-Caveat Lector- from; http://www.aci.net/kalliste/ Click Here: <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- Information Warfare FBI Lied to Wen Ho Lee Implied he had failed lie detector test, when he hadn't. FBI agents misled physicist Wen Ho Lee into believing that he had failed a Department of Energy polygraph test as they pressed him during a lengthy interrogation last March to confess to passing nuclear weapons secrets to China. Lee insisted throughout the tape-recorded session that he was telling the truth, unaware that polygraph examiners actually had given him an extremely high score for honesty. "I don't know why I fail," Lee told the agents, according to a transcript obtained by The Washington Post. "But I do know I have not done anything. . . . I never give any classified information to Chinese people." The interrogation on March 7, 1999, the day before Lee was fired from his job at Los Alamos National Laboratory for violating security rules, was highly adversarial and ended only after Lee repeatedly asked to leave. "I'm an honest person and I'm telling you all the truth, and you don't believe it," he said at one point. Lee's family and supporters view the transcript as a vivid demonstration that the FBI was unfair and even devious in its investigation of the 60-year-old, Taiwan-born scientist, who is being held without bail on charges of copying a vast trove of classified nuclear data to computer tapes, seven of which are missing. Prosecutors, however, deny that the investigation was biased or unethical in any way. They say the FBI's skepticism during the interrogation was justified by a series of lies the scientist had told colleagues, superiors and investigators over a period of many years. Independent legal experts also said it is not uncommon for police or FBI agents to mislead suspects during preliminary questioning. The March 7 interrogation came at a critical juncture in the FBI's attempt to determine how China might have obtained secrets about the design of the W-88 warhead, America's most sophisticated nuclear weapon. Lee had become the government's prime suspect, having acknowledged--immediately before taking a Department of Energy polygraph in December 1998--that Chinese weapons scientists asked him about the W-88 during a trip he made to Beijing 10 years earlier. The DOE polygraph examiners concluded that Lee was telling the truth when he said he had never passed classified information to China during that or any other meeting. But two months later, FBI polygraph examiners concluded that Lee was being deceptive when he was asked the same question. Throughout the March 7 interrogation, FBI agents pressed Lee to admit that he had passed secrets to the Chinese scientists who visited him at his Beijing hotel in 1988 and asked specific questions about the W-88. The agents suggested that unless he confessed, he would be arrested for espionage and possibly executed. "Do you know who the Rosenbergs are?" one of the agents asked Lee. "The Rosenbergs are the only people that never cooperated with the federal government in an espionage case. You know what happened to them? They electrocuted them, Wen Ho." "Yeah, I heard," Lee replied. In another exchange, an FBI agent told Lee, "Wen Ho, you're in trouble. You are in big trouble." Lee replied: "I know. But I tell you one thing. I'm the victim. I am innocent." Lee's attorneys introduced an 82-page, declassified transcript of the interrogation in court at a bail hearing in Albuquerque in late December to bolster their contention that the government, not Lee, had acted deceptively. The government conceded in a written motion opposing bail that Lee passed the polygraph test given by the Energy Department but noted that he failed the FBI-administered test in February. At the end of the three-day hearing Dec. 30, U.S. District Judge James A. Parker ruled that Lee must remain in jail pending trial. Lee was charged Dec. 10 with 59 felony counts of mishandling classified information and could, if convicted, be sentenced to life imprisonment. The government discovered the downloaded data inside Lee's unsecure office computer only after he consented to a search following his March 8 firing from Los Alamos, where he had worked for two decades. Federal authorities have acknowledged that they do not have any evidence that Lee passed secrets to China, and they have not accused him of espionage. But they are pressing him for information about the missing computer tapes. Lee's attorneys say he destroyed the tapes, but they have not given any details about how, when and where the portable cartridges, similar to VHS videotapes, disappeared. Mark Holscher, one of Lee's lawyers, said in a telephone interview yesterday that the FBI's false statements and threats of electrocution should make it clear why the scientist "is reluctant to be subjected to further questioning." "The transcript clearly shows that the FBI on at least a dozen occasions [during the interrogation] pressured Dr. Lee to confess to a death penalty offense, which even the Department of Justice must now concede he did not commit," Holscher said. At one point during the interrogation, as FBI agents told Lee over and over that no one in the government believed his denials, the scientist replied: "There's nothing I can tell you because I already told you everything, okay? If they want to put me in jail, fine." Washington lawyer Plato Cacheris, who has been both a federal prosecutor and a defense attorney, said yesterday that although he "does not applaud the practice," it is well known that agents "tell false information to suspects in order to get them to confess without being sanctioned by the court." Lawyers often go into court, Cacheris said, and argue that FBI agents "lied to my client; they do it all time." But, he added, as long as the suspect is not under arrest, it is a technique that judges generally accept. Washington Post, Jan. 8, 2000 Digital Society Son of ChinaGate Figure Li Ka-Shing Taps Internet Craze AN ODD thing happened last month, just before Christmas. A Hong Kong firm, only eight months old, run by the 33-year-old son of an old-style property tycoon and with a business plan that almost nobody fully understands, suddenly became one of the biggest Internet companies in the world, with a stockmarket value of $21 billion. Odder yet: it might even deserve it. The firm is Pacific Century CyberWorks (PCCW), a name still little known outside Hong Kong. That will soon change, thanks to the vaulting ambitions of its founder, Richard Li, and the billions of dollars he can marshal behind them. PCCW is assembling a satellite-based broadband Internet network, modelled on America’s Excite@Home, with the aim of becoming the largest broadband Internet business in the world. It has also built a venture-capital arm, CyberWorks Ventures, that has already invested $500m in cash and equity in nearly 30 companies. They include big stakes in SoftNet, a broadband data-p rovider passing 2.4m cable subscribers in America, and CMGI, an American-based venture-fund with a similar investment strategy. PCCW’s venture-capital investments alone are now worth nearly $2 billion. At a rate of nearly a deal a week, PCCW is putting together the pieces of what could soon be one of the world’s biggest Internet conglomerates. It is building the pipes—from satellite capacity and transmission to deals with the cable-television network operators that will reach individual subscribers—to bring broadband data to millions of households in Asia. It is buying stakes in dozens of companies that will fill these pipes with content and services, from portals such as Sina.com to Internet telephony, gaming and e-commerce. And it is starting joint ventures with heavyweights such as Hikari Tsushin, a leader in Japan’s booming mobile-phone industry, that may extend its reach to mobile multimedia as well. Overnight, PCCW has become Asia’s Internet darling. Bankers are falling over themselves to praise it (although it suffered badly in the stockmarket correction that pounded Hong Kong this week). The firm’s deals in the past month, says Credit Suisse First Boston, have made it “the Asian e-infrastructure play”. Credit Lyonnais calls it an “all-in-one of Excite@Home, Yahoo! and CMGI in Asia”. Lehman Brothers proclaimed that “an Internet star is born”. Not bad for a firm that, Credit Suisse notes, was a small telecoms-equipment distributor a few months ago. Is PCCW really so magical? No firm could be. It is not really eight months old—it just looks that way because Mr Li bought a small local firm called Tricom Holdings last May and used it to list the Internet ventures of his existing property conglomerate, the Pacific Century Group, which until then was best-known for winning a sweetheart deal from Hong Kong’s government to build an industrial park. Cyber-Port, as it is called, has moved to the periphery of the firm’s operations—where it belongs. The Internet ventures had been in the works for more than two years; indeed, the first sign that something was up was when Intel paid $50m for a minority share in Mr Li’s Internet project in early 1998. Nor is Mr Li a newcomer to either satellites or technology: he started Pacific Century in 1993 with the billion dollars he got for selling Star TV, his first media venture and today the leading satellite broadcaster in the region. He has a degree from Stanford in computer engineering. And there is the small matter of his father, Li Ka-Shing, Hong Kong’s richest tycoon and a force in telecoms thanks to his ownership of Hutchinson Whampoa, which last year made a fortune selling its stake in the Orange mobile network in Britain to Germany’s Mannesmann. The elder Mr Li has virtually no part in PCCW: yet few names carry more weight in Asia. When he started in business the younger Mr Li’s arrogance made him plenty of enemies, but he has since grown up, discovering his inner geek along with a softer style. The younger Mr Li was already a wealthy man when he started: last year Forbes ranked the Li family tenth-richest in the world, with about $13 billion. The elder Mr Li’s canny trading last year probably added $5 billion or so to that. But in the space of only a few months, Mr Li junior has nearly equalled his father. Sohaib Umar, an analyst with Credit Lyonnais Asia, calculates that the junior Mr Li owns 54.5% of PCCW, a stake that is now worth nearly $9 billion. Add his property and other investments and the total may exceed $12 billion, not counting his share of the family wealth. In any case, it is easy to make too much of the family connection. PCCW is not an outpost of the elder Mr Li’s empire, nor is it the dalliance of an indulged son (the elder Mr Li’s sole financial contribution was to invest $62m to help set up Star TV in the early 1990s). But the younger Mr Li did inherit one trait that has served him well: a knack for deal-making perfectly tuned to the frantic pace of the Internet. Aides describe him negotiating billion-dollar deals in a few hours, sealing clauses with rapid fire (“Done!”) on a mixture of instinct, experience and some of the best connections in the technology industry. Having the chairman as chief negotiator has allowed PCCW to react to openings as nimbly as any startup: in the dot.com industry these days, the ability to invest and strike alliances quickly counts for more than soldiering on behind a solid business plan. That might make PCCW sound like Japan’s Softbank, but it is not. Unlike the phenomenal Internet investor, PCCW aims to build a real business, not just a portfolio. A new star dawns Yet in PCCW’s core broadband-access business, doubts remain. On the face of it, there is something counterintuitive about PCCW’s dream. It wants to bring broadband Internet access to all of Asia (mainly China, India and Japan) via televisions and interactive set-top boxes. This is natural enough for Mr Li: take his old Star TV business plan, replace “television” with “broadband Internet” and you would not be far off. But Star is thought to have lost more than $600m in less than a decade and is still losing money. Asian viewers, like European ones, turn out to have a taste for expensive local programming. Most also refuse to pay for content. They are, needless to say, poor—indeed, Mr Li’s target audience is one of the least affluent in the world. By contrast Excite@Home’s consumers are rich. Yet the American company has fought to find customers for its own broadband offerings. After four years, it has only about 1m subscribers and its business is only now taking off. Can Mr Li really thrive in India and China when Excite@Home has struggled in Silicon Valley and New York? Bravely, Mr Li thinks that it can—and he might be right. Excite@Home suffered because American cable operators had neither the money nor the urgency to upgrade their own systems to carry two-way data. But broadband is taking off now because AT&T’s huge investment in cable firms has kick-started the market—and led to price competition with telecoms firms that offer broadband services over copper wires. In Asia, Mr Li argues, the cable operators have even more reason to invest: many of the households he wants to supply have no telephone at all. Asian cable infrastructure, especially in China, is newer and easier to convert to two-way data than America’s, and where it is not in good condition (such as in India), it is cheaper to replace, thanks to lower labour costs. Overall, PCCW hopes to reach more than 16m households by 2005, out of an Asian cable market of more than 160m by then. These will be mostly rich, urban Asians. There are an awful lot of these, even in otherwise poor countries. Within a few months, PCCW will be able to prove its point. It plans to launch its service, initially as satellite-television channels with Web content, by mid-year. One test will be whether PCCW can bring together enough compelling content to create a service people will pay for—something neither Cable & Wireless HKT or Singapore Telecom has managed with their own broadband services in those cities. Their potential audiences, of just a few million, are too small to justify the dozens of expensive channels of local content required to attract viewers. Mr Li’s audiences will at first be even smaller and spread over even more disparate cultures. Hence the venture fund, whose investments are intended to supply the content that PCCW cannot. Sometimes being a billionaire really does have its advantages. The Economist, Jan. 8-14, 2000 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, All My Relations. Omnia Bona Bonis, Adieu, Adios, Aloha. Amen. 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