Entrance conferences are initial meetings between agency officials and GAO staff that allow GAO to communicate its audit objectives and enable agencies to assign key personnel to support the audit work. The four entrance conferences that were scheduled more than 14 days after notification were scheduled late due to either difficulties in identifying a primary action officer or aligning the schedules of GAO and DOD officials. The three entrance conferences that were held more than 30 days after notification were scheduled late due to difficulties in aligning the schedules of GAO and DOD officials. GAO's agency protocols govern GAO's relationships with audited agencies. These protocols assist GAO in scheduling entrance conferences with key agency officials within 14 days of their receiving notice of a new audit. The ability of the Congress to conduct effective oversight of federal agencies is enhanced through the timely completion of GAO audits. In past years, DOD experienced difficulty meeting the protocol target for the timely facilitation of entrance conferences. In Senate Report 116-48 accompanying a bill for the National Defense Authorization Act for Fiscal Year 2020, the Senate Armed Services Committee included a provision for GAO to review DOD's scheduling and holding of entrance conferences. In this report, GAO evaluates the extent to which DOD scheduled entrance conferences within 14 days of receiving notice of a new audit, consistent with GAO's agency protocols, and held those conferences within 30 days. This is the final of four quarterly reports that GAO will produce on this topic for fiscal year 2020. In the first three quarterly reports, GAO found that DOD had improved its ability to meet the protocol target. GAO analyzed data on GAO audits involving DOD and initiated in the fourth quarter of fiscal year 2020 (July 1, 2020, through September 30, 2020). Specifically, GAO identified the number of notification letters requesting entrance conferences that it sent to DOD during that time period. GAO determined the number of days between when DOD received GAO's notification letter for each new audit and when DOD scheduled the entrance conference and assessed whether DOD scheduled entrance conferences within 14 days of notification, which is the time frame identified in GAO's agency protocols. GAO also determined the date that each requested entrance conference was held by collecting this information from the GAO team conducting each audit and assessed whether DOD held entrance conferences for new audits within 30 days of notification, which was the time frame identified in the mandate for this review. For more information, contact Elizabeth Field at (202) 512-2775 or Fielde1@gao.gov.
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    The Department of Justice today announced a settlement in which DISH Network LLC (DISH) will pay $126 million in civil penalties to the United States for placing millions of telemarketing calls in violation of the FTC’s Telemarketing Sales Rule (TSR). This settlement represents the largest civil penalty ever paid to resolve telemarketing violations under the FTC Act, and exceeds the total penalties paid to the government by all prior violators of the TSR. DISH will also pay a combined $84 million to four states for violations of the Telephone Consumer Protection Act, for a total settlement of $210 million.
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  • Climate Change: USAID Is Taking Steps to Increase Projects’ Resilience, but Could Improve Reporting of Adaptation Funding
    In U.S GAO News
    The U.S. Agency for International Development (USAID) provided at least $810 million to directly and indirectly support climate adaptation from fiscal years 2014 through 2018—the latest available data at the time of GAO's analysis. However, USAID ended new funding for programming activities that directly address climate adaptation (i.e., direct funding) in fiscal year 2017 in part due to a shift in administration priorities, according to agency officials. However, following a congressional directive in the fiscal year 2020 appropriations act, USAID restored direct funding for adaptation programming. GAO found that USAID did not consistently report all funding data for activities that indirectly addressed climate adaptation, which does not align with expectations in foreign assistance guidance and internal controls standards. USAID's direct adaptation assistance had the primary program goal of enhancing resilience and reducing vulnerability. For example, in the Philippines, a USAID activity assisted communities in preparing for extreme weather events by developing maps of potential hazards to aid in evacuation planning. USAID attributed funding that indirectly addresses climate adaptation assistance (i.e., indirect funding) from programs with other goals such as agriculture, where priorities include supporting food production and distribution. For example, in Guatemala, a USAID agricultural activity worked with farmers to transition to crops with greater economic benefits that are also drought tolerant. However, not all missions with indirect adaptation assistance reported these funding data and reporting has varied, in part, because the agency has not clearly communicated the expectation to do so. Without addressing this issue, USAID risks providing incomplete and inconsistent data to Congress and others. A Community Leader Shows the Hazard Map Prepared as Part of a U.S. Agency for International Development Project to Help Adapt to Climate Change in the Philippines Since October 2016, USAID has generally required projects and activities to conduct climate risk management, which is the process of assessing and managing the effects of climate change. USAID requires documentation of this process and GAO's review found 95 percent compliance for USAID's priority countries for adaption funding. USAID has experienced some challenges with its initial implementation of climate risk management and is assessing these challenges and identifying improvements. For example, mission officials said that some technical staff lack expertise to do climate risk management and that their environment offices had a small number of staff to provide assistance. To help staff conduct climate risk management, USAID is building staff capacity through trainings and is in the process of evaluating implementation of the policy and whether it requires any changes, among other efforts. USAID is the primary U.S. government agency helping countries adapt to the effects of climate change. USAID has provided this assistance through activities that directly address climate adaptation as well as indirectly through activities that received funding for other purposes, such as agriculture, but which also support climate adaptation goals. GAO was asked to review issues related to U.S. foreign assistance for climate adaptation. For USAID, this report examines (1) funding the agency provided for climate adaptation assistance in fiscal years 2014 through 2018, and (2) how climate risk management is implemented. GAO analyzed funding data and documentation of agency activities and climate risk management; interviewed agency and project officials; and conducted fieldwork in three countries receiving adaptation assistance—Guatemala, the Philippines, and Uganda. GAO selected these countries based on the amount of funding they received for climate adaptation activities, geographic diversity, and variety of observed and projected climate effects, among other factors. GAO recommends that USAID communicate to its missions and bureaus that they are expected to report all data on funding that indirectly addresses climate adaptation. USAID agreed with the recommendation and outlined a number of steps the agency plans to take to improve the reporting of these data. For more information, contact David Gootnick at (202) 512-3149 or gootnickd@gao.gov.
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  • Sexual Harassment: VA Needs to Better Protect Employees
    In U.S GAO News
    According to data from the most recent Merit Systems Protection Board (MSPB) survey in 2016, an estimated 22 percent of Department of Veterans Affairs (VA) employees, and 14 percent of federal employees overall, experienced some form of sexual harassment in the workplace from mid-2014 through mid-2016. VA has policies to prevent and address sexual harassment in the workplace, but some aspects of the policies and of the complaint processes may hinder those efforts. Misalignment of Equal Employment Opportunity (EEO) Director position: VA's EEO Director oversees both the EEO complaint process, which includes addressing sexual harassment complaints, and general personnel functions. According to the Equal Employment Opportunity Commission (EEOC), this dual role does not adhere to one of its key directives and creates a potential conflict of interest when handling EEO issues. Incomplete or outdated policies and information: VA has an overarching policy for its efforts to prevent and address sexual harassment of its employees. However, some additional policies and information documents are not consistent with VA's overarching policy, are outdated, or are missing information. For example, they may not include all options employees have for reporting sexual harassment, which could result in confusion among employees and managers. Delayed finalization of Harassment Prevention Program (HPP): VA has not formally approved the directive or the implementing guidance for its 4-year-old HPP, which seeks to prevent harassment and address it before it becomes unlawful. Lack of formal approval could limit the program's effectiveness. VA uses complaint data to understand the extent of sexual harassment at the agency, but such data are incomplete. For example, VA compiles information on allegations made through the EEO process and HPP, but does not require managers who receive complaints to report them to VA centrally. As a result, VA is not aware of all sexual harassment allegations across the agency. Without these data, VA may miss opportunities to better track prevalence and to improve its efforts to prevent and address sexual harassment. VA provides training for all employees and managers, but the required training does not have in-depth information on identifying and addressing sexual harassment and does not mention HPP. Some facilities within VA's administrations supplement the training, but providing additional information is not mandatory. Requiring additional training on sexual harassment could improve VA employees' knowledge of the agency's policies and help prevent and address sexual harassment. In June 2020, GAO issued a report entitled Sexual Harassment: Inconsistent and Incomplete Policies and Information Hinder VA's Efforts to Protect Employees (GAO-20-387). This testimony summarizes the findings and recommendations from that report, including (1) the extent to which VA has policies to prevent and address sexual harassment of VA employees, (2) how available data inform VA about sexual harassment of its employees, and (3) training VA provides to employees on preventing and addressing sexual harassment. GAO made seven recommendations in its June 2020 report, including that VA ensure its EEO Director position is not responsible for personnel functions; require managers to report all sexual harassment complaints centrally; and require additional employee training. VA concurred with all but the EEO Director position recommendation, which GAO continues to believe is warranted. For more information, contact Cindy S. Brown Barnes at (202) 512-7215 or brownbarnesc@gao.gov.
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