U.S. To Retaliate Against China’s Hacking

U.S. Decides to Retaliate Against China’s Hacking
By DAVID E. SANGER JULY 31, 2015 NY Times

The Obama administration has determined that it must retaliate against China for the theft of personal information of more than 20 million Americans from the databases of the Office of Personnel Management, but it still is struggling to decide what it can do without prompting an escalating cyberconflict.

The decision came after the administration concluded that the hacking attack was so vast in scope and ambition that the usual practices for dealing with traditional espionage cases did not apply.

But in a series of classified meetings, officials have struggled to choose among options that range from largely symbolic responses — for example, diplomatic protests or the ouster of known Chinese agents in the United States — to more significant actions that some officials fear could lead to an escalation of the hacking conflict between the two countries.

Network specialists at the Department of Homeland Security’s National Cybersecurity and Communications Integration Center in Arlington, Va., during an unclassified tour for members of the news media last week. Classified information was excluded from screen displays.U.S. vs. Hackers: Still Lopsided Despite Years of Warnings and a Recent PushJULY 18, 2015
That does not mean a response will happen anytime soon — or be obvious when it does. The White House could determine that the downsides of any meaningful, yet proportionate, retaliation outweigh the benefits, or will lead to retaliation on American firms or individuals doing work in China. Mr. Obama, clearly seeking leverage, has asked his staff to come up with a more creative set of responses.

“One of the conclusions we’ve reached is that we need to be a bit more public about our responses, and one reason is deterrence,” said one senior administration official involved in the debate, who spoke on condition of anonymity to discuss internal White House plans. “We need to disrupt and deter what our adversaries are doing in cyberspace, and that means you need a full range of tools to tailor a response.”

In public, Mr. Obama has said almost nothing, and officials are under strict instructions to avoid naming China as the source of the attack. While James R. Clapper Jr., the director of national intelligence, said last month that “you have to kind of salute the Chinese for what they did,” he avoided repeating that accusation when pressed again in public last week.

But over recent days, both Mr. Clapper and Adm. Michael S. Rogers, director of the National Security Agency and commander of the military’s Cyber Command, have hinted at the internal debate by noting that unless the United States finds a way to respond to the attacks, they are bound to escalate.

Mr. Clapper predicted that the number and sophistication of hacking aimed at the United States would worsen “until such time as we create both the substance and psychology of deterrents.”

Admiral Rogers made clear in a public presentation to the meeting of the Aspen Security Forum last week that he had advised President Obama to strike back against North Korea for the earlier attack on Sony Pictures Entertainment. Since then, evidence that hackers associated with the Chinese government were responsible for the Office of Personnel Management theft was gathered by personnel under Admiral Rogers’s command, officials said.

Admiral Rogers stressed the need for “creating costs” for attackers responsible for the intrusion, although he acknowledged that it differed in important ways from the Sony case. In the Sony attack, the theft of emails was secondary to the destruction of much of the company’s computer systems, part of an effort to intimidate the studio to keep it from releasing a comedy that portrayed the assassination of Kim Jung Un, the North Korean leader.

According to officials involved in the internal debates over responses to the personnel office attack, Mr. Obama’s aides explored applying economic sanctions against China, based on the precedent of sanctions the president approved against North Korea in January.

“The analogy simply didn’t work,” said one senior economic official, who spoke on condition of anonymity to discuss internal White House deliberations. North Korea is so isolated that there was no risk it could retaliate in kind. But in considering sanctions against China, officials from the Commerce Department and the Treasury offered a long list of countersanctions the Chinese could impose against American firms that already are struggling to deal with China.

The Justice Department is exploring legal action against Chinese individuals and organizations believed responsible for the personnel office theft, much as it did last summer when five officers of the People’s Liberation Army, part of the Chinese military, were indicted on a charge of the theft of intellectual property from American companies. While Justice officials say that earlier action was a breakthrough, others characterize the punishment as only symbolic: Unless they visit the United States or a friendly nation, none of them are likely to ever see the inside of an American courtroom.

“Criminal charges appear to be unlikely in the case of the O.P.M. breach,” a study of the Office of Personnel Management breach published by the Congressional Research Service two weeks ago concluded. “As a matter of policy, the United States has sought to distinguish between cyber intrusions to collect data for national security purposes — to which the United States deems counterintelligence to be an appropriate response — and cyber intrusions to steal data for commercial purposes, to which the United States deems a criminal justice response to be appropriate.”

There is another risk in criminal prosecution: Intelligence officials say that any legal case could result in exposing American intelligence operations inside China — including the placement of thousands of implants in Chinese computer networks to warn of impending attacks.

Other options discussed inside the administration include retaliatory operations, perhaps designed to steal or reveal to the public information as valuable to the Chinese government as the security-clearance files on government employees were to Washington.

One of the most innovative actions discussed inside the intelligence agencies, according to two officials familiar with the debate, involves finding a way to breach the so-called great firewall, the complex network of censorship and control that the Chinese government keeps in place to suppress dissent inside the country. The idea would be to demonstrate to the Chinese leadership that the one thing they value most — keeping absolute control over the country’s political dialogue — could be at risk if they do not moderate attacks on the United States.

But any counterattack could lead to a cycle of escalation just as the United States hopes to discuss with Chinese leaders new rules of the road limiting cyberoperations. A similar initiative to get the Chinese leadership to discuss those rules, proposed by Mr. Obama when he met the Chinese leader at Sunnylands in California in 2013, has made little progress.

The United States has been cautious about using cyberweapons or even discussing it. A new Pentagon strategy, introduced by the secretary of Defense, Ashton B. Carter, in the spring, explicitly discussed retaliation but left vague what kind of cases the United States viewed as so critical that it would prompt that type of retaliation.

In response to the O.P.M. attack, White House officials on Friday announced the results of a 30-day “cybersecurity sprint” that began in early June after the federal personnel office disclosed the gigantic theft of data.

Tony Scott, the government’s chief information officer, who ordered the review, said in a blog post that agencies had significantly ramped up their use of strong authentication procedures, especially for users who required access to sensitive parts of networks.

By the end of the 30th day, officials said that more than half of the nation’s largest agencies, including the departments of Transportation, Veterans Affairs and the Interior, now required strong authentication for almost 95 percent of their privileged users.

For President Obama, responding to the theft at the Office of Personnel Management is complicated because it was not destructive, nor did it involve stealing intellectual property. Instead, the goal was espionage, on a scale that no one imagined before.

“This is one of those cases where you have to ask, ‘Does the size of the operation change the nature of it?’ ” one senior intelligence official said. “Clearly, it does.”

Michael D. Shear c

Rivals of ISIS Attack U.S.-Backed Syrian Rebel Group

COMMENT
MIDDLE EAST A question of who is fighting whom? Didn’t we know this problem before the Iraq invasion and America’s longest war, so far? Bill Deqne

Rivals of ISIS Attack U.S.-Backed Syrian Rebel Group
By ANNE BARNARD and ERIC SCHMITT JULY 31, 2015, NY Times

BAGHDAD — A Syrian insurgent group at the heart of the Pentagon’s effort to fight the Islamic State came under intense attack on Friday from a different hard-line Islamist faction, a serious blow to the Obama administration’s plans to create a reliable military force inside Syria.

The American-led coalition responded with air strikes to help the American-aligned unit, known as Division 30, in fighting off the assault, according to an American military spokesman and combatants on both sides. The strikes were the first known use of coalition air power in direct battlefield support of fighters in Syria who were trained by the Pentagon.

The attack on Friday was mounted by the Nusra Front, which is affiliated with Al Qaeda. It came a day after the Nusra Front captured two leaders and at least six fighters of Division 30, which supplied the first trainees to graduate from the Pentagon’s anti-Islamic State training program.

Members of the Nusra Front, a group in Syria that is affiliated with Al Qaeda, near Aleppo last year. Nusra fighters have kidnapped the leader of a group of American-trained Syrian fighters.Abductions Hurt U.S. Bid to Train Anti-ISIS Rebels in Syria JULY 30, 2015In Washington, several current and former senior administration officials acknowledged that the attack and the abductions by the Nusra Front took American officials by surprise and amounted to a significant intelligence failure.

While American military trainers had gone to great lengths to protect the initial group of trainees from attacks by Islamic State or Syrian Army forces, they did not anticipate an assault from the Nusra Front. In fact, officials said on Friday, they expected the Nusra Front to welcome Division 30 as an ally in its fight against the Islamic State.

“This wasn’t supposed to happen like this,” said one former senior American official, who was working closely on Syria issues until recently, and who spoke on the condition of anonymity to discuss confidential intelligence assessments.

The Nusra Front said in a statement on Friday that its aim was to eliminate Division 30 before it could gain a deeper foothold in Syria. The Nusra Front did much the same last year when it smashed the main groups that had been trained and equipped in a different American effort, one run covertly by the C.I.A.

A spokesman for the American military, Col. Patrick S. Ryder, wrote in an email statement that “we are confident that this attack will not deter Syrians from joining the program to fight for Syria,” and added that the program “is making progress.”

Division 30’s leaders expected to play a role in an ambitious new joint push by the United States and Turkey to help less radical Syrian insurgent groups seize territory from the fundamentalist militant fighters of the Islamic State, also known as ISIS, ISIL or Daesh.

But the unit had no known plans to fight the Nusra Front, and the attacks on Thursday and Friday seemed to catch the unit off guard. Though the Nusra Front is allied with Al Qaeda, it is seen by many insurgents in Syria as preferable to the Islamic State, and it sometimes cooperates with other less radical groups against both the Islamic State and Syrian government forces.

A senior Defense Department official acknowledged that the threat to the trainees and their Syrian recruiters had been badly misjudged.

3333333333333333333333333333333333333333333333333333333333333333333333333333333333333333The Defense official, speaking on the condition of anonymity to discuss intelligence reports, described what he called “silver linings” to the attack on Friday: that the trainees had fought effectively in the battle, and that coalition warplanes responded quickly with airstrikes to support them.

Witnesses described the attack as an all-out assault, with medium and heavy weapons, on a Division 30 encampment west of the town of Azaz in Aleppo Province, near the border with Turkey.

In a statement on Friday, Division 30’s leaders called on all nationalist Syrian insurgents to “stand firm and proactively” against what they called an unprovoked attack, and asked “the brothers in the Nusra Front” to “stop the bloodshed and preserve the unity.”

Yet witnesses to the attack on Friday and insurgent leaders said that most of the other groups in the area failed to come to Division 30’s aid. By staying out of the fight, they may have signaled that they have not accepted a central feature of the Pentagon’s program: that it be directed only at the Islamic State and not at the Syrian government forces of President Bashar al-Assad, against whom the rebels originally took up arms.

At a minimum, it appears that other insurgent groups were not ready to directly take on the Nusra Front, one of the strongest and best-financed forces on the ground in Syria. Neither did they join in the Nusra Front’s attack on Division 30, perhaps because of the coalition airstrikes. The Islamic State does not have a significant presence in that area.

Ahrar al-Sham, another powerful Islamist insurgent group, stayed on the sidelines, according to a spokesman, Ahmad Kara Ali. Ahrar al-Sham has often aligned with the Nusra Front, but it has been at odds with the group in some places lately over power and over how to govern areas they have conquered.

One group that apparently did side with Division 30 was Jaish Al-Thuwar, a coalition based west of Azaz that includes several Arab and Kurdish factions. The group said in a statement that it, too, had come under attack after Division 30 fighters had fallen back to areas under its control, and that it tried to assist Division 30 during the battle.

Division 30 said in a statement that five of its fighters were killed in the firefight on Friday, 18 were wounded and 20 were captured by the Nusra Front. It was not clear whether the 20 captives included the six fighters and two commanders captured a day earlier.

Division 30 was formed from a number of smaller groups to streamline the recruitment and training of fighters by the Pentagon to fight the Islamic State. The program has produced only a handful of graduates so far, in part because of a screening process to root out suspected extremists that Division 30’s leaders say is too stringent.

Its first contingent of trained fighters — just 54 in all — recently re-entered Syria to join the rest of the division. An American official said that none of those 54 were among the eight captured on Thursday by the Nusra Front.

But the captives did include Nadeem Hassan, a defector from the Syrian Army who helped organize Division 30’s 1,200 fighters, and Farhan Jasem, a deputy who commanded the 54 trained fighters, according to a statement from Division 30.

The Nusra Front’s statement offered its view of the American role in Syria. Referring to the C.I.A. program, the group said that when the United States tried to “plant its hands inside Syria,” the Nusra Front “cut those hands off,” and that Division 30 was merely another proxy “aiming to advance the projects and interests of America.”

Sunni Arabs have formed the backbone of the revolt against Mr. Assad’s rule, which exploded into civil war after his security forces cracked down on protesters. As the conflict has dragged on, more groups have come to frame it the way the Nusra Front does, as a sectarian struggle.

The group’s statement said Sunnis would not hand the sacrifices of four years of war “on a plate of gold” to the United States “for it to establish its feet in the region over the graves of hundreds of thousands of the people of Syria.”

The war has killed at least 230,000 Syrians, wounded more than a million and displaced more than nine million, half the country’s population.

Anne Barnard reported from Baghdad, and Eric Schmitt from Washington. Karam Shoumali contributed reporting from Istanbul, and Maher Samaan from Beirut, Lebanon.

Pacific Trade Deal Talks Stalled

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INTERNATIONAL BUSINESS

Talks for Pacific Trade Deal Stall at a Critical Step
By JONATHAN WEISMANJULY 31, 2015, NY Times
Photo

Trade ministers negotiating the Trans-Pacific Partnership in Lahaina, Hawaii, gather for a group
LAHAINA, Hawaii — Trade negotiators from the United States and 11 other Pacific nations were headed toward failure Friday, with difficult talks on the largest regional trade agreement ever breaking down over protections for pharmaceutical companies and access to agriculture markets on both sides of the Pacific.

Negotiators will return to their home countries to obtain high-level signoffs for a small number of final sticking points on the agreement, the Trans-Pacific Partnership, with bilateral talks reconvening soon.

But the breakdown is a setback for the Obama administration, which had promoted the talks here as the final round ahead of an accord that would bind 40 percent of the world’s economy under a new set of rules for commerce.

President Obama’s trade push had been buoyed by Congress’s narrow passage in June of “fast track” trade negotiating powers, and American negotiators had hoped other countries could come together once Congress had given up the right to amend any final agreement.

In the end, a deal filled with 21st-century policies on Internet access, advanced pharmaceuticals, and clean energy trade foundered on issues that have bedeviled international trade for decades: access to dairy markets in Canada, sugar markets in the United States and rice markets in Japan.

Australia, Chile and New Zealand also continue to resist the United States push to protect the intellectual property of major pharmaceutical companies for as much as 12 years, shielding them from generic competition as they recoup the cost of developing next-generation “biologic” medicines.

“There’s always been more than one issue,” said Representative Sander Levin, Democrat of Michigan, who is here as an observer.

The trade ministers who gathered at the luxury hotels of Maui this week for talks that went deep into the night did have some successes. They reached agreement on broad environmental protections for some of the most sensitive, diverse and threatened ecosystems on Earth, closing one of the most contentious chapters of the Pacific accord.

failure to complete the deal — eight years in the making — means the next round of negotiations will push the United States ratification fight into 2016, a presidential election year. Most Republican candidates are likely to back it, but a final agreement would force the Democratic front-runner Hillary Rodham Clinton to declare her position, which she has avoided.

This week, she told reporters, “I did not work on T.P.P.” as secretary of state, although she gave a 2012 speech in Australia declaring the accord “the gold standard in trade agreements.”

The push for the Pacific deal has already split most Democrats from their president. Further delay raises the prospect that a deal sealed by President Obama might have to be ratified by his successor, just as George Bush’s North American Free Trade Agreement was secured by Bill Clinton.

The failure of the Maui talks pointed to the extreme difficulty of reaching agreement with so many countries, each with their political dynamics. Vietnam, Malaysia and New Zealand were willing to make significant concessions to gain access to United States markets.

But with Canada’s prime minister, Stephen Harper, fighting for his political life ahead of national elections in October, Canada would not budge on opening its poultry and dairy markets.

Chile, with a new, left-of-center government and existing free trade agreements with each of the countries in the Pacific deal, including the United States, saw no reason to compromise, especially on its demand for a short window of protection for United States pharmaceutical giants.

Australia’s delegation insisted that pharmaceutical market protections beyond five years would never get through parliament, and the United States team was demanding 12.

The bright spot might have been the environmental negotiations. The completed environmental chapter would cover illegal wildlife trafficking, forestry management, overfishing and marine protection, and it could prove to be a landmark, setting a new floor for all future multilateral accords.

“As centers of biodiversity, T.P.P. countries cover environmentally sensitive regions from tundra to island ecosystems, and from the world’s largest coral reefs to its largest rain forest,” reads a summary of the environment chapter, obtained by The New York Times. “T.P.P.’s Environment chapter addresses these challenges in detail.”

Under the agreement, the 12 countries — from Peru and its rain forest to Vietnam and the diverse Mekong Delta — must commit to obeying existing wildlife trafficking treaties and their own environmental laws. Environmentally destructive subsidies, such as cheap fuel to power illegal fishing vessels and governmental assistance for boat making in overfished waters, are banned.

The chapter singles out the “long-term conservation of species at risk,” such as sea turtles, sea birds and marine mammals and “iconic marine species such as whales and sharks.”

Failure to comply would subject a signatory to the same government-to-government compliance procedures as any other issue covered by the trade agreement, potentially culminating in trade sanctions. United States negotiators hope that just the threat of economic sanctions will bolster relatively weak environmental ministries in countries like Peru, Malaysia and Vietnam.

Some environmental groups, and many Democrats in Congress, are likely to be dissatisfied. They complain that agreeing to a series of “obligations” falls short of “requirements.” The Sierra Club has complained that the United States has yet to pursue trade remedies against countries already obliged to environmental enforcement under existing trade accords, such as the United States-Peru free trade deal.

But most major environmental groups remained circumspect until they could read the details, or cautiously optimistic.

“Negotiators have accomplished much, but the hard work is far from over. Individual nations now must live up to their T.P.P. conservation obligations, including putting in place effective measures to ensure that they are responsible traders in wildlife and products provided by our forests and oceans,” said David McCauley, senior vice president for policy at the World Wildlife Fund.

The impact of the Pacific accord’s environmental chapter could be broad, both for the nations in the deal and those outside. The 12 participating countries account for more than a quarter of the global seafood trade and about a quarter of the world’s timber and pulp production. Five of the countries rank among the world’s most biologically diverse countries.

Some, like Vietnam and Malaysia, have long been on the watchlist for illegal wildlife trafficking, such as rhino horns. Japan has long been scrutinized for its treatment of whales and dolphins. The World Bank has estimated that as much as 80 percent of Peru’s logging exports are harvested illegally.

Under the terms of the new accord, member countries are required to beef up port inspections and document checks, a provision that could expand the scope of the deal beyond the 12 countries. Illegal wildlife and timber harvests bound for countries like China go through ports of the 12 countries.

And countries in the deal are required to take action if they discover contraband that has been harvested illegally, even if the particular product isn’t illegal in their country.

Negotiators say they did substantially narrow the number of outstanding issues. They vowed to keep the momentum going. But, as one non-United States official said, if talks go into hiatus for long, it could be easier for many of the countries to say no than yes.

Jewish Arsonists Suspected of Killing an 18-month Palestinian Child

MIDDLE EAST

Jewish Arsonists Suspected in West Bank Attack That Killed Palestinian Toddler
By DIAA HADID and JODI RUDOREN JULY 31, 2015 New York Times
Photo

Mourners buried the remains of 18-month-old Ali Saad Dawabsheh in the West Bank village of Duma on Friday.

DUMA, West Bank — A Palestinian toddler was burned to death and his 4-year-old brother critically injured early Friday morning in an arson attack on their home in the West Bank that witnesses and officials attributed to Jewish extremists because of Hebrew graffiti sprayed nearby. “Revenge!” was written on one wall, next to a Star of David.

The attack was branded as terrorism by Israeli and Palestinian politicians, and shocked consciences on both sides of the simmering conflict that has boiled into renewed violence in recent weeks.

Residents of Duma — a hilltop hamlet of 3,000, many of whose men, including the children’s father, work building homes in nearby Israeli settlements — milled with stony faces around the charred home, where relatives threw a baby bottle still sloshing with milk and photographs of the young family atop a pile of blackened furniture and burned blankets. The parents were also hurt in the fire.

“The atmosphere here is very grave,” Sakariya Shadeh, a human rights worker from a nearby village who was at the scene, said on Army Radio. “People are angry over what has happened, over what has brought upon this act.”

Hebrew graffiti reading “revenge” was spray-painted on a house that was set alight in an attack in the West Bank village of Duma.
Officials and neighbors identified the dead child as 18-month old Ali Saad Dawabsheh, and said his parents, Saad, 32, and Riham, a 27-year-old mathematics teacher, were being treated in Israeli hospitals along with their other son, Ahmad.

Witnesses said that they saw four masked men in black clothing throw firebombs through the windows of two homes near the village entrance around 2 a.m. and that Duma residents had chased them toward the nearby settlement of Maale Efraim; two witnesses said they saw two of the men standing over the burning bodies.

President Mahmoud Abbas of the Palestinian Authority said that he would ask the International Criminal Court to investigate the attack as a war crime, local news sites reported, and that Israeli expressions of outrage were not sufficient. “Steps beyond words also have to be taken,” Mr. Abbas said.

Saeb Erekat, the chief Palestinian negotiator, called it a “brutal assassination” and said he held the Israeli government “fully responsible.” He called the attack “a direct consequence of decades of impunity given by the Israeli government to settler terrorism.”

“This is the consequence of a culture of hate funded and incentivized by the Israeli government and the impunity granted by the international community,” Mr. Erekat said in a statement. “We call upon the international community to end its policy of empty statements and to finally do something to protect Palestinians.”

Israeli politicians across the spectrum also quickly condemned the arson as barbaric, heinous, horrific and “a terror attack,” a term usually reserved for Palestinian violence against Jews. Members of Parliament, President Reuven Rivlin and Prime Minister Benjamin Netanyahu visited Ahmad and Mrs. Dawabsheh, whose injuries were described as life-threatening, in the hospital Friday afternoon.

“It is hard when you stand beside the bed of such a young child, and you know that his older brother, who was a year-and-a-half-old, was murdered here and you ask for what was this awful act,” Mr. Netanyahu said afterward. “We are shocked by it, we condemn it fully, the entire Israeli government and all the citizens of Israel. We decry it as a terrorist crime. Terrorism is terrorism. We need to fight it every place it comes from. We will capture these murderers. We will use all the tools at our disposal to bring them to justice and to see justice served to them.”

The attack revived painful memories of the abduction and murder last July of Mohammed Abu Khdeir, 16, who was burned alive by Jewish extremists after being snatched from his East Jerusalem neighborhood before dawn. The past month, while hardly comparable to last year’s war between Israel and Palestinian militants in the Gaza Strip, has been marked by an unsettling string of violent incidents.

Four Palestinians have been fatally shot by Israeli soldiers in recent weeks during arrest raids and other clashes. Just hours before the Duma arson, an ultra-Orthodox Jew was arrested for stabbing six participants in the Jerusalem gay-pride parade, weeks after he was released from prison for a mirror-image attack a decade before.

A total of four relatives were critically injured and were being transferred to a hospital in Israel, officials said. Jewish extremists are suspected as Hebrew graffiti was found sprayed nearby. By REUTERS on Publish Date July 31, 2015.
The Duma fire appeared to be the most severe recent case of what Israelis call “price tag” attacks, often vandalism of mosques or the uprooting of Palestinians’ olive trees, carried out by bands of settlers in retribution for Palestinian attacks on Jews.

Duma, a village of boxy, concrete homes, donkeys and roosters that is reachable only by rocky mountain roads, is very close to Shilo, a settlement near which Malachi Rosenfeld, 26, was fatally shot by Palestinian militants a month ago while he and four friends were driving home from a basketball game. The Israeli military announced on July 19 that it had arrested several members of what it called a “Hamas terror cell” accused of Mr. Rosenfeld’s murder and another shooting two days earlier.

Hamas, the militant Palestinian movement, called for a “day of fury” Friday in response to the Dawabsheh baby’s killing, and local media reported some rioting and clashes with Israeli soldiers Friday afternoon in Hebron and Qalandiya, the main checkpoint between Jerusalem and Ramallah.

Yinon Magal, a member of the Israeli Parliament from the pro-settler Jewish Home faction, noted that Thursday was the 30th day since Mr. Rosenfeld’s death, a significant mourning milestone for religious Jews. “I suppose there is some sort of message here,” he said in a radio interview. But he and leaders of his right-wing party were among an array of politicians who used the bluntest possible language to distance themselves from the arson.

“This is not a Jewish act,” Mr. Magal said. “This is not a moral act. This is a terrible act. We do not do such things. This is not our way.”

Palestinians and their supporters questioned whether the perpetrators would be treated similarly to Palestinians who kill Israelis – whether, for example, their family homes would be demolished. Israel has long been criticized for not vigilantly investigating price-tag attacks or punishing their offenders, but Gilad Erdan, minister of internal security, said Friday that he was giving the Duma case “top priority” and that the suspects “should end their lives behind bars.”

“A nation whose sons were burned in the Holocaust cannot allow its members to burn human beings,” Mr. Erdan, a leader of Mr. Netanyahu’s conservative Likud Party, said on the radio. “We have to drop everything and think about what we can do to ensure that events like this do not occur among us – and that if they do, the price paid will be very heavy indeed.”

In Duma, where the baby Ali was buried in a brief 2 p.m. funeral that drew about 1,000 mourners, relatives said the parents were first cousins in an arranged marriage who were quiet, religious, and prosperous by village standards. Their renovated two-bedroom home had a microwave, washing machine and air conditioner; on Friday, its drapes were still hanging, a small pink plastic milk holder stood near the ashy kitchen, a fly drowning inside.

RECENT COMMENTS

SM
I understand the call for equal treatment of Israeli and Palestinian terrorists. That said, destroying the homes of the Israeli terrorists…
Seth 22 minutes ago
That is the second despicable act by a radical group of Jews in the last few days in Israel (The first being the stabbings at the Gay Pride…
gideon brenner 23 minutes ago
Does a Palestinian victim have to be an infant for the NYT to mourn their death?The people who did this should be called “terrorists,”…

The father, Saad, has been earning 200 shekels a day – about $58 – working construction in a settlement. He listened to the Quran and liked to crack jokes with his close friends, but mostly kept to himself, relatives and neighbors said. The mother, Riham, earns about $800 a month at a nearby school. A charred photograph of the family showed a man in a neat blue shirt and beige pants holding the baby, in red, and a smiling woman in a pinkish head scarf and gray robe.

“Nothing like this has ever happened to us before,” said Uday Dawabsheh, 22, who like many in the village shares the family’s last name. “We don’t have any problems with people.”

One relative, Ali Raqi, 22, said he saw smoke pluming from the house as he sat on his roof early Friday, trying to find a cool place to sleep during a heat wave that has gripped the area. “I ran toward the smoke,” he recalled. “I reached the house and I found Saad lying on the ground.”

Pointing to a concrete-covered hole in front of the house, he said: “Riham was there, by the well.” One of the children was near the door. “Riham told me, ‘I have a son, for the sake of God, help him,’ ” Mr. Raqi said.

“I tried to go in, but I couldn’t,” he continued. “I went on my stomach, I crawled on my stomach, but I couldn’t see. The fire was choking me. I had to go outside.”

Besides “revenge,” there was more Hebrew graffiti, black paint sprayed on a gray wall, that read, “Long live the Messiah king!” with a crown next to it. An adjacent home was also burned, but it was empty.Rashid Dawabsheh, 70, said it belonged to one of his sons, whose family had not come home Thursday night, for a reason he did not know.

“Thank God they didn’t, they would have gone too,” said Mr. Dawabsheh, a tall, wrinkled man who smoked a cigarette as he surveyed the scene.

Ali Dawabsheh, his hands and face stained black from being around the smoldering home, contorted into tears as he talked about his nephews and sister. He had seen her just the night before, watching television. Ahmad, the older boy, was precocious and prone to tantrums if anyone played with his toys, the uncle said; baby Ali, in contrast, was quiet and sweet.

When he heard about the fire, he rushed to the home and collapsed on the floor, weeping. “I knew that he had died,” he said of the baby.

After Friday’s midday prayers, men waited for the funeral to begin in a partially built home near the site.

“May God have revenge on them,” one said to another, echoing the Hebrew graffiti. “An innocent child! What fault did he bear?”

Jodi Rudoren reported from Jerusalem.

U.S. Banks Take Global Lead

MARKETS

As big European firms retrench, American rivals are dialing up their overseas ambitions
European banks poached star bankers and expanded operations in Asia and the U.S., including building massive trading floors in Stamford that were conceived as a satellite to Wall Street.
European banks poached star bankers and expanded operations in Asia and the U.S., including building massive trading floors in Stamford that were conceived as a satellite to Wall Street.
By JUSTIN BAER And MAX COLCHESTER, Wall Street Journal.
Updated July 30, 2015 7:59 p.m. ET

In the trans-Atlantic rivalry for investment-banking supremacy, the Americans are running up the score.

European bank executives over the past week have delivered a series of dour proclamations about their need to shrink and further dial back their global ambitions. Meanwhile U.S. banks are preparing to pounce, with executives touting the gloom emanating from their European counterparts as a big opportunity to press their newfound advantage.

On Thursday, Deutsche Bank AG’s new co-Chief Executive John Cryan wrapped up the first half’s earnings period for major European banks by warning of more pain to come. “We must shrink our balance sheet,” he said, indicating plans for the German bank to pull back from a number of countries and businesses.

Those remarks followed Barclays PLC Chairman John McFarlane, who on Wednesday conceded that the big Wall Street firms are “an enormous threat” to European investment banks. “They have the scale that we no longer have to be global,” he said.

The diverging paths are now clear, at least to investors. Over the past five years, the shares of J.P. Morgan Chase & Co., Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley have climbed, on average, by 45%. In the same period, European banks Barclays, Credit Suisse Group AG, Deutsche Bank, UBS Group AG and Royal Bank of Scotland PLC are down 17%.

By market capitalization, those U.S. banks have added a total of $254.6 billion in that period, while the Europeans have gained $9.5 billion.

As recently as a few years ago, the big U.S. and European banks were going toe to toe on Wall Street and in markets across the globe. The Europeans poached star bankers and expanded operations in Asia and the U.S., including building massive trading floors in Stamford, Conn., that UBS and RBS conceived as a satellite to Wall Street.

Those Stamford offices are now largely empty, part of a broad global retreat by the Europeans, who have been pushed by regulators and shareholders to change strategies and, in some cases, chief executives. Meanwhile, their big U.S. counterparts have generally found their footing after years of searching for answers to many of the postcrisis existential questions the European banks are still addressing.

The U.S. firms have spent the past several years shedding unprofitable businesses and assets, while stockpiling enough capital to return some to shareholders through stock buybacks and dividend increases. When the Federal Reserve unveiled last week an additional layer of capital requirements for the biggest lenders, all but one of the U.S. firms were already above their new buffer. They have also benefited from the relative strength of the U.S. economy, the world’s largest.

Europe’s economy is at an earlier stage in its recovery. So are the Continent’s banks. Deep cutbacks loom at Deutsche Bank and Credit Suisse, where new CEOs consider ways to streamline their balance sheets to conform to new capital rules and investor expectations. For others, like Barclays and UBS, restructurings are under way. Some, like RBS, have thrown in the towel and are shutting down large parts of their investment banks.

Some of Asia’s largest banks have maintained a presence on Wall Street, too, but their forays into investment banking and trading to date generally haven’t been as global or as aggressive as their Western peers’.

Executives at Goldman, Morgan Stanley, Citigroup and Bank of America have recently acknowledged the struggles facing their competitors across the Atlantic—and the opportunities they present.

James Gorman, Morgan Stanley’s chairman and chief executive, said last week that his firm is poised to gain a bigger slice of the debt-trading pie. “There’s clearly more turmoil in other parts of the world than there is in the U.S.,” Mr. Gorman said in a call with analysts earlier this month. “And we think that there’s a potential for, over a period of time, share gain for our business.”

On a call with analysts earlier this month, Goldman finance chief Harvey Schwartz said, “we’re seeing potential big restructuring [by banks] on the European side.”

During the first half of 2015, Deutsche Bank, Credit Suisse, Barclays and UBS each had a smaller slice of the investment-banking revenue pie than they held during the same period three years ago, according to Dealogic. By comparison, J.P. Morgan, Goldman, Bank of America, Morgan Stanley and Citigroup each have a bigger share of the market this year than in 2012.

Big European investment banks’ revenue across Europe, the Middle East and Africa fell 18% to $23.7 billion between 2012 and 2014, compared with a drop of 2% to $26.2 billion, for the largest U.S. banks, according to research firm Coalition.

Most European investment banks now make half the returns on assets of their U.S. peers, according to Morgan Stanley. This has squeezed return on equity, an important measure of profitability, and prompted shareholders to pile pressure on chief executives to improve performance. In the past few months, Barclays, Credit Suisse and Deutsche Bank announced their CEOs’ departures.

European lenders are also battling to keep their best-performing bankers after the European Union imposed rules that cap bonuses for top managers, giving U.S. banks, which don’t face the same restrictions, a potential advantage.

The high-risk, high-reward debt-trading floors may prove an even tougher battleground for European banks. That is where all big lenders have had to make difficult choices on their ambitions in markets where the barriers of entry are higher and the balance-sheet demands are greater.

“Part of the strategy shift is going to be a de-emphasis of the trading businesses at some of the larger European players,” said Steven Chubak, an analyst with Nomura Holdings.

Thus far, though, 2015 has been a mixed bag in that area for U.S. firms. In the first quarter—typically Wall Street’s busiest period—the five banks reported a median increase of 7% in fixed-income, currencies and commodities revenue. For the second quarter, the firms’ FICC businesses posted a median decline of 9%, according to a recent research report by Deutsche Bank analysts.

The European investment banks broadly performed in line with analyst expectations in the quarter ended June 30, aping U.S. trends with a strong showing in equities helping to offset a slowdown in fixed-income revenue. Still, executives at Barclays, Deutsche and Credit Suisse signaled more restructuring in the near future as they continue to bolster their capital reserves.

Asked this week whether U.S. investment banks were eating European lenders’ lunch, Barclays’s Mr. McFarlane replied: “they are doing a good job of it.”

The U.S. banks, he said, “are the only ones that really claim to be global and successful.”

Write to Justin Baer at justin.baer@wsj.com and Max Colchester at max.colchester@wsj.com

Foreign Donors Continue to Grow the Clinton Foundation

POLITICS

Spike in Donor Numbers for Clinton Foundation
By MAGGIE HABERMAN and STEVE EDER JULY 30, 2015 New York Times
Photo

The foundation of Hillary Rodham Clinton, the former secretary of state, and former President Bill Clinton has updated its cumulative list of contributors.

The Clinton Foundation accelerated its fund-raising in the first six months of the year, officials said Thursday, as Hillary Rodham Clinton was gearing up for her presidential run amid a crush of news reports scrutinizing the charity’s solicitation of foreign donors.

Foundation officials said there were 10,516 donors so far this year, compared with 8,801 during the same six-month period last year.

The Bill, Hillary and Chelsea Clinton Foundation did not release the precise amounts any donor gave or the total raised. Rather, it posted on its website a newly updated cumulative list of contributors, most of them dating to 2001. The amounts are listed in ranges; the highest tier is $25 million and up.

Among the names that surfaced as donors for the first time was that of the golfer Tiger Woods, who was listed as having given $25,001 to $50,000.

As Mrs. Clinton, in the early days of her campaign, called for prosecuting executives and companies for Wall Street crimes, the financial services industry continued to support the Clinton Foundation. Goldman Sachs, Bank of America and J. P. Morgan Chase & Co. — all of which had given before, either directly or through their own foundations — made new contributions.

The Clintons themselves crossed a new financial threshold, arriving in the $5 million to $10 million donor bracket. That may reflect their enhanced wherewithal: The former president and the former secretary of state recently disclosed that their earnings from January 2014 through mid-May of this year had exceeded $30 million, much of that from speaking fees.

They did not write personal checks, however: The money was transferred from a smaller charity, the Clinton Family Foundation, to the larger entity.

There were also donations from at least four Moroccan entities, including a mining company and a bank, during the first half of the year. One of them, OCP Corporation, a phosphate mining company that had donated to the foundation in the past, rose into the $5 million to $10 million category during the period. Politico reported in April that OCP had planned to give the Clinton Foundation a major gift to hold a conference in Marrakesh. The meeting took place in May with former President Bill Clinton on hand.

Those who gave from January through June included plenty of previous donors and familiar names, among them many who have supported the Clintons in other areas, including Haim Saban, who (with his wife and foundation) has given $10 million to $25 million to the foundation, along with $2 million to a “super PAC” supporting Mrs. Clinton’s campaign, and J. B. Pritzker, a Chicago philanthropist who was a national co-chairman of Mrs. Clinton’s 2008 campaign, who gave through his family foundation.

Some of the foundation’s most generous donors also made additional gifts, including the Bill & Melinda Gates Foundation, the Canadian billionaire Frank Giustra and Nationale Postcode Loterij, a Dutch lottery. Each was listed at $25 million and up.

Officials of the foundation, after years of it generally being treated as an apolitical entity, spent several months swatting back questions about large donations from Middle Eastern countries known for violence against women — at a time when Mrs. Clinton was making her advocacy on behalf of women a major part of her campaign.

Mr. Clinton has defended the fund-raising efforts, arguing that the foundation’s good works justify the acceptance of money from all sorts of donors.

He raised money aggressively to try to amass a $250 million endowment before Mrs. Clinton began her campaign. But Mr. Clinton’s aides have said he has now set a fund-raising target of twice that.

The foundation has also faced recent questions about donations from companies and countries that had business before the United States government while Mrs. Clinton was secretary of state during President Obama’s first term.

Mrs. Clinton’s campaign realized early on that voters did not know the scope of the Clinton Foundation’s work, giving an opening to Republicans who want to portray it as a way for political donors to curry favor and access.

On the campaign trail, Mrs. Clinton, who joined the foundation shortly after leaving the State Department at the beginning of 2013, has repeatedly said she is proud of the foundation’s work. Surrogates have received talking points to remind voters that the foundation has helped fight AIDS in Africa and rebuild Haiti after the 2010 earthquake, among other endeavors.

Reporting was contributed by Mike McIntire, Kitty Bennett, Sarah Cohen and Amy Chozick.

Find out what you need to know about the 2016 presidential race today, and get politics news updates via Facebook, Twitter and the First Draft newsletter.

A version of this article appears in print on July 31, 2015, on page A17 of the New York edition with the headline: Spike in Donor Numbers For Clinton Foundation. Order Reprints| Today’s Paper|Subscribe

Canadian Version of David Letterman’s Top Ten List

Canadians have been having fun for years with their version of a Letterman Top Ten list.
This is one of the latest, published by the Toronto Sun. Submitted by ourMissingNews
without Comment:

How true all of this is.
This is so sad; from a proud, strong country to a laughing
stock of the world.

Canadians Version of David Letterman’s Top 10. Just makes
you want to shake your head in disbelief, and, just maybe
choke someone in charge.

This is Canada’s Top Ten List of America’s Stupidity.
Of course we look like idiots – we are!
# 10 Only in America… could politicians talk about the
greed of the rich at a $35,000.00 per plate Obama campaign
fund-raising event.

# 09 Only in America… could people claim that the
government still discriminates against black Americans
when they have a black President, a black Attorney General
and roughly 20% of the federal workforce is black while
only 14% of the population is black, 40+% of all federal
entitlements goes to black Americans – 3X the rate that go
to whites, 5X the rate that go to Hispanics!

# 08 Only in America… could they have had the two people
most responsible for our tax code, Timothy Geithner (the
head of the Treasury Department) and Charles Rangel (who
once ran the Ways and Means Committee), BOTH turn out to
be tax cheats who are in favor of higher taxes.

# 07 Only in America… can they have terrorists kill
people in the name of Allah and have the media primarily
react by fretting that Muslims might be harmed by the
backlash.

# 06 Only in America… would they make people who want to
legally become American citizens wait for years in their
home countries and pay tens of thousands of dollars for
the privilege, while they discuss letting anyone who
sneaks into the country illegally just ‘magically’ become
American citizens. (probably should be number one)

# 05 Only in America… could the people who believe in
balancing the budget and sticking by the country’s
Constitution be called EXTREMISTS.

# 04 Only in America… could you need to present a
driver’s license to cash a check or buy alcohol, but not
to vote.

# 03 Only in America… could people demand the government
investigate whether oil companies are gouging the public
because the price of gas went up when the return on equity
invested in a major U.S. Oil company (Marathon Oil) is
less than half of a company making tennis shoes (Nike).

# 02 Only in America… could you collect more tax dollars
from the people than any nation in recorded history, still
spend a Trillion dollars more than it has per year – for
total spending of $7 Million PER MINUTE, and complain that
it doesn’t have nearly enough money.

# 01 Only in America…. could the rich people – who pay
86% of all income taxes – be accused of not paying their
“fair share” by people who don’t pay any income taxes at
all.
PLEASE DON’T KEEP THIS – SEND IT OUT TO YOUR ENTIRE LIST.

NLRB to Rule on Northwestern Football Players’ Bid to Unionize

U.S.

Decision could have broad impact on college athletics

By MELANIE TROTTMAN And DOUGLAS BELKIN, WSJ
July 30, 2015 3:09 p.m. ET

The National Labor Relations Board is expected to decide in coming weeks whether to give labor unions a foothold in college sports, a decision that could have a widespread impact on college athletics.

The five-member board of the federal labor agency is weighing whether Northwestern University’s scholarship football players are school employees, as an agency regional director ruled last year, and can therefore unionize.

Close watchers of the NLRB predict the board, with its Democratic majority, is more likely than not to uphold the regional decision. If so, the players would be eligible to form America’s first college-athletes union.

The agency referees workplace disputes in the private sector and oversees union-organizing elections. Its board has the final say.

The ruling last year found the 85 scholarship players in place at the time had athletic duties that required as many as 60 hours a week during training camp and 50 hours weekly during the football season. In all, the players on the team of about 112 members clocked more hours than “many undisputed full-time employees” work, and more than the players spend on their studies, the ruling found.

Northwestern, of Evanston, Ill., appealed, arguing the decision ignored evidence showing the players were primarily students. The school also said the decision failed to apply a legal precedent from a prior NLRB decision that found another university’s graduate assistants were mostly students.

The case could spur similar efforts at other private institutions and spill over into the public-university realm. While state-supported colleges and universities are beyond the NLRB’s private-sector jurisdiction, state labor boards often follow NLRB precedent, Northwestern’s President Morton Schapiro has warned other colleges.

Opponents of the unionization effort fear the board’s current Democratic majority will give an edge to the players who have pushed to unionize so they could negotiate for benefits like payment for medical care and scholarship protection. During the current administration, Democrats on the board, which is appointed by President Barack Obama, have made several major decisions unions sought and employer groups opposed.

A politically divided board in December established new rules for union elections to streamline and speed the organizing process. Board Democrats also had a partisan split when they ruled employees have the right to use their employers’ email systems to form or join a union during “nonworking time.”

Even if the board says the players can unionize, that doesn’t mean they will. The scholarship players cast their votes in April of 2014—76 were eligible to do so—but the ballots were impounded, pending the labor board’s ruling. The ballots will be counted if the university loses its appeal. Only scholarship players who hadn’t exhausted their eligibility were eligible to vote.

Kain Colter, the 2014 Northwestern University graduate and former football-team co-captain who led the effort to unionize, said the school put a lot of pressure on the players to vote against the union. He believes that pressure will be reflected in the votes if they are ever counted.

If the players reject unionization, the team could hold another vote this year, as could any other Division 1 private college, said Ramogi Huma, a former University of California, Los Angeles linebacker who is president and founder of the College Athletes Players Association, which helped organize the union drive. The organization receives some financial support from the United Steelworkers.

If the NLRB overturns the regional decision, “we don’t have an option to try and unionize at another private school,” Mr. Huma said. “This is a big domino to fall one way or the other.”

Mr. Schapiro, Northwestern’s president, has said the university would appeal a loss in federal court and take the case to the Supreme Court if necessary.

Another pending board decision that could come soon could lower the barriers between companies and the contract workers they use. In that case, known as Browning-Ferris, a union wants a company to be at the table in collective-bargaining talks involving the company’s subcontracted workers. The union says it can’t effectively bargain for the workers unless the company is declared a “joint employer” of the workers. Business groups fear the board will use the case to loosen its decades-old standard for determining when contractual relationships render businesses joint-employers, which they say will undermine contracting efficiencies, expose businesses to greater liability in labor matters and drag more employers into union-organizing campaigns.

Write to Melanie Trottman at melanie.trottman@wsj.com and Douglas Belkin at doug.belkin@wsj.com

This blog is dedicated to bringing back the commitment of professional journalism. As a former network news editor, major market news director and anchor, BILL DEANE gives you the inside story often missed by media more interested in Hollywood gossip. OUR MISSING NEWS gets into the WHY of the day's significant events.