Hello and welcome to the session. This is Professor Farhad. In this session, we would look at the elimination of unrealized gain or losses on depreciable asset. This is different from the first section. In the first section, we looked at non-depreciable asset. So in this session, we have to deal with depreciation. This is part two of five, which is we have the previous session. And I suggest you view the previous session if you are not very comfortable with the topic. This topic is covered in advanced accounting and an advanced accounting course also covered on the CPA exam, specifically the far section. Additional lectures similar to this one can be found on my website.  So please connect with me on LinkedIn. I'm very active on LinkedIn. I do post lectures as well as other information about accounting, accounting career, the CPA exam and related topics. If you're a Facebook user, please connect with me on my Facebook page, Accounting Lectures. Obviously, all my lectures are housed on YouTube. So make sure you subscribe to my YouTube and please share and like my YouTube so others can benefit as well. If you are a Twitter user, this is my Twitter handle. Also, obviously my website is also another resource for you. So the first thing we're going to look at is the overall picture. What are the rules that we have to deal with when we are dealing with intercompany sale of depreciable property? So here's what's going to happen. The overall idea is this. We have the parent company and we have the subsidiary. So the parent might sell the subsidiary or the subsidiary might sell to the parent assets. And as a result of this exchange, one of these parties might have a gain or might have a loss. So we'll have a gain or a loss. We call those gains and losses, intercompany gains and losses. And when we prepare the consolidated financial statement for both the parent and the subsidiary, any intercompany gain and losses need to be eliminated. That's one thing. And we learned this in the prior session. Also, we have to keep the original cost of the assets of P company sold to sub. When we report the original cost of the asset, we have to report based on what P purchased the asset at, not what sub purchased it from the parent. Also, if sub sold something to P, we report the asset at the original cost of the sub because that's the original cost for the affiliated group. So those are the things that we talked about in the prior session, but now let's go over the rules. So we only report gains and losses that are the result of a sale of depreciable asset to outside party. So any gain and losses intercompany, which is inside parties are eliminated. Also, part of the elimination entries is to present the asset, the property and the consolidated balance sheet at the cost, at its cost to the affiliate. So it's its original cost, whatever that cost is to the affiliate. So if the sub sold it, it's the original cost of the sub of the P sold it, we have to go back and report it at the P cost. Also, so this is one in two, we already covered one in two in the first session. Now this is new. The third point is new three. We need to present accumulated depreciation, which is, which is an important concept in this session and the consolidated balance sheet based on the cost of the affiliated group. So remember, we are dealing with depreciable asset. And when we have depreciable asset, guess what, we are going to have, when we have depreciable asset, we're going to have accumulated depreciation. So what we are saying is the accumulated depreciation will have to be reported based on the original cost. And we're also going to have depreciation expense. We have depreciation expense because we have, we have to depreciate this asset. When we compute depreciation expense, the depreciation expense will have to be based on the original cost. Why? Because we have to report the asset in the consolidated financial statement at the original cost. Okay, so those are the four things. And keep the slide, copy the notes on the slide, because you're going to see, we're going to have to prepare the journal entries to comply with those rules, to make sure those rules are complied with. Also, we have to learn about something new. In this session is something called realization through usage. And what is realization through usage? So remember, when we sell, when a firm sells property or equipment to an affiliate, the price will differ from the book value. And because it differ, what's going to happen, we're going to either have a gain or a loss. So we're either going to have a gain, a G or an L, a gain or a loss. Now remember, we have to eliminate the gain or the loss. That's understandable. However, what we're going to have to do, if there's any gain or loss, okay, what's going to happen, the gain or the loss will be realized through a decrease or increase in depreciation. What does that mean? Okay, let me explain this to you. And we're going to see some numbers later on. From the viewpoint of the consolidated entity, the intercompany gain or loss is considered to be realized. So we're going to realize it from the use of the property or equipment in the generation of revenue. So simply put, we're going to recognize some of the gain and some of the losses. But how are we going to recognize it? You will see later through the use is measured through depreciation adjustment. So we're going to do adjustment to depreciation. What does that mean? If we have a gain, okay, what we're going to do, we're going to be depreciating, we're going to be reducing depreciation expense. And you will see that. So depreciation expense is reduced. And as we reduce depreciation expense, simply put, when your expense goes down, you have more gain. When we have a loss, we are going to increase depreciation expense. And you will see how when depreciation goes, depreciation expense goes up, when depreciation expense goes up, you will recognize the loss. You will recognize the loss. But we're going to be doing so in pieces. Because remember, depreciation is not taken all at once. It's taken over the years. So the gain and the losses will be realized through depreciation adjustment. Just know this rule. And you will see this in an example. And I will tell you this is the rule that you need to be aware of. Also, what's involved in the work paper elimination entries before we look at an example. Firm using the cost or partial equity method. An additional objective is to equate beginning consolidated retained earning with the amount of the consolidated retained earning reported in the prior period. Simply put, every period we have to start with the beginning retained earnings. And you'll see how we do so. For firms using the complete equity method, this objective is not necessary because the parent retained earning already reflect all the adjustments. And for upstream sales, the entries will also serve to equate beginning NCI and prior NCI. Again, we'll look at an example later. But those are the rules that we have to follow. So the best way to illustrate this is to work through an example. So let's take a look at this example. And for the illustration of this example, we're going to be using assuming we're using cost or partial equity. Let's take a look at this example. We have P company, Powell company owns 80% of the outstanding stocks of SAP. On June 30th, it's important to know the date because that makes a difference on the depreciation. Sullivan company sold equipment to P company for half a million. The cost to Sullivan company is 750. So Sullivan had a cost of an asset of 750 and had accumulated depreciation of 400. So they had accumulated depreciation. So they depreciated this asset over the years for $400,000. What does that mean? It means once we have depreciation, once we have accumulated depreciation, we can take cost minus accumulated depreciation, cost minus accumulated depreciation. So 780, 780 minus 400,000. It's going to give us the 780 minus 400,000. It's going to give us the book value of the asset. So the book value of the asset, the difference between those two, it's 380,000. That's the book value. That's the book value of the asset. So the book value, sorry my pen is not working properly, equal to 380. Now we sold it, the selling price was half a million. So S company sold it for half a million. That's mean we have a gain for the subsidiary for 120,000. So the gain for the subsidiary is 120,000. So the management of P company estimated that equipment has remaining life of four years. This is important from June 30th. So they're going to be appreciated based on four years. So that's important for us. In 2012, P company reported 300,000 and S company reported 200,000 in net income from their independent operations, including sales to affiliate, but excluding dividend or equity from income from the subsidiary. So this way they're telling us how much income they reported and how we measured that income. So the first thing we're going to do is we're going to record the transaction on the books of the parent company and on the books of the subsidiary. So the parent bought the asset. They paid $500,000 for it. They debit equipment, 500,000. They credit cash, 500,000. Salovin company sold the asset. Well, if they sold the asset they would receive cash of 500,000. They would remove the equipment from the books at 780,000. They would remove accumulated depreciation of 400,000 and they will book again, which I showed you how to compute for 120,000. Now, you might be asking why did he highlight those three entries in red? Look, what we have to do year after year is to do the following. Year after year we have to make sure the equipment is restored to 780, accumulated depreciation is restored to 400,000 and we have to remove this gain. And the reason that that's why I highlighted those three entries. So this is the entries that takes place. This entries took place on June 30th for both companies. But the end of the year what we have to do, we have to prepare a consolidated balance sheet or consolidated financial statement, not only a balance sheet. As a result, what we have to do, we have to restore the asset. Now the equipment is recorded at 500,000 at P company. That's incorrect. We have to restore the equipment back to 780,000. We eliminated 400,000 of accumulated depreciation. We have to go back and put that 400,000 on the books and we have a gain that we have to eliminate. Now the cash will basically cancel each other. Credit cash, debit cash. Well, what's going to happen when we consolidate they're gone. Okay, so in order to do so, so the first thing we have to do at the end of the year, and this is basically a good schedule to follow. Remember the original cost is 780. The selling price is 500,000. Therefore there's a difference of 280. Now the equipment is worth 280 less on the books. So the first thing we have to do is debit the equipment at the end of the year. So this is December 31st, 2011. So we have to restore the equipment back to 780. Why? Because the equipment now sitting on the parent company, the parent company books at 500,000. It's sitting on the books at 500,000. Okay, so if we look at the books of the parent company, so this is the parent company asset. Well, that's incorrect. Why? Because the asset needs to be reported at 780. Why? Because we need to restore it. We need to report it in the consolidated financial statement at its original cost, which is 780. Therefore we debit equipment 280,000. Now remember, when we sold the asset, the subsidiary had an accumulated depreciation of 400,000. Then what they did when they sold the asset, they debited accumulated depreciation. Therefore accumulated depreciation went down to zero. Guess what? We have to restore accumulated depreciation. Therefore we have to go back and credit. We have to go back and credit accumulated depreciation for 400,000. Therefore we're going to credit accumulated depreciation of 400,000. Okay, so we have to put the book on the books accumulated depreciation. And remember, we booked again of 120, which is we also have to eliminate the gain. And what do we do to eliminate the gain? Because this is an intercompany gain. We debit the gain. Therefore we debit the gain 120, and we credit accumulated depreciation. And what did we just do? What did we just do? We just restore, eliminate the intercompany gain, and restore the equipment to its original cost. This is how we remove the gain. Because remember, we had the gain here. S company reported the gain right here. We need to take out, and we did so. Then we needed to debit the equipment to 80 to make sure the equipment back to 780, and we need to put back accumulated depreciation. Now this entry will have will occur at the end of every year going forward. However, the gain will not be with us because the gain will be closed by the end of the year. Remember, the gain is a temporary account. So the gain will be closed. To what account will be closed? It will be closed to retained earnings. So what happened going forward, we are going to be debiting retained earnings to eliminate the effect of the gain from the consolidated financial statement. And we always have to go back, assuming we haven't sold the equipment. We have to go back and restore the equipment and restore accumulated depreciation. Okay. So now, oh, before we proceed, let me show you what's going to happen here. Remember, when the asset was on the books of the subsidiary, the asset has a cost of 780,000, and they were depreciating the asset at $95,000 per year. Okay. That was the base on the life of the asset. There were four year remaining, and they're supposed to depreciate the asset 95,000, 95,000, 95,000. Now, once the asset is on the books of the subsidiary, the depreciation became based on the, because they bought it at 500,000. So the cost is 500,000. And if you divide 500,000 by four, if you divide 500,000, if you take 500,000, and you'll divide 500,000 by four, that's equal to 125. Therefore, the sub will be depreciating the asset for 125 under books. The original depreciation amount was 95,000. Now, bear in mind, we're not giving detail of what's the original life of the asset. Maybe we are, maybe we are not, but it doesn't matter. The original depreciation was 95,000. No, we're not told, but no, that it's 95,000. Okay. So what does that mean? It means we're going to have excess depreciation of 30,000. Because the sub, what's going to happen? The sub company, they're going to depreciate this asset, I'm sorry, the parent company will start to depreciate this asset. And how would they depreciate this asset? Well, for every year, they will depreciate it by 125,000. So every year, what's going to happen, the parent company, they will debit depreciation expense 125, credit accumulated depreciation 125. Let me tell you about what's wrong with this entry. This entry is overstating depreciation. Depreciation is supposed to be only 95 because we depreciate the asset based on the original cost, based on the cost of the affiliate. What does that mean? It means we have per the whole year, for the whole year, we have 30,000 of excess depreciation. So now we have to journalize an entry to reverse this effect. Now, bear in mind for year one, for year one, we bought the asset June 30th. It means we only have half a year to take care of. Therefore, half a year, if $30,000 is for the whole year, for a half a year, we need to remove only 15,000. Therefore, what we have to do is to debit accumulated depreciation 15,000, credit depreciation expense 15,000. Why did we do so? Because the parent company is booking 125,000 of depreciation per year, which is $30,000 per year in excess of the original cost, of the original depreciation. But for year one, we only have to reverse 15,000. Why 15,000? Because for year one, we only had the asset for six out of the 12 months. Now, this is what I meant by, when I originally told you, realization through usage. By reducing depreciation expense, what we did is basically, we recognized again. By reducing depreciation expense in 15,000, we recognized again. And this is what we meant by realization through usage. This slide here, when I told you, I will show you what it means. And this is what we meant by realization through usage. What we do is, as we adjust depreciation, we recognize some of the gain. Now, if we had a loss, obviously, if the transaction had a loss, the entry will be the opposite. Why? Because then we'll have to debit depreciation expense, because we had a loss to basically, in quote, amortize or spread out. So that's, hopefully, you understand what we meant by realization, adjustment through realization. So to adjust depreciation expense to the correct amount, that's realizing a portion of the gain through usage. This is what we mean by realizing portion of the gain through usage. So this is all the entries that we need in 2011. Okay, let's review them again. By the end of the year, we eliminate the gain, restore the asset, and restore accumulated depreciation. Then we have to book another entry to fix, in quote, to fix or adjust depreciation. And here, since we had a gain on the entry to adjust depreciation, we're going to recognize some of the gain by reducing depreciation expense. Notice we credited depreciation expense. We reduced depreciation expense. Now, December 31st, 2012. This is a year later. A year later, remember, the work paper entries are not permanent. Therefore, they're gone. Now, by the end of the following year, we have to do the same thing. And what's the same thing? Do three things. Remove the gain, the $120,000 gain, restore the asset and restore the appreciation. So basically, what we have to do by the end of 2012, we have to go back and do the same thing as we did in 2011. Remember, the gain is gone. So all we have to do now, adjust the beginning retained earnings. So here's what's going to happen. We're going to debit. And again, we're using the cost and partial equity here. We're going to debit equipment, $280,000 to bring the equipment back to its original cost on the consolidated financial statement. We need to debit retained earnings. Now, what's going to happen now is this. Remember, we own only 80% of the subsidiary. Therefore, we debit beginning retained earning, 80%, and we debit non-controlling interest to make sure the non-controlling interest is updated to remaining 20%, which is $24,000. But in total, this is $120,000. But remember, some of the gain went to the NCI, which is $24,000. Therefore, we have to take out of OCI, $24,000. Then we restore depreciation by crediting accumulated depreciation. So we have to prepare this entry to basically bring everything back to the original status. Now, are we done yet? No, we still have to do another entry. And what's the other entry? Remember, we have to adjust depreciation. Because what happened is this. For year two, the parent company debited depreciation expense $125,000, credited accumulated depreciation $125,000. Remember, they are for the full year. For 2012, we had the asset for the full year. Therefore, depreciation expense is $125,000. Therefore, depreciation expense is $30,000 and access of the original depreciation. What do we have to do? We have to reduce depreciation expense by $30,000. That's the first thing we have to do. Therefore, we debit depreciation expense $30,000. And what we just did, we just we are also what we are doing is we are preparing this entry here in a sense. But this is for $30,000 to adjust depreciation expense to the correct amount, thus realizing a portion of the game. We're doing the same thing here. So what I did is I debited depreciation expense $30,000. What do I do? I debit, I credit depreciation expense, I credit accumulated depreciation $30,000. So that's for the current year. That's for the year two. Now remember, what we have to do, we have to reverse the $15,000 of depreciation of the prior year. What does that mean? Remember, in the prior year, this was part, this was part of the work papers. Okay. And basically, this will be gone. So this, this will be gone in a sense that it's not permanent. This entry is not permanent. What we have to do in year two, we have to restore this. We have to restore this entry. And how do we restore this? We're going to debit accumulated depreciation. We're going to debit, we're going to debit accumulated depreciation $15,000. And you might be asking, hold on a second, why don't I just debit accumulated depreciation? It's okay. I'm just showing you what's happening here. So I'm going to have to debit accumulated depreciation $15,000, then credit beginning retained earning for not for the full $15,000, I'm going to spread it $12,000 for the parent company and NCI will absorb $3,000. And what's this entry for? This entry to, to update, to update our consolidated financial statement to make sure the $15,000 of the prior year is accounted for. Okay. So simply put, can we consolidate those two entries? Sure. Rather than having two accumulated depreciation, we're going to have one. So let me just show you the consolidated entry and not the consolidated, the compound entry of the consolidated entry. Okay. So we're going to debit accumulated depreciation $45, credit depreciation expense, credit beginning retained earning and credit non-controlling interest. This is what I had earlier. So this $30,000 is for the current year and those $15,000 is from the prior year. But remember what we have to do now, make sure you, for the prior year, you update the beginning retained earning, 80% to the beginning retained earning of P and 3,000, which is 20% of the non-controlling interest. And this is using the cost or the partial equity method. Now for using the full equity method, the complete equity method, what's going to happen is, okay, this is the entry to restore the asset, to restore accumulated depreciation. And what we do is we debit investment in S company rather than beginning retained earnings. So notice we debit investment rather than beginning retained earning for 96, okay, because the investment is reflecting everything. And the second entry, what we do is we also, rather than the beginning retained earning, we credit the investment, we credit the investment account because everything is reflected in the investment account. Okay. So this is basically to show you if you're using the equity method. Okay. Now what happened if this was a downstream sale? So let's just flip the positions. Now what's going to happen, the parent company is selling the subsidiary. What would change if we're using the partial or the cost equity? Okay. The non-controlling interest of 20% will be included in the beginning retained earning of P company. Simply put, let me go up here. This non-controlling interest will be gone. And this will be 15,000. Okay. This is for using the cost of the partial, the cost or the partial equity method. If we're using the complete equity method, non-controlling interest of 20% will be included in the investment in Sullivan. This one here will be included with the 15,000. Simply put, because we're going from the parent to the subsidiary, there is no, we don't differentiate between the controlling and the non-controlling interest in a downstream sale. So there is no differentiation between the controlling and non-controlling interest when we're going from the parent company to the subsidiary. Okay. It's only we differentiate when we're going upstream from the subsidiary to the from the subsidiary to the parent company. This is when we differentiate. Hopefully this example kind of gave you more knowledge, a little bit more flexibility with learning this. If you have any questions, email me. This topic is covered on the exam on the CPA exam study hard. And if you want additional lectures, go to my website. If you happen to go to my website, please consider donating. Thank you very much. Study hard for the exam. It's worth it.


We appreciate it a lot. This year there are not Q&A rooms, so we hope that those of you who want to continue the conversation will come to our table in the vendor room where you can become members or renew your membership, get our new DEF CON special edition ACLU Fourth Amendment t-shirts. We would love to see you there. My name is Ben Weisner. I direct our national project on speech, privacy and technology. The women and men at the table with me work on surveillance, national security, technology, privacy, both in our national office and in some of our affiliates around the country. So when we heard that the NSA had been disinvited from DEF CON this year, we kind of scratched our heads a little. Because since when has the NSA needed to be invited? We had planned to do a review that we were going to call a year in surveillance and talk to you about the breadth and scope of the work that we do on privacy and surveillance. And then Ed Snowden got on a plane to Hong Kong and really changed everything. So maybe we should give him a hand. And what he revealed is something that many of us were anxious about, knew about, had worried about for years, which is that the NSA's strategy has been to collect everything and worry about the law later. That as technology has developed, as the cost of collection and storage has gone down, the NSA has begun to construct the most comprehensive surveillance time machine ever created and then hope that the law could be twisted in order to justify what it was already doing. I feel that we say it so often it's a cliche that the law has not kept pace with technology. We believe that Americans privacy should be protected by constitutional law, not by Moore's law. So my colleagues here are going to talk briefly. There's five of them. We have only 45 minutes and we do hope to have time for a couple of questions to give you a taste of the kind of work that we are doing with regard to NSA surveillance. And we hope that many of you will join us at our table. We also have one of the parties tonight on the pub crawl party like it's 1986. That is ACLU, ECPA humor. So we hope to see more of you all later. And to kick us off, this is Alex Abdo from our national security project. Hi everyone and thanks so much for coming. So I want to talk just for a few minutes about the prison program which was revealed a couple of months ago by Ed Snowden. But before I get to the prison program, I want to talk about what there was before the prison program and what we were doing beforehand because it's a really fascinating change of events in the last two months. In 2008, Congress passed the most sweeping surveillance statute that Congress has ever passed called the FISA Amendment Act of 2008. And it essentially gives the NSA and the government unfettered access to Americans international communications. And we challenged the law at the time because we didn't think that the fact that someone is communicating internationally means they should sacrifice the right to privacy. That in today's interconnected world, you can't often control the way your packets are scurried around the world. And your right to privacy shouldn't depend on the paths they take and the friends you choose to associate with. We brought that challenge in 2008. And for the next five years, we didn't actually litigate the merits of whether the government can collect our international communications. We spent five years debating with the government whether our clients were allowed to sue. And our clients were lawyers who represented Guantanamo detainees, human rights researchers and activists who worked in areas of the world where there was a significant violence and counterterrorism interest on the part of the U.S. government. And journalists who reported on those areas, the very sorts of people who would find themselves trapped in an international NSA surveillance dragnet. And for that reason, these individuals, our plaintiffs, our clients, took significant and burdensome measures to protect the confidentiality of their communications. Some of them had ethical obligations to do so. Others just thought it was good professional responsibility. Despite that fact, the government argued that we couldn't sue unless our clients could prove that their communications were surveilled. And if you know anything about the NSA, you know that's a vicious catch-22. Nonetheless, the government prevailed in front of the Supreme Court in February in a decision, a five-to-four decision, holding that the government's most sweeping surveillance statute ever enacted is essentially immune from judicial review unless the NSA, in its benevolence, chooses to disclose who it's surveilling. I don't recommend you hold your breath. So that all changed two months ago when Ed Snowden disclosed the existence of the prison program. And the prison program is essentially one version of an implementation of the FISA amendments act. It is a small part of the way the government conducts its international surveillance. But it's authorized by this very same statute that was passed in 2008. And some of the most important disclosures that Mr. Snowden made are of the procedures that the government uses to select its targets and to protect the privacy and theory of Americans who find themselves ensnared in the international dragnet. And having seen those procedures now, we know that they never should have been secret in the first instance, but they reveal a number of really critically important things about the way the government conducts its surveillance. The government's main defense, if you've been reading the news, about the prison program, is that it's a program directed at foreigners, not Americans. And I think that's an extraordinarily misleading defense of the program. When the government was pushing for the passage of this act, actually to a predecessor of the statute, it argued that some of the communications of most interest to the NSA were the ones that had one terminus in the United States. And you can imagine for obvious reasons why that would be the case. But the government used the fact that Americans were communicating internationally, essentially to bootstrap away their rights to privacy. So even though foreigners have to be the targets of the government's surveillance, Americans' communications are inevitably swept up into them. And you might think that because the government calls the collection of Americans' communications incidental under these programs, you might think that they would treat them as incidental and delete them when they get them. We now know, thanks to Ed Snowden, that that's not the case. The government is allowed to keep even Americans' communications in the course of targeting foreigners for five years in any event, and indefinitely if any of a number of sweeping exceptions apply. One of the exceptions, by the way, is if the information is encrypted. So ironically, as we are now seeing a push in the industry for greater use of HTTPS and encrypted communications, we are actually handing the NSA more authority to retain those communications indefinitely until a time that they can decrypt them if they can't already. The second big problem with the government's targeting of foreigners is that it presumes its targets are foreign unless it has a reason to believe otherwise. Which is a really bizarre way of going about it, you can imagine. So if the government has any doubt as to where you are, and they don't have any positive indication that you're an American, they'll treat you as a foreigner and targetable, and they'll retain your communications even if they later discover that they were wrong.  And you can imagine the types of services available digitally now that would give the government the doubt they need about your foreignness to allow them to keep your communications. You could think of services like TOR or VPN services. The final problem, you know, a major problem I find with the government's defense of its prison program, is that it says the program is supposedly limited to foreign intelligence information, which is this phrase they bandy about, which really has very little meaning. It includes things as broad as the foreign affairs of the United States, which essentially makes a target out of everyone who's a foreigner. And we know that in part because the procedures that were released by Ed Snowden confirmed that two of the broadest factors the government relies on in determining whether someone is exchanging foreign intelligence information are one, if you're communicating with a foreigner, and two, if your phone number or email address appears in a foreigner's contact book.  And they can keep those communications even if they later discover that you're an American. Just two quick additional points and then I'll hand it over. First, that the government is not actually limited to directing its surveillance at targets. It can direct its surveillance at third parties to collect information about its targets. And it can do so using IP filtering and country code filtering. And the example that I think has been thrown out is that they might decide that Osama bin Laden is a target and then decide to IP filter internet traffic for everything going into or out of Pakistan as their filter and then collect everything. So the prison program allows the government to do broad geographic surveillance in a way that ensures that countless people's rights to privacy are unjustifiably intruded upon. And secondly, the government considers that any extensive use of a IP range or cryptographic service by foreigners allows the NSA to target that IP range or cryptographic service. So if there's a service like Tor, for example, that is used extensively by foreigners and who knows what that means in the context of terrorists, you know, there are not so many terrorists in the world, we hope. So if a dozen of them are using Tor, that might justify the government in collecting everything that's going on over Tor to allow traffic analysis and maybe later decryption. So, you know, the irony is that those who seek to protect the sensitivity of their communications the most are engaging in communications that are born targetable. Whether or not the government has any specific reason to collect those individual's communications. I think there's an easy fix to this problem but maybe we can discuss that later and I'll hand it over for now with that vague teaser. Easy fix. Well, hello. My name is Catherine Crump and I'm a staff attorney with the ACLU's Speech, Privacy and Technology Project. I've been at the ACLU for about eight years and I've been primarily litigating challenges to government surveillance programs and that length of time has given me a little perspective on this because for years members of Congress have been saying things like if the American people knew what was actually going on with some of the NSA related spying programs they'd be really outraged but there was no way to have an honest conversation about what was happening until just recently when Edward Snowden finally disclosed some of these programs. But there has been such a torrent of information about the different programs that I think it can be often difficult to try to figure out what the different specific programs are and what they're doing. So, Alex talked about the PRISM program and now I want to spend a few minutes talking about the NSA's domestic collection of all telephony metadata. Why the ACLU thinks there are serious privacy problems with this and then what we're doing to try to rein in the NSA's surveillance. So, we know now, thanks to reporting by the Guardian and Ed Snowden, that the NSA is collecting all domestic telephony metadata. It has gone to the Foreign Intelligence Surveillance Court, the secret court in Washington, D.C. and it seems that every three months it gets an order authorizing it to collect telephony metadata from all major U.S. telephone communications company. So, at the end of every day, every telephone call that you make, every telephone call that you receive and how long those telephone calls last get handed over to the government. This is true for domestic communications. This is not about international communications and I think sometimes in some of the government's counter messaging, that fact is being lost. The government has also tried to argue that metadata isn't sensitive and has made the point, for example, we're just getting telephone numbers, we're not getting anyone's name, but I think the people in this room certainly see the flaw in that argument without anyone having to point it out. It's not just that the government is getting this information, it's that they're also storing the metadata going back five years. So, that's really a truly vast amount of information about all of the communications all of us engage in. So, what is the government doing with this information? The government says that whenever it has a reasonable, articulable suspicion that there is a selector, which is probably a telephone number, for example, associated with terrorism, it can query this database for that number and track connections going out three hops. So, the telephone number that calls the telephone number that calls the telephone number. When you think about that, it ends up being a sweeping amount of data because if the typical person has, for example, 40 telephone numbers in their phone, that can sweep in as many as 2.5 million phone numbers. This, by the way, isn't actually being approved on an individualized basis by a court. The FISA court has simply approved this general programmatic approach to surveillance, but there's no supervision of individual pieces of surveillance along the way. I want to step back for a second and talk about what a major paradigm shift this is. As my colleague, Ben, mentioned at the beginning, this is about collecting at all. We haven't previously lived in a world where every single thing we say and do is capable of being recorded, but that's now the world we live in, and that's exactly what's happening when it comes to telephony metadata. The government's argument is that it essentially doesn't implicate a privacy interest for the government to merely collect the data. That only happens when you look at it, but I think having a record of essentially everyone you call can have a real chilling effect on who people are willing to communicate with. The standard under which the government says what is the government's legal argument here? The government is relying on a section called 215 of the Patriot Act, which says that it is authorized to collect information that is relevant to certain types of investigations, generally for an intelligence or terrorism investigations, and on that relevance definition, the government has argued that every single phone call all Americans make are under that definition relevant. Now that's a pretty broad and sweeping definition of relevance, one we haven't really seen before, and I think it also poses an interesting conundrum too that I think is coming up a lot in the era of big data. Does the fact, as the government, if it is true that to understand the meaning of one piece of data, you need to have the entire universe. Does that make the entire universe of data relevant? Now you won't be surprised to hear that the ACLU objects to this program. We think it raises real privacy problems, and one of the first orders that was disclosed about the court giving the government access to this information dealt with Verizon business network services, which is pretty startling to us, because do you know who provides the ACLU's telephone communication? Verizon network business services. And we sat in our office and we thought taught about all the people who call us, all of the whistleblowers who call us, maybe seeking legal help or protection. Everyone who calls our offices for help with reproductive freedom services, right? Or reporting any number of abuses. And you can see some real problems with the idea that all of this information is being monitored and logged by the government. And because we think that poses a real threat to the longstanding right of Americans to be able to associate with one another. And also our fourth amendment, freedom to be free from unreasonable searches and seizures. We filed a lawsuit in federal court very quickly after the program was revealed. And we've asked the court to enjoin the government from engaging in this mass collection program and also to delete all of the data from the ACLU in this, because we know that it's sitting in a database, every phone call we've made for the last five years. The court has scheduled a briefing schedule for the going through the fall. There's an argument in November. And so hopefully by the time we're all back here next year, we'll be able to report a little more. I don't know if any of you had the privilege to hear Chris Segoian this morning in the pen and teller room. I made the mistake of getting there at five to 12 and you all had the seats already. So next up, Chris Segoian. Hi everyone. So I'm the principal technologist with our speech privacy and technology team. I joined last fall for those of you who caught my talk earlier. The FBI is now in the hacking business. If you didn't catch the talk, hopefully the video will be available at some point. I want to talk for the few minutes I have, I want to talk about how the government spies. There are not enough FBI agents to follow every person. There are not enough NSA employees to read everyone's email or to go and directly acquire everyone's communications. The government doesn't have the resources to directly monitor every American or let alone every foreigner. But they want to read the communications of every foreigner and they want to be able to collect information about every American and so they have this problem. Particularly for for dragnet style searches where you want to do a keyword search or you want to do social network analysis, you need everyone's communications. What do you do when you don't have the manpower to collect everyone's communications? You deputize the telephone and internet companies. In some cases with their willing assistance and in other cases against their will. But you force these companies to help out. Sometimes paying helps to get them to agree. We learn for example one of the documents that Ed Snowden released is a 2009 inspector general report from the NSA showing that about $100 million dollars in voluntary assistance payments were made to telecommunications companies to get them to participate in some of the domestic metadata programs. $100 million dollars goes a long way when you're buying the goodwill of companies who are going out of their way to help the government with its mission. So I want to talk about the role these companies play. Every internet company, every telephone company has a team of people who do nothing but respond to surveillance requests and I'm not going to talk about how many requests they get because my colleague Nikki will be talking about that but I want to emphasize that these companies provide assistance that enables surveillance that wouldn't be possible without their help. There would not be a 215 metadata program without the willing assistance of AT&T and Verizon and reportedly sprint. It simply wouldn't be possible. There wouldn't be a program of monitoring the communications of foreigners talking to Americans if the NSA couldn't get the undersea cable operators to provide access to the communications that are flowing through fiber optic cables. Those with a foreigner and one with an American or those where both ends are foreigners and the communications are passing through the United States. The NSA program depends upon American communications companies. What's been good is that as communications have shifted in the last few years from telephone companies to internet companies we're starting to see companies that aren't as happy about being deputized. We're starting to see companies that are deploying crypto whether it is HTTPS to protect data over the wire or in some cases end to end crypto and really what this is doing is making dragnet surveillance difficult. I don't think that we're ever going to be able to put the government out of the surveillance business. I would personally like to but I don't think we're ever going to get there. But I do think we can make dragnet surveillance impossible. We just have to raise the cost. We have to make it difficult enough to target one person that they simply don't have the resources to collect everyone's communications. Crypto can help us get there. Moving from companies that say yes to dragnet requests to companies that only say yes to target requests can help too. But I really think we need to be thinking not about making it impossible for the government but making it expensive. Chris Rock has this joke in which he says that he believes that guns should be legal and bullets should be a million dollars apiece. And I think surveillance should be expensive too. And the problem right now is that the cost of surveillance is that it's just too damn low. Thank you very much. Hi everyone. I'm Nicoloser. I'm the technology and civil liberties policy director for the ACLU of California. So very nice to be back with many of you today. I just wanted to take a sort of bigger picture for a moment to understand just how Edward Snowden's impact has rippled out much farther than NSA spying. Much farther than the docs that he released or the revelations. And just to give everyone a sense of just how important these revelations have been to getting out the truth about what's really happening and ongoing efforts by the ACLU and other organizations to really reestablish some desperately needed and long overdue balance between government surveillance and all of our personal privacy. So Edward Snowden's actions in addition to really giving us a sense of what the NSA has been doing has finally given us all our real first information on just how often as Chris was talking about that the government from the lowest levels of police on the street to all the way up to the highest echelons of the NSA, how often the government is really taking advantage of anachronistic Supreme Court decisions from the 1970s, outdated privacy laws that haven't been updated since the 1980s from before the web even existed from when our cell phones were the size of bricks and no one could even imagine that people would actually store email for longer than six months. And they've been taking advantage of these outdated laws and things that really haven't been properly reconsidered for decades to engage in what we have known for a long time to be a largely unsupervised shopping spree in the treasure trove of data that online companies are collecting every day about who each of us are, where we go on a daily basis, who we know what our concerns are, habits, our hobbies, and are keeping that for extremely long periods of time. The ACLU first really started to sound the alarm about this sort of surveillance industrial complex that had been growing and growing largely in the dark way back a decade ago in 2003. We knew for a long time that this was happening, that the government was really reaching into these treasure troves and largely getting at this data without a warrant, without a judge's permission, but we never had the facts. The government doesn't need to tell the American people how often they're demanding electronic communications that are being held by these companies, unlike the fact that they have to report how many wiretaps they issue. They're not required by law to do that, so they weren't doing it, no surprise. And the companies weren't very interested in telling us either how many times the government was knocking on their door and asking for really personal data about people. They didn't really want to give us pause and wonder and worry. Are we really having sort of a three-way conversation every time we email a friend or pick up the phone? So we knew it was happening, but the facts just weren't there. The companies largely didn't want to come forward and the government didn't want to give us this information voluntarily. But post-prism, a lot of what we had known for a long time was finally confirmed. The companies, in an attempt to actually defend themselves against being said that they had given a back door to the government and to actually try and assuage the fears of the public, many of them for the first time released transparency reports that gave some contours of just how many demands were coming from local law enforcement all the way up the pike. We had had some companies like Google and Twitter come forward with these reports before, but post-prism was the first time that folks like Yahoo and Apple and Facebook actually came out with this information as well. And it really confirms what we had long known that tens of thousands of requests are coming into these companies just in a six-month basis that's affecting 80, 90, 100 thousand different accounts. And if you think about all the information that Google might have in a particular account, it could be tons and tons of emails or photos, sort of the whole range of data. So we know from some of the reports Google and Twitter are actually doing a breakdown of how many of these demands are actually coming with a warrant and how many of these demands are really just coming with a subpoena, which a judge often has never seen. And as we expected, subpoenas are sort of much take the bulk of these things. You know, Twitter recently reported just a couple of days ago that 56% of the demands for the government are subpoenas. Only 23% are warrants with probable cause. And Google has gotten over 5,000 demands that are subpoena demands just in the past six months that accounts for over 10,000 plus accounts of people. So we're finally starting to see a glimpse into how often the government is demanding this information, which finally gives us some of the facts to talk to Congress about how important it truly is to update these laws and make sure that they do keep pace with the technology that we're all living in, the fact that we are living our lives online and the government shouldn't be able to reach in and spy on that personal information without having a very good reason in going to a judge and explaining it. Thank you. So we have one more speaker. We have 15 minutes. We probably will have time for a couple of questions. So maybe while my colleague Cade Crockford is speaking, if some of you want to gather at the microphones, we'll try to take a bunch of questions at once and use our last 10 minutes or so to answer those questions. So go ahead, Cade. Hey, everybody. My name is Cade Crockford. I work for the ACLU of Massachusetts where I direct something called the Technology for Liberty Project. And I just want to say to sort of frame what my colleagues have talked about and what I'm going to say that over the past 12 years since 9-11, we've really seen a dramatic shift in the relationship between the governed and the government. And that is marked by two really problematic features. One of them is that now we're basically guilty until proven innocent as these bulk records collections programs demonstrate. And the second is that, you know, the way that a democracy should work is that the government is transparent and people have privacy from the government. Unfortunately, that situation has been radically flipped. So now the government is incredibly secretive, as we know, about its surveillance policies as well as even about the law in some cases. And the government can, if it wants to, know nearly everything about us, even if it doesn't have articulable suspicion, probable cause, show evidence to a judge, all of the sort of, you know, traditional American norms of justice. So having, you know, framed the conversation in that way, I just want to talk very briefly about how some little brothers have sprung up over the past 12 years. So we've heard a lot about Big Brother and some of the corporate surveillance but, or the facilitation of surveillance by corporations, but also, you know, the Department of Homeland Security and the Department of Justice have over the past 12 years given billions and billions and billions of dollars to state and local law enforcement to build up a really robust surveillance and sort of militarized police infrastructure at the state and local level. And they've done this by funding, you know, the procurement of things like electronic fingerprint readers at state and local police departments nationwide, face recognition technologies, as well as something called automatic license plate readers. Can I just show a hand of how many people in this room know what those are? Great, y'all are awesome. All right, yeah. So we just put out a huge report on this, actually, you can see it at aclu.org slash plates. Basically what we found is that the state and local police departments as well as private corporations are operating under the same methodology that the NSA is. They want everything. They want to collect it all. They want records of where everyone has driven, you know, going back depending on the police department, either months or years even in some cases. We found that the regulations are all over the map. There are only five states that have laws on the books about this kind of technology. So in every other state, it's really up to local police departments to decide how long they want to keep records of where everyone has driven. And right now, as I'm sure you know, these cameras are not as ubiquitous as surveillance cameras as CCTV, but they will become that ubiquitous. In fact, I'm sure that within the next 20 years, these cameras will be on every single police cruiser. They'll be at every single intersection in urban areas. So really it's going to be a situation where the government's going to be able to warrantlessly track our driving habits retroactively for, you know, however long they keep this information. So I also just want to tell you very quickly about, okay, on the license plate reader tip, private companies. There are these private companies, one of which is called Vigilant Solutions. Vigilant Solutions maintains a database called the National Vehicle Location Service. That database has at this point over 1 billion discrete license plate reads, probably actually much more than that. Those are slightly dated figures that I'm working off of. And that information is accessible not only to state and local law enforcement as well as the FBI, immigration customs enforcement, likely the US military, but also to other private companies, insurance companies, repo men, tow truck drivers. So, you know, the corollary between the NSA's surveillance and collusion with companies like Google and state and local cops colluding with private companies like Vigilant Solutions is really a very serious problem that again, as my colleagues have said, are in the vast majority of cases, state legislatures have not really stepped up to the plate to deal with. And so that's some of the work that we're trying to do in the states is to pass discrete legislation that would, for example, ban the police from retaining this data for a long time. You know, the ACLU, Chris maybe is the one exception to this. But the ACLU as an organization does not oppose law enforcement surveillance if they go to a judge and get a probable cause warrant, right? I mean, there are murderers in the world, there are rapists. People do bad things. If there's evidence to show that somebody is involved in a criminal activity, then the judge should give cops a warrant to invade that person's privacy. I personally don't like it either, but I think it's a reasonable balance to strike between privacy and security. But what we have now is that probable cause warrant practice barely exists anymore. The DOJ has said to Congress that it doesn't think it needs a warrant to read our emails. The DOJ has also said to Congress and to courts that we have no privacy interest in information showing where we go 24 hours a day that is communicated through cell site information through our cell phones. And I just want to give you really quickly a very brief example of how not only the collected all sort of theme has trickled down to the state and local level, but also the state secrecy itself has really trickled down in a very dangerous way. And that is a case that we had a couple of years ago during Occupy Boston. Somebody decided to pick a fight with the cops and put together a paceman with information about Boston Police Department officers that was all publicly available. This person didn't do anything illegal, but just put it all together in one sort of database and put it on a paceman. Well, the DA in Suffolk County where I come from did not like that whatsoever. And so they went after this person. They sent what's called an administrative subpoena to Twitter. This is not a warrant. No judge ever sees this piece of paper. Subpoenas are just pieces of paper that prosecutors fill out and give to companies like Google, Microsoft, Twitter, Facebook. So Twitter is one of very, very few companies that actually stands up for its users on a routine basis when they get these subpoenas. And they do that by informing the person who's targeted that a subpoena has been filed that prosecutors are seeking information about them. So what happened was this person came to us at the ACLU of Massachusetts and said, you know, the DA in Suffolk County wants my information and I'd like to remain anonymous. So we took the case. It was incredible what happened after that. You know, this is a very low level issue. This is not some like, you know, Al Qaeda national security issue. But we had a, you know, PIPS week, I'm just going to say that. We had this like PIPS week assistant DA, right? In Suffolk County telling a judge, you know, holding ex parte hearings, which essentially means that the government is giving information to the judge in secret that not even our attorneys could see, right? So secret proceedings, and to this day, two years later, those records are secret. They were sealed. The prosecutor asked that these records be sealed.  And I think that said, the people probably have a lot of questions. I would just say, please support the ACLU if you care about these issues, because we're really working in every state. We work on a range of issues, as my colleagues said, from choice to privacy and everything in between. So thank you for coming. I appreciate it. So I see six people standing. We have nine minutes, maybe seven. The only way we're going to make this work is if people speak for 30 seconds and ask a question. If you have statements for us, we'll be at the table this afternoon. You will not believe my ability to violate your right to free speech if you go beyond 30 seconds. OK, I'm really good at it. So let's start here. But really, we don't want to hear your story. Is the mic on? Yes, OK. I'm Mike Doherty from Atlanta. And I was going to ask you about the judicial system. I actually am under federal investigation for data security practices. So go to devilinsidethebellway.com and you'll see my book coming out for 17th. But it is amazing. And the judicial system I find incredibly, incredibly behind. And judges don't a deal. So how do you deal with the judges that don't a deal in the judicial system that is just so far behind and just look in the other way? OK, let's take let's hear the next one. We're going to take them all. And then we're going to answer. Go ahead. My name is Dana Morrow. I'm from San Antonio, Texas. These issues come up. I'm concerned. So I write my congressman and my representative like I'm supposed to or like I'm told to do. I make phone calls. I leave messages. All I get is the, excuse me? OK, well, the question is, what can I do? How can I get a better response than thank you for being a concerned citizen? We'll get back to you. I don't ever get a response. OK. Citizen empowerment. Next, quickly. So what about me? I'm not American. I'm a foreigner. Obviously, I use American services all the time. Am I suspicious just because I'm a foreigner? That's my question. OK. Go ahead. Thank you. We're going to go over here. Any thoughts or remarks on Senator Wyden's recent speech and his frequent illusions to a potential or hypothetical geolocation tracking program? Yeah, yeah, totally. OK. Hints of geolocation tracking by the NSA. Quickly, next. 2006, 2007, I assisted most of the telecommunications companies in the country installing Cisco TAPMHIBs and NARS probes as part of the Communications Act for Law Enforcement, also known as CLEA. That was all done on their dime, and I believe one of the speakers mentioned that they were being subsidized. So I'm curious to know how we know that that's being subsidized by the federal government as opposed to being picked up by the carriers. Come talk to us at our table, please. Yeah. Go ahead. How can people get access to this stuff for civil matters, civil lawsuits? OK. And again, most of these answers are going to be provided at our makeshift A part of the Q&A at our table in the vendor area. But go ahead. I didn't hear anything on Lexis, Nexus, or Fusion Centers. Yeah, come talk to me at, yeah. Yeah. Well, OK, so fellow panelists, there are a range of things that you can weigh in on. I hope someone at least will say something about the feeling of helplessness that citizens have who write to their legislators, because it seems to me that we are in a pretty unique moment where we are being heard. But go ahead. So I'll respond to two of the things. If Wyden could, so Senator Wyden has been warning about the NSA's abuse of its surveillance powers for several years, and most recently he's been specifically highlighting the issue of location. He said, he gave a speech last week in which he said the word location five times. If he could signal any more clearly, I don't know what it would look like. Right now, he's basically standing on a stool waving his hands, jumping up and down. So I think there's something location-related that he's trying to tell us about, and I hope we will find out what that is. To Miko's question about foreigners, it's not that you're suspicious, it's just that you're fair game. Foreigners don't vote in Kansas, and so U.S. law doesn't protect the communications of non-Americans. That's really unfortunate.  If the cloud computing companies want to salvage their foreign business, we're gonna need to see a big change in the law, or they're gonna need to start using end-to-end crypto where you don't care about government access to data. Alex? So just quickly on what you can do. A week and a half or now, two weeks ago, there was an incredibly important vote in the House about whether the government was going to rein in the NSA's bulk collection of our phone records, and surprisingly, I mean, unsurprisingly the vote lost, but surprisingly it was very close, 217 to 205 votes, and a big part of the reason why the vote was so close is because literally thousands of people called their representatives and urged them to vote in support of the bill that would have reigned in the NSA. That support matters more than you know, more than I knew up until a few weeks ago. If you have any questions about it, you should really talk to Kevin Bankson at the Center for Democracy and Technology who's been doing some incredible work on this and can speak to how effective it is for you to call your representatives. And I'd just like to say for those of us who are in California, we know how difficult Feinstein has been on these issues. She's been a huge supporter of the NSA and has just been intractable for years and years. A couple of days ago, Feinstein actually said, hmm, maybe there need to be some changes. So, you know, and we also saw President Obama meeting with top legislators just a couple of days ago saying that he's open to suggestions. So, you know, we have finally sort of started to turn the tide in Washington, D.C. based on the fact that members of the public have picked up the phone, have responded to those emails from the ACLU and have started to meet actually with their members of Congress. So, it is making a huge difference. We've talked a lot about sort of how we got to this point and the problems that we're seeing, but we're at a really crucial point to turn the tide on these issues. And I really hope that anyone in the audience who has not picked up the phone and called their members of Congress or stopped by our booth and filled out the action alert, please do it, because we can change this. We really can. This is a predictable and self-serving note to end on, but it matters a lot for you to become members of the ACLU. And I mean it, I mean it, you know, we have between six and 700,000 ACLU members nationwide. The NRA has over four million members. If all of you who had an affinity for the ACLU were members of the ACLU, we would have a lot more voice, a much louder voice in Washington. I'm not saying that to denigrate the NRA. For those of you who are supporters, they're a very effective organization in support of what they do. We can be even more... Help us be that effective. Yeah, no, no, seriously, it matters a lot to have a large civil society counterweight to the kinds of developments that we've been talking about today. So please come by, get our special edition DEF CON 4th Amendment t-shirt, join the ACLU, continue the conversation. Thank you so much for joining us today.


My name is Colonel Carmela Scott Skellerin. I am a senior fellow assigned to New America. This past year, my research topic was Army Logistics in the Pacific. I looked at logistics in the Pacific through three lens. That's contested logistic, tyranny of logistics and modernization on equipment in the Pacific. Just looking at these three aspects logistics in the Pacific. I just believe that the Army as well as the other services can get a lot of things accomplished as we look at the challenges in the Pacific. So first, if we think about contested logistics, disunderstanding, especially looking at some of the issues that we're currently facing and that the Ukraine, looking at the importance of what's happening in the lessons learned during the Ukraine's operation. They're things that we can take away from. So I think that the Ukraine has been successful overall because of some of the things that they've done initially with the logistics operations. And so logistics has been around a long time and Army's wars can never be won because of logistics but they definitely can be lost because of logistics. So when we start talking about contested logistics, today's environment, especially in the Pacific, logistics will be contested across all domains. So what can we do today to get prepared for that operation? So when we start thinking about contested logistics, in the Army lens, we start to think, how can we position ourselves? What do we have now that we can position in the Pacific or globally across the world to ensure that we're positioned correctly to support that the particular theater of operations? So when we start thinking of those things, what comes to mind is Army pre-position equipment. So we start thinking about Army pre-position equipment. What are those equipment that we have that we can use that can bring to bear in the Pacific theater operation? That's important. Do we have the right equipment in the Pacific at the right time and can we get it to the right point of need when needed? We have our seven sustainment support brigade that have those functions, the Army watercraft associated with them. So there have been studies on the Army watercraft. So what we need to do when I say we meaning the Army, how many watercraft do we really need to sustain in the Pacific theater? How we maintain in those watercraft? Do we have enough? So I think it's worth senior leaders kind of pulling that thread a little bit and conducting a study to ensuring that we have enough watercraft and that those watercraft are actually being maintained, maintained to a level that they need to be maintained and not just hovering around 37% because at one particular time the Army watercraft fleets were, the readiness rates were dipped as low as that 37%. So we have to ensure that we are maintaining the level of our readiness for Army watercraft at a high level because we don't know when we may need those Army watercraft because when you look at modernization on the logistics side, we still have enduring equipment. So as we're modernizing and bringing new equipment online, we're still trying to maintain our enduring equipment set. So that's a challenge for some of our logisticsians out there. And as we're bringing new equipment abroad, ensuring that we have our maintainers that's trained and that they have the right tools to maintain this new equipment. Those are the key things that we have the right equipment preposition globally and this equipment is maintained and that is also exercise, meaning that this equipment is being downloaded and that it is supporting joint exercises, joint meaning, all services, allies and partners are utilizing this equipment. The more we can touch the equipment it is being utilized, it's that muscle memory. It's the people knowing and understanding what capabilities they have to bring to bear that come back to command and understanding that we have this resource that's associated with this theater that I can use. So all of that is important when I start thinking about how we sustain operations in the Pacific. When we start talking about new equipment being fielded in that theater, just ensuring that our maintainers are being trained to maintain this new equipment while at the same time maintaining the enduring fleets that we have. So that's gonna be equally as important. And so as we moved to sustainment 2030 and beyond, we have this whole predicted logistics that's on the table now. So I know our AMC commander, he's doing a great job with that CASCOM commander. They're doing great, they predicted logistics. So that's the wave of the future. I'm excited about that.  We all know that, but I'm here to tell you that. Logistics, if not done correctly, can cause a defeat. So we have to pay attention to all those decisions and some of the challenges with logistics. And we have to do the things now to get ahead of these challenges and confront.  And I know that our senior leaders are doing that. And again, I'm just proud to be a part of that. And I hope that my research and that when people kind of read the research and the paper, they can walk away with some little anecdote to say, hey, this paper kind of highlight certain things and that's the hope of this. Like I say, some of the things in my research, some of the senior leaders, some of the senior leaders are already working towards that. But I just kind of wanted to highlight my 30-something years of logistics in the Army, things that I've seen on the ground that I felt like just putting it out in the paper, hoping that senior leaders would read the paper that they can understand from my level. I kind of went through the ranks from enlisted officer to a current in the Army. So I've seen a lot of logistics. And again, hopefully this paper will kind of knight people to focus a little more on logistics and not let it be the last conversation for our conversation after we've gone through everything, just understanding that logistics is very important. And as we start talking about any type of exercise, we should always ask ourselves, hey, where's my logistics counterpart? If they're not in the room, let's pause and let's find that G4 because this is important.


so what you're about to see is my little video I put together to show and how to show you all how I was going to go about finishing up the May section for my my my year 2017 journal I I just let it sit for a few weeks and I did it like half the month and then I just let it go so I thought there might be some of you others out there who are trying to document your year and you might have the same issue where life just gets in the way and you do collect your bits but then you never put them in and so that maybe you might want to see somebody else who does the same thing and how how I solve that problem so it's kind of a long video it's part of the my year 2017 Facebook group if you're not part of that group and you'd like to be the link is in the description below so check it out and here we go this is just a little bit of a bonus video but like I said it's kind of a long chatty one I decided to chat through it so to fast forward so if you you may like it you may not let me know in the in the comments if you have any questions let me know alright that's it I'll be back in a bit hey guys how are you today can you see the mess on my desk all right it is I'm such a bad example for you all it is June but I don't even know days it's Monday June 5th and I have yet to close out my year 2017 journal for May that's right I said May this is why my desk looks this way now maybe you're like me I wasn't gonna film this but then I thought hmm maybe you're like me and you you know documented part of the month or you got the month ready to document and you collected all you your bits but they just never went in there then what do you do then you just kind of feel like I just don't even want to even put them in stop don't think that way let's we're gonna put them in and I'm gonna show you my thinking behind what I've kept and what I've kept that I'm not gonna stick in there and why what I've kept that will go in there what I've kept that I knew when I kept it was just extra and something I was gonna do something else with alright so let's get going I'm gonna try to keep this short and sweet to no guarantee so okay so here is my travellers notebook that I've been using this this year and this is May and I this is as far as I got in here looks cute what I did looks great but you know I didn't do too much more so let's fix that shall we now I don't know about timelines on most of the things there is a couple of things I do know or have a timeline for my anniversary my daughter's graduation which are towards the middle or end of the month and then Mother's Day was in there but I don't remember what day that was was it the 21st I don't even know see I didn't even write it down doesn't matter all right so we're gonna start with the thing that I think happened towards the beginning of the month or at least before other things and that would be my cousin and his wife adopting a sweet little baby boy that was a lot of fun to celebrate that with them and I have a copy of the invitation that I want to somehow some way use in here and I think what I want to do is just something like that let's see there's a better place to put it yeah I think I'm gonna follow my instinct and I'm gonna stick it here I'm gonna just staple it in I like the industrial look of staples it's just oh except you have to have staples in there it's just something that I really enjoying at the moment and I like the industrial sort of messy look of them the imperfect to look so let's grab some and this is the Tim Holt's tiny attach for those that don't know you can get it at any of your stores that carry ranger products they usually have this and use a coupon so the little boy's name is Carlos he's adorable little boy and I'm so happy for my cousin and his wife that works I love it all right next let's take some of these which are from I had my first sponsored video paid for sponsored video that this at the end of May actually air June 1st but the process happened in May with graphic stock these are some of the stickers I made from some of their images so I am going to use some of them in my journal I really love some of the images that I was able to make into stickers and of course we'll write on here that was a lot of fun to celebrate them although I do have to say that it was down at near Gilroy, California and they picked a day that was almost 100 degrees it was really hot all right let's put those to the side and then we did here's our book club and this is celebrating the donation to the women's shelter that was a lot of fun to do here's another blank space and I am going to take some of these green tickets and are on my table this is one of these things that I would collect to use in my journal knowing I'm not going to use all of them and I'm going to put the rest of them in my stash of stuff so I'm going to tear off like three of them and these I'm going to keep and I'm going to go I have a little bin of tickets so these are going to go in the bin and this is going to go here I do these sticky tape double stick tape let's get some out and this it was a another charity event that we went to this last month called Hot Wheels for Kids it's a fundraising charity for foster care that my husband go to every year it is organized by one of my husband's Masonic brethren and it is a old car show and they had a bunch of beautiful cars and I of course took some pictures and I got this one of a old Chevy that's just of the hood kind of an artistic shot I might try to paint it someday although I won't do as good as some artists I know out there like Andrew Alexander Coupe she does a fabulous job of course I'll never be able to match hers but I may have to try it it's a really good shot so we're going to put that there then I have sort of a funny picture here of my coffee cup and my inhaler and allergy meds I made a joke about you know the breakfast of champions being that it's going to be one of those kind of months or seasons where I'm just taking loads of allergy medicine put that there on our anniversary my husband actually went out and I went out for Chinese food and we're in the midst of some home renovations so we wanted to not really spend a lot of money because we're sort of getting each other a new bathroom this year for all the holidays we're spending so much money it's just all the holidays but we and we also love Chinese food and this was in one of my fortune one of our fortune it was in my fortune cookie and can you read that it says you will soon miss witness a miracle it's all I thought that was great so I'm gonna actually stick that right on the calendar because I love that that was my phone sorry throw these away so now of course now let's stop and do some more journaling okay turn the page we've got some more space to work with we've got more stuff all right my daughter graduated college this month you guys was a big deal but I think we're gonna do we're gonna do Mother's Day first for Mother's Day they all asked me when I wanted and like I've already said didn't want to spend a lot of money but I did say I want us all to spend some time together I'd like to go to Santa Cruz I'd like to go to the art supply store and so I was able to do that I needed a few things I'd saved up and we just went walking around the area we love to go down there on the main street and there's a couple of used music stores there one of them had this really great card advertising some sort of concert but I mean I had to pick that up how do you not pick that up so we're gonna we're gonna tip that in I got a smashed penny at the boardwalk at one of the splash penny machine so we're gonna stick that in we had a really great lunch at this Italian delicatessen and the kids got me a dick like gift card and don't you love the way the kids signed it future son-in-law they're hilarious okay so for the penny let's do the penny first you can put these things in your journal you have to of course use appropriate glue it's a heavy metal thing e6000 of course would work extra heavy gel medium also works use what you have and I think it's easier for me to get to the gel medium so we're gonna do that here it is because we're gonna pretend that I do know where my e6000 is but I just can't reach it or something we're gonna just pretend that I don't I haven't misplaced it again so I'm gonna just take a blob of gel medium I'm a butter the back of the penny I've done this many times and then you just want to push it down you want some to little squeeze out around the edges it's gonna take a while to dry so when you're done you're gonna have to hold your journal open prop it open get some tape for that great art card because I want to get that in here really loving this month using the decorative masking tape I'm not sure why but I just like it there doesn't have to be a reason does there pretend I knew what I was doing you can help the gel medium along a little bit by heating it up but keep in mind that the penny is metal and it's gonna get hot too so please take precautions against burning yourself or lighten something on fire because I don't want to hear how did you hurt yourself man how did you burn yourself I lit myself on fire when I was our journey let's just not have that conversation okay all right so we're gonna take this menu now sometimes I'll take the whole menu and I will stick it in and put a pocket there sometimes I'll just cut it apart and I think in this case I'm gonna cut it apart and I'm gonna take the front of it and we are going to cut out the part with the address on it and the web the URL for their website that way if somebody says mom went or grandma or where was that deli and I would say well it I don't I can't I don't I can't tell them I don't remember because it's in the journal and I could always say go look in the journal because I don't remember but it's in there and you'd be surprised how many times I have that conversation with people it was a great little mom and pop Italian delicatessen down on the main drag and Santa Cruz and down the street from street light music and very busy place sorry for all the arms very very busy place so you know they had good food all right it's more tape on here I had a BLT with avocado it was delicious I flipped this over now for the gift receipt or gift card we are going to I think I'm gonna save the whole email and I'm gonna put it in here I'm gonna save the whole email I don't think I'm gonna actually I'm gonna take this and I'm gonna cut out I don't need that whole big piece of paper in there I just want the part where it says the gift card and I have the funny note from the kids that makes me smile I did pick up a newspaper while I was there at a food and drink magazine but I picked them up more to look through for my glue books than I did to actually put anything in here so I think I'm gonna put those aside in the pile of stuff that I want to do other things with let's do a little journaling again I put a couple more of those pretty stickers that I made in here is one of the ocean now we also gave blood and my daughter graduated so let's do the graduation first because the graduation happened and then the Saturday afterwards we gave blood and somewhere in there we went to the habit burger restaurant with my dad I think when we were when he was here visiting for the graduation and we were out running errands the Friday afterwards so I do want to put this in here and we all had the original char burger so this is how I would handle this menu I would cut out the name of the restaurant and I would cut out what we had char burger with cheese number one I'm going to cut out the website okay so let's trim this a little bit it's a little bit too big I don't need all that white space so we have our habit burger menu I've got a bunch of things from the graduation so which include the program which this is the one thing I'm not going to cut up I have a beautiful thank you note from my daughter which I'm going to leave I here's the envelope it came in I'm going to tuck it into the envelope and leave it hanging out like this and then I want to paste it in like that so we're going to put tape on the back it was the most beautiful thank you note for my daughter she's turned out to be just a beautiful young lady more very proud of her she did something her mother never did I never finished college so yay for her actually I'm gonna stick it here love that and I'm going to stick I think I want to put it here I'm gonna put this picture it's not a great picture but this is one I took of her actually walking across the stage so I'm gonna put there yeah that works this is napkin from the bar next door to the venue where the graduation was we all but we got there early because we dropped her off and then all the grown-ups went next door and we all had to drink while we were waiting so I had ginger ale everybody else had alcohol all right so I'm gonna separate my napkin I am going to tear it around the bar logo yep that'll work I need my matte medium that medium rush of some sort okay now I'm going to grab do I have any in here of course I'm gonna grab one of my clear pockets if I can remember where I stuck maybe yep all right my clear sticky pockets and I'm gonna put it down here and we're gonna fold fold the program so I do want to dry this it's gonna be too wet so let's give that a little dry I'll be back I got it in I got this dry I did a little bit of journaling we're gonna flip the page I did a little note here on the flap of the thank you note and her pictures inside there now we want to take the habit burger restaurant thing and I think I'm going to put it back here helps if I don't put it upside down don't you think all right and then the little clipping of what we ate and their web address sometimes my sticky tape gets the better of me sticky tape on the mat that's not one thing it's 10 other things right hopefully I can get that off and then I also gave blood so I'm going to put my blood donation stickers in here my husband and I both went in we go in with our group of Freemasons every few months and we like to do for charity in one way or the other one of those ways is blood donation I'm gonna take the blood donation pamphlet and I'm going to put it in another sticky pocket and stick it back here I have a few more bits and pieces but I don't need to I was gonna say save them this is the receipt to my daughter's graduation celebration dinner I'm actually gonna save that I'm gonna put it in the pocket with the program and this other stuff I picked up but I don't think I want to use it is there extra programs I don't remember why I got the bank thing I think I made a trip to the safety deposit box or something this last month was so remember memorable that I don't remember why but that's what I do I just collect stuff whether I think I'm going to use it or not and bring it home I'd rather have it then and toss it then not have it and kick myself so if you get behind never fear just take a minute take a deep breath and let yourself catch up you don't have to fill it up with notes you don't even have to fill it up with artwork just put your things in there that's all you need to do that's it for today everybody don't forget to check out the video description for links to both all of my Facebook groups including the my year group which is that what this journal is for as I said in the beginning of the video and if you would like to support my channel by shopping in my Etsy shop or send me an email or check out my website or you know any of that stuff send me happy now all the stuffs in the description so check it out don't forget to like share and subscribe and the most important thing go out and have a great day do something nice for yourself because you deserve it and I'll see you later bye guys oh hey guys so in the video you're going to see is kind of a little bit of a long one but it's one in which I spent some time closing up my May Journal at the time I'm filming this I'm very very aware that it's actually June 5th I am a little confused in the beginning of the video but yeah it's June 5th so anyway you know nobody's perfect and you know the month just got away from me so there you have it anyway I did finally get it done and it's really greatly done and I love the way it turned out and how some of our elements came out this month they look so great in here so I hope you enjoy it I don't have to show you all these oh that's just terrible


It's the end of May, 1992, when the war started. They started bombing the town, and I remembered the noise and the earth shaking. We didn't know what's going to happen, so we had to leave. My mom was already gone because somebody got injured, and as my mom was a nurse, they called her to take care of this person. My mom started packing. My sister did that as well. That's where she packed my underwear because she knew I couldn't sleep without it. We would just leave the house and run. And all the older people stayed in the houses, and that's where all of them died. My name is Admiyat Priyanin. Today I live a normal life like everybody else does, but I have a different story. As a war refugee during the Balkan War, we went into the town searching for help. And information as well. And that's when we got arrested and put into the camp, Tanopaya. My sixth birthday was in this camp.  They didn't give a lot of food to the people. They would just give them dried bread to eat, and there were people starving in there. And people told me, go and ask for food. And this was a really tall man in army uniform with a long beard, and he gave me an apple. My mom's friend told her husband to get us out of the camp. Then we went to a refugee camp in Umak, that's where we met other family members. We didn't know if they survived. Back then, you had no cell phone. In total, we were in three different refugee camps, and this is what makes our case very similar to the refugee scenario we have today, because they go from refugee camp to refugee camp with the help of the ICRC, who managed to leave very short. This teddy bear is the only thing left from a postman.