Connecticut Shooting: Bodies Removed from School, Positively Identified

By Mike Fleeman

12/15/2012 at 10:25 AM EST

Connecticut State Police Lt. J. Paul Vance

Mary Altaffer/AP

A horrific day turned to a night of unspeakable grief as parents received formal notifications that their children were killed in the Connecticut school massacre.

The last of the dozens of bodies – most of them children – were removed by early Saturday from Sandy Hook Elementary School in Newtown, Conn.

"Our objective certainly was to positively identify the victims to try to give the families some closure," State Police Spokesman Lt. Paul Vance tells CBS News. "Our detectives worked well through the night. By early this morning, we were able to positively identify all of the victims and make some formal notification to all of the families of the victims."

The gunman, identified by multiple law enforcement sources as 20-year-old Adam Lanza, killed 20 children between the ages of 5 and 10 and six adults, before taking his own life at the school. His mother also was killed at a different location, bringing the total death toll to 28.

Eighteen children were pronounced dead at the scene and two at the hospital; six adult victims were pronounced dead at the scene, the Los Angeles Times reports.

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APNewsBreak: Texas cancer probe draws NCI scrutiny

AUSTIN, Texas (AP) — The National Cancer Institute confirmed Friday that federal officials are taking a closer look at a troubled $3 billion cancer-fighting effort in Texas that is under a criminal investigation over a lucrative taxpayer-funded grant awarded by the state agency.

The Cancer Prevention and Research Institute of Texas has coveted status as an NCI-approved funding entity — an exclusive group headlined by the nation's most prominent cancer organizations. The list is fewer than two dozen and includes the American Cancer Society, Susan G. Komen for the Cure and federal entities like the Center for Disease Control and Prevention.

The designation is a federal seal-of-approval that signals high peer review standards and conflict of interest policies. Yearlong turmoil within the Texas institute, or CPRIT, reached a new peak this week when the agency's beleaguered chief executive asked to resign and prosecutors opened cases following an $11 million grant to a private company that was revealed to have bypassed an independent review.

NCI spokeswoman Aleea Farrakh Khan told The Associated Press that officials are "evaluating recent events" at CPRIT. She said officials have not made decisions or contacted the agency directly.

Members of CPRIT's governing board did not immediately return an email seeking comment.

NCI designation is not required for CPRIT to continue running the nation's second-largest pot of cancer research dollars, Khan said. But jeopardizing that status — and especially losing it — would be a severe blow to CPRIT's reputation, which already has been battered by sweeping resignations, internal accusations of politics trumping science and now a criminal investigation.

A recent internal audit at CPRIT discovered an $11 million funding request from Dallas-based Peloton Therapeutics was approved without the agency ever scrutinizing the proposal's merits. The revelation came only months after two Nobel laureates and other top scientists left the agency in protest over a $20 million grant some accused of being rushed to approval without a proper peer review.

While CPRIT is funded by taxpayers, donors to cancer nonprofits might look to an NCI designation for assurance that their money is in good hands.

"It says, 'If I'm donating money to this agency, if NCI is approving them, that means NCI says it's handling its money well,'" Khan said.

Khan added that CPRIT's inclusion on the list does not mean all of its funding mechanisms are NCI-approved.

An entire page of CPRIT's website is devoted to boasting its NCI designation. The agency says the status is important because it means cancer centers in Texas seeking its own NCI designation — so as to reassure patients or bolster recruitment — can include CPRIT research dollars in their calculations to maintain levels needed to be NCI approved.

"This enhances Texas' ability to leverage additional federal funding for cancer research and raises Texas' profile as a center for cancer research," according to the website.

Executive Director Bill Gimson submitted his resignation letter Tuesday but offered to stay on through January. He has described Peloton's improper funding as an honest mistake and said no one associated with CPRIT stood to personally profit from the company's award.

Prosecutors have not made any specific criminal allegations. Launching separate investigations into CPRIT are the Texas attorney general's office and the Travis County district attorney's public integrity unit, which investigates criminal misconduct within state government.

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Follow Paul J. Weber on Twitter: www.twitter.com/pauljweber

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Wall Street drops as Apple falls, "cliff" looms

NEW YORK (Reuters) - Stocks fell on Friday, led by losses in the Nasdaq after another drop in shares of Apple, and as the overhang of "fiscal cliff" negotiations kept buyers on the sidelines.

Apple slid 4.2 percent to $507.21 after UBS cut its price target on the stock to $700 from $780. The stock of the most valuable U.S. company has been hit hard in the last three months. On Friday, Apple's stock fell after a tepid reception for the iPhone 5 in China.

The S&P Information Technology Index <.gspt> lost 0.9 percent as Apple fell and Jabil Circuit Inc shed 5 percent to $17.61 after UBS cut its price target.

The possibility of a "fiscal cliff" deal not taking place until early 2013 is rising. The back-and-forth negotiations over the fiscal cliff in Washington have kept markets on hold in what would already be a quiet period for stocks.

"We're faced with uncertainty ... and that's going to continue now into January. It basically puts everybody on hold and (you) just have the markets kind of thrash around," said Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston.

President Barack Obama and U.S. House of Representatives Speaker John Boehner held a "frank" meeting on Thursday at the White House to discuss how to avoid the tax hikes and spending cuts set to kick in early in 2013.

The Dow Jones industrial average <.dji> shed 19.68 points, or 0.15 percent, to 13,151/04. The Standard & Poor's 500 Index <.spx> slipped 3.79 points, or 0.27 percent, to 1,415.66. The Nasdaq Composite Index <.ixic> dropped 19.24 points, or 0.64 percent, to 2,972.97.

American Express Co shares fell 1.5 percent to $56.83 and ranked as the heaviest weight on the Dow.

The S&P 500 dropped 0.6 percent on Thursday after six straight positive sessions. Investors are concerned that going over the cliff could tip the economy back into recession. While a deal is expected to ultimately be reached, a drawn-out debate - like the one seen over 2011's debt ceiling - can erode confidence.

Still, expectations of an eventual agreement have helped the S&P 500 bounce back over the last month. On Wednesday, the index hit its highest intraday level since late October. For the year, the S&P has climbed 12.6 percent.

"It's quieter than it has been recently. I think it's the Friday before the holiday week and people are starting to go away, and absent some big news out of Washington, I think things will be quieter," said Jeff Meyerson, head of trading for Sunrise Securities in New York.

Best Buy Co Inc slid 14 percent to $12.13 after the electronics retailer agreed to extend the deadline for the company's founder to make a bid. Shares jumped as much as 19 percent on Thursday after initial reports of a bid this week from founder Richard Schulze.

Consumer prices fell in November for the first time in six months, indicating U.S. inflation pressures were muted. A separate report showed manufacturing grew at its swiftest pace in eight months in December.

Data out of China was encouraging, as Chinese manufacturing grew at its fastest pace in 14 months in December. The news was seen as helping U.S. materials companies, including U.S. Steel , which rose 6 percent to $23.66.

(Reporting by Gabriel Debenedetti; Additional reporting by Caroline Valetkevitch; Editing by Bernadette Baum and Jan Paschal)

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Panetta Orders Deployment of U.S. Anti-Missile Units in Turkey

Bernd Wustneck/DPA, via Agence France-Presse — Getty Images

German soldiers with a Patriot missile battery earlier this month in Bad Suelze, Germany.

INCIRLIK AIR BASE, Turkey — Defense Secretary Leon E. Panetta signed an official deployment order on Friday to send 400 American military personnel and two Patriot air defense batteries to Turkey as its cross-border tensions intensify with Syria, where loyalist forces have increasingly resorted to aerial attacks, including use of ballistic missiles, to fight a spreading insurgency.

The American batteries will be part of a broader push to strengthen Turkey’s defenses that will include the deployment of four other Patriot batteries — two from Germany and two from the Netherlands. Each battery contains multiple rounds of guided missiles that can intercept and destroy other missiles and hostile aircraft flying at high speeds.

Mr. Panetta’s deployment order, the result of NATO discussions last week, represents the most direct American military action so far to help contain the Syrian conflict and minimize the risk it will spill across the 550-mile border with Turkey, a NATO member that is housing more than 100,000 Syrian refugees and providing aid to the Syrian rebels trying to oust President Bashar al-Assad.

Tensions between Turkey and Syria have escalated in recent months as Syrian forces have bombed rebel positions along the border and occasionally lobbed artillery rounds into Turkish territory. The Turks have also grown increasingly alarmed that Mr. Assad’s forces could fire missiles into Turkey.

News of the Patriot deployment order came as antigovernment activists inside Syria reported fresh mayhem, including an unconfirmed rebel claim to have downed a government warplane attacking insurgent positions near the international airport in Damascus, the capital.

In Moscow, meanwhile, the Russian Foreign Ministry sought to distance itself from comments a day earlier by its Middle East envoy that the Syrian rebels may defeat Mr. Assad, a longstanding Kremlin ally and arms client. A ministry spokesman, Aleksandr K. Lukashevich, said Russia remained committed to a political solution in Syria.

“We have never changed our position and will not change it,” Mr. Lukashevich said. He rejected a comment made by a State Department spokesman on Thursday that Moscow had “woken up” and changed its position as dynamics shifted on the battlefield, saying “we have never been asleep.”

All six Patriot units deployed in Turkey will be under NATO’s command and are scheduled to be operational by the end of January, according to officials in Washington.

George Little, the Pentagon spokesman, said Mr. Panetta signed the order as he flew from Afghanistan to this air base in southern Turkey, close to the Syrian border.

“The United States has been supporting Turkey in its efforts to defend itself,” Mr. Little said.

The order “will deploy some 400 U.S. personnel to Turkey to support two Patriot missile batteries,” Mr. Little added, and the personnel and Patriot batteries will arrive in Turkey “in coming weeks.” He did not specify their deployment locations.

After landing at Incirlik on Friday, Mr. Panetta told a gathering of American Air Force personnel of his decision to deploy the Patriots.

He said the United States was working with Turkey, Jordan and Israel to monitor Syria’s stockpiles of chemical weapons, and warned of “serious consequences” if Syria used them, but he did not offer any specifics.

“We have drawn up plans for presenting to the president,” Mr. Panetta said. “We have to be ready.”

Turkey’s worries about vulnerability to Syrian missiles, including Scuds that might be tipped with chemical weapons, were heightened recently by reports of increased activity at some of Syria’s chemical sites, though Mr. Panetta said this week that intelligence about chemical weapons activity in Syria had “leveled off.”

The recent Scud missile attacks by Mr. Assad’s forces against rebels in northern Syria have only added to Turkey’s concerns. The Scud missiles were armed with conventional warheads, but the attacks showed that the Assad government is prepared to use missiles as it struggles to slow rebel gains.

With the nearly two-year-old Syrian conflict entering its second winter and many thousands of people struggling for food and warmth in cities ruined by protracted fighting, the humanitarian costs seemed to be mounting.

An activist in Syria’s central province of Homs, who identified himself as Abu Ourouba, said the town of Houla — where the United Nations confirmed in May that Syrian troops had killed more than 100 people, including at least 32 children — was facing a catastrophe.

“Houla has been besieged from all directions for the past 10 days. Until now, not even one loaf of bread has entered Houla. The food that was available is beginning to run out very quickly. Most children don’t have milk anymore. The kids are at risk of dying from hunger,” he said. Shelling along access routes meant no one could walk “unless they crawl” to avoid hundreds of strikes from tanks, warplanes and rocket launchers, the activist said.

Thom Shanker reported from Incirlik Air Base, Turkey, and Michael R. Gordon from Washington. Reporting was contributed by Eric Schmitt from Washington, Anne Barnard, Hania Mourtada and Hwaida Saad from Beirut, Lebanon, Alan Cowell from London and Ellen Barry from Moscow.

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Xbox 720 and PlayStation 4 might not launch until 2014

Nintendo (NTDOY) says its kickstarted the next generation of video game consoles with the Wii U. But considering its graphics and processing power are comparable to Microsoft’s (MSFT) Xbox 360 and Sony’s (SNE) PlayStation 3, hardcore gamers are holding out for the next Xbox, tentatively dubbed “Xbox 720,” and next-generation PlayStation, tentatively called PS4. Rumors insist Microsoft and Sony will both launch their next consoles in the fall of 2013, but SemiAccurate, the website that first reported the next Xbox could see a delay, says there is a bit of confusion over how the consoles are progressing and when they’ll arrive.

According to SemiAccurate, the next Xbox is currently code-named “Kryptos” and not “Durango” anymore, and the next PlayStation is now code-named “Thebes” rather than “Orbis.” The PS4 will reportedly have a 28-nanometer AMD chipset and will be produced by IBM or Global Foundries.

SemiAccurate says the PS4 could be released in spring of 2014 or fall 2014 and the Xbox 720 could still see the delay from fall 2013 to 2014.

Xbox World claimed last month that the next Xbox will have a Blu-ray disc drive, Kinect 2.0, directional audio, TV output and input, an “innovative controller” and support for augmented reality glasses – all packaged in a magnesium alloy shell that will supposedly use the same patented “VaporMg” process found on the Surface tablet.

Not only that, but Microsoft is also working on an “Xbox Lite,” according to reports from earlier this year.

As for PS4 details, VG247 reported in November that Sony has already sent out various developer kits with specs including 16GB of RAM and 256GB of storage.

Sony and Microsoft are expected to reveal their next consoles at E3 2013 this coming June.

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Gaming News Headlines – Yahoo! News

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Dozens Reported Dead in Connecticut Elementary School Shooting

Breaking News

By Stephen M. Silverman

UPDATED
12/14/2012 at 01:55 PM EST

• Originally published 12/14/2012 at 01:00 PM EST

State police personnel lead children from the Sandy Hook Elementary School

Shannon Hicks/Newtown Bee/Reuters/Landov

A massive, deadly shooting broke out Friday morning at the Sandy Hook Elementary School in Newtown, Conn., about 65 miles northeast of New York City.

A federal official tells PEOPLE that 26 people were killed, including 18 children.

"The shooter is deceased inside the building. The scene is secure," Lt. J. Paul Vance of the Connecticut State Police deparatment said in a press conference Friday afternoon. "Many agencies are working together to answer questions about what happened ... the public is not in danger."

CNN reports that one alleged shooter's body was discovered in a classroom, though it is not known if he died by his own hand, by police, or some other means.

According to the Associated Press, the gunman is a 20-year-old man with ties to the school. An official said the gun used in the attacks was a .223-caliber rifle.

Early reports that there was a second gunman remain unconfirmed. Car-to-car searches in the area are taking place, reports ABC News.

The tragedy began just after 9:40 a.m., when police reported that a shooter was in the main office of Sandy Hook Elementary School. One person in a room suffered "numerous gunshot wounds," police told the Hartford Courant.

A photo taken on the scene shows distressed students as they were led away from the school by state police. Nearby Danbury Hospital, which is receiving victims of the shooting, is on lockdown, according to its Facebook page.

"Out of abundance of caution and not because of any direct threat Danbury Hospital is under lockdown," says the statement. "This allows us simply to focus on the important work at hand."

A young girl after being evacuated from Sandy Hook Elementary School

Michelle McLoughlin / Reuters / Landov

FBI agents, SWAT teams and ambulances are on the scene, according to state emergency management officials.

Also under lockdown are all of the area's schools. Newtown Public School District secretary of superintendent Kathy June said in a statement, "The district is taking preventive measures by putting all schools in lockdown until we ensure the safety of all students and staff."

Some reports are calling this the worst school massacre in American history. At Colorado's Columbine High School in 1999, 15 were killed, including the two shooters. The 2007 Virginia Tech massacre claimed 32 victims.

Sandy Hook Elementary School in Newtown, Conn.

Google / AP

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Study: People worldwide living longer, but sicker

LONDON (AP) — Nearly everywhere around the world, people are living longer and fewer children are dying. But increasingly, people are grappling with the diseases and disabilities of modern life, according to the most expansive global look so far at life expectancy and the biggest health threats.

The last comprehensive study was in 1990 and the top health problem then was the death of children under 5 — more than 10 million each year. Since then, campaigns to vaccinate kids against diseases like polio and measles have reduced the number of children dying to about 7 million.

Malnutrition was once the main health threat for children. Now, everywhere except Africa, they are much more likely to overeat than to starve.

With more children surviving, chronic illnesses and disabilities that strike later in life are taking a bigger toll, the research said. High blood pressure has become the leading health risk worldwide, followed by smoking and alcohol.

"The biggest contributor to the global health burden isn't premature (deaths), but chronic diseases, injuries, mental health conditions and all the bone and joint diseases," said one of the study leaders, Christopher Murray, director of the Institute of Health Metrics and Evaluation at the University of Washington.

In developed countries, such conditions now account for more than half of the health problems, fueled by an aging population. While life expectancy is climbing nearly everywhere, so too are the number of years people will live with things like vision or hearing loss and mental health issues like depression.

The research appears in seven papers published online Thursday by the journal Lancet. More than 480 researchers in 50 countries gathered data up to 2010 from surveys, censuses and past studies. They used statistical modeling to fill in the gaps for countries with little information. The series was mainly paid for by the Bill & Melinda Gates Foundation.

As in 1990, Japan topped the life expectancy list in 2010, with 79 for men and 86 for women. In the U.S. that year, life expectancy for men was 76 and for women, 81.

The research found wide variations in what's killing people around the world. Some of the most striking findings highlighted by the researchers: — Homicide is the No. 3 killer of men in Latin America; it ranks 20th worldwide. In the U.S., it is the 21st cause of death in men, and in Western Europe, 57th.

— While suicide ranks globally as the 21st leading killer, it is as high as the ninth top cause of death in women across Asia's "suicide belt," from India to China. Suicide ranks 14th in North America and 15th in Western Europe.

— In people aged 15-49, diabetes is a bigger killer in Africa than in Western Europe (8.8 deaths versus 1 death per 100,000).

— Central and Southeast Asia have the highest rates of fatal stroke in young adults at about 15 cases per 100,000 deaths. In North America, the rate is about 3 per 100,000.

Globally, heart disease and stroke remain the top killers. Reflecting an older population, lung cancer moved to the 5th cause of death globally, while other cancers including those of the liver, stomach and colon are also in the top 20. AIDS jumped from the 35th cause of death in 1990 to the sixth leading cause two decades later.

While chronic diseases are killing more people nearly everywhere, the overall trend is the opposite in Africa, where illnesses like AIDS, malaria and tuberculosis are still major threats. And experts warn again shifting too much of the focus away from those ailments.

"It's the nature of infectious disease epidemics that if you turn away from them, they will crop right back up," said Jennifer Cohn, a medical coordinator at Doctors Without Borders.

Still, she acknowledged the need to address the surge of other health problems across Africa. Cohn said the agency was considering ways to treat things like heart disease and diabetes. "The way we treat HIV could be a good model for chronic care," she said.

Others said more concrete information is needed before making any big changes to public health policies.

"We have to take this data with some grains of salt," said Sandy Cairncross, an epidemiologist at the London School of Hygiene and Tropical Medicine.

He said the information in some of the Lancet research was too thin and didn't fully consider all the relevant health risk factors.

"We're getting a better picture, but it's still incomplete," he said.

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Online:

www.lancet.com

http://healthmetricsandevaluation.org

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Nasdaq falls more than 1 percent

NEW YORK (Reuters) - The Nasdaq composite index fell more than 1 percent and the Dow and S&P 500 added to losses on Thursday, with energy and technology shares leading the way lower on the S&P 500.

The Dow Jones industrial average <.dji> was down 88.80 points, or 0.67 percent, at 13,156.65. The Standard & Poor's 500 Index <.spx> was down 12.08 points, or 0.85 percent, at 1,416.40. The Nasdaq Composite Index <.ixic> was down 30.87 points, or 1.02 percent, at 2,982.95.

(Reporting By Caroline Valetkevitch; Editing by Kenneth Barry)

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Most Pakistani Lawmakers Don’t File Tax Returns, Study Finds

ISLAMABAD, Pakistan — Fewer than a third of Parliament members in Pakistan file annual tax returns, according to a report published on Wednesday, lending new focus to longstanding complaints from foreign donors and ordinary Pakistanis about tax evasion at the highest levels of society.

The report, which was published jointly by two civil society organizations — the Center for Peace and Development Initiatives and the Center for Investigative Reporting in Pakistan — found that just 126 of the country’s 446 federal lawmakers filed income tax returns in 2011. Among the leaders who did not was President Asif Ali Zardari, the report said.

The report does not take into account the tax paid by politicians on their parliamentary salaries, which is automatically deducted by the government. Instead, it focuses on the lawmakers’ declarations of supplemental income from property, professional practices and other sources of revenue.

Nevertheless, in a country where many politicians enjoy lifestyles that far exceed their official salaries, the report raises new questions about the dedication of top lawmakers in Pakistan to enforcing the tax laws they are supposed to oversee.

“Tax evasion has become a social norm in our country,” said Umar Cheema, an investigative journalist who compiled the report. “People don’t consider it a crime. But this tax demand established a bond between the people and the state. That’s how you become a stakeholder in society.”

Pakistan has a chronically low rate of income tax collection. Of the country’s 180 million people, only 2 percent are registered to pay tax, and fewer than a quarter of those actually do so, according to the report.

Income tax evasion is particularly high among the wealthiest Pakistanis, leaving the country with the lowest ratio of tax to gross domestic product in South Asia.

Meanwhile, the poor bear a disproportionately high tax burden, experts say, because of indirect taxes on electricity, food and other goods.

The country’s flawed tax system has long been an issue for Western donors, who have given the Pakistani government billions of dollars in humanitarian and development aid over the past decade and supported bailout programs from multinational institutions like the International Monetary Fund.

Addressing a Congressional hearing in 2010, Secretary of State Hillary Rodham Clinton said: “They don’t tax income. They don’t tax land. And a lot of the wealth is held in these huge feudal estates.”

“They have no public education system to speak of, and it’s because the very well off, of whom there is a considerable number, do not pay their fair share,” she said.

The report found that tax evasion was spread evenly across the political spectrum, with low rates among the governing Pakistan Peoples Party, the opposition Pakistan Muslim League and other religious and regional parties.

In the Senate, it found that the lawmaker who paid the most in taxes last year — $133,000 — was Aitzaz Ahsan, a lawyer who helped oust President Pervez Musharraf from office in 2008. The least of those who filed was paid by Mushahid Hussain, a former Musharraf adviser, who paid 84 cents.

Mr. Cheema said his findings were based on a combination of publicly available data and questionnaires he sent to members of both houses of Parliament — though just two members responded to his queries.

But some politicians and tax experts questioned Mr. Cheema’s findings, saying they did not take into account the wider failings of the country’s tax laws.

Ikram ul Haq, a lawyer and tax expert, said it was incorrect to describe two-thirds of Parliament members as “tax dodgers,” because they automatically pay tax on their salaries. But, he added, there is a serious problem with the declaration of income from land and other assets. Some politicians do not declare their extra income, or grossly underestimate it, he said.

And others legally avoid taxation because their income is largely derived from agriculture, a sector that is exempt from federal taxation — a longstanding complaint of the country’s urban middle classes.

Ayaz Amir, a lawmaker and landowner from Punjab Province, who said he had filed his tax returns, said the main problem lay with the broken system of tax enforcement. “The point is not that 70 percent don’t file their returns,” he said. “It’s that those who do file fictitious returns and do not declare the true extent of their income.” The problem is not limited to lawmakers, he added. “It’s the entire prosperous class of Pakistan. Their lifestyles are totally out of sync with their declared income.”

Another difficulty is that, even when breaches of the tax laws are discovered, the rich and politically connected are rarely prosecuted. “Law enforcement is in general very weak,” said Ahmed Bilal Mehboob, executive director of the Pakistan Institute of Legislative Development and Transparency. “And if you happen to be an influential and powerful person like a politician,” he said, “then it is even weaker.”

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Selling flak jackets in the cyberwars

SAN FRANCISCO (Reuters) – When the Israeli army and Hamas trade virtual blows in cyberspace, or when hacker groups like Anonymous rise from the digital ether, or when WikiLeaks dumps a trove of classified documents, some see a lawless Internet.

But Matthew Prince, chief executive at CloudFlare, a little-known Internet start-up that serves some of the Web’s most controversial characters, sees a business opportunity.

Founded in 2010, CloudFlare markets itself as an Internet intermediary that shields websites from distributed denial-of-service, or DDoS, attacks, the crude but effective weapon that hackers use to bludgeon websites until they go dark. The 40-person company claims to route up to 5 percent of all Internet traffic through its global network.

Prince calls his company the “Switzerland” of cyberspace – assiduously neutral and open to all comers. But just as companies like Twitter, YouTube and Facebook have faced profound questions about the balance between free speech and openness on the Internet and national security and law enforcement concerns, CloudFlare‘s business has posed another thorny question: what kinds of services, if any, should an American company be allowed to offer designated terrorists and cyber criminals?

CloudFlare’s unusual position at the heart of this debate came to the fore last month, when the Israel Defense Forces sought help from CloudFlare after its website was struck by attackers based in Gaza. The IDF was turning to the same company that provides those services to Hamas and the al-Quds Brigades, according to publicly searchable domain information. Both Hamas and al-Quds, the military wing of the Palestinian Islamic Jihad, are designated by the United States as terrorist groups.

Under the USA Patriot Act, U.S. firms are forbidden from providing “material support” to groups deemed foreign terrorist organizations. But what constitutes material support – like many other facets of the law itself – has been subject to intense debate.

CloudFlare’s dealings have attracted heated criticism in the blogosphere from both Israelis and Palestinians, but Prince defended his company as a champion of free speech.

“Both sides have an absolute right to tell their story,” said Prince, a 38-year old former lawyer. “We’re not providing material support for anybody. We’re not sending money, or helping people arm themselves.”

Prince noted that his company only provides defensive capabilities that enable websites to stay online.

“We can’t be sitting in a role where we decide what is good or what is bad based on our own personal biases,” he said. “That’s a huge slippery slope.”

Many U.S. agencies are customers, but so is WikiLeaks, the whistle-blowing organization. CloudFlare has consulted for many Wall Street institutions, yet also protects Anonymous, the “hacktivist” group associated with the Occupy movement.

Prince‘s stance could be tested at a time when some lawmakers in the United States and Europe, armed with evidence that militant groups rely on the Web for critical operations and recruitment purposes, have pressured Internet companies to censor content or cut off customers.

Last month, conservative political lobbies, as well as seven lawmakers led by Ted Poe, a Republican from Texas, urged the FBI to shut down the Hamas Twitter account. The account remains active; Twitter declined to comment.

MATERIAL SUPPORT

Although it has never prosecuted an Internet company under the Patriot Act, the government’s use of the material support argument has steadily risen since 2006. Since September 11, 2001, more than 260 cases have been charged under the provision, according to Fordham Law School’s Terrorism Trends database.

Catherine Lotrionte, the director of Georgetown University’s Institute for Law, Science and Global Security and a former Central Intelligence Agency lawyer, argued that Internet companies should be more closely regulated.

“Material support includes web services,” Lotrionte said. “Denying them services makes it more costly for the terrorists. You’re cornering them.”

But others have warned that an aggressive government approach would have a chilling effect on free speech.

“We’re resurrecting the kind of broad-brush approaches we used in the McCarthy era,” said David Cole, who represented the Humanitarian Law Project, a non-profit organization that was charged by the Justice Department for teaching law to the Kurdistan Workers’ Party, which is designated by the United States as a terrorist group. The group took its case to the Supreme Court but lost in 2010.

The material support law is vague and ill-crafted, to the point where basic telecom providers, for instance, could be found guilty by association if a terrorist logs onto the Web to plot an attack, Cole said.

In that case, he asked, “Do we really think that AT&T or Google should be held accountable?”

CloudFlare said it has not been contacted about its services by the U.S. government. Spokespeople for Hamas and the Palestinian Islamic Jihad, told Reuters they contracted a cyber-security company in Gaza that out-sources work to foreign companies, but declined to comment further. The IDF confirmed it had hired CloudFlare, but declined to discuss “internal security” matters.

CloudFlare offers many of its services for free, but the company says websites seeking advanced protection and features can see their bill rise to more than $ 3,000 a month. Prince declined to discuss the business arrangements with specific customers.

While not yet profitable, CloudFlare has more than doubled its revenue in the past four months, according to Prince, and is picking up 3,000 new customers a month. The company has raked in more than $ 22 million from venture capital firms including New Enterprise Associates, Venrock and Pelion Venture Partners.

Prince, a Midwestern native with mussed brown hair who holds a law degree from the University of Chicago, said he has a track record of working on the right side of the law.

A decade ago, Prince provided free legal aid to Spamhaus, an international group that tracked email spammers and identity thieves. He went on to create Project Honey Pot, an open source spam-tracking endeavor that turned over findings to police.

Prince’s latest company, CloudFlare, has been hailed by groups such as the Committee to Protect Journalists for protecting speech. Another client, the World Economic Forum, named CloudFlare among its 2012 “technology pioneers” for its work. But it also owes its profile to its most controversial customers.

CloudFlare has hosted 4Chan, the online messaging community that spawned Anonymous. LulzSec, the hacker group best known for targeting Sony Corp, is another customer. And since last May, the company has propped up WikiLeaks after a vigilante hacker group crashed the document repository.

Last year, members of the hacker collective UgNazi, whose exploits include pilfering user account information from eBay and crashing the CIA.gov website, broke into Prince’s cell phone and email accounts.

“It was a personal affront,” Prince said. “But we never kicked them off either.”

Prince said CloudFlare would comply with a valid court order to remove a customer, but that the Federal Bureau of Investigation has never requested a takedown. The company has agreed to turn over information to authorities on “exceedingly rare” occasions, he acknowledged, declining to elaborate.

“Any company that doesn’t do that won’t be in business long,” Prince said. But in an email, he added: “We have a deep and abiding respect for our users’ privacy, disclose to our users whenever possible if we are ordered to turn over information and would fight an order that we believed was not proper.”

Juliannne Sohn, an FBI spokeswoman, declined to comment.

Michael Sussmann, a former Justice Department lawyer who prosecuted computer crimes, said U.S. law enforcement agencies may in fact prefer that the Web’s most wanted are parked behind CloudFlare rather than a foreign service over which they have no jurisdiction.

Federal investigators “want to gather information from as many sources as they can, and they’re happy to get it,” Sussmann said.

In an era of rampant cyber warfare, Prince acknowledged he is something of a war profiteer, but with a wrinkle.

“We’re not selling bullets,” he said. “We’re selling flak jackets.”

(Reporting By Gerry Shih in San Francisco and Nidal al-Mughrabi in Gaza; editing by Jonathan Weber and Claudia Parsons)

Internet News Headlines – Yahoo! News

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