Supplemental Nutrition Assistance Program (SNAP_

The Pronk Pops Show 1323, September 19, 2019, Story 1: Zuckerberg Meets President Trump and Senators — Regulating Big Tech Data Cartel: Internet Regulation, Data Privacy, Bias, Censorship, Filtering, Shadow Banning, Cryptocurrency, Control — Breakup The Big Tech Data Cartel or Threat of Changing Big Tech Platforms to Publishers — Internet Bill of Rights — Videos –Story 2: Department of Justice Charges Health Care Fraud Against 58 Individuals — Pill Mills — Videos —

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Pronk Pops Show 1323 September 19 2019

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Pronk Pops Show 1282 June 27, 2019

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Pronk Pops Show 1280 June 25, 2019

Pronk Pops Show 1279 June 24, 2019

Pronk Pops Show 1278 June 20, 2019 

Pronk Pops Show 1277 June 19, 2019

Pronk Pops Show 1276 June 18, 2019

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Pronk Pops Show 1274 June 13, 2019

Pronk Pops Show 1273 June 12, 2019

Pronk Pops Show 1272 June 11, 2019

Pronk Pops Show 1271 June 10, 2019

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Pronk Pops Show 1269 June 5, 2019

Pronk Pops Show 1268 June 3, 2019

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Story 1: Zuckerberg Meets President Trump and Senators — Regulating Big Tech Data Cartel: Internet Regulation, Data Privacy, Bias, Censorship, Filtering, Shadow Banning, Cryptocurrency, Control — Breakup The Big Tech Data Cartel or Threat of Changing Big Tech Platforms to Publishers — Internet Bill of Rights — Videos —

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Mark Zuckerberg meets with senators on Captiol Hill

Mark Zuckerberg doesn’t answer questions between meetings with senators

President Trump says his meeting with Mark Zuckerberg ‘constructive’

Facebook CEO Mark Zuckerberg meets with President Trump and other lawmakers

Is Facebook a Publisher or a Platform? A Definitive Answer…

Google, Twitter and Facebook – Platforms or Publishers?

Zuckerberg: We’re a tech company, not a publisher

The Rise of Big Tech Monopolies from Microsoft to Google

Breaking the Monopolies of Facebook, Google, and Amazon | Kat Chrysostom | TEDxOcala

Politico’s Levine: The main issue with Big Tech is the financial relationship between publishers and

Design of the platform business | Paul von Gruben | TEDxTUBerlin

Congressional investigation into big tech companies focus on effect digital platforms have on jou…

As calls to break up big tech grow louder, a split may pay off for one tech company

It’s Time: Break Up Big Tech

Which Silicon Valley Tech Titans Will Topple? (w/ Scott Galloway)

Measuring Market Concentration

What is HERFINDAHL INDEX? What does HERFINDAHL INDEX mean? HERFINDAHL INDEX meaning & explanation

Market Concentration: Greg Werden on the difficulties in measuring concentration

In this video, Greg Werden, Senior Economic Counsel in the Antitrust Division of the US Department of Justice explains the difficulties in using US census bureau data to measure market concentration and what he thinks about the existing evidence on market power in the US. More materials on this discussion available at http://oe.cd/2gw

Regulations may not hurt big tech companies

Antitrust & Big Tech

Adam Ruins Everything – How the Government Created Tech Monopolies | truTV

States Targeting Big Tech Companies

Feds investigating major tech companies for antitrust violations

Watch out, Google, the U.S. government has an ‘ironclad’ antitrust case

Big Tech and Antitrust: Rethinking Competition Policy for the Digital Era

The Left Ruins Everything

Big Tech Is Big Brother

Ted Cruz’s Opening Statement on Big Tech Censorship

Dr. Robert Epstein on Big Tech Censorship

Ingraham: Big tech and the new corporate censorship

Dennis Prager and Google VP Testify Before the U.S. Senate on Tech Censorship

Dennis Prager on Google’s censorship allegations

PragerU v. YouTube

Tucker defends Steven Crowder in spat with YouTube

How to Combat Big Tech Censorship | Louder with Crowder

Steven Crowder Exposes Vox’s Dirty Tactics

Dave Rubin Responds to VoxAdpocalypse I Louder with Crowder

Vox Journalist Gets Steven Crowder Demonetized on Youtube I White House Brief

In an unprecedented move, Youtube demonetized Steven Crowder after Vox Journalist Carlos “Gaywonk” Maza complained on Twitter about a few of Crowder’s jokes. Bowing to twitter mobs, Youtube demonetized Steven Crowder’s whole channel along with hundreds of other small creators on Youtube. Jon Miller breaks down the latest tech censorship drama in today’s episode of White House Brief.

YouTube’s messy fight with its most extreme creators

Big Tech Promotes Pluralism | The News & Why It Matters | Ep 329

Dan Crenshaw Interrogates Social Media Execs on Silencing Conservatives

Big Tech faces backlash as Washington explores regulation

Bill Gates says to regulate big tech companies

Bill Gates Says Big Tech Companies Shouldn’t Be Broken Up

The War on Big Tech – Everything is About to Change

FTC’s New Antitrust Task Force Zeroes In on Big Tech

Why Sen. Mark Warner wants tech companies to tell you how much your data is worth

The evolving relationship between platforms and publishers

Politicians Want to Destroy Section 230, the Internet’s First Amendment

Here’s a recap of Tuesday’s Big Tech antitrust congressional hearing

Is Big Tech Too Big?

Trump warns tech over conservative censorship concerns

Ted Cruz GRILLS Google rep over big tech censorship

Report reveals how tech giants censor conservative speech

What Should Have Happened at the Facebook Hearing

Department of Justice’s antitrust chief on regulating big tech

8 Attorneys General Launch Facebook Antitrust Investigation

How to regulate Facebook, Google, Apple, Amazon? | Tech Wash

News Media Alliance on Google profiting from news coverage

Lawsuit over big tech censorship strikes at core of American values

Facebook falls on report of possible FTC antitrust investigation

How to regulate Facebook, Google, Apple, Amazon? | Tech Wash

Sen. Ted Cruz grills Mark Zuckerberg on political bias

10 Most Expensive Things Owned By Mark Zuckerberg

Priscilla Chan is trying to change the fate of an entire generation

Priscilla Chan on meeting Mark Zuckerberg, and their goal to cure all diseases

The Struggles That Almost Ruined Mark Zuckerberg’s Marriage | ⭐OSSA

Zuckerberg meets Trump, senators; nixes breaking up Facebook

Facebook chief executive Mark Zuckerberg held private meetings with US lawmakers in Washington to discuss technology regulations and social media issues, including concerns about the social network's operations

Facebook chief executive Mark Zuckerberg held private meetings with US lawmakers in Washington to discuss technology regulations and social media issues, including concerns about the social network’s operations

Facebook chief executive Mark Zuckerberg met Thursday with US President Donald Trump and members of Congress on a political reconnaissance mission to Washington, where he rejected calls to break up the world’s biggest social network.

Zuckerberg’s visit comes as Facebook faces a myriad of regulatory and legal questions surrounding issues like competition, digital privacy, censorship and transparency in political advertising.

A Facebook spokesman said discussions were focusing in part on future internet regulation.

Senate Democrat Mark Warner, one of the lawmakers who has taken the lead in Washington on digital security, signalled they gave Zuckerberg an earful.

The visit, including a Wednesday night private dinner with Warner and other lawmakers, comes after his stormy appearance last year before Congress, where he was grilled on Facebook’s data protection and privacy missteps.

Senator Josh Hawley, a Republican freshman and one of the more outspoken critics of Facebook, said he had a “frank conversation” with Zuckerberg but remains concerned.

“Challenged him to do two things to show FB is serious about bias, privacy & competition. 1) Sell WhatsApp & Instagram 2) Submit to independent, third-party audit on censorship,” Hawley tweeted.

“He said no to both.”

Trump late Thursday posted a picture on Facebook and Twitter showing him shaking hands with Zuckerberg, but didn’t share details of their conversation.

“Nice meeting with Mark Zuckerberg of Facebook in the Oval Office today,” the president wrote.

Federal and state anti-trust enforcers are looking into potential anti-competitive actions by Facebook, and members of Congress are debating national privacy legislation.

The messaging product WhatsApp and picture-sharing giant Instagram are part of Facebook’s broad family of services that has made it a global online behemoth, but have also exposed the company to concerns about competition, data harvesting and sprawling digital control.

Warner said he was not prepared to call for Facebook’s dismantlement.

“I’m not yet with some of my friends who want to go straight to break up,” he told Fox Business Network.

“I am concerned. These are global companies, and I don’t want to transfer the leadership to Chinese companies,” he added.

“But I do think we need a lot more transparency. We need to have privacy rights protected. We need to increase competition with things like data portability and interoperability.”

Two months ago, the US Federal Trade Commission hit Facebook with a record $5 billion fine for data protection violations in a wide-ranging settlement that calls for revamping privacy controls and oversight at the social network.

Earlier Wednesday, executives from Facebook, Google and Twitter appeared before a Senate panel to answer questions on “digital responsibility” in the face of online violence and extremism.

https://www.dailymail.co.uk/wires/reuters/article-7484185/Saudi-led-coalition-launches-military-operation-north-Hodeidah-Yemen.html

Hawley Introduces Bill to Make Big Tech Embrace Free Speech

By Corinne Weaver | June 19, 2019 10:49 AM EDT

Republicans in the Senate plan on striking a blow for online free speech — by eradicating censorship of conservatives online.

Senator Josh Hawley (R-MO) introduced a new bill June 19, meant to tackle the problem of tech monopolies and their consistent censorship of conservatives and conservative ideology. The bill, called the Ending Support for Internet Censorship Act, looks to remove the immunity enjoyed by Big Tech companies from Section 230 of the Communications Decency Act. The bill would target companies with more than 30 million monthly users, such as Facebook, Google, Twitter, and YouTube.

Hawley wrote that the companies could earn their immunity back through a series of third-party external audits that provided “convincing evidence that their algorithms and content-removal practices are politically neutral.”

The legislation would exclude smaller companies. Hawley’s bill is more interested in going after the “tech monopolies” that present a greater threat through censorship. He stated in his press release:

There’s a growing list of evidence that shows big tech companies making editorial decisions to censor viewpoints they disagree with. Even worse, the entire process is shrouded in secrecy because these companies refuse to make their protocols public. This legislation simply states that if the tech giants want to keep their government-granted immunity, they must bring transparency and accountability to their editorial processes and prove that they don’t discriminate.”

In the bill itself, all acts of business were permitted except for those that favored or were biased against a specific ideology, political candidates, or political opinions.

The Free Speech Alliance, a coalition of more than 50 conservative organizations led by the Media Research Center, urged that tech companies “mirror the First Amendment.” This bill, if passed, would require Big Tech to do just that.

So far, major critics have gone after Hawley on Twitter. Americans for Prosperity called the bill “misguided legislation.” The group argued that the bill will prevent innovative startups from succeeding, even though it is clearly aimed at companies larger than 30 million monthly users.

Executive editor of Vox’s tech magazine, The Verge, Dieter Bohn, wrote that Hawley “doesn’t understand section 230.”

https://www.newsbusters.org/blogs/2019/06/19/hawley-introduces-bill-make-big-tech-embrace-free-speech

 

Mark Zuckerberg’s Call to Regulate Facebook, Explained

Here’s why the Facebook chief executive invited Congress to regulate his company in a post on Saturday.

Facebook's chief executive, Mark Zuckerberg, at Senate hearings last year. With the expectation that personal data handling and content restrictions are coming, Facebook tries in an op-ed piece to set the playing field.
CreditCreditTom Brenner/The New York Times

Facebook has faced months of scrutiny for a litany of ills, from spreading misinformation to not properly protecting its users’ data to allowing foreign meddling in elections.

Many at the Silicon Valley company now expect lawmakers and regulators to act to contain it — so the social network is trying to set its own terms for what any regulations should look like.

That helps explain why Mark Zuckerberg, Facebook’s chief executive, wrote an opinion piece for The Washington Post on Saturday laying out a case for how he believes his company should be treated.

In his post, Mr. Zuckerberg discussed four policy areas — harmful content, election integrity, privacy and data portability — which he said the government should focus attention on.

https://www.nytimes.com/2019/03/30/technology/mark-zuckerberg-facebook-regulation-explained.html

What Would Regulating Facebook Look Like?

In an interview with WIRED, Mark Zuckerberg seemed to accept the idea of some US regulation. Other countries could provide the blueprint.

In an interview with WIRED Mark Zuckberg seemed to accept the idea of some US regulation. Other countries could provide...
In an interview with WIRED, Mark Zuckberg seemed to accept the idea of some US regulation. Other countries could provide the blueprint .PHUC PHAM The drumbeat to regulate Big Tech began pounding long before the Cambridge Analytica scandal rocked Facebook—six long years ago, the Obama administration pushed a “Privacy Bill of Rights” that, like most other legislative attempts to safeguard your data online, went nowhere. But this time, as they say, feels different. Thanks to repeated lapses from not just Facebook but all corners of Silicon Valley, some sort of regulation seems not only plausible but imminent.

US politicians have called for Facebook CEO Mark Zuckerberg to appear in person before Congress. Some tech-focused legislation is currently wending its way through the Capitol’s corridors. And regulators in other countries have already clamped down on tech.

‘I think what tends to work well is transparency, which I think is an area where we need to do a lot better and are working on.’

FACEBOOK CEO MARK ZUCKERBERG

In an interview with WIRED editor-in-chief Nicholas Thompson Wednesday, Facebook CEO Mark Zuckberg seemed if not outright welcoming toward regulation, at least accepting of it. “There are some really nuanced questions though about how to regulate, which I think are extremely interesting intellectually,” says Zuckerberg, who points to the bipartisan Honest Ads Act, cosponsored by senators Mark Warner, Amy Klobuchar, and John McCain, as an example of the sort of bill his company can get behind.

The Honest Ads Act, legislation that calls for increased transparency behind who pays for political ads online, makes for a convenient example, though, in part because Facebook has already implemented many of its provisions. The bill, introduced last October, also appears to have languished, making it a non-substantive threat. Meanwhile, critics say it wouldn’t have stopped Russian propagandists from flooding Facebook in the first place.

Besides, even the Honest Ads Act’s sponsors have noted that it addresses a very small piece of a very large problem. And it does nothing to address the data privacy concerns that rightly create so much angst among anyone with any sort of presence online. Which is to say, everyone. For that, the US would need something much bigger.

“We do not have an omnibus privacy legislation at the federal level,” says David Vladeck, former director of the Federal Trade Commission’s Bureau of Consumer Protection. “We don’t have a statute that recognizes generally that privacy is a right that’s secured by federal law. And that puts us at the opposite end of the spectrum from some of the other major economies in the world.”

It’s not that living in the US puts you totally in the privacy hinterlands. The FTC has a modicum of authority, and has used it when companies grossly overreach—as it did against Facebook in 2011, when the company failed to keep its promises regarding how it treated their data. Facebook had made user information public, even if they’d previously had more restrictive privacy settings, and allowed third-party developers to mine the data not just of the Facebook users who downloaded their apps, but of all of those peoples’ friends. (If that sounds familiar, well, it’s precisely what allowed the Cambridge Analytica fiasco.)

Even then, though, Facebook got off with a scolding. It had to sign a consent decree, essentially a promise that it wouldn’t stray again. That’s gone unchecked until this week, when the FTC reportedly opened an investigation into the Cambridge Analytica scandal, and could fine Facebook up to $40,000 per violation—with 50 million people impacted, the potential fine hypothetically stretches into the trillions.

But the threat of retroactive fines clearly hasn’t done the trick. The FTC, meanwhile, can only work with the legislative tools it’s given. So what would it look like if Congress gave it better tools? Other countries might offer something like an outline, if not an outright blueprint.

In Finland, officials feel that their strong public education system and a coordinated government response have been enough to stave off Russia’s propaganda; Sri Lanka banned Facebook, WhatsApp, and Instagram entirely. Which is to say, it’s a wide gamut.

On the data privacy front, the most recent high-profile model comes from the European Union, where General Data Protection Regulation becomes the law of the land on May 25. GDPR focuses on ensuring that people who use online services know not only exactly what data those companies will take, but how they put it to use.

Zuckerberg, at least, seems supportive of those levels of transparency—although they’re also, since GDPR’s passage, an inevitability. “I think what tends to work well is transparency, which I think is an area where we need to do a lot better and are working on,” Zuckerberg tells WIRED. “I think guidelines are much better than dictating specific processes.”

‘We do not have an omnibus privacy legislation at the federal level.’

DAVID VLADECK FORMER BUREAU OF CONSUMER PROTECTION DIRECTOR

Rough guidelines also seem like a more plausible approach in the US due to both precedent and practicality. The EU approach to privacy law has long been highly detailed and prescriptive, says Vladeck, which sounds good in theory but can create issues in practice. “The implementation of it, in my view, is going to be ineffective, because it places an enormous regulatory burden on some parties, and worse, it places an enormous regulatory burden on the data protection authorities that need to enforce it,” says Vladeck. “I don’t think we could simply take the European regulation and simply adopt it in the United States. But I think there are a lot of elements in it that could provide guidance.”

One danger of an overly prescribed law is that technological solutions can outpace those mandates. Zuckerberg points to Germany, where hate speech laws require Facebook and other companies to remove offending posts within 24 hours. “The German model—you have to handle hate speech in this way—in some ways that’s actually backfired,” Zuckerberg says. “Because now we are handling hate speech in Germany in a specific way, for Germany, and our processes for the rest of the world have far surpassed our ability to handle that. But we’re still doing it in Germany the way that it’s mandated that we do it there. So I think guidelines are probably going to be a lot better.”

Zuckerberg also raises the question of the use of artificial intelligence in weeding out unwelcome uploads. “Now that companies increasingly over the next five to 10 years as AI tools get better and better will be able to proactively determine what might be offensive content or violate some rules, what therefore is the responsibility and legal responsibility of companies to do that,” Zuckerberg says.

Here, too, Facebook’s getting out ahead of any potential legal requirements; it already scans for nudity and terrorist content, and remains hard at work at AI that can spot what Zuckerberg calls “really nuanced hate speech and bullying.”

Eventually, though, Silicon Valley may run out of ways to appease regulators. By now there have been too many data breaches, too much negligence, whether by Facebook, Equifax, or the government itself. “I do think increasingly that there’s a sense that we need it,” says Vladeck.

At the very least, when regulation does come, Facebook has an open invite to help inform what happens, albeit in gruff terms. “Mr. Zuckerberg needs to testify before the Senate and answer some tough questions about Russian activity on the platform, and the way his company protects—or doesn’t—its users’ data,” said Senator Mark Warner in a email to WIRED Wednesday.

And if it doesn’t pitch in, Congress has a model for privacy protection waiting for it, at least philosophically, just an ocean away.

Facebook’s World

https://www.wired.com/story/what-would-regulating-facebook-look-like/

Section 230 of the Communications Decency Act

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Section 230 of the Communications Decency Act (CDA) of 1996 (a common name for Title V of the Telecommunications Act of 1996) is a landmark piece of Internet legislation in the United States, codified at 47 U.S.C. § 230. Section 230(c)(1) provides immunity from liability for providers and users of an “interactive computer service” who publish information provided by third-party users:

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

Section 230 was developed in response to a pair of lawsuits against Internet service providers in the early 1990s that had different interpretations of whether the services providers should be treated as publishers or distributors of content created by its users. It was also pushed by the tech industry and other experts that language in the proposed CDA making providers responsible for indecent content posted by users that could extend to other types of questionable free speech. After passage of the Telecommunications Act, the CDA was challenged in courts and ruled by the Supreme Court in Reno v. American Civil Liberties Union (1997) to be partially unconstitutional, leaving the Section 230 provisions in place. Since then, several legal challenges have validated the constitutionality of Section 230. Section 230 protects are not limitless, requiring providers to remove criminal material such as copyright infringement; more recently, Section 230 was amended by the Stop Enabling Sex Traffickers Act in 2018 to require the removal of material violating federal and state sex trafficking laws.

Passed at a time where Internet use was just starting to take off, Section 230 has frequently been referred as a key law that has allowed the Internet to flourish, often referred to as “The Twenty-Six Words That Created the Internet”.

Contents

History

Prior to the Internet, case law was clear that a liability line was drawn between publishers of content and distributors of content; publishers would be expected to have awareness of material it was publishing and thus should be held liable for any illegal content it published, while distributors would likely not be aware and thus would be immune. This was established in Smith v. California (1959), where the Supreme Court ruled that putting liability on the provider (a book store in this case) would have “a collateral effect of inhibiting the freedom of expression, by making the individual the more reluctant to exercise it.”[1]

In the early 1990s, the Internet became more widely adopted and created means for users to engage in forums and other user-generated content. While this helped to expand the use of the Internet, it also resulted in a number of legal cases putting service providers at fault for the content generated by its users. This concern was raised by legal challenges against CompuServe and Prodigy, early service providers at this time.[2] CompuServe stated they would not attempt to regulate what users posted on their services, while Prodigy had employed a team of moderators to validate content. Both faced legal challenges related to content posted by their users. In Cubby, Inc. v. CompuServe Inc., CompuServe was found not be at fault as, by its stance as allowing all content to go unmoderated, it was a distributor and thus not liable for libelous content posted by users. However, Stratton Oakmont, Inc. v. Prodigy Services Co. found that as Prodigy had taken an editorial role with regard to customer content, it was a publisher and legally responsible for libel committed by customers.[3][a]

Chris Cox
Ron Wyden
Chris Cox (left) and Ron Wyden, the framers of Section 230

Service providers made their Congresspersons aware of these cases, believing that if upheld across the nation, it would stifle the growth of the Internet. United States Representative Christopher Cox (R-CA) had read an article about the two cases and felt the decisions were backwards. “It struck me that if that rule was going to take hold then the internet would become the Wild West and nobody would have any incentive to keep the internet civil”, Cox stated.[4]

At the time, Congress was preparing the Communications Decency Act (CDA), part of the omnibus Telecommunications Act of 1996, which was designed to make knowingly sending indecent or obscene material to minors a criminal offense. A version of the CDA had passed through the Senate pushed by Senator J. James Exon.[5] A grassroots effort in the tech industry reacted to try to convince the House of Representatives to challenge Exon’s bill. Based on the Stratton Oakmont decision, Congress recognized that by requiring service providers to block indecent content would make them be treated as publishers in context of the First Amendment and thus become liable for other illegal content such as libel, not set out in the existing CDA.[2] Cox and fellow Representative Ron Wyden (D-OR) wrote the House bill’s section 509, titled the Internet Freedom and Family Empowerment Act, designed to override the decision from Stratton Oakmont, so that services providers could moderate content as necessary and did not have to act as a wholly neutral conduit. The new Act was added the section while the CDA was in conference within the House.

The overall Telecommunications Act, with both Exon’s CDA and Cox/Wyden’s provision, passed both Houses by near-unanimous votes and signed into law by President Bill Clinton by February 1996.[6] Cox/Wyden’s section was codified as Section 230 in Title 47 of the US Code. The anti-indecency portion of the CDA was immediately challenged on passage, resulting in the Supreme Court 1997 case, Reno v. American Civil Liberties Union, that ruled all of the anti-indecency sections of the CDA were unconstitutional, but left Section 230.[7]

One of the first legal challenges to Section 230 was the 1997 case Zeran v. America Online, Inc., in which a Federal court affirmed that the purpose of Section 230 as passed by Congress was “to remove the disincentives to self-regulation created by the Stratton Oakmont decision”.[8] Under that court’s holding, computer service providers who regulated the dissemination of offensive material on their services risked subjecting themselves to liability, because such regulation cast the service provider in the role of a publisher. Fearing that the specter of liability would therefore deter service providers from blocking and screening offensive material, Congress enacted § 230’s broad immunity “to remove disincentives for the development and utilization of blocking and filtering technologies that empower parents to restrict their children’s access to objectionable or inappropriate online material.”[8] In addition, Zeran notes “the amount of information communicated via interactive computer services is . . . staggering. The specter of tort liability in an area of such prolific speech would have an obviously chilling effect. It would be impossible for service providers to screen each of their millions of postings for possible problems. Faced with potential liability for each message republished by their services, interactive computer service providers might choose to severely restrict the number and type of messages posted. Congress considered the weight of the speech interests implicated and chose to immunize service providers to avoid any such restrictive effect.”[8]

Application and limits

In analyzing the availability of the immunity offered by Section 230, courts generally apply a three-prong test. A defendant must satisfy each of the three prongs to gain the benefit of the immunity:[9]

  1. The defendant must be a “provider or user” of an “interactive computer service.”
  2. The cause of action asserted by the plaintiff must treat the defendant as the “publisher or speaker” of the harmful information at issue.
  3. The information must be “provided by another information content provider,” i.e., the defendant must not be the “information content provider” of the harmful information at issue.

Section 230 immunity is not unlimited. The statute specifically excepts federal criminal liability and intellectual property claims.[10] However, state criminal laws have been held preempted in cases such as Backpage.com, LLC v. McKenna[11] and Voicenet Commc’ns, Inc. v. Corbett[12] (agreeing “[T]he plain language of the CDA provides … immunity from inconsistent state criminal laws.”).

As of mid-2016, courts have issued conflicting decisions regarding the scope of the intellectual property exclusion set forth in 47 U.S.C. § 230(e)(2). For example, in Perfect 10, Inc. v. CCBill, LLC,[13] the 9th Circuit Court of Appeals ruled that the exception for intellectual property law applies only to federal intellectual property claims such as copyright infringement, trademark infringement, and patents, reversing a district court ruling that the exception applies to state-law right of publicity claims.[14] The 9th Circuit’s decision in Perfect 10 conflicts with conclusions from other courts including Doe v. Friendfinder. The Friendfinder court specifically discussed and rejected the lower court’s reading of “intellectual property law” in CCBill and held that the immunity does not reach state right of publicity claims.[15]

Additionally, with the passage of the Digital Millennium Copyright Act in 1998, services provides must comply with additional requirements for copyright infringement to maintain “safe harbor” protections from liability, as defined in the DMCA’s Title II, Online Copyright Infringement Liability Limitation Act.[16]

Controversies

The first major challenge to Section 230 was in Zeran v. AOL, a 1997 case decided at the Fourth Circuit. The case involved a person that sued America Online (AOL) for failing to remove, in a timely manner, libelous ads posted by AOL users that inappropriately connected his home phone number to the Oklahoma City bombing. The court found for AOL and upheld the constitutionality of Section 230, stating that Section 230 “creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.”[17] This rule, cementing Section 230’s liability protections, has been considered one of the most important case laws affecting the growth of the Internet, allowing websites to be able to incorporate user-generated content without fear of prosecution.[18] However, at the same time, this has led to Section 230 being used as a shield for some website owners as courts have ruled Section 230 provides complete immunity for ISPs with regard to the torts committed by their users over their systems.[19]

Sex trafficking

Around 2001, a University of Pennsylvania paper warned that “online sexual victimization of American children appears to have reached epidemic proportions” due to the allowances granted by Section 230.[20] Over the next decade, advocates against such exploitation such as the National Center for Missing and Exploited Children pressured major websites to block or remove content related to sex trafficking, leading to sites like FacebookMySpace, and Craigslist to pull such content. Because mainstream sites were blocking this content, those that engaged or profited from trafficking started to use more obscure sites, leading to the creation of sites like Backpage. In addition to removing these from the public eye, these new sites worked to obscure what trafficking was going on and who was behind it, limiting ability for law enforcement to take action.[20] Backpage and similar sites quickly came under numerous lawsuits from victims of the sex traffickers and exploiters for enabling this crime, but the court continually found in favor of Backpage due to Section 230,[21] and the Supreme Court let stand a Circuit Court decision in favor of Backpage due to Section 230 in January 2017.[22]

Due to numerous complaints from constituents, Congress began an investigation into Backpage and similar sites in January 2017, finding Backpage complicit in aiding and profiting from illegal sex trafficking.[23] Subsequently, Congress introduced the FOSTA-SESTA bills: the Allow States and Victims to Fight Online Sex Trafficking Act (FOSTA) in the House of Representatives by Ann Wagner in April 2017, and the Stop Enabling Sex Traffickers Act (SESTA) U.S. Senate bill introduced by Rob Portman in August 2017. Combined, the FOSTA-SESTA bills modified Section 230 to exempt services providers from Section 230 immunity when dealing with civil or criminal crimes related to sex trafficking,[24] which removes section 230 safe harbors for services that knowingly facilitate or support sex trafficking.[25] The bill passed both Houses and was signed into law by President Donald Trump on April 11, 2018.[26][27]

The bills were criticized by pro-free speech and pro-Internet groups as a “disguised internet censorship bill” that weakens the section 230 safe harbors, places unnecessary burdens on Internet companies and intermediaries that handle user-generated content or communications with service providers required to proactively take action against sex trafficking activities, and requires a “team of lawyers” to evaluate all possible scenarios under state and federal law (which may be financially unfeasible for smaller companies).[28][29][30][31][32] Critics also argued that FOSTA-SESTA did not distinguish between consensual, legal sex offerings from non-consensual ones, and argued it would cause websites otherwise engaged in legal offerings of sex work would be threatened with liability charges.[23] Online sex workers argued that the bill would harm their safety, as the platforms they utilize for offering and discussing sexual services in a legal manner (as an alternative to street prostitution) had begun to reduce their services or shut down entirely due to the threat of liability under the bill.[33][34]

Social media

Many social media sites, notably Facebook and Twitter, came under scrutiny as a result of the alleged Russian interference in the 2016 United States elections, where it was alleged that Russian agents used the sites to spread propaganda and fake news to swing the election in favor of Donald Trump. These platforms also were criticized for not taking action against users that used the social media outlets for harassment and hate speech against others. Shortly after the passage of FOSTA-SESTA acts, some in Congress recognized that additional changes could be made to Section 230 to require service providers to deal with these bad actors, beyond what Section 230 already provided to them.[35] During 2019, there have been renewed calls for changes in Section 230 to address what are seen as growing problems across social media and the protections given to tech companies.

Platform neutrality

Some politicians, including Republican senators Ted Cruz and Josh Hawley, have accused major social networks of displaying a bias against conservative perspectives when moderating content (such as Twitter suspensions).[36][36][37][38] In a Fox News op-ed, Cruz argued that section 230 should only apply to providers that are politically “neutral”, suggesting that a provider “should be considered to be a [liable] ‘publisher or speaker’ of user content if they pick and choose what gets published or spoke.”[39] Section 230 does not contain any requirements that moderation decisions be neutral.[39] Hawley alleged that section 230 safe harbors were a “sweetheart deal between big tech and big government”.[40][41]

In December 2018, Republican house representative Louie Gohmert introduced the Biased Algorithm Deterrence Act (H.R.492), which would remove all section 230 protections for any provider that used filters or any other type of algorithms to display user content when otherwise not directed by a user.[42][43]

In June 2019, Hawley introduced the Ending Support for Internet Censorship Act (S. 1914), that would remove section 230 protections from companies whose services have more than 30 million active monthly users in the U.S. and more than 300 million worldwide, or have over $500 million in annual global revenue, unless they receive a certification from the majority of the Federal Trade Commission that they do not moderate against any political viewpoint, and have not done so in the past 2 years.[44][45]

There has been criticism—and support—of the proposed bill from various points on the political spectrum. A poll of more than 1,000 voters gave Senator Hawley’s bill a net favorability rating of 29 points among Republicans (53% favor, 24% oppose) and 26 points among Democrats (46% favor, 20% oppose).[46] Some Republicans feared that by adding FTC oversight, the bill would continue to fuel fears of a big government with excessive oversight powers.[47] Democrat Speaker Nancy Pelosi has indicated support for the same approach Hawley has taken.[48] The chairman of the Senate Judiciary Committee, Senator Graham, has also indicated support for the same approach Hawley has taken, saying “he is considering legislation that would require companies to uphold ‘best business practices’ to maintain their liability shield, subject to periodic review by federal regulators.” [49]

Legal experts have criticized the Republicans’ push to make Section 230 encompass platform neutrality. Wyden stated in response to potential law changes that “Section 230 is not about neutrality. Period. Full stop. 230 is all about letting private companies make their own decisions to leave up some content and take other content down.”[50] Law professor Jeff Kosseff, who has written extensively on Section 230, has stated that the Republican intentions are based on a “fundamental misunderstanding” of Section 230’s purpose, as platform neutrality was not one of the considerations made at the time of passage.[51] Kosseff stated that political neutrality was not the intent of Section 230 according to the framers, but rather making sure providers had the ability to make content-removal judgement without fear of liability.[2] There have been concerns that any attempt to weaken Section 230 could actually cause an increase in censorship when services lose their liability.[41][52]

Hate speech

In the wake of the 2019 shootings in Christchurch, New ZealandEl Paso, Texas and Dayton, Ohio, the impact on Section 230 and liability towards online hate speech has been raised. In both the Christchurch and El Paso shootings, the perpetrator posted hate speech manifestos to 8chan, a moderated imageboard known to be favorable for the posting of extreme views. Concerned politicians and citizens raised calls at large tech companies for the need for hate speech to be removed from the Internet; however, hate speech is generally protected speech under the First Amendment, and Section 230 removes the liability for these tech companies to moderate such content as long as it is not illegal. This has given the appearance that tech companies do not need to be proactive against hateful content, thus allowing the hate content to fester online and lead to such incidents.[53][5]

Notable articles on this concerns were published after the El Paso shooting by The New York Times,[53] The Wall Street Journal,[54] and Bloomberg Businessweek,[5] among other outlets, but which were criticized by legal experts including Mike GodwinMark Lemley, and David Kaye, as the articles implied that hate speech was protected by Section 230, when it is in fact protected by the First Amendment. In the case of The New York Times, the paper issued a correction to affirm that the First Amendment protected hate speech, and not Section 230.[55][56][57]

Members of Congress have indicated they may pass a law that changes how Section 230 would apply to hate speed as to make tech companies liable for this. Wyden, now a Senator, stated that he intended for Section 230 to be both “a sword and a shield” for Internet companies, the “sword” allowing them to remove content they deem inappropriate for their service, and the shield to help keep offensive content their from sites without liability. However, Wyden argued that become tech companies have not been willing to use the sword to remove content, it is necessary to take away that shield.[53][5] Some have compared Section 230 to the Protection of Lawful Commerce in Arms Act, a law that grants gun manufacturers immunity from certain types of lawsuits when their weapons are used in criminal acts. According to law professor Mary Anne Franks, “They have not only let a lot of bad stuff happen on their platforms, but they’ve actually decided to profit off of people’s bad behavior.”[5] Representative Beto O’Rourke has stated his intent for his 2020 presidential campaign to introduce sweeping changes to Section 230 to make Internet companies liable for not being proactive in taking down hate speech.[58]

Terrorism-related content

In the aftermath of the Backpage trial and subsequent passage of FOSTA-SESTA, others have found that Section 230 appears to protect tech companies from content that is otherwise illegal under United States law. Professor Danielle Citron and journalist Benjamin Wittes found that as late as 2018, several groups deemed as terrorist organizations by the United States had been able to maintain social media accounts on services run by American companies, despite federal laws that make providing material support to terrorist groups subject to civil and criminal charges.[59] However, case law from the Second Circuit has ruled that under Section 230, technology companies are not liable for civil claims based on terrorism-related content.[60]

Case law

Defamatory information

Immunity was upheld against claims that AOL unreasonably delayed in removing defamatory messages posted by third party, failed to post retractions, and failed to screen for similar postings.

  • Blumenthal v. Drudge, 992 F. Supp. 44, 49-53 (D.D.C. 1998).[62]

The court upheld AOL’s immunity from liability for defamation. AOL’s agreement with the contractor allowing AOL to modify or remove such content did not make AOL the “information content provider” because the content was created by an independent contractor. The Court noted that Congress made a policy choice by “providing immunity even where the interactive service provider has an active, even aggressive role in making available content prepared by others.”

The court upheld immunity for an Internet dating service provider from liability stemming from third party’s submission of a false profile. The plaintiff, Carafano, claimed the false profile defamed her, but because the content was created by a third party, the website was immune, even though it had provided multiple choice selections to aid profile creation.

  • Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2003).[64]

Immunity was upheld for a website operator for distributing an email to a listserv where the plaintiff claimed the email was defamatory. Though there was a question as to whether the information provider intended to send the email to the listserv, the Court decided that for determining the liability of the service provider, “the focus should be not on the information provider’s intentions or knowledge when transmitting content but, instead, on the service provider’s or user’s reasonable perception of those intentions or knowledge.” The Court found immunity proper “under circumstances in which a reasonable person in the position of the service provider or user would conclude that the information was provided for publication on the Internet or other ‘interactive computer service’.”

  • Green v. AOL, 318 F.3d 465 (3rd Cir. 2003).[65]

The court upheld immunity for AOL against allegations of negligence. Green claimed AOL failed to adequately police its services and allowed third parties to defame him and inflict intentional emotional distress. The court rejected these arguments because holding AOL negligent in promulgating harmful content would be equivalent to holding AOL “liable for decisions relating to the monitoring, screening, and deletion of content from its network — actions quintessentially related to a publisher’s role.”

Immunity was upheld for an individual internet user from liability for republication of defamatory statements on a listserv. The court found the defendant to be a “user of interactive computer services” and thus immune from liability for posting information passed to her by the author.

  • MCW, Inc. v. badbusinessbureau.com(RipOff Report/Ed Magedson/XCENTRIC Ventures LLC) 2004 WL 833595, No. Civ.A.3:02-CV-2727-G (N.D. Tex. April 19, 2004).[67]

The court rejected the defendant’s motion to dismiss on the grounds of Section 230 immunity, ruling that the plaintiff’s allegations that the defendants wrote disparaging report titles and headings, and themselves wrote disparaging editorial messages about the plaintiff, rendered them information content providers. The Web site, http://www.badbusinessbureau.com, allows users to upload “reports” containing complaints about businesses they have dealt with.

  • Hy Cite Corp. v. badbusinessbureau.com (RipOff Report/Ed Magedson/XCENTRIC Ventures LLC), 418 F. Supp. 2d 1142 (D. Ariz. 2005).[68]

The court rejected immunity and found the defendant was an “information content provider” under Section 230 using much of the same reasoning as the MCW case.

False information

  • Gentry v. eBay, Inc., 99 Cal. App. 4th 816, 830 (2002).[69]

eBay‘s immunity was upheld for claims based on forged autograph sports items purchased on the auction site.

  • Ben Ezra, Weinstein & Co. v. America Online, 206 F.3d 980, 984-985 (10th Cir. 2000), cert. denied, 531 U.S. 824 (2000).[70]

Immunity for AOL was upheld against liability for a user’s posting of incorrect stock information.

Immunity was upheld against claims of fraud and money laundering. Google was not responsible for misleading advertising created by third parties who bought space on Google’s pages. The court found the creative pleading of money laundering did not cause the case to fall into the crime exception to Section 230 immunity.

Immunity for Orbitz and CheapTickets was upheld for claims based on fraudulent ticket listings entered by third parties on ticket resale marketplaces.

  • Herrick v. Grindr, 18-396

The Second Circuit upheld immunity for the Grindr dating app for LGBT persons under Section 230 in regards to the misuse of false profiles created in the names of a real person. The plaintiff had broken up with a boyfriend, who later went onto Grindr to create multiple false profiles that presented the real-life identity and address of the plaintiff and as being available for sexual encounters, as well as having illegal drugs for sale. The plaintiff reported that over a thousand men had come to his house for sex and drugs, based on the communications with the fake profile, and he began to fear for his safety. He sued Grindr for not taking actions to block the false profiles after multiple requests. Grindr asserted Section 230 did not make them liable for the actions of the ex-boyfriend. This was agreed by the district court and the Second Circuit.[73][74]

Sexually explicit content and minors

  • Doe v. America Online, 783 So. 2d 1010, 1013-1017 (Fl. 2001),[75] cert. denied, 122 S.Ct. 208 (2000).

The court upheld immunity against state claims of negligence based on “chat room marketing” of obscene photographs of minor by a third party.

  • Kathleen R. v. City of Livermore, 87 Cal. App. 4th 684, 692 (2001).[76]

The California Court of Appeal upheld the immunity of a city from claims of waste of public funds, nuisance, premises liability, and denial of substantive due process. The plaintiff’s child downloaded pornography from a public library’s computers, which did not restrict access to minors. The court found the library was not responsible for the content of the internet and explicitly found that section 230(c)(1) immunity covers governmental entities and taxpayer causes of action.

The court upheld immunity for a social networking site from negligence and gross negligence liability for failing to institute safety measures to protect minors and failure to institute policies relating to age verification. The Does’ daughter had lied about her age and communicated over MySpace with a man who later sexually assaulted her. In the court’s view, the Does’ allegations were “merely another way of claiming that MySpace was liable for publishing the communications.”

The court upheld immunity for Craigslist against a county sheriff’s claims that its “erotic services” section constituted a public nuisance because it caused or induced prostitution.

  • Backpage.com v. McKenna, et al., CASE NO. C12-954-RSM[79]
  • Backpage.com LLC v Cooper, Case #: 12-cv-00654[SS1][80]
  • Backpage.com LLC v Hoffman et al., Civil Action No. 13-cv-03952 (DMC) (JAD)[81]

The court upheld immunity for Backpage in contesting a Washington state law (SB6251)[82] that would have made providers of third-party content online liable for any crimes related to a minor in Washington state.[83] The states of Tennessee and New Jersey later passed similar legislation. Backpage argued that the laws violated Section 230, the Commerce Clause of the United States Constitution, and the First and Fifth Amendments.[82] In all three cases the courts granted Backpage permanent injunctive relief and awarded them attorney’s fees.[80][84][85][86][87]

The court ruled in favor of Backpage after Sheriff Tom Dart of Cook County IL, a frequent critic of Backpage and its adult postings section, sent a letter on his official stationary to Visa and MasterCard demanding that these firms “immediately cease and desist” allowing the use of their credit cards to purchase ads on Backpage. Within two days both companies withdrew their services from Backpage.[89] Backpage filed a lawsuit asking for a temporary restraining order and preliminary injunction against Dart granting Backpage relief and return to the status quo prior to Dart sending the letter. Backpage alleged that Dart’s actions were unconstitutional, violating the First and Fourteenth Amendments to the US Constitution as well as Section 230 of the CDA. Backpage asked for Dart to retract his “cease and desist” letters.[90] After initially being denied the injunctive relief by a lower court,[91][92] the Seventh Circuit U.S. Court of Appeals reversed that decision and directed that a permanent injunction be issued enjoining Dart and his office from taking any actions “to coerce or threaten credit card companies…with sanctions intended to ban credit card or other financial services from being provided to Backpage.com.”[93] The court cited section 230 as part of its decision.

Discriminatory housing ads

The court upheld immunity for Craigslist against Fair Housing Act claims based on discriminatory statements in postings on the classifieds website by third party users.

The Ninth Circuit Court of Appeals rejected immunity for the Roommates.com roommate matching service for claims brought under the federal Fair Housing Act[96] and California housing discrimination laws.[97] The court concluded that the manner in which the service elicited information from users concerning their roommate preferences (by having dropdowns specifying gender, presence of children, and sexual orientation), and the manner in which it utilized that information in generating roommate matches (by eliminating profiles that did not match user specifications), the matching service created or developed the information claimed to violate the FHA, and thus was responsible for it as an “information content provider.” The court upheld immunity for the descriptions posted by users in the “Additional Comments” section because these were entirely created by users.

Threats

  • Delfino v. Agilent Technologies, 145 Cal. App. 4th 790 (2006), cert denied, 128 S. Ct. 98 (2007).

A California Appellate Court unanimously upheld immunity from state tort claims arising from an employee’s use of the employer’s e-mail system to send threatening messages. The court concluded that an employer that provides Internet access to its employees qualifies as a “provider . . . of an interactive service.”

Failure to warn

The Ninth Circuit Court of Appeals rejected immunity for claims of negligence under California law. Doe filed a complaint against Internet Brands which alleged a “failure to warn” her of a known rape scheme, despite her relationship to them as a ModelMayhem.com member. They also had requisite knowledge to avoid future victimization of ModelMayhem.com users by warning users of online sexual predators. The Ninth Circuit Court of Appeals concluded that the Communications Decency Act did not bar the claim and remanded the case to the district court for further proceedings.

In February 2015, the Ninth Circuit panel set aside its 2014 opinion and set the case for reargument. In May 2016, the panel again held that Doe’s case could proceed.[98][99]

Terrorism

  • Force v. Facebook, Inc., No. 18-397 (2d Cir. July 31, 2019)

The Second Circuit upheld immunity in civil claims for service providers for hosting terrorism-related content created by users. Families, friends, and associates of several killed in Hamas-attacks filed suit against Facebook under the United State’s Anti-Terrorism Act, asserting that since Hamas members used Facebook to coordinate activities, Facebook was liable for its content. While previous rules at federal District and Circuit level have generally ruled against such cases, this decision in the Second Circuit was first to assert that Section 230’s safe harbor provisions do apply even to acts related to terrorism that may be posted by users of service providers, thus dismissing the suit against Facebook. The Second Circuit ruled that the various algorithms Facebook uses to recommend content remains as part of the role of the distributor of the content and not the publisher, since these automated tools were essentially neutral.[60]

Similar legislation in other countries]

European Union

Directive 2000/31/EC[100] establishes a safe haven regime for hosting providers:

  • Article 14 establishes that hosting providers are not responsible for the content they host as long as (1) the acts in question are neutral intermediary acts of a mere technical, automatic and passive capacity; (2) they are not informed of its illegal character, and (3) they act promptly to remove or disable access to the material when informed of it.
  • Article 15 precludes member states from imposing general obligations to monitor hosted content for potential illegal activities.

The updated Directive on Copyright in the Digital Single Market (Directive 2019/790) Article 17 makes providers liable if they fail to take “effective and proportionate measures” to prevent users from uploading certain copyright violations and do not response immediately to takedown requests.[101]

Australia

In Dow Jones & Company Inc v Gutnick,[102] the High Court of Australia treated defamatory material on a server outside Australia as having been published in Australia when it is downloaded or read by someone in Australia.

Gorton v Australian Broadcasting Commission & Anor (1973) 1 ACTR 6

Under the Defamation Act 2005 (NSW),[103] s 32, a defence to defamation is that the defendant neither knew, nor ought reasonably to have known of the defamation, and the lack of knowledge was not due to the defendant’s negligence.

New Zealandcause of the material CompuServe’s network was carrying into Germany. He was convicted and sentenced to two years probation on May 28, 1998.[104][105] He was cleared on appeal on November 17, 1999.[106][107]

The Oberlandesgericht (OLG) Cologne, an appellate court, found that an online auctioneer does not have an active duty to check for counterfeit goods (Az 6 U 12/01).[108]

In one example, the first-instance district court of Hamburg issued a temporary restraining order requiring message board operator Universal Boards to review all comments before they can be posted to prevent the publication of messages inciting others to download harmful files. The court reasoned that “the publishing house must be held liable for spreading such material in the forum, regardless of whether it was aware of the content.”[109]

United Kingdom

Also see: Defamation Act 2013.

The laws of libel and defamation will treat a disseminator of information as having “published” material posted by a user, and the onus will then be on a defendant to prove that it did not know the publication was defamatory and was not negligent in failing to know: Goldsmith v Sperrings Ltd (1977) 2 All ER 566; Vizetelly v Mudie’s Select Library Ltd (1900) 2 QB 170; Emmens v Pottle & Ors (1885) 16 QBD 354.

In an action against a website operator, on a statement posted on the website, it is a defence to show that it was not the operator who posted the statement on the website. The defence is defeated if it was not possible for the claimant to identify the person who posted the statement, or the claimant gave the operator a notice of complaint and the operator failed to respond in accordance with regulations.

Notes

  1. ^ The details of the Stratton Oakmont case would later serve as the basis for the book and its film The Wolf of Wall Street

References …

External links

https://en.wikipedia.org/wiki/Section_230_of_the_Communications_Decency_Act

 

United States antitrust law

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“The Bosses of the Senate”, a cartoon by Joseph Keppler depicting corporate interests—from steel, copper, oil, iron, sugar, tin, and coal to paper bags, envelopes, and salt—as giant money bags looming over the tiny senators at their desks in the Chamber of the United States Senate.[1]

In the United States, antitrust law is a collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote competition for the benefit of consumers. (The concept is called competition law in other English-speaking countries.) The main statutes are the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These Acts serve three major functions. First, Section 1 of the Sherman Act prohibits price-fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that would likely substantially lessen competition. Third, Section 2 of the Sherman Act prohibits the abuse of monopoly power.[2]

The Federal Trade Commission, the U.S. Department of Justice, state governments and private parties who are sufficiently affected may all bring actions in the courts to enforce the antitrust laws. The scope of antitrust laws, and the degree to which they should interfere in an enterprise’s freedom to conduct business, or to protect smaller businesses, communities and consumers, are strongly debated. One view, mostly closely associated with the “Chicago School of economics” suggests that antitrust laws should focus solely on the benefits to consumers and overall efficiency, while a broad range of legal and economic theory sees the role of antitrust laws as also controlling economic power in the public interest.[3]

Contents

History

Although “trust” has a specific legal meaning (where one person holds property for the benefit of another), in the late 19th century the word was commonly used to denote big business, because that legal instrument was frequently used to effect a combination of companies.[4] Large manufacturing conglomerates emerged in great numbers in the 1880s and 1890s, and were perceived to have excessive economic power.[5] The Interstate Commerce Act of 1887 began a shift towards federal rather than state regulation of big business.[6] It was followed by the Sherman Antitrust Act of 1890, the Clayton Antitrust Act of 1914 and the Federal Trade Commission Act of 1914, the Robinson–Patman Act of 1936, and the Celler–Kefauver Act of 1950.

In the 1880s, hundreds of small short-line railroads were being bought up and consolidated into giant systems. (Separate laws and policies emerged regarding railroads and financial concerns such as banks and insurance companies.) People for strong antitrust laws argued that, in order for the American economy to be successful, it would require free competition and the opportunity for individual Americans to build their own businesses. As Senator John Sherman put it, “If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life.” Congress passed the Sherman Antitrust Act almost unanimously in 1890, and it remains the core of antitrust policy. The Act prohibits agreements in restraint of trade and abuse of monopoly power. It gives the Justice Department the mandate to go to federal court for orders to stop illegal behavior or to impose remedies.[7][original research?]

Public officials during the Progressive Era put passing and enforcing strong antitrust high on their agenda. President Theodore Roosevelt sued 45 companies under the Sherman Act, while William Howard Taft sued 75. In 1902, Roosevelt stopped the formation of the Northern Securities Company, which threatened to monopolize transportation in the Northwest (see Northern Securities Co. v. United States).

Standard Oil (Refinery No. 1 in ClevelandOhio, pictured) was a major company broken up under United States antitrust laws.

One of the better-known trusts was the Standard Oil CompanyJohn D. Rockefeller in the 1870s and 1880s had used economic threats against competitors and secret rebate deals with railroads to build what was called a monopoly in the oil business, though some minor competitors remained in business. In 1911 the Supreme Court agreed that in recent years (1900–1904) Standard had violated the Sherman Act (see Standard Oil Co. of New Jersey v. United States). It broke the monopoly into three dozen separate companies that competed with one another, including Standard Oil of New Jersey (later known as Exxon and now ExxonMobil), Standard Oil of Indiana (Amoco), Standard Oil Company of New York (Mobil, again, later merged with Exxon to form ExxonMobil), of California (Chevron), and so on. In approving the breakup the Supreme Court added the “rule of reason”: not all big companies, and not all monopolies, are evil; and the courts (not the executive branch) are to make that decision. To be harmful, a trust had to somehow damage the economic environment of its competitors.[citation needed]

United States Steel Corporation, which was much larger than Standard Oil, won its antitrust suit in 1920 despite never having delivered the benefits to consumers that Standard Oil did.[citation needed] In fact, it lobbied for tariff protection that reduced competition, and so contending that it was one of the “good trusts” that benefited the economy is somewhat doubtful.[citation needed] Likewise International Harvester survived its court test, while other monopolies were broken up in tobacco, meatpacking, and bathtub fixtures. Over the years hundreds of executives of competing companies who met together illegally to fix prices went to federal prison.[citation needed]

In 1914 Congress passed the Clayton Act, which prohibited specific business actions (such as price discrimination and tying) if they substantially lessened competition. At the same time Congress established the Federal Trade Commission (FTC), whose legal and business experts could force business to agree to “consent decrees“, which provided an alternative mechanism to police antitrust.[citation needed]

American hostility to big business began to decrease after the Progressive Era.[citation needed] For example, Ford Motor Company dominated auto manufacturing, built millions of cheap cars that put America on wheels, and at the same time lowered prices, raised wages, and promoted manufacturing efficiency. Welfare capitalism made large companies an attractive place to work; new career paths opened up in middle management; local suppliers discovered that big corporations were big purchasers.[citation needed] Talk of trust busting faded away. Under the leadership of Herbert Hoover, the government in the 1920s promoted business cooperation, fostered the creation of self-policing trade associations, and made the FTC an ally of “respectable business”.[citation needed]

The printing equipment company ATF explicitly states in its 1923 manual that its goal is to ‘discourage unhealthy competition’ in the printing industry.

During the New Deal, attempts were made to stop cutthroat competition. The National Industrial Recovery Act (NIRA) was a short-lived program in 1933–35 designed to strengthen trade associations, and raise prices, profits and wages at the same time. The Robinson-Patman Act of 1936 sought to protect local retailers against the onslaught of the more efficient chain stores, by making it illegal to discount prices. To control big business, the New Deal policymakers preferred federal and state regulation —controlling the rates and telephone services provided by AT&T, for example— and by building up countervailing power in the form of labor unions.[citation needed]

The antitrust environment of the 70’s was dominated by the case United States v. IBM, which was filed by the U.S. Justice Department in 1969. IBM at the time dominated the computer market through alleged bundling of software and hardware as well as sabotage at the sales level and false product announcements. It was one of the largest and certainly the lengthiest antitrust case the DoJ brought against a company. In 1982, the Reagan administration dismissed the case, and the costs and wasted resources were heavily criticized. However, contemporary economists argue that the legal pressure on IBM during that period allowed for the development of an independent software and personal computer industry with major importance for the national economy.[8]

In 1982 the Reagan administration used the Sherman Act to break up AT&T into one long-distance company and seven regional “Baby Bells“, arguing that competition should replace monopoly for the benefit of consumers and the economy as a whole. The pace of business takeovers quickened in the 1990s, but whenever one large corporation sought to acquire another, it first had to obtain the approval of either the FTC or the Justice Department. Often the government demanded that certain subsidiaries be sold so that the new company would not monopolize a particular geographical market.[citation needed]

In 1999 a coalition of 19 states and the federal Justice Department sued Microsoft.[9] A highly publicized trial found that Microsoft had strong-armed many companies in an attempt to prevent competition from the Netscape browser.[10] In 2000, the trial court ordered Microsoft to split in two, preventing it from future misbehavior.[11][9] The Court of Appeals affirmed in part and reversed in part. In addition, it removed the judge from the case for discussing the case with the media while it was still pending.[12] With the case in front of a new judge, Microsoft and the government settled, with the government dropping the case in return for Microsoft agreeing to cease many of the practices the government challenged.[13] In his defense, CEO Bill Gates argued that Microsoft always worked on behalf of the consumer and that splitting the company would diminish efficiency and slow the pace of software development.[citation needed]

Cartels and collusion

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

Sherman Act 1890 §1

Preventing collusion and cartels that act in restraint of trade is an essential task of antitrust law. It reflects the view that each business has a duty to act independently on the market, and so earn its profits solely by providing better priced and quality products than its competitors. The Sherman Act §1 prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce.”[14] This targets two or more distinct enterprises acting together in a way that harms third parties. It does not capture the decisions of a single enterprise, or a single economic entity, even though the form of an entity may be two or more separate legal persons or companies. In Copperweld Corp. v. Independence Tube Corp.[15] it was held an agreement between a parent company and a wholly owned subsidiary could not be subject to antitrust law, because the decision took place within a single economic entity.[16] This reflects the view that if the enterprise (as an economic entity) has not acquired a monopoly position, or has significant market power, then no harm is done. The same rationale has been extended to joint ventures, where corporate shareholders make a decision through a new company they form. In Texaco Inc. v. Dagher[17] the Supreme Court held unanimously that a price set by a joint venture between Texaco and Shell Oil did not count as making an unlawful agreement. Thus the law draws a “basic distinction between concerted and independent action”.[18] Multi-firm conduct tends to be seen as more likely than single-firm conduct to have an unambiguously negative effect and “is judged more sternly”.[19] Generally the law identifies four main categories of agreement. First, some agreements such as price fixing or sharing markets are automatically unlawful, or illegal per se. Second, because the law does not seek to prohibit every kind of agreement that hinders freedom of contract, it developed a “rule of reason” where a practice might restrict trade in a way that is seen as positive or beneficial for consumers or society. Third, significant problems of proof and identification of wrongdoing arise where businesses make no overt contact, or simply share information, but appear to act in concert. Tacit collusion, particularly in concentrated markets with a small number of competitors or oligopolists, have led to significant controversy over whether or not antitrust authorities should intervene. Fourth, vertical agreements between a business and a supplier or purchaser “up” or “downstream” raise concerns about the exercise of market power, however they are generally subject to a more relaxed standard under the “rule of reason”.

Restrictive practices

Some practices are deemed by the courts to be so obviously detrimental that they are categorized as being automatically unlawful, or illegal per se. The simplest and central case of this is price fixing. This involves an agreement by businesses to set the price or consideration of a good or service which they buy or sell from others at a specific level. If the agreement is durable, the general term for these businesses is a cartel. It is irrelevant whether or not the businesses succeed in increasing their profits, or whether together they reach the level of having market power as might a monopoly. Such collusion is illegal per se.

Bid rigging is a form of price fixing and market allocation that involves an agreement in which one party of a group of bidders will be designated to win the bid. Geographic market allocation is an agreement between competitors not to compete within each other’s geographic territories.

  • Addyston Pipe and Steel Co. v. United States[20] pipe manufacturers had agreed among themselves to designate one lowest bidder for government contracts. This was held to be an unlawful restraint of trade contrary to the Sherman Act. However, following the reasoning of Justice Taft in the Court of Appeals, the Supreme Court held that implicit in the Sherman Act §1 there was a rule of reason, so that not every agreement which restrained the freedom of contract of the parties would count as an anti-competitive violation.
  • Hartford Fire Insurance Co. v. California, 113 S.Ct. 2891 (1993) 5 to 4, a group of reinsurance companies acting in London were successfully sued by California for conspiring to make U.S. insurance companies abandon policies beneficial to consumers, but costly to reinsure. The Sherman Act was held to have extraterritorial application, to agreements outside U.S. territory.
Group boycotts of competitors, customers or distributors

Rule of reason

If an antitrust claim does not fall within a per se illegal category, the plaintiff must show the conduct causes harm in “restraint of trade” under the Sherman Act §1 according to “the facts peculiar to the business to which the restraint is applied”.[21] This essentially means that unless a plaintiff can point to a clear precedent, to which the situation is analogous, proof of an anti-competitive effect is more difficult. The reason for this is that the courts have endeavoured to draw a line between practices that restrain trade in a “good” compared to a “bad” way. In the first case, United States v. Trans-Missouri Freight Association,[22] the Supreme Court found that railroad companies had acted unlawfully by setting up an organisation to fix transport prices. The railroads had protested that their intention was to keep prices low, not high. The court found that this was not true, but stated that not every “restraint of trade” in a literal sense could be unlawful. Just as under the common law, the restraint of trade had to be “unreasonable”. In Chicago Board of Trade v. United States the Supreme Court found a “good” restraint of trade.[23] The Chicago Board of Trade had a rule that commodities traders were not allowed to privately agree to sell or buy after the market’s closing time (and then finalise the deals when it opened the next day). The reason for the Board of Trade having this rule was to ensure that all traders had an equal chance to trade at a transparent market price. It plainly restricted trading, but the Chicago Board of Trade argued this was beneficial. Brandeis J., giving judgment for a unanimous Supreme Court, held the rule to be pro-competitive, and comply with the rule of reason. It did not violate the Sherman Act §1. As he put it,

Every agreement concerning trade, every regulation of trade, restrains. To bind, to restrain, is of their very essence. The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine that question, the court must ordinarily consider the facts peculiar to the business to which the restraint is applied, its condition before and after the restraint was imposed, the nature of the restraint, and its effect, actual or probable.[24]

Tacit collusion and oligopoly

Vertical restraints

Resale price maintenance
  • Dr. Miles Medical Co. v. John D. Park and Sons, 220 U.S. 373 (1911) affirmed a lower court’s holding that a massive minimum resale price maintenance scheme was unreasonable and thus offended Section 1 of the Sherman Antitrust Act.
  • Kiefer-Stewart Co. v. Seagram & Sons, Inc., 340 U.S. 211 (1951) it was unlawful for private liquor dealers to require that their products only be resold up to a maximum price. It unduly restrained the freedom of businesses and was per se illegal.
  • Albrecht v. Herald Co., 390 U.S. 145 (1968) setting a fixed price, minimum or maximum, held to violate section 1 of the Sherman Act
  • State Oil Co. v. Khan, 522 U.S. 3 (1997) vertical maximum price fixing had to be adjudged according to a rule of reason
  • Leegin Creative Leather Products, Inc. v. PSKS, Inc. 551 U.S. 877 (2007) 5 to 4 decision that vertical price restraints were not per se illegal. A leather manufacturer therefore did not violate the Sherman Act by stopping delivery of goods to a retailer after the retailer refused to raise its prices to the leather manufacturer’s standards.
Outlet, territory or customer limitations
  • Packard Motor Car Co. v. Webster Motor Car Co., 243 F.2d 418, 420 (D.C. Cir.), cert, denied, 355 U.S. 822 (1957)
  • Continental Television v. GTE Sylvania, 433 U.S. 36 (1977) 6 to 2, held that it was not an antitrust violation, and it fell within the rule of reason, for a seller to limit the number of franchises and require the franchisees only sell goods within its area
  • United States v. Colgate & Co.250 U.S. 300 (1919) there is no unlawful action by a manufacturer or seller, who publicly announces a price policy, and then refuses to deal with businesses who do not subsequently comply with the policy. This is in contrast to agreements to maintain a certain price.
  • United States v. Parke, Davis & Co.362 U.S. 29 (1960) under Sherman Act §4
  • Monsanto Co. v. Spray-Rite Service Corp.465 U.S. 752 (1984), stating that, “under Colgate, the manufacturer can announce its re-sale prices in advance and refuse to deal with those who fail to comply, and a distributor is free to acquiesce to the manufacturer’s demand in order to avoid termination”. Monsanto, an agricultural chemical, terminated its distributorship agreement with Spray-Rite on the ground that it failed to hire trained salesmen and promote sales to dealers adequately. Held, not per se illegal, because the restriction related to non-price matters, and so was to be judged under the rule of reason.
  • Business Electronics Corp. v. Sharp Electronics Corp.485 U.S. 717 (1988) electronic calculators; “a vertical restraint is not illegal per se unless it includes some agreement on price or price levels. … [T]here is a presumption in favor of a rule-of-reason standard; [and] departure from that standard must be justified by demonstrable economic effect, such as the facilitation of cartelizing … “

Mergers

No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.

Clayton Act 1914 §7

Although the Sherman Act 1890 initially dealt, in general, with cartels (where businesses combined their activities to the detriment of others) and monopolies (where one business was so large it could use its power to the detriment of others alone) it was recognized that this left a gap. Instead of forming a cartel, businesses could simply merge into one entity. The period between 1895 and 1904 saw a “great merger movement” as business competitors combined into ever more giant corporations.[25] However upon a literal reading of Sherman Act, no remedy could be granted until a monopoly had already formed. The Clayton Act 1914 attempted to fill this gap by giving jurisdiction to prevent mergers in the first place if they would “substantially lessen competition”.

Dual antitrust enforcement by the Department of Justice and Federal Trade Commission has long elicited concerns about disparate treatment of mergers. In response, in September 2014, the House Judiciary Committee approved the Standard Merger and Acquisition Reviews Through Equal Rules Act (“SMARTER Act”).[26]

Horizontal mergers

Vertical mergers

Conglomerate mergers

Monopoly and power

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

Sherman Act 1890 §2

The law’s treatment of monopolies is potentially the strongest in the field of antitrust law. Judicial remedies can force large organizations to be broken up, be run subject to positive obligations, massive penalties may be imposed, and/or the people involved can be sentenced to jail. Under §2 of the Sherman Act 1890 every “person who shall monopolize, or attempt to monopolize … any part of the trade or commerce among the several States” commits an offence.[27] The courts have interpreted this to mean that monopoly is not unlawful per se, but only if acquired through prohibited conduct.[28] Historically, where the ability of judicial remedies to combat market power have ended, the legislature of states or the Federal government have still intervened by taking public ownership of an enterprise, or subjecting the industry to sector specific regulation (frequently done, for example, in the cases watereducationenergy or health care). The law on public services and administration goes significantly beyond the realm of antitrust law’s treatment of monopolies. When enterprises are not under public ownership, and where regulation does not foreclose the application of antitrust law, two requirements must be shown for the offense of monopolization. First, the alleged monopolist must possess sufficient power in an accurately defined market for its products or services. Second, the monopolist must have used its power in a prohibited way. The categories of prohibited conduct are not closed, and are contested in theory. Historically they have been held to include exclusive dealingprice discrimination, refusing to supply an essential facilityproduct tying and predatory pricing.

Monopolization

  • Northern Securities Co. v. United States, 193 U.S. 197 (1904) 5 to 4, a railway monopoly, formed through a merger of 3 corporations was ordered to be dissolved. The owner, James Jerome Hill was forced to manage his ownership stake in each independently.
  • Swift & Co. v. United States, 196 U.S. 375 (1905) the antitrust laws entitled the federal government to regulate monopolies that had a direct impact on commerce
  • Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (1911) Standard Oil was dismantled into geographical entities given its size, and that it was too much of a monopoly
  • United States v. American Tobacco Company, 221 U.S. 106 (1911) found to have monopolized the trade.
  • United States v. Alcoa, 148 F.2d 416 (2d Cir. 1945) a monopoly can be deemed to exist depending on the size of the market. It was generally irrelevant how the monopoly was achieved since the fact of being dominant on the market was negative for competition. (Criticised by Alan Greenspan.)
  • United States v. E. I. du Pont de Nemours & Co., 351 U.S. 377 (1956), illustrates the cellophane paradox of defining the relevant market. If a monopolist has set a price very high, there may now be many substitutable goods at similar prices, which could lead to a conclusion that the market share is small, and there is no monopoly. However, if a competitive price were charged, there would be a lower price, and so very few substitutes, whereupon the market share would be very high, and a monopoly established.
  • United States v. Syufy Enterprises, 903 F.2d 659 (9th Cir. 1990) necessity of barriers to entry
  • Lorain Journal Co. v. United States, 342 U.S. 143 (1951) attempted monopolization
  • United States v. American Airlines, Inc., 743 F.2d 1114 (1985)
  • Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993) in order for monopolies to be found to have acted unlawfully, action must have actually been taken. The threat of abusive behavior is insufficient.
  • Fraser v. Major League Soccer, 284 F.3d 47 (1st Cir. 2002) there could be no unlawful monopolization of the soccer market by MLS where no market previously existed
  • United States v. Griffith 334 U.S. 100 (1948) four cinema corporations secured exclusive rights from distributors, foreclosing competitors. Specific intent to monopolize is not required, violating the Sherman Act §§1 and 2.
  • United Shoe Machinery Corp v. U.S., 347 U.S. 521 (1954) exclusionary behavior
  • United States v. Grinnell Corp., 384 U.S. 563 (1966) Grinnell made plumbing supplies and fire sprinklers, and with affiliates had 87% of the central station protective service market. From this predominant share there was no doubt of monopoly power.

Exclusive dealing

  • Standard Oil Co. v. United States (Standard Stations), 337 U.S. 293 (1949): oil supply contracts affected a gross business of $58 million, comprising 6.7% of the total in a seven-state area, in the context of many similar arrangements, held to be contrary to Clayton Act §3.
  • Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320 (1961): Tampa Electric Co contracted to buy coal for 20 years to provide power in Florida, and Nashville Coal Co later attempted to end the contract on the basis that it was an exclusive supply agreement contrary to the Clayton Act § 3 or the Sherman Act §§ 1 or 2. Held, no violation because foreclosed share of market was insignificant this did not affect competition sufficiently.
  • US v. Delta Dental of Rhode Island, 943 F. Supp. 172 (1996)

Price discrimination

Essential facilities

Tying products

It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce.

Clayton Act 1914 §3

Predatory pricing

In theory, which is hotly contested, predatory pricing happens when large companies with huge cash reserves and large lines of credit stifle competition by selling their products and services at a loss for a time, to force their smaller competitors out of business. With no competition, they are then free to consolidate control of the industry and charge whatever prices they wish. At this point, there is also little motivation for investing in further technological research, since there are no competitors left to gain an advantage over. High barriers to entry such as large upfront investment, notably named sunk costs, requirements in infrastructure and exclusive agreements with distributors, customers, and wholesalers ensure that it will be difficult for any new competitors to enter the market, and that if any do, the trust will have ample advance warning and time in which to either buy the competitor out, or engage in its own research and return to predatory pricing long enough to force the competitor out of business. Critics argue that the empirical evidence shows that “predatory pricing” does not work in practice and is better defeated by a truly free market than by antitrust laws (see Criticism of the theory of predatory pricing).

Intellectual property

Scope of antitrust law

Antitrust laws do not apply to, or are modified in, several specific categories of enterprise (including sports, media, utilities, health careinsurancebanks, and financial markets) and for several kinds of actor (such as employees or consumers taking collective action).[29]

Collective actions

First, since the Clayton Act 1914 §6, there is no application of antitrust laws to agreements between employees to form or act in labor unions. This was seen as the “Bill of Rights” for labor, as the Act laid down that the “labor of a human being is not a commodity or article of commerce”. The purpose was to ensure that employees with unequal bargaining power were not prevented from combining in the same way that their employers could combine in corporations,[30] subject to the restrictions on mergers that the Clayton Act set out. However, sufficiently autonomous workers, such as professional sports players have been held to fall within antitrust provisions.[31]

Pro sports exemptions and the NFL cartel

Since 1922 the courts and Congress have left Major League Baseball, as played at Chicago‘s Wrigley Field, unrestrained by antitrust laws.

Second, professional sports leagues enjoy a number of exemptions. Mergers and joint agreements of professional football, hockey, baseball, and basketball leagues are exempt.[32] Major League Baseball was held to be broadly exempt from antitrust law in Federal Baseball Club v. National League.[33] Holmes J held that the baseball league’s organization meant that there was no commerce between the states taking place, even though teams traveled across state lines to put on the games. That travel was merely incidental to a business which took place in each state. It was subsequently held in 1952 in Toolson v. New York Yankees,[34] and then again in 1972 Flood v. Kuhn,[35] that the baseball league’s exemption was an “aberration”. However Congress had accepted it, and favored it, so retroactively overruling the exemption was no longer a matter for the courts, but the legislature. In United States v. International Boxing Club of New York,[36] it was held that, unlike baseball, boxing was not exempt, and in Radovich v. National Football League (NFL),[37] professional football is generally subject to antitrust laws. As a result of the AFL-NFL merger, the National Football League was also given exemptions in exchange for certain conditions, such as not directly competing with college or high school football.[38] However, the 2010 Supreme Court ruling in American Needle Inc. v. NFL characterised the NFL as a “cartel” of 32 independent businesses subject to antitrust law, not a single entity.

Media

Third, antitrust laws are modified where they are perceived to encroach upon the media and free speech, or are not strong enough. Newspapers under joint operating agreements are allowed limited antitrust immunity under the Newspaper Preservation Act of 1970.[39] More generally, and partly because of concerns about media cross-ownership in the United States, regulation of media is subject to specific statutes, chiefly the Communications Act of 1934 and the Telecommunications Act of 1996, under the guidance of the Federal Communications Commission. The historical policy has been to use the state’s licensing powers over the airwaves to promote plurality. Antitrust laws do not prevent companies from using the legal system or political process to attempt to reduce competition. Most of these activities are considered legal under the Noerr-Pennington doctrine. Also, regulations by states may be immune under the Parker immunity doctrine.[40]

  • Professional Real Estate Investors, Inc., v. Columbia Pictures, 508 U.S. 49 (1993)
  • Allied Tube v. Indian Head, Inc., 486 U.S. 492 (1988)
  • FTC v. Superior Ct. TLA, 493 U.S. 411 (1990)

Other

Fourth, the government may grant monopolies in certain industries such as utilities and infrastructure where multiple players are seen as unfeasible or impractical.[41]

Fifth, insurance is allowed limited antitrust exemptions as provided by the McCarran-Ferguson Act of 1945.[42]

Sixth, M&A transactions in the defense sector are often subject to greater antitrust scrutiny from the Department of Justice and the Federal Trade Commission.[43]

Remedies and enforcement

The several district courts of the United States are invested with jurisdiction to prevent and restrain violations of sections 1 to 7 of this title; and it shall be the duty of the several United States attorneys, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises.

Sherman Act 1890 §4

The remedies for violations of U.S. antitrust laws are as broad as any equitable remedy that a court has the power to make, as well as being able to impose penalties. When private parties have suffered an actionable loss, they may claim compensation. Under the Sherman Act 1890 §7, these may be trebled, a measure to encourage private litigation to enforce the laws and act as a deterrent. The courts may award penalties under §§1 and 2, which are measured according to the size of the company or the business. In their inherent jurisdiction to prevent violations in future, the courts have additionally exercised the power to break up businesses into competing parts under different owners, although this remedy has rarely been exercised (examples include Standard OilNorthern Securities CompanyAmerican Tobacco CompanyAT&T Corporation and, although reversed on appeal, Microsoft). Three levels of enforcement come from the Federal government, primarily through the Department of Justice and the Federal Trade Commission, the governments of states, and private parties. Public enforcement of antitrust laws is seen as important, given the cost, complexity and daunting task for private parties to bring litigation, particularly against large corporations.

Federal government

Along with the Federal Trade Commission the Department of Justice in Washington, D.C. is the public enforcer of antitrust law.

Federal Trade Commission building, view from southeast

The federal government, via both the Antitrust Division of the United States Department of Justice and the Federal Trade Commission, can bring civil lawsuits enforcing the laws. The United States Department of Justice alone may bring criminal antitrust suits under federal antitrust laws.[44] Perhaps the most famous antitrust enforcement actions brought by the federal government were the break-up of AT&T’s local telephone service monopoly in the early 1980s[45] and its actions against Microsoft in the late 1990s.

Additionally, the federal government also reviews potential mergers to attempt to prevent market concentration. As outlined by the Hart-Scott-Rodino Antitrust Improvements Act, larger companies attempting to merge must first notify the Federal Trade Commission and the Department of Justice’s Antitrust Division prior to consummating a merger.[46] These agencies then review the proposed merger first by defining what the market is and then determining the market concentration using the Herfindahl-Hirschman Index (HHI) and each company’s market share.[46] The government looks to avoid allowing a company to develop market power, which if left unchecked could lead to monopoly power.[46]

The United States Department of Justice and Federal Trade Commission target nonreportable mergers for enforcement as well. Notably, between 2009 and 2013, 20% of all merger investigations conducted by the United States Department of Justice involved nonreportable transactions.[47]

  • FTC v. Sperry & Hutchinson Trading Stamp Co., 405 U.S. 233 (1972). Case held that the FTC is entitled to bring enforcement action against businesses that act unfairly, as where supermarket trading stamps company injured consumers by prohibiting them from exchanging trading stamps. The FTC could prevent the restrictive practice as unfair, even though there was no specific antitrust violation.

International cooperation

Despite considerable effort by the Clinton administration, the Federal government attempted to extend antitrust cooperation with other countries for mutual detection, prosecution and enforcement. A bill was unanimously passed by the US Congress;[48] however by 2000 only one treaty has been signed[49] with Australia.[50] On 3 July 2017 the Australian Competition and Consumer Commission announced it was seeking explanations from a US company, Apple Inc. In relation to potentially anticompetitive behaviour against an Australian bank in possible relation to Apple Pay.[51] It is not known whether the treaty could influence the enquiry or outcome.

In many cases large US companies tend to deal with overseas antitrust within the overseas jurisdiction, autonomous of US laws, such as in Microsoft Corp v Commission and more recently, Google v European Union where the companies were heavily fined.[52] Questions have been raised with regards to the consistency of antitrust between jurisdictions where the same antitrust corporate behaviour, and similar antitrust legal environment, is prosecuted in one jurisdiction but not another.[53]

State governments

State attorneys general may file suits to enforce both state and federal antitrust laws.

Private suits]

Private civil suits may be brought, in both state and federal court, against violators of state and federal antitrust law. Federal antitrust laws, as well as most state laws, provide for triple damages against antitrust violators in order to encourage private lawsuit enforcement of antitrust law. Thus, if a company is sued for monopolizing a market and the jury concludes the conduct resulted in consumers’ being overcharged $200,000, that amount will automatically be tripled, so the injured consumers will receive $600,000. The United States Supreme Court summarized why Congress authorized private antitrust lawsuits in the case Hawaii v. Standard Oil Co. of Cal., 405 U.S. 251, 262 (1972):

Every violation of the antitrust laws is a blow to the free-enterprise system envisaged by Congress. This system depends on strong competition for its health and vigor, and strong competition depends, in turn, on compliance with antitrust legislation. In enacting these laws, Congress had many means at its disposal to penalize violators. It could have, for example, required violators to compensate federal, state, and local governments for the estimated damage to their respective economies caused by the violations. But, this remedy was not selected. Instead, Congress chose to permit all persons to sue to recover three times their actual damages every time they were injured in their business or property by an antitrust violation. By offering potential litigants the prospect of a recovery in three times the amount of their damages, Congress encouraged these persons to serve as “private attorneys general”.

  • Pfizer, Inc. v. Government of India, 434 U.S. 308 (1978) foreign governments have standing to sue in private actions in the U.S. courts.
  • Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251 (1946) treble damages awarded under the Clayton Act §4 needed not to be mathematically precise, but based on a reasonable estimate of loss, and not speculative. This meant a jury could set a higher estimate of how much movie theaters lost, when the film distributors conspired with other theaters to let them show films first.
  • Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) indirect purchasers of goods where prices have been raised have no standing to sue. Only the direct contractors of cartel members may, to avoid double or multiple recovery.
  • Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) on arbitration

Theory

The Supreme Court calls the Sherman Antitrust Act a “charter of freedom”, designed to protect free enterprise in America.[54] One view of the statutory purpose, urged for example by Justice Douglas, was that the goal was not only to protect consumers, but at least as importantly to prohibit the use of power to control the marketplace.[55]

We have here the problem of bigness. Its lesson should by now have been burned into our memory by Brandeis. The Curse of Bigness shows how size can become a menace–both industrial and social. It can be an industrial menace because it creates gross inequalities against existing or putative competitors. It can be a social menace … In final analysis, size in steel is the measure of the power of a handful of men over our economy … The philosophy of the Sherman Act is that it should not exist … Industrial power should be decentralized. It should be scattered into many hands so that the fortunes of the people will not be dependent on the whim or caprice, the political prejudices, the emotional stability of a few self-appointed men … That is the philosophy and the command of the Sherman Act. It is founded on a theory of hostility to the concentration in private hands of power so great that only a government of the people should have it.

— Dissenting opinion of Justice Douglas in United States v. Columbia Steel Co.[55]

By contrast, efficiency argue that antitrust legislation should be changed to primarily benefit consumers, and have no other purpose. Free market economist Milton Friedman states that he initially agreed with the underlying principles of antitrust laws (breaking up monopolies and oligopolies and promoting more competition), but that he came to the conclusion that they do more harm than good.[56] Thomas Sowell argues that, even if a superior business drives out a competitor, it does not follow that competition has ended:

In short, the financial demise of a competitor is not the same as getting rid of competition. The courts have long paid lip service to the distinction that economists make between competition—a set of economic conditions—and existing competitors, though it is hard to see how much difference that has made in judicial decisions. Too often, it seems, if you have hurt competitors, then you have hurt competition, as far as the judges are concerned.[57]

Alan Greenspan argues that the very existence of antitrust laws discourages businessmen from some activities that might be socially useful out of fear that their business actions will be determined illegal and dismantled by government. In his essay entitled Antitrust, he says: “No one will ever know what new products, processes, machines, and cost-saving mergers failed to come into existence, killed by the Sherman Act before they were born. No one can ever compute the price that all of us have paid for that Act which, by inducing less effective use of capital, has kept our standard of living lower than would otherwise have been possible.” Those, like Greenspan, who oppose antitrust tend not to support competition as an end in itself but for its results—low prices. As long as a monopoly is not a coercive monopoly where a firm is securely insulated from potential competition, it is argued that the firm must keep prices low in order to discourage competition from arising. Hence, legal action is uncalled for and wrongly harms the firm and consumers.[58]

Thomas DiLorenzo, an adherent of the Austrian School of economics, found that the “trusts” of the late 19th century were dropping their prices faster than the rest of the economy, and he holds that they were not monopolists at all.[59] Ayn Rand, the American writer, provides a moral argument against antitrust laws. She holds that these laws in principle criminalize any person engaged in making a business successful, and, thus, are gross violations of their individual expectations.[60] Such laissez faire advocates suggest that only a coercive monopoly should be broken up, that is the persistent, exclusive control of a vitally needed resource, good, or service such that the community is at the mercy of the controller, and where there are no suppliers of the same or substitute goods to which the consumer can turn. In such a monopoly, the monopolist is able to make pricing and production decisions without an eye on competitive market forces and is able to curtail production to price-gouge consumers. Laissez-faire advocates argue that such a monopoly can only come about through the use of physical coercion or fraudulent means by the corporation or by government intervention and that there is no case of a coercive monopoly ever existing that was not the result of government policies.

Judge Robert Bork‘s writings on antitrust law (particularly The Antitrust Paradox), along with those of Richard Posner and other law and economics thinkers, were heavily influential in causing a shift in the U.S. Supreme Court’s approach to antitrust laws since the 1970s, to be focused solely on what is best for the consumer rather than the company’s practices.[45]

See also[

Notes …

References

Texts
  • ET Sullivan, H Hovenkamp and HA Shlanski, Antitrust Law, Policy and Procedure: Cases, Materials, Problems (6th edn 2009)
  • CJ Goetz, FS McChesney and TA Lambert, Antitrust Law, Interpretation and Implementation (5th edn 2012)
  • P Areeda and L Kaplow, Antitrust Analysis: Problems, Texts, Cases (1997)
Theory
  • W Adams and JW Brock, Antitrust Economics on Trial: Dialogue in New Learning (Princeton 1991) ISBN 0-691-00391-2.
  • O Black, Conceptual Foundations of Antitrust (2005)
  • RH BorkThe Antitrust Paradox (Free Press 1993) ISBN 0-02-904456-1.
  • Choi, Jay Pil (ed.) (2007). Recent Developments in Antitrust: Theory and EvidenceThe MIT PressISBN978-0-262-03356-5.
  • Antonio Cucinotta, ed. Post-Chicago Developments in Antitrust Law (2003)
  • David S Evans. Microsoft, Antitrust and the New Economy: Selected Essays (2002)
  • John E Kwoka and Lawrence J White, eds. The Antitrust Revolution: Economics, Competition, and Policy (2003)
  • RA PosnerAntitrust Law: An Economic Perspective (1976)
Articles
Historical
  • Adolf Berle and Gardiner MeansThe Modern Corporation and Private Property (1932)
  • Louis BrandeisThe Curse of Bigness (1934)
  • Alfred ChandlerThe Visible Hand: The Managerial Revolution in American Business (1977)
  • J Dirlam and A Kahn, Fair Competition: The Law and Economics of Antitrust Policy (1954)
  • J Dorfman, The Economic Mind in American Civilization 1865–1918 (1949)
  • T Freyer, Regulating Big Business: Antitrust in Great Britain and America, 1880–1990 (1992)
  • W Hamilton & I Till, Antitrust in Action (U.S. Government Printing Office, 1940)
  • W Letwin, Law and Economic Policy in America: The Evolution of the Sherman Antitrust Act (1965)
  • E Rozwenc, ed. Roosevelt, Wilson and The Trusts. (1950)
  • George StiglerThe Organization of Industry (1968)
  • G Stocking and M Watkins, Monopoly and Free Enterprise (1951).
  • H Thorelli, The Federal Antitrust Policy: Origination of an American Tradition (1955)
  • S Webb and B WebbIndustrial Democracy (9th edn 926) Part III, ch 2

External links

https://en.wikipedia.org/wiki/United_States_antitrust_law

Industrial Concentration


Industrial concentration” refers to a structural characteristic of the business sector. It is the degree to which production in an industry—or in the economy as a whole—is dominated by a few large firms. Once assumed to be a symptom of “market failure,” concentration is, for the most part, seen nowadays as an indicator of superior economic performance. In the early 1970s, Yale Brozen, a key contributor to the new thinking, called the profession’s about-face on this issue “a revolution in economics.” Industrial concentration remains a matter of public policy concern even so.

The Measurement of Industrial Concentration

Industrial concentration was traditionally summarized by the concentration ratio, which simply adds the market shares of an industry’s four, eight, twenty, or fifty largest companies. In 1982, when new federal merger guidelines were issued, the Herfindahl-Hirschman Index (HHI) became the standard measure of industrial concentration. Suppose that an industry contains ten firms that individually account for 25, 15, 12, 10, 10, 8, 7, 5, 5, and 3 percent of total sales. The four-firm concentration ratio for this industry—the most widely used number—is 25 + 15 + 12 + 10 = 62, meaning that the top four firms account for 62 percent of the industry’s sales. The HHI, by contrast, is calculated by summing the squared market shares of all of the firms in the industry: 252 + 152 + 122 + 102 + 102 + 82 + 72 + 52 + 52 + 32 = 1,366. The HHI has two distinct advantages over the concentration ratio. It uses information about the relative sizes of all of an industry’s members, not just some arbitrary subset of the leading companies, and it weights the market shares of the largest enterprises more heavily.

In general, the fewer the firms and the more unequal the distribution of market shares among them, the larger the HHI. Two four-firm industries, one containing equalsized firms each accounting for 25 percent of total sales, the other with market shares of 97, 1, 1, and 1, have the same four-firm concentration ratio (100) but very different HHIs (2,500 versus 9,412). An industry controlled by a single firm has an HHI of 1002 = 10,000, while the HHI for an industry populated by a very large number of very small firms would approach the index’s theoretical minimum value of zero.

Concentration in the U.S. Economy

According to the U.S. Department of Justice’s merger guidelines, an industry is considered “concentrated” if the HHI exceeds 1,800; it is “unconcentrated” if the HHI is below 1,000. Since 1982, HHIs based on the value of shipments of the fifty largest companies have been calculated and reported in the manufacturing series of the Economic Census.1 Concentration levels exceeding 1,800 are rare. The exceptions include glass containers (HHI = 2,959.9 in 1997), motor vehicles (2,505.8), and breakfast cereals (2,445.9). Cigarette manufacturing also is highly concentrated, but its HHI is not reported owing to the small number of firms in that industry, the largest four of which accounted for 89 percent of shipments in 1997. At the other extreme, the HHI for machine shops was 1.9 the same year.

Whether an industry is concentrated hinges on how narrowly or broadly it is defined, both in terms of the product it produces and the extent of the geographic area it serves. The U.S. footwear manufacturing industry as a whole is very unconcentrated (HHI = 317 in 1997); the level of concentration among house slipper manufacturers is considerably higher, though (HHI = 2,053.4). Similarly, although the national ready-mix concrete industry is unconcentrated (HHI = 29.4), concentration in that industry undoubtedly is much higher in specific cities and towns that typically are served by only a handful of such firms.

These examples suggest that concentration varies substantially across U.S. industries. Trends in concentration vary from industry to industry, but most changes in concentration proceed at a glacial pace. So, too, does aggregate concentration: the fifty largest U.S. companies accounted for 24 percent of manufacturing value added (revenue minus the costs of fuel, power, and raw materials) in 1997, the same percentage as in 1992 (and as in 1954, for that matter). On some measures—the percentages of total employment and total assets controlled by the nation’s 50, 100, or 200 largest firms—industrial concentration in the United States actually has declined since World War II.

Concentration indexes calculated for a particular year conceal the identities of the industry’s members. In reality, turnover among the nation’s leading firms is fairly regular over long time horizons, averaging between 2 and 5 percent annually. Success at one point in time does not guarantee survival: only three of the ten largest U.S. companies in 1909 made the top one hundred list in 1987. Available concentration indexes, which are based solely on domestic manufacturing data, also ignore the global dimensions of industrial production.

The Causes and Consequences of Industrial Concentration

Some industries are more concentrated than others because of technical properties of their production technologies or unique characteristics of the markets they serve. Economies of scale, which allow firms to reduce their average costs as they increase their rates of output, favor large-scale production over small-scale production. Thus, industries for which scale economies are important (e.g., auto manufacturing and petroleum refining) are expected to be more concentrated than others in which costs do not fall as rapidly as output expands (e.g., cut-and-sew apparel manufacturing). Similarly, concentration tends to be higher in industries, such as aircraft and semiconductor manufacturing, where learning curves generate substantial production-cost savings as additional units of the original model or design are made.

Owing to so-called network effects, some goods increase in value as more people use them. Computer operating systems, word-processing software, and video recorder-players are examples of such goods, as are literal networks such as railroads, commercial air transportation, and wire line telephony. Because standard technologies and protocols that provide compatible interconnections are critical to the realization of network effects— allowing faxes to be sent and received or computer users easily to exchange files—consumers rationally favor large networks over small ones. The necessity of building networks that accommodate critical masses of users means that only a few providers will achieve dominant positions, and therefore the industry will tend to be highly concentrated. Such domination is likely to be temporary, however, since consumers will switch networks when benefits outweigh costs, as illustrated by the replacement of Betaformatted video tapes by VHS formatted ones, which in turn are being replaced by DVDs.

Industrial concentration also is promoted by barriers to entry, which make it difficult for new firms to displace established firms. Barriers to entry are erected by government-conferred privileges such as patents, copyrights and trademarks, exclusive franchises, and licensing requirements. Existing firms may possess other advantages over newcomers, including lower costs and brand loyalty, which make entry more difficult.

The fundamental public policy question posed by industrial concentration is this: Are concentrated industries somehow less competitive than unconcentrated ones? Concentration would have adverse effects if it bred market power—the ability to charge prices in excess of costs—thereby increasing industry profits at consumers’ expense. In theory, industrial concentration can facilitate the exercise of market power if the members of the industry agree to cooperate rather than compete, or if the industry’s dominant firm takes the lead in setting prices that rivals follow. And, indeed, the evidence generated by hundreds of econometric studies suggests that concentrated industries are more profitable than unconcentrated ones. But that evidence begs the question. It does not tell us whether profits are higher in concentrated industries because of market power effects or because the firms in those industries use resources more efficiently (i.e., have lower costs).

Some economists have found that concentration leads to higher prices, but the link observed typically is both small (prices elevated by 1–5 percent) and statistically weak. A detailed econometric study by Sam Peltzman (1977) reaches the opposite conclusion. He reports that profits are higher in concentrated industries not because prices are higher, but because they do not decline as much as costs do as efficient firms expand their scales of operation. Analyses by Yale Brozen (1982), Harold Demsetz (1974), and others have found that the positive relation between industrial concentration and profits disappears altogether when firm size is taken into account. These results are consistent with the hypothesis that some industries are more concentrated than others because large firms have significant cost advantages over small firms. There is, in short, little unequivocal evidence that industrial concentration per se is worrisome. Just the reverse seems to be true.

Public Policies Toward Industrial Concentration

Consolidating production in the hands of fewer firms through mergers and acquisitions obviously is the most direct route to industrial concentration. Preventing transactions that, by eliminating one or more competitors, would lead to undue increases in concentration and the possible exercise of market power by the remaining firms is the mandate of the two federal antitrust agencies—the U.S. Department of Justice and the Federal Trade Commission—under section 7 of the Clayton Act (1914). That mandate was strengthened considerably by the Hart-Scott-Rodino Act (1978), which requires firms to notify the antitrust authorities of their intention to merge and then to hold the transaction in abeyance until it has been reviewed. Most transactions with summed firm values of fifteen million dollars or more had to file premerger notifications initially; in February 2001 that threshold was raised to fifty million dollars and indexed for inflation.

Two important factors that antitrust authorities consider in deciding whether to allow a proposed merger to proceed are the level of market concentration if the merger is consummated and the change in market concentration from its premerger level. (Note that the “market” considered relevant for merger analysis hardly ever corresponds to the “industry” defined by the Economic Census; antitrust markets may be defined more broadly or more narrowly; in practice, the definition of the relevant market usually is the key to whether a merger is lawful or not.) Concentration thresholds are laid out in the Justice Department’s merger guidelines, first promulgated in 1968, revised substantially in 1982, and amended several times since.

The guidelines state that proposed mergers are unlikely to be challenged if the postmerger market is unconcentrated (HHI remains below 1,000). However, mergers generally will not be approved if, following consummation, market concentration falls within the 1,000–1,800 range, and the HHI increases by more than 100 points or, if the postmerger HHI is 1,800 or more, concentration increases by more than 50 points.2 Exceptions are provided when the merging firms can demonstrate significant cost savings, when barriers to entry are low, or when one of the merger’s partners would fail otherwise. (In the European Union, by contrast, competition policy, including merger law enforcement, is shaped principally by fears of possible “abuses of dominant market positions” by large firms.)

Studies examining the enforcement of section 7 under the merger guidelines have found that they are not always followed closely. Mergers are, indeed, more likely to be challenged the greater the level of market concentration and the higher the barriers to entry are thought to be. But law enforcement also is found to be influenced significantly by political pressures on the antitrust authorities from groups that stand to lose if a merger is approved, including rivals worried that the transaction will create a more effective competitor. In fact, studies of stock-market reactions to news that a merger is likely to be challenged typically find competitors to be the main beneficiaries of such decisions.


About the Author

William F. Shughart II is F. A. P. Barnard Distinguished Professor of Economics at the University of Mississippi. He was special assistant to the director of the Federal Trade Commission’s Bureau of Economics during the Reagan administration and currently is editor in chief of Public Choice and associate editor of the Southern Economic Journal.


Further Reading

Introductory

Adams, Walter, and James Brock. The Structure of American Industry. 11th ed. Upper Saddle River, N.J.: Pearson/Prentice Hall, 2005.
Cabral, Luís M. B. Introduction to Industrial Organization. Cambridge: MIT Press, 2000.
Kwoka, John E. Jr., and Lawrence J. White. The Antitrust Revolution: Economics, Competition, and Policy. 4th ed. New York: Oxford University Press, 2004.
Pautler, Paul A. “Evidence on Mergers and Acquisitions.” Antitrust Bulletin 48 (Spring 2003): 119–221.
Shughart, William F. II. Antitrust Policy and Interest-Group Politics. New York: Quorum Books, 1990.
Shughart, William F. II. “Regulation and Antitrust.” In Charles K. Rowley and Friedrich Schneider, eds., The Encyclopedia of Public Choice. Vol. 1. Boston: Kluwer, 2004. Pp. 263–283.

 

Advanced

Brozen, Yale. Concentration, Mergers, and Public Policy. New York: Macmillan, 1982.
Carlton, Dennis W., and Jeffrey M. Perloff. Modern Industrial Organization. 3d ed. Reading, Mass.: Addison-Wesley, 2000.
Coate, Malcolm B., Richard S. Higgins, and Fred S. Mc-Chesney. “Bureaucracy and Politics in FTC Merger Challenges.” Journal of Law and Economics 33 (October 1990): 463–482.
Demsetz, Harold. “Two Systems of Belief About Monopoly.” In Harvey J. Goldschmid, H. Michael Mann, and J. Fred Weston, eds., Industrial Concentration: The New Learning. Boston: Little, Brown, 1974.
Goldschmid, Harvey J., H. Michael Mann, and J. Fred Weston, eds. Industrial Concentration: The New Learning. Boston: Little, Brown, 1974.
McChesney, Fred S., and William F. Shughart II, eds. The Causes and Consequences of Antitrust: The Public-Choice Perspective. Chicago: University of Chicago Press, 1995.
Peltzman, Sam. “The Gains and Losses from Industrial Concentration.” Journal of Law and Economics 20 (April 1977): 229–263.
Shy, Oz. The Economics of Network Industries. Cambridge: Cambridge University Press, 2001.
Stiglitz, Joseph E., and G. Frank Mathewson, eds. New Developments in the Analysis of Market Structure. Cambridge: MIT Press, 1986.

Footnotes

The Economic Census has been conducted every five years since 1967, and before that for 1954, 1958, and 1963. Prior to 1997, it was known as the Census of Manufactures. That same year, industries began being categorized according to the North American Industry Classification System (NAICS), which replaced the Standard Industrial Classification (SIC) codes used until 1992. Industrial concentration also is reported by the Economic Census on the basis of value added. Industry concentration ratios and HHIs for the 1992 and 1997 economic censuses can be accessed online at: http://www.census.gov/epcd/www/concentration.html. Information on industrial concentration is not readily available for sectors of the economy other than manufacturing.

When firms with market shares of s1 and s2 merge, the HHI increases by (s1 + s2)2 − s12 − s22 = 2s1s2. So, for example, if a merger is proposed between the two largest firms in the hypothetical ten-firm industry described earlier, the HHI would increase by 2 × 25 × 15 = 750 points (from 1,366 to 2,116). According to the guidelines, that merger would in all likelihood be challenged.

 

Cryptocurrency

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Various cryptocurrency logos.

cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.[1][2][3] Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems.[4]

The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.[5]

Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency.[6] Since the release of bitcoin, over 4,000 altcoins (alternative variants of bitcoin, or other cryptocurrencies) have been created.

Contents

History

In 1983, the American cryptographer David Chaum conceived an anonymous cryptographic electronic money called ecash.[7][8] Later, in 1995, he implemented it through Digicash,[9] an early form of cryptographic electronic payments which required user software in order to withdraw notes from a bank and designate specific encrypted keys before it can be sent to a recipient. This allowed the digital currency to be untraceable by the issuing bank, the government, or any third party.

In 1996, the NSA published a paper entitled How to Make a Mint: the Cryptography of Anonymous Electronic Cash, describing a Cryptocurrency system first publishing it in a MIT mailing list[10] and later in 1997, in The American Law Review (Vol. 46, Issue 4).[11]

In 1998, Wei Dai published a description of “b-money”, characterized as an anonymous, distributed electronic cash system.[12] Shortly thereafter, Nick Szabo described bit gold.[13] Like bitcoin and other cryptocurrencies that would follow it, bit gold (not to be confused with the later gold-based exchange, BitGold) was described as an electronic currency system which required users to complete a proof of work function with solutions being cryptographically put together and published. A currency system based on a reusable proof of work was later created by Hal Finney who followed the work of Dai and Szabo.[citation needed]

The first decentralized cryptocurrency, bitcoin, was created in 2009 by pseudonymous developer Satoshi Nakamoto. It used SHA-256, a cryptographic hash function, as its proof-of-work scheme.[14][15] In April 2011, Namecoin was created as an attempt at forming a decentralized DNS, which would make internet censorship very difficult. Soon after, in October 2011, Litecoin was released. It was the first successful cryptocurrency to use scrypt as its hash function instead of SHA-256. Another notable cryptocurrency, Peercoin was the first to use a proof-of-work/proof-of-stake hybrid.[16]

On 6 August 2014, the UK announced its Treasury had been commissioned to do a study of cryptocurrencies, and what role, if any, they can play in the UK economy. The study was also to report on whether regulation should be considered.[17]

Formal definition

According to Jan Lansky, a cryptocurrency is a system that meets six conditions:[18]

  1. The system does not require a central authority, its state is maintained through distributed consensus.
  2. The system keeps an overview of cryptocurrency units and their ownership.
  3. The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
  4. Ownership of cryptocurrency units can be proved exclusively cryptographically.
  5. The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
  6. If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.

In March 2018, the word cryptocurrency was added to the Merriam-Webster Dictionary.[19]

Altcoin

The term altcoin has various similar definitions. Stephanie Yang of The Wall Street Journal defined altcoins as “alternative digital currencies,”[20] while Paul Vigna, also of The Wall Street Journal, described altcoins as alternative versions of bitcoin.[21] Aaron Hankins of the MarketWatch refers to any cryptocurrencies other than bitcoin as altcoins.[22]

Crypto token

blockchain account can provide functions other than making payments, for example in decentralized applications or smart contracts. In this case, the units or coins are sometimes referred to as crypto tokens (or cryptotokens).

Architecture

Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known. In centralized banking and economic systems such as the Federal Reserve System, corporate boards or governments control the supply of currency by printing units of fiat money or demanding additions to digital banking ledgers. In case of decentralized cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it. The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto.[23]

As of May 2018, over 1,800 cryptocurrency specifications existed.[24] Within a cryptocurrency system, the safety, integrity and balance of ledgers is maintained by a community of mutually distrustful parties referred to as miners: who use their computers to help validate and timestamp transactions, adding them to the ledger in accordance with a particular timestamping scheme.[14]

Most cryptocurrencies are designed to gradually decrease production of that currency, placing a cap on the total amount of that currency that will ever be in circulation.[25] Compared with ordinary currencies held by financial institutions or kept as cash on hand, cryptocurrencies can be more difficult for seizure by law enforcement.[1] This difficulty is derived from leveraging cryptographic technologies.

Blockchain

The validity of each cryptocurrency’s coins is provided by a blockchain. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography.[23][26] Each block typically contains a hash pointer as a link to a previous block,[26] a timestamp and transaction data.[27] By design, blockchains are inherently resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.[28] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.

Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault toleranceDecentralized consensus has therefore been achieved with a blockchain.[29] Blockchains solve the double-spending problem without the need of a trusted authority or central server, assuming no 51% attack (that has worked against several cryptocurrencies).

Timestamping

Cryptocurrencies use various timestamping schemes to “prove” the validity of transactions added to the blockchain ledger without the need for a trusted third party.

The first timestamping scheme invented was the proof-of-work scheme. The most widely used proof-of-work schemes are based on SHA-256 and scrypt.[16]

Some other hashing algorithms that are used for proof-of-work include CryptoNightBlakeSHA-3, and X11.

The proof-of-stake is a method of securing a cryptocurrency network and achieving distributed consensus through requesting users to show ownership of a certain amount of currency. It is different from proof-of-work systems that run difficult hashing algorithms to validate electronic transactions. The scheme is largely dependent on the coin, and there’s currently no standard form of it. Some cryptocurrencies use a combined proof-of-work/proof-of-stake scheme.[16]

Mining

Hashcoin mine

In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machines such as FPGAs and ASICs running complex hashing algorithms like SHA-256 and Scrypt.[30] This arms race for cheaper-yet-efficient machines has been on since the day the first cryptocurrency, bitcoin, was introduced in 2009.[30] With more people venturing into the world of virtual currency, generating hashes for this validation has become far more complex over the years, with miners having to invest large sums of money on employing multiple high performance ASICs. Thus the value of the currency obtained for finding a hash often does not justify the amount of money spent on setting up the machines, the cooling facilities to overcome the enormous amount of heat they produce, and the electricity required to run them.[30][31]

Some miners pool resources, sharing their processing power over a network to split the reward equally, according to the amount of work they contributed to the probability of finding a block. A “share” is awarded to members of the mining pool who present a valid partial proof-of-work.

As of February 2018, the Chinese Government halted trading of virtual currency, banned initial coin offerings and shut down mining. Some Chinese miners have since relocated to Canada.[32] One company is operating data centers for mining operations at Canadian oil and gas field sites, due to low gas prices.[33] In June 2018, Hydro Quebec proposed to the provincial government to allocate 500 MW to crypto companies for mining.[34] According to a February 2018 report from Fortune,[35] Iceland has become a haven for cryptocurrency miners in part because of its cheap electricity. Prices are contained because nearly all of the country’s energy comes from renewable sources, prompting more mining companies to consider opening operations in Iceland.[citation needed]

In March 2018, a town in Upstate New York put an 18-month moratorium on all cryptocurrency mining in an effort to preserve natural resources and the “character and direction” of the city.[36]

GPU price rise

An increase in cryptocurrency mining increased the demand of graphics cards (GPU) in 2017.[37] Popular favorites of cryptocurrency miners such as Nvidia’s GTX 1060 and GTX 1070 graphics cards, as well as AMD’s RX 570 and RX 580 GPUs, doubled or tripled in price – or were out of stock.[38] A GTX 1070 Ti which was released at a price of $450 sold for as much as $1100. Another popular card GTX 1060’s 6 GB model was released at an MSRP of $250, sold for almost $500. RX 570 and RX 580 cards from AMD were out of stock for almost a year. Miners regularly buy up the entire stock of new GPU’s as soon as they are available.[39]

Nvidia has asked retailers to do what they can when it comes to selling GPUs to gamers instead of miners. “Gamers come first for Nvidia,” said Boris Böhles, PR manager for Nvidia in the German region.[40]

Wallets

An example paper printable bitcoin wallet consisting of one bitcoin address for receiving and the corresponding private key for spending

cryptocurrency wallet stores the public and private “keys” or “addresses” which can be used to receive or spend the cryptocurrency. With the private key, it is possible to write in the public ledger, effectively spending the associated cryptocurrency. With the public key, it is possible for others to send currency to the wallet.

Anonymity

Bitcoin is pseudonymous rather than anonymous in that the cryptocurrency within a wallet is not tied to people, but rather to one or more specific keys (or “addresses”).[41] Thereby, bitcoin owners are not identifiable, but all transactions are publicly available in the blockchain. Still, cryptocurrency exchanges are often required by law to collect the personal information of their users.[citation needed]

Additions such as Zerocoin, Zerocash and CryptoNote have been suggested, which would allow for additional anonymity and fungibility.[42][43]

Fungibility

Most cryptocurrency tokens are fungible and interchangeable. However, unique non-fungible tokens also exist. Such tokens can serve as assets in games like CryptoKitties.

Economics

Cryptocurrencies are used primarily outside existing banking and governmental institutions and are exchanged over the Internet.

Transaction fees

Transaction fees for cryptocurrency depend mainly on the supply of network capacity at the time, versus the demand from the currency holder for a faster transaction. The currency holder can choose a specific transaction fee, while network entities process transactions in order of highest offered fee to lowest. Cryptocurrency exchanges can simplify the process for currency holders by offering priority alternatives and thereby determine which fee will likely cause the transaction to be processed in the requested time.

For ether, transaction fees differ by computational complexity, bandwidth use, and storage needs, while bitcoin transaction fees differ by transaction size and whether the transaction uses SegWit. In September 2018, the median transaction fee for ether corresponded to $0.017,[44] while for bitcoin it corresponded to $0.55.[45]

Exchanges

Cryptocurrency exchanges allow customers to trade cryptocurrencies for other assets, such as conventional fiat money, or to trade between different digital currencies.

Atomic swaps

Atomic swaps are a mechanism where one cryptocurrency can be exchanged directly for another cryptocurrency, without the need for a trusted third party such as an exchange.

ATMs

Jordan Kelley, founder of Robocoin, launched the first bitcoin ATM in the United States on 20 February 2014. The kiosk installed in Austin, Texas is similar to bank ATMs but has scanners to read government-issued identification such as a driver’s license or a passport to confirm users’ identities.[46]

Initial coin offerings

An initial coin offering (ICO) is a controversial means of raising funds for a new cryptocurrency venture. An ICO may be used by startups with the intention of avoiding regulation. However, securities regulators in many jurisdictions, including in the U.S., and Canada have indicated that if a coin or token is an “investment contract” (e.g., under the Howey test, i.e., an investment of money with a reasonable expectation of profit based significantly on the entrepreneurial or managerial efforts of others), it is a security and is subject to securities regulation. In an ICO campaign, a percentage of the cryptocurrency (usually in the form of “tokens”) is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, often bitcoin or ether.[47][48][49]

According to PricewaterhouseCoopers, four of the 10 biggest proposed initial coin offerings have used Switzerland as a base, where they are frequently registered as non-profit foundations. The Swiss regulatory agency FINMA stated that it would take a “balanced approach” to ICO projects and would allow “legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with national laws protecting investors and the integrity of the financial system.” In response to numerous requests by industry representatives, a legislative ICO working group began to issue legal guidelines in 2018, which are intended to remove uncertainty from cryptocurrency offerings and to establish sustainable business practices.[50]

Legality

The legal status of cryptocurrencies varies substantially from country to country and is still undefined or changing in many of them. While some countries have explicitly allowed their use and trade,[51] others have banned or restricted it. According to the Library of Congress, an “absolute ban” on trading or using cryptocurrencies applies in eight countries: Algeria, Bolivia, Egypt, Iraq, Morocco, Nepal, Pakistan, and the United Arab Emirates. An “implicit ban” applies in another 15 countries, which include Bahrain, Bangladesh, China, Colombia, the Dominican Republic, Indonesia, Iran, Kuwait, Lesotho, Lithuania, Macau, Oman, Qatar, Saudi Arabia and Taiwan.[52] In the United States and Canada, state and provincial securities regulators, coordinated through the North American Securities Administrators Association, are investigating “bitcoin scams” and ICOs in 40 jurisdictions.[53]

Various government agencies, departments, and courts have classified bitcoin differently. China Central Bank banned the handling of bitcoins by financial institutions in China in early 2014.

In Russia, though cryptocurrencies are legal, it is illegal to actually purchase goods with any currency other than the Russian ruble.[54] Regulations and bans that apply to bitcoin probably extend to similar cryptocurrency systems.[55]

Cryptocurrencies are a potential tool to evade economic sanctions for example against RussiaIran, or Venezuela. Russia also secretly supported Venezuela with the creation of the petro (El Petro), a national cryptocurrency initiated by the Maduro government to obtain valuable oil revenues by circumventing US sanctions.[citation needed]

In August 2018, the Bank of Thailand announced its plans to create its own cryptocurrency, the Central Bank Digital Currency (CBDC).[56]

Advertising bans

Bitcoin and other cryptocurrency advertisements were temporarily banned on Facebook,[57] GoogleTwitter,[58] Bing,[59] SnapchatLinkedIn and MailChimp.[60] Chinese internet platforms BaiduTencent, and Weibo have also prohibited bitcoin advertisements. The Japanese platform Line and the Russian platform Yandex have similar prohibitions.[61]

U.S. tax status

On 25 March 2014, the United States Internal Revenue Service (IRS) ruled that bitcoin will be treated as property for tax purposes. This means bitcoin will be subject to capital gains tax.[62] In a paper published by researchers from Oxford and Warwick, it was shown that bitcoin has some characteristics more like the precious metals market than traditional currencies, hence in agreement with the IRS decision even if based on different reasons.[63]

In July 2019, the IRS started sending letters to cryptocurrency owners warning them to amend their returns and pay taxes.[64]

The legal concern of an unregulated global economy

As the popularity of and demand for online currencies has increased since the inception of bitcoin in 2009,[65] so have concerns that such an unregulated person to person global economy that cryptocurrencies offer may become a threat to society. Concerns abound that altcoins may become tools for anonymous web criminals.[66]

Cryptocurrency networks display a lack of regulation that has been criticized as enabling criminals who seek to evade taxes and launder money.

Transactions that occur through the use and exchange of these altcoins are independent from formal banking systems, and therefore can make tax evasion simpler for individuals. Since charting taxable income is based upon what a recipient reports to the revenue service, it becomes extremely difficult to account for transactions made using existing cryptocurrencies, a mode of exchange that is complex and difficult to track.[66]

Systems of anonymity that most cryptocurrencies offer can also serve as a simpler means to launder money. Rather than laundering money through an intricate net of financial actors and offshore bank accounts, laundering money through altcoins can be achieved through anonymous transactions.[66]

Loss, theft, and fraud

In February 2014 the world’s largest bitcoin exchange, Mt. Gox, declared bankruptcy. The company stated that it had lost nearly $473 million of their customers’ bitcoins likely due to theft. This was equivalent to approximately 750,000 bitcoins, or about 7% of all the bitcoins in existence. The price of a bitcoin fell from a high of about $1,160 in December to under $400 in February.[67]

Two members of the Silk Road Task Force—a multi-agency federal task force that carried out the U.S. investigation of Silk Road—seized bitcoins for their own use in the course of the investigation.[68] DEA agent Carl Mark Force IV, who attempted to extort Silk Road founder Ross Ulbricht (“Dread Pirate Roberts”), pleaded guilty to money laundering, obstruction of justice, and extortion under color of official right, and was sentenced to 6.5 years in federal prison.[68] U.S. Secret Service agent Shaun Bridges pleaded guilty to crimes relating to his diversion of $800,000 worth of bitcoins to his personal account during the investigation, and also separately pleaded guilty to money laundering in connection with another cryptocurrency theft; he was sentenced to nearly eight years in federal prison.[69]

Homero Josh Garza, who founded the cryptocurrency startups GAW Miners and ZenMiner in 2014, acknowledged in a plea agreement that the companies were part of a pyramid scheme, and pleaded guilty to wire fraud in 2015. The U.S. Securities and Exchange Commission separately brought a civil enforcement action against Garza, who was eventually ordered to pay a judgment of $9.1 million plus $700,000 in interest. The SEC’s complaint stated that Garza, through his companies, had fraudulently sold “investment contracts representing shares in the profits they claimed would be generated” from mining.[70]

On 21 November 2017, the Tether cryptocurrency announced they were hacked, losing $31 million in USDT from their primary wallet.[71] The company has ‘tagged’ the stolen currency, hoping to ‘lock’ them in the hacker’s wallet (making them unspendable). Tether indicates that it is building a new core for its primary wallet in response to the attack in order to prevent the stolen coins from being used.

In May 2018, Bitcoin Gold (and two other cryptocurrencies) were hit by a successful 51% hashing attack by an unknown actor, in which exchanges lost estimated $18m.[citation needed] In June 2018, Korean exchange Coinrail was hacked, losing US$37 million worth of altcoin. Fear surrounding the hack was blamed for a $42 billion cryptocurrency market selloff.[72] On 9 July 2018 the exchange Bancor had $23.5 million in cryptocurrency stolen.[73]

The French regulator Autorité des marchés financiers (AMF) lists 15 websites of companies that solicit investment in cryptocurrency without being authorised to do so in France.[74]

Darknet markets

Properties of cryptocurrencies gave them popularity in applications such as a safe haven in banking crises and means of payment, which also led to the cryptocurrency use in controversial settings in the form of online black markets, such as Silk Road.[66] The original Silk Road was shut down in October 2013 and there have been two more versions in use since then. In the year following the initial shutdown of Silk Road, the number of prominent dark markets increased from four to twelve, while the amount of drug listings increased from 18,000 to 32,000.[66]

Darknet markets present challenges in regard to legality. Bitcoins and other forms of cryptocurrency used in dark markets are not clearly or legally classified in almost all parts of the world. In the U.S., bitcoins are labelled as “virtual assets”. This type of ambiguous classification puts pressure on law enforcement agencies around the world to adapt to the shifting drug trade of dark markets.[75]

Reception

Cryptocurrencies have been compared to Ponzi schemespyramid schemes[76] and economic bubbles,[77] such as housing market bubbles.[78] Howard Marks of Oaktree Capital Management stated in 2017 that digital currencies were “nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it”, and compared them to the tulip mania (1637), South Sea Bubble (1720), and dot-com bubble (1999).[79] The New Yorker has explained the debate based on interviews with blockchain founders in an article about the “argument over whether Bitcoin, Ethereum, and the blockchain are transforming the world”.[80]

While cryptocurrencies are digital currencies that are managed through advanced encryption techniques, many governments have taken a cautious approach toward them, fearing their lack of central control and the effects they could have on financial security.[81] Regulators in several countries have warned against cryptocurrency and some have taken concrete regulatory measures to dissuade users.[82] Additionally, many banks do not offer services for cryptocurrencies and can refuse to offer services to virtual-currency companies.[83] Gareth Murphy, a senior central banking officer has stated “widespread use [of cryptocurrency] would also make it more difficult for statistical agencies to gather data on economic activity, which are used by governments to steer the economy”. He cautioned that virtual currencies pose a new challenge to central banks’ control over the important functions of monetary and exchange rate policy.[84] While traditional financial products have strong consumer protections in place, there is no intermediary with the power to limit consumer losses if bitcoins are lost or stolen.[85] One of the features cryptocurrency lacks in comparison to credit cards, for example, is consumer protection against fraud, such as chargebacks.

An enormous amount of energy goes into proof-of-work cryptocurrency mining, although cryptocurrency proponents claim it is important to compare it to the consumption of the traditional financial system.[86]

There are also purely technical elements to consider. For example, technological advancement in cryptocurrencies such as bitcoin result in high up-front costs to miners in the form of specialized hardware and software.[87] Cryptocurrency transactions are normally irreversible after a number of blocks confirm the transaction. Additionally, cryptocurrency private keys can be permanently lost from local storage due to malware, data loss or the destruction of the physical media. This prevents the cryptocurrency from being spent, resulting in its effective removal from the markets.[88]

The cryptocurrency community refers to pre-mining, hidden launches, ICO or extreme rewards for the altcoin founders as a deceptive practice.[89] It can also be used as an inherent part of a cryptocurrency’s design.[90] Pre-mining means currency is generated by the currency’s founders prior to being released to the public.[91]

Paul KrugmanNobel Memorial Prize in Economic Sciences winner does not like bitcoin, has repeated numerous times that it is a bubble that will not last[92] and links it to Tulip mania.[93] American business magnate Warren Buffett thinks that cryptocurrency will come to a bad ending.[94] In October 2017, BlackRock CEO Laurence D. Fink called bitcoin an ‘index of money laundering‘.[95] “Bitcoin just shows you how much demand for money laundering there is in the world,” he said.

Academic studies

In September 2015, the establishment of the peer-reviewed academic journal Ledger (ISSN 2379-5980) was announced. It covers studies of cryptocurrencies and related technologies, and is published by the University of Pittsburgh.[96]

The journal encourages authors to digitally sign a file hash of submitted papers, which will then be timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers.[97][98]

See also

References …

https://en.wikipedia.org/wiki/Cryptocurrency

 

 

Story 2: Department of Justice Charges Health Care Fraud Against 58 Individuals — Pill Mills — Videos

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58 charged in health care fraud across Texas

Health care frauds arrests announced by DOJ in regional investigation

DOJ charges 601 in health care fraud takedown

2 Sisters, Others Charged In Massive Medicaid Fraud Scheme

4 NYC area doctors among 20 charged in massive health care fraud scheme

I

DOJ Announces Major Crackdown On Healthcare Fraud; 301 Arrested

Investigators warn of Medicaid fraud and home care abuse

Health Care Fraud Enforcement – The Final Frontier

Medicare/Medicaid Fraud Waste and Abuse Training

Texas Health Care Fraud and Opioid Takedown Results in Charges Against 58

HOUSTON – The Justice Department has announced a coordinated health care fraud enforcement operation across the state of Texas involving charges against a total of 58 individuals, several of which are charged in Houston. They were allegedly involved in Medicare fraud schemes and networks of “pill mill” clinics resulting in $66 million in loss and 6.2 million pills. Of those charged, 16 were doctors or medical professionals, while 20 were charged for their role in diverting opioids.

The Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force (MFSF) partners led the enforcement actions. The MFSF is a partnership among the Criminal Division, U.S. Attorney’s Offices, FBI, Department of Health and Human Services – Office of Inspector General (HHS-OIG) and Drug Enforcement Administration. In addition, the operation includes the participation of the Veterans Affairs – OIG and the Department of Labor (DOL), various other federal law enforcement agencies and Texas State Medicaid Fraud Control Units.

The charges announced today aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), DOL – Office of Worker’s Compensation Programs and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals allegedly involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department.

According to the Centers for Disease Control, approximately 115 Americans die every day of an opioid-related overdose.

Today’s arrests come three weeks after the Department announced that the Health Care Fraud Unit’s Houston Strike Force coordinated the filing of charges against dozens in a trafficking network responsible for diverting over 23 million oxycodone, hydrocodone and carisoprodol pills.

“Sadly, opioid proliferation is nothing new to Americans,” said U.S. Attorney Ryan K. Patrick of the Southern District of Texas. “What is new, is the reinforced fight being taken to dirty doctors and shady pharmacists. Texas may have four U.S. Attorneys, but we are focused on one health care mission: shutting down pills mills and rooting out corruption in health care. From Lufkin to Laredo and Dallas to Del Rio, one of us will shut these operations down.”

“Today’s charges highlight the amazing work being done by the Department’s Medicare Fraud Strike Force and our partners in Texas,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “As we continue to dedicate resources to battle healthcare and opioid fraud schemes in Texas and elsewhere, we are shining an inescapable light on dirty doctors, clinic owners, pharmacists and others who may have long believed they could perpetrate their frauds behind closed doors.”

“These arrests across multiple investigations and jurisdictions is further proof that successful teamwork exemplifies Texas law enforcement,” said DEA Houston Special Agent in Charge Will R. Glaspy. “Today’s operation affirms both our commitment to targeting those individuals who illegally divert opioids in our communities, and our collective will to bring those individuals to justice.”

“Health care fraud undermines our country by driving up medical costs, wasting taxpayer dollars, and often harming patients,” said Special Agent in Charge C.J. Porter of HHS-OIG. “Today’s takedown shows that we are fighting hard to protect Medicare and Medicaid and the patients served by those programs. Working closely with our law enforcement partners, our agents are determined to ensure fraudsters pay for their crimes.”

“Today’s announcement demonstrates the close collaboration between the FBI and its law enforcement partners in North Texas,” said Special Agent in Charge Matthew J. DeSarno of the FBI’s Dallas Field Office. “The enormous economic damage caused by those who defraud crucial public health programs, as well as the ever-increasing loss of life caused by illicit and illegitimate pill schemes cannot be overstated. The public can rest assured the FBI will continue to make these investigations a top priority moving forward.”

Among those charged in the Southern District of Texas are:

Diana Hernandez, Kathy Hernandez, Hieu Troung R.P.H., Clint Randall, Prince White, Charles Walton and Cedric Milbrurn were charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose through S&S Pharmacy of Houston.

Franklin Nwabugwu R.P.H. was charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose through Golden Pharmacy of Houston.

Steven Inbody M.D. and Hoai-Huong Truong were charged for their alleged participation in a scheme to unlawfully distribute and dispense controlled substance without a legitimate medical purpose.

Ashley McCain, John Sims, Gregory Comer, Kesia Banks and Jacqueline Hill were charged for their alleged participation in a scheme to unlawfully distribute and dispense a controlled substance without a legitimate medical purpose through Continuous Medical Care and Rehabilitation.

Trial Attorneys Devon Helfmeyer and Catherine Wagner and Assistant Deputy Chief Aleza Remi, all of the Fraud Section, are prosecuting the respective cases.

Several others were also charged in the Northern District of Texas (NDTX), Eastern District of Texas (EDTX) and Eastern District of Texas (EDTX).

“Healthcare should revolve around patients’ well-being – not providers’ personal interests,” said NDTX U.S. Attorney Erin Nealy Cox.  “When medical professionals line their own pockets by submitting false insurance claims or prescribing unnecessary medications, equipment or treatments, it not only drains taxpayer coffers – but it makes healthcare more expensive for everyone else. We cannot allow the healthcare industry to become bloated by fraud.”

“Every dollar stolen from Medicare through fraud comes out of the pocket of taxpayers,” said EDTXU.S. Attorney Joseph D. Brown of the “These are real costs that help drive up the cost of medical services for everyone. It is important that there be real consequences for those who cheat the system.”

“I am proud to fight healthcare fraud in Texas alongside Ryan Patrick, Erin Nealy Cox and Joe Brown,” said WDTX U.S. Attorney John Bash. “These crimes drive up the cost of health insurance, waste tax revenue and threaten the well-being of Texans.”

The Fraud Section leads the MFSF, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. MFSF maintains 15 strike forces operating in 24 districts. Since its inception in March 2007, MFSF has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.

Medicaid Fraud and Abuse

Overview

Fraud, abuse and waste in Medicaid cost states billions of dollars every year, diverting funds that could otherwise be used for legitimate health care services. Not only do fraudulent and abusive practices increase the cost of Medicaid without adding value – they increase risk and potential harm to patients who are exposed to unnecessary procedures. In 2015, improper payments alone—which include things like payment for non-covered services or for services that were billed but not provided—totaled more than $29 billion according to the Government Accountability Office.

While Medicaid fraud involves knowingly misrepresenting the truth to obtain unauthorized benefit, abuse includes any practice that is inconsistent with acceptable fiscal, business or medical practices that unnecessarily increase costs. Waste encompasses overutilization of resources and inaccurate payments for services, such as unintentional duplicate payments. As states look for innovative ways to contain burgeoning Medicaid costs and promote the program’s integrity, fighting fraud and abuse offers one approach that everyone can support.

Program Integrity Initiatives. The federal government and states have adopted a variety of steps to combat Medicaid fraud, waste and abuse and to ensure that public funds are used to promote Medicaid enrollees’ health. According to the Medicaid and CHIP Payment Access Commission (MACPAC), these include data mining, audits, investigations, enforcement actions, technical assistance to help state agencies detect fraud and abuse, and provider and enrollee outreach and education. Well-designed program integrity initiatives ensure that:

  • Eligibility decisions are made correctly;
  • Prospective and enrolled providers meet federal and state participation requirements;
  • Delivered services are medically necessary and appropriate; and
  • Provider payments are made in the right amount and for appropriate services.

A 2013 Pew Charitable Trusts’ report found that states utilized three types of Medicaid fraud prevention strategies, including: provider screening; prior authorization and pre-payment reviews; and post-payment review and recovery. While states have traditionally relied upon the latter, “pay and chase” model in which they pay Medicaid claims and then try to recover improper payments, they are increasingly focusing on preventing and detecting fraudulent activities early on. New York, for example has integrated targeted data mining and risk analysis into its fraud-fighting tool box. In Texas, a few simple process changes and new pattern analysis and recognition efforts moved the state closer to ‘real–time analysis’ and significantly increased the amount of fraud identified.  For more on what these states have done to fight Medicaid fraud and abuse, check out this Webinar archive.

Federal Medicaid Integrity Provisions. The Affordable Care Act (ACA) introduced various requirements aimed at improving Medicaid program integrity. For example, the law created a web-based portal, enabling states to compare information on providers that have been terminated (and whose billing privileges have been revoked). An overview of the law’s provisions related to improving Medicaid program integrity is available here.

Common Examples of Medicaid Fraud

Provider Fraud

Patient Fraud

Insurer Fraud

  • Billing for services not performed
  • Billing duplicate times for one service
  • Falsifying a diagnosis
  • Billing for a more costly service than performed
  • Accepting kickbacks for patient referrals
  • Billing for a covered service when a noncovered service was provided
  • Ordering excessive or inappropriate tests
  •  Prescribing medicines that are not medically necessary or for use by people other than the patient
  • Filing a claim for services or products not received
  • Forging or altering receipts
  • Obtaining medications or products that are not needed and selling them on the black market
  • Providing false information to apply for services
  • Doctor shopping to get multiple prescriptions
  • Using someone else’s insurance coverage for services
  • Overstating the insurer’s cost in paying claims
  • Misleading enrollees about health plan benefits
  • Undervaluing the amount owed by the insurer to a health care provider under the terms of its contract
  • Denying valid claims

Additional NCSL Resources

 

Other Recent Medicaid Program Integrity and Fraud Prevention Resources

http://www.ncsl.org/research/health/medicaid-fraud-and-abuse.aspx

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The Pronk Pops Show 1294, July 23, 2019, Story 1: Spending Beyond The Means of The American People and Burdening Future Generations — Shame on Democrat and Republican Politicians For Out-of Control Government Spending or Spending Addiction Disorder (SAD) — They Have No Shame —  Betrayal of American People By Their Elected Representatives — Two Party Tyranny — Tea Party 2.0 Time To Stand-up A New Political Party — American Independence Party — to Challenge Both Democrats and Republicans — Send Them All Home — To Save The American Constitutional Representative Republic From Bankruptcy, Default, Socialism, and Budget Busting  Warfare and Welfare Statists — President Trump Either Vetoes This Bill or Faces The Dump The Two Party Tyranny Movement — Videos — Story 2: United States and Israel Joint Strike Targeting Iran’s Nuclear and Missile Weapon System Programs Deep Underground in Mountains will Require Low Yield Nuclear Weapons To Be Successful — Waiting For Trump To Start World War 3 To Stop Nuclear Proliferation in The Middle East and Far East — Videos

Posted on July 24, 2019. Filed under: 2020 Republican Candidates, Addiction, Addiction, American History, Applications, Banking System, Blogroll, Breaking News, Budgetary Policy, Business, Cartoons, China, Coal, Communications, Computers, Congress, Corruption, Countries, Culture, Deep State, Defense Spending, Disasters, Diseases, Donald J. Trump, Donald J. Trump, Donald Trump, Economics, Education, Elections, Empires, Employment, Energy, Fiscal Policy, Foreign Policy, Freedom of Speech, Genocide, Government, Government Dependency, Government Spending, Great Britain, Hardware, Hate Speech, History, House of Representatives, Human, Human Behavior, Illegal Immigration, Immigration, Independence, Islamic Republic of Iran, Israel, Labor Economics, Law, Legal Immigration, Life, Liquid Natural Gas (LNG), Media, Medicare, Military Spending, Monetary Policy, National Security Agency, Natural Gas, North Korea, Nuclear, Nuclear, Nuclear Weapons, Oil, People, Philosophy, Photos, Politics, Polls, Progressives, Public Relations, Radio, Raymond Thomas Pronk, Robert S. Mueller III, Rule of Law, Senate, Servers, Social Security, Spying, Success, Supplemental Nutrition Assistance Program (SNAP_, Surveillance and Spying On American People, Surveillance/Spying, Tax Policy, Taxation, Taxes, Technology, Terror, Terrorism, Trade Policy, United Kingdom, United States of America, Videos, War, Wealth, Weapons, Weapons of Mass Destruction, Welfare Spending, Wisdom | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

 

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The Pronk Pops Show Podcasts

Pronk Pops Show 1294 July 23, 2019

Pronk Pops Show 1293 July 22, 2019

Pronk Pops Show 1292 July 18, 2019

Pronk Pops Show 1291 July 17, 2019

Pronk Pops Show 1290 July 16, 2019

Pronk Pops Show 1289 July 15, 2019

Pronk Pops Show 1288 July 11, 2019

Pronk Pops Show 1287 July 10, 2019

Pronk Pops Show 1286 July 9, 2019

Pronk Pops Show 1285 July 8, 2019

Pronk Pops Show 1284 July 2, 2019

Pronk Pops Show 1283 July 1, 2019

Pronk Pops Show 1282 June 27, 2019

Pronk Pops Show 1281 June 26, 2019

Pronk Pops Show 1280 June 25, 2019

Pronk Pops Show 1279 June 24, 2019

Pronk Pops Show 1278 June 20, 2019 

Pronk Pops Show 1277 June 19, 2019

Pronk Pops Show 1276 June 18, 2019

Pronk Pops Show 1275 June 17, 2019

Pronk Pops Show 1274 June 13, 2019

Pronk Pops Show 1273 June 12, 2019

Pronk Pops Show 1272 June 11, 2019

Pronk Pops Show 1271 June 10, 2019

Pronk Pops Show 1270 June 6, 2019

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Pronk Pops Show 1268 June 3, 2019

Pronk Pops Show 1267 May 30, 2019

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Pronk Pops Show 1264 May 24, 2019

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Pronk Pops Show 1259 May 16, 2019

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Pronk Pops Show 1249 May 2, 2019

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Pronk Pops Show 1247 April 30, 2019

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Pronk Pops Show 1241 April 18, 2019

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Pronk Pops Show 1239 April 15, 2019

Pronk Pops Show 1238 April 11, 2019

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Pronk Pops Show 1236 April 9, 2019

Pronk Pops Show 1235 April 8, 2019

Pronk Pops Show 1234 April 5, 2019

Pronk Pops Show 1233 April 4, 2019

Pronk Pops Show 1232 April 1, 2019 Part 2

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Story 1: Spending Beyond The Means of The American People and Burdening Future Generations — Shame on Democrat and Republican Politicians For Out-of Control Government Spending or Spending Addiction Disorder (SAD) — They Have No Shame —  Betrayal of American People By Their Elected Representatives — Two Party Tyranny — Tea Party 2.0 Time To Stand-up A New Political Party — American Independence Party — to Challenge Both Democrats and Republicans — Send Them All Home — To Save The American Constitutional Representative Republic From Bankruptcy, Default, Socialism, and Budget Busting  Warfare and Welfare Statists — President Trump Either Vetoes This Bill or Faces The Dump The Two Party Tyranny Movement — Videos — 

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Big Spender

Hey Big Spender

The minute you walked in the joint,
I could see you were a man of distinction,
A real big spender,
Good looking, so refined.
Say, wouldn’t you like to know
What’s going on in my mind?
So, let me get right to the point,
I don’t pop my cork for every guy I see.
Hey, big spender, spend,
A little time with, me, me, me!
Do you wanna have fun?
How’s about a few laughs?
I can show you a, good time,
Do you wanna have fun, fun, fun?
How’s about a few laughs
Laughs laughs
(I can show you a good time)
(Good time)
(Good time)
(Good time)
What did you say you are?
How’s about a ,
I could give you some,
Are you ready for,
How would you like a,
Let me show you a, (good time)
Hey, big spender,
Hey, big spender,
The minute you walked in the joint,
I could see you were a man of distinction,
A real big spender.
Good looking, so refined.
Say wouldn’t you like to know
What’s going on in my mind?
So, let me get right to the point,
I don’t pop my cork for every guy I see.
Hey, big spender,
Hey, big spender!
Hey, big spender!
Spend a little time with me!
Source: LyricFind
Songwriters: Fields Coleman
Hey Big Spender lyrics © Downtown Music Publishing LLC

 

Fiscal Conservatism Dead: Trump’s Deal with Democrats Unleashes Spending, Uncaps Debt

David Stockman And Peter Schiff Address Trump – Mr. President, if you watch this-Stop

GOP repeals the entire legacy of the Tea Party in one fell swoop

· July 23, 2019
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Franklin with debt

DNY59 | Getty Images

All Republicans had to do when they won the election in 2016 was to hold the line on the budget bill they helped pass in 2011 with control of just one branch of government. Instead, first with control of all three branches and now with control of two of the three, they are about to undo the one spending success of the past decade, and with it, pre-empt any leverage they have to pressure Democrats on a single issue.

Why is it that not a single mile of new fencing has been constructed for Trump’s entire term? Why is it that we’ve spent billions taking 21,000 sick illegal aliens to the hospital, chewing up 250,000 man-hours of Border Patrol at hospitals and away from patrolling, yet not a penny more was spent on Border Patrol or the military holding the line against the cartel smuggling?

Look no further than the budget deals Trump signed over and over again, which collectively increased discretionary spending by 16 percent but not a dime for new border walls or deportations. He gave away his leverage for free. Now, with Trump agreeing to the deal Senate Republicans and his treasury secretary just forged, the total spending binge will rise to 20 percent above fiscal year 2017 levels and will still not include a dime for the border.

Here are the toplines of the deal:

  • The debt ceiling will once again be suspended until July 31, 2021, with zero reforms or spending cuts. We will likely accrue over $2 trillion in additional debt over that time. And that is if Congress holds the line one any new “supplemental” or “emergency” spending over the next two years, which is next to impossible.
  • By canceling the budget caps for the final two years of the Budget Control Act (FY 2020 and FY 2021), Trump will seal our fiscal ruin. All they had to do was simply pass a clean continuing resolution, and the automatic spending cuts would kick back in. Now that leverage is gone.
  • The total cost of erasing the spending cuts plus adding new spending will be $321 billion over two years.
  • What Republicans accomplished with one branch of government was erased when their power grew. After winning back control of the Senate, noted fiscal “conservative” Paul Ryan forged a deal to bust the caps by a total of $80 billion in FY 2016 and FY 2017. When Republicans won the White House, they agreed to another budget-busting bill of $296 billion for FY 2018 and FY 2019. Now they will add another $320 billion. In other words, by simply coasting with the status quo baseline, Republicans could have pocketed nearly $700 billion in less spending, yet they chose to use their power to spend everything Democrats wanted.
  • Making this deal the new baseline for the next two years will lead to nearly $2 trillion in more spending over 10 years.
  • Crafters of the deal are claiming that there are $77.4 billion in spending offsets, but the majority of it is scandalous. It’s from what’s called CHIMPs. No, it’s not chimpanzee-style math, but it as may as well be so. Changes IMandatory Programs means that they just write a line in the bill saying, “In 10 years from now we will spend less on entitlement programs, and that will free up immediate increases for spending on discretionary programs.” They’ve been doing this for decades, and of course the cuts never happen. Imagine if you had a credit card limit and you got to say, “Hey, in 10 years I will find some funding to pay for the extra $100,000 I want to spend today, so here it is, fully offset.” Real monkey business.
  • Consider that revenue is now $1.5 trillion higher than in 2009-2010 – during the Great Recession – yet the emerging deficits will rival those of the Obama stimulus era.

Republicans and even the Trump administration will once again hide behind military spending as excuse for this deal. But the entire point of the 2018 deal was to secure that spending. We already paid the price. Why does military spending have to be increased yet again, especially when we won’t even properly counter the Mexican cartels or Iran?

Even if Trump were inclined to agree with this madness, at least make the Senate work through the August recess on sovereignty and border security issues and build the case for a better budget deal in September. Why give away all your leverage at once on both the debt ceiling and spending caps?


 

There’s only one reason why Congress is doing this so quickly and rushing it before the August recess. They know the president is influenced by his conservative base and will reject this plan if it’s allowed to be exposed to the sunlight of the August townhalls held by members of Congress. Where is the outrage from media members who claim the mantle of conservatism? At the precise moment when their voice needs to be heard, they remain silent.

When spending and illegal immigration numbers were not nearly as bad as they are today, Trump was very clear about what should be done with debt ceiling negotiations:

Donald J. Trump

@realDonaldTrump

The Republicans must use the debt ceiling as leverage to make a great deal!

400 people are talking about this

Yet almost seven years later and $6 trillion deeper into the abyss of debt, Trump as president is now agreeing to a blank check, which will in turn preclude any leverage to deal with illegal immigration, which is about three times as large as it was at the time of that tweet.

 

 

White House, congressional leaders work to sell two-year budget deal


Speaker of the House Nancy Pelosi holds a news conference on Capitol Hill on Wednesday. (J. Scott Applewhite/AP)

July 23 at 2:20 PM

White House officials and congressional leaders defended a controversial budget deal on Tuesday, hoping to assuage concerns from conservatives and liberals ahead of a crucial House vote this week.

Treasury Secretary Steven Mnuchin met with Senate Republicans at a lunch on Capitol Hill, conveying that President Trump fully supported the deal and would sign it into law. Republicans felt burned by Trump last year after they voted on a budget deal they thought he supported, only to have the White House withdraw its backing at the last minute.

“The four (congressional) leaders and the president are fully on board with this,” Mnuchin told reporters as he left the meeting.

Still, the effort to whip up political support showed signs of strain.

A number of conservative Senate Republicans announced their opposition to the two-year, $320 billion deal, complaining it adds to the ballooning deficit while doing nothing to constrain spending. Mnuchin defended the agreement, saying it was crucial to increase military spending and suspend the debt ceiling through July 2021, lifting the prospect of a full-blown financial crisis later this year.

But Sen. Ron Johnson (R-Wis.) said he’d told Mnuchin the deal should have included changes to take the threat of future government shutdowns off the table.

“If we don’t get a structural reform in exchange for an increase the debt ceiling, I don’t see how I can support this thing,” Johnson said.

Sen. Mike Braun (R-Ind.) said he declared his opposition to the deal during the lunch with Mnuchin. And while some senators said Mnuchin had effectively conveyed the stakes for the Pentagon budget and looming debt crisis absent a deal, others left the lunch with the treasury secretary unpersuaded.

Sen. John Neely Kennedy (R-La.) said Mnuchin’s message to senators amounted to, “’Yippee yippee yay, I made a deal.’”

“I didn’t learn anything. … It was more of a rah, rah session,” Kennedy said, adding he was undecided how he’d vote. “I think it says about the United States Congress, both sides, that we really don’t have a commitment to getting control of the credit card.”

On the Democratic side, some liberals including Sen. Jeff Merkley (D-Ore.) expressed consternation about a side agreement struck by House Speaker Nancy Pelosi (D-Calif.) to keep controversial policy provisions off spending bills. This would include agreeing not to limit Trump’s ability to transfer money to build his border wall. The practical implication of the agreement seems limited, since any such changes would require bipartisan support anyway, but White House officials were touting it as an important win.

Despite the complaints from rank-and-file lawmakers of both parties, White House officials and Democratic and Republican leaders all argued that the deal was the best they could get in divided government, and blamed their political opponents if it wasn’t any better.

“I make no apologies for this two-year caps deal,” said Senate Majority Leader Mitch McConnell (R-Ky.). “I think we’ve done the best we can with this divided government.”

Sen. Richard J. Durbin (Ill.), the No. 2 Senate Democrat and vote-counter, said the deal was better than any of the alternatives.

“The notion of shutting down the government or defaulting on the America debt — those are unacceptable,” Durbin said.

Exiting the GOP lunch, Mnuchin was asked how he would defend the deal against its GOP critics. “Well we needed a debt ceiling increase, that was incredibly important,” Mnuchin replied. “And again we couldn’t get a deal without getting bipartisan support, so the Democrats, they compromised on a lot of things along the way, and we had to make certain compromises.”

The budget deal, announced Monday, would suspend the debt ceiling through July 2021 and raise the budget for the military and many other programs for two years. Lawmakers will still need to approve individual spending bills, but the agreement is expected to make it much less likely that there will be a government shutdown when existing agency budgets run out Oct. 1. But the budget also appears to lock in a large gap between tax revenue and government spending, which could breach $1 trillion this year and continue in perpetuity if changes aren’t made.

The government must borrow money to finance that gap and pay interest on the growing debt.

Lawmakers were rushing to cut the deal because Mnuchin had warned the Treasury could run out of money by early September to pay all of the government’s bills if the debt ceiling wasn’t raised by then. Congress is set to go on a lengthy August recess soon, leaving legislators little time to maneuver.

The House is expected to vote on the deal this week, with the Senate voting next week.

Pelosi released a letter to House Democrats touting what she described as wins in the deal, including extending the debt limit, obtaining increased domestic nondefense spending, avoiding onerous budget caps known as “sequestration,” and staving off the administration’s demands for spending cuts to accompany the budget increases.

But reaction from lawmakers in the House made clear the speaker will have to navigate opposition from liberal Democrats and conservative Republicans to pass the deal with the votes of more moderate-leaning lawmakers in both parties.

Rep. Alexandria Ocasio-Cortez (D-N.Y.) complained about a double standard that prioritized tax cuts and spending that Republicans favored but refused to extend money for things she advocates for, like college education.

And Rep. Mark Walker (R-N.C.) posted a video on Twitter of the comic book figure the “Joker” standing in front of an inferno, and labeled it “Budget deal.”

Acting White House budget director Russ Vought, who had fought largely unsuccessfully to secure large spending cuts as part of the agreement, acknowledged the GOP frustration and promised to push for spending reductions in the future.

“Look, I love the concern of the conservatives who are bringing attention to the problems that we have with fiscal responsibility in this town,” Vought said on Fox News.

The budget has grown markedly since Trump took office, even though he campaigned on a promise to eliminate the now-$22 trillion debt by the time he left the White House after eight years.

https://www.washingtonpost.com/business/economy/white-house-congressional-leaders-work-to-sell-two-year-budget-deal/2019/07/23/fb2fe29a-ad55-11e9-a0c9-6d2d7818f3da_story.html?utm_term=.a1a4223b2b69

Deal sealed on federal budget ensures no shutdown, default

President Donald Trump and congressional leaders have announced a critical debt and budget agreement that’s an against-the-odds victory for Washington pragmatists seeking to avoid political and economic tumult over the possibility of a government shutdown or first federal default.

The deal, announced Monday by Trump on Twitter and in a statement by Democratic House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer, will restore the government’s ability to borrow to pay its bills past next year’s elections and build upon recent large budget gains for both the Pentagon and domestic agencies.

“I am pleased to announce that a deal has been struck,” Trump tweeted, saying there will be no “poison pills” added to follow-up legislation. “This was a real compromise in order to give another big victory to our Great Military and Vets!”

The agreement is on a broad outline for $1.37 trillion in agency spending next year and slightly more in fiscal 2021. It would mean a win for lawmakers eager to return Washington to a more predictable path amid political turmoil and polarization, defense hawks determined to cement big military increases and Democrats seeking to protect domestic programs.

Nobody notched a big win, but both sides view it as better than a protracted battle this fall.

Pelosi and Schumer said the deal “will enhance our national security and invest in middle class priorities that advance the health, financial security and well-being of the American people.” Top congressional GOP leaders issued more restrained statements stressing that the deal is a flawed but achievable outcome of a government in which Pelosi wields considerable power.

“While this deal is not perfect, compromise is necessary in divided government,” said House Minority Leader Kevin McCarthy, R-Calif.

However, it also comes as budget deficits are rising to $1 trillion levels — requiring the government to borrow a quarter for every dollar the government spends — despite the thriving economy and three rounds of annual Trump budget proposals promising to crack down on the domestic programs that Pelosi is successfully defending now. It ignores warnings from deficit and debt scolds who say the nation’s fiscal future is unsustainable and will eventually drag down the economy.

“This agreement is a total abdication of fiscal responsibility by Congress and the president,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a Washington advocacy group. “It may end up being the worst budget agreement in our nation’s history, proposed at a time when our fiscal conditions are already precarious.”

A push by the White House and House GOP forces for new offsetting spending cuts was largely jettisoned, though Pelosi, D-Calif., gave assurances about not seeking to use the follow-up spending bills as vehicles for aggressively liberal policy initiatives.

The head of a large group of House GOP conservatives swung against the deal.

“No new controls are put in place to constrain runaway spending, and a two-year suspension on the debt limit simply adds fuel to the fire,” said Republican Study Committee Chairman Mike Johnson, R-La. “With more than $22 trillion in debt, we simply cannot afford deals like this one.”

Fights over Trump’s U.S.-Mexico border wall, other immigration-related issues and spending priorities will be rejoined on spending bills this fall that are likely to produce much the same result as current law. The House has passed most of its bills, using far higher levels for domestic spending. Senate measures will follow this fall, with levels reflecting the accord.

At issue are two separate but pressing items on Washington’s must-do agenda: increasing the debt limit to avert a first-ever default on U.S. payments and acting to set overall spending limits and prevent $125 billion in automatic spending cuts from hitting the Pentagon and domestic agencies with 10 percent cuts starting in January.

The threat of the automatic cuts represents the last gasp of a failed 2011 budget and debt pact between former President Barack Obama and then-Speaker John Boehner, R-Ohio, that promised future spending and deficit cuts to cover a $2 trillion increase in the debt. But a bipartisan deficit “supercommittee” failed to deliver, and lawmakers were unwilling to live with the follow-up cuts to defense and domestic accounts. This is the fourth deal since 2013 to reverse those cuts.

Prospects for an agreement, a months-long priority of top Senate Republican Mitch McConnell, R-Ky., became far brighter when Pelosi returned to Washington this month and aggressively pursued the pact with Treasury Secretary Steven Mnuchin , who was anointed lead negotiator instead of more conservative options like acting White House Chief of Staff Mick Mulvaney or hardline Budget Director Russell Vought.

Mnuchin was eager to avert a crisis over the government’s debt limit. There’s some risk of a first-ever U.S. default in September, and that added urgency to the negotiations.

The pact would defuse the debt limit issue for two years, meaning that Trump or his Democratic successor would not have to confront the politically difficult issue until well into 2021.

Washington’s arcane budget rules give each side a way to paint the numbers favorably. Generally speaking, the deal would lock in place big increases won by both sides in a 2018 pact driven by the demands of GOP defense hawks and award future increases consistent with low inflation.

Pelosi and Schumer claimed rough parity between increases for defense and nondefense programs, but the veteran negotiator retreated on her push for a special carve-out for a newly reauthorized program for veterans utilizing private sector health care providers. Instead non-defense spending increases would exceed increases for the military by $10 billion over the deal’s two-year duration.

In the end, non-defense appropriations would increase by $56.5 billion over two years, giving domestic programs 4% increases on average in the first year of the pact, with a big chunk of those gains eaten up by veterans increases and an unavoidable surge for the U.S. Census. Defense would increase by $46.5 billion over those two years, with the defense budget hitting $738 billion next year, a 3% hike, followed by only a further $2.5 billion increase in 2021.

Trump retains flexibility to transfer money between accounts, which raises the possibility of attempted transfers for building border barriers. That concession angered the Senate’s top Appropriations Committee Democrat, Patrick Leahy of Vermont, who said he has “many concerns” with a memorandum outlining the agreement that promised there will also be no “poison pills,” new policy “riders,” or bookkeeping tricks to add to the deal’s spending levels.

The results are likely to displease some on both sides, especially Washington’s weakening deficit hawks and liberals demanding greater spending for progressive priorities. But Pelosi and McConnell have longtime histories with the Capitol’s appropriations process and have forged a powerful alliance to deliver prior spending and debt deals.

The measure would first advance through the House this week and win the Senate’s endorsement next week before Congress takes its annual August recess. Legislation to prevent a government shutdown will follow in September.

https://apnews.com/b72be6c420bb478ea469da72c73065e2

The US national debt just pushed past $22 trillion — here’s how Trump’s $2 trillion in debt compares with Obama, Bush, and Clinton

donald trump chart debt obamaJoe Raedle/Getty Images
  • On February 11, the US national debt eclipsed $22 trillion for the first time.
  • Since President Donald Trump took office, the US has added over $2 trillion in new federal debt.
  • See how Trump’s debt accumulation — and projected debt accumulation — stacks up to that of recent presidents including Barack Obama, Bill Clinton, and George W. Bush.

The US national debt passed $22 trillion on February 11, the first time the federal debt had breached that threshold.

The landmark came just over two years after President Donald Trump, who once promised to eliminate the federal debt in eight years, took over the Oval Office.

But compared with some other recent presidents’, Trump’s debt accumulation is not as stunning as it first appears.

Read more: The US national debt just topped $22 trillion for the first time

The US Treasury has been tracking day-by-day debt accumulationsince the start of 1993, meaning daily debt figures are available for the presidencies of Bill Clinton, George W. Bush, Barack Obama, and Trump.

In raw terms, Trump added the second-most debt of any recent president. According to the Treasury data, the US added $2.07 trillion — $2,065,536,336,472.90 to be exact — in new debt between Trump’s inauguration on January 20, 2017, and February 11, when the country pushed past $22 trillion. (The US added another $2.8 billion through February 15, the latest daily figures available.)

That is less than the $3.46 trillion added between Obama’s inauguration in January 2009 and February 11, 2011, but it is more than the $676 billion added under Bush and the $617 billion added under Clinton in their first 752 days as president.

One important difference between Trump’s debt figures and Obama’s is that Trump has added a massive amount of debt while the US economy has been strong, whereas Obama took over during the depths of the financial crisis.

Economists typically recommend that the federal government increase spending, and thus add more debt, during times of economic struggles and then pay down that debt when the economy recovers. So while economic theory would support Obama’s spending to help support the economy, Trump’s recent debt binge has less support among economists.

Looking ahead, recent legislative changes are expected to help Trump catch up to some of his predecessors in the debt-accumulation department.

The combination of the new GOP tax law and the recent bipartisan spending deal are projected to increase the speed of debt accumulation over the rest of Trump’s presidency.

According to the Congressional Budget Office, the annual deficit — the shortfall of federal revenue compared with spending in a given fiscal year — will soon push past $1 trillion. 2018’s budget deficit was the largest since 2012, when the US was still dealing with the fallout from the recession.

Based on the CBO’s projections, Trump will have accumulated $3.73 trillion in new debt by the end of the 2020 fiscal year, which, because of federal budget rules, actually runs until the end of September 2020. And by the end of fiscal 2024, the last year of Trump’s second term if he wins reelection, the total debt added is projected to come in at $8.78 trillion.

A lot could change over that time period — adjustments to the tax code that increase revenue or spending cuts would alter the CBO’s projections. But as it stands, Trump could add roughly the same amount of debt as Obama over two terms.

total debt accumulated by president v2Andy Kiersz/Business Insider

But while the raw debt figures are astonishing, putting the accumulation in percentage terms provides a somewhat different picture. Based on Treasury data and CBO projections:

  • The national debt grew by 15% through February 11 of Clinton’sfirst term and ended up growing by 36% by the end of the 2000 fiscal year, the final full fiscal year of his presidency.
  • The debt grew by 12% during Bush’s first 752 days and grew by 75% when the 2008 fiscal year came to a close.
  • Under Obama’s first two years and change, the national debt grew by 33%, and it grew by 84% by the end of the 2016 fiscal year.
  • The debt grew 10% in Trump’s first 752 days and is projected to grow by 44% by the end of the 2024 fiscal year.
percent change though feb 11Andy Kiersz/Business Insider

https://www.businessinsider.com/trump-national-debt-deficit-compared-to-obama-bush-clinton-2019-2

Story 2: United States and Israel Joint Strike Targeting Iran’s Nuclear and Missile Weapon System Programs Deep Underground in Mountains will Require Nuclear Weapons To Be Successful — Waiting For Trump To Start World War 3 — Videos —

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Dr. Strangelove – Ending

We’ll Meet Again
We’ll meet again
Don’t know where
Don’t know when
But I know we’ll meet again some sunny day
Keep smiling through
Just like you always do
‘Till the blue skies drive the dark clouds far away
So will you please say hello
To the folks that I know
Tell them I won’t be long
They’ll be happy to know
That as you saw me go
I was singing this song
We’ll meet again
Don’t know where
Don’t know when
But I know we’ll meet again some sunny day
We’ll meet again
Don’t know where
Don’t know when
But I know we’ll meet again some sunny day
Keep smiling through
Just like you always do
‘Til the blue skies
Drive the dark clouds far away
So will you please say hello
To the folks that I know
Tell them it won’t be long
They’ll be happy to know
That as you saw me go
I was singin’ this song
We’ll meet again
Don’t know where
Don’t know when
But I know we’ll meet again some sunny day
Source: LyricFind
Songwriters: Hughie Charles / Ross Parker
We’ll Meet Again lyrics © Music Sales Corporation, Universal Music Publishing Group

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Nuclear Weapons: Who Has What at a Glance
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ContactKelsey DavenportDirector for Nonproliferation Policy, (202) 463-8270 x102; Kingston ReifDirector for Disarmament and Threat Reduction Policy, (202) 463-8270 x104

Updated: July 2019

At the dawn of the nuclear age, the United States hoped to maintain a monopoly on its new weapon, but the secrets and the technology for making nuclear weapons soon spread. The United States conducted its first nuclear test explosion in July 1945 and dropped two atomic bombs on the cities of Hiroshima and Nagasaki in August 1945. Just four years later, the Soviet Union conducted its first nuclear test explosion. The United Kingdom (1952), France (1960), and China (1964) followed. Seeking to prevent the nuclear weapon ranks from expanding further, the United States and other like-minded states negotiated the nuclear Nonproliferation Treaty (NPT) in 1968 and the Comprehensive Nuclear Test Ban Treaty (CTBT) in 1996.

India, Israel, and Pakistan never signed the NPT and possess nuclear arsenals. Iraq initiated a secret nuclear program under Saddam Hussein before the 1991 Persian Gulf War. North Korea announced its withdrawal from the NPT in January 2003 and has tested nuclear devices since that time. Iran and Libya have pursued secret nuclear activities in violation of the treaty’s terms, and Syria is suspected of having done the same. Still, nuclear nonproliferation successes outnumber failures and dire forecasts decades ago that the world would be home to dozens of states armed with nuclear weapons have not come to pass.

At the time the NPT was concluded, the nuclear stockpiles of both the United States and the Soviet Union/Russia numbered in the tens of thousands. Beginning in the 1970s, U.S. and Soviet/Russian leaders negotiated a series of bilateral arms control agreements and initiatives that limited, and later helped to reduce, the size of their nuclear arsenals. Today, the United States and Russia each deploy roughly 1,400 strategic warheads on several hundred bombers and missiles, and are modernizing their nuclear delivery systems.

China, India, and Pakistan are all pursuing new ballistic missile, cruise missile, and sea-based nuclear delivery systems. In addition, Pakistan has lowered the threshold for nuclear weapons use by developing tactical nuclear weapons capabilities to counter perceived Indian conventional military threats. North Korea continues its nuclear pursuits in violation of its earlier denuclearization pledges.

Nuclear-Weapon States:

The nuclear-weapon states (NWS) are the five states—China, France, Russia, United Kingdom, and the United States—officially recognized as possessing nuclear weapons by the NPT. The treaty legitimizes these states’ nuclear arsenals, but establishes they are not supposed to build and maintain such weapons in perpetuity. In 2000, the NWS committed themselves to an “unequivocal undertaking…to accomplish the total elimination of their nuclear arsenals.” Because of the secretive nature with which most governments treat information about their nuclear arsenals, most of the figures below are best estimates of each nuclear-weapon state’s nuclear holdings, including both strategic warheads and lower-yield devices referred to as tactical weapons.

China

  • About 290 total warheads.

France

  • About 300 total warheads.

Russia

  • March 2019 New START declaration: 1,461 strategic warheads deployed on 524 intercontinental ballistic missiles, submarine-launched ballistic missiles, and strategic bombers.
  • The Federation of American Scientists (FAS) estimates approximately 4,490 stockpiled warheads and 2,000 retired warheads for a total of roughly 6,490 warheads, as of early 2019.

United Kingdom

  • About 120 strategic warheads, of which no more than 40 are deployed at sea on a nuclear ballistic missile submarine at any given time. The United Kingdom possesses a total of four ballistic missile submarines.
  • Total stockpile is estimated up to 200 warheads.

United States:

  • March 2019 New START declaration: 1,365 strategic nuclear warheads deployed on 656 intercontinental ballistic missiles, submarine-launched ballistic missiles, and strategic bombers.
  • FAS estimates approximately 3,800 stockpiled warheads and 2,385 retired warheads for a total of 6,185 warheads as of early 2019.

Non-NPT Nuclear Weapons Possessors:

  • India, Israel, and Pakistan never joined the NPT and are known to possess nuclear weapons.
  • India first tested a nuclear explosive device in 1974. That test spurred Pakistan to ramp up work on its secret nuclear weapons program.
  • India and Pakistan both publicly demonstrated their nuclear weapon capabilities with a round of tit-for-tat nuclear tests in May 1998.
  • Israel has not publicly conducted a nuclear test, does not admit or deny having nuclear weapons, and states that it will not be the first to introduce nuclear weapons in the Middle East. Nevertheless, Israel is universally believed to possess nuclear arms, although it is unclear exactly how many.

The following arsenal estimates are based on the amount of fissile material—highly enriched uranium and plutonium—that each of the states is estimated to have produced. Fissile material is the key element for making nuclear weapons. India and Israel are believed to use plutonium in their weapons, while Pakistan is thought to use highly enriched uranium.

IndiaBetween 130-140 nuclear warheads.
IsraelAn estimated 80-90 nuclear warheads, with fissile material for up to 200.
PakistanBetween 150-160 nuclear warheads.


States of Immediate Proliferation Concern:

Prior to the implementation of the Joint Comprehensive Plan of Action, Iran pursued a uranium-enrichment program and other projects that provided it with the capability to produce bomb-grade fissile material and develop nuclear weapons, if it chose to do so. Iran’s uranium enrichment program continues, but it is restricted and monitored by the nuclear deal. North Korea announced its withdrawal from the NPT in 2003 and tested nuclear devices and nuclear-capable ballistic missiles. Uncertainty persists about how many nuclear devices North Korea has assembled. In 2007, Israel bombed a site in Syria that was widely assessed to be a nuclear reactor being constructed with North Korea’s assistance. Syria has refused to cooperate with the International Atomic Energy Agency’s attempts to investigate.

Iran:

  • No known weapons or sufficient fissile material stockpiles to build weapons.
  • The International Atomic Energy Agency (IAEA), the institution charged with verifying that states are not illicitly building nuclear weapons, concluded in 2003 that Iran had undertaken covert nuclear activities to establish the capacity to indigenously produce fissile material.
  • July 2015: Iran and six world powers negotiated a long-term agreement to verify and significantly reduce Iran’s capacity to produce material for nuclear weapons.
  • As part of this agreement, the IAEA and Iran concluded an investigation into Iran’s past nuclear weapons-related activities. The agency concluded that Iran had an organized program to pursue nuclear weapons prior to 2003. Some of these activities continued through 2009, but there were no indications of weaponization activities taking place after that date.

North Korea:

  • Estimated as of June 2019 to have approximately 20-30 warheads and the fissile material for 30-60 nuclear weapons.
  • While there is a high degree of uncertainty surrounding North Korea’s fissile material stockpile and production, particularly on the uranium enrichment side, North Korea is estimated to have 20-40 kilograms of plutonium and 250-500 kilograms of highly enriched uranium. The estimated annual production of fissile material is enough for 6-7 weapons.
  • North Korea operates its 5-megawatt heavy-water graphite-moderated reactor used to extract plutonium in the past for nuclear warheads on an intermittent basis since August 2013. There has also been intermittent activity at North Korea’s reprocessing facility since 2016, indicating that Pyongyang has likely separated plutonium from the reactor’s spent fuel.
  • North Korea unveiled a centrifuge facility in 2010. It is likely that Pyongyang is using the facility to produce highly-enriched uranium for weapons. U.S. intelligence suggests that there are several additional centrifuge facilities in North Korea.
  • By 2020, experts estimate that North Korea could have anywhere between 20-100 nuclear warheads based on the rate of its stockpile growth and technological improvements.

Syria:

  • September 2007: Israel conducted an airstrike on what U.S. officials alleged was the construction site of a nuclear research reactor similar to North Korea’s Yongbyon reactor.
  • The extent of Syrian-North Korean nuclear cooperation is unclear, but is believed to have begun in 1997.
  • Investigations into U.S. claims uncovered traces of undeclared man-made uranium particles at both the site of the destroyed facility and Syria’s declared research reactor.
  • Syria has not adequately cooperated with the IAEA to clarify the nature of the destroyed facility and procurement efforts that could be related to a nuclear program.

States That Had Nuclear Weapons or Nuclear Weapons Programs at One Time:

  • Belarus, Kazakhstan, and Ukraine inherited nuclear weapons following the Soviet Union’s 1991 collapse, but returned them to Russia and joined the NPT as non-nuclear-weapon states.
  • South Africa secretly developed but subsequently dismantled its small number of nuclear warheads and also joined the NPT in 1991.
  • Iraq had an active nuclear weapons program prior to the 1991 Persian Gulf War, but was forced to verifiably dismantle it under the supervision of UN inspectors. The U.S.-led March 2003 invasion of Iraq and subsequent capture of Iraqi leader Saddam Hussein definitively ended his regime’s pursuit of nuclear weapons.
  • Libya voluntarily renounced its secret nuclear weapons efforts in December 2003.
  • Argentina, Brazil, South Korea, and Taiwan also shelved nuclear weapons programs.

Sources: Arms Control Association, Federation of American Scientists, International Panel on Fissile Materials, U.S. Department of Defense, U.S. Department of State and Stockholm International Peace Research Institute.

https://www.armscontrol.org/factsheets/Nuclearweaponswhohaswhat

The F-35 has already freaked out Iran and changed everything in the Middle East

Jake Novak
CC: Lockheed Martin F-35 Joint Strike Fighter Lightning II
Lockheed Martin F-35 Joint Strike Fighter Lightning II
Robert Sullivan | FlickrCC

No conversation about the world’s massive political and economic changes since 2015 is complete without mentioning the F-35 Joint Strike Fighter, developed by Lockheed Martin.

That became even clearer this week thanks to a somewhat cheeky statement by Israeli Prime Minister Benjamin Netanyahu in response to Iran’s provocative moves in the Persian Gulf and other threats from Tehran. Standing in front of an F-35 jet parked at an Israeli Air Force base, Netanyahu barely held back a smile as he said that Israel can reach Iran, but Iran cannot reach Israel.

He didn’t add the words “undetected by radar,” but it was surely implied.

To understand why that soundbite with the visual backdrop was more than just bluster, you have trace the F-35′s incredible history in the Middle East over the past four years.

We hopped into a F-35 simulator. Here’s what it’s like

You don’t have to be a military genius to know that a supersonic jet that can fly undetected by radar for hundreds of miles will make a difference anywhere in the world. But the F-35′s already powerful impact in the Middle East was multiplied extensively during the months leading up to the 2015 Iran nuclear deal. That was still more than a year before the jet was put into service anywhere in the world.

But it was late summer 2015 when reports in the Israeli news media surfaced about how Israelis working on F-35 prototypes had managed to double the jet’s flight and stealth capacity. It wasn’t lost on anyone that the extension meant Israeli Air Force pilots could use the F-35 to fly from Israel to Tehran and back without detection — and without having to refuel at U.S. air bases in Saudi Arabia or Iraq.

Suddenly, U.S.-Israeli air superiority in the region had risen to a new level. Saudi Arabia had already begun the process of cooperating more with Israel on defense and security matters for some time, something Prime Minister Benjamin Netanyahu hinted at during a “60 Minutes” interview after President Trump’s election. But the idea of letting Israeli jets land and refuel in that Arab country was still a stretch in 2015. Iraqi leaders were also not receptive to the idea. But the new technology was now rendering the objections moot.

The move only acted to bring the Saudis and the Israelis closer. It was one thing for the two countries to have a common enemy in Iran that was on the verge of getting billions of dollars and a clear, if supposedly delayed, path to a nuclear weapon. But with the new F-35 and its expanded capacities in the picture, there was something more tangible than political promises and intelligence sharing to hang their hopes on.

Israel says it’s the first country to use F-35 fighter jet in combat

All of that made it easier for King Salman to shake up his regime and name Mohammed bin Salman the new crown prince. Mohammad, who is aggressive on defense, wasted little time enhancing military ties with Israel and the U.S. There was even an unconfirmed report that he visited Israel secretly in September 2017.

Yet the most direct effects of the F-35 were still to come. In July 2018, a Kuwaiti newspaper reported that Israel had flown a test mission of at least three F-35 jets to Tehran and back from an airbase near Tel Aviv. While never confirmed publicly, a good number of military and political leaders in the region believed and still believe the story. The long-rumored threat the F-35 posed to Iran now seemed like a reality.

Earlier this month, reports in the same Kuwaiti newspaper said that Iran’s military leadership panicked enough over the purported stealth mission that it kept news of it from reaching Iran’s Supreme Leader Ali Khamenei.

But when Khamenei found out about the mission, he reportedly moved to fire not only Iran’s air force chief but also the long-serving and powerful commander of Iran’s Revolutionary Guard Corps. That’s major impact without even firing a shot.

All of this comes as Turkey’s Prime Minister Tayyip Erdogan has decided to choose procuring Russia’s S-400 missile program at the expense of getting promised F-35s from the U.S. Judging by how much his neighbors in the region fear and revere the F-35, this appears to be a ruinous choice.

US halts delivery of F-35 equipment to Turkey

The impact of the F-35′s development has had a major financial impact, as well. Since reports of the Israeli stealth enhancement first surfaced, Lockheed Martin shares are up more the 75%. The F-35 program is also the most expensive defense project in U.S. history, and it has faced a long history of criticism for that cost.

But considering how much the very existence of the jet has already achieved in Israel, Saudi Arabia and Iran, it may already be more than worth it.

Jake Novak is a political and economic analyst at Jake Novak News and former CNBC TV producer. You can follow him on Twitter @jakejakeny.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

https://www.cnbc.com/2019/07/18/f-35-has-freaked-out-iran-and-changed-everything-in-the-middle-east.html

Arms Control and Proliferation Profile: The United States
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Updated: July 2019

According to the Federation of the American Scientists, as of April 2019, the United States possesses 3,800 stockpiled strategic and non-strategic nuclear warheads and an additional 2,385 retired warheads awaiting dismantlement, for a total of 6,185 nuclear warheads. On Feb. 2, 2018, the Trump administration released its Nuclear Posture Review, detailing its strategy for the role of U.S. nuclear forces. The United States has destroyed about 90.6% of its chemical weapons arsenal as of 2017 and is due to complete destruction by September 2023. It is party to the Biological Weapons Convention and has destroyed its biological weapons arsenal, although Russia alleges that U.S. biodefense research violates the BWC.

Contents

Major Multilateral Arms Control Agreements and Treaties

Export Control Regimes, Nonproliferation Initiatives, and Safeguards

Nuclear Weapons Programs, Policies, and Practices

  • The Nuclear Arsenal, an Overview
  • Delivery Systems
  • Ballistic Missile Defense Systems
  • Fissile Material
  • Proliferation Record
  • Nuclear Doctrine

Biological Weapons

Chemical Weapons

Other Arms Control and Nonproliferation Activities

  • The Intermediate-Range Nuclear Forces (INF) Treaty
  • New START
  • Nuclear Reductions Beyond New START
  • Conference on Disarmament (CD)
  • Nuclear Weapons Free Zones
  • Nuclear Security Summits
  • Joint Comprehensive Plan of Action (JCPOA)
  • Syrian Chemical Weapons

 

Major Multilateral Arms Control Agreements and Treaties

Signed

Ratified

Nuclear Nonproliferation Treaty

1968

1970

Comprehensive Test Ban Treaty

1996

– – –

Convention on the Physical Protection of Nuclear Material (CPPNM)

1980

1982

CPPNM 2005 Amendment

– – –

2015

Chemical Weapons Convention

1993

1997

Biological Weapons Convention

1972

1975

International Convention for the Suppression of Acts of Nuclear Terrorism

2005

2015

Back to Top

Export Control Regimes, Nonproliferation Initiatives, and Safeguards

Group Status
Australia Group Member
Missile Technology Control Regime Member
Nuclear Suppliers Group Member
Wassenaar Arrangement Member
International Atomic Energy Agency (IAEA) Additional Protocol Signed in 1998, entered into force January, 2009.
Global Initiative to Combat Nuclear Terrorism Co-founder with Russia
Hague Code of Conduct against Ballistic Missile Proliferation Participant
Proliferation Security Initiative Founder
UN Security Council Resolutions1540 and 1673 The United States has filed reports on its activities to fulfill the resolutions and volunteered to provide assistance to other states.

Back to Top

Nuclear Weapons Programs, Policies, and Practices

The Nuclear Arsenal, an Overview

According to the Federation of the American Scientists, as of April 2019, the United States possesses 3,800 stockpiled strategic and non-strategic nuclear warheads and an additional 2,385 retired warheads awaiting dismantlement, for a total arsenal of 6,185 warheads. In April 2019, the Defense Department stated it would no longer declassify the number of U.S. nuclear warheads.

Under the 2010 New Strategic Arms Reduction Treaty (New START), the United States can deploy no more than 1,550 treaty accountable strategic warheads on 700 deployed delivery systems until February 2021 when the treaty expires. According to the March 2019 New START data exchange, the United States deploys 1,365 strategic nuclear warheads on 656 strategic delivery systems.

The United States also deploys an additional 150 tactical (non-strategic) nuclear warheads based in Europe. While the United States and Russia maintain similarly sized total arsenals, the United States possesses a much larger number of strategic warheads and delivery systems while Russia possesses a much larger number of non-strategic (or tactical) nuclear warheads.

The United States is the only nation to have used nuclear weapons against another country, dropping two bombs (one apiece) on the Japanese cities of Hiroshima and Nagasaki in August 1945.

Delivery Systems

(For a detailed overview of current and planned U.S. nuclear modernization programs, see our fact sheet here.)

Intercontinental Ballistic Missiles (ICBM)

  •  As of April 2019, the United States Air Force deploys 400 LGM-30G Minuteman III ICBMs.
    • The Minuteman III has a range of over 6,000 miles (9,650-13,000 km).
    • Each missile is equipped with either one 300 kt W87 warhead or one 335 kt W78 warhead.
  • Under New START, the United States reduced the number of deployed ICBMs from 450 to 400. 50 excess silos have not been destroyed but have been kept in a “warm” operational status and can be loaded with missiles relatively quickly if necessary.
  • In 2015, the United States concluded a multibillion dollar, decade-long modernization program that will extend the service life of the Minuteman III to beyond 2030.
  • The U.S. Air Force is also developing a new ICBM, known as the ground-based strategic deterrent (GBSD), which is intended to replace the Minuteman III between 2029 and 2035.

Submarines and Submarine-Launched Ballistic Missile (SLBM)

Submarines:

  • The U.S. Navy operates 14 Ohio-class SSBNs submarines, two of which are undergoing overhaul of their nuclear reactors at any given time. The remaining 12 are available for deployment. However, since some operational SSBNs also undergo minor repairs at any given time the actual number of SSBNs at sea usually numbers at around 10.
  • 7 submarines are based out of Bangor, Washington and 5 submarines are based out of Kings Bay, Georgia.
  • The submarines originally had 24 missile tubes for Trident II D5 SLBMs, but under New START, the Navy deactivated 4 tubes on each submarine, finishing this process in 2017.
  • The Ohio-class submarines have a life-span of 42 years.

Submarine-Launched Ballistic Missiles (SLBMs):

  • The Trident II D5 was first deployed in 1990 and has an operational range of 7,400-12,000 km.
  • The Trident II D5 missile can hold up to eight warheads (but usually holds an average of four to five) and carries 3 variants:
    • the W88—a 475 kt Multiple Independently Targetable Reentry Vehicle (MIRV) warhead.
    • the W76-0—a 100 kt MIRV warhead.
    • the W76-1—a 100 kt MIRV warhead.
  • To comply with New START, the Navy will not deploy more than 240 missiles. As of February 2018, 203 submarine-launched ballistic missiles were deployed.
  • An ongoing life extension program is expected to keep the Trident II D5 in service until  2042.
  • The Trident II D5 is the only MIRV’ed (multiple independently targetable reentry vehicle) strategic missile remaining in the U.S. nuclear arsenal.

Bombers

  • As of April 2019, the Air Force deploys 46 nuclear-capable B-52H Stratofortress bombers and 20 nuclear-capable B-2A Spirit bombers.
  • The Air Force plans to deploy no more than 60 nuclear-capable strategic bombers under New START.
  • An estimated 850 nuclear warheads are assigned to the strategic bombers, but only about 300 are typically deployed at bomber bases.
    • B-52H Stratofortress bombers: dual-capable; can carry 20 AGM-86B cruise missiles. The AGM-86B has a range of 2,500 km and is equipped with a 5-150 kt W80-1 warhead
    • B-2A Spirit bombers: dual capable; can carry 16 B61-7, B61-11, or B83-1 gravity bombs.
  • The United States also maintains several fighter-aircraft that serve in a dual-capable role. The F-15E and F-16C have been the cornerstone of this aspect of nuclear deterrence, carrying the B61 gravity bomb. The new stealth F-35 Lightning II, also known as the Joint Strike Fighter, will replace the F-16 as the U.S. Air Force’s primary nuclear capable fighter-aircraft.

Ballistic Missile Defense Systems

The United States develops and deploys several ballistic missile defense systems around the world. To learn more, see: “U.S. Missile Defense Programs at a Glance.”

Fissile Material

Highly Enriched Uranium (HEU)

  • The United States has publicly declared that it no longer produces fissile material for weapons purposes. It stopped production of HEU in 1992.
  • In March 2016, the United States announced the declassification of its national inventory of highly enriched uranium (HEU) of 585.6 tons, as of September 30, 2013.
  • The United States halted the production of HEU for weapons in 1964 and ceased plutonium separation for weapons in 1992.
  • Estimates from 2016 place the U.S. HEU stockpile at around 600 metric tons, including 253 metric tons of military HEU and 264 metric tons of fresh and spent naval HEU.
  • According to the 2015 Global Fissile Material Report, the United States has about 40 metric tons of HEU remaining to be downblended of the 187 metric tons it declared as excess to defense requirements and has committed to dispose.

Plutonium

  • The United States ended production of separated plutonium in 1988.
  • At the end of 2014, U.S. military plutonium stockpiles amounted to a total of 87.6 declared metric tons (49.3 metric tons of which are declared as excess military plutonium).
  • In October 2016, citing U.S. failure to meet its obligations under the agreement, Russia suspended its own implementation of the deal. Russia refuses to resume the agreement’s implementation until U.S. sanctions against Russia are lifted and NATO forces in Europe are reorganized along lines favorable to Russia. Russia contends that U.S. plans to abandon the conversion of plutonium into MOX fuel in favor of a cheaper and faster downblending method does not meet the terms of the deal because doing so would fail to change the composition of the plutonium from weapons-grade to reactor grade.
  • The United States possesses no separated civilian plutonium but at the end of 2014, an estimated 625 metric tons of plutonium were contained in spent fuel stored at civilian reactor sites.
  • Under the Plutonium Management and Disposition Agreement (PMDA), finalized with Russia in 2000, the United States committed to disposing of 34 metric tons of excess weapons-grade plutonium beginning in 2018. The agreement was amended in 2010 to change the agreed disposition methods in which Russia abandoned using mixed-oxide (MOX) fuel in light-water reactors in favor or irradiating plutonium in its fast-neutron reactors. The amendment also expressed renewed U.S. commitment to provide $400 million towards the Russian disposition program. Russia suspended cooperation with the agreement in November 2016.

 Proliferation Record

  • A close relationship exists between U.S. and British nuclear weapons programs. The United States supplies the United Kingdom with the Trident II D5 SLBM.
  • Belgium, Germany, Italy, the Netherlands, and Turkey all host U.S. tactical nuclear gravity bombs as part of NATO nuclear sharing agreements. The estimated 180 weapons remain under U.S. custody during peacetime, but some may be released to U.S. allies for delivery in times of war.
  • Beginning with President Dwight Eisenhower’s 1953 “Atoms for Peace” initiative, the United States has engaged in extensive worldwide trading and exchanging of fissile materials and technical information for nuclear science research and the peaceful use of nuclear technology. In 1954, an amendment to the Atomic Energy Act allowed bilateral nuclear agreements with U.S. allies to proceed, with the intent of exporting only low enriched uranium (LEU) fuel; however, this soon expanded to include HEU.
  • Under the “Atoms for Peace” program a number of former, aspiring, and current nuclear-weapon states such as South Africa, Iran, India, Pakistan, and Israel all received, directly or indirectly, training and technology transfers utilized in their nuclear weapons programs. For example, in 1967, the United States supplied Iran with a 5 megawatt nuclear research reactor along with HEU fuel. Iran admitted to using the reactor in the early 1990s for the production of small amounts of Polonium-210, a radioactive substance capable of starting a chain reaction inside a nuclear weapon.
  • Since the end of the Cold War the United States has tried to mitigate the adverse effects of the “Atoms for Peace” initiative and returned exported HEU and plutonium to the United States.

Nuclear Doctrine

Then-Deputy Defense Secretary Patrick Shanahan, in a Feb. 2, 2018 press briefing, claimed that the 2018 NPR “reaffirms that the fundamental role of U.S. nuclear policy is deterrence.” Critics of the 2018 Nuclear Posture Review (NPR) argue that the NPR reverses previous policy to reduce the role and number of U.S. nuclear weapons.

Declaratory Policy

The NPR dictates that the use of nuclear weapons will only be considered under “extreme circumstances” to defend the “vital interests” of the United States and its allies. It defines “extreme circumstances,” which the 2010 NPR did not, to include “significant non-nuclear strategic attacks” against “U.S., allied or partner civilian population or infrastructure, and attacks on U.S. or allied nuclear forces, their command and control, or warning and attack assessment capabilities.” For more on declaratory policy, see: Nuclear Declaratory Policy and Negative Security Assurances.

Negative Security Assurance

The NPR also includes a negative security assurance that the United States will not use nuclear weapons against non-nuclear-weapons states that are “party to the nuclear Nonproliferation Treaty and are in compliance with their nuclear nonproliferation obligations.” The review caveats this negative security assurance by retaining “the right to make any adjustment in the assurance that may be warranted by the evolution and proliferation of non-nuclear strategic attack technologies and U.S. capabilities to counter that threat.” For more on negative security assurances, see: U.S. Negative Security Assurances at a Glance.

Testing
The United States has conducted 1,030 nuclear weapons tests. The first test was conducted on July 16, 1945 and the last test occurred on Sept. 23, 1992. The United States was the first country to conduct a nuclear test.

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Biological Weapons

  • In the early 1970s, the United States destroyed its entire stockpile of biological weapons, which had been developed between 1943 and 1969.
  • The United States ratified the Biological Weapons Convention in 1975.  However, in 2001, the Bush administration opposed and killed an effort dating back to 1995 to augment the Biological Weapons Convention with a legally binding verification protocol. U.S. officials said the protocol would be too burdensome on legitimate governments and private biodefense programs, while at the same time failing to deter cheaters.
  • According to a 2016 State Department report, “In December 2015 at the annual Meeting of States Parties to the BWC, the delegation of the Russian Federation asserted that the United States had knowingly transferred live anthrax spores to a foreign country for use in open-air testing, and that this constituted a ‘grave violation’ of Articles III and IV of the BWC [Biological Weapons Convention].”
  • The United States maintains that these transfers were a blunder. The report also notes that, “All U.S. activities during the reporting period were consistent with the obligations set forth in the BWC. The United States continues to work toward enhancing transparency of biological defense work using the BWC confidence-building measures.”

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Chemical Weapons

  • Behind Russia, the United States has declared the second-largest stockpile of chemical agents.
  • As of 2017, the United States had destroyed about 25,154 metric tons, or about 90.6 percent, of its declared Category 1 chemical weapons stockpile. The United States has completed destruction of all its Category 2 and 3 chemical weapons.
  • The United States received several extensions on its initial deadline for chemical weapons destruction under the Chemical Weapons Convention, and it now due to destroy its chemical weapons arsenal by September 2023.
  • Destruction of the United States’ largest remaining stockpile of chemical weapons began in 2016 at Colorado’s Pueblo Chemical Depot. Upon completion, the Blue Grass Army Depot in Richmond, Kentucky will have the last remaining chemical agent stockpile in the United States.

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Other Arms Control and Nonproliferation Activities  

Intermediate-Range Nuclear Forces (INF) Treaty
The 1987 INF Treaty between the United States and the Soviet Union requires the United States and Russia to eliminate and permanently forswear all of their nuclear and conventional ground-launched ballistic and cruise missiles with ranges of 500 to 5,500 kilometers. The treaty resulted in the United States and the Soviet Union destroying a total of 2,692 short-, medium-, and intermediate-range missiles by the treaty’s implementation deadline of June 1, 1991.
However, in July 2014 the U.S. State Department officially assessed Russia to be in violation of the agreement citing Russian production and testing of an illegal ground-launched cruise missile. The State Department reiterated this conclusion in 2015, 2016, 2017, and 2018. In February 2019 the United States announced its intention to suspend its obligations and withdraw from the treaty, beginning a six-month withdrawal period that will end in August.  For more information on the INF Treaty visit our “INF Treaty at a Glance” fact sheet.

New START
In April 2010, the United States and Russia signed a successor agreement to the original Strategic Arms Reduction Treaty (START) accord. The 2010 agreement, known as New START, commenced on Feb. 5, 2011. It requires that both sides reduce their arsenals to 1,550 deployed strategic nuclear weapons on no more than 700 ICBMs, SLMBs, and bombers by Feb. 5, 2018 and both sides met the limits by the deadline. In addition, it contains rigorous monitoring and verification provisions to ensure compliance with the agreement. President Donald Trump has repeatedly questioned the value of New START, calling it a “one-sided” agreement.

New START allows for a five-year extension subject to the agreement of both parties. The Trump administration has begun an interagency review on whether to extend the treaty and is weighing several factors, including the lack of China’s participation in the agreement, Russia’s new and developing strategic systems, and Russian tactical delivery systems currently not covered by the treaty. Though no official decision has been made yet regarding the Trump administration’s decision to extend, National Security Advisor John Bolton called it“unlikely” in June 2019.

Nuclear Reduction Beyond New START
In February 2013, President Obama announced that the United States intended to engage with Russia to further reduce deployed strategic warheads by one-third below the New START limit to around 1,100 to 1,000 deployed warheads. However, there has been little progress toward achieving such reductions due to the deterioration of U.S.-Russia relations in the aftermath of Russia’s annexation of Crimea and Russia’s insistence that other issues, such as limits on U.S. missile defenses, be part of negotiations on further reductions. In the spring of 2019, the White House told reporters that the administration is seeking a new trilateral arms control agreement that limits all types of nuclear weapons and includes China in addition to the United States and Russia.

Conference on Disarmament (CD)
The Conference on Disarmament was established in 1979 as a multilateral disarmament negotiating forum by the international community. At the 65-member CD, the United States has expressed support for continuing discussions on the CD’s core issues: nuclear disarmament, a fissile material cut-off treaty (FMCT), prevention of an arms race in outer space (PAROS), and negative security assurances. The United States has been a prominent supporter of a proposed FMCT.

In March 1995, the CD took up The Shannon Mandate which established an ad hoc committee directed to negotiate an FMCT by the end of the 1995 session. A lack of consensus over verification provisions, as well as desires to hold parallel negotiations on outer space arms control issues, prevented negotiations from getting underway. Later, in May 2006, the United States introduced a draft FMCT along with a draft mandate for its negotiations. However, following an impasse in negotiations on a FMCT in 2010, the United States (and others) signaled its desire to look at alternative approaches outside the CD and called for negotiations to be moved to the United Nations General Assembly where the agreement could be endorsed by a majority vote. However, the United States no longer makes comments to this effect.

The United States does not support negotiations on PAROS, deeming it unnecessary because there are no weapons yet deployed in outer space. China and Russia continue to articulate a desire to hold parallel negotiations, a point which has further stalled efforts to begin FMCT negotiations.

Nuclear Weapons Free Zones
The United States has ratified a protocol to the Latin America and the Caribbean Nuclear Weapons Free Zone (NWFZ) treaty pledging not to use or threaten to use nuclear weapons against the contracting parties. The U.S. has declined to ratify similar additional protocols to any of the remaining NWFZ treaties for Africa, Central Asia, Southeast Asia, and the South Pacific.

Nuclear Security Summits
In April 2010, the United States hosted the first Nuclear Security Summit (NSS) in Washington, DC. Participants included 47 countries, 38 of which were represented at the head of state or head of government level, and the heads of the United Nations, the International Atomic Energy Agency, and the European Union. At the summit, the participants unanimously adopted the goal of securing all vulnerable nuclear material in the next four years. The United States also attended the NSS in Seoul, South Korea, on March 26-27, 2012 and the third NSS on Mar. 24-25, 2014. Washington hosted a fourth summit in the Spring of 2016 where attendees developed action plansfor five global organizations to continue the work of the summits.

Joint Comprehensive Plan of Action (JCPOA)
Under the Obama administration the United States played the central role in the brokering of the July 2015 JCPOA, better known as the “Iran deal,” which limits and rolls back Iran’s nuclear program in exchange for lifting economic sanctions. Congress in September 2015 debated a resolution that would have blocked implementation of the accord, but it failed to receive enough votes to pass the Senate. In January 2016, sanctions on Iran, including those targeting the financial and oil sectors, were lifted and $100 billion worth of frozen Iranian assets were released after international inspectors confirmed that Iran had rolled back large sections of its nuclear program and met more intrusive monitoring requirements.

On May 8, 2018 President Trump violated the JCPOA by reimposing sanctions on Iran that were lifted by the agreement, despite the U.S. intelligence community’s assessment that Iran was adhering to its commitments under the deal and over objections from the remaining parties to the agreement. Since the U.S. decision to withdraw, the remaining parties to the deal have reiterated their commitment to the JCPOA and taken steps to bypass U.S. sanctions and preserve legitimate trade with Iran.

Syrian Chemical Weapons
In September 2013, in the aftermath of the large-scale use of chemical weapons by the Syrian government, United States reached an agreement with Russia to account, inspect, control, and eliminate Syria’s chemical weapons. Before the deal was reached, the United States was planning to use airstrikes to punish the perpetrators of the attack, which the United States blamed on the Syrian government. By July 2014, Syria’s declared chemical weapons stockpile had been successfully removed from the country and flagged for destruction following a broad multilateral operation. However, the United States has raised concerns about the accuracy of Syria’s declaration.

In September 2014, the Organisation for the Prohibition of Chemical Weapons (OPCW) confirmed that chlorine gas was being used in Syria. The UN Security Council adopted a resolution on Mar. 6, 2015 condemning the use of chlorine gas in Syria. Secretary of State John Kerry was quick to suggest that the Assad regime was the likely perpetrator of the chlorine gas attacks; Russia, however, was hesitant to assign blame. In August 2016, the third report of the OPCW-UN Joint Investigative Mechanism was released, finding that the Syrian government was responsible for chemical weapons attacks.

In April 2017, another chemical weapon attack was carried out in the Syrian town of Khan Shaykhun where Syrian government warplanes were accused of spreading a nerve agent via bombs, killing dozens. U.S. President Donald Trump responded by immediately blaming the regime of Bashar Assad and launching 59 Tomahawk missiles targeting the airfield that had allegedly launched the attack. Following the launches, Trump stated that “It is in this vital national security of the United States to prevent and deter the spread and use of deadly chemical weapons.” As a justification for the U.S. response, Secretary of State Rex Tillerson stated that “If you violate international agreements, if you fail to live up to commitments, if you become a threat to others, at some point a response is likely to be undertaken.”

(For a detailed timeline on Syrian chemical weapons, see our fact sheet here.)

https://www.armscontrol.org/factsheets/unitedstatesprofile

9 questions about the US-Iran standoff you were too embarrassed to ask

Will the US and Iran go to war?

US Secretary of State Mike Pompeo briefs reporters on the suspected attacks on two oil tankers in the Gulf of Oman at the State Department on June 13, 2019, in Washington, DC.
US Secretary of State Mike Pompeo briefs reporters on the suspected attacks on two oil tankers in the Gulf of Oman at the State Department on June 13, 2019, in Washington, DC.
 Win McNamee/Getty Images

For the past month and a half, the US and much of the world has been consumed by a terrifying question: Is America going to war with Iran?

It’s an understandable question. The Trump administration says an Iranian strike on Americans in the Middle East remains “imminent” and has blamed Tehran for attacks on oil tankers in a vital waterway. Iran, meanwhile, has told its proxies to prepare for war and indicated it may stop abiding by the 2015 nuclear deal within just a matter of days (though it hasn’t said that it plans to pursue a nuclear weapon).

Those developments, combined with the rise of Iran hawks in the administration like National Security Adviser John Bolton and Secretary of State Mike Pompeo, have led to widespreadfear that some sort of conflict between Washington and Tehran is imminent.

Here’s the good news: Right now it seems fairly unlikely that a full-blown war is on the horizon — even though a limited strike was considered this week — mostly because President Donald Trump and American allies don’t want one. Nor does Iran, it seems.

But the situation is still very tense, and the room for error and miscalculation on both sides remains high.

So what exactly is going on? How did we get here? Why did this escalation happen so suddenly? And what would a conflict with Iran even look like, anyway?

Don’t worry, we’ve got you covered. What follows are answers to some of the most pressing questions about the latest US-Iran standoff; hopefully they’ll allow you to breathe just a little easier.

1) What is actually going on?

The current crisis started on May 5, when National Security Adviser John Bolton announced the US was deploying an aircraft carrier and bomber planes to the Persian Gulf in response to “a number of troubling and escalatory indications and warnings” of threats from Iran.

This move, Bolton said, was meant “to send a clear and unmistakable message to the Iranian regime that any attack on United States interests or on those of our allies will be met with unrelenting force.” He said that the US “is not seeking war with the Iranian regime,” but added, “we are fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces.”

At the time, it was unclear exactly what that intelligence said, but reports over the following days provided a bit more clarity. Iran apparently intended to target US troops in Iraq and Syria, or even use drones against Americans in a key waterway near Yemen. There was also information that Iran put cruise missiles on ships, heightening fears that it might attack US Navy vessels with them.

The severity of the intelligence remains in dispute, and some say Bolton and others have inflated the threat. What isn’t in dispute is that America’s response dramatically raised the tension between the two countries — and a series of subsequent events only made things worse.

On May 8, three days after Bolton’s statement, Iranian President Hassan Rouhani announced that his country would no longer comply with parts of the 2015 nuclear deal if European signatories to the deal didn’t provide Iran with financial relief within 60 days.

Specifically, Rouhani said Iran would start stockpiling extra low-enriched uranium and heavy water, the kind used in nuclear reactors that could be used to produce a nuclear weapon, and would enrich uranium to previously banned levels.

Iranian President Hassan Rouhani at the United Nations on September 26, 2018.
Iranian President Hassan Rouhani at the United Nations on September 26, 2018.
 Spencer Platt/Getty Images

All those actions remain banned by the agreement, which Iran, as well as some European powers, Russia, and China, is still party to. But Tehran’s decision, which it telegraphed days in advance, came exactly one year after Trump ended the US’s commitment to the accord.

Rouhani made sure all of that wasn’t an escalation. “The path we have chosen today is not the path of war,” he said, “it is the path of diplomacy.”

Still, that set the stage for a potential confrontation: The Trump administration doesn’t want Iran to get a nuclear weapon, and while Rouhani’s announcement still wouldn’t put Tehran anywhere near obtaining the bomb, it inched a little closer. And with the threat of a military fight hanging over it all, the chance for miscalculation grew.

But it didn’t stop there. A few days later, four oil tankers were damaged in attacks near the Strait of Hormuz, a vital waterway aggressively patrolled by Iran through which a third of the world’s liquefied natural gas and almost 20 percent of the world’s oil production flows.

Two of the oil tankers belonged to Saudi Arabia and one belonged to the United Arab Emirates — both staunch enemies of Iran and friends to the US. (The fourth was owned by a Norwegian company.) United Nations ambassadors from the UAE, Saudi Arabia, and Norway said two weeks ago that the damages came after a country used divers to place mines on the large ships. The diplomats didn’t specifically name Iran as the culprit, but the US had already blamed Tehranfor the sabotage.

Iran denied any involvement. But one day after the suspected attack, Iran-backed Houthi rebels in Yemen launched an assault on a Saudi oil pipeline. And one of Iran’s top military leaders reportedly told militias in Iraq to prepare for a war, prompting the US to remove some staff from the embassy in Baghdad and its consulate in Erbil last month.

Then, last week, two oil tankers in the Gulf of Oman — just east of the Strait of Hormuz — were damaged in suspected attacks. The Trump administration said Iran was responsible.

That was followed by an Iranian official on Monday saying his country would stockpile enough low-enriched uranium that it would blow through the limits imposed in the 2015 nuclear deal, the same one the US withdrew from last year. The US soon after responded y saying it would send 1,000 more troops to the Middle East to counter Iran.

And then on Wednesday night or Thursday morning (the timing is still unclear), Iran shot down a US military drone (no one was hurt). That’s by far the biggest provocation yet in the weeks-long standoff, and could cause the tensions to skyrocket.

Trump authorized a limited strike on Iran to retaliate for the downing, but suddenly reversed himself, he said on Friday morning, worried that potentially killing Iranians wouldn’t be a proportionate response.

Donald J. Trump

@realDonaldTrump

….On Monday they shot down an unmanned drone flying in International Waters. We were cocked & loaded to retaliate last night on 3 different sights when I asked, how many will die. 150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it, not….

Donald J. Trump

@realDonaldTrump

….proportionate to shooting down an unmanned drone. I am in no hurry, our Military is rebuilt, new, and ready to go, by far the best in the world. Sanctions are biting & more added last night. Iran can NEVER have Nuclear Weapons, not against the USA, and not against the WORLD!

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Put together, it’s a fraught, delicate, and dangerous situation that could spiral out of control if not carefully managed by both countries. Worries of a larger war are widespread, and it’s not clear how the US and Iran will walk back from the brink.

2) Why is all of this happening right now?

The US and Iran have been at odds for decades. Since a 1979 revolution in Iran that overthrew the American-backed and installed leader, both countries have held aggressive stances toward the other.

Over the years, Iranian-backed groups have fought and attacked US forces, leaving hundreds of American troops dead in total. The US has also launched assaults of its own, including a devastating cyberattack, a naval campaign to sink Iranian ships, and mistakenly downing an Iranian commercial airliner.

First, the US withdrew from the Iran nuclear deal last year, reimposing sanctions on the country and compelling European allies to stop importing Iranian oil. That has started to tank Iran’s economy.

Second is how the intelligence and military actions have been perceived over the past few weeks. According to the Wall Street Journal, Iran may have feared an American attack was imminent and is taking action to dissuade the US from doing so.

That view would make sense, according to some Iran experts. “To counterattack in response to pressure is a standard part of the Iranian playbook,” Suzanne Maloney, an Iran expert at the Brookings Institution think tank in Washington, tweeted on May 6.

The Iranian Islamic Republic Army demonstrates in solidarity with people in the street during the 1979 Iranian Revolution. They are carrying posters of the Ayatollah Khomeini, the Iranian religious and political leader.
The Iranian Islamic Republic Army demonstrates in solidarity with people in the street during the 1979 Iranian Revolution. They are carrying posters of the Ayatollah Khomeini, the Iranian religious and political leader.
 Keystone/Getty Images

Misperception and miscalculation are always worrisome in situations like this. One wrong move by the US, for example, could lead Iran to think war is afoot, thereby compelling Tehran to make aggressive countermoves or even launch assaults of its own. The same is true if Tehran startles Washington with some action, leading the White House to authorize a strike.

Which takes us to the third “push”: the Iran hawks in the Trump administration who are itching for a fight.

John Bolton, Trump’s top national security aide, has long argued for regime change in Iran and advocated for bombing the country to stop it from obtaining a nuclear weapon. Secretary of State Mike Pompeo has also pushed the US to confront the Iranian regime.

In May 2018, he gave a speech outlining 12 ways the clerical government must change — including stopping its support for proxy groups and halting its missile program — before the US lifts any financial and diplomatic pressure off Tehran.

Together, they have made the Trump administration a lot more antagonistic toward the Islamic Republic. It’s a stark difference from when Trump was flanked by Defense Secretary Jim Mattis and Secretary of State Rex Tillerson. While they both expressed deep distrust of Iran, they didn’t make maximalist demands or threaten conflict so brazenly.

It’s important to note that Trump says he doesn’t want a war with Iran, but the problem is that he’s effectively outsourced his Iran policy to the hawks. That means that at a time when cooler heads should prevail, there aren’t many cool heads to be found.

“Moments like these are when institutions should matter: leadership at the cabinet level, a serious policy-making process, intelligence standards, professional ethics. All those have been eroded by the Trump administration,” Maloney tweeted.

3) Wait, why do Bolton and Pompeo hate Iran so much?

It’s hard to find two more anti-Iran figures in Washington than the national security adviser and the secretary of state.

Let’s start with Bolton: The longtime Republican official and operative rarely has found an authoritarian regime he hasn’t wanted to punish in some way, but Iran seems to hold a special place in his heart.

In 2015, he wrote an op-ed for the New York Times making the case that the US should bomb Iran to keep it from getting a nuclear weapon. “Iran will not negotiate away its nuclear program,” Bolton wrote, slamming the Obama administration’s efforts to strike a diplomatic agreement with Tehran. “The inconvenient truth is that only military action … can accomplish what is required. Time is terribly short, but a strike can still succeed.”

And in 2017, just eight months before becoming Trump’s third national security adviser, Bolton gave a paid speech to an Iranian exile group that wants to overthrow the country’s leadership.

Clearly, he agrees with them: “The declared policy of the United States should be the overthrow of the mullahs’ regime in Tehran,” he said. “The behavior and the objectives of the regime are not going to change and, therefore, the only solution is to change the regime itself.”

“Before 2019, we here will celebrate in Tehran,” he concluded. Well, it’s 2019 now, so perhaps Bolton hopes to make up for lost time.

Where Bolton’s animus seems driven by Cold War-era thinking, Pompeo’s seems to come from something much deeper.

The nation’s chief diplomat has made no secret of his evangelical Christian faith, which he admits guides his policy views. That holds true for world affairs, where his religious beliefs have partly led him to offer unqualified support for Israel, a key American ally — and for Prime Minister Benjamin Netanyahu, who sees Iran as an existential threat to his country.

During a March 20 visit to Jerusalem, for example, Pompeo and Netanyahu both vowed to continue their joint pressure on Iran. Five days later, the secretary gave a speech to the pro-Israel lobby group American Israel Public Affairs Committee (AIPAC) to show his support for the US ally and disdain for Iran.

“We’ve enacted the strongest pressure campaign in history against Iran and its proxies, and they are feeling the pain,” Pompeo said to applause. He added: “Anti-Zionism is anti-Semitism, and any nation that espouses anti-Zionism, like Iran, must be confronted. We must defend the rightful homeland of the Jewish people.”

Pompeo, then, has expressly linked America’s combative stance against Iran to support for Israel. While he has also said Iran deserves pushback for its pursuit of a nuclear program and its support for terrorists and dictators like Bashar al-Assad in Syria, it’s clear Pompeo views Iran as a threat to a country important to his Christian faith.

Which means Bolton and Pompeo are unlikely to tamp down growing tensions with Iran. If anything, they will want to escalate matters now that they have the chance.

4) Are the US and Iran going to war?

Breathe easy: It doesn’t look like the US will go to war with Iran anytime soon, although that possibility can’t be fully counted out. But there are three main reasons for optimism (or just not outright pessimism).

First some experts say the US military deployments to the Middle East aren’t so out of the ordinary.

Sure, the US moved an anti-missile battery to the region last month, but it removed four of them months earlier, Ilan Goldenberg, an Iran expert at the Center for a New American Security in Washington, tweeted on May 11. He added that the aircraft carrier sent to the Middle East to deter an Iranian attack was previously scheduled to be in the region.

“So what is actually happening? Someone in the administration has decided to dramatically increase the media posture of the US government around these deployments to apply pressure on Iran,” Goldenberg continued. The reason for the exaggeration, though, is not entirely clear.

Second, Trump doesn’t seem to want a war with Iran. He campaigned on not getting the US further involved in wars abroad, particularly in the Middle East. While Trump is no dove on Iran and seems to relish the US-led pressure on it, he’s not aching for a fight like some around him. He reportedly told his acting Pentagon chief in May that he doesn’t want to get into a skirmish with Iran right now.

And when Trump was asked on May 16 if the US was going to war Iran, he simply responded: “Hope not.”

MSNBC

@MSNBC

Reporter: “Mr. President, are we going to war with Iran?”

President Trump: “Hope not.”

Embedded video

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Third, it actually seems like tensions may be fairly low in the grand scheme of things. For example, Pompeo is leaning on European allies to compel Iran to “de-escalate” the tensions, the New York Times reported in May. It’s unclear if he’s doing this under Trump’s orders or if he’s decided to tamp down his typical hawkish Iran policies for the time being.

However, the recent attacks on oil tankers, Iran’s statement that it won’t abide by a crucial part of the nuclear deal, and the downing of the drone means problems might mount in the days ahead.

Donald J. Trump

@realDonaldTrump

Iran made a very big mistake!

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Still, the US-Iran standoff isn’t quite as dire as it seems and may settle down. That’s not guaranteed, of course, as there’s always room for error. But for now, it doesn’t look like the US and Iran are going to war.

5) If the US did decide to go to war with Iran, what would be the rationale?

Based on the Trump administration’s statements and past US policy, America might choose to go to war for three reasons: 1) Iran gets close to obtaining a nuclear weapon, 2) the US decides to overthrow the regime, or 3) Iran launches a massive attack on Americans requiring an even bigger response in return.

Let’s start with the nuclear issue. US policy in this and previous administrations is that Iran should not have a nuclear weapon. That’s why President Barack Obama signed the Iran nuclear deal — to delay Tehran’s path to the bomb. Trump pulled out of the deal for a variety of reasons, but one was that he claimed it made Iran’s ability to get a nuke more likely, even though most experts disagree.

As of today, Iran is still far away from having a reliable nuclear arsenal at its disposal — and it has never officially said it is even seeking the bomb in the first place. But if it starts to move seriously in that direction, one could imagine folks like Bolton and Netanyahu pushing for a military strike on its nuclear facilities. As a sign of Israel’s seriousness on this issue, it has reportedly even killed nuclear scientists working for the Iranian regime.

Iran’s armed forces during an April 17, 2008 military parade.
Iran’s armed forces during an April 17, 2008, military parade.
 Majid/Getty Images

But what would that actually accomplish in the long run? Would we be able to stop Iran from ever getting a bomb if it really wanted to?

“We can probably destroy the existing program” with limited strikes, Richard Nephew, an architect of the Iran nuclear deal, told me last month. But “we cannot prevent Iran from reconstituting that program. So we would then have to either attack again in the future to deal with a reconstituted nuclear program or acquiesce to Iran having a nuclear weapon.”

Attacking Iran, he added, could actually compel the country to pursue the bomb in earnest in order to deter more US strikes.

Okay, so what about starting a war to overthrow the regime? That’s even less likely to happen, as it would take a colossal military effort. Right now the administration is reportedly considering sending 6,000 more troops to the gulf region, far below what would be required to carry out a major war against Iran.

That’s a far cry from previous considerations. In May administration weighed one plan which included sending 120,000 US troops to the Middle East — a plan Trump denied was ever in the works. Colin Kahl, who oversaw the Pentagon’s Iran planning from 2009 to 2011, tweeted on May 13 that the US would only deploy that many service members if regime change was the goal, although he noted it’s still too small of a force for a full-scale invasion.

By comparison, the US sent around 150,000 troops in the initial phase of the 2003 invasion of Iraq — and Iran is a much bigger country than Iraq.

If the White House aims to remove Iran’s leadership permanently, then, it would need to launch an invasion on a scale even bigger than the one in Iraq — starting what would be one of the most horrific wars in recent memory and leading to hundreds of thousands dead.

It’s hard to imagine Trump would find much love for a full-scale war. “Almost nobody would support an Iraq-like ground invasion for regime change under current circumstances,” Eric Brewer, who worked on Iran in Trump’s National Security Council, told me last month. “It’s hard to over-emphasize how costly such a conflict would be.”

Finally, war could break out if Iran were to attack American forces. Iran’s military leadershipdoes have its troops and proxies on high alert, but that doesn’t mean Tehran plans to imminently attack Americans.

The Islamic Republic is almost certainly aware that any action that puts US troops, diplomats, or private citizens in mortal danger will provide Trump advisers like Bolton or Pompeo with the ammunition needed to push harder for war.

The pressure will also be on Trump to respond in kind — if not more forcefully — if Iran kills Americans during this tense time. That pressure actually already exists, with some saying the attacks on two oil tankers last week requires a US military response.

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That therefore incentivizes Tehran not to make overly provocative moves right now.

Luckily, then, none of these main pathways to war seem particularly open. And while it’s unlikely they will be, that’s not a certainty either.

6) What would a war with Iran look like?

That really comes down to what the US wants to accomplish, experts say. As noted above, war could take the form of targeted US military strikes against Iranian nuclear facilities, or it could look like a full-scale invasion of Iran by the US.

But it’s worth noting that there are lower-level ways the US and Iran could fight each other.

US Army soldiers take part in a joint Israeli-American military exercise at a Patriot missile battery site October 27, 2009, in Tel Aviv, Israel.
US Army soldiers take part in a joint Israeli-American military exercise at a Patriot missile battery site on October 27, 2009, in Tel Aviv, Israel.
 Ziv Koren-Pool/Getty Images

For example, the US could launch cyberattacks on Iran’s infrastructure and power grid, a plan the military has already named “Nitro Zeus.” The Obama administration used this method to bring down part of Iran’s nuclear program. However, Iran has cyber capabilities of its own that it could use to target important American companies or even the government.

What’s more, Iran’s proxies across the Middle East could target Americans in Iraq, Syria, or elsewhere in the Middle East. Perhaps worried about that possibility, the US removed staff from two of its missions in Iraq last month.

Importantly, Iran doesn’t have nuclear weapons, so the worst attack imaginable is off the table. Still, it’s possible that Tehran could use its growing missile program to target American ships and troops in the area.

It therefore wouldn’t take a full-on fight for things to get really, really bad between the US and Iran pretty quickly. Let’s hope we don’t find out.

7) Does anyone outside the US want an Iran war?

Mainly no, but there are some out there who do.

Israel, which in the past has advocated for strikes on Iran, is actively trying to stay out of the fray. The main reason is that a major war with Tehran would certainly involve Israel, most likely pitting it against Hezbollah, Iran’s ally and proxy in Lebanon.

Axios reported in May that Netanyahu has told his top defense and intelligence leadership that his country should “make every effort not to get dragged into the escalation in the Gulf and would not interfere directly in the situation.” So Israel, along with the United Arab Emirates, has backed off its openly hawkish Iran stances so as not to spark a war right now.

Russia and European countries, especially those still party to the Iran nuclear deal, are also working as go-betweens to end the standoff. Experts also say that European nations worry greatly about millions of refugees streaming into the continent if a war with Iran breaks out, which would put immense pressure on governments already dealing with the fallout of the Syrian refugee crisis.

That’s bad news for Bolton and others who might want a full-on war with Iran. For the US to be successful, it will need political and military support from Israel and Europeans. Without them, the US would struggle to have the international legitimacy and help it needs not only to win the fight but also to deal with the immense fallout.

But the US does have some support for a fight. Most of it comes from Saudi Arabia, which has been locked in a decades-long cold war of sorts with Iran for control in the Middle East. Arab News, a Riyadh-aligned newspaper, called for the US to launch a “surgical strike” on Iran in May.

That said, Riyadh doesn’t seem to want a war right now. Saudi Foreign Affairs Minister Adel al-Jubeir told reporters last month that “the kingdom of Saudi Arabia does not want war in the region and does not strive for that.” He added: “if the other side chooses war, the kingdom will fight this with all force and determination and it will defend itself, its citizens and its interests.”

Still, it seems that if the US decided to launch a war with Iran, it would mostly do so alone. That must surely give even those itching for a fight in the Trump administration some pause.

8) This feels like the runup to the Iraq War. Is it similar?

Not really, no. “There are valid concerns that some in the administration are casting intelligence in a certain light to further their goals of regime change, but I think there are more differences than similarities to Iraq,” says Brewer, who is now at the Center for a New American Security in Washington.

In the runup to the Iraq War, George W. Bush’s administration made a clear and repeated case that Saddam Hussein, the country’s brutal dictator, had weapons of mass destruction. The problem is that it was based on cherry-picked intelligence that proved not to be credible, leading the US to launch a war based on faulty information and a misleading public pitch.

“There was a serious, coordinated effort by the Bush administration — via major speeches, interviews, etc. — to lay out its case for war. None of that appears to be happening now,” Brewer told me.

Still, there’s a good reason some compare the current Iran moment to the previous Iraq one. You have a Republican administration, featuring some of the same figures who pushed the US to war in Iraq (namely, Bolton), saying it has intelligence showing an imminent threat against Americans.

So let’s be clear about what we actually know — that is, what reports say the US has found:

  • Iran had plans to target US troops in Iraq and Syria, and a top Iranian military leader told the nation’s proxies to prepare for war.
  • Iran has placed missiles on ships that it could use to attack the US Navy, and could use drones against Americans in a key waterway near Yemen.
  • The US military released video the US claims shows Iranians removing an unexploded limpet mine from the side of one of the oil tankers attacked last week.

Experts are mostly unanimous in believing that intelligence like this exists and is credible. Where they differ is on just how much it clearly shows a new level of Iranian aggression.

Phillip Smyth, an Iran expert at the Washington Institute for Near East Policy, told me in May that major threats from Tehran’s proxies have continued since early 2018. “There have been maneuvers in the past that sent a signal to the Americans” of a worsening regional situation, he said.

But he noted that just because there are indications that an attack could happen doesn’t mean an Iranian proxy will launch one soon. “These guys are very smart and very patient with how they plan and execute,” he said.

Others, like Brookings’s Maloney, have said that people shouldn’t assume the intelligence is bogus, mainly because Iran would likely retaliate forcefully to the Trump administration’s antagonism.

President Donald Trump in the Oval Office on May 13, 2019 in Washington, DC.
President Donald Trump in the Oval Office on May 13, 2019, in Washington, DC.
 Mark Wilson/Getty Images

What gives many pause, though, is that there seems to be a difference in what the US and its allies glean from the intelligence. For example, a top British military official involved in the coalition fight against ISIS in Iraq told Pentagon reporters last month that the threats weren’t extraordinary.

Meanwhile, senators from both parties in Congress have been briefed on the Iran intelligence — and both came away with completely different reads.

After a May briefing with National Security Adviser John Bolton on Monday, administration ally Sen. Lindsey Graham (R-SC) tweeted, “It is clear that over the last several weeks Iran has attacked pipelines and ships of other nations and created threat streams against American interests in Iraq. … If the Iranian threats against American personnel and interests are activated we must deliver an overwhelming military response.”

Meanwhile Sen. Chris Murphy (D-CT), an outspoken critic of Trump’s foreign policy and a member of the Senate Foreign Relations Committee, also tweeted his take. “I‘m listening to Republicans twist the Iran intel to make it sound like Iran is taking unprovoked, offensive measures against the US and our allies. Like it just came out of nowhere,” he said. “I’ve read the intel too. And let me be clear: That’s not what the intel says.”

US defense and intelligence officials familiar with the information wouldn’t provide me with any more information than is already public.

But what makes all this different from the Iraq War is that both Congress and the press are refusing to take the administration’s claims at face value, and instead are pushing the Trump administration to back up those claims with actual proof.

9) Does the US-Iran standoff have anything to do with oil?

Pretty much anytime talk of America going to war in the Middle East comes up, people wonder if it’s merely a quest to control more oil. That’s fair to an extent, as the US and other world powers have launched wars to take charge of energy sources.

That’s not really the case here. What the US does care about, though, is ensuring that vessels are allowed to sail freely through the Strait of Hormuz, a crucial maritime passage aggressively patrolled by Iran where a third of the world’s liquefied natural gas and almost 20 percent of the world’s oil production flows. When US-Iran tensions spike, Iran typically threatens to shut down the strait.

Doing so would send the global energy market into a tailspin and cause a worldwide crisis.

But Iran doesn’t usually follow through with its bluster, surely aware of the fury it would face from the United States and others. So when news of the mystery attacks on oil tankers surfaced twice in two months, it raised worries that Tehran may have found a way to send a message.

“By signaling that this supply is not safe and can be disrupted, Tehran is letting the world know it has escalation options,” Behnam Ben Taleblu, an Iran expert at the Foundation for the Defense of Democracies, told me last month.

But while the continued supply of cheap oil is definitely important to the US, it’s not really the reason some in the Trump administration are pushing for an Iran fight today. That really comes down to this: Bolton, Pompeo, and others want regime change in Iran, and are using intelligence that shows Tehran doing provocative things to advocate for a more combative stance.

But Trump is still the boss, and so far he’s expressed no real appetite for war with Iran. Which means that a major, bloody conflict remains an unlikely possibility — at least for now.

https://www.vox.com/2019/5/20/18628977/us-iran-war-trump-oil-tanker-attacks-nuclear-program-pompeo-bolton-irgc

 

Iran and weapons of mass destruction

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Iran, officially the Islamic Republic of Iran, is not known to currently possess weapons of mass destruction (WMD) and has signed treaties repudiating the possession of weapons of mass destruction including the Biological Weapons Convention,[1] the Chemical Weapons Convention,[2] and the Non-Proliferation Treaty (NPT).[3] The country has first-hand knowledge of WMD effects—over 100,000 Iranian troops and civilians were victims of chemical weapons during the 1980s Iran–Iraq War.[4][5]

On ideological grounds, a public and categorical religious decree (fatwa) against the development, production, stockpiling and use of nuclear weapons has been issued by the Supreme Leader of Iran Ayatollah Ali Khameneialong with other clerics,[6][7] though it is approved by some relatively minor clerics.[8] Later versions of this fatwa forbid only the “use” of nuclear weapons, but said nothing about their production.[9] Iran has stated its uranium enrichment program is exclusively for peaceful purposes.[10][11] The IAEA has confirmed the non-diversion of declared nuclear material in Iran but has also said it “needs to have confidence in the absence of possible military dimensions to Iran’s nuclear program.”[12][13]

In December 2014, a Wisconsin Project on Nuclear Arms Control report by Lincy and Milhollin based on International Atomic Energy Agency data concluded that Iran could produce enough weapons-grade uranium for one nuclear warhead in 1.7 months [14] In 2012, sixteen U.S. intelligence agencies, including the CIA, reported that Iran was pursuing research that could enable it to produce nuclear weapons, but was not attempting to do so.[15]The senior officers of all of the major American intelligence agencies stated that there was no conclusive evidence that Iran has made any attempt to produce nuclear weapons since 2003.[16] In a 2007 National Intelligence Estimate, the United States Intelligence Community assessed that Iran had ended all “nuclear weapon design and weaponization work” in 2003.[17] U.S. Defense Secretary Leon Panetta stated in January 2012 that Iran was pursuing a nuclear weapons capability, but was not attempting to produce nuclear weapons.[18] In 2009, U.S. intelligence assessed that Iranian intentions were unknown.[19][20] Some European intelligence believe Iran has resumed its alleged nuclear weapons design work.[21] Russian Prime Minister Vladimir Putin said he had seen no evidence of any nuclear weapons program in Iran,[22] while Russian President Dmitry Medvedev said Iran was close to having the capability to produce nuclear weapons.[23][24] Iran has called for nuclear weapons states to disarm and for the Middle East to be a nuclear weapon free zone.[25]

After the IAEA voted in a rare non-consensus decision to find Iran in non-compliance with its NPT Safeguards Agreement and to report that non-compliance to the UN Security Council,[26][27] the Council demanded that Iran suspend its nuclear enrichment activities[28][29] and imposed sanctions against Iran[30][31][32][33] when Iran refused to do so.[34] Former Iranian President Mahmoud Ahmadinejad argued that the sanctions were illegal.[35] The IAEA has been able to verify the non-diversion of declared nuclear material in Iran, but not the absence of undeclared activities.[36] The Non-Aligned Movement has called on both sides to work through the IAEA for a solution.[37]

In November 2009, the IAEA Board of Governors adopted[38] a resolution against Iran which urged Iran to apply the modified Code 3.1 to its Safeguard Agreement,[39] urged Iran to implement and ratify the Additional Protocol,[39] and expressed “serious concern” that Iran had not cooperated on issues that needed “to be clarified to exclude the possibility of military dimensions to Iran’s nuclear program.”[40] Iran said the “hasty and undue” resolution would “jeopardize the conducive environment vitally needed” for successful negotiations[40] and lead to cooperation not exceeding its “legal obligations to the body”.[41]

Contents

Nuclear weapons

Overview

In September 2005, the IAEA Board of Governors, in a rare non-consensus decision with 12 abstentions,[42] recalled a previous Iranian “policy of concealment” regarding its enrichment program[43] and found that Iran had violated its NPT Safeguards Agreement.[44] Another IAEA report stated “there is no evidence that the previously undeclared nuclear material and activities … were related to a nuclear weapons program.”[43] Iran has claimed that the military threat posed by Israel and the United States is forcing it to restrict the release of information on its nuclear program.[45] Gawdat Bahgat of the National Defense University speculates that Iran may have a lack of confidence in the international community which was reinforced when many nations, under pressure from the United States, rejected or withdrew from signed commercial deals with the Iranian nuclear authority.[46]

On 31 July 2006, the Security Council passed a resolution demanding Iran suspend its enrichment program.[34] On 23 December 2006, the UN Security Council imposed sanctions against Iran,[30] which were later tightened on 24 March 2007,[31] because Iran refused to suspend enrichment. Iran’s representative to the UN argued that the sanctions compelled Iran to abandon its rights under the NPT to peaceful nuclear technology.[30] The Non-Aligned Movement called on both sides to work through the IAEA for a solution.[37]

US intelligence predicted in August 2005 that Iran could have the key ingredients for a nuclear weapon by 2015.[47] On 25 October 2007, the United States declared the Revolutionary Guards a “proliferator of weapons of mass destruction”, and the Quds Force a “supporter of terrorism”.[48] Iran responded that “it is incongruent for a country [US] who itself is a producer of weapons of mass destruction to take such a decision.”[48] Mohamed ElBaradei, director of the IAEA at the time, said he had no evidence Iran was building nuclear weapons and accused US leaders of adding “fuel to the fire” with their rhetoric.[49] Speaking in Washington in November 2007, days before the IAEA was to publish its latest report, Israeli Deputy Prime Minister Shaul Mofaz called for ElBaradei to be sacked, saying: “The policies followed by ElBaradei endanger world peace. His irresponsible attitude of sticking his head in the sand over Iran’s nuclear programme should lead to his impeachment.” Israel and some western governments fear Iran is using its nuclear programme as a covert means to develop weapons, while Iran says it is aimed solely at producing electricity. For its part in the conflict-ridden Middle East, Israel is a member of the IAEA, but it is not itself a signatory to the Nuclear Non-Proliferation Treaty, and is widely believed to currently be the only nuclear-armed state in the region.[50]

History

Iran’s nuclear program began as a result of the Cold War alliance between the United States and the shah of Iran, Mohammad Reza Pahlavi, who emerged as an important American ally in the Persian Gulf.[51] Under the Atoms for Peace program, Iran received basic nuclear research facilities from the United States. In return, Tehran signed the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) in 1968. Fueled by high oil prices in the 1970s, Iran sought to purchase large-scale nuclear facilities from Western suppliers in order to develop nuclear power and fuel-cycle facilities with both civilian and potential military applications.[51] In March 1974, the shah established the Atomic Energy Organization of Iran (AEOI).[52] Sensing a heightened risk of nuclear proliferation, the United States convinced western allies to limit the export of nuclear fuel-cycle facilities to Iran. Supreme Leader Ayatollah Ruhollah Khomeini, whose revolution displaced the shah’s monarchy in 1979 and ruled the newly established Islamic Republic of Iran until his death in 1989, placed little emphasis on nuclear weapons development because it was viewed as a suspicious western innovation.[53] During that time, many of Iran’s top scientists fled the country while the United States organized an international campaign to block any nuclear assistance to Iran.

Following the death of Ayotollah Khomeini, the leadership of President Ali Akbar Hashemi Rafsanjani and Supreme Leader Ali Hosseini Khamenei sought to revive Iran’s overt nuclear civilian program and expand undeclared nuclear activities during the 1990s.[54] According to a strategic dossier from International Institute for Strategic Studies, Iran turned away from Western suppliers and obtained nuclear assistance from Russia and China in a number of key areas, including uranium mining, milling and conversion, as well as technology for heavy-water research reactors.[51] However, Washington intervened with Moscow and Beijing to prevent Iran from fully acquiring its list of nuclear power and fuel-cycle facilities. The 1990s also saw Iran expand its furtive nuclear research into conversion, enrichment and plutonium separation. “Most importantly, on the basis of additional centrifuge assistance from the A.Q. Khan network, Iran was able to begin the construction of pilot-scale and industrial-scale enrichment facilities at Natanz around 2000.”[51] Full exposure of Iran’s nuclear activities came in 2002, when an Iranian exiled opposition group, the National Council of Resistance of Iran (NCRI) declared the Natanz project in August of that year. Since that time, international pressure on Iran has remained steady, hampering but not halting the country’s nuclear development.[51] Iran remains legally bound to the NPT and states its support for the treaty.

There are various estimates of when Iran might be able to produce a nuclear weapon, should it choose to do so:

  • A 2005 assessment by the International Institute for Strategic Studies concluded “if Iran threw caution to the wind, and sought a nuclear weapon capability as quickly as possible without regard for international reaction, it might be able to produce enough HEU for a single nuclear weapon by the end of this decade”, assuming no technical problems. The report concludes, however, that it is unlikely that Iran would flatly ignore international reactions and develop nuclear weapons anyway.[55]
  • A 2005 US National Intelligence Estimate stated that Iran was ten years from making a nuclear weapon.[56]
  • In 2006 Ernst Uhrlau, the head of German intelligence service, said Tehran would not be able to produce enough material for a nuclear bomb before 2010 and would only be able to make it into a weapon by about 2015.[57]
  • A 2007 annual review the International Institute for Strategic Studies in London stated that “If and when Iran does have 3,000 centrifuges operating smoothly, the IISS estimates it would take an additional 9-11 months to produce 25 kg of highly enriched uranium, enough for one implosion-type weapon. That day is still 2–3 years away at the earliest.”[58]
  • The former head of the IAEA, Mohamed ElBaradei, said on 24 May 2007 that Iran could take between 3 and 8 years to make a bomb if it went down that route.[58]
  • On 22 October 2007, Mohamed ElBaradei repeated that, even assuming Iran was trying to develop a nuclear bomb, they would require “between another three and eight years to succeed”, an assessment shared by “all the intelligence services”.[59]
  • In December 2007, the United States National Intelligence Estimate (representing the consensus view of all 16 American intelligence agencies) concluded with a “high level of confidence” that Iran had halted its nuclear weapons program in 2003 and “with moderate confidence” that the program remains frozen as of mid-2007. The new estimate says that the enrichment program could still provide Iran with enough raw material to produce a nuclear weapon sometime by the middle of next decade, but that intelligence agencies “do not know whether it currently intends to develop nuclear weapons” at some future date.[60][61] Iranian Foreign Minister Manouchehr Mottaki said 70 percent of the U.S. report was “true and positive,” but denied its allegations of Iran having had a nuclear weapons program before 2003. Russia has said there was no proof Iran has ever run a nuclear weapons program.[62] The former head of the IAEA, Mohamed ElBaradei, stated that he had seen “maybe some studies about possible weaponization”, but “no evidence” of “an active weaponization program” as of October 2007.[63] Thomas Fingar, former Chairman of the National Intelligence Council until December 2008, in reference to the 2007 Iran NIE and using intelligence to anticipate opportunities and shape the future, said intelligence has a “recently reinforced propensity to underscore, overstate, or ‘hype’ the findings in order to get people to pay attention” and that the 2007 NIE was intended to send the message “you do not have a lot of time but you appear to have a diplomatic or non-military option”.[64] A National Intelligence Estimate (NIE) is the most authoritative written judgment concerning a national security issue prepared by the Director of Central Intelligence.[65]
  • The U.S. Director of National Intelligence said in February 2009 that Iran would not realistically be able to a get a nuclear weapon until 2013, if it chose to develop one.,[66] and that US intelligence does not know whether Iran intends to develop nuclear weapons, but believes Iran could at least be keeping the option to develop them open.[67] Mossad Chief Meir Dagan was more cautious, saying recently that it would take the Iranians until 2014. German, French, and British intelligence say that under a worst-case scenario it would take Iran a minimum of 18 months to develop a nuclear weapon if it chose to build one, and it would have to first purify its uranium and weaponize its uranium.[66] An anonymous source in the German Foreign Intelligence Service (BND) whose rank was not provided has gone further and claimed Iran could produce a nuclear bomb and conduct an underground test in 6 months if it wanted to and further asserted that Iran had already mastered the full uranium enrichment cycle, and possessed enough centrifuges to produce weapons-grade uranium.[68][69] Physicists say that if Iran were to choose to develop a nuclear weapon, it would have to withdraw from the International Nuclear Non-Proliferation Treaty and expel International Atomic Energy Agency inspectors from the country.[70]George Friedman, head of the global intelligence company Stratfor, has said Iran is “decades away” from developing any credible nuclear-arms capacity.[71]
  • On 12 February 2010 US think tank expert David Albright, the head of the Institute for Science and International Security, said in a report that Iran was seeking to “make sufficient weapons-grade uranium”. His claim was criticized by former chief U.N. weapons inspector Scott Ritter.[72]
  • An IAEA report issued 8 November 2011 provided detailed information outlining the IAEA’s concerns about the possible military dimensions of Iran’s nuclear program, noting that Iran had pursued a structured program or activities relevant to the development of nuclear weapons.[73]
  • On 30 April 2018, Israeli Prime Minister Binyamin Netanyahu revealed thousands of files he said were copied from a “highly secret location” in Teheran which show an Iranian effort to develop nuclear weapons between 1999 and 2003.[74]
  • On 1 May 2018 the IAEA reiterated its 2015 report, saying it had found no credible evidence of nuclear weapons activity in Iran after 2009.[75][76][77]

IAEA

The International Atomic Energy Agency (IAEA) is an autonomous international organization that seeks to promote the peaceful use of nuclear energy and to inhibit its use for military purposes.

On 6 March 2006, the IAEA Secretariat reported that “the Agency has not seen indications of diversion of nuclear material to nuclear weapons or other nuclear explosive devices … however, after three years of intensive verification, there remain uncertainties with regard to both the scope and the nature of Iran’s nuclear programme“.[78] However, the inspectors did find some sensitive documents, including instructions and diagrams on how to make uranium into a sphere, which is only necessary to make nuclear weapons. Iran furnished the IAEA with copies, claiming not to have used the information for weapons work, which it had obtained along with other technology and parts in 1987 and the mid-1990s.[79] It is thought this material was sold to them by Abdul Qadeer Khan,[80] though the documents did not have the necessary technical details to actually manufacture a bomb.

On 18 December 2003, Iran voluntarily signed, but did not ratify or bring into force, an Additional Protocol that allows IAEA inspectors access to individuals, documentation relating to procurement, dual-use equipment, certain military-owned workshops, and research and development locations.[81] Iran agreed voluntarily to implement the Additional Protocol provisionally, however when the IAEA reported Iran’s non-compliance to the United Nations Security Council on 4 February 2006 Iran withdrew from its voluntary adherence to the Additional Protocol.[82]

On 12 May 2006, claims that highly enriched uranium (well over the 3.5% enriched level) was reported to have been found “at a site where Iran has denied such sensitive atomic work”, appeared. “They have found particles of highly enriched uranium [HEU], but it is not clear if this is contamination from centrifuges that had been previously found [from imported material] or something new,” said one diplomat close to the UN International Atomic Energy Agency (IAEA). These reports have not yet been officially confirmed by the IAEA (as of 1 June 2006).[83][84][85]

On 31 July 2006, the United Nations Security Council passed a resolution demanding that Iran suspend its uranium enrichment activities.[34]

In late 2006, “New traces of plutonium and enriched uranium– potential material for atomic warheads– have been found [by the IAEA] in a nuclear waste facility in Iran.” However, “A senior U.N. official who was familiar with the report cautioned against reading too much into the findings of traces of highly enriched uranium and plutonium, saying Iran had explained both and they could plausibly be classified as byproducts of peaceful nuclear activities.”[86] In 2007 these traces were determined to have come from leaking used highly enriched uranium fuel from the Tehran Research Reactor, which the U.S. supplied to Iran in 1967, and the matter was closed.[87]

In July 2007 the IAEA announced that Iran has agreed to allow inspectors to visit its Arak nuclear plant, and by August 2007 a plan for monitoring the Natanz uranium enrichment plant will have been finalised.[88]

In August 2007 the IAEA announced that Iran has agreed to a plan to resolve key questions regarding its past nuclear activities. The IAEA described this as a “significant step forward”.[89]

In September 2007 the IAEA announced it has been able to verify that Iran’s declared nuclear material has not been diverted from peaceful use. While the IAEA has been unable to verify some “important aspects” regarding the nature and scope of Iran’s nuclear work, the agency and Iranian officials agreed on a plan to resolve all outstanding issues, Director-General Mohamed ElBaradei said at the time.[90] In an interview with Radio Audizioni Italiane the same month, ElBaradei remarked that “Iran does not constitute a certain and immediate threat for the international community”.[91] In October 2007, ElBaradei amplified these remarks, telling Le Monde that, even if Iran did intend to develop a nuclear bomb, they would need “between another three and eight years to succeed”. He went on to note that “all the intelligence services” agree with this assessment and that he wanted to “get people away from the idea that Iran will be a threat from tomorrow, and that we are faced right now with the issue of whether Iran should be bombed or allowed to have the bomb”.[59]

In late October 2007, according to the International Herald Tribune, the former head of the IAEA, Mohamed ElBaradei, stated that he had seen “no evidence” of Iran developing nuclear weapons. The IHT quoted ElBaredei as stating that,

“We have information that there has been maybe some studies about possible weaponization,” said Mohamed ElBaradei, who led the International Atomic Energy Agency. “That’s why we have said that we cannot give Iran a pass right now, because there is still a lot of question marks.”

“But have we seen Iran having the nuclear material that can readily be used into a weapon? No. Have we seen an active weaponization program? No.”

The IHT report went on to say that “ElBaradei said he was worried about the growing rhetoric from the U.S., which he noted focused on Iran’s alleged intentions to build a nuclear weapon rather than evidence the country was actively doing so. If there is actual evidence, ElBaradei said he would welcome seeing it.”[63]

In November 2007 ElBaradei circulated a report to the upcoming meeting of the IAEA Board of Governors.[92][93][94] Its findings conclude that Iran has made important strides towards clarifying its past activities, including provided access to documentation and officials involved in centrifuge design in the 1980s and 1990s. Answers provided by Iran regarding the past P-1 and P-2 centrifuge programs were found to be consistent with the IAEA’s own findings. However, Iran has ignored the demands of the UN Security council, and has continued to enrich uranium in the past year. The IAEA is not able to conclusively confirm that Iran isn’t currently enriching uranium for military purposes, as its inspections have been restricted to workshops previously declared as part of the civilian uranium enrichment program, and requests for access to certain military workshops have been denied; the report noted that “As a result, the agency’s knowledge about Iran’s current nuclear program is diminishing”. The report also confirmed that Iran now possesses 3000 centrifuges, a 10-fold increase over the past year, though the feed rate is below the maximum for a facility of this design. Data regarding the P-2 centrifuge, which Ahmadinejad has claimed will quadruple production of enriched uranium, was provided only several days before the report was published; the IAEA plan to discuss this issue further in December. In response to the report the US has vowed to push for more sanctions, whilst Iran has called for an apology from the US.[95]

In his final November 2009 statement to the IAEA Board of Governors, Dr. Mohamed ElBaradei said the Agency continued to verify the non-diversion of declared nuclear material in Iran, but that other issues of concern had reached a “dead end” unless Iran were to fully cooperate with the agency. ElBaradei stated it would be helpful if “we were able to share with Iran more of the material that is at the centre of these concerns”, and also said it would be helpful if Iran fully implemented the Subsidiary Arrangements to its Safeguards Agreement and fully implemented the Additional Protocol. ElBaradei said Iran’s failure to report the existence of a new fuel enrichment facility until September 2009 was inconsistent with its obligations under the Subsidiary Arrangements to its Safeguards Agreement. ElBaradei closed by saying international negotiations represented a “unique opportunity to address a humanitarian need and create space for negotiations”.[96]

On 18 February 2010 the IAEA released a new report on Iran’s nuclear program. Ivan Oelrich and Ivanka Barzashka, writing in the Bulletin of the Atomic Scientists, suggested “the media has seriously misrepresented the actual contents of the report” and that “in fact, no new information has been revealed.” They wrote that there was “no independent assessment that Iran is engaged in weapons work” and that this was “hardly the first time that the agency has discussed potential evidence of Tehran’s nuclear weapons research”.[97] Iran’s envoy to the UN atomic watchdog criticized Western powers for interpreting the IAEA report in an “exaggerated, selective and inaccurate” manner.[98] PressTV reported that the report verified the non-diversion of declared nuclear material in Iran and that Iran started enriching uranium to a higher level in the presence of IAEA inspectors.[99]

In an April 2010 interview with the BBC, former IAEA Director General Mohamed ElBaradei said Western nations were seeking harsher sanctions “out of frustration”. “I don’t think Iran is developing, or we have new information that Iran is developing, a nuclear weapon today .. there is a concern about Iran’s future intentions, but even if you talk to MI6 or the CIA, they will tell you they are still four or five years away from a weapon. So, we have time to engage,” he said. ElBaradei further said the building of trust between the parties would “not happen until the two sides sit around the negotiating table and address their grievances. Sooner or later that will happen.”[100]

Alleged weaponization studies

Former IAEA Director General ElBaradei said in 2009 that the agency had been provided with “no credible evidence” that Iran is developing nuclear weapons,[101] but the New York Times reported in January 2009 that the IAEA is investigating U.S. allegations Project 110and Project 111 could be names for Iranian efforts for designing a nuclear warhead and making it work with an Iranian missile.[102] “We are looking to those suppliers of information to help us on the question of authenticity, because that is really a major issue. It is not an issue that involves nuclear material; it’s a question of allegations,” ElBaradei further said.[103] ElBaradei has strongly denied reports that the agency had concluded Iran had developed technology needed to assemble a nuclear warhead,[104] when a November 2009 article in The Guardian said the allegations included Iran’s weapon design activities using two point implosion designs.[105]

The New York Times article cited classified US intelligence reports asserting that Professor Mohsen Fakhrizadeh is in charge of the projects, while Iranian officials assert these projects are a fiction made up by the United States.[102] The article further reported that “while the international agency readily concedes that the evidence about the two projects remains murky, one of the documents it briefly displayed at a meeting of the agency’s member countries in Vienna last year, from Mr. Fakrizadeh’s projects, showed the chronology of a missile launching, ending with a warhead exploding about 650 yards above ground – approximately the altitude from which the bomb dropped on Hiroshima was detonated.”[102] Gordon Oehler, who ran the CIA’s nonproliferation center and served as deputy director of the presidential commission on weapons of mass destruction, wrote “if someone has a good idea for a missile program, and he has really good connections, he’ll get that program through.. But that doesn’t mean there is a master plan for a nuclear weapon.”[106] Outside experts note that the parts of the report made public lack many dates associated with Iran’s alleged activities meaning it is possible Iran had a Project 110 at one time, but scrapped it as US intelligence insists.[107] The Washington Post reports that “nowhere are there construction orders, payment invoices, or more than a handful of names and locations possibly connected to the projects.”[108] Former IAEA Director Mohamed ElBaradei said the Agency didn’t have any information that nuclear material has been used and didn’t have any information that any components of nuclear weapons had been manufactured.[103] Iran has asserted that the documents are a fabrication, while the IAEA has urged Iran to be more cooperative and Member States to provide more information about the allegations to be shared with Iran.[109]

In August 2009 an article in the Israeli newspaper Haaretz alleged that ElBaradei had “censored” evidence obtained by IAEA inspectors over the preceding few months.[110] ElBaradei has angrily rejected claims from Israel, France and the US that he had suppressed the internal IAEA report, saying all relevant and confirmed information had been presented to member states.[101] ElBaradei said he and the Agency have repeatedly said the rumors of censorship were “totally baseless, totally groundless. All information that we have received that has been vetted, assessed in accordance with our standard practices, has been shared with the Board.”[103]

On 16 November 2009 the Director General provided a report to the Board of Governors. The report stated “there remain a number of outstanding issues which give rise to concerns, and which need to be clarified to exclude the existence of possible military dimensions to Iran’s nuclear programme.” “The Agency is still awaiting a reply from Iran to its request to meet relevant Iranian authorities in connection with these issues”, the report said. The report further said, “it would be helpful if Member States which have provided documentation to the Agency would agree to share more of that documentation with Iran, as appropriate.”[111][112]

Russia has denied allegations of “continued Russian assistance to Iran’s nuclear weapons program” as “totally groundless” and said the November 2009 IAEA report reaffirmed the absence of a military component in Iran’s efforts in the nuclear field.[113]

In December 2009, The Times claimed that a document from an unnamed Asian intelligence agency described the use of a neutron source which has no use other than in a nuclear weapon, and claimed the document appeared to be from an office in Iran’s Defense Ministry and may have been from around 2007.[114][115] Norman Dombey, professor emeritus of theoretical physics at Sussex University, wrote in that “nothing in the published ‘intelligence documents’ shows Iran is close to having nuclear weapons” and argued that it is “unlikely that nuclear weapon projects would be distributed among several universities, or weapon parts marketed to research centres.”[116] A senior U.N. official who saw the document said it may or may not be authentic, that it was unclear when the document was written, and that it was unclear whether any experiments had ever actually been performed.[117] The C.I.A. did not declare whether it believes the document was real, and European spy agencies also did not give any authentication to the document.[118] Western intelligence agencies said that, if genuine, it was unclear whether the paper provided any new insights into the state of Iranian weapons research.[118] “It’s very troubling – if real,” said Thomas B. Cochran, a senior scientist in the nuclear program of the Natural Resources Defense Council.[118] The Institute for Science and International Security, said that it “urges caution and further assessment” of the document and noted that “the document does not mention nuclear weapons .. and we have seen no evidence of an Iranian decision to build them.”[118] Anton Khlopkov, the founding director of the Center for Energy and Security Studies, said the media leak may be being used “as a pretext for inciting the campaign against Iran.”[119] Former Russian Prime Minister Yevgeny Primakov has also said after the public publications of the documents “Russia has no concrete information that Iran is planning to construct a weapon”.[120] Russia’s representative to the IAEA, Alexander Zmeyevskiy, has noted that though the IAEA is in possession of these documents, the IAEA’s findings “do not contain any conclusions about the presence of undeclared nuclear activities in Iran.”[121] Iran pointed out the claims had not been verified by the International Atomic Energy Agency and argued that “some countries are angry that our people defend their nuclear rights.”[122] “I think that some of the claims about our nuclear issue have turned into a repetitive and tasteless joke,” Iranian President Mahmoud Ahmadinejad said in response to the documents.[123]

Iranian stance

Iran states that the purpose of its nuclear program is the generation of power and that any other use would be a violation of the Nuclear Non-Proliferation Treaty, of which it is a signatory, as well as being against Islamic religious principles. Iran claims that nuclear power is necessary for a booming population and rapidly industrialising nation. It points to the fact that Iran’s population has more than doubled in 20 years, the country regularly imports gasoline and electricity, and that burning fossil fuel in large amounts harms Iran’s environment drastically. Additionally, Iran questions why it shouldn’t be allowed to diversify its sources of energy, especially when there are fears of its oil fields eventually being depleted. It continues to argue that its valuable oil should be used for high value products and export, not simple electricity generation. Furthermore, Iran argues that nuclear power makes fairly good economic sense. Building reactors is expensive, but subsequent operating costs are low and stable, and increasingly competitive as fossil-fuel prices rise.[124] Iran also raises funding questions, claiming that developing the excess capacity in its oil industry would cost it $40 billion, not to speak of paying for the power plants. Harnessing nuclear power costs a fraction of this, considering Iran has abundant supplies of accessible uranium ore.[125]These claims have been echoed by Scott Ritter, the former UN weapons inspector in Iraq.[126] Roger Stern, of Johns Hopkins Department of Geography and Environmental Engineering, agrees “Iran’s claims to need nuclear power could be genuine”.[127]

Iran states it has a legal right to enrich uranium for peaceful purposes under the NPT, and further says that it “has constantly complied with its obligations under the NPT and the Statute of the International Atomic Energy Agency”.[128] Twelve other countries are known to operate uranium enrichment facilities. Iran states that “the failure of certain Nuclear- Weapon States to fulfill their international obligations continue to be a source of threat for the international community”.[25] Iran also states that “the only country that has ever used nuclear weapons still maintains a sizable arsenal of thousands of nuclear warheads” and calls for a stop to the transfer of technology to non-NPT states.[25] Iran has called for the development of a follow-up committee to ensure compliance with global nuclear disarmanent.[129]Iran and many other nations without nuclear weapons have said that the present situation whereby Nuclear Weapon States monopolise the right to possess nuclear weapons is “highly discriminatory”, and they have pushed for steps to accelerate the process of nuclear disarmament.[130]

Iran has criticized the European Union because it believes it has taken no steps to reduce the danger of nuclear weapons in the Middle East.[25] Iran has called on the state of Israel to sign the NPT, accept inspection of its nuclear facilities, and place its nuclear facilities under IAEA safeguards.[25] Iran has proposed that the Middle East be established as a proposed Nuclear Weapon Free Zone.[25]

On 3 December 2004, Iran’s former president and an Islamic cleric, Akbar Hashemi Rafsanjani alluded to Iran’s position on nuclear energy:

God willing, we expect to soon join the club of the countries that have a nuclear industry, with all its branches, except the military one, in which we are not interested. We want to get what we’re entitled to. I say unequivocally that for no price will we be willing to relinquish our legal and international right. I also say unequivocally to those who make false claims: Iran is not pursuing nuclear weapons, but it will not give up its rights. Your provocation will not make us pursue nuclear weapons. We hope that you come to your senses soon and do not get the world involved in disputes and crises.[131]

On 14 November 2004, Iran’s chief nuclear negotiator said that his country agreed to voluntarily and temporarily suspend the uranium enrichment program after pressure from the European Union on behalf of the United Kingdom, France and Germany, as a confidence-building measure for a reasonable period of time, with six months mentioned as a reference.

Iranian president Mahmoud Ahmadinejad has publicly stated Iran is not developing nuclear weapons. On 9 August 2005 Iran’s Supreme Leader, Ayatollah Ali Khamenei, issued a fatwa that the production, stockpiling and use of nuclear weapons are forbidden under Islam and that Iran shall never acquire these weapons. The text of the fatwa has not been released although it was referenced in an official statement at a meeting of the International Atomic Energy Agency (IAEA) in Vienna.[132]

Iranian President Mahmoud Ahmadinejad in a 2005 speech to the U.N. General Assembly said “We are concerned that once certain powerful states completely control nuclear energy resources and technology, they will deny access to other states and thus deepen the divide between powerful countries and the rest of the international community … peaceful use of nuclear energy without possession of a nuclear fuel cycle is an empty proposition”.[133]

On 6 August 2005, Iran rejected a 34-page European Union proposal intended to help Iran build “a safe, economically viable and proliferation-proof civil nuclear power generation and research program.” The Europeans, with US agreement, intended to entice Iran into a binding commitment not to develop uranium enrichment capability by offering to provide fuel and other long-term support that would facilitate electricity generation with nuclear energy. Iranian Foreign Ministry spokesman Hamid Reza Asefi rejected the proposal saying, “We had already announced that any plan has to recognize Iran’s right to enrich uranium”.[134] After the Iranian Revolution, Germany halted construction of the Bushehr reactor, the United States cut off supply of highly enriched uranium (HEU) fuel for the Tehran Research Reactor, and Iran never received uranium from France which it asserted it was entitled to. Russia agreed not to provide an enrichment plant and terminated cooperation on several other nuclear-related technologies, including laser isotope separation; China terminated several nuclear projects (in return, in part for entry into force of a U.S.-China civil nuclear cooperation agreement); and Ukraine agreed not to provide the turbine for Bushehr. Iran argues that these experiences contribute to a perception that foreign nuclear supplies are potentially subject to being interrupted.[135]

Iran resumed its uranium enrichment program in January 2006, prompting the IAEA to refer the issue to the UN Security Council.

On 21 February 2006, Rooz, a news website run by Iranian exiles (the Fedayeen Khalq [People’s Commandos] leftist terrorist group),[136] reported that Hojatoleslam Mohsen Gharavian, a student of Qom’s fundamentalist cleric Mesbah Yazdi, spoke about the necessity of using nuclear weapons as a means to retaliate and announced that “based on religious law, everything depends on our purpose”.[137] In an interview with the Islamic Republic News Agency the same day, Gharavian rejected these reports, saying “We do not seek nuclear weapons and the Islamic religion encourages coexistence along with peace and friendship…these websites have tried to misquote me.”[138]

On 11 April 2006, Iranian President Mahmoud Ahmadinejad announced Iranian scientists working at the pilot facility at Natanz had successfully enriched uranium to the 3.5 percent level, using a small cascade of 164 gas centrifuges. In the televised address from the city of Mashhad he said, “I am officially announcing that Iran has joined the group of those countries which have nuclear technology“.[139]

In May 2006 some members of the Iranian legislature (“Majlis” or Parliament) sent a letter to UN Secretary-General Kofi Annan threatening to withdraw from the NPT if Iran’s right to peaceful use of nuclear technology under the treaty was not protected.[140]

On 21 February 2007, the same day the UN deadline to suspend nuclear activities expired, Mahmoud Ahmadinejad made the following statement: “If they say that we should close down our fuel production facilities to resume talks, we say fine, but those who enter talks with us should also close down their nuclear fuel production activities”. The White House‘s spokesperson Tony Snow rejected the offer and called it a “false offer”.[141]

Iran has said that U.N. Security Council sanctions aimed at curtailing its uranium-enrichment activities unfairly target its medical sector. “We have thousands of patients a month at our hospital alone .. If we can’t help them, some will die. It’s as simple as that,” said an Iranian nuclear medicine specialist. An Iranian Jew from California claimed “I don’t believe in these sanctions… They hurt normal people, not leaders. What is the use of that?” Vice President of the Atomic Energy Organization of Iran Ghannadi framed the debate as a humanitarian issue, “This is about human beings. . . . When someone is sick, we should give medicine.” Iran informed the International Atomic Energy Agency (IAEA) that fuel obtained from Argentina in 1993 would run out by the end of 2010, and that it could produce the uranium itself or buy the uranium from abroad.[142]

In February 2010, to refuel the Tehran Research Reactor which produces medical isotopes,[143] Iran began using a single cascade to enrich uranium “up to 19.8%”,[144][145] to match the previously foreign supplied fuel.[146] 20% is the upper threshold for low enriched uranium (LEU).[147] Though HEU enriched to levels exceeding 20% is considered technically usable in a nuclear explosive device,[148] this route is much less desirable because far more material is required to achieve a sustained nuclear chain reaction.[149] HEU enriched to 90% and above is most typically used in a weapons development program.[150][151]

In an interview in October 2011, President Ahmadinejad of Iran said:

“We have already expressed our views about nuclear bombs. We said those who are seeking to build nuclear bombs or those who stockpile, they are politically and mentally retarded. We think they are stupid because the era of nuclear bombs is over. [Why] for example, should Iran continue its efforts and tolerate all international treasures only to build a nuclear bomb, or a few nuclear bombs that are useless? They can never be used!”[152]

On 22 February 2012, in a meeting in Tehran with the director and officials of the Atomic Energy Organization of Iran (AEOI) and nuclear scientists, Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei said:

“The Iranian nation has never pursued and will never pursue nuclear weapons. There is no doubt that the decision makers in the countries opposing us know well that Iran is not after nuclear weapons because the Islamic Republic, logically, religiously and theoretically, considers the possession of nuclear weapons a grave sin and believes the proliferation of such weapons is senseless, destructive and dangerous.”[153]

U.S. stance

  • In 2005, the United States stated that Iran has violated both Article III and Article II of the NPT.[154] The IAEA Board of Governors, in a rare divided vote, found Iran in noncompliance with its NPT safeguards agreement for a 1985–2003 “policy of concealment”[43]regarding its efforts to develop enrichment and reprocessing technologies.[26] The United States,[155] the IAEA[156] and others[157] consider these technologies to be of particular concern because they can be used to produce fissile material for use in nuclear weapons.
  • The United States has argued that Iran’s concealment of efforts to develop sensitive nuclear technology is prima facie evidence of Iran’s intention to develop nuclear weapons, or at a minimum to develop a latent nuclear weapons capability. Others have noted that while possession of the technology “contributes to the latency of non-nuclear weapon states in their potential to acquire nuclear weapons” but that such latency is not necessarily evidence of intent to proceed toward the acquisition of nuclear weapons, since “intent is in the eye of the beholder”.[158]
  • The United States has also provided information to the IAEA on Iranian studies related to weapons design, activities, including the intention of diverting a civilian nuclear energy program to the manufacture of weapons, based on a laptop computer reportedly linked to Iranian weapons programs. The United States has pointed to other information reported by the IAEA, including the Green Salt Project, the possession of a document on manufacturing uranium metal hemispheres, and other links between Iran’s military and its nuclear program, as further indications of a military intent to Iran’s nuclear program.[159] The IAEA has said U.S. intelligence provided to it through 2007 has proven inaccurate or not led to significant discoveries inside Iran;[160] however, the US, and others have recently provided more intelligence to the agency.[161]
  • In May 2003, The Swiss ambassador to Iran sent the State Department a two-page document, reportedly approved by Ayatollah Khamanei, outlining a road map towards normalization of relations between the two states. The Iranians offered full transparency of its nuclear programme and withdrawal of support from Hamas and Hezbollah in exchange for security assurances and normalization of diplomatic relations. The Bush Administration did not respond to the proposal, as senior U.S. officials doubted its authenticity.[162][163]
  • The United States acknowledges Iran’s right to nuclear power, and has joined with the EU-3, Russia and China in offering nuclear and other economic and technological cooperation with Iran if it suspends uranium enrichment. This cooperation would include an assured supply of fuel for Iran’s nuclear reactors.[164]
  • A potential reason behind U.S. resistance to an Iranian nuclear program lies in Middle Eastern geopolitics. In essence, the US feels that it must guard against even the possibility of Iran obtaining a nuclear weapons capability. Some nuclear technology is dual-use; i.e. it can be used for peaceful energy generation, and to develop nuclear weapons, a situation that resulted in India’s nuclear weapons program in the 1960s. A nuclear-armed Iran would dramatically change the balance of power in the Middle East, weakening US influence. It could also encourage other Middle Eastern nations to develop nuclear weapons of their own further reducing US influence in a critical region.[165]
  • In 2003, the United States insisted that Tehran be “held accountable” for seeking to build nuclear arms in violation of its agreements.[166] In June 2005, the US secretary of state Condoleezza Rice required former IAEA head Mohamed ElBaradei to either “toughen his stance on Iran” or fail to be chosen for a third term as IAEA head.[167] The IAEA has on some occasions criticised the stance of the U.S. on Iran’s program.[168] The United States denounced Iran’s successful enrichment of uranium to fuel grade in April 2006, with spokesman Scott McClellan saying, they “continue to show that Iran is moving in the wrong direction”. In November 2006, Seymour Hersh described a classified draft assessment by the Central Intelligence Agency “challenging the White House’s assumptions about how close Iran might be to building a nuclear bomb.” He continued, “The CIA found no conclusive evidence, as yet, of a secret Iranian nuclear-weapons program running parallel to the civilian operations that Iran has declared to the International Atomic Energy Agency,” adding that a current senior intelligence official confirmed the assessment.[169] On 25 February 2007, The Daily Telegraph reported that the United States Fifth Fleet, including the Nimitz-class supercarriers EisenhowerNimitz and Stennis “prepares to take on Iran“.[170]
  • In March 2006, it was reported that the US State Department had opened an Office of Iranian Affairs (OIA) – overseen by Elizabeth Cheney, the daughter of Vice President Dick Cheney. The office’s mission was reportedly to promote a democratic transition in Iran.[171]and to help “defeat” the Iranian regime.[172] Iran argued the office was tasked with drawing up plans to overthrow its government. One Iranian reformer said after the office opened that many “partners are simply too afraid to work with us anymore”, and that the office had “a chilling effect”.[173] The US Congress has reportedly appropriated more than $120 million to fund the project.[174] Investigative journalist Seymour Hersh also revealed in July 2008 Congress also agreed to a $400-million funding request for a major escalation in covert operations inside Iran.[175]
  • The Bush Administration repeatedly refused to rule out use of nuclear weapons against Iran. The U.S. Nuclear Posture Review made public in 2002 specifically envisioned the use of nuclear weapons on a first strike basis, even against non-nuclear armed states.[176]Investigative reporter Seymour Hersh reported in 2006 that the Bush administration had been planning the use of nuclear weapons against Iran.[177] When specifically questioned about the potential use of nuclear weapons against Iran, President Bush claimed that “All options were on the table.” According to the Bulletin of the Atomic Scientists, “the president of the United States directly threatened Iran with a preemptive nuclear strike. It is hard to read his reply in any other way.”[178]
  • In September 2007, Condoleezza RiceU.S. Secretary of State, cautioned the IAEA not to interfere with international diplomacy over Iran’s alleged weapons program. She said the IAEA’s role should be limited to carrying out inspections and offering a “clear declaration and clear reporting on what the Iranians are doing; whether and when and if they are living up to the agreements they have signed.” Former IAEA Director General ElBaradei called for less emphasis on additional UN sanctions and more emphasis on enhanced cooperation between the IAEA and Tehran. Iran has agreed with IAEA requests to answer unresolved questions about its nuclear program. ElBaradei often criticized what he called “war mongering,” only to be told by Rice to mind his business.[179]
  • In December 2007, the United States National Intelligence Estimate (which represents the consensus view of all 16 American spy agencies) concluded, with a “high level of confidence”, that Iran had halted all of its nuclear weapons program in 2003 and that the program remains frozen. The new estimate says that the enrichment program could still provide Iran with enough raw material to produce a nuclear weapon sometime by the middle of next decade but that intelligence agencies “do not know whether it currently intends to develop nuclear weapons” at some future date. Senator Harry Reid, the majority leader, said he hoped the administration would “appropriately adjust its rhetoric and policy”.[60][61]
  • On 2 February 2009, the thirtieth anniversary of the Islamic Revolution in Iran, Iran launched its first domestically produced[180][181] Iran’s President Mahmoud Ahmadinejad described the successful launching of the Omid data-processing satellite as a very big source of pride for Iran and said the project improved Iran’s status in the world.[182] The United States claimed Iran’s activities could be linked to the development of a military nuclear capability and that the activities were of “great concern”.[183] The U.S. specifically said it would continue “to address the threats posed by Iran, including those related to its missile and nuclear programs.”[184] Despite the U.S. saying it would use all elements of its national power to deal with Tehran’s actions,[185] Iran said the launch was a step to remove the scientific monopoly certain world countries are trying to impose on the world.[186] Iraqi National Security Advisor Muwafaq al-Rubaie said Iraq was very pleased with the launch of Iran’s peaceful data-processing national satellite.[187]
  • In March 2009, Richard N. Haass, President of the Council on Foreign Relations, wrote that U.S. policy must be thoroughly multilateral and suggested recognizing Iranian enrichment while getting Iran to agree to limits on its enrichment. “In return, some of the current sanctions in place would be suspended. In addition, Iran should be offered assured access to adequate supplies of nuclear fuel for the purpose of producing electricity. Normalization of political ties could be part of the equation,” Haass said.[188] In October 2009, Ploughshares Fund President Joseph Cirincione outlined “five persistent myths about Iran’s nuclear program”: that Iran is on the verge of developing a nuclear weapon, that a military strike would knock out Iran’s program, that “we can cripple Iran with sanctions”, that a new government in Iran would abandon the nuclear program, and that Iran is the main nuclear threat in the Middle East.[189]
  • In 2009, Independent U.S. Security Consultant Linton F. Brooks wrote that in an ideal future “Iran has abandoned its plans for nuclear weapons due to consistent international pressure under joint U.S.–Russian leadership. Iran has implemented the Additional Protocol and developed commercial nuclear power under strict International Atomic Energy Agency (IAEA) safeguards using a fuel leasing approach with fuel supplied by Russia and spent fuel returned to Russia.”[190]
  • A 2009 U.S. congressional research paper says U.S. intelligence believes Iran ended “nuclear weapon design and weaponization work” in 2003.[19] The intelligence consensus was affirmed by leaders of the U.S. intelligence community.[citation needed] Some advisors within the Obama administration reaffirmed the intelligence conclusions,[191] while other “top advisers” in the Obama administration “say they no longer believe the key finding of the 2007 National Intelligence Estimate“.[192] Thomas Fingar, former Chairman of the National Intelligence Council until December 2008, said that the original 2007 National Intelligence Estimate on Iran “became contentious, in part, because the White House instructed the Intelligence Community to release an unclassified version of the report’s key judgments but declined to take responsibility for ordering its release.”[193]
  • Lieutenant General Ronald Burgess, the chief of the Defense Intelligence Agency, said in January 2010 that there is no evidence that Iran has made a decision to build a nuclear weapon and that the key findings of a 2007 National Intelligence Estimate are all still correct.[194]
  • On 20 July 2011, Frederick Fleitz, a former CIA analyst and House Intelligence Committee staff member, took issue with a February 2011 revision of the 2007 National Intelligence Estimate on Iran’s nuclear weapons program in a Wall Street Journal op-ed titled “America’s Intelligence Denial on Iran.” In the op-ed, Fleitz claimed the new estimate had serious problems and underplayed the threat from Iran’s pursuit of nuclear weapons program much as the 2007 version did. However, Fleitz stated that he was not permitted by CIA censors to discuss his specific concerns about the estimate. Fleitz also claimed the estimate had a four-member outside review board that he viewed as biased since three of the reviewers held the same ideological and political views and two of them were from the same Washington DC think tank. He noted that the CIA prevented him from releasing the names of the outside reviewers of the 2011 Iran estimate.
  • Several high U.S. military and intelligence officials have stated that the effects of an Israeli attack on Iran’s nuclear facilities would not be preventive. Defense Secretary Leon E. Panetta said in December 2011, and Lt. Gen. James R. Clapper, director of National Intelligence, said in February 2012 that an Israeli attack would only delay Iran’s program by one or two years. General Michael V. Hayden, former CIA Director, said in January 2012 that Israel was not able to inflict significant damage on Iran’s nuclear sites. He said, “They only have the ability to make this worse.”[195] In February 2012, Admiral William J. Fallon, who retired in 2008 as head of U.S. Central Command, said, “No one that I’m aware of thinks that there’s any real positive outcome of a military strike or some kind of conflict.” He advocated negotiating with Iran and deterring Iran from aggressive actions and said, “Let’s not precipitate something.”[196][197] General Martin Dempsey, Chairman of the Joint Chiefs of Staff, said in August 2012 that a unilateral Israeli attack on Iran would delay but not destroy Iran’s nuclear program and that he did not wish to be “complicit” in such an attack. He also stated that sanctions were having an effect and should be given time to work, and that a premature attack might damage the ‘international coalition’ against Iran.[198] Former Defense Secretary and former CIA Director Robert Gates stated in October 2012 that sanctions were beginning to have an effect and that “the results of an American or Israeli military strike on Iran could, in my view, prove catastrophic, haunting us for generations in that part of the world.”[199]
  • In 2011, the senior officers of all of the major American intelligence agencies stated that there was no conclusive evidence that Iran has made any attempt to produce nuclear weapons since 2003.[15]
  • In January 2012, U.S. Defense Secretary Leon Panetta stated that Iran was pursuing a nuclear weapons capability, but was not attempting to produce nuclear weapons.[18]
  • In 2012, sixteen United States intelligence agencies, including the CIA, reported that Iran was pursuing research that could enable it to produce nuclear weapons, but was not attempting to do so.[15]

Other international responses[

United Nations

In 2009, the United Nations built a seismic monitoring station in Turkmenistan near its border with Iran, to detect tremors from nuclear explosions.[citation needed] The UN Security Council has demanded Iran freeze all forms of uranium enrichment.[34] Iran has argued these demands unfairly compel it to abandon its rights under the Nuclear NonProliferation Treaty to peaceful nuclear technology for civilian energy purposes.[30]

On 29 December 2009, Zongo Saidou, a sanctions advisor for the U.N., said that as far as he knew, none of the U.N.’s member nations had alerted the sanctions committee about allegations of sales of uranium to Iran from Kazakhstan. “We don’t have any official information yet regarding this kind of exchange between the two countries,” Saidou said. “I don’t have any information; I don’t have any proof,” Saidou said.[200] An intelligence report from an unknown country alleged that rogue employees of Kazakhstan were prepared to sell Iran 1,350 tons of purified uranium ore in violation of UN Security Council sanctions.[201] Russia said it had no knowledge of an alleged Iranian plan to import purified uranium ore from Kazakhstan. Kazakhstan denied the reports.[202] “Such fabrications of news are part of the psychological warfare (against Iran) to serve the political interests of the hegemonic powers,” Iran said.[203] Askar Abdrahmanov, the official representative of the Ministry for Foreign Affairs of Kazakhstan, said “the references to the anonymous sources and unknown documents show groundlessness of these insinuations.”[204]

China

The Chinese Foreign Ministry supports the peaceful resolution of the Iran nuclear issue through diplomacy and negotiations. In May 2006 Chinese Foreign Ministry spokesperson Liu Jianchao stated “As a signatory to the Non-Proliferation Treaty, Iran enjoys the right to peaceful use of nuclear power, but it should also fulfil its corresponding responsibility and commitment”. He added “It is urgently needed that Iran should fully cooperate with the IAEA and regain the confidence of the international community in its nuclear program”.[205]

In April 2008, several news agencies reported that China had supplied the IAEA with intelligence on Iran’s nuclear program following a report by Associated Press reporter George Jahn based on anonymous diplomatic sources.[161] Chinese Foreign Ministry spokesperson Jiang Yu described these reports as “completely groundless and out of ulterior motives”.[206]

In January 2010, China reiterated its calls for diplomatic efforts on the Iran nuclear issue over sanctions. “Dialogue and negotiations are the right ways of properly solving the Iran nuclear issue, and there is still room for diplomatic efforts,” said Chinese spokesperson Jiang Yu. “We hope the relevant parties take more flexible and pragmatic measures and step up diplomatic efforts in a bid to resume talks as soon as possible,” said Jiang.[207]

In September 2011 Israeli newspaper Haaretz reported several statements about Iran’s nuclear program and China’s foreign policy in the Middle East, made by independent Chinese expert on the Middle East who recently visited Israel at the invitation of “Signal”, an organization that furthers academic ties between Israel and China. Yin Gang of the Chinese Academy of Social Sciences has expressed his opinion on China policies toward region, and according to Haaretz he made surprising statement: “China is opposed to any military action against Iran that would damage regional stability and interfere with the flow of oil. But China will not stop Israel if it decides to attack Iran. For all these reasons, Israel and the Middle East need a country like China. Israel needs China’s power.”[208]

In March 2012, Chinese Foreign Minister Yang Jiechi said that “China is opposed to any country in the Middle East, including Iran, developing and possessing nuclear weapons.”, adding that Iran nonetheless has the right to pursue nuclear activities for peaceful purposes.[209]

France

On 16 February 2006 French Foreign Minister Philippe Douste-Blazy said “No civilian nuclear programme can explain the Iranian nuclear programme. It is a clandestine military nuclear programme.”[210]

In January 2007, former French President Jacques Chirac, speaking “off the record” to reporters from The New York Times, indicated that if Iran possessed a nuclear weapon, the weapon could not be used. Chirac alluded to mutually assured destruction when he stated:[211]

“Where will it drop it, this bomb? On Israel? It would not have gone 200 meters into the atmosphere before Tehran would be razed.”

Russia

In 2005, Russian Advisor to Minister of Atomic Energy Lev Ryabev asserted that “neither the signing by Iran of the NPT, the adoption of the Additional Protocol (which provides for the right of inspection of any facility at any time with no prior notice), placement of nuclear facilities under IAEA safeguards, nor Russia’s and Iran’s commitments to repatriate spent nuclear fuel to Russia is seen as a good enough argument by the United States.” Ryabev argued that “at the same time, such requirements are not imposed on, for example, Brazil, which has been developing its nuclear power industry and nuclear fuel cycle, including uranium enrichment.”[212]

On 5 December 2007 Russian Foreign Minister Sergey Lavrov said he had seen no evidence of any nuclear weapons program in Iran, no matter how old.[213] On 16 October 2007 Vladimir Putin visited Tehran, Iran to participate in the Second Caspian Summit, where he met with Iranian leader Mahmoud Ahmadinejad.[214] At a press conference after the summit Putin said that “Iran has the right to develop their peaceful nuclear programs without any restrictions”.[215]

In 2009, Russian Major-General Pavel S. Zolotarev argued Iran’s security could be partially be assured by supplying Iran with modern missile and air defense systems and offering for Iran to take part in the work of one of the data exchange centers in exchange for “concrete non-proliferation obligations”.[216]

In May 2009, the EastWest Institute released a joint U.S.-Russian Threat Assessment on Iran’s Nuclear and Missile Potential. The report concluded that there was “no IRBM/ICBM threat from Iran and that such a threat, even if it were to emerge, is not imminent.” The report said there was no specific evidence that Iran was seeking the ability to attack Europe and that “it is indeed difficult to imagine the circumstances in which Iran would do so.” The report said if Iran did pursue this capability, it would need six to eight years to develop a missile capable of carrying a 1,000 kilogram warhead 2,000 kilometers. The report said Iran ending “IAEA containment and surveillance of the nuclear material and all installed cascades at the Fuel Enrichment Plan” might serve as an early warning of Iranian intentions.[217]

In December 2009, Russian Foreign Minister Sergei Lavrov said that the Iran nuclear issue would be resolved by diplomatic methods exclusively. “It is absolutely clear that the problem can be settled exclusively by political and diplomatic methods and any other scenarios, especially use-of-force scenarios, are completely unacceptable,” Lavrov said.[218] Yevgeny Primakov, a former Russian prime minister considered the doyen of Moscow’s Middle East experts, said he did “not believe that Iran had made a decision to acquire nuclear weapons. Russia has no concrete information that Iran is planning to construct a weapon. It may be more like Japan, which has nuclear readiness but does not have a bomb,” Primakov said.[120]

In February 2012, Russian Prime Minister Vladimir Putin said that Russia opposes Iran developing nuclear-weapons capability. “Russia is not interested in Iran becoming a nuclear power. It would lead to greater risks to international stability.”, Putin said.[219]

United Kingdom

The United Kingdom is part of the EU3+3 (UK, France, Germany, US, China and Russia) group of countries that are engaged in ongoing discussions with Iran.[220] The UK is therefore one of the countries that has stated that Iran would be provided with enriched fuel and support to develop a modern nuclear power program if it, in the words of the Foreign Office spokesperson “suspends all enrichment related activities, answer all the outstanding issues relating to Iran’s nuclear programme and implement the additional protocol agreed with the IAEA“.[221] The UK (with China, France, Germany and Russia) put forward the three Security Council resolutions that have been passed in the UN.

On 8 May 2006, Former Deputy Commander-in-Chief of British Land Forces, General Sir Hugh Beach, former Cabinet Ministers, scientists and campaigners joined a delegation to Downing Street opposing military intervention in Iran. The delegation delivered two letters to Prime Minister Tony Blair from 1,800 physicists warning that the military intervention and the use of nuclear weapons would have disastrous consequences for the security of Britain and the rest of world. The letters carried the signatures of academics, politicians and scientists including some of 5 physicists who are Nobel Laureates. CASMII delegation

Israel

Israel, which is not a party to the Nuclear Non-Proliferation Treaty and which is widely believed to possess nuclear weapons,[222] has frequently claimed that Iran is actively pursuing a nuclear weapons program.[223] Arguing an “existential threat from Iran”, Israel has issued several veiled and explicit threats to attack Iran.[224][225][226] Mike Mullen, former chairman of the U.S. Joint Chiefs of Staff, has cautioned that an Israeli air attack on Iran would be high-risk and warned against Israel striking Iran.[227]

George Friedman, head of the global intelligence company Stratfor, has said Iran is “decades away” from developing any credible nuclear-arms capacity and that an attack on Iran would have grave repercussions for the global economy.[71] If Iran ever did develop nuclear weapons, Israeli academic Avner Cohen has observed “that the prospect of a deliberate Iranian first nuclear strike on Israel, an out-of the-blue scenario, is virtually nonexistent… [T]he chances of Iran – or for that matter any other nuclear power – unleashing a nuclear strike against Israel, which has nuclear capabilities itself, strike me as close to zero.”[228]

Walter Pincus of the Washington Post has written that Israel’s stance on nuclear arms complicates efforts against Iran.[229] Gawdat Bahgat of the National Defense University believes Iran’s nuclear program is partially formed on the potential threat of a nuclear Israel.[46]Iran and the Arab League have proposed that the Middle East be established as a Nuclear Weapon Free Zone.[25][205] Israel said in May 2010 it would not consider taking part in nuclear weapon-free zone discussions or joining the Nuclear Nonproliferation Treaty.[230] The UN Security Council has also pushed for a nuclear-weapon free zone in the Middle East, and has urged all countries to sign and adhere the 1970 Nuclear Nonproliferation Treaty.[231]

In May 2010, Israel reportedly deployed Dolphin class submarines with nuclear missiles capable of reaching any target in Iran in the Persian Gulf. Their reported missions were to deter Iran, gather intelligence, and to potentially land Mossad agents on the Iranian coast.[232] In 2018, the Israeli Prime Minister said that the Mossad seized about one hundred thousand documents of Iran’s nuclear program.[233]

Netherlands

According to a Dutch newspaper, the Netherlands had launched an operation to infiltrate and sabotage the Iranian weapons industry, but ended the operation due to increasing fears of an American or Israeli attack on Iran’s nuclear facilities.[234]

Muslim countries

The A.Q. Khan network, established to procure equipment and material for Pakistan’s nuclear weapons program (gas-centrifuge-based programme), also supplied Iran with critical technology for its uranium enrichment program, and helped “put Iran on a fast track toward becoming a nuclear weapons power.”[235]

World map with nuclear weapons development status represented by color.

  Five “nuclear weapons states” from the NPT
  Other states known to possess nuclear weapons
  States formerly possessing nuclear weapons
  States suspected of being in the process of developing nuclear weapons and/or nuclear programs
  States which at one point had nuclear weapons and/or nuclear weapons research programs
  States that possess nuclear weapons, but have not widely adopted them

The 2008 Annual Arab Public Opinion Poll, Survey of the Anwar Sadat Chair for Peace and Development at the University of Maryland, College Park conducted in Egypt, Jordan, Lebanon, Morocco, Saudi Arabia and the UAEin March 2008 noted the following as a key finding.[236]

“In contrast with the fears of many Arab governments, the Arab public does not appear to see Iran as a major threat. Most believe that Iran has the right to its nuclear program and do not support international pressure to force it to curtail its program. A plurality of Arabs (44%) believes that if Iran were to acquire nuclear weapons, the outcome would be more positive for the region than negative.”

Indonesia, the world’s most populous Muslim-majority nation and a non-permanent member of the U.N. Security Council abstained from a vote in March 2008 on a U.N. resolution to impose a third set of sanctions on Iran.[237] It was the only country out of the 10 non-permanent members to abstain. Indonesian President Susilo Bambang Yudhoyono speaking at a joint news conference with Iran’s President Mahmoud Ahmadinejad in Tehran in March 2008 said[238]

“Iran’s nuclear program is of a peaceful nature and must not be politicized”

Pakistan, which has the second largest Muslim population in the world is not a member of the Nuclear Non-Proliferation Treaty and already possesses nuclear weapons.

On 12 May 2006 AP published an interview with Pakistan’s former Chief of Army Staff of Pakistan Army General Mirza Aslam Beg In the AP interview, Beg detailed nearly 20 years of Iranian approaches to obtain conventional arms and then technology for nuclear weapons. He described an Iranian visit in 1990, when he was Chief of Army Staff.

They didn’t want the technology. They asked: ‘Can we have a bomb?’ My answer was: By all means you can have it but you must make it yourself. Nobody gave it to us.

Beg said he is sure Iran has had enough time to develop them. But he insists the Pakistani government didn’t help, even though he says former Prime Minister Benazir Bhutto once told him the Iranians offered more than $4 billion for the technology. [1]

In an article in 2005 about nuclear proliferation he stated

I would not like my future generations to live in the neighborhood of “nuclear capable Israel.”
Countries acquire the (nuclear) capability on their own, as we have done it. Iran will do the same, because they are threatened by Israel.[239]

The San Francisco Chronicle reported on 31 October 2003, that Grand Ayatollahs, like Ayatollah Yousef Sanei, and Iranian clerics led by Ayatollah Ali Khamenei have repeatedly declared that Islam forbids the development and use of all weapons of mass destruction. SFGate.com quoted Ayatollah Ali Khamenei as saying:

The Islamic Republic of Iran, based on its fundamental religious and legal beliefs, would never resort to the use of weapons of mass destruction. In contrast to the propaganda of our enemies, fundamentally we are against any production of weapons of mass destruction in any form.[6]

On 21 April 2006, at a Hamas rally in Damascus, Anwar Raja, the Lebanon-based representative of the Popular Front for the Liberation of Palestine, a party that achieved 4.25% of the votes and holds 3 out the 132 seats in the Palestinian Legislative Council following the election declared:

The Muslim, Iranian, fighting people now possess nuclear capabilities. My brother, the Iranian representative sitting here, let me tell you that we, the Palestinian people, are in favour of Iran having a nuclear bomb, not just energy for peaceful purposes.[240]

On 3 May 2006 Iraqi Shia cleric Ayatollah Ahmad Husseini Al Baghdadi, who opposes the presence of US forces in Iraq and is an advocate of violent jihad was interviewed on Syrian TV. In his interview he said:[241]

How can they face Iran? How come Israel has 50 nuclear bombs? Why are they selective? Why shouldn’t an Islamic or Arab country have a nuclear bomb? I am not referring to the Iranian program, which the Iranians say is for peaceful purposes. I am talking about a nuclear bomb.
This Arab Islamic nation must obtain a nuclear bomb. Without a nuclear bomb, we will continue to be oppressed,

Baku declaration

A declaration signed on 20 June 2006 by the foreign ministers of 56 nations of the 57-member Organisation of the Islamic Conference stated that “the only way to resolve Iran’s nuclear issue is to resume negotiations without any preconditions and to enhance co-operation with the involvement of all relevant parties”.

Qatar and Arab vote against the U.N. Security Council resolution

31 July 2006: The UN Security Council gives until 31 August 2006 for Iran to suspend all uranium enrichment and related activities or face the prospect of sanctions.[242] The draft passed by a vote of 14–1 (Qatar, which represents Arab states on the council, opposing). The same day, Iran’s U.N. Ambassador Javad Zarif qualified the resolution as “arbitrary” and illegal because the NTP protocol explicitly guarantees under international law Iran’s right to pursue nuclear activities for peaceful purposes. In response to today’s vote at the UN, Iranian President Mahmoud Ahmadinejad said that his country will revise his position vis-à-vis the economic/incentive package offered previously by the G-6 (5 permanent Security council members plus Germany.)[243]

In December 2006, the Gulf Cooperation Council called for a nuclear weapons free Middle East and recognition of the right of a country to expertise in the field of nuclear energy for peaceful purposes.[244]

Non-Aligned Movement

The Non-Aligned Movement has said that the present situation whereby Nuclear Weapon States monopolise the right to possess nuclear weapons is “highly discriminatory”, and they have pushed for steps to accelerate the process of nuclear disarmament.[130]

On 16 September 2006 in Havana, Cuba, all of the 118 Non-Aligned Movement member countries, at the summit level, declared supporting Iran’s nuclear program for civilian purposes in their final written statement.[245] That is a clear majority of the 192 countries comprising the entire United Nations, which comprise 55% of the world population.

On 11 September 2007 the Non-Aligned Movement rejected any “interference” in Iran’s nuclear transparency deal with U.N. inspectors by Western countries through the UN Security Council.[37]

On 30 July 2008 the Non-Aligned Movement welcomed the continuing cooperation of Iran with the IAEA and reaffirmed Iran’s right to the peaceful uses of nuclear technology. The movement further called for the establishment of a nuclear weapons free zone in the Middle East and called for a comprehensive multilaterally negotiated instrument which prohibits threats of attacks on nuclear facilities devoted to peaceful uses of nuclear energy.[246]

Biological weapons

Iran ratified the Biological Weapons Convention on 22 August 1973.[1]

Iran has advanced biology and genetic engineering research programs supporting an industry that produces world-class vaccines for both domestic use and export.[247] The dual-use nature of these facilities means that Iran, like any country with advanced biological research programs, could easily produce biological warfare agents.

A 2005 report from the United States Department of State claimed that Iran began work on offensive biological weapons during the Iran–Iraq War, and that their large legitimate bio-technological and bio-medical industry “could easily hide pilot to industrial-scale production capabilities for a potential BW program, and could mask procurement of BW-related process equipment”. The report further said that “available information about Iranian activities indicates a maturing offensive program with a rapidly evolving capability that may soon include the ability to deliver these weapons by a variety of means”.[248]

According to the Nuclear Threat Initiative, Iran is known to possess cultures of the many biological agents for legitimate scientific purposes which have been weaponised by other nations in the past, or could theoretically be weaponised. Although they do not allege that Iran has attempted to weaponise them, Iran possesses sufficient biological facilities to potentially do so.[249]

Chemical weapons

Iranian soldier with gas mask under chemical bombardment by Iraqi forces in the battlefield during the Iran–Iraq War.

Iran has experienced attack by chemical warfare (CW) on the battlefield and suffered hundreds of thousands of casualties, both civilian and military, in such attacks during the 1980–88 Iran–Iraq War. Iran was completely unprepared for chemical warfare and did not even have sufficient gas masks for its troops. Due to sanctions, Iran had to purchase gas masks from North Korea or commercial painting respirator masks bought from the West. Iran is not known to have resorted to using chemical weapons in retaliation for Iraqi chemical weapons attacks during the Iran–Iraq War despite the fact it would have been legally entitled to do so under the then-existing international treaties on the use of chemical weapons which only prohibited the first use of such weapons.[250] Still Iran did develop a chemical-weapons-program during the latter part of that war, and in 1989, The New York Times reported that Iran started a major campaign to produce and stockpile chemical weapons after a truce was agreed with Iraq.[251]

On 13 January 1993 Iran signed the Chemical Weapons Convention and ratified it on 3 November 1997. In the official declaration submitted to OPCW Iranian government acknowledged that it had developed a chemical-weapons-program in the 1980s but asserted that it had since ceased the program and destroyed the stockpiles of operational weapons.[252]

In an interview with Gareth PorterMohsen Rafighdoost, the Minister of the Islamic Revolutionary Guard Corps throughout the eight-year Iran-Iraq war, described how supreme leader Ayatollah Khomeini had twice blocked his proposal to begin working on both nuclear and chemical weapons to counter Iraqi chemical attacks, which Rafighdoost interpreted as a fatwa against their use and production, because it was issued by the “guardian jurist“.[253]

A U.S. Central Intelligence Agency report dated January 2001 speculated that Iran had manufactured and stockpiled chemical weapons – including blisterbloodchoking, and probably nerve agents, and the bombs and artillery shells to deliver them. It further claimed that during the first half of 2001, Iran continued to seek production technology, training, expertise, equipment, and chemicals from entities in Russia and China that could be used to help Iran reach its goal of having indigenous nerve agent production capability.[254] However the certainty of this assessment declined and in 2007 the U.S. Defense Intelligence Agency limited its public assessment to just noting that “Iran has a large and growing commercial chemical industry that could be used to support a chemical agent mobilization capability.”[255]

Iran is a signatory of the Chemical Weapons Convention, which bans chemical weapons, delivery systems, and production facilities.[2] Iran has reiterated its commitment to the CWC and its full support for the work of the OPCW, in particular in view of the considerable suffering these weapons have caused to the Iranian people.[256] Iran has not made any declaration of a weapons stockpile under the treaty.[257]

In 2013 Ahmet Uzumcu, the Director-General of the OPCW, hailed Iran as an effective and active member-state of the OPCW.[258] In 2016 Iranian chemists synthesised five Novichok nerve agents, originally developed in the Soviet Union, for analysis and produced detailed mass spectral data which was added to the OPCW Central Analytical Database.[259][260] Previously there had been no detailed descriptions of their spectral properties in open scientific literature.[261][259]

Delivery systems

Missiles

Shahab-4 with a range of 2,000 km and a payload of 1,000 kg is believed to be under development. Iran has stated the Shahab-3 is the last of its war missiles and the Shahab-4 is being developed to give the country the capability of launching communications and surveillance satellites. A Shahab-5, an intercontinental ballistic missile with a 10,000 km range, has been alleged but not proven to be under development.[262]

In 2017, Iran tested the Khorramshahr, an MRBM that can carry an 1800 kg payload over 2000 km.[263]

Iran has 12 X-55 long range cruise missiles purchased without nuclear warheads from Ukraine in 2001. The X-55 has a range of 2,500 to 3,000 kilometers.[264]

Iran’s most advanced missile, the Fajr-3, has an unknown range but is estimated to be 2,500 km. The missile is radar evading and can strike targets simultaneously using multiple warheads.[265]

On 2 November 2006, Iran fired unarmed missiles to begin 10 days of military war games. Iranian state television reported “dozens of missiles were fired including Shahab-2 and Shahab-3 missiles. The missiles had ranges from 300 km to up to 2,000 km…Iranian experts have made some changes to Shahab-3 missiles installing cluster warheads in them with the capacity to carry 1,400 bombs.” These launches come after some United States-led military exercises in the Persian Gulf on 30 October 2006, meant to train for blocking the transport of weapons of mass destruction.[266]

The Sejil is a two-stage, solid-propellant, surface-to-surface missile (SSM) produced by Iran with a reported 1,930 km (1,200 mi) range. A successful test launch took place on 12 November 2008.[267]

According to Jane’s Information Group, details of the design other than the number of stages and that it uses solid fuel have not been released. Uzi Ruben, former director of Israel’s Ballistic Missile Defense Organization, indicated that, “Unlike other Iranian missiles, the Sajil bears no resemblance to any North Korean, Russian, Chinese or Pakistani (missile technology). It demonstrates a significant leap in Iran’s missile capabilities.” Ruben went on to state that the Sejil-1 ” … places Iran in the realm of multiple-stage missiles, which means that they are on the way to having intercontinental ballistic missile (ICBM) capabilities …”[268] As a weapon, the Sejil-1 presents much more challenge to Iran’s potential enemies, as solid-fuel missiles can be launched with much less notice than liquid-fueled missiles, making them more difficult to strike prior to launch.[269]

Sejil-2 is an upgraded version of the Sejil. The Sejil-2 two-stage solid-fuel missile has a 2,000 km range and was first test fired on 20 May 2009.[270] The Sejil-2 surface-to-surface medium-range ballistic missile (MRBM) was first tested eight months prior to the actual test launch, which took place in the central Iranian province of Semnan.[271] Improvements include better navigation system, better targeting system, more payload, longer range, faster lift-off, longer storage time, quicker launch, and lower detection possibility.[272]

Iran’s Nuclear Capable Missiles
Name/Designation Class Range
(varies with payload weight)
Payload Status
Fajr-3 MRBM 2,000 km 800 kg Operational
Shahab-2 SRBM 300–2,000 km 1200 kg Operational
Shahab-3//Emad/Ghadr-110 MRBM 2,100 km 990 kg Operational
Shahab-4 MRBM 2,000 km 2,000 kg Under Development
Sejil-1 MRBM 1,930 km Unknown Operational
Sejil-2 MRBM 2,000 km Unknown Operational
Khorramshahr MRBM 2,000 km 1800 kg Testing phase

Aircraft

Any aircraft could potentially be used to host some form of WMD distribution system.[citation needed] Iran has a varied air force with aircraft purchased from many countries, including the United States. Due to sanctions, the Iranian government has encouraged the domestic production of aircraft and, since 2002, has built its own transport aircraft, fighters, and gunship helicopters.

See also

References …

External links

Analysis
Political statements

 

 

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The Pronk Pops Show 1278, June 20, 2019, Part 1– Story 1: President Trump: “Iran made a very big mistake” — Option A: Strong Message and Done , Option B: One Missile Attack and Done, Option C: Total War With Iran and World Recession Due To Spike in Oil and Gas Prices — Videos — Story 2: Federal Reserve Board Votes To Keep Federal Funds Target Range of 2.25% to 2.5% Waiting For July 2019 Jobs Report and Second Quarter Real GDP Growth Rate Number — Videos — Story 3: Creepy, Sleepy, Dopey Joey Biden in Praise of Civility of Democrat Segregationist Senators — Radical Extremist Democrats (REDS) Attack Biden — Videos — Part 2– Story 4: President Trump Pushes All The Right Buttons in 2020 Stump Speech in Orlando, Florida — Boom Boom Boom — Send Them Home — MAGA MAGA MAGA — Lock Them Up — Four More Years — Keep America Great — Win Win Win — Videos

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