Where the hell is Juan Zarate? It will be a boring Where is Juan Zarate Yeah Good afternoon everybody welcome. Thank you. Thank you for coming the bar will stay open. So those that aren't going to be sufficiently Educated can always take their repast back there, but I think you're going to be fixated by a very interesting evening I want to say thank you for coming. My name is John Cameron the president here at CSIS And this is probably the last thing we're going to be doing here in this building. We're going to be Decamping very quickly a matter of fact there's brackets around here if you look to see we're moving out Moving to our new headquarters will be there and about well Probably ten days before we're actually going to be there But this is about the last thing we're going to do with you here and want to say Welcome to all of you. It's not hard to find our new place And I would hope that you all join us when we get up to 1616 Rhode Island Avenue. It's just four blocks from here I want to say thanks to Ron to Juan for giving us a chance to host this tonight now I feel like I'm spending my entire day with Juan because when the alarm went off this morning Whose dulcet voice was on NPR? But Juan's a ratay, you know, and so I fear my whole day is going to be devoted to listening to one I think it's But it's emblematic of the significance of the book the book is really quite good and you know we frequently Talk about whole of government But what that usually means is I want your budget and would you please send it to me? You know, that's usually what that means when you hear a government people talk about whole of government and But what I think we're really going to listen to today is about What real whole of government means when we brought to bear? Honestly an underutilized Tool that is available to governments for their national purposes and intents and Juan's going to describe that to us and discuss that with us today and was one of the champions one of the pioneers I've frequently amassed is is one a treasury guy or is he the fence guy? I say yes He's been that's been his Personal avocation to help build America in many ways and he did it very powerfully During his role when he was over at Treasury, so we're gonna we're gonna explore that today and listen to it And of course who better to bring this to all of us and engage all of you than Rachel Martin Now I don't know how this lady does it I mean, you know she her you know her husband works in the NSE. She's she's with NPR with a weekend edition and is as a little one-year-old at home So she she covered she has terrorism at home terrorism at work You know everything But but a remarkable a remarkable journalist and personality and Genuine policy leader and I and I'm grateful that she's willing to take the time tonight to be with us I mean, I will say one I don't know how the hell you convinced her to read your book But she should have been taking care of her little son But but she devoted the time to it and it's gonna make it for a very interesting evening for all of us So would you with your applause please welcome both Rachel and one and we'll get this Well, dr. Hammery was half-joking, but it is serious when one called and said got a favor to ask Little book have written, you know, three four hundred pages Paris financing and I said sure and I was and I've said this to his face privately Pleasantly surprised at how compelling I found this book to be it is not exactly a beach read But as far as the topic is concerned it is pretty darn close my wife read it So I think that's a test exactly Exactly, so I was honored and I'm thrilled to have been asked to moderate the conversation and it's an important one It comes also on an important day That we should not forget and this is when Everything started to change for Treasury everything changed for this country, but in particular Everything changed for this department where one was working the outlook for terrorist financing its import and and really a tectonic shift in how many in our government looked at the tool chest that we had amassed in order to to confront Al-Qaeda and and how that threat would evolve and change is what is chronicled in this book and in particular The tectonic shift that happened at the Treasury Department and so with that I would love to to kind of start back Rewind the clock 12 years You were at Treasury at the time of the September 11th attacks I wonder if you could start off by just giving us a sense of those early days and When it became apparent to the people who were sitting in that building That there was going to be a that they were going to have a role to play that that that there was going to be something called Financial warfare that was launched in response to these attacks Rachel before I answer the question first of all Let me thank you for accepting the invitation and for doing this.  You you've been phenomenal on national security issues, which is Admirable, and I love listening to you on Sunday mornings. I just want to thank dr. Hamry CSIS or no to Borsch-Graw of Tom Sanderson CSIS and others for all their support. I would not have been able to do this book or craft it without their help The other thing I want to say is this is like a little bit of a reunion There's a lot of you who are part of the community who were Working on these issues before 9 11 certainly after 9 11 and it's a really an honor and a privilege that you've attended today So I want to thank you for that 9 11 really was a dramatic day not only for the obvious reasons and the tragedy that we we all experienced But it was a shift in how the government thought about the use of power And it was very clear the president Bush not only articulated That we were going to be at war with an enemy that had been at war with us and brought that war to our shores in New York and Pennsylvania and in Washington But that also we had to think creatively and differently about the use of all elements of national power And I think it's significant that the first Real step that the president took and the US government took was the signing of this executive order The executive order announced on September 24th, 2001 that gave the Secretary of the Treasury enormous powers Powers that weren't necessarily new but they were amplified And in essence opened the door to this new age of financial warfare And what it did was it empowered the Secretary of the Treasury and all the tools attendant to the Treasury Department its regulatory Functions its sanctions capabilities at the time its guns and badges the law enforcement and the policy community internationally to start focusing on the isolation of al-Qaeda from the financial system both formal and informal And that really opened the door for a new way of thinking about how to use Treasury's powers At the time. We were very much focused on terrorist financing. I remember that day I had just arrived at the Treasury Department three weeks before from the Department of Justice I was welcomed by folks like Danny Glazer who's the current assistant secretary who's here with us and others But I didn't really know what Treasury did to be honest I came over to work on international money laundering and enforcement, but I didn't quite understand Treasury's role And I think that was emblematic of the government writ large I don't think many people understood what Treasury could bring to bear and the directive from the White House was Bring your powers to bear figure out how to go after al-Qaeda's money Isolate it internationally build an international coalition deep in the standards that you have on money laundering to go after terrorist financing and Do everything possible to not only stop the next attack But to deter future funding of terrorist groups and that really was the paradigm as I call sort of the first part Of the book the foundation for a new approach to the use of Treasury and its powers So that were that those were your marching orders you started operating under something called the 80 20 rule Can you describe what that is and and how it shaped what you were doing at the time? well, the the mandate at the time was to be aggressive to be as aggressive as possible and as Underlaw as we could in terms of the use of these powers and so secretary O'Neill the secretary of the Treasury at the time instituted what is in essence a management rule the 80 20 rule for purposes of using Treasury powers and he said We're not going to have paralysis by analysis. We're not going to do anything. That's beyond the law We're going to we're going to abide by the law But we're going to be aggressive with what we can do and that meant freezing assets aggressively Which created some controversy because the use of asset freezing authorities are powerful In essence you throw a net around a network Regardless of whether or not people are criminally liable To freeze assets to stop those funds from in the future going into the wrong hands. You only need it to be 80% sure Yeah, and and under the law you the secretary of the Treasury under this power only has to have a reasonable basis to believe That somebody is a terrorist or falls under the categories of the executive order and that executive order again And folks like David off-houser who general counsel the time were seminal and in crafting it That that executive order allowed the Secretary of Treasury not only to go after terrorists the bin Laden's of the world But also those who were financially supporting or even associated with those who were financially supporting So it opened up the potential for the use of the power and the directive was use it aggressively Now the lawyers in the room who were part of that process probably screaming right now because there was no question It went through a battery of lawyers and checks and an interagency process That was rigorous, but the mandate was use it aggressively Let's touch some nerves And do what we can and we did we did that I lay out some of the sensitivities for example with the Saudi government in terms of looking at The sources of Wahhabi funding and how some of the charities that had been built up over time to not only do good works But also to support the Afghan Mujahideen Really was really a problem and that led ultimately to the shutdown of the largest Saudi charity In existence at the time and as you say there were innocent people who were swept up in this who were found to be culpable or suspect or suspected of being culpable of some kind of financial misdeeds in the end were Proven that they were not involved and you and you write in the book that this is just the price of doing business at that time a bit it's a it's a price of the nature of this kind of authority and the fact that we were Being preventative with the tool that is to say we were arresting assets not people we were trying to stop bad money from going to nefarious groups and Plots and that meant you had to stop the money and if it was in the possession of people who weren't necessarily Culpable or we didn't have necessarily proof of intent That was okay because that's not the standard and that creates all sorts of friction We had all sorts of debates internationally particular with our European colleagues about what those standards are how should use it Now I think it's important to note. We used it judiciously We knew how the power how important this power was and we wanted to preserve it and over time that 8020 rule grew to be 100% rule I mean there was there were diplomatic costs to doing this wrong There were legal consequences if we if we didn't get it right and so that rule shifted over time But the the baseline was we're going to be preventative and we're going to try to Disrupt in this mantle financing that goes to terrorist groups another pivotal event Comes through the creation of the Department of Homeland Security Which stripped Treasury of some pretty as you described key authorities And it's interesting how you describe the effect on that department. Can you talk a little bit about? What that did to morale and and your sense of what your role was supposed to be in this new post 9-11 world Well, one of the reasons I wanted to tell the story was because I think the history of that transition the transition of the Department of Homeland Security is not well understood from the Treasury perspective at least not outside of the halls of the Treasury Department And one of the dramatic things that happened was the stripping of what was then called the Treasury even Treasury Enforcement Office Keep in mind Treasury at the time had about 40% of federal law enforcement under its auspices the custom service secret service Bureau of Alcohol Tobacco and Firearms was responsible for all federal law enforcement training Which I have to say some who might not know this world might say why in the world were those authorities ever under Treasury to begin with well, a lot of them grew up over Excised taxes Secret Service for example was born out of a directive from Abraham Lincoln to go after the counterfeit rings That were bedeviling the country during the Civil War And so these were authorities that were sort of naturally Treasury, but look like guns and badges That often creates friction and did create friction with the FBI Department of Justice and other agencies But what happened when these? Bodies were stripped and this these functions were stripped from the Treasury was a real fundamental question as to What is the Treasury Department if? 98% of its budget in this realm is gone if it's most Significant agencies like the Secret Service are stripped out What is the Treasury and does it even have a seat at the table and I recount in the book there were times When I had to go and represent the Treasury and some of my colleagues did as well in interagency meetings over at the White House Where literally the question would come up people raising their hand saying why is Treasury here? Why are they here and the remarkable thing Rachel is that that question is never asked anymore that the question instead Is where is Treasury? Why aren't they here? What do they have to bring the table in terms of national security strategies? And I think to me that's the the great success of that bureaucratic transition And frankly the magic of that period which was we were so demoralized very much sort of kicked in the gut But we reconceived what Treasury should be And you know if you look at all the key national security issues Treasuries at the table for each and every one of them without blinking an eye and I want to talk about those specific evolutions but When that person looked at you at the table and said why is treasurer here? Did you have an answer in that moment? Oh, absolutely, and and we we strategized around this. I mean this This was a small cabal the original title for the book by the way was gorillas in gray suits and Part of the reason I love that title publisher didn't But part of the reason I love that title was we were not only Engaged in a financial insurgency against our enemies But we also had engaged in an insurgency bureaucratically within the US government to survive And it was actually a very small group Danny Glazer was one of them chip Ponsy Jeff Ross a very core group of people I was left with six people To help oversee the elements of the Treasury that were left behind the office of foreign assets control folks like Bob McBride And others that handle sanctions the financial crimes enforcement network The criminal investigators from the IRS were still left behind But we we actually strategize we had sort of a come to Jesus moment to say what are we? Do we even exist should we exist and why and the answer was internally into others? Treasury has unique powers Authorities and relationships that can impact our enemies in ways that no other agency and government can the FBI can't do What we can the CIA can't the Department of Homeland Security can't we're the only ones that can touch the markets and the financial system in a way That forces the isolation of rogue financial activity Treasury can do that with our powers and authorities and we set out to do that so let's get into that And I'm going to quote from the book you write that the 21st century financial and commercial environment had its own Ecosystem that could be leveraged uniquely to American advantage in the system the banks were the prime movers simple as it was This was strategic revelation. This strategic revelation was revolutionary Where was the revolution and how did that manifest the revolution was in two ways? I think the first was recognizing that this was an ecosystem that the ability to isolate rogue actors from a financial perspective was really about tending to the financial environment and Harnessing the fact that financial actors Held as the coin of the realm their financial reputation and risk and really that that in and of itself that motivation Was a core element of this ecosystem and if we could impact it we could actually impact How banks non-bank financial institutions decided to do business with? Suspect actors Iranian front companies North Korean actors so understanding that it was an ecosystem the second Revolution I think was the fact that we recognize that What mattered most was what those financial and commercial institutions decided in their boardrooms and in their compliance offices? It became more important to us The how the CEOs of banks around the world reacted then how? Foreign ministries were reacting because at the end of the day it was the the financial actors They were acting as the guardians of the gate of the financial system They were the ones determining whether or not they were going to open accounts wire money Issue liens allow financial activity to go forward And if they weren't People were blocked from the the financial system and it didn't matter what the UN said it didn't matter what the finance ministry said In fact one of one of the things that we came up against especially in the later years with Stuart Levy driving much of this on Iran Was just the grave consternation that European countries had with the fact that we were meeting with their financial institutions And the financial institutions were taking steps that were further and beyond what the governments were both mandating and frankly wanted But those banks were more concerned about their bottom line and their financial risk and their reputational risk than anything else And I think again it was a simple proposition But what we did was we said look there's a strategy to actually impact this and impact it centrally And so that's what we did and I think that's why you've seen These financial pressure campaigns and and other things work in ways that people hadn't even imagined You know just a few years ago. Let's walk through this a little bit. We're not talking about sanctions. You're talking about something different you're talking about isolating and Convincing those CEOs in the boardrooms that it is it's not only a moral It's just bad business to do to do business with these rogue countries right sanctions are a core part of it I don't want to dismiss sanctions because the way that The US Treasury has innovated and used targeted sanctions the way the European does this very important and critical UN as well But it's part of what I call financial suasion You know, how do you impact the ecosystem in a way that actually organically rejects illicit financial activity? And how can you prompt that system to reject it in a way where you align your national security interests with the financial interest and so You're absolutely right. It's not just sanctions and it's not just classic sanctions It's the use of sanctions enforcement mechanisms regulations laws international standards UN resolutions Finds everything in your toolkit to actually set the ecosystem and then to prompt it and that was the trick And Treasury today, they're just masterful at it. They do this very well And it's one of the great tools that I think the US government brings to bear In a tool that we've got to preserve in many ways It's not all it's not all perfect as you write about in the book There are several different case studies most notably North Korea, which is a page-turner of a section if you're looking for that that really good be treed I've never met North Korea But you write about shortcomings how Treasury's goals in this kind of isolation didn't always Measure up with line up with the goals of of other agencies other departments in in the government Can you talk a little bit about those shortcomings and and how you how you navigate this? I think there's an inherent tension with These kinds of campaigns and keep in mind that this is about Not just telling banks what to do, but it's about focusing on illicit conduct It's often called called conduct based sanctions or conduct based Activity that we're focused on and the the point of this is it often is Difficult to move the agenda from looking at some of those illicit activities and to mesh it for example with diplomatic goals The North Korea example is a great example of why this is different than classic sanctions the sanctions pre 9 11 We're typically trade based sanctions commercial based sanctions driven by Diplomacy or what was happening at the UN in the post 9 11 period in the way we applied it against North Korea What we did was to focus on North Korea's illicit financial activity the soprano state Which deals in drug trafficking money laundering counterfeiting a hundred dollar bills Is engaged in illicit activity that is bad for business and so we focused very much on that element of The North Korea portfolio the problem though Rachel is there's a Divergence or or a juxtaposition between the interests of the diplomats to make a deal and to have Chips on the table to trade and this kind of pressure which is basically about cleansing and protecting the international financial system and what you had in the North Korean example was Our ability to actually isolate the North Koreans in a way that they hadn't felt before they told senior White House Negotiator in private you finally found a way of hurting us because we had isolated them from the banking system with one Domestic regulatory act the problem was it worked too. Well and it got in the way of the six-party talks and the diplomats wanted to unwind it and That grew very difficult because what we had tried to do was inoculate the system from doing business with North Korea And in the unwinding what we had to do was tell the financial system to do business with North Korea And so it became a very tense Interagency process between the Treasury and the State Department And also became a very difficult episode. I think in our diplomacy because we gave away leverage I think too early in the interactions with North Korea does that then undercut the effectiveness of these kinds of tools and specifically We're talking We're talking about section 311 Does that make it less effective if they are susceptible to to politics geopolitical interests national security concerns? And and other interests of other US government agencies. I think so I think that the danger here is that you have Not only the potential overuse of these powers, but you also have the potential that there's a Divergence of interest between the Treasury and the State Department or even between the Treasury and other parts of the government for example The CIA or the intelligence community in terms of wanting to take action to actually isolate actors and the intelligence community Wanting to sit back and watch and wait But absolutely, I think there's a there's a potential tension there And I think that's something that has yet to be resolved in the Iranian context because we have President Rouhani talking about Negotiations and the question that he will raise and already has begun to raise is How can the economy be improved? How can sanctions and pressure be lifted? The question on our end is how do you unwind it? Because the baseline of the of the pressure we've put on Iran has been the baseline of Suspect and illicit activity that the Iranians are engaged in it's not because they're necessarily engaged in a nuclear program It's because their activities are Potentially detrimental to the financial system And so how you unwind that becomes a very tricky venture And if the sense in the in the banking community is that these are just political tools to be tossed around like diplomatic chips Then it really starts to lose its resonance and starts to lose its effectiveness globally I want to get to questions But before we do I do want to ask you about Syria and might be something other people pick up in questions But you write about a Syrian case study applying this kind of financial warfare to a bank used by the Assad regime I wonder as you look at at the situation now where we are in this moment in Syria Do you look and and see an obvious Opportunity for some kind of financial Pressure that would actually make a difference in in a moment like this. I Think it's difficult and one of the points I try to make in the book is that these powers and these campaigns have been very successful and in a sense they've been sort of thought of as as The alternative to diplomacy and military power and often seen as kind of maybe the silver bullet for some of these problems And it's not unfortunately. It's part of a set of tools and strategies to build leverage And so I'm not polly an ish enough to think that You know a more effective or aggressive financial campaign would actually stop what Assad's doing and the atrocities in Syria That said I do think you can build on what's been done and and to the Obama administration's credit It's done a fair bit on Syria It hasn't risen to the level of attention like Iran and North Korea or even al-Qaeda But it has garnered attention and you've seen the Treasury Department do some very creative things Isolating another Syrian Bank just about a year ago along with the Qataris Which was a significant sort of move in terms of coordination with Gulf related countries Trying to isolate actors and financial actors that are not only engaged in corruption But also tied to Iranian support and so that's very powerful because The financial community doesn't want to deal with the Iranians and it certainly doesn't now want to do with deal with the Syrians But I do think there's a moment for amplification and this is probably it And we just have to have the political will to say look we're willing to take some risks In terms of our diplomacy and otherwise to go after Syria more aggressively on the financial front I'll give you two examples. One is I think we should launch a preemptive asset hunt for For Assad his regime and his cronies that is to say traditionally the way we've done asset hunts the way I described we did the Saddam Hussein asset hunt or even the the Qaddafi freezing of assets that Stewart led levy led Those have been sort of after the fact post revolution post fall of the regime Why don't we do that now? We've declared the regime illegitimate. We've declared them corrupt They're engaged in all sorts of atrocities now to include chemical weapons use So let's go after their assets now Let's leverage the international system all the actors in the space that actually go and hunt and look for those kinds of assets And let's go find them and make it a concerted effort and maybe you split elements of the Assad regime the other thing is There are no doubt Russian banks who are assisting with providing Financing for the weapons and other things that are going in and perhaps a lifeline for Assad Maybe we Do more than send a shot across about maybe we hit a Russian bank that serves as a nexus And you send a very clear message to the Russians the Russian banking system the banking system at large and to Assad That we're playing for keeps with respect to financial warfare And so those are just a couple of examples where if we wanted to ratchet up the dial we probably could Okay, with that I know there are people in the audience who are perhaps even in the book now Call out Zerate on what he got wrong I think we have a couple of microphones wandering around does anyone have a question Not we'll keep blathering on up here Yes, sir, right in the front and if you don't mind waiting for the microphone And introduce yourself if you would my name is Frank Barone and I'm a private investor So I'm on the you're effectively the tail that's whacking my dog So I would like to tell you a little bit of a story and then I'll ask you a couple of point of questions I was in markets very heavily and very deeply for some 25 years before the crisis began I went through those markets with the crisis and felt indirectly at the third and fourth layer the effect of many of the Things you're talking about most of us Could not figure out what was going on, but we knew something was going on Usually when we reach that state in the financial community, we always look at the government as being a real cause So we suspected you guys, but we couldn't prove it So now comes a question at the core of all of this is the protection of the US dollars the global reserve currency If we lose that it's game over Now there's a lot of counter plays going on against you now You know what you did on wheat and sugar in Syria, which reveals what you just talked about Has already tipped your hand There's already some discussions going on between Saudi and between Qatar to do direct Tratings for EU's on oil. There's a lot of significant other alternatives that are weakening the dollar I would ask you this what's the Treasury Department's natural checkmate if in fact you do begin to damage the dollar as a reserve currency Because that's game over Well, you raise a great point I talk about this in the latter part of the book the challenges to the power and Certainly the challenge of the dollar is a central one All the things you've mentioned also that the use of the remin B for bartering and exchanges more and more often So I to answer your question I think the check is is the private sector because in order for this power to work Private sector has to be on side, you know The question is how do you build the legitimate systems where the private sector is on its own taking the right steps or prompted to take the Right steps if if the steps we're taking and I talk about this as a tipping point potentially Is actually forcing the good actors in the system to retreat from not only use of the dollar But from providing banking services or financial services and at-risk business lines or in at-risk jurisdictions Then our policy of exclusion from the financial system is actually Being done damaged you because we're losing the inclusion that allows that to be To function and so there's a very healthy But delicate balance between inclusion and exclusion in the financial system And I think the bright minds of Treasury understand that And so it's a matter of calibrating how hard we go and use these powers But I think that the natural check is the private sector itself And that's why these interactions between the private sector and the Treasury Are so important and frankly one of the things that makes Treasury unique is that it has that dialogue with the finance Financial community on a regular basis and by the way, I'm no longer in government. So the the we here is historical He says so I said outside That does raise another question in this related vein And that is about the risks of over designating Can you talk a little bit about because it it is a balance? I mean if every other day Treasury is throwing down some different designation On a bank that's Doing some nefarious business does it lose its power? Yeah, I think it potentially does I think that these powers are best used when they're not only used on Issues of national security import, but also in ways that are targeted and focused You do run the risk because these powers are so attractive, right? These are the powers that sit between diplomacy and war and so and people have seen that they're effective and so Congress Administration officials the executive want to use these powers and they want to use them for everything And I'll take a little bit of blame for this I think some of us should because what happened in the post 9-11 period was we adopted and adapted the terrorist financing paradigm the foundation of this and started to apply it in other areas ones that were critically important like counterproliferation or against transnational organized crime or looking at kleptocracy and so You know, you've got to be careful how far you take it because you do run the risk that it starts to blunt its effectiveness And as I just said starts to drive the private sector away from even wanting to do business in potentially risky zones and so Again, it's an ecosystem and so it has to be tended very carefully And if you don't have some of these checks you could you could run the risk of overusing the authority or affecting your ability to actually exclude from the market and if you you also raise the risk of Allowing a space where other rogue actors other financial institutions that aren't playing above board can come in and fill that space if If the sanctioned bank. Yeah, and that's one of the dangers You've actually seen it you've seen it in a couple of ways, but you in particular and when I was at the White House I was worried about this because he started to see The countries that were isolated starting to band together a little bit like you know the alliance of financial rogues and Trying to help each other evade sanctions and create alternate ways of moving money and the trick there is Do they have the facilities to do that? Do they have outlets into the financial system? Venezuela Has done that historically now for the last few years for Iran for example And so you've seen this with Belarus as well in certain cases and so the question is How can you continue to isolate actors without creating a shadow network or an alliance of financial rogues that actually serves to circumvent and Part of this is making sure the dollar is still central making sure New York as strong as a banking center And that we are a central place for capital investment And I think the fundamentals of America's economy and its strength globally Is at the heart of why this power even works the less powerful? We are the less our economy runs the less the dollar is central the weaker We are and that the the part it is to implement these strategies Go to the audience again, sir. Third row back right here. Don't mind waiting for the mic Thank you. My name is Olin. Why don't I thank you one for your service for this book look forward to reading it Question could you make some comment, please on the state of cooperation of governments and other major money centers London Singapore Hong Kong Tokyo How are we doing and bringing them into the kind of approach that? Treasuries put in place Oh, and thank you and Olin did great work in Iraq for the US government US Treasury. So Thank you for your service. Oh, I Think in when you think about the sort of the international coalition that the Treasury built What's interesting about it was we built coalitions along three lines one We did it with counterparts and so the finance ministries in the central banks of the world actually became very important actors in this space Including in the financial intelligence space Secondly the banks themselves as we've talked about and third the banking centers And so certain countries like Switzerland or Lichtenstein or Luxembourg Become more important in those kinds of alliances, right? It's it's less about NATO and more about the banking centers And so I think one of the successes of this period and it's a constant challenge is having the banking centers sort of in line with US interests and policies and You know a lot of credit goes to Treasury officials John Taylor others who were involved in this space trying to ensure that The major economies the banking centers were adopting the same standards were applying and enforcing them And politically we're on the same page as we started to isolate Iran North Korea and others And so I think that has gone relatively well Where you have some friction of course and it's worth watching in the newspapers is on the tax side and I think Tax treaties the treatment of tax transparency has always been a point of friction between banking centers And that's one that I think the US is trying to deal with quite aggressively and one that's going to continue to present some challenges between some of these traditional banking centers Well sunny a friend with human rights first I welcomed your comments on the Russian banks and wanted to draw you out on that more Specifically on the issue of how to deal with a frenemy like Russia You know last week we were in one place in the relationship this week We're in a little bit of a different place the two points that you raised about the preemptive search for Assad's money And the question of how to go after the Russian banks. I think you know all All of those strands converge on Russia and Russia's decision to continue to arm the rebels And I wonder if you could talk about how you would pursue that without running some of the hazards of Having the tool politicized or tanking a major relationship or sending shockwaves through the financial system. Thank you I think you have to do it delicately But the historically what the Treasury has done is to has been to focus on conduct, right? This isn't a political maneuver. It's one that relates to the Sanctity and the protection of the financial system and so in the North Korean context for example We picked a bank that was a very bad bank Bank of Delta Asia and Macau and we targeted it because it was facilitating North Korean activity Now we also targeted it because we knew it wouldn't necessarily upset the Chinese in the first instance because the Chinese were banking with the North Koreans as well But we knew it would send a very clear signal to the Chinese banks and markets And so I think finding the right example is important You've seen the Treasury do this recently a couple of years ago. They designated a Chinese bank Kulun Bank for doing business with Iranians As well as an Iraqi bank. It was subsequently delisted But the the import here is you can pick the right bank as both an example for the market and an example diplomatically without destroying the relationship And I imagine there's probably a Russian bank or two that we could pick that would serve as a sacrificial lamb In this effort and would really send some clear messages in Moscow and elsewhere But we've got to be careful not to over politicize its use Let me go to the gentleman right here in the second row get a microphone to him Thank You Juan All this exercise started after 9-11 because of a direct security threat and What you have turned rogue players or actors have been Directly a source of threat to the security of the United States Is there any perception of a threat to the national security out of corrupt governments? That are not directly involved in any security threat to the United States but as threat to the security of Their people and therefore connected with the security of the United States and other any measures being considered to Address this issue. How do they affect the ecosystem? Yeah, you know Zia, that's a great point I think the most dangerous thing to the ecosystem are state actors that Amplify and enable non-state actors to access the financial system and so You see that in two ways as the odd the first is where you have States like China that serve as outlets for those who are coming under financial pressure In the book I detail, you know, how the Chinese and the North Koreans through the trading companies have largely evaded sanctions over the last Few years and develop protocols for doing so So you have kind of states that do that you also have states that are involved in corruption Moises naeem has talked about The mafia states and that's a real problem where you have states that are that have direct ties with organized criminal groups and That purposely leverage the power of these non-state networks to access the financial system empower themselves and enrich themselves and What's so dangerous about the nation-states is the nation-states have access to lots of Not only protocols and laws, but facilities and for example one of the things the North Koreans have done Traditionally is to use their embassies to curry your money back and forth to be able to deposit the supernote the counterfeit hundred dollar bills And that's why you see the counterfeit note show up in places like Yemen and Peru and Taiwan And so it's when this the nation-state is mixed with these non-state actors to engage in Profit-making and illicit activity that you really have dangers not only to the ecosystem, but potentially to national security Hi, Dan wurz from the National Committee on North Korea In the cases of financial sanctions on Iran and North Korea, there have both been some humanitarian consequences In Iran with difficulties getting medicine into the country in North Korea after the foreign trade bank sanctions earlier this year The UN agencies have had difficulties Getting money into the country to pay the bills Is it possible for the Treasury Department or the US government to create channels for humanitarian aid in these cases? without disrupting the ecosystem That it wants to shape in accordance with national interests It's a great question, and it's certainly a challenge. I think sort of the maximalist use of this isolation in these campaigns Can do some damage, and you've seen this not just in the examples you've given but in remittance operations Charitable contributions, and so that's always a balance and a challenge, but sitting in front of you is a former council from OFAC Sean Thornton who could tell you chapter and verse as to how the Treasury Department actually issues regulations and licenses To allow for those kinds of humanitarian exemptions and actually one of the interesting things that you've seen the Treasury do And this goes to a more positive agenda in the financial warfare campaigns It's to allow licenses for categories of exports or categories of financial dealings that actually allow for the kinds of Goods and services to get into countries that we want for example Technology to get to opposition movements in places like Iran That has been done fairly recently The license has been granted and so banks and exporters know that they can export then Perhaps with some danger, but can export given the license that the Treasury has provided So yes, there are the vehicles for that and you've seen the Treasury Department use that strategically to affect some key policy goals Sir in the back. He was quickest Well, thanks a lot to one for an excellent book and for your service. I just had one question I'm Amit Kumar from the Center for National Policy. Just just one question on section 311 Which is quite a widely used tool now and it's helpful in quarantining tainted accounts transactions Jurisdictions and and financial institutions from the US financial system But I think one of the drags is that other jurisdictions do not have a section 311 like system What can be done or what is the Treasury doing in that regard to make other jurisdictions? Implement and execute and design something like section 311. Thanks Amit, thank you very much. Thank you for your scholarship on on these issues, too You know one of the interesting things Rachel, especially with the president's speech last night and the debate about the United States is the indispensable and indispensable nation and power It's clear that that's the role that we played when we're talking about these financial campaigns It's not to say that other countries haven't done quite a bit and it's not to say that other countries don't have initiatives and strategies But it's often left to the US Treasury. It's often left left to the US government to actually drive these strategies Now that European Union has actually been fairly aggressive in recent years on things like Iran sanctions and Syrian sanctions But even in their legal system. They're coming across difficulties with a number of Iranian banks for example Challenging the listing in Europe and actually winning that challenge just recently just recently a number of al-Qaeda financiers Challenging and winning in the European system And so there are challenges to the system writ large and I think at the end of the day We still are the indispensable nation and Treasury is the indispensable party in driving What happens in the ecosystem and that require requires clarity of policy And good strategic thinking and great execution Hello Brennan Shields with CACI. Thanks for spending a little time here I think if you went and walked on the street in any city and asked an American to describe You know, what do you think our instruments of national power? It might be a short list that might say well military and state department I think it's great. We can bring more attention this and hopefully it gets a little bit more widely understood in DC and elsewhere Two things one what other instruments of national power Do you think we can be brought better to focus to pursue our national interests and two as October's coming up? What do you think is the best shout the World Series? Well, my angels are suffering this year, so I'm not going to comment on the World Series It's a great point Brennan because I think you know You listen to some of the great sort of national security professionals from the US And they're always bemoaning the fact that we don't have enough tools in the toolkit There's something Madeleine Albright talks a lot about she lexers about And in some ways we've added to that toolkit here And so I would hope with this book at least people are aware look We've got a set of actors and actions we can take in this space that Give us at least a complement to the types of things that we're more aware of But I think more interestingly and this is I think a lesson of the use of this kind of power in In the 21st century in a globalized world and economy It's often the non-state actors that have power and influence, right? We've bemoaned the fact that the US is not good at street craft as the Arab Spring has emerged So what do we learn then we learn actually what you can try to do at least is to leverage the power and influence of these non-state actors and networks for positive agendas Those that are in line with US interest and whether it's a human rights agenda or it's a financial integrity agenda or something else There are actors out there that actually are in line with our interest And I think the trick there in the 21st century is figuring out how you actually leverage that power And how do you create strategic? Swasion to complement financial suasion so that so people start to see that our diaspora community is an asset and a resource That the fact that we've got Americans who are helping to run the Somali transitional government is an asset The fact we have Pakistani business people in the fatah doing business is an asset the fact that you know social activists can draw out 11 million people using a Facebook campaign against terrorists That's an asset and so thinking differently about how we use power and frankly the power of individuals themselves I think it's pretty important because we often get in this dichotomy of what Washington does what the rest of America thinks And I think 21st century is going to be more about what people power can do and what the super empowered individual can do Not just for nefarious purposes as we've seen with terrorism, but on the positive side of the ledger And I think and I hope that's one of the lessons for what we've done over the last 12 years One Tom Sanderson from CSI I said first like to say that I think I speak for everyone here in the front row that's been tremendously rewarding to work with you over the past few years, so Thank you and congratulations on the book What you were able to accomplish in your successors as well demonstrates that You're able to influence the formal banking system Can you talk a little bit about the informal banking system how difficult it is to impact things like the Huala? No, it's a great question Tom And I think one of the one of the great challenges because I think The tools that we've talked about are most effective when you're talking about the formal financial system Now I think it's a little bit of a False paradigm to think of the informal sector and the formal sector and no ties in between So one of the things I do in the book is try to explain what the Huala network is The Huala network is this informal system of moving money across borders basically a Brokering system kind of like Western Union, but between trusted actors The interesting thing about these networks Tom is that they they keep records The brokers want to know where they've sent money who owes them. So there's record-keeping. They're on computers There are transfers their settlements between brokers using bank accounts And so there are ties between the informal systems and the formal system and even I was very critical For example when talking about piracy sort of using these tools against piracy and thinking, you know What are we going to do launch Danny Glazer and a parachute and go attach a land rover and Mogadishu? You know, what do we do but the reality is and as you've seen in your own research and field work in Kenya That illicit trade and finance actually ultimately if it reaches enough of a volume Starts to infect and impact the formal system and so in places like Eastley you have banking Centers built up around the financial networks of these pirate networks And so at some point the ligaments of the financial system Interact and can be impacted, but that's not to say it's easy And it's not to say that it can be done As effectively But it can be affected the other thing that's a challenge in here and talk about in the book is sort of the new technologies that are Merging the bitcoins the alternate currencies that not only impact the role of the dollar But start to impact the the ability of law enforcement to know who's behind Transactions and how money laundering is operating the FBI has put out a number of warnings about the use of Bitcoin by criminal groups And so we've got to watch the digital currency space For for these purposes as well One more question gentlemen in the back Yeah, I get to ask my question rich Davis from artists Juan. Congratulations. Thank you, right I'm going to put you on the spot policy wise assuming that you had a policy position today And we were considering the issue of non-proliferation Or proliferation particularly around nuclear camera bio But recognizing that you have state actors and potentially non-state actors that are interested in and pursuit of proliferation say nuclear the What opportunities are there through the instruments of Treasury to be able to actually prevent Proliferation in countries that might be reactive to Iran for example, whether it be Saudi Arabia or another One caveat to the question would be to recognize that oftentimes you have Nuclear power plants because they cost so much for example and oftentimes they're able to be used for plutonium or Enrichment that because they cost so much oftentimes they're syndicated loans that are actually used to pay for them Are there any tools that can be used in in that fight? Great and complicated question rich I think one of the huge challenges in this space and it's not just in the financial space but also with trade is the problem of dual use items And whether it's nuke or chem or even bio you have the challenge of goods that are potentially being used for normal commercial purposes or or in a various purposes One of the things we did rich. I think that was Effective was we transplanted the paradigm on terrorist financing On the issue of counter proliferation financing And so now if you talk to the anti-money laundering community whether it's the compliance officers and banks or The financial action task force you look at the standards They are anti-money laundering counter-terrorist financing counter proliferation financing and it's hard to say and So you've got the tools you've have standards set internationally The trick is I think in this space politically what you decide to do Because I think there are sensitivities around these programs mixed agendas in terms of Where they fall on the on the arena of priority and I think given the situation with Syria the whole question of chem weapons precursor Proliferation is going to now fall to the top of the scale because people saying the New York Times reporting the other day You know, why weren't we worried about this before? Clearly we were but things like nuclear proliferation terrorism and other things fall to the head of the line And so I don't have an easy answer for you But the system is set so that you can use sanctions you can use the financial pressure techniques that we've used all along to go more aggressively at the networks that matter and frankly, I think if I You know, this is hard to say But I think that's the kind of system you would have needed to go after for example the aq con network which relied on financiers in Switzerland suppliers in Malaysia and the ability to ship to places like Libya And and elsewhere and so I think we've we've created enough awareness and Systemic attention that now you just need the political will to start going after these targets and networks of concern But that takes political guidance and strategy Thank you. I think I'm gonna ask one more question as Moderator and as a way of giving you a chance to make some closing remarks, but you talk about the The system an ecosystem of bad banks and rogue actors terrorist networks In the beginning right after 9-eleven there was a moral imperative It wasn't a tough sell to get cooperation I wonder if you could talk a little bit about the evolution of that now 12 years on is that Cooperation which really is essential to what you describe as an organic kind of process That has a sense of fragility to it. Is that cooperation as forthcoming? How do you ensure that it is going forward? It's a great question right y'all I'd answer it this way. I think the intensity of cooperation the sense of the day-to-day importance of counterterrorism work with large Fades over time. That's human nature. I think that's natural I think the interesting thing about these tools Financial campaigns and and focusing on illicit finance is that these are enduring issues that matter to the integrity of the financial system and so Money laundering mattered before 9-eleven and it matters more so after 9-eleven Financial crime mattered before it matters even more so now I think the real question is how far you expand these powers And whether or not you reach a tipping point where they start to be less effective over time Either because the US has lost its predominance as a central economy in the world or the dollar has lost its primacy in terms of currencies or Because we've just overused it and people stop paying attention and these alliance of rogues have emerged and so I Don't think the attention is waned. I think the pressure is still there people understand it But it comes from different motivations and that's in part what makes these tools also unique Well with that The book is called treasuries war at the unleashing of a new era of financial warfare. I think you can buy some copies outside Thank you all so much for coming. Thank you to dr. Hamory. Thank you to CSIS for hosting the event Thank you to one. Thank you, Rachel. Appreciate it


Hi, I'm John Thatcher, Lead Software Engineer on the database server team at FileMaker. Join me this year at the FileMaker Developer Conference, where I'll be providing under-the-hood details on FileMaker Server 13, including the new database encryption feature. I'll also be part of a Q&A panel on FileMaker performance. I hope to see you in San Antonio.


Good to have you all back for another episode of think that Hawaii's human human architecture. We're broadcasting life again from our intercultural intercontinental triangle. With you to sort of brown in Honolulu Hawaii at your Bishop museum. Good morning in Long Beach, California on the West Coast mainland US and me your host Martin the Spang from near Munich Germany. So we are back as the three from the filling station with volume seven and this is by the way our 207th show. And so we're back to the comparison of automobiles and architecture. And why is that run we missed, we had to miss out on you for a little bit because while you have that extreme heat over there at the whole West Coast, and you would desperately need water you unfortunately had the water on the inside of your house we didn't want it right while we here in Europe have the water on the outside as crazy floods. So the world the globe is angry at us and and I know you Ron and myself to we have tried maybe not the very best but we tried hard to do by climatic architecture you've been doing the finest easy breezy resorts in Hawaii and we've been building for my hometown the first kindergarten off the grid for Germany's oldest university and gutting the same thing, but still here we are so we're kind of frustrated. What else can we do and we had tried, you know, in the last 200 shows the best to promote that architecture, especially of that by climatic kind in Hawaii but you know it got us 11,000 views but you know the world is still angry at us so now we're trying a different angle to something that we believe we know that people have a better access to and that's basically their automobile and hopefully through that, we can figure out more about, you know, the future of architecture. Ron you you wanted slides of the slide with a with a gas stations back because we had to stop there at the last volume six but didn't quite get to the point that you wanted to make about the future of these right. Yeah, the fact is that we're looking at some at a slide that has both drawings and photographs of projects and built of garages. We really should take a very long and fun look at those because sooner than we think those are going to become a thing of the past. Consider the fact that vehicle emissions are 28% responsible for those greenhouse gases that are dangerously altering the world's climate through global warming. In fact, manufacturing is a close second at about 27%. In response to that President Biden has vowed to reduce those gases in the United States by 50% at the end of this decade 2030. Frankly that laudable goal seems a very difficult one because even in the very heart of the pandemic lockdown, when people weren't driving and manufacturing was curtailed, we only managed to get greenhouse gases down by 22%. Nevertheless, the only way this can be done is to phase out all vehicles driven by fossil fuels. So in response to that, the presidents of GM and Ford and their counterparts around the world have already and very recently stated and promised that they will only be making all electric vehicles and light trucks by the year 2035 heavy multi axle trucks will follow suit five years later in 2040. So what will happen to gas stations and what is the fast approaching era of the electric vehicles. There are about 107,000 gas stations in the United States. That turns out to be about one for every 3000 people in the country. In American towns and cities. Those gas stations typically were located on very prominent and very visible and easily accessible corner lots. Now we got 107,000 of those that are looking to do what in the future, any replacement new construction on a site where a gas station is, or maybe adding on to it to make it something else. When that break around, all of a sudden, the developer has to face the really huge cost of removing the enormous underground gasoline storage tanks, plus all of the properties soil that has been contaminated by their leakage over the years. The designs of adaptive reuse can be successfully adopted by architects and interior designers for old, empty one story gas stations. And as as the last comment, and this really surprised me two thirds to three quarters of the existing American gas station sales are to customers for food and drink. The primary role of gas stations is as convenient stores. Could some of them continue to be convenient stores. Good question. That's my spiel on why we should look very finely at gas stations, because they will soon be something we see in our rearview mirror. Let me just add Ron that we've already been through a big change in yours and my lifetime from gas stations being garages or service stations that did car repairs to outlets that just sell gasoline, plus food and alcohol. And now, if you want to get your car fixed, you have to take it to pretty much to the dealer that sells the cars. That's already been a major change. The other thing I just want to point out is the coffee place that I go to that is close to my house is a former gas station. So that is an adaptive reuse it's literally the same building that is no longer a gas station but sells coffee. Let's go to the next slide guys per one of my your favorite presentations to solo the island's tradition of innovation. This is truly in addition to that one because it basically points something out. That was absolutely impossible unimaginably at that time it's century of the last century, where I'm from in Germany, nor do we have these cars nor do we have these shelves for these cars. So explain what these are and where they were this photo on a little. These pictures are of a facility that was located at a major car dealership, which is now the Honolulu Convention Center, by the way. This was called Aloha Motors and it was actually an amalgamation of another car dealership as well called Murphy Motors. It was for a time, I believe the largest Chevrolet dealership and the entire United States, what that meant was that they had to store quantities of cars, even though that's a very big site. So they did this by building this innovative, essentially parking structure, but because it was the cars were not being driven by individual owners. They were loaded and unloaded by the elevator device that you see in the center between the two buildings. And this was only used by the professionals who worked there you never saw. You really couldn't see this very clearly from the street when you drove by because it was mostly enclosed, and you didn't see what was going on. It was this system in which cars were picked up and placed in a parking space and then brought down when it was necessary for a dealer to to sell them or somebody wanted to buy them. So this is something that's been done sometimes for parking lots or parking structures for privately owned cars, but it was probably one of the unique situations in the USA, where this has been done by a car dealership. Well, and once again, Hawaii had that as having been so innovative at that time and we wish and we want to bring that innovative nature back and we refer at the top right on slide three here on image three. It's basically a show from that's how time flies by from December 2017, where we were basically in dress that's where where I will be going as well on over the weekend over the coming weekend to see my parents again before I come back to you to buy a soda and that's addressed and that's, as we said there on slide three the glazed manufacturing plant by VW where they're used to make their, which gets the closest in for VW to these big boats here, which was the faton the I didn't really sell that well. I think you guys never got it. It was never imported. So they discontinued that. Now they do what we see on image two is the ID three, which is their new, there we go electric line electric serious, and it just started at the beginning to manufacture that so the, the, the architecture the building is in the prime location in Dresden and the historic next to a park, and it prides itself to be absolutely zero emissions and clean, and now making much sense to also produce a zero emission, absolutely clean car there. And by the way, Ron you were talking about Biden and Harris's agenda of 2035, being off the fossil for individual passenger cars and that's in compliance with back to teamwork with the European political business. So that's exactly the agenda of the European Commission's president also left on the line 2035 and I will you guys charge me to check this out and take pictures so I will. But let's go back to what we see here because these cars again. We talked before this photo you got your German beetle back then so there were VW dealerships there were BMW and Mercedes dealerships, but the American car manufacturers decided to not have dealerships for their these cars and in Germany at that time. So I know only knew that from playing with them in the sandbox, watching movies and dreaming of these. And I just taught you the term, how did we call these. You called them Strycen Kauza. Very, very good. Very good. Very good. It's good. And what does that mean. It means street cruiser but in this case, the word cruiser is not used as it would be in the United States to devote to describe driving along the street in your car that you want to show off. Instead in Germany, it prefers to a type of ship, because in naval terms, there are different types of classes or sizes of ships so there are battleships and there are aircraft carriers and there are cruisers. So Germans used it to mean cruisers like big boats. And as Ron pointed out cruising also in the United States or in English can mean looking for sex. So a word that has a lot of baggage. Different connotations. Yeah, let's go to the next slide. Before you guys get too excited how the show will proceed. I will disappoint you because it's staying within architecture and automobiles primarily, but it is about people and it's about, you know, attitudes. And so, here we go. This is a little longer monologue sorry for you guys but you said it's okay to understand me better where I come from literally and figure to be speaking. So because it took me until a quarter of a century of age to finally get to that holy land. You're a United States of America as a student with a scholarship a president scholarship by the University of Nebraska. And I will never forget when I flew in into Omaha, Nebraska, there were some other exchange students that were more part of the direct exchange between the two universities. And they were in this German embassy which was an old house turn of the century that they donated to these exchange students, and they had this beige Buick the Sabre 70s. And they were coming up in Omaha from the airport and I will never forget, when this is not out of bond right so this was cruising because you can't go fast 65 or whatever miles per hour. And then this wobbly suspension basically, you know, got me to got me to Lincoln. And then this is for my students to listen, what their professor did when you know he was their age. He basically did what guys, I told you before left about that. Well, you said that they could take the first days off from class to go buy themselves a car because everybody needs a car or at least that's what you figured out or were told when you were in Lincoln Nebraska. Well, even worse it's like if you have no car in the US it's like having no legs, and that's true to certain degrees right. I basically walked, indeed, as far as I could many blocks to find used car dealers on old street which is the main street in Lincoln Nebraska and at both ends of it. I found a billboard with your car. This photo right. My Volkswagen, my Volkswagen Beetle. And who was, who was around it. Well, you said that weird Wally was the name of the guy who had this used car lot and there were ads with him, where he just his bathing suit curled up in the front trunk open trunk of a VW Beetle as his image that he was showing to the world. And that says scandalous as I can get in the heartland where you're from wrong right. So weird Wally basically then I saw this on slide number three, that 72 Plymouth Fury light blue black vinyl top and I fell in love with it. And I stopped by there over and over again at some point a black Cadillac convertible was driving by with weird Wally in it. I, you know, I should have known better because yes, I watched movies, American movies. So which profession is the most untrustworthy and corrupted in American movies. Used car salesman. No. So I asked that most regardless I asked that you know it was green behind my ears young kid I basically said is this a good car to drive to buy to drive and he laughed and maybe said young kid what do you want to hear. You want to hear this is the greatest car in the world I'm not going to tell you because I don't know it's an old car. Yes it was built to last but it might break down at the next corner. I don't know. So that was, you know, you know, this is the heartland people are honest there. The little dishonesty was that he said well you know it's the only thing that doesn't work. And that was not dishonest there was honest to but he said the AC and here comes the dishonesty he said you don't really need that, but it was August in the heartland so give me a break when I got off the plane it was someone through it went out in my face. But even that one turned out good because when parents came to visit me I had some time to spend in my car before they flew in and I played around at the lower part of my dashboard there was a little switch. And I flipped it and ice cooled air blew in my face and so he didn't even know about that aftermarket switch down there. So it was all great. And so this car you know we all know you know I had other older cars and I still have our twingo or Mercedes are, you know a one we will get to sorry a tool get to later. But this will always have been the best car in the world that I will ever had, because it never gave up on me talking loyalty we talked about that before. But it never broke down except that one time where the timing chain broke, and if we can go to image number eight, the guy on the right to the left by the way is me was still here on, and the guy on the right is Dan Kubrick, my dear buddy, and he was And he basically took me under his wing, and he was able in a brutally cold night in a garage of that German embassy he was fixing that timing chain that I had no clue how to do it. And he took me under his wing. And when you first introduced first had me over to his house his parents house and Omaha which is in a typical suburban subdivision and when he opened the tool stall garage door. And what I looked at me was what we see on image for, and what is that one guys. That's a GTO isn't it. That is a GTO that's a Pontiac GTO and there's the, there's the, there's the story behind these were the days when they were still you know pride and ethics and, you know people didn't stew each other when they had some argument. And this is the, there are there are GTO Ferraris to and when the Americans had the guts to want to steal that that name they basically fought it out by racing, and guess what the Pontiac one, they could keep it. And one on number five on image five is one of the very few ones around still that we spotted on our main O Street, which is Kapahulu Avenue in our front yard disorder. And so, Dan really then became a really good friend and when my parents needed to go back. They rented this on number seven this 1980s 90s. And so we drove it all the way from Lincoln, Nebraska to New York City, which is half across the whole continent and made a stopover in Chicago to finally there you know still we were young and wild so we wanted to keep cruising it we ended up in the bronze and stop at any stoplight on a red one because there was some burning trash cans around and we didn't want the car to be to be robbed. And the color gold for a car. I want to, you know, compare to the building we see here so finally we get to architecture, because this is the HDR headquarter in Omaha, Nebraska and Ron you know from your colleagues this is one of the largest corporate architectural firms in the country in fact in the world, and that's the original headquarter building. And here we go it's basically a Bauhausi and box, but the difference is what the color, where does the color come from and what's behind the color or what is the color. The color is gold and the color you're saying comes from actual gold, either impregnated into the glass or as a as a film over the glass which as you said was to help mitigate glare and excessive sunlight. And you were pointing out that in Europe, nobody would ever make gold put gold windows on a plain square glass box. In the United States. Yes, in fact, people will do that and you heard the rumor or the claim that there were maybe hundreds of thousands of dollars worth of gold included in these windows just to make it even more prestigious. Exactly. So there's something very patriotic very heroic. Maybe we can say there's a bling factor in there that's probably more American than German. And I have to add for, you know, again with with Dan when no for just like for you guys you said this sort of before we, we didn't even want to call these big boats. So for us, they were just the normal thing, right. So for him, my, my 72 Plymouth fury compared to his goat, which is the nickname of his GTO, which is like a joke, right. But he know how sort of affiliated this was my first real shot. So I was very emotionally attached. So when I had to leave to go back to Germany to continue my college there.  And the only thing you could see at the big boat furious that was the chrome coated, you know, big steel, you know beam bumper just you know had like two millimeters, you know was offset there's something that that's how heavy they were built right.  And again, here, here we go architecturally that you guys took on the old Bauhaus you know idea and pushed it to a significantly different level. And so the next slide as probably the last one for today to tell you another since I'm in the storytelling mode let's use the last couple minutes for the, for the next story, because one of my friends in in in high school. His father, and we know this gentleman a little bit from the slides to the at the top right, but his here it's about his father, his father was a banker and a honorary console of Panama. He was a very successful guy and he was part of the people racing he had horses and he raised them on the racing track we we still have in an over surprise surprise, but he was very low key and humble and just like wrong minds as an article we just wrote about our most great president Jimmy Carter right who still lives in his talking architecture $160,000. You know cheap house he bought 40 years ago and he still lives in it and asked why he never bought something more expensive he said I was never interested in I was never interested in money, or to show off the money right. And in this case, similar, which car did this very, you know, wealthy guy drive that is very familiar to you this photo. Well, I don't know if that's the exact same car but he drove an old Volkswagen beetle that I don't know if it was rusty or not but it certainly wasn't a very prestigious or expensive car. It was a pretty beaten up one because I remember that as a little kid because they took me to the racing tracks, and then he got peer pressure from his peers in his in his league.  I don't know if we had those voices in Hanover but certainly the seven series. And so they said you got to have something you know of that that sure. And he did. When we go to the very bottom right image there. The number, I forgot to number 12 I guess it is. He got himself what you got himself a large Lincoln continental and I don't know if this is the exact same car it's just a. I was back in the day I was a kid I don't know if I even had a camera I was one of the Kota cameras if I, but I didn't know I had to Google as one of the exceptions to the rule, right to our rule of not violating copyright. So that was a sneaky way to basically said okay guys you got what you wanted, but I stay true to myself right I'm not interested in showing off with shiny new cars right he stayed with a beaten up. And, and, you know, the, the his son is now the largest developer in Hanover, we talked about that his architect his main architect which by the way my sister ones was was skiing and she said that one of the, the up to she bars there and the guy was setting her up and said yeah you know I'm from Hanover not knowing that she originally is to and he basically said yeah we have basically made an architect, and that architect was the one who converted fathers brown banking tower that we dedicated to go to and were somewhat critical because we said you know if you have an original building, just like we drove by a, I have to share with you guys pictures, just before the show we came back from a vintage automobile car dealership. And that I have to give it to you the solo there was a, an old beetle with a number of 53 from the Herbie movie back then. Oh yeah yeah and it was, it was imported from a thing from Turkey or something like that oh no Cecilia so it's a good shape because it has no rust. And that one is worth now I think the price tag was like 30,000 euros. And so, again, if you have an original one, keep it in the original right because the original color, you know is worth more than a repaint job right and that certainly applies to automobiles as to architecture because if you have an original from its century by one of the modern masters, might it be by, you know, Wilka as here in Germany, or might it be by killingsworth and Lindgren and Ron getting close to the end of the show please show your shirt. Oh yes, I'm celebrating being back with you doing some co hosting. So here is my Holly Clonny t shirt, and I'm wearing it proudly today and thinking of getting back to Hawaii as soon as possible. And relative to what we just said, we know it was under renovation. So we're very anxious and curious and still hopeful to see it having been renovated in respect to its original, just again with the cars and the original color. Holly Clonny is one of the most keepers and certainly in its originality. So, let ourselves be surprised by the Holly Clonny corporation that that is the case.  Alright guys and everyone else. See you next week for that. Bye bye.


Election Day has arrived, and voters across the country are casting their ballots. But despite widespread predictions that Republicans will easily keep control of the House and could take the Senate, President Obama doesn't seem too concerned. Has he or the White House or both of you considered what life will be like with the Republican Senate? Not really. For quite some time, I've thought that the wind was still at the backs of Democrats. They're competing in states that have really good Democratic turnout operations. But as we get closer to the election, the polls are really not breaking in Democrats' favor. So at this point, it does look like the Republicans will take over the Senate by the slimmest of majorities. Even if they do, however, things may not change much. I think we are going to see roughly the same amount of gridlock over the next two years as over the last few. Because you are still going to have divided control of the government. And I'm not sure that 45 Republicans versus 52 Republicans is going to make all that much difference. There will be tremendous gridlock still, whether it is because of a Democratic filibuster or whether it's because of a presidential veto. And despite polls tilting towards the GOP, Democrats could potentially hang on to their majority. Several races are too close to call. We might not know who controls the Senate after Election Day. It might take one or two months before runoffs happen in Louisiana and in Georgia to very competitive Senate races. That's a real challenge for our understanding of what policy is going to look like. A midterm election is very different from a presidential election. And it's different for the Senators and Congressmen who are going to be up in 2016 compared to those who are up in 2014. Many predict a Republican Senate would make trying to repeal part or all of the Affordable Care Act one of their top priorities. Others have talked of trying to compromise on immigration to improve the party's image with Hispanic voters and their 2016 election prospects. There's going to be a larger electorate next time. It's going to be a more diverse and a younger electorate next time. And that means that some of the political calculations that people make have to change as well. It is hard to look forward and see what an agenda will be like for Senate Republicans. They are not speaking in a unified voice. There will be new Senators in this new Congress who we just don't know yet.  We'll just have to wait to see what happens if Republicans capture both houses of Congress. For BU News Service, from Washington, D.C., I'm John Riley.


Live from Orlando, Florida, it's theCUBE. Covering Grace Hopper's Celebration of Women in Computing, brought to you by SiliconANGLE Media. Welcome back to theCUBE's coverage of the Grace Hopper Conference here in Orlando, Florida. I'm your host, Rebecca Knight. I'm joined by Ayanna Howard. She is a professor at the Georgia Institute of Technology and also Chief Technology Officer at ZY Robotics. Thanks so much for joining us. Thank you very much for having me. So, start to tell our viewers a little bit about ZY Robotics. I know it was a spin-off of your research that you were doing at Georgia Tech. Yeah, so interesting enough, ZY Robotics, so at Georgia Tech, I focus on working in technologies, robotics for children with special needs. Primarily children with motor disabilities, cerebral palsy, for example, children with autism. And so one of the things that we had developed was the ability to access computing technology. Because I was running robot road programming camps. So I was running camps for all children, so an inclusive camp that had typical children, children with special needs. And what happened was people kept asking me, oh, can you take this home? It's like, yeah, now this is not in my Georgia Tech lab. Sorry, but you can bring your kid back. And so the company really came out of trying to commercialize that special technology that allowed inclusiveness for kids in this kind of STEM education. So that's how ZY Robotics came about. So talk a little bit about the technology. What does it do? How does it help kids with these different learning needs? So imagine you have a child who has a motor limitation. And if you look now, there's so much is on apps, tablets and smartphones, even education. And if I have a motor disability, have you ever tried swiping with your fists, right? Or even if you're an older adult and taking your finger and if you have a tremor by moving things around? So this is very difficult. And yet that is the way the technology is made, which isn't a service, it's just not made for everyone. And so what we've done is we've created these devices, very fun, think of it as a stuffed animal that allows you to, if you want to stop, if you want to do your finger, if with your access point is in your foot and you just tap your foot, allows you to interact with a different educational apps. But what we found is that typical kids also like playing with the toy. Right, right, right. So I was like, oh, what is this? This is interesting. So that's why it provided this nice blend of kids, of any abilities, the ability to access these educational apps.  Tell our viewers a little bit more about that. Yeah, so I run a program called Arms that's funded by the National Science Foundation. And what I found is long time ago, the way that we were training our computer science students, our engineering students in robotics was typically, I would say ad hoc. So I'd have a student and they were like, I'm interested in healthcare robotics and I would call up my clinician friend and say, hey, can we do an observation? And my student would go there and basically shadow a therapist or a doctor for the day and then they go back. And so this is what I was doing. And I found out that most professors who had students in healthcare related activities were doing the same thing. And I was like, wait, hold it. But this sounds like it's more than just me. Maybe we can formalize this a little bit more. And so the traineeship program actually takes roboticist students and immerses them in the medical side. And so for example, this past summer, they spent the entire summer over in the clinic and the hospital watching surgeries. I mean, like actually scrubbing up, following patients, understanding what is Parkinson's and how do you do assessments? And so they were fully immersed as if they were a medical resident student or resident person in the clinic. And what happens is then, and this is very on their first year, they come back into their studies and now they understand, okay, if I'm designing this technology, what does it mean if I'm designing someone who's recovering from stroke? What does that really mean? And they have a vision of the patient, not just their own, I mean, they have a real vision of Mr. Joe that they worked with and how he might have struggled with some concept and what they're doing can actually enable. And so it gives engineers, computer scientists, roboticists that power. And the empathy to really understand how it will be used. Yes, understand that and not build or design in a box, which is really unfortunate that sometimes we do that. We design based on our own beliefs, not taking in the account that there are other users and you are maybe not, you are not the user necessarily of your own technology. So I want to talk a little bit about this conference. This is your third Grace Hopper conference. What does it mean to you to be here and what do you get out of it? Are you here for Zyrobotics? Are you here for Georgia Tech? Are you? You know, I'm here for women in computing. And so it's actually not linked to a specific company or organization. It's the fact that I feel a responsibility as they call me a role model. But I think we're gonna go with it. We're gonna go with it. I mean, I feel that there were a lot, I had a lot of mentors growing up. Not many were women. It's only in my later age that I've actually met some great, great women mentors. And so I feel a responsibility to come to Grace Hopper and just talk, share my experience, sometimes be vulnerable and open to, you know, the trials and tribulations, but then the pure joy you get from staying in the field and the pure joy you get from actually impacting the world with your mind, with your technology, with your stuff. And I think it's amazing how you can be here and see all these young ladies, both students, and older, like well-established women leaders and say, yeah, we got this. We can change the world with our power. So we're really at this inflection point in technology where problems, the biases, the barriers that have kept women from progressing in, from first of all, getting into the field and also progressing are really front-page news. And sort of the problems that women have faced in the industry, the sexism, is really being talked about. But is that a good thing in the sense, I mean, yes, it's one thing to get these problems out there, but are we also discouraging women because it's showing women how tough it is to be in this industry and this brogrammer culture? You know, I think there's a two-edged school. So in one instance, these things were happening anyway. And if you actually look at retention, which is surprising, retention of women who've been in the computing field for a longer period of time, a lot of them were dropping out. It's like, wait, hold it. You got through the pipeline, what happened? And so we all knew a lot of this stuff was going on. We have firsthand experience with it. And so what the conversation now is letting everyone know about it. And I think that's how anything happens is that then others are like, I didn't realize. Others start empathizing. I didn't realize that this is what you were going through. What can I do to help? Even if they are not necessarily a woman or a minority. And so I think what happens is by having that conversation, it makes everyone aware of it so that things can start changing. Is the negative, the fact that maybe young women are like, oh, I don't want to go through that? I think by having role models that are like, hey, yeah, this is what it's like, but guess what? I'm running this company. I'm CEO. And so imagine what it'd be like if you come in now when the conversation is open versus when I was going through it, when nobody was talking about it. And you couldn't have anyone to say, hey, can you help me? I just need some assistance just to talk about something. Now you can. You can be open. So what is your advice? I mean, we know that the numbers are bleak. 25%, tech is comprised of 25% women. 15% in leadership positions. For black and Latina, it's abysmal. What do you tell your students about this industry? So I tell my students, one is if you want to change the world. And usually students that take my course and work with me are ones that want to have an impact with their minds, with their technology. And so my thing is, is if you want to change the world, you know, science engineering is the only way that you can because the world is based on you and your technology. And in fact, if you don't, and then I put in the guilt, if you don't get involved in this, then the world is not going to change and your kids' kids will have to live in this world that you have. And so it's really your responsibility to get into this thing. The guilt is a good, that's good, yeah. For women, guilt is really good. I know it's powerful, it's so powerful. Yes, yes. I want to talk a little bit about funding because one of the, I know that your trainee program is partly funded by the National Science Foundation.  Can you talk, tell us a little bit about the landscape, what you're seeing, what you're feeling. I would say that government funding, so National Science Foundation, I would say NIH, there is more equality in the representation. There is more equality. It's not 50%. Okay, okay. But it's, you know, you have a fighting chance, right? I would argue though that in the startup world, you need to go for government funding and nonprofits and maybe angels because honey, VCs are not going to look at you. I truly believe that in the startup company, I talked to a lot of women entrepreneurs who have broken the VCU and they tell me how many, basically how many frogs they had to kiss, you know? Yeah. And so I think that landscape has not changed as much but I think funding as a scientist for government grants, I think it's more, it's not fair but it's more equal because in government, it's okay for you to say as a program manager, hey, something's wrong here. Yeah. Because that is, the government represents, you know, the population. So it's okay as a program manager to say that. I don't know if it's as safe to say that as a VC, like, hey, our company portfolio doesn't look like the rest of America. Right, right. So your advice there for female entrepreneurs or female researchers trying to get money is to go first to either angels or the government. And then- I say that will help you keep your company alive but you still have to kiss a lot of frogs. Yeah. You still do. And eventually you will find a frog that turns into a princess and will fund you. But if you think about how do you survive through this company and how do you keep it to the next level? You go through any type of funding resources you can and so if the angel funding world in terms of government is not a guarantee but if it's easier, grab that, non-diluted by the way, typically, but still go the VC direction. Now, in terms of the funding environment though, NIH and NSF, do you feel they're getting as much money right now? We have an administration that is questionable. Yeah, no, so overall the budgets themselves are- So NSF and NIH, this last cycle, they kind of weathered a cut. But if you look overall over the last umpteen years, you see that the rates of acceptance has dropped because there's a lot more researchers going for funding. The budget doesn't keep up necessarily with the cost of living expenses kind of thing, cost of tuition, cost of grad students. And so overall the funding has declined but that is not a gender issue. That is a issue just about the value of the basic research in general. In the US, a lot of us understand but a lot of us do not and so we feel that in terms of the funding crisis. So as a professor but then also as someone who's working in industry, how do you make sure that women can see themselves and see potentially rich and rewarding careers? So I do a couple of activities, for example. I'm going to talk about one which is CRAW Brad Gohort. And so what that focuses on is graduate students, women, either PhD, master's wanting to be a PhD. And what we do is we provide a mechanism for them to interact with senior women. So we bring in these- So this is not just at Georgia Tech, this is nationwide? This is nationwide.  First off, they get to see other of their peers at other schools. Second is we bring in senior women that are doing exceptionally well and they do things like one-on-one mentorship, they share. So we've selected women who are open to sharing their experiences, both the goods and the bad. And so it provides that network of, okay, look, it might be hard in grad school but you have a pure network. Take advantage, and there are senior women you can take advantage and talk to and kind of ping them on different issues that you have. So I think programs like that, and we're not the only one, but programs like CRAW grad cohort, CRAW URM and the graduate cohort are ways to ensure that you don't get discursions at the end of the day. So Xirobotics, it's founded in 2013. What is the future of it? I mean, it's such an exciting technology and one that I think really has a lot of uses because as you said, it's not only for children but it could be for stroke victims, for aging people who are sort of losing some of their mobility. So my goal, I would say five years, right? So when I started, it was like five years old because that's like the Holy Grail, you make it for five years. So we're at year four, we just crossed. So we're in that five years. But what I see more as the vision, what I would say the secret magic of Xirobotics is to make sure that accessibility is an integral part of the conversation. It's not an afterthought. It's not a following design technology. Oh, let's think about accessibility and inclusiveness after the fact. And so I'm hoping that, one, the product, of course, takes off but also that it starts changing the conversation a little bit. So for example, I go out, I talk about, how do you design technology that is really, really cool? Is cutting edge? It's accessible as it's core. It's accessible to the different learning needs, different access ways that people have of interacting with technology. How do you get that message across that, hey, you can do this and you can still make money? So it's not like, you're like, oh, accessibility, we can't make any money. Like, no, you can actually still make money even if it was a core value. So that's my vision is to have basically, have Xirobotics lead that but then have other companies adopt it as like, oh no, why haven't we done this? Yeah, this makes total, total sense. Great, Iona Howard, thank you so much for joining us. It's been a pleasure having you on theCUBE. Thank you, this was fun. Thank you for the invite. I'm Rebecca Knight here in Orlando, Florida at Grace Hopper. We will have more just after this.