Alice Ross Writes

“War happens to people, one by one. That is really all I have to...

Sat, 18 May 2013 11:26:00 +0100

“War happens to people, one by one. That is really all I have to say and it seems to me I have been saying it forever. Unless they are immediate victims, the majority of mankind behaves as if war was an act of God which could not be prevented; or they behave as if war elsewhere was none of their business. It would be a bitter cosmic joke if we destroy ourselves due to atrophy of the imagination.”

- Martha Gellhorn

May 18 2013

Delighted to learn that Chris Woods, Jack Serle and I have been shortlisted for the Martha Gellhorn Prize for Journalism for our work on drones for the Bureau of Investigative Journalism.

Any shortlisting is an privilege, but this one is particularly special: it’s prestigious, certainly, but it’s also in honour of a pioneering lady reporter, one whose powerful, clear-sighted, angry reporting on Dachau sent chills down my spine on a Mediterranean beach when I came across it.

May 2013 - Chris Woods and I reveal a further two cases of...

Thu, 16 May 2013 10:00:00 +0100

May 2013 - Chris Woods and I reveal a further two cases of people losing their citizenship - but there’s no way of knowing yet who they are or what they’re alleged to have done. And judges in a further case say the Home Secretary may have abused her powers.

Home Secretary strips two more people of British citizenship

The Home Secretary has stripped at least two additional individuals of their British citizenship in recent months, the Bureau has learned.

In February, an investigation by the Bureau and published with the Independent revealed that Theresa May had signed deprivation of citizenship orders for 16 people between the 2010 election and November 2012, including five British-born individuals. That total has now risen to 18 cases. Under the Labour government, five people lost their UK nationality.

The two new cases were revealed by a recent Freedom of Information request made by the Bureau. One deprivation notice was issued late last year, taking the total number who lost their UK nationality in 2012 to six. A further case took place between January 1 and mid-March, when the Freedom of Information request was submitted.

The Home Secretary cannot remove citizenship if it will make an individual stateless, so the orders can only be made against dual-nationality individuals.

The Freedom of Information release listed the other nationality of the individuals who have had their UK passports revoked. This revealed that two new nations, Iran and Yemen, joined the list of alternate nationalities; the Bureau has established that Yemeni and Iranian dual-nationals lost their UK citizenship between June 2012 and March 2013.

However almost nothing else is known about the most recent deprivation cases. Of the six that took place in 2012, nothing at all is known about three; a further individual is known only as F2. The sole case in 2013 is similarly a mystery.

Deprivation of citizenship orders take effect immediately, often leaving individuals stranded abroad with no UK passport in a process likened to ‘medieval exile’ by leading human rights lawyer Gareth Peirce.

In cases where citizenship is being removed on terrorism grounds, the only route of appeal is through the Special Immigration Appeals Commission (Siac), a court that can hear evidence in secret. Cases often go through many rounds of appeals and can last years.

Siac judgments are one of the primary sources of information about deprivation of citizenship cases. When cases do not go before Siac they receive no judicial scrutiny and often remain hidden from public scrutiny too – as is the case in the most recent orders.

‘Manipulating the system’
Separately, the Court of Appeal has agreed to hear the case of a man who lost his British citizenship when he left the country to go on holiday in 2010. Judges voiced concerns that the order had been an ‘abuse of power’ on the part of the Home Secretary, court transcripts show.

A Sudanese-born man known only as L1 left the UK in July 2010 with his four children, all British citizens, and his wife, to spend the summer holiday in Sudan. Four days later, the UK Border Agency (UKBA) sent a letter to his London home notifying him that the Home Secretary intended to strip him of his citizenship on ‘terrorism’ grounds. He had 28 days to appeal.

L1 claimed he did not learn of the letter until the 28-day window had expired, although UKBA officials insisted they had alerted his brother to the letter and L1 would have learned of it in time. Siac refused to allow him to lodge a belated appeal, although Mr Justice Mitting noted: ‘The natural inference, which we draw, from the events described, is that she [Theresa May] waited until he had left the United Kingdom before setting the process in train.’

Three Court of Appeal judges have now said at a pre-appeal hearing that this appeared to be ‘a deliberate exercise… Once they are out of the country, you then make jolly sure they cannot get back in.’

One judge added: ‘It seems to me, if the Secretary of State is manipulating the system so as to obstruct access to a right [of appeal in the UK] that Parliament has given, whether it is fair or not, it is abusive’.

On this ground alone, the appeal should proceed, the judges decided, adding they were ‘very troubled’ by the way L1′s citizenship had been stripped as soon as he left the UK: ‘We cannot really have the Secretary of State behaving like this,’ they noted.

(The original story is here)

Photo by the Home Office via Flickr Creative Commons.

May 2013 - Two days before Pakistan’s elections, a high...

Thu, 09 May 2013 16:39:00 +0100

May 2013 - Two days before Pakistan’s elections, a high court came down firmly against drone strikes and called on the new government to take firm action. The man in the photo is Shahzad Akbar, the lawyer who brought the suits, photographed by my colleague Chris Woods.

Pakistani court rules CIA drone strikes are illegal

In the first major Pakistani court ruling on the legality of the CIA’s drone campaign in the country, a Peshawar High Court judge said this morning that strikes are ‘criminal offences’. Chief Justice Dost Muhammad Khan ordered Pakistan’s government to ‘use force if need be’ to end drone attacks in the country’s tribal regions.

He ruled that US drone strikes in Pakistan constitute a ‘war crime’ and are a ‘blatant violation of basic human rights’, killing hundreds of civilians. He ordered the government to ‘forcefully’ convey to the US that it must end drone strikes and called on the UN Security Council to intervene.

The Pakistani government should also gather data on those affected by drone strikes, and offer redress to the victims, Khan added. At present the only data systematically released on drone strikes comes from independent monitoring organisations such as the Bureau of Investigative Journalism, which has been investigating drone strikes and tracking reported casualties since 2011.

The ruling comes two days ahead of national elections marking Pakistan’s first-ever transition from one civilian administration to another. The new government will have to decide between implementing the court’s orders or appealing to the Supreme Court.

The judgment applies to a lengthy case against the CIA brought by the Foundation for Fundamental Rights on behalf of Noor Khan, a tribesman whose father was among dozens of civilians killed in a drone strike on a gathering of tribal elders on March 17 2011. Last year, Noor Khan also attempted to bring legal action against the UK government for providing information that could lead to deaths in drone strikes, in a case backed by legal charity Reprieve. The attempt was refused but he is appealing.

Lawyer Shahzad Akbar, who argued the Peshawar case, said: ‘It is a landmark judgment: drone victims in Waziristan will now get some justice after a long wait. This ruling will also prove to be a test for the new government as if drones continue and government fails to act, it will run the risk of contempt of court.’

In the course of the Peshawar case, Dost Muhammad Khan also clarified that drone strikes were illegal even if – as has been rumoured – senior Pakistani officials secretly consent to strikes.

He also repeatedly demanded that the secretariat for the tribal regions releases any casualty data it holds.

Naureen Shah, an academic at Columbia Law School and co-author of several studies on drones, said the ruling increases the pressure on the US to respond to claims of civilian deaths in drones strikes.

‘The US government can’t afford to be silent on civilian deaths any more,’ she said. ‘The Peshawar High Court says that drone strikes are carried out “at random” and kill hundreds of civilians. That’s a damning charge that may be overstated. The US government must answer it with investigations and public disclosure about who is being killed and on what legal basis. If the US does not respond, it risks the appearance of indifference – to human life, and to the rule of law.’

(See the original story here)

Photo: Shahzad Akbar, by Chris Woods

April 2013 - As the UK’s first drone base opens, a report...

Mon, 29 Apr 2013 15:22:00 +0100

April 2013 - As the UK’s first drone base opens, a report for the Bureau of Investigative Journalism on the emergence of the UK’s role in the drone war in Afghanistan and Iraq.

Protesters march against UK drones as MoD reveals ‘drone sharing’ with US

An estimated 600 campaigners staged a march and rally at a Lincolnshire air base this weekend protesting at the opening of the UK’s first military base for remote armed drone operations.

Protesters marched four miles from Lincoln to RAF Waddington. Last week the Ministry of Defence (MoD) confirmed that drone flights in Afghanistan are already being piloted from the air base.

The march took place as the government admitted that Royal Air Force crews have carried out more than 2,000 missions using ‘borrowed’ US armed drones. These are on top of hundreds of missions carried out by the RAF’s own Reaper drone fleet in Afghanistan.

The news prompted Conservative MP Rehman Chishti to warn that armed drone operations in Afghanistan by the RAF and the United States Air Force have become so interchangeable that Britain ‘may no longer be able to determine accountability and responsibility if civilians are killed’.

‘Normalised’
Protest group Stop the War described Saturday’s demonstration at RAF Waddington as the first public protest in the UK against armed drones being controlled from Britain.

Spokesman Ian Chamberlain told the Bureau: ‘There’s something morally repulsive about the idea that in Lincolnshire someone can press a button and kill in Afghanistan.’

Since 2008, RAF crews have remotely-piloted Britain’s small armed drones fleet from Creech Air Force Base in Nevada. The additional facility at Waddington will allow the RAF to operate more efficiently, according to the Ministry of Defence.

‘The opening of this new drone warfare centre has brought home to many people that the use of drones by British forces is not after all, temporary and time-limited. Rather the use of drones to launch “risk-free” airstrikes at great distances is being normalised,’ said Chris Cole of Drone Wars UK.

Defence minister Andrew Robathan also revealed last week that British military personnel have been directly embedding with the US Air Force, flying combat drone sorties in the recent Libyan and Iraq wars, as well as in Afghanistan. These ‘embeds’ last for up to three years with ‘fewer than 10 pilots’ embedded at any one time, an MoD spokesman told the Bureau.

Rehman Chishti, Conservative MP for Gillingham and Rainham, said he was ‘surprised and astonished’ by the minister’s answers which he says make it difficult to understand where accountability for armed drone strikes now lies.

‘The problem with embedding British pilots with the Americans, for example, is that you can no longer determine responsibility,’ Chisti told the Bureau. ‘This muddies the waters completely, risks turning the people of Afghanistan against us, and creates a joint liability for both the UK and US governments.’

Interlocking forces
Britain is the only nation Washington has so far allowed to purchase and operate armed MQ-9 Reaper drones. UK-badged combat missions began in Afghanistan in late 2008. Yet for some years beforehand, British pilots and analysts were flying US drones under the embedding programme. An MoD spokesman said UK drone pilots follow British rules of engagement even when embedded with the US military.

Operations by RAF and USAF Reapers have now become so interchangeable in Afghanistan that it may no longer be possible to distinguish between the two. News that British crews are flying US armed drones may also help to explain anomalies that have been puzzling drone analysts.

Two apparent anomalies are the high proportion of missiles reportedly fired by UK pilots, and the low numbers of RAF-declared civilian casualties when compared to other recent conflicts.

Last autumn Britain announced it is doubling the size of its fleet of Reapers in Afghanistan from five to ten aircraft. The US Air Force is believed to operate as many as 200 armed drones in Afghanistan, although a spokeswoman declined to provide figures.

Yet data released last year to the Bureau by Centcom, which oversees coalition operations in Afghanistan, indicated that British crews fired at least one in five of all missiles fired by drones in the country in 2012. Neither Centcom nor the Ministry of Defence (MoD) in London could explain that high figure.

News that many of these missiles may have been fired from US-badged drones could help explain the discrepancy.

2013 figures are to January 31 only. Click the chart to view the data.

There remains no official, systematic account of how many people are killed by drones in Afghanistan, and their identities. Centcom routinely declines to provide any casualty data for Afghanistan drone strikes, though Britain has been slightly more forthcoming. David Cameron told reporters in 2010 that UK drones had killed ‘more than 124 insurgents’, and the MoD has also admitted to four civilian deaths. The UN mission in Afghanistan reported that 16 civilians died in drone strikes in 2012 alone, but in the absence of official estimates from the US and UK, it is impossible to tell who was responsible.

This week defence minister Andrew Robathan also confirmed British pilots have flown drone combat missions in both Libya and Iraq – conflicts in which no UK-badged armed drones participated. Between 2006 and 2012, UK crews flew 2,150 missions in US-owned drones in Afghanistan and Libya, according to Robathan – a small but significant portion of total drone missions in those theatres.

Data on Coalition drone usage only spans back to 2008, but this shows drones flew around 36,500 armed missions in total in Afghanistan and Libya between 2008 and October 31 2012. Of these, around one in thirty resulted in a drone strike.

Centcom recently stopped publishing statistics on armed drone activity in Afghanistan, saying they ‘disproportionately focused’ on the role played by unmanned aircraft. Before the figures were effectively reclassified, they illustrated the rapid rise of the drone in conventional wars. In 2009, drones fired around one in 20 of all missiles released by Coalition aircraft. By January 2013, this had risen to one in five.

(The original story is here)

Photo by Sarah Baldwin

April 2013 - The almost unprecedented testimony of a young...

Wed, 24 Apr 2013 15:54:00 +0100

April 2013 - The almost unprecedented testimony of a young Yemeni journalist on the impact of drones on his village stunned a Senate committee and raised the profile of the covert war in his home country.

Yemeni tells US Senate ‘drones are fuelling anti-Americanism’

‘Drone strikes are the face of America to many Yemenis,’ Farea al-Muslimi told a rare US Senate hearing on targeted killing yesterday.

The Yemeni journalist and activist gave emotive testimony at a Senate subcommittee about the impact of drone strikes and targeted killings on his homeland. His statement was a view from beneath the strikes that is almost unique in Washington and drew some applause from the chamber.

In stark terms he described the human toll of the US’s covert campaign in Yemen, such as the aftermath of the catastrophic December 2009 cruise missile strike on al-Majala that killed over 40 civilians, including children and pregnant women. After the attack the bodies of the women and children were indistinguishable from the livestock that died alongside them, a tribesman told him.

‘Just six days ago, this so-called war came straight to my village,’ said al-Muslimi, who was educated in the US. A reported drone strike on April 18 left farmers ‘scared and angry’ and ‘tore my heart’, he added.

The presumed target of the strike, Hamdi al Radami, could easily have been arrested, al-Muslimi claimed, challenging statements by President Obama and his new CIA chief John Brennan that targeted killings are only used as a ‘last resort’, when capture is impossible.

Accounts of the strike vary: unnamed intelligence officials said al Radami was an ‘influential al Qaeda trainer’ and founder of a local cell. Yemeni journalist Nasser al-Arabyee described the area as ‘Yemen’s Tora Bora’.

Read Farea al-Muslimi’s written testimony here

The Senate constitutional subcommittee hearing, which heard al-Muslimi’s statement, is one of a tiny number of public examinations of the drone campaign and targeted killing to date.

As public interest in the drone issue has mounted there has been increasing pressure on the government to be more open over its use of drones and its legal justifications, and President Obama has recently pledged the administration will be more transparent over targeted killings. But the government refused to send a representative to yesterday’s hearing.

Alongside al-Muslimi, the committee heard from the Pentagon’s former number two General James Cartwright, from constitutional lawyers, and from the casualty-counting organisation New America Foundation.

Witnesses all expressed reservations about the current drone programme, and several voicedconcerns at the prospect of other nations embarking on targeted killing programmes of their own.

Retired US Air Force colonel Martha McSally said oversight of targeted killing needed to be ‘tightened up’ and added: ‘There has been, I think, way too much vagueness and lack of clarity even in the information that’s come out of the chain of command relating to their legal argument and their strategy on that matter.’

But drones allowed more ‘oversight and precision’, and were more efficient than capture missions, she added, which could also risk civilian lives and took longer.

General Cartwright, the former deputy Chairman of the Joint Chiefs of Staff, told the committee, chaired by Senator Dick Durbin, that he feared the US had ‘ceded the moral authority’ through its use of drones, while law professor Rosa Brooks warned the ‘squishy’ definition of what constitutes official armed combat meant the US’s justification for targeted killing was ‘infinitely malleable’.

The hearing follows a row between Congress and the government over the government’s initial refusal to reveal its legal justifications for targeted killing to members of the Intelligence committee, even though the committee is responsible for overseeing the CIA’s activities. The issue threatened to dominate Brennan’s nomination hearings as CIA director. Durbin indicated in yesterday’s session that further government hearings are a possibility.

Watch the full hearing here

(Read the original story here)

March 2013 - The Pakistani government releases what appears to...

Fri, 15 Mar 2013 15:45:00 +0000

March 2013 - The Pakistani government releases what appears to be its own estimate of drone strike casualties.

Pakistan government says ‘at least 400 civilians’ killed in drone strikes

The Pakistani government estimates at least 400 civilians have been killed in drone strikes – a figure close to the Bureau’s own findings.

In evidence to Ben Emmerson QC, UN special rapporteur on counter-terrorism, the Pakistan Ministry of Foreign Affairs has said that CIA drones have killed at least 2,200 people in the country including at least 400 civilians. This is close to the Bureau’s low range estimate of 411.

The figures were disclosed to Emerson as he made a three-day visit to the country. The Ministry of Foreign Affairs, which compiled the figures, said a further 200 of the total dead were likely to be civilians too.

The US has consistently denied this level of non-combatant death, most recently claiming civilian casualties were ‘typically in single digits’ for each year of the nine-year campaign in Pakistan.

The Bureau estimates that 411-884 civilians are among 2,536-3,577 people reportedly killed in CIA drone strikes in Pakistan, based on its two-year analysis of news reports, court documents, field investigations and other sources.

Senior Pakistani government representatives met with Emmerson, who is investigating the legal and ethical framework of drone strikes.

In a statement released after his visit, Emmerson said: ’The position of the government of Pakistan is quite clear. It does not consent to the use of drones by the United States on its territory and it considers it to be a violation of Pakistan’s sovereignty and territorial integrity.

‘As a matter of international law the US drone campaign in Pakistan is therefore being conducted without the consent of the elected representatives of the people, or the legitimate government of the state. It involves the use of force on the territory of another state without its consent and is therefore a violation of Pakistan’s sovereignty.’

Pakistan used the special rapporteur’s visit to mount a full-blooded attack on the justifications given by US officials for the drone campaign, particularly the claim that it is ‘unwilling or unable’ to tackle terrorist groups in the tribal regions bordering Afghanistan. The Pakistani government ‘made it quite clear’ to Emmerson that this suggestion was ‘an affront to the many Pakistani victims of terrorism’.

The US has claimed it has a right to carry out strikes on those who are plotting against the US and its interests, including troops fighting in Afghanistan – but officials said Pakistan bore the brunt of terror attacks, and aimed to tackle this through ‘law enforcement with dialogue and development’. Terrorism has cost Pakistan $70bn in the past decade, killing 7,000 soldiers and policemen and 40,000 civilians, the government disclosed.

‘Interference by other states’ harmed Pakistan’s counter-terrorism efforts, the officials complained.

Emmerson said: ‘Pakistan has also been quite clear that it considers the drone campaign to be counter-productive and to be radicalising a whole new generation, and thereby perpetuating the problem of terrorism in the region.’

Drone strikes are undermining public confidence in Pakistan’s democratic process, they added. This is particularly problematic in the context of upcoming elections scheduled for May.

Emmerson said: ‘It is time for the international community to heed the concerns of Pakistan, and give the next democratically elected government of Pakistan the space, support and assistance it needs to deliver a lasting peace on its own territory without forcible military interference by other States.’

A group of maliks (tribal elders) from North Waziristan, the Pashtun tribal region most often hit by drone strikes, told Emmerson civilian drone deaths were a ‘commonplace occurrence’, particularly among adult men, who were often killed ‘carrying out ordinary daily tasks’. Traditional Pashtun forms of dress and the custom of adult men carrying guns makes it hard to distinguish between civilians and members of the Pakistani Taliban.

‘The Pashtun tribes of the [tribal] area have suffered enormously under the drone campaign,’ said Emmerson. Civilian deaths in drone strikes were contributing to radicalisation of youths in the region, officials and maliks told him.

Kat Craig, legal director of campaign group Reprieve, said: ‘The UN’s statement today is an unequivocal warning that the CIA drones programme is not only completely unwanted by the Pakistani government but is irrefutably illegal. More worryingly, it is shredding apart the fabric of life in Pakistan, terrorising entire communities. The special rapporteur’s job is to balance the need for counter-terrorism with the need to protect basic human rights – what he has revealed today is that this balance is far, far from being achieved.’

The Pakistani government said at least 330 strikes had taken place on its territory. The Bureau has counted 365 to date; the disparity may be because the Bureau counts missiles that hit more than an hour apart as individual strikes. We also count missiles that hit separate locations in close proximity as individual strikes, while the government may count these as a single strike.

Emmerson was asked to investigate drone strikes by the UN Human Rights Council after nations including Russia, China and Pakistan requested action at a session last June. He will make recommendations to the UN General Assembly in the autumn.

Separately, today the CIA lost a three-year Freedom of Information battle to keep information about its drone programme secret. The CIA had argued it could not release documents relating to the drone programme to the American Civil Liberties Union as even acknowledging its existence endangered national security. But a federal court ruled that since the government already acknowledges the programme, this argument will not stand.

(The original story is here)

Photo by stephendpend.

February 27 2013 A nine-month investigation into the 21...

Wed, 27 Feb 2013 11:44:00 +0000

February 27 2013

A nine-month investigation into the 21 people who were stripped of their British citizenship under draconian, secretive powers, and what became of them. By Chris Woods and me for the Bureau of Investigative Journalism, this was a splash in the Independent.

Former British citizens killed by drone strikes after passports revoked

The government has secretly ramped up a controversial programme that strips people of their British citizenship on national security grounds – two of whom have been subsequently killed by US drone attacks.

An investigation by the Bureau of Investigative Journalism and published in the Independent has established that since 2010 the Home Secretary Theresa May has revoked the passports of 16 individuals many of whom are alleged to have had links to militant or terrorist groups.

Critics of the programme warn that it also allows ministers to ‘wash their hands’ of British nationals suspected of terrorism who could be subject to torture and illegal detention abroad.

They add that it also allows those stripped of their citizenship to be killed or ‘rendered’ without any onus on the British government to intervene.

At least five of those deprived of their UK nationality by the Coalition government were born in Britain, and one man had lived in the country for almost 50 years.

Those affected have their passports cancelled, and lose their right to enter the UK – making it very difficult to appeal the Home Secretary’s decision.

Last night the Liberal Democrat’s deputy leader Simon Hughes said he was writing to the Home Secretary to call for an urgent review into how the law was being implemented.

The leading human rights lawyer Gareth Peirce said the present situation ‘smacked of medieval exile, just as cruel and just as arbitrary’.

Ian Macdonald QC, president of the Immigration Law Practitioners’ Association, described the citizenship orders as ‘sinister’.

‘They’re using executive powers and I think they’re using them quite wrongly,’ he said.

‘It’s not open government, it’s closed, and it needs to be exposed because in my view it’s a real overriding of open government and the rule of law.’

Laws were passed in 2002 enabling the Home Secretary to remove the citizenship of any dual nationals who had done something ‘seriously prejudicial’ to the UK, but the power had rarely been used before the current government.

The Bureau’s investigations have established the identities of all but four of the 21 British passport holders who have lost their citizenship, and their subsequent fates. Only two have successfully appealed – one of whom has since been extradited to the US.

In many cases those involved cannot be named because of ongoing legal action.

The Bureau has also found evidence that government officials act when people are out of the country – on two occasions while on holiday - cancelling passports and revoking citizenships.

Those targeted include Bilal al-Berjawi, a British-Lebanese citizen who came to the UK as a baby and grew up in London, but left for Somalia in 2009 with his close friend British-born Mohamed Sakr, who also held Egyptian nationality.

Both had been the subject of extensive surveillance by British intelligence, with the security services concerned they were involved in terrorist activities.

Once in Somalia, the two reportedly became involved with al Shabaab, an Islamist militant group with links to al Qaeda. Berjawi was said to have risen to a senior position in the organisation, with Sakr his ‘right hand man’.

In 2010, Theresa May stripped both men of their British nationalities and they soon became targets in an ultimately lethal US manhunt.

In June 2011 Berjawi was wounded in the first known US drone strike in Somalia and last year he was killed by a drone strike – within hours of calling his wife in London to congratulate her on the birth of their first son.

Sakr, too, was killed in a US airstrike in February 2012, although his British origins have not been revealed until now.

Sakr’s former UK solicitor said there appeared to be a link between the Home Secretary removing citizenships, and subsequent US actions.

‘It appears that the process of deprivation of citizenship made it easier for the US to then designate Sakr as an enemy combatant, to whom the UK owes no responsibility whatsoever,’ Saghir Hussain told the Bureau.

Macdonald added that depriving people of their citizenship ‘means that the British government can completely wash their hands if the security services give information to the Americans who use their drones to track someone and kill them.’

Campaign group CagePrisoners is in touch with many families of those affected. Executive director Asim Qureshi said the Bureau’s findings were deeply troubling for Britons from an ethnic minority background.

‘We all feel just as British as everybody else, and yet just because our parents came from another country, we can be subjected to an arbitrary process where we are no longer members of this country any more,’ he said.

‘I think that’s extremely dangerous because it will speak to people’s fears about how they’re viewed by their own government, especially when they come from certain areas of the world.’

Liberal Democrat Hughes said that while he accepted there were often real security concerns, he was worried that those who were innocent of Home Office charges against them and were trying to appeal risked finding themselves in a ‘political and constitutional limbo’.

‘There was clearly always a risk when the law was changed seven years ago that the executive could act to take a citizenship away in circumstances that were more frequent or more extensive than those envisaged by ministers at the time,’ he said.

‘I’m concerned at the growing number of people who appear to have lost their right to citizenship in recent years. I plan to write to the Home Secretary and the Home Affairs Select Committee to ask for their assessment of the situation, the policy both in general and in detail, and for a review of whether the act working as intended.’

Gareth Peirce said the present situation ‘smacked of medieval exile’.

‘British citizens are being banished from their own country, being stripped of a core part of their identity yet without a single word of explanation of why they have been singled out and dubbed a risk,’ she said.

Families are sometimes affected by the Home Secretary’s decisions. Parents may have to choose whether their British children remain in the UK, or join their father in exile abroad.

In a case known only as L1, a Sudanese-British man took his four British children on summer holiday to Sudan, along with his wife, who had limited leave to remain in the UK. Four days after his departure, Theresa May decided to strip him of his citizenship.

With their father excluded from the UK and their mother’s lack of permanent right to remain, the order effectively blocks the children from growing up in Britain.At the time of the order the children were aged eight to 13 months.The judge, despite recognising their right to be brought up in Britain, ruled that the grounds on which their father’s citizenship was revoked ‘outweighed’ the rights of the children.

Mr Justice Mitting, sitting in the semi-secret Special Immigration Appeals Commission, said: ‘We accept that it is unlikely to be in the best interests of the Appellant’s children that he should be deprived of his British citizenship… They are British citizens, with a right of abode in the United Kingdom.

‘They are of an age when that right cannot, in practice, be enjoyed if both of their parents cannot return to the United Kingdom.’

Yet he added that Theresa May was ‘unlikely to have made that decision without substantial and plausible grounds’.

In another case, a man born in Newcastle in 1963 and three of his London-born sons all lost their citizenship two years ago while in Pakistan.

An expert witness told Siac, the semi-secretive court which hears deprivation appeals, that those in the family’s situation may be at risk from the country’s government agencies and militant groups. Yet Siac recently ruled that the UK ‘owed no obligation’ to those at risk of ‘any subsequent act of the Pakistani state or of non-state actors [militant groups] in Pakistan’.

The mother, herself a naturalised British citizen, now wants to return here in the interests of her youngest son, who has developmental needs. Although 15, he is said to be ‘dependent upon [his mother and father] for emotional and practical support’. His mother claimed he ‘has no hope of education in Pakistan’. But the mother has diabetes and mobility problems that mean she ‘does not feel able to return on her own, with or without [her son].’

Mr Justice Mitting ruled that the deprivation of citizenship of the family’s father had ‘undoubtedly had an impact on the private and family life of his wife and youngest son, both of whom remain British citizens’.

But he added that the father posed such a threat to national security that the ‘unavoidable incidental impact’ on his wife and youngest son was ‘justifiable’, and dismissed the appeal.

A Home Office spokeswoman said: ‘Citizenship is a privilege not a right. The Home Secretary has the power to remove citizenship from individuals where she considers it is conducive to the public good. An individual subject to deprivation can appeal to the courts.’

She added: ‘We don’t routinely comment on individual deprivation cases.’

Asked whether intelligence was provided to foreign governments, she said: ‘We don’t comment on intelligence issues. Drone strikes are a matter for the states concerned.’

A law unto herself: How the Home Secretary has the power to strip British citizenship

The Home Secretary has sole power to remove an individual’s British citizenship. The decision does not have to be referred through the courts.

From the moment the Home Secretary signs a deprivation of citizenship order, the individual ceases to be a British subject – their passport is cancelled, they lose the diplomatic protections Britain extends to its citizens, and they must apply for a visa to re-enter the country.

The Home Secretary can only deprive an individual of their citizenship if they are dual nationals. The power cannot be used if by removing British citizenship it renders an individual stateless.

The Home Secretary, Theresa May can use the power whenever she deems it ‘conducive to the public good’. She can act based on what she believes someone might do, rather than based on past acts.

The only way to challenge an order is through retrospective appeal. Where the deprivation is on national-security grounds, as in almost every known case, appeals go to the semi-secret Special Immigration Appeals Commission (Siac).

Siac hears sensitive, intelligence-based evidence in ‘closed’ proceedings – where an individual and their legal team cannot learn the detail of the evidence against them. Instead, a special advocate – a carefully vetted barrister – challenges the government’s account. But once they have seen the secret material they cannot speak with the defendant without the court’s permission, making cross-examination ‘pretty useless’, in the words of former special advocate Ian Macdonald.

The government has long been able to remove the citizenship of those who acquired it in cases such as treason, but the power to do so to British-born individuals was introduced after 9/11 in the Nationality, Immigration and Asylum Act 2002. This allowed the Home Secretary to strip the nationality of those who had ‘done anything seriously prejudicial’ to the country. At that point, no deprivation order had been issued since 1973.

Following the July 7 bombings, the law changed again, so citizenship could be stripped if it is deemed ‘conducive to the public good’. Conservative MPs called this a ‘watered-down test’ – but the Conservative-led coalition government has embraced the power, issuing over three times as many orders as under Labour.

February 2013 - A case-by-case breakdown of the 21 former Brits...

Wed, 27 Feb 2013 10:00:00 +0000

February 2013 - A case-by-case breakdown of the 21 former Brits who have lost their citizenship. Part of a nine-month investigation into deprivation of citizenship by Chris Woods and me for the Bureau of Investigative Journalism, this story appeared in the Independent and prompted two Liberal Democrat MPs to write to the Home Secretary expressing concern.

‘Medieval Exile’: The 21 Britons stripped of their citizenship

The government has used little-known powers to strip 21 people of their British nationality since 2002, a Bureau investigation has found. Sixteen of these cases have occurred under the Coalition government.

Almost all of those affected lost their citizenship on national security grounds, often based on evidence which remains secret. Leading immigration lawyer Gareth Peirce has described the process as akin to ‘medieval exile.’

Changes to the law in 2002 allowed Britain’s Home Secretary to deprive dual-nationality Britons of their citizenship on national security grounds, without any prior approval from the courts. This doesn’t just affect people originally born outside Britain. The Bureau has identified five cases so far where British-born people have lost their UK nationality.

Those affected – or more often their UK relatives – only know of a decision when they receive a registered letter informing them of the fact. In almost every case, the government has stripped citizenship from people while they are out of the country. Once the decision is made, citizenship is immediately lost, along with all associated rights – the affected person’s passport is cancelled, they lose all rights to assistance from British embassies and consulates overseas, and they must apply for a visa if they wish to return to the country.

Individuals have just 28 days to challenge a deprivation order and in almost every case they are heard with the defendant outside the country. Of the 21 people who have been stripped of their British nationalities, only two have successfully appealed.

Of the other 19, two have been killed in US drone strikes, while one has been seized by the FBI and rendered to New York. The identities and whereabouts of four remain unknown.

All others are effectively exiled, with many caught up in lengthy court battles in an effort to return home.

The 21 cases:

Two persons unknown
Nationalities unknown. Deprivation dates unknown (likely post-June 2012). No other details known.

On February 22 the Home Office finally revealed to the Bureau – after weeks of delay – that five people had been stripped of their citizenships in 2012. Until then we were aware of only one case in 2012 – Mahdi Hashi (see below). Two of these individuals have so far filed no appeal. Unless this takes place we may never learn more about their identities or their situation.

F2
Nationality unknown. Deprivation date unknown (likely post-June 2012). Siac appeal pending.

F2′s identity is unknown. All we know so far is that this person is appealing the removal of their citizenship.

Mahdi Hashi
Somalia-born. Deprived June 2012. Secretly rendered by FBI to New York.

Hashi grew up in Camden, north London. In 2009 he and several friends said they were being pressured by MI5 into working as informants. That same year Hashi moved to Somalia, despite saying he had been warned by an MI5 agent: ‘Whatever happens to you outside [the] UK is not our responsibility’. There are claims that once in Somalia he became involved with al Shabaab, and in June 2012 Hashi’s family was informed he would be stripped of his citizenship on national security grounds. They say he intended to challenge this, but then vanished. In December, the Bureau reported the family’s suspicion that Hashi had been rendered by the US. Just days later it emerged he was in jail in New York, having been secretly taken there by the FBI. He now faces charges of belonging to al Shabaab and of taking part in ‘elite suicide bomber’ training.

E2
Afghan-born. Deprived March 2012. Siac appeal rejected August 2012

Afghan-born E2 is described in Siac papers as a 36-year-old male who became a British citizen in 2009 and ran a business in London. While visiting his family in Pakistan, the Home Secretary deprived him of his nationality before he could return to the UK. In court papers E2 says he only learned that he had lost his citizenship on May 25 2012, when a British embassy official informed him at Dubai airport as he tried to fly home. His appeal was rejected following a partially secret Siac hearing.

B2
Deprived December 2011. Successfully challenged. Government now appealing.

This is one of three known cases where notice has been served on an individual while they were still in the UK. B2 came to the UK as a child with his refugee Vietnamese parents. He became a UK citizen in 1995, and later converted to Islam. In 2010 he reportedly traveled to Yemen, where MI5 alleges he trained with al Qaeda in the Arabian Peninsula (AQAP). He apparently returned to the UK in July 2011 and the Home Secretary informed him he would lose his British citizenship that December. B2 appealed, saying the decision would make him stateless. The Vietnamese government agreed that he was not its citizen, and the order was overturned. However the Home Office told the Bureau it is appealing. B2 is thought still to be in the UK.

Y1
Afghan-born. Deprived July 2011. Appeal dismissed May 2012. Proceedings are ongoing.

An Afghan asylum seeker, Y1 became a British citizen in 2004, married and had a son here. In 2010 he left London for Kabul, accompanied by his second wife, also British. According to court papers Y1 was arrested by UK forces in Afghanistan in summer 2011, after visiting Pakistan’s tribal areas. He was stripped of his citizenship on terrorism grounds on the same day as his release without charge in July 2011. Y1 challenged the order, arguing it would make him stateless. However Siac rejected the appeal.

S1, T1, U1 and V1
All British-born. Deprived April 2011. Appeal refused December 2012. Proceedings are ongoing.

S1 was born in Newcastle in 1963, a second-generation Briton whose father had moved to the UK from Kashmir five years earlier. S1′s own children are also British-born. Yet three of his sons – known only as T1, U1 and V1 and all in their twenties – were stripped of their citizenship along with their father in 2011. According to the Home Secretary the men were ‘active members’ of Kashmiri militant group Lashkar e Taiba and had links to al Qaeda. S1 denies the claims and argues the decision has made him stateless, since he never held a legitimate Pakistani passport. The family started proceedings to be allowed to return to the UK during the appeal, claiming that the family’s youngest son – a teenager who remains a British citizen – suffers from developmental issues and has ‘no hope of education in Pakistan’. Experts have argued that those in the family’s situation may be at risk from local militant factions and others. Yet the latest Siac judgement on the case states that the UK government and courts have no responsibility for the safety of ex-citizens. The entire family remains in Pakistan.

Mohamed Sakr
British-born. Deprived September 2010. Killed February 2012.

Mohamed Sakr was born and brought up in London, where he once ran a car valeting business. He had his citizenship revoked in September 2010, at the same time as his good friend Bilal al-Berjawi (see below). Sakr appears to have come to the attention of UK intelligence officials after he visited Saudi Arabia, Egypt and Dubai in 2007. His family was targeted by counter-terrorism officers over a two-year period according to reports, before al-Berjawi and Sakr left the UK in late 2009. Both allegedly became involved with al-Shabaab. Sakr had just turned 27 when he was killed in a US drone strike near Mogadishu. News agency AP reported an anonymous US officialas saying that the strike had targeted an ‘international member of al Shabaab’, while Reuters said that ‘a very senior Egyptian‘ was killed. Sakr also held Egyptian nationality.

Bilal al-Berjawi
Lebanese-born. Deprived September 2010. Killed January 2012.

Like Sakr, Bilal al-Berjawi was killed by the US following the removal of his UK citizenship. He was brought up in London from infancy, but allegedly became a senior figure with militant group al Shabaab in Somalia. He was also by some accounts a liaison between the group and al Qaeda, and Berjawi had been known to British counter-terrorism agencies for some years. In an interview before his death, Berjawi described how he was treated after being deported from Kenya to Britain in 2009: ‘When I arrived in the UK literally 10 to 13 big white built men came on the plane with suits. They escorted us off the actual aeroplane and they explained themselves, “We are MI5.” Took my fingerprints, took pictures. The way I was dealt with was not nice to be honest. It’s like I felt I was a man with no rights.’ In September 2010 the home secretary removed Berjawi’s citizenship. Nine months later came the first US attempt to kill him in a drone strike. In January 2012 the US succeeded, shortly after Berjawi phoned his wife to congratulate her on the birth of their son.

L1
Sudanese-born. Deprived July 2010. Appeal refused December 2010. Proceedings are ongoing.

L1 arrived in the UK as an asylum seeker in 1991 and became British in 2003. He is married to a Sudanese woman who has limited leave to remain in the UK. Their four children – all aged 11 or under – are British citizens. In July 2010 the family left the UK to spend their summer holiday in Sudan. ‘It was his and their intention that they should all return in time for the new school year,’ according to Siac court records. But within four days of the family leaving, the Home Secretary issued notice that L1 was to be stripped of his citizenship, claiming he had links to terrorism. His subsequent appeal focused on why L1 did not appeal within the 28-day time limit. The removal of his British citizenship effectively prevents L1’s four British children from growing up in the UK – and the Siac judges noted this was ‘unlikely to be in the best interests’ of the children. But they concluded the home secretary was ‘unlikely to have made that decision without substantial and plausible grounds for doing so’ – and upheld the order. The entire family remains in Sudan.

Anna Chapman
Russian-born. Deprived July 2010. No appeal was lodged.

Russian-born Anna Chapman acquired UK citizenship through her four-year marriage to Briton Alex Chapman. Following their divorce she moved to the US on her British passport. But the home secretary removed Chapman’s British citizenship within a month of reports that she was a member of a Russian spying ring. The government later issued a statement noting that: ‘The home secretary has the right to deprive dual nationals of their British citizenship and, once deprived, to exclude them from the UK where she considers that to do so would be conducive to the public good.’ Chapman’s New York attorney in 2010, Robert Baum, told the Bureau that Chapman was ‘upset’ at the time to lose her UK nationality, as she had hoped to return to Britain. He also recalls the ‘huge surprise’ when informed by letter that Chapman had lost her citizenship on grounds of national security. ‘I thought you couldn’t revoke someone’s citizenship except under the most draconian circumstances…’ he said. Chapman now lives in Russia.

G1
Sudanese-born. Deprived June 2010. Appeal process paused during ongoing legal challenges.

‘G1′ cannot be named due to ongoing legal challenges. He was born in Sudan and came to the UK as a child. He obtained British citizenship in 2000. In early 2009 he reportedly took part in a protest against the Israeli offensive on Gaza and was arrested for a public order offence. He failed to appear at a London magistrate’s court later that year and is thought to have left the country. His citizenship was removed in 2010 on the claim that he was ‘involved in terrorism and had links to Islamic extremism’. G1 launched a judicial review application asking to return to the UK to appeal through Siac. He claimed he risked becoming of ‘adverse interest to the Sudanese security service’ if he tried to communicate with his lawyers over video or Skype. The legal challenge continues. G1 was last reported to be living in Sudan while his wife and young child remain in Britain.

Altin Arusha
Albanian-born. Deprived November 2009. Overturned March 2012.

Arusha, along with Abu Hamza (see below), are the only two people to have successfully challenged a deprivation order from the Home Secretary. Arusha sought asylum in the UK claiming he was from Kosovo, and acquired citizenship in 2008. The same year, he attempted to bring his fiancée from Albania to live with him in Britain, for which he had to present himself as a formal sponsor. The immigration authorities investigated his case and decided that Arusha was from Albania, which would have made his initial asylum application fraudulent. However, the courts did not feel the Home Secretary provided enough evidence and overturned the case. This is the only known case where citizenship has been stripped for something other than on national security grounds. Arusha continues to live in the UK.

Unknown Anglo-Pakistani
Pakistani-born. Deprived April-June 2009. No further details are known.

The Home Office refuses to release any further details about this case. Answers to parliamentary questions show the individual lost their UK citizenship sometime between April and June 2009. A later freedom of information request shows that they lost their British nationality while they were out of the country. Their present whereabouts are unknown.

Hilal al Jedda
Iraqi-born. Deprived December 2007. Overturned March 2012. Government appealing.

Hilal al Jedda is an Iraqi asylum seeker who returned to Baghdad during the war. He was held for three years in Basra, accused of recruiting terrorists and of plotting against allied forces. He fought several high-profile cases against his detention. The Home Secretary revoked his citizenship while he was in custody. He appealed after he was released in December 2007, arguing he did not have Iraqi citizenship. In March 2012 the court ‘reluctantly’ allowed al Jedda’s appeal and restored his British citizenship. But the Home Office is now challenging that ruling in a case which will go before the Supreme Court later this year. The British government will argue that while the law forbids the Home Secretary from making someone stateless, al Jedda could in principle have applied for Iraqi nationality. The latest appeal prevents al Jedda from returning to the UK, and he continues to live with part of his extended family in Turkey.

David Hicks
Australian-born. Deprived July 2006. Appeal plans dropped in plea bargain.

David Hicks is probably the only person ever to have gained and lost British citizenship on the same day. Although Australian he claimed British citizenship through his UK-born mother, while in the US military prison at Guantanamo Bay. Court papers say he did this because ‘he considers he has a better chance of release [from Guantanamo], or other remedy, if a British citizen’. Despite UK government opposition, the High Court ruled there was no way to block his entitlement. But the government amended the law. This meant that when Home Secretary John Reid eventually granted Hicks his British citizenship in July 2006, he was immediately able to remove it. Hicks’ British barrister at the time, Stephen Grosz QC, recalls Hicks getting two letters from the Home Office on the same day. ‘One said, “Congratulations on your new citizenship”, the other, “We have to inform you you have now lost your British nationality.”‘ Hicks is now free and lives in Australia.

Abu Hamza
Egyptian-born. Deprived April 2003, successfully appealed 2010. Extradited to the US 2012.

The first attempt in 30 years to strip someone of their UK nationality took place in 2003. Just three days after new powers came into force, Tony Blair’s government sought to remove Egyptian-born Abu Hamza’s dual UK citizenship. But as a court judgment noted, ‘his appeal was overtaken by events’. Hamza was convicted of several offences in the UK, and the US also lodged extradition proceedings. These led to several unsuccessful legal challenges all the way up to the European Court of Human Rights. Hearings on the deprivation of Hamza’s citizenship finally resumed in 2010, and the laws at the time meant he remained British until the conclusion of his appeal. By then he had been stripped of his Egyptian nationality. And since the law forbids the home secretary from making someone stateless, Hamza won his case and remained British. That didn’t prevent him from being extradited to the US in October 2012.

January 2013 - Following the strange and convoluted case of...

Fri, 11 Jan 2013 15:37:00 +0000

January 2013 - Following the strange and convoluted case of Mahdi Hashi, the young Londoner who lost his British citizenship and was renditioned from Djibouti to a New York jail. By Chris Woods and me for the Bureau of Investigative Journalism.

European terrorism suspects secretly held in New York under false names

Three European-Somali men facing terrorism charges in a New York court were secretly held under false names in the city’s jails for over five weeks.

The three men, including Mahdi Hashi, 23, a former care worker from Camden in London, and two Swedish-Somalis, Ali Yasin Ahmed, 27, and Mohamed Yusuf, 29, were captured in the East African country of Djibouti in August last year. One of the men’s lawyers alleges his client was ‘slapped around’ by local officials during the three months in which they were held there without charge.

As reported by the Bureau last month, they were subject to secret rendition to the US by the Federal Bureau of Investigation (FBI) on November 14, where they were assigned US lawyers and charged in secret the following day.

They were held under the false names ‘John Doe A’, ‘John Doe B’ and ‘John Doe C’ in New York jails for five weeks, one of the men’s lawyers told the Bureau, before the charges were made public on December 21. They are provisionally charged with belonging to al Shabaab, designated a terrorist organisation by the US in 2008. The FBI claimed in a statement they had participated in ‘an elite al Shabaab suicide bomber program’.

The Bureau can further reveal that before the rendition to the US, there were behind-the-scenes efforts to have the two Swedes returned to their home country. Hashi, on the other hand, was stripped of his British citizenship by the home secretary, Theresa May, shortly before he was apprehended last summer. The Foreign Office told Hashi’s UK lawyers it could not help in his case as he was no longer British.

‘Slapped around’
Many events about the seizing of the three remain unclear, although it appears all were captured in Djibouti on or around August 7 2012. Swedes Ahmed and Yusuf, and Hashi, were first held at Nagad Detention Centre, the Bureau believes.

The Swedish men were entitled to support from their embassy in Djibouti, and their families were informed of their whereabouts two months after their capture.

For some weeks before the rendition, there were secret negotiations between Djibouti and Stockholm for the return of the two Swedish nationals. Thomas Olsson, lawyer for the families, said that talks were well-advanced.

‘But then suddenly we got the information that they were sitting on a plane somewhere over the Atlantic on their way to the United States,’ he said.

Mahdi Hashi (Photo: Hashi family)

In contrast, Mahdi Hashi’s family and UK lawyers were never officially informed of where he was being held, or by whom. The family later went public with fears for Hashi’s safety.

While in jail, the Swedish-Somali prisoners have been visited by the Swedish consul and have received support from their embassy. The Bureau has been unable to confirm whether Hashi has received support or visits from Somali officials.

According to Ephraim Savitt, US lawyer for Mohamed Yusuf, his client was ‘slapped around’ by Djibouti officials before being interrogated ‘by FBI agents and American agents from undisclosed agencies.’

Hashi’s Manhattan-based attorney, Harry Batchelder, told the Bureau his own client had not been mistreated. And Susan Kellman, lawyer for Ali Yasin Ahmed, also reports that her client was not directly harmed, although was aware that others were.

‘According to what [Ahmed] said he certainly heard a lot of people being mistreated, which in its own way is a form of mistreatment,’ said Kellman.

‘Outer frontiers’
The three men are now being held separately in high-security New York jails.

The court-appointed lawyers for the three men say the cases are highly problematic. Although indictments claim that the alleged crimes fall under the ‘extraterritorial jurisdiction’ of the US, there is so far no allegation that they posed a direct threat to American lives or interests, they insist.

‘We are now approaching the outer frontiers of defining what a terrorist is under US law in this case,’ Yusuf’s attorney Savitt told the Bureau.

‘There’s no allegation or suggestion that any of these three were involved in any planning or any attack against US personnel or US organisations, none whatsoever.’

And Hashi’s lawyer, Batchelder, told the Bureau he fears the men will struggle to get a fair hearing. ‘An eminent FBI worthy opined to a ’friendly’ journalist that all of the defendants are guilty of terrorism… The statement starkly reveals that this case will put to the test the American justice system’s sense of ‘fair play’. Such a statement… is not an auspicious start.’

‘Risk to national security’
Mahdi Hashi moved to the UK from Somalia as a child and later became a British national. In 2009 he complained he was coming under sustained pressure from MI5, the domestic security service, to work as an informant.

In a detailed complaint to the Investigatory Powers Tribunal seen by the Bureau, he said: ‘I feel I’ve been the victim of harassment and discrimination and selective targeting… I have been accused of hideous crimes with absolutely no evidence.’

However, the letter stripping him of his British citizenship accuses him of being involved in Islamic extremism and presenting ‘a risk to the national security of the United Kingdom due to your extremist activities.’

Hashi was seized by the Djibouti authorities in circumstances that remain unclear. An FBIstatement claimed Hashi and his Swedish-Somali co-defendants were ‘on their way to Yemen’, although the Bureau understands they were not arrested in the act of leaving the country.

The FBI did not announce the date of the initial arrests, although a Swedish secret service investigation into one of the detainees, Yusuf (also allegedly known as Abu Zaid), was dropped on August 7 according to Swedish newspaper Göteborgs-Posten, indicating that the arrests may have been on or around this date.

The Swedish men’s families told the newspaper that the two had ‘dropped out of al Shabaab and were heading home to Sweden’ when they were arrested.

(The original story is here)

Photo by Asterix611/Flickr

December 2012 - News story for the Bureau of Investigative...

Sun, 23 Dec 2012 00:09:00 +0000

December 2012 - News story for the Bureau of Investigative Journalism - a day after we published a story in which Mahdi Hashi’s father told us he feared his son had been abducted by the Americans, he turned up in a New York court.

Missing British-Somali man reappears in New York court

Mahdi Hashi, the British-Somali man who disappeared from east Africa shortly after being stripped of his British citizenship, appeared yesterday in a New York federal court alongside two Swedish men. All three appear to have been rendered by the United States from Djibouti, and have now been charged with terrorism offences.

Hashi, 23, is accused of ‘providing material support’ to Somali militant group al Shabaab. A statement released by the FBI revealed that Hashi has been in the US penal system since November 12. Neither his family nor his UK legal team were informed.

The US claims that between 2008 and 2012 Hashi carried out weapons and explosive training with al Shabaab and was ‘deployed in combat operations to support al Shabaab’s military action in Somalia.’ It adds that he allegedly participated in ‘an elite al Shabaab suicide bomber program’.

In June, Hashi’s family was notified that he had been stripped of his British citizenship; the Home Secretary claimed he was ‘involved in Islamist extremism’. Hashi and a group of Somali Muslim friends in Camden, London, previously claimed MI5 had subjected them to a campaign of harassment and had threatened to label them as terrorists unless they agreed to work as informants.

Mohamed Hashi told the Bureau his son disappeared from his home on the outskirts of Mogadishu weeks after losing his citizenship and that the family was later contacted by a man who said he had been held alongside Hashi in a jail in neighbouring Djibouti.

The fellow inmate also mentioned that two Somali-Swedes were in the facility. Hashi is charged alongside Ali Yasin Ahmed, 27, and Mohamed Yusuf, 29. The New York Times reports the men ‘appeared in court with the aid of a Swedish interpreter’, and Yusuf’s lawyer told Bloomberg his client held Swedish citizenship.

Hashi was taken from the jail by Americans, his family was told by the former prisoner. Yet until the case was unsealed yesterday, they had no further clue as to his whereabouts. The Bureau contacted the State Department on Thursday to ask if Hashi was in US custody and was told: ‘We do not have anything on this to share publicly at this time.’

Saghir Hussain, Hashi’s solicitor, told the Bureau: ‘It seems the US disappeared Mahdi Hashi for the past several months and rendered him to New York. The British government also needs to explain its involvement in this case.’

Asim Qureshi, research director of campaign group CagePrisoners said: ‘If Mahdi Hashi had still been a British citizen he would have had some protection. But he has had his citizenship taken away and that has left him open to being a victim of rendition to the US with no state to defend his rights.’

According to the FBI, the three men were arrested ‘in Africa’ in early August ‘while on their way to Yemen.’ No information is given as to the nationality of the local authorities that carried out the arrest.

A New York court issued a secret indictment against the men on October 18. On November 14, the FBI ‘took custody of the defendants and brought them to the Eastern District of New York’, a statement says. But it provides no information as to where the men were held, or who had custody up to that point. If convicted, they face at least 30 years in jail.

This is not the only case in US courts against alleged terrorists for acts committed overseas.

In July 2011, Somali national Ahmed Abdulkadir Wasame pleaded not guilty to supporting al Shabaab and al Qaeda in the Arabian Peninsula in a New York federal court. The Justice Department said he was ‘captured in the Gulf region by the US military on April 19, 2011, and was questioned for intelligence purposes for more than two months’ before being handed to law enforcement.

Other sources reported Warsame had been captured by JSOC, the special forces unit that runs most US operations in Somalia and Yemen, and was held in international waters on the JSOC ship the USS Boxer for questioning.

FBI assistant director-in-charge Janice K Fedarcyk said of the Warsame case: ‘The mission of the FBI is to protect innocent lives not just in the United States, but everywhere the law permits us to.’

But Republican Senate leader Mitch McConnell told the New York Times: ‘The administration’s actions are inexplicable, create unnecessary risks here at home, and do nothing to increase the security of the United States.’

(Read the original here)

December 2012 - A news story for the Bureau of Investigative...

Sat, 22 Dec 2012 23:46:00 +0000

December 2012 - A news story for the Bureau of Investigative Journalism. The day we published, Mahdi Hashi appeared in court in New York - he had been in FBI custody for five weeks, without notifying his family or lawyers. But that’s another story.

British-Somali man’s family fear US is secretly holding him

The family of a young Somali-British man who disappeared from Mogadishu believes he is being secretly held by US agencies, his father has told the Bureau.

Mahdi Hashi, 23, was informed in June that he was to lose his British citizenship because he ‘present[ed] a risk to national security’. Weeks later he disappeared from the outskirts of Mogadishu, and his family later heard from someone who had recently been released from prison in Djibouti that Mahdi had been detained alongside him.

His father Mohamed Hashi believes he may have been ‘extraordinarily rendered’, and is now being held at an unknown location by the United States. A press officer at the US State Department told the Bureau that ‘We do not have anything on this to share publicly at this time.’

‘Our fears are whether he’s healthy, his whereabouts, whether we’re going to see him again,’ Mohamed Hashi told the Bureau. ‘We’re worried about the way he’s being treated – maybe he’s being tortured.’

Born in Somalia, Hashi arrived in the UK as a child and grew up in Camden, north London, becoming a British citizen at the age of 14. A devout Muslim, he worked as a carer but claimed he and a group of friends were coming under pressure from the British security services to work for them, and in 2009 the group told the Independent they had come under sustained pressure from MI5 to become informants.

One of them, Nur Mohamed, said an intelligence officer told him: ‘Mohamed if you do not work for us we will tell any foreign country you try to travel to that you are a suspected terrorist.’

Hashi claimed he was repeatedly stopped at borders and that MI5 agents had warned him he would be flagged up as a terrorist and face travel restrictions unless he co-operated.

He returned to Somalia in 2009, where he married and had a son. In June 2012, a letter delivered to Hashi’s family home in London informed him that the home secretary Theresa May had decided to strip him of his British citizenship, claiming he had been ‘involved in Islamist extremism’.

Mohamed Hashi: fears son is being mistreated.

The letter added that he had four weeks to appeal, but he disappeared before he was able to act.

A man later contacted his family in Somalia claiming he had been held alongside Hashi in a Djibouti jail.

Mahdi’s father Mohamed Hashi told the Bureau: ‘He said [Hashi] was fingerprinted and his DNA was taken, and they found out that he was a British citizen and contacted the British consulate – but the British said sorry, we took his citizenship away from him and we can’t help him.’

Campaign group CagePrisoners is concerned that Hashi may have been extraordinarily rendered by the US. Research director Asim Qureshi said: ‘His location and condition of detention are still unknown up to this date and the UK authorities have refused to help on this matter, arguing that he was no longer a British citizens so that Britain has no responsibility over his case.’

The fellow prisoner said they had been held at ‘Nagana prison’. This may refer to Nagad Detention Centre, two formal incarceration facilities in the tiny East African country. It is ‘not part of the prison system’, according to the US State Department, which notes it is mainly used for housing ‘undocumented migrants‘.

But in 2011 a UN report by the High Commissioner for Refugees said Nagad was ‘regularly used for the arbitrary detention of people who are critical of the Government’. And Human Rights Concern Eritrea has claimed Nagad holds over 300 Eritrean military detainees, of whom 58 were said to be in ‘extremely poor health’. A statement published by the group in October claimed: ‘Conditions were so bad that some of the detainees looked barely human’.

Mohamed Hashi said his son’s fellow inmate told the family: ‘The place is bad and there was a bit of mistreatment.’ The man claimed that Hashi was taken by ‘Americans’ before he could be released.

Continuing renditions?
Mahdi Hashi passed through Djibouti on a number of previous occasions when visiting relatives in Somalia. It’s not known whether he made his own way to the small nation on this occasion, or was forcibly abducted and transferred to jail there.

If abducted his case would fit an established pattern of renditions – where individuals are transported between countries for interrogation without judicial process, according to Clara Gutteridge, an expert on rendition and director of the Equal Justice Forum.

‘There have been renditions, disappearances in and out of Somalia since at least 2001, but now, because the Horn of Africa is the new front in the war on terror, it’s becoming an increasing issue. What this young man’s family is saying about his disappearance from Mogadishu is highly plausible in relation to what we are seeing,’ she said.

Gutteridge points out that Djibouti has served as a ‘regional rendition hub’, with individuals captured elsewhere held there – sometimes in the charge of the Djibouti authorities – before being handed to the US and being transferred elsewhere.

Djibouti is also home to Camp Lemonnier, the base for drones flying over both Somalia and Yemen, which also hosts intelligence personnel. The US provides ‘human rights training’ to Djibouti’s prison guards, the State Department notes.

Leaked Guantanamo files released by WikiLeaks that reveal in 2004 Guleed Hassan Ahmed was arrested from his house and held by the Djibouti authorities before being handed to the US and transferred to Guantanamo. And in 2007, Abdullahi Sudi Arale was arrested by Djiboutian authorities at passport controls and held before being transferred to the US-run Camp Lemonnier and then on to Guantanamo Bay.

Last year Yemeni businessman Mohammed Abdullah Saleh al-Asad took Djibouti’s government to court for the part it allegedly played in his abduction and rendition from Tanzania in 2004. His testimony describes in detail how he was held in a Djibouti cell and interrogated at length by an individual who identified herself as American, before being transported to other sites. He claims that from Djibouti, he was taken to four secret prisons around the world over 16 months, and experienced abuses including sleep deprivation, constant blaring music and ‘dietary manipulation’ – being fed dietary supplements in place of food.

Executive order
When he was running for president, Barack Obama was highly critical of President Bush’s counterterrorism policies, pledging to end ‘the practices of shipping away prisoners in the dead of night to be tortured in far-off countries, of detaining thousands without charge or trial, of maintaining a network of secret prisons to jail people beyond the reach of law… That will be my position as president. That includes renditions.’

One of his first actions in office was to sign executive orders closing Guantanamo and announcing an end to CIA secret prisons. But crucially this second order excluded ‘facilities used only to hold people on a short-term, transitory basis’.

In recent years the US has moved towards providing information – and funding – to other countries in order that they can capture and transfer suspects, Gutteridge says. In 2009, Ahmed Abdullahi Hassan was rendered from Kenya to a Somali prison based on information provided by the US, officials told reporter Jeremy Scahill. Although the prison was nominally run by Somalia, the US paid staff salaries and directly interrogated prisoners.

Clara Gutteridge said: ‘Hashi disappeared in Mogadishu and reappeared in Djibouti: unless he went to Djibouti and got arrested, there’s no way that could have happened without rendition. None of what’s happened could be happening without some form of US assistance – it fits with US foreign policy and counterterrorism policy.’

Mohamed Hashi is adamant his son has no links to terrorism – but believes Mahdi’s disappearance is closely related to his losing his citizenship. ‘MI5 and the British government, they know his whereabouts – they want to keep him out of the country,’ he said. ‘They know where he is, but they will not help.’

A Home Office spokeswoman said: ‘We do not comment on security matters.’

(The original story is here)

December 2012 - working with Chris Woods at the Bureau of...

Sat, 22 Dec 2012 23:26:00 +0000

December 2012 - working with Chris Woods at the Bureau of Investigative Journalism, coaxing drone data out of various military authorities to shed some light on the increasingly important role played by drones in conventional battlefields.

Revealed: US and Britain launched 1,200 drone strikes in recent wars

Recent conflicts in Afghanistan, Libya and Iraq have seen almost 1,200 drone strikes over the past five years, according to new data released to the Bureau.

The information, much of it classified until now, shows that US Air Force drones carried out most of the 1,168 attacks. However British crews are also responsible for a significant portion of the strikes in Afghanistan.

The Bureau has obtained data from the US armed forces, Nato and the UK’s Ministry of Defence. It reveals, for example, that more than a quarter of all armed Coalition air sorties in Afghanistan are now carried out by drones.

While only a fraction of those missions result in strikes, drone strikes in Afghanistan are now taking place on average five times each week.

NB: Libya figures are to September 2 2011; conflict ended on October 31. Yemen figures are confirmed drone strikes only; dozens of further strikes are reported but unconfirmed.
Click the graph to see the data.

Afghanistan – the US’s most intense conflict
The US’s secret drone campaign in Pakistan and elsewhere is now in its eleventh year and is attracting increasing scrutiny, including academic studies, court cases and, soon, a UN investigation. Ironically, less is known about the use of drones in conventional theatres of war.

When the Bureau first approached the US military in August seeking drone data for recent conflicts, we were told the information was classified. Central Command (Centcom) later relented after the Bureau argued there was a strong public interest in releasing the information.

Centcom now says it is committed to publishing statistics on the number of missiles fired by drones in Afghanistan, as part of its monthly reports.

The newly declassified figures provided to the Bureau show armed drones flown by the Coalition have carried out 1,015 drone strikes in Afghanistan since 2008. This is three times more than the 338 attacks the CIA has carried out in neighbouring Pakistan over the same period.

Of more than 7,600 armed drone missions flown by Coalition forces between January and October 2012, ‘kinetic events’ – drone strikes – occurred 245 times, a ratio of about one strike for every 30 missions flown. In Iraq, however, only one in every 130 armed drone missions in 2008 resulted in a strike.

For context, there were an additional 1,145 attacks by conventional aircraft in Afghanistan during that period, official figures show. The proportion of airstrikes carried out by drones has risen steeply to 18%, up from 11% in 2009.

While Coalition drones fly thousands of armed sorties in Afghanistan, drone strikes are ‘the exception, not the norm’, a Centcom spokeswoman told the Bureau.

The number of strikes has increased steadily year-on-year – but there is ambiguity over who is carrying them out. The majority are by the US Air Force, with the remainder by the British military and – possibly – US Special Forces. Here there is some confusion.

A senior US Army spokesman said: ‘Of the thousands of UAS [unmanned aerial systems] we have, only a very small number (well less than 100) are armed.’

But another senior US military official, speaking on background terms, said: ‘The Army doesn’t have UAVs [unmanned aerial vehicles] in service that carry munitions… Any UAVs that can carry munitions are/were under the charge of the Air Force in Afghanistan and Iraq.’

Military officials were unable to explain the discrepancy between the two statements. The Pentagon’s Joint Special Operations Command (JSOC) has its own classified fleet of Reaper drones, however, which may account for the apparently contradictory statements.

Britain’s small, active fleet
The UK’s drone fleet in Afghanistan is small compared with that of the US – Britain will shortly double its number of Reapers from five to ten aircraft.

Yet British-piloted aircraft launched a high proportion of the total missiles fired from drones.

The Ministry of Defence (MoD) has released new data on the number of missiles fired in each of the past five years. In 2011, almost four missiles of every ten fired by drones in Afghanistan were the work of UK forces, the new figures indicate. In 2010 and 2012 the proportion was over a quarter. An MoD spokesman pointed out that the rate of missiles released in comparison to total hours flown had fallen significantly from its peak in 2008.

The MoD refused to reveal the number of strikes it had carried out, and indicated it would be inaccurate for the Bureau to infer a number of attacks by comparing British data with Centcom’s more complete numbers, ‘because of differing rules of engagement’.

Click the image to see an interactive and download the data

The missing numbers
The US has so far refused to release casualty data for its drone campaigns, although an Air Force spokeswoman insisted that ‘protecting civilians is the cornerstone of our mission’. She added: ‘The use of all Afcent weapons and methods are tightly restricted, carefully supervised, and applied by only qualified and authorised personnel.’

Only Britain has issued estimates of the non-combatants it has killed. According to officials at the Ministry of Defence, four civilians have died in UK-piloted drone strikes in Afghanistan – although campaigners such as Drone Wars UK have questioned this figure.

A ministry spokesman said: ‘Every effort, which includes in some circumstances deciding not to release weapons, is made to ensure the risk of collateral damage, including civilian casualties, is minimised.’

Although Britain has not officially estimated the number of militants killed, prime minister David Cameron told reporters in December 2010 that by that point UK drones ‘killed more than 124 insurgents’. More than 200 missiles have been fired by British drones since that date.

Libya: a short, bloody campaign
In contrast to the long-running Iraq and Afghanistan conflicts, figures supplied by Nato and the Pentagon on last year’s Libyan air campaign give an insight into the brutal intensity of that short conflict.

Nato provided the Bureau with figures for the operation, first published in a letter to the head of the UN’s investigation into Libya in January 2012. Differences in how data is recorded makes it difficult to draw a comparison between Libya and other recent campaigns. What is clear is that armed drones played a small yet significant role.

In April 2011, the US announced it was sending Reaper and Predator drones to Libya as part of Operation Unified Protector. ‘They are uniquely suited for urban areas,’ Marine General James Cartwright, the vice-chairman of the Joint Chiefs of Staff, told a press conference at the time.

While no British drones went to Libya, the MoD laterrevealed British pilots had flown US drones in the campaign.

Nato aircraft – piloted by the US, France and UK – flew around 18,000 armed sorties during thebrief campaign, firing 7,600 missiles.

A tiny proportion of these armed missions – 250 in total – were flown by drones. US Predators flew 145 strike sorties, according to a Department of Defense briefing published in October 2011. A Nato spokesman explained ‘strike sorties’ is the term used for ‘identifying and engaging targets’, while armed sorties could also be for surveillance, and carrying weapons for self-defence.

The Pentagon confirmed to the Bureau that US-piloted drones carried out 105 strikes between the start of April and September 2, 2011. This figure does not reflect the full campaign, which continued until October 31. However, it does indicate a very high ratio of strikes to armed sorties – more than one in three total armed missions led to a strike – reflecting the intensity of the Libyan conflict compared to the more drawn-out wars in Afghanistan and Iraq, where drones often fly armed missions without firing weapons.

Following the end of the campaign, in November 2011 Nato secretary general Anders Fogh Rasmussen claimed: ‘We conducted our operations in Libya in a very careful manner, so we have no confirmed civilian casualties caused by Nato.’

But the following month, a New York Times investigation reported 40-70 civilians died in Nato bombings. The findings were supported by an Amnesty International investigation published in March 2012, which named 55 civilians including 16 children and 14 women – all killed in strikes on urban areas, including in Tripoli, Zlitan, Majer and Sirte.

But it is not clear how many – if any – of these deaths were caused by drones.

Iraq: a rapid wind-down
The Bureau has also obtained previously classified details of US drone strikes in Iraq for the final years of the conflict.

These demonstrate how swiftly the US Air Force scaled down its drone strikes as withdrawal approached.

The number of armed drone sorties dropped steadily between 2008 and December 2011, when US forces finally withdrew.

Actual drone strikes – or ‘kinetic events’ – collapsed by more than 90% between 2008 and 2009, Obama’s first year in office, from 43 strikes to four. In comparison, the CIA carried out 55 drone strikes in Pakistan in 2009.

There were no US Air Force drone strikes in Iraq in 2010, and just one in 2011. All US military drone sorties in the country have now ceased.

(The original story is online here)

October 2012 - Report for the Bureau of Investigative Journalism...

Sat, 27 Oct 2012 00:42:00 +0100

October 2012 - Report for the Bureau of Investigative Journalism on the first legal challenge in the UK courts to the drone campaign.

GCHQ intel sharing for drone strikes may be ‘accessory to murder’

UK intelligence officers may be assisting in murder or war crimes by sharing information with the CIA that leads to deaths in Pakistan drone strikes, a London court heard this week.

Pakistani tribesman Noor Khan, whose father was killed by a drone strike last year, has launched an application for a judicial review examining the UK’s alleged complicity in the CIA’s drone campaign. If Khan’s case is successful, judges will examine whether GCHQ officers can legally share information on the location of individuals if they believe this may be used to target them with drone strikes.

An ornate, book-lined courtroom at the Royal Courts of Justice was crowded with activists and government lawyers on October 23 and 24 as the first British legal challenge to the drone campaign got underway. Khan’s case against foreign secretary William Hague is backed by Reprieve and Islamabad-based lawyer Shahzad Akbar, and is funded by UK legal aid.

The British government has hired a trio of highly respected barristers to fight its corner, including first Treasury counsel James Eadie QC, international law expert Professor Malcolm Shaw QC, and criminal law specialist Andrew Edis QC.

Press reports indicate the UK government shares intelligence, including the location of suspected militant commanders, with the CIA. In 2010 the Sunday Times quoted ‘insiders’ claiming that GCHQ has better interception networks than the CIA in south Asia, and had shared information about the locations of al Qaeda and Taliban commanders in both Afghanistan and Pakistan. GCHQ told the Sunday Times all intelligence sharing was in ‘strict accordance’ with the law.

But the government has never officially confirmed or denied sharing intelligence for drone attacks.

‘There’s a well known, well acknowledged drone programme, there’s a list of people the CIA wants to target as part of that drone programme. A GCHQ officer comes into information about the location of a person and passes it to the CIA officer, we say there’s a very real chance of a crime being committed,’ Khan’s barrister Martin Chamberlain said.

Lord Justice Moses, one of two judges who will decide whether to order a judicial review, commented that if individual officers could be held culpable, then so potentially could the foreign secretary, since the decision to share intelligence rests with him.

While soldiers who kill as part of an international armed conflict are protected from prosecution by combatant immunity, it’s unclear whether the turmoil in Pakistan’s volatile tribal belt constitutes a war, Chamberlain said. This could make the killings unlawful, and British officials who shared intelligence leading to those killings would be guilty of accessory to murder.

Even if this is held to be a war, the drone strikes could break international humanitarian law by exceeding what is ‘proportionate and necessary’ – leaving officers who share intelligence at risk of assisting crimes against humanity or war crimes, he added.

National interests
But holding a judicial review would mean delving into issues of national security, defence and diplomacy and could harm Britain’s national interests, Hague’s lead barrister James Eadie QC told the court. In particular, it could affect relations with the US, ‘our closest ally, whose importance to our national security I assume needs no stating in front of this court,’ he said.

Effectively English courts would be forced to rule on the legality – or otherwise – of the CIA’s drone campaign. ‘It would be amazing if the American government was sanguine about an English court saying it’s guilty of murder,’ he said.

Examining the legality of drone strikes would also mean exploring whether the Pakistani government gave its consent, which ‘may be controversial in Pakistan’: this too could have serious diplomatic and international consequences, he explained.

A judicial review would be ‘about as controversial and as potentially damaging as it’s possible to conceive,’ Eadie said.

A review would also mean revealing top-secret intelligence policies to the court – and since judicial review proceedings can’t include closed court materials, this would present severe practical problems, Eadie said. Intelligence policies and practices are scrutinised by parliament through the Intelligence and Security Committee, he added: a judicial review would see the courts ‘trespassing’ on parliament’s territory.

There are ‘jolly good reasons’ for not publishing policies relating to the intelligence services, he concluded, handing over to Andrew Edis.

Working from just a few A4 pages where the other barristers had had the judges leafing through enormous binders of case law, Edis scrutinised the chapter and verse of the criminal laws cited in Khan’s application.

‘Notionally, if someone’s to be accessory to a murder, it must be an illegal act in [the murderer’s] own country,’ Edis told the court. In this case, killing alleged militants is not illegal in the US, so therefore there is no ‘murder’ to which UK intelligence officers could be accessory, he argued.

Challenged by Lord Justice Moses as to whether it would be considered murder in Pakistan, Edis replied that the drone pilots are in Nevada, not Pakistan.

It is not the job of the English court to ‘consider whether a foreigner who commits an act of killing abroad is or isn’t guilty of murder’ – and this would in turn prevent the court from deciding whether a British citizen was an accessory to that murder, he said. ‘Nothing in the English law gives this court the power to decide what’s a murder in Waziristan or America.’

The application hearing is expected to conclude on October 25, and the judges are expected to return their decision in the coming weeks.

(The original story is here)

September 2012 - Interview with Naureen Shah, of Columbia Law...

Sun, 30 Sep 2012 00:47:00 +0100

September 2012 - Interview with Naureen Shah, of Columbia Law School, on her report on the impact of drone strikes on civilian populations.

Obama risks handing ‘loaded gun’ drone programme to Romney

President Obama’s personal involvement in selecting the targets of covert drone strikes means he risks effectively handing a ‘loaded gun’ to Mitt Romney come November, says the co-author of a new report aimed at US policymakers.

‘If Obama leaves, he’s leaving a loaded gun: he’s set up a programme where the greatest constraint is his personal prerogative. There’s no legal oversight, no courtroom that can make [the drone programme] stop. A President Romney could vastly accelerate it,’ said Naureen Shah, associate director of the Counterterrorism and Human Rights Project at the Columbia Law School.

The president ‘personally approves every military target’ in Yemen and Somalia and around a third of targets in Pakistan, the report says. The remainder of strikes in Pakistan are decided by the CIA, so are even further from formal decision-making processes and public scrutiny.

‘We are asking President Obama to put something in writing, to disclose more, because he needs to set up the limitations of the programme before someone else takes control,’ Shah told the Bureau.

In The Civilian Impact of Drones: Unexamined Costs, Unanswered Questions, experts from Columbia Law School and the Center for Civilians in Conflict examine the impact of the US ‘war on terror’ on the lives of civilian Pakistanis, Yemenis and Somalis caught in the crossfire. The report’s publication marks the anniversary of the assassination of US citizen Anwar al-Awlaki by a US drone in Yemen.

The report, which Shah said is ‘aimed squarely at policymakers’, calls on the Obama administration to justify its drone campaigns and their targets under international law. It also calls for a task force to examine what measures are in place to protect civilians.

‘The perception is that civilian casualties are not a problem. If you say otherwise, you’re accused of being naïve and being a pawn of al Qaeda… There’s an instinctual dismissal of reporting that shows there’s a casualty problem,’ said Shah.

Deep impact
The report examines how drone strikes have prompted retaliatory attacks from militants on those they believe are US spies, and stirred anti-US sentiment and violence among civilians in Pakistan and Yemen.

In the Waziristan region of Pakistan, the near-constant presence of drones exerts a terrible psychological toll on the civilian population, while the destruction of homes and other property is often catastrophic for Pakistani and Yemeni families.

In Somalia, many have been ‘forced to flee’ their homes in areas where al Qaeda-linked militants al Shabaab have their strongholds, to avoid drone and other air attacks.

And while the US claims only tiny numbers of civilians are killed by drones, establishing the truth of these claims is difficult. The report compares the Bureau’s estimates of drone deaths in Pakistan to similar projects by the Long War Journal, the New America Foundation and the Pakistan Institute of Peace Studies, noting that they ‘consistently point to significantly higher civilian casualties than those suggested by the US government’s statements’.

But deciding who is a militant and who is a civilian is fraught with difficulty – the very terms ‘civilian’ and ‘militant’ are ‘ambiguous, controversial, and susceptible to manipulation,’ the report says.

The US’s criteria for who is a civilian are ‘deeply problematic’, it adds. In May, a New York Times investigation revealed that all ‘military-aged males’ are held to be militants.

Spy agency turned covert military force
The CIA decides on the targets of Pakistan strikes – but next to nothing is known about its procedures for monitoring whether strikes kill civilians. To this day, the CIA has never officially acknowledged its campaign.

‘We know the US military has set up procedures for tracking and responding to civilian deaths because there’s so much public scrutiny… The CIA has no institutional history of complying with international law or setting up procedures for civilian deaths,’ said Shah. ‘It was a covert spy agency; it wasn’t set up for this. We don’t know how prepared they are to monitor civilian deaths or how concerned they are.’

The CIA is supposed to be accountable to Congress – but lawmakers are failing to scrutinise the impact of the CIA’s drone campaign on civilians, Shah said. Its watchdog role is compromised by the fact that the CIA has been ‘really careful to get political buy-in’, having come under intense criticism from Congress over allegations of torture under President Bush.

‘The strange thing about Congress is they think they are very well informed through briefings from the CIA… The CIA has got them to buy into the drone programme, so there’s no incentive for them to criticise it. If they were to admit there was a problem, Congress would be on the hook as well,’ she continued.

Lawmakers should look beyond government sources for information on the impact of drone strikes, and scrutinise whether the CIA’s processes for protecting civilians and investigating the aftermath of strikes are up to the task, the report says.

The Obama administration is so in thrall to drones’ technological potential that alternatives are barely considered, Shah said.

‘For policymakers there’s a false sense of limited options: [there’s] a drones-only approach in the situation room… drones are becoming the only game in town and the other tools are being taken off the table. And there’s no thought that a non-lethal approach might have less impact on the community,’ she explained.

‘The focus is so much on the extent to which drones protect American lives that the impact on Pakistani or Somali lives is displaced. There’s so much trust placed in the technology that policymakers especially are failing to consider whether drone strikes are wreaking havoc on these communities.’

(Original story is here)

September 2012 - Investigation into whether high frequency...

Mon, 17 Sep 2012 10:30:00 +0100

September 2012 - Investigation into whether high frequency trading is the future of the stock markets or a sure-fire route to disaster. Worryingly, the jury’s still out - even though the practice accounts for over a third of European trading.

Part of a package of stories for the Bureau of Investigative Journalism

Robot wars: How high frequency trading changed global markets

Welcome to the world’s most intense electronic battle. It’s waged on world stock markets and the ammunition is tiny fractions of pennies, fired through super-charged computers. The object is to wipe out the opposition.

The theatre of war is a long way from the raucous bear pit of baying stock traders. Instead, capital is unleashed in a cavernous space, lined with banks of computer servers and chilled by air conditioning. Rather than the shouts of traders, orders to buy and sell come in electronic pulses; processed instantly in near-silence.

‘It’s high tech war,’ explained a City computer expert working for an investment bank. ‘When they’re doing a trade, they can blast it with full volume so you can’t get up.’

Buy low, sell high remains the market’s mantra. But the age of computer-driven trading has ushered in speed and processing power. Trading times have accelerated exponentially. Markets are so fast today, a trade is now measured in microseconds – millionths of a second.

Allied to speed is staggering computer processing power. Now processors can assimilate transactions made on virtually every single exchange and assess who made the trade, all in the blink of an eye. This gives investors more ammunition in their battle to outmanoeuvre and second-guess rivals.

At this level, humans are out of the game. Instead, investment banks, fund managers and traders put all their trust on complex algorithms run by computers to buy and sell shares, with varying degrees of human involvement. And the fastest players of all are a new and evolving breed of market participant: the high frequency traders.

In the past five years, high frequency trading (HFT) has stormed the citidels of finance. Today it accounts for more than a third of activity on European markets and 70% in the US. Its dramatic rise to prominence has polarised opinion. Exponents say it has reduced trading costs and increased activity on markets – but critics point to two devastating US market collapses in which HFT played a central role. And now European policymakers are debating whether to impose severe limits on HFT. Influential figures are even calling for it to be banned.

The cash/time continuum
HFT takes place at speeds more commonly associated with particle physics. In the quarter of a second it takes you to blink, an HFT computer can carry out over 5,000 transactions.

Computers are locked in a permanent race against one another, and against the wider market, to perform millions of tiny, rapid trades, each yielding a tiny profit. There is no interest in actually owning a company’s stock. The game is to sell it on at a fraction of a penny’s profit very, very quickly. The tiniest delay is the difference between profit and loss.

So HF traders pay to place their servers close to an exchange’s, and invest in ultra-high speed feeds of market data. The reason? Whittling microseconds off ‘latency’ – the time it takes their message to reach the exchange and return.

‘It’s become a technological race for traders trying to exploit quirks in human behaviour,’ says a former banker. ‘So what’s at a premium is the timing and getting hold of the data as quickly as possible.’

And with billions of microscopic transactions to monitor, detecting market abuse is increasingly becoming impossible for regulators. ‘Markets get manipulated. It does happen. And there are accidents sometimes,’ a City computer expert said.

Trading tactics
Forget Gordon Gekko: the new generation of financial masters of the universe are quantitative programmers, who write the sophisticated algorithms that HFT relies on. ‘Quants’ are advanced mathematicians rather than financiers, often educated to PhD level or beyond – although their pay is closer to a banker than an academic. A junior quant can expect to earn £50,000 or more.

The algorithms they design use a variety of tactics to hunt down profits on the stock exchange. Some programmes search out stocks that are rising, to cash in on the momentum. Others look for minuscule price variations between the same stock on different markets and seek to close the price gap.

Perhaps the most innovative, or feared (depending on what position you take), are behavioural algorithms. These hunt for clues an investor wants a specific stock. Gaining this prized intelligence requires gathering and crunching colossal quantities of data to second-guess rivals. HFT’s algos then buy the stock and sell it on to the original buyer for a tiny bit more than they paid.

Then there are murkier practices that cross the line into market abuse: tactics such as ‘quote stuffing’ – firing thousands of trades into the markets and cancelling them within microseconds, with the intention of slowing down the markets and profiting from the price differences. Or ‘smoking’ or ‘layering’: entering fake trades at artificially low or high prices, to mislead other market players. American regulators have already sanctioned at least one firm for this HFT strategy.

Prepare for takeoff
It was an arcane European Union directive that effectively launched this new era in financial trading. Called the Markets in Financial Instruments (Mifid) directive, it abolished the monopoly enjoyed by stock exchanges in each EU country in 2007 – although some, like London, had already started introducing competition. New exchanges opened and a wave of merger activity ensued.

Mifid’s aim was to force stock exchanges to compete. The theory went this would make transactions cheaper and more transparent. Its introduction incentivised exchanges to increase the amount of trading providing the perfect conditions for HFT to take off. With transactions ostensibly cheaper, HFT could profit on a huge number of transactions that yielded small margins.

The industry argue it’s not just HFT which benefits. Investors now enjoy reduced spreads – the gap between bid and offer prices, and trading fees have fallen. Most importantly, they claim, HFT boosts liquidity – the willingness of the market to buy what you’re selling and sell what you want to buy.

But storm clouds are gathering for HFT. It is also blamed for making markets more predatory and volatile, causing sudden spikes and dips as black boxes bet against one another at frenetic speeds.

The critics are becoming more vocal. Last weekend a senior European Central Bank policymaker called for the trade to be banned outright, while Andrew Haldane, the Bank of England’s head of financial stability, used a speech last year to call for ‘grit in the wheels’ to slow trading and ‘forestall the next crash’.

The complaints are the sound of vested interests at work, says Remco Lenterman, chairman of HFT industry body the European Principal Traders’ Association (Epta). ‘Initiatives to try to stop our members [are] because we make the market so efficient that it becomes less profitable for the financial industry,’ he said. ‘Clearly it’s a very disruptive technology.’

The price of progress?
Concern on the potential for market harm that HFT could bring is mounting. HFT’s reputation was severely dented by the ‘flash crash’ of May 6 2010, in which already choppy US stock markets dropped by 600 points inside five minutes – wiping nearly $1 trillion off share prices at a speed only possible with quantitative trading, before rebounding just as quickly.

Two years on, many in the financial markets are still shaken by the event.

‘It was Chernobyl for stock markets,’ said one observer.

‘It was a near-death experience,’ said another: had the fall happened at the end of a trading day, markets would have closed mid-crash, sparking panic on the international markets.

‘The Flash Crash was a near miss. It taught us something important, if uncomfortable, about our state of knowledge of modern financial markets,’ Haldane said in his speech.

A SEC investigation into the events found that the fall was triggered by a mutual fund trying to shift a large amount of stock in edgy markets using an algorithm. But it gathered momentum as HFTs took advantage and drove the prices down.

If this wasn’t bad enough, last month a malfunctioning algorithm in the US saw trading firm Knight Capital lose $440m in half an hour, causing market chaos in the process.

European stock exchanges say such events couldn’t happen here: they have safety features such as circuit breakers, which halt trading on a stock when prices move too sharply. On the London Stock Exchange (LSE), they kick in around 35 times a day – although during market stress last August, this rose to 170 times a day.

But such European measures may not, according to some, be enough. Only luck has prevented major crashes in the UK, several market observers have told the Bureau.

‘The flash crash could happen here: our system’s automatic stops would kick in automatically so it wouldn’t be as dramatic, but we could still have a 10% drop before the circuit breakers kick in,’ said Kay Swinburne, a former banker and Conservative MEP on the British government’s Economic Affairs Committee.

Certainty at a premium
The trouble is that getting clarity as to whether HFT harms Europe’s markets is not an easy task. The debate is characterised by apparently contradictory studies, claims and counterclaims.

‘A lot of the research is biased,’ an informed source said: many studies are commissioned by investment banks, who count HFT firms among their clients and use HFT strategies, and others with vested interests.

There are huge technical barriers to researching HFT’s impact on markets and trades – the raw datasets are massive, complex and scattered across multiple exchanges and trading platforms.

The lack of any conclusive evidence has allowed HFT to thrive with only limited regulatory understanding. There is not even a commonly accepted definition of what HFT actually is. ‘With the regulator understanding we are in a similar situation to how they handled off balance sheet and debt markets. The regulators are starting to realise that they know fuck all,’ said the City IT manager.

This uncertainty about HFT’s benefits or pitfalls has made European politicians nervous. They are now planning tough new measures on HFT in the revised Markets in Financial Instruments Directive (Mifid 2). The proposals, which include forcing high frequency traders to trade in all market conditions, pose a serious threat to HFT, MEPs told the Bureau.

As Europe debates HFT, the British government has launched the Foresight Review, which has commissioned a series of academic studies on HFT’s impact.

The LSE’s Professor Oliver Linton examined the overall quality of the UK’s markets. Examining daily data, he found no significant rise in volatility over the past 10 years. But nor did he find significantly more liquidity. In other words, the markets haven’t got worse since the advent of HFT, but they’re not much better either.

Experts at the Financial Crisis Observatory asked whether HFT could lead to crashes,concluding, ‘We believe it has in the past, and can be expected to do so more and more in the future.’ Though some of HFT’s supporters argue this position fails to reflect some markets have better systems to prevent a crash happening than others.

Drying up
Traditional investors, such as pension funds, complain HFT’s dominance of equity markets means the dice are loaded against them: a majority told a poll by the Foresight project they were finding it ever harder to access liquidity.

The liquidity HFT claims to provide can also prove illusory – bids or orders vanish when traders go to use them, market observers told the Bureau. This is because the vast majority of messages signalling willingness to buy or sell are actually HFT’s attempts to probe the prices others will accept. These orders are cancelled in the blink of an eye – the ratio of cancelled to traded orders can be as high as 1,000:1. And in depressed markets, liquidity can simply evaporate.

‘A lot of the price discovery methods may seem dodgy,’ said the head of IT at a City bank. ‘HFTs might throw $5m on five exchanges [and] it looks like $25m liquidity. Big players have an advantage because they can afford the algorithms, be close to the exchanges and can manipulate the market.’

The argument from critics of HFT is that it makes it harder for pension funds and other institutional investors to buy large blocks of shares without being detected by behaviour-seeking algorithms.

‘Institutional investors today know the moment they begin to trade a large position at one price, it will likely be detected by software, which may then effectively front-run the order. In the past, it would have been arranged hush-hush over the phone by a block trading desk, and the trade size and price would generally appear only after a large order was placed. You can’t hide large position trades anymore,’ said Professor Bruce Weber, a markets expert.

This, critics point out, forces fund managers to buy or sell in smaller blocks in an attempt to hide what they are doing, pushing up transaction costs. Research commissioned by the EU has shown that the overall cost of buying shares has risen by 14% in three years, despite individual transaction costs having fallen.

Other costs are also incurred as many traders feel forced to join the technological arms race. ‘As HFT becomes more important it’s driven more market participants to invest more in trading technology,’ said Robert Talbut, chief investment officer of Royal London Asset Management.

A third of traditional investors polled by Foresight said the real cost of trading shares had risen, as the benefits of lower spreads and trading fees were offset by the need to invest in ever-faster equipment and staff costs.

Into the shadows
The rise of HFT has had other repercussions. It appears increasingly to be pushing traditional investors from mainstream exchanges, and onto conducting big transactions in ‘dark pools’ – off-exchange trading platforms operated by brokers, or even by exchanges, where shares are traded anonymously, without the prices being published in advance.

Market observers and traders alike say fear of having their trades detected and headed off by HFT computers are driving longer-term investors away from the ‘lit’ open markets. In Foresight’s poll, two-thirds of traditional investors said they used dark pools, especially for large orders.

‘There’s a perceived problem that strategies by HFT firms are picking off long-term only investors. That perception is why people on the buy side have moved significant amounts into dark pools,’ said a market observer.

This shift to dark pool trading raises a number of concerns. Trading in the dark is more expensive – it also affects the markets’ transparency, making it harder for other players to gauge prices.

In the UK, dark pools have almost tripled their market share in the last three years, to 3.3% of trading volume, an analysis of data from the Federation of European Securities Exchanges (FESE), by the Bureau shows. Today London’s dark pools are handling over €3bn of trades every 24 hours, and those close to the market point the finger at this rise as a response to HFT.

Consultancy Rosenblatt Securities estimates that across Europe, the share of trades changing hands on dark pools may represent up to 6.75% of turnover.

The meaning of markets
The rise in dark pools and the increasing difficulty of dealing in open, regulated markets add to a sense that the markets are no longer working as they should: they are separating from their original purpose.

‘I see [the] role of financial markets as matching up providers of capital with users of capital. I see HFT as absolutely nothing to do with investment. It is trading for tradings sake. It has no interest in a company’s fundamentals. Therefore I fail to see why it’s an activity we should be encouraging to be part of our market,’ said Robert Talbut.

‘We need to build financial markets that make sense for society and the economy as a whole. This means discouraging practices that only benefit high frequency traders, for example, and encouraging markets to serve end-users. It means helping to feed innovation and productive investment, in short: more investment and less betting,’ said Benoît Lallemand, senior research analyst at public interest advocacy group Finance Watch.

Despite the relative paucity of hard evidence to support many of the gut-felt criticisms of HFT, the overall view that HFT does more harm than good is gathering momentum in Europe. It is a view that is likely to influence the debate when MEPs meet later this month to agree the measures for Mifid 2.

The Bureau understands there is broad support for forcing HFT players to keep trading in all conditions – ending the problem of trading opportunities vanishing in stressed markets. But a Foresight analysis of the proposals released just as MEPs returned from their summer break, warned this could ‘force high frequency traders out of the business of liquidity provision’.

The next three months represent a watershed for HFT. If the current tough measures stay on the table, the industry will have to change – and may even wither away.

Its fate is bound in with other Mifid market proposals including reining in commodity speculation and protecting investors. HFT may yet emerge unscathed in compromises inevitably struck between the Commission, the European parliament and national treasuries over the nature of the entire Mifid package. Perhaps it is only a souped up algorithm that can at this stage accurately predict HFT’s outcome.

September 2012 - On the political wrangling behind efforts to...

Mon, 17 Sep 2012 10:15:00 +0100

September 2012 - On the political wrangling behind efforts to ban a high-tech but frankly terrifying market practice, high frequency trading. Written for the Guardian, working with Bureau of Investigative Journalism colleagues Nick Mathiason and Will Fitzgibbon. That’s Sharon Bowles MEP in the picture there.

Britain opposes MEPs seeking ban on high frequency trading

High-frequency trading (HFT) faces possible extinction in Europe as politicians from across the political spectrum join forces to impose restrictions on a practice blamed for two market crashes in recent years.

Several influential MEPs are determined to clamp down on the use of sophisticated computer algorithms and fast connections to generate profits through huge numbers of high-speed trades, after seeing its role in the notorious 2010 US Flash Crash and the collapse of Knight Capital last month.

But behind the scenes, the UK Treasury is trying to water down attempts by EU legislators to impose tough limits on the fiendishly complicated trading systems that generate a significant slice of trading on Europe’s stock exchanges.

Analysts at the consultancy firm Tabb Group estimate that high-frequency trading accounts for 36% of UK stock market transactions. Advocates argue high-frequency trading HFT improves markets, provides liquidity and reduces transaction costs. But many institutional investors and a growing rising number of MEPs have told the Bureau of Investigative Journalism that HFT increases volatility.

They also cite an EU study showing the cost to buy equities has increased 14% in the three years to 2009.

Fuelled by fears over potential market shocks and unease that markets appear dominated by speculators, the European parliament is cracking down on the industry through the revised Markets in Financial Instruments Directive (Mifid), which shapes financial markets across the European Union.

The Bureau spoke to six MEPs from a range of parties and found broad parliamentary agreement on reforms including introducing ‘circuit breakers’ that halt trading at large, sudden movements in prices and limiting the number of orders that traders cancel – an idea said to be gaining ground.

Sharon Bowles, the Liberal Democrat chair of the European parliament’s powerful economic affairs committee, which is steering the HFT proposals, said: ‘The jury’s still out on whether high-frequency trading does anybody any good, and as more quite significant fund managers and others say they don’t want it, it may be that it disappears.’

‘There are some systemic risks that need to be addressed,’ said Kay Swinburne, a Conservative MEP and former investment banker, who warned that European markets were not immune from the sudden shocks that have hit US markets. ‘The flash crash could happen here: our system’s automatic stops would kick in automatically so it wouldn’t be as dramatic, but we could still have a 10% drop before the circuit breakers kick in.’

The UK’s official response, made jointly through the Treasury and the City watchdog, the Financial Services Authority, supports HFT, arguing it increases liquidity and cuts trading costs. While supporting ‘steps to enhance stability and protect against market abuse’, the Treasury does not support European moves requiring HFT firms to hold equities for a minimum period.

The Treasury’s position is informed by a research project it commissioned from the Office for Science. Known as the Foresight Group, it consists of two advisory panels. The first is an eight-strong working group overseen by Clara Furse, the former London Stock Exchange chief executive whose tenure spanned the rise of HFT, and Andy Haldane, the Bank of England director responsible for financial stability and an outspoken critic of HFT.

The second, the High Level Stakeholder Group is a 31-member strategic panel appointed by former City minister, Mark Hoban. Of the 22 members from financial services, the Bureau has found evidence to link 16 to the HFT industry.

Last month, Foresight’s interim paper written by three academics criticised virtually all the EU’s proposals.

A Foresight spokeswoman said: ‘When the final report is published, it will take into consideration a wide range of evidence from academic studies, all of which have been independently peer reviewed to ensure that the findings are of a high standard.’

But a well-placed source close to the Foresight team said the High Level Panel ‘is dominated by providers, not by users’. The three- to four-hour meetings, the insider said, ‘tended to be dominated by industry … It is a concern that the group is like that.’

John Mann, a Labour MP on the Treasury select committee, said: ‘It’s the same old vested interests. The UK government is totally sold on the idea that financial markets are where the future is.’

He added that he would now draw issues raised by the Bureau’s investigation to the Treasury select committee’s attention.

Leading the HFT industry’s response in Europe is Remco Lenterman, managing director of a Dutch HFT firm, IMC, and chairman of the European Principal Traders Association, the HFT lobby group. The former Goldman Sachs banker said: ‘If I heard of this phenomenon, coming after a massive financial crisis, and I was unfamiliar with these participants, you hear it’s new [and] it appears to have no social value; it sounds like a personification of what’s bad about the [financial] industry.’

‘When Foresight started, [the Bank of England’s Andy] Haldane was very critical. The committee’s now coming to a different conclusion. The data tends to support the claims that we are making.’

Whoever is right, this multibillion-pound industry’s fate will be decided by negotiations between European Union finance ministers and MEPs, which will conclude this year.

September 2012 - Part of a package explaining the world of high...

Mon, 17 Sep 2012 10:00:00 +0100

September 2012 - Part of a package explaining the world of high frequency trading for the Bureau of Investigative Journalism, with colleagues Nick Mathiason and Will Fitzgibbon.

The A to Z of high frequency trading

The financial markets can be bewildering beasts for the uninitiated to get to grips with – and the fact that they enjoy their own vocabulary doesn’t help. Some of the terms are off-puttingly technical, while others have a certain descriptive poetry to them. Here’s our A-Z guide to some of the most common.

Arbitrage - Seek out a stock that’s a fraction of a penny cheaper in one market than in another. Then buy low, sell high. Repeat.

Bats - One of the new generation of trading platforms. Bats suffered serious embarrassment earlier this year when its US trading platform was blamed for a mini flash crash affecting the flotation of its own shares.

Colocation - Allows traders to place their black boxes closer to exchanges’ own servers – for a price – shaving valuable microseconds off transaction times.

Dark pools - Trading venues for those wanting to buy or sell without tipping the rest of the market off. Dark pools, run by exchanges or brokers, allow anonymous trading and prices aren’t reported until later – making them increasingly popular for investors trying to hide from HFT firms.

Exchange - Market places for buying and selling shares. Since 2007, they have faced competition from new rival platforms, creating new spaces for HFTs to play, and from dark pools.

FIA Epta - Group set up by independent trading firms to argue HFT’s case in Europe. ‘We’ve never really had to engage with the outside world,’ says chair Remco Lenterman. ‘It’s about engaging and explaining what we do.’

Photo by John C Abell

Getco - One of the leading ‘prop HFTs’ – firms that trade using their own capital, rather than investing others’ money. Founded in Chicago in 1999, Getco landed on European shores in 2003. Its most recent accounts show European profits of $52.5m (£32m) in 2010 – not bad for a company of 31 people, although a significant fall from the previous year.

High frequency trading - Much of the wrangling in new European legislation has involved trying to fix on a definition of what HFT even is. The Bureau defines it as dealing relying on complex algorithms, computing might and speedy connections with exchanges, with no intention of holding onto stocks: instead the aim is to leverage tiny profits from the market’s movements.

Investment banks - Financial institutions providing a range of services to clients and big salaries to employees. Major users of HFT.

Jitter - Tiny irregularities in electronic signals – unnoticeable to humans, but a serious problem when trading at microsecond speeds.

Knight Capital - US HFT firm whose value plummeted by $440m in half an hour on August 1 2012. Knight’s CEO Tom Joyce told reporters it was due to a ’fairly large bug‘ in its software.

Liquidity - One of those confusing but really quite poetic phrases, liquidity describes the willingness of markets to trade: in liquid markets or stocks, shares flow smoothly from seller to buyer. HFT’s advocates say it boosts liquidity – although in the UK academics have found no ‘statistically significant trend’ over the last decade to support the claim.

Mifid - Markets in Financial Instruments Directive. European legislation introduced in 2007 aiming to increase trading competition. Its unintended consequences – including the rapid increase in HFT it helped enable in Europe – are currently being tackled by the European Parliament in Mifid II.

Nanosecond - One billionth of a second. A holy grail for HFT technicians. Data research company Nanex writes that humans will be living on another planet before regulators could investigate one hour of nanosecond trading data.

Over-the-counter - A way of trading shares in unlisted companies – or those from listed companies without signalling your intentions to the open markets.

Related story – Infographic: Trading at the speed of light

Picosecond - One trillionth of a second. HFT is not there yet.

Quants - The advanced mathematicians who design HFT’s algorithms. Unlike many who work in finance, their backgrounds are often physics and advanced mathematics rather than economics.

Rebate - Tiny refund on trading fees paid by some exchanges to entice players to the market.

Secondary market - Market where investors buy from other investors rather than from companies issuing original assets themselves, the primary market.

Transaction costs - The price of trading. Transaction costs include fees charged by exchanges and commissions to brokers, both of which have fallen since Mifid. But they can also include colocation, data feeds, defensive algorithms and computing power – all costs of competing in the new markets.

Uncertainty - With little clear consensus over the impact of HFT on the markets and the economy as a whole, uncertainty rules – although the UK’s Foresight project has set out partly to fill the knowledge vacuum.

Volatility - The speed with which prices rise and fall – HFT’s critics claim it has made markets more volatile. The UK’s Foresight study found the UK’s markets saw extreme volatility during 2008-9, but have since calmed – at least, on a day-by-day level.

Warren Buffett - The ‘sage of Omaha’, a US investor who runs trading firm Berkshire Hathaway. His vice chairman recently said HFT has ‘all the social utility of a bunch of rats admitted to a granary’.

Chi-X Europe - Another of the post-Mifid generation of competitors to the established exchanges, Chi-X was bought by Bats last November for a reported $300m, creating a serious rival to the London Stock Exchange. The two platforms merged earlier this year.

Yield - Amount paid to shareholders in dividends. Not a priority for high frequency traders, who don’t plan on holding onto shares for long.

Zero-sum game - One trader’s profit is another’s loss: one of the accusations levelled at HFT is that its profits come at the expense of other market players – so HFT shifts but does not create wealth.

July 2012 - The UK’s gambling industry has been...

Tue, 24 Jul 2012 00:00:00 +0100

July 2012 - The UK’s gambling industry has been transformed by fixed-odds betting terminals, high-speed roulette machines that some believe are dangerously addictive. This infographic shows quite how important they’ve been to the bookies’ bottom line.

July 2012 - Investigation for the Bureau of Investigative...

Tue, 24 Jul 2012 00:00:00 +0100

July 2012 - Investigation for the Bureau of Investigative Journalism into the high-speed roulette machines that earn UK bookmakers £3m profit a day, but which campaigners say are seriously addictive. As well as this in-depth feature I published a news story and more.

How Britain got addicted to bookies’ betting terminals

It’s 10am and already there’s a knot of men at the back of the betting shop. The strip-lit space is filled with the chatter of racing commentary, but the clients aren’t paying attention. Instead, they’re intently focused on a bank of tall touchscreen machines near the counter.

A man in his sixties in a tatty hat is playing poker games on two machines at once; to either side of him younger men play digital roulette. It’s been half an hour since anybody placed a sports bet, but each of the shop’s four gaming terminals is busy.

Mikheil isn’t having a good morning. He feeds in £20 and arranges his chips on the screen. He hits the Bet button, and watches an animation of a ball circling a roulette wheel, jittering into a slot with a clacking sound. No luck. He plays again. Within a couple of minutes he’s inserting another £20. The total in his electronic bank swells rapidly – at one point he’s up £170. He could cash it in. But he doesn’t, and it quickly vanishes.

By the time he leaves he’s lost £260, and it’s barely 11am. As a painter and decorator Mikheil earns £400 a week. But this week there’s no work, and he’s whiling away the mornings playing high-speed roulette.

‘It’s one of those things you do, and you know it’s not good, but you do it anyway,’ he says. ‘Even when you win and take your money, it’s not enough – you’ll just lose it again next time.’

Outside the shop, someone has broken the glass in the bus stop. This is Green Lanes in Haringey, one of London’s poorest boroughs. The street, a cluttered and unlovely artery road, is filled with battered grocers and pawnbrokers; Mikheil is far from the only one drifting about looking for ways to fill the time. Almost the only big operators are the bookmakers – and they are here in force.

Within a half-mile stretch there are eight betting shops, including a cluster of four surrounding the post office. You can place a bet in more places than you can buy a newspaper; bookmakers outnumber banks by four to one.

All through the afternoon, the crowds in the bookmakers thicken; by 7pm they’re more popular than ever. They will stay open until 10pm.

And although the shops’ windows are plastered with football odds and their interior hums with racing commentary, for much of the day the gaming machines are the main attraction. Men – it is almost always men – charge in to play for 20 minutes, or linger for hours in a trance-like state.

When somebody wins, they make no fuss, but play again. When they lose, they might swear quietly or tut, and then play again.

‘The important thing is not to get greedy. You see people get greedy, and then when they lose, they get angry,’ cautions Mahir, a tiny man in his sixties, tapping his own screen with tobacco-stained fingers. He lost £10 earlier and is trying unsuccessfully to win it back. ‘I just play little amounts, to pass the time.’

Does he enjoy it? He looks blank and shrugs.

‘When I came here in 1998 or 1999, there were only one or two bookies,’ says Fasul, who is waiting for his cousin to finish on a roulette machine. ‘Now they are everywhere. The government should stop these machines: it’s a disease. With the horses, you put £5 on and you lose, it’s gone – so what? With the machines, it’s different.’

Fasul is right: with the machines, it’s different. If you think bookmakers make their money from racing and football, think again. Although online gambling has taken off in a big way, bricks-and-mortar bookmakers continue to thrive. These machines – formally called fixed-odds betting terminals – are the reason: they have transformed the industry, brought in new revenues, and in the process they have profoundly changed places like Green Lanes.

Souped-up fruit machines
Long gone are the fruit machines of old. In their place are souped-up betting machines offering high-speed, high-stakes casino games, where players can stake up to £100 on a 20-second spin of the wheel. Punters can play with cash, or pay with credit or debit cards at the counter.

This turbo-charged gambling is a niche occupation – fewer than 1 in 20 adults has used a fixed-odds betting terminal in the past year. But within this tiny group, they are phenomenally popular: based on financial statements from the biggest bookmakers’ accounts, the Bureau estimates that £123m a day is wagered on the UK’s 32,000 terminals. The bookmakers keep a tiny proportion of this, but it still adds up to £3.3m a day, or £1.2bn a year, according to the Gambling Commission.

Ironically, the gaming machines make bookmakers less dependent on chance: whereas a surprise sports result can affect a whole financial quarter, with fixed-odds betting terminals the returns are just that – fixed. The company keeps a long-term average of around 3% of the money staked on them.

For bookmakers it’s a winning strategy. The machines contributed 49% of William Hill’s high-street gains from bets last year – £424m. And each year bookmakers squeeze out more profits. William Hill’s latest figures show its 9,000 fixed-odds betting terminals earned an average of £900 a week – more than double the £402 per machine it earned in 2005.

Maximising these profits has meant changing how betting shops operate.

‘We have shops that open at 8am and don’t close until 10pm. This has nothing to do with football betting or horse racing – it’s just to keep the machines open and running as long as possible,’ said a spokesman for Community, the trade union for bookmakers’ staff.

Regular free tournaments entice people to give the gaming machines a go, while staff are encouraged to bring punters free tea and coffee as they play.

Of course, bookmakers must also make sure there are enough machines to keep the punters playing. This is more complicated than it sounds.

When fixed-odds betting terminals appeared around the millennium, politicians spotted their similarity to ‘pokies’, the gambling machines that are massively popular in Australia. There, ‘pokie sheds’ can contain hundreds of machines, and the industry rakes in billions of dollars in tax for the government. But there is mounting opposition to this solitary form of gambling and last year prime minister Julia Gillard pieced together her coalition partly by promising curbs on pokies.

Keen to avoid pokie sheds in the UK, Richard Caborn, then the Labour gambling minister, agreed a voluntary cap of four machines per shop. This became law in the 2005 Gambling Act – but the Act also removed councils’ powers to prevent betting shops from opening. So in areas where the machines are in most demand the bookmakers simply open more branches.

A link to deprivation
The Gambling Prevalence Survey, a major study of British gambling, found the machines are most popular among young, male, low-income gamblers – particularly the unemployed – as well as students and those from ethnic minorities. This has led bookmakers to concentrate their high-street efforts on poor areas, where there are many such gamblers.

‘The expansion of betting shops is increasingly into areas which other retailers find difficult to make profitable because they are often targeting places which would have a DE demographic,’ said a retail analyst from Verdict Research. A ‘DE’ demographic includes manual workers, casual workers and the unemployed. ‘It seems gambling companies are able to make profits in these areas.’

In a way, betting shops are more akin to coffee shops than retailers: like a latte, having a flutter is a treat that doesn’t have to cost a couple of pounds. But it’s noticeable that there is no Starbucks, Costa or Caffe Nero on Green Lanes. Instead, there are two branches of Ladbrokes, two William Hills, a Betfred, a Coral, and two smaller outfits, Metrobet and Jennings Bet. Another Coral is a few metres away on a side street. By comparison, wealthy Hampstead High Street, a couple of miles to the west, has a solitary William Hill.

Peter Craske of the Association of British Bookmakers (ABB) said: ‘The number of betting shops has remained constant for the last 10 years at about 8,500. They are a key part of a local high street and play a key role in supporting a local economy.’ Although the ABB did tell a parliamentary select committee that the ‘geographic distribution [of betting shops] has been changing.’

This targetting of poor areas is what concerns Tottenham MP David Lammy, whose constituency includes Haringey. ‘The betting industry profits from poverty,’ he said, adding that Green Lanes’ betting shops ‘completely change the look and feel of the area.’

‘The clustering of betting shops is a local problem which calls for a local solution,’ says a parliamentary report, published today, that looked at the impact of the 2005 Gambling Act. The report recommends that councils should gain the powers to lift the limit of four machines per shop ‘if they believe that it will help to deal with the issue of clustering’ – yet it does not specify an upper limit on the number of machines that might be allowed.

Green Lanes’ eight bookmakers have 32 machines between them. If each is earning William Hill’s average of £900 a week, that’s almost £1.5m leaving the pockets of residents every year on this street alone. Yet Haringey is the fourth-poorest borough in London: one in five adults is on benefits, and almost 40% of children live in poverty.

Lammy’s concerns do not end there. He continues: ‘They attract small crowds of men that smoke and drink on the pavement outside, which can be an intimidating sight for many of my constituents. Other businesses on the high road suffer as they see their footfall reduced and prospective businesses look elsewhere to set up.’

Then there is the violence and petty crime. In Haringey, police were called to the borough’s betting shops an average of five times a week in 2010, the council reports. Betting shops are a ‘focus for crime and antisocial behaviour in areas where this was already known to be a problem’, the police told a council inquiry.

This is not a uniquely local problem. Community, the trade union, found there was a 150% rise in violent incidents in London’s betting shops between 2005 and 2011.

Gambling lobby
Betting-shop operators have long chafed against the ‘arbitrary’ limit of four machines per shop – and with the select committee’s recommendations to remove the cap, it appears the bookmakers’ lobby has scored a significant victory.

In March’s Budget, George Osborne announced plans for a 20% tax on the profits from fixed-odds terminals, replacing the flat-rate fee and VAT that had been payable before. This, campaigners argue, could be the stick the industry needs to finally persuade the government to increase the number of machines allowed in each shop. Already Peter Craske, of the Association of British Bookmakers (ABB), said the tax is ‘putting at risk over 2,600 shops and 11,000 jobs’.

The powerful gambling lobby has gained plenty of behind-the-scenes access to key decision-makers: Gala Coral, William Hill and the ABB have each treated gambling minister John Penrose to days at the races since the election. Meanwhile Steve Donoughue, a gambling lobbyist whose clients include William Hill, serves as secretary of the All-Party Parliamentary Group on Betting and Gaming, giving him direct access to interested MPs and peers.

And Donoughue has served as a paid adviser to the select committee inquiry, where industry bosses have used appearances to make their case for more machines per shop.

‘Ladbrokes does believe that when every internet-connected device – mobile, laptop or iPad – can be operated as a gaming machine, the arbitrary limit of four per shop is looking outdated. Machines in betting shops generate taxes, promote employment and provide an opportunity for people to enjoy their chosen pastime in a regulated, supervised environment,’ says Ciaran O’Brien, corporate affairs director at Ladbrokes.

William Hill’s commercial director David Steele told the select committee the increase wouldn’t have to be huge: ‘Five or six [machines per shop] would certainly satisfy demand at the high points of the day for the vast majority of shops in the UK.’

Problem gambling
But more machines may mean more money being extracted from poor communities such as Green Lanes. And many believe the gaming machines are a key factor in Britain’s rising rate of problem gambling.

The 2010 Gambling Prevalence Survey found the number of problem gamblers in the UK had risen to 451,000 – more than the population of Bristol, and an increase of 90,000 compared to three years before.

The same study found that 9% of those who had used fixed-odds betting terminals in the past year were problem gamblers – a higher rate than almost any other form of gambling.

From its modest top-floor premises in Soho, the NHS Problem Gambling Clinic has gathered a uniquely detailed set of data on the habits of chronic gamblers – including hundreds of users of fixed-odds betting terminals. People arriving at the clinic are asked which forms of gambling are most problematic: 51.4% named the machines.

But all the evidence is anecdotal, and Dr Henrietta Bowden-Jones, the Soho clinic’s director, is seeking funding for a much-needed focused study. She is finding these hard to come by.

The UK’s gambling industry made gross profits of £5.5bn in 2010/11 and commits to raising £5m to fund research, education and treatment – 0.001% of its profits.

The Responsible Gambling Trust distributes these funds. Its chief executive Marc Etches says: ‘There is no empirical evidence that gambling machines, including those found in licensed betting offices in Britain, cause people to become problem gamblers.’

Studying the machines will be ‘an important element’ of the trust’s work, he added – although the research on gaming machines the trust is currently funding does not include fixed-odds betting terminals.

Betting it all
For a tiny proportion of players, the machines can be devastating. David Armstrong, 65, from Norwich, had rarely been into a bookmakers until he was invited to join a digital roulette tournament in a branch of Coral. From a £100 dummy stake, he built up around £400.

‘I thought, that’s a lot of money – that’s a week’s wages,’ he said. ‘The next week, I went in and put a fiver on. And then another.’

While his partner worked nights at the local hospital, Armstrong started dropping into bookmakers. ‘Quick visits’ would last until closing time; sometimes he would bet £50 or even £100 on each spin.

In four years, he lost his garage business, his home, his long-term relationship and over £100,000 to the machines. He eventually had a breakdown – and he is still piecing his life back together.

‘You lose your sense of money when you’re on the machines: it means nothing. It’s so quick, you’re thinking just one more spin, just one more – until you walk out and you’ve lost it all,’ he adds.

Experts believe this speed of play – known as ‘event frequency’ – influences how addictive the machines are. Gambling counsellor Ron Turrell, of addiction charity Norcas, said: ‘Gamblers who move onto fixed-odds betting terminals seem to lose far more money than with the previous type of gambling. Because it’s a very fast game, it doesn’t give you much time to stop and think.’

Anthony Jennens, chairman of gambling charity GamCare, pointed out the ‘realpolitik’ of the situation: fixed-odds betting terminals are so profitable that ‘it would possibly be a waste of time to focus too much attention on whether [they] are good or bad.’

A Department for Media, Culture and Sport spokesman said although the government is ‘aware of the general concerns’ around fixed-odds betting terminals, it has no plans to introduce new regulations.

Perhaps unsurprisingly, David Armstrong believes fixed-odds betting terminals should be banned. ‘They are machines of self-destruction,’ he said. ‘They’ve left me a destitute pensioner, and I’m still craving for them. How can you let a toy ruin your life? But when they’re emptying out the machines at the end of the day, it’s no toy any more.’

May/June 2012 - Work on possible corruption in the DRC’s...

Tue, 12 Jun 2012 17:54:34 +0100

May/June 2012 - Work on possible corruption in the DRC’s mining sector, for the Bureau of Investigative Journalism.

Demands for transparency over DRC mining deals

The IMF is so concerned about the lack of transparency in the Democratic Republic of Congo’s mining sector that it has temporarily suspended funding.

Reports by NGO Global Witness, the Carter Center and MP Eric Joyce have highlighted fears that sales of the country’s vast mineral wealth could be enriching corrupt officials rather than helping one of the world’s poorest countries. But without proper transparency it is impossible to tell.

Despite linking billions of dollars in aid in the past decade to a requirement for transparency, resources are still being sold off in secret. Both the IMF and the World Bank have withheld payments or suspended programmes in the country over its failure to put contracts out to public tender, publish full contracts and disclose who actually owns the companies that are buying up huge parts of the country’s natural resources.

Yet as reports published by Global Witness and Eric Joyce show, assets have continued to be sold in secret and for prices that independent observers have suggested could be below the market rate. Eric Joyce estimates that these deals, some of which involve secretive offshore companies whose true owners are unclear, could have cost this desperately poor country $5.5bn in lost revenue.

The IMF, which made payments to the country totalling $230m between 2010 and early 2011, is so concerned about the situation that it has suspended payments for over a year and sent a team to Kinshasa to investigate.

An IMF spokesman said: ‘The IMF has not made a disbursement to the Democratic Republic of the Congo since April 2011 due to insufficient progress in structural reform, in particular with regards to governance and transparency in the natural resources sector. Several transactions have been recently published by the authorities, and IMF staff is currently in Kinshasa to assess progress more fully.’

In December 2009, the IMF agreed a $551m loan to the Congolese government, on the condition that it publish all contracts between public and private bodies ‘including information on bonus signing shares, taxation system, private shareholders, and members of the board of directors’. The money was to be released in tranches following regular reviews. It paid out $230m of this before suspending the remainder last year.

The IMF did succeed in forcing the DRC to publish some contracts, but the information is far from complete.

The Bureau has identified 17 contracts reported to have been signed since this loan was agreed, by analysing reports by NGOs, activists and reporters, and comparing them with the documents posted on the DRC’s mining ministry website and the website of state miner Gécamines. Six of these contracts – over a third – are not publicly available on official DRC websites.

Of the contracts that are officially available, vital details such as the private shareholders and directors are usually omitted. We could find no evidence of any tender processes.

Click here to see our data.

State miner Gécamines did not respond to the Bureau’s requests for comment.

The World Bank has also expressed concerns about the issue. It has been heavily involved in the country’s mining sector for almost 20 years, including spending millions of dollars to restructure the state miner Gécamines. But its input has had little impact on accountability – leading a World Bank employee to complain in a leaked 2005 memo that contracts were being signed with ‘a complete lack of transparency’. He warned the World Bank risked ‘perceived complicity and/or tacit approval’ of the deals.

In October 2011, the World Bank and UK government reinstated the mining transparency programme, ProMines – a month before it was reported that Gécamines was refusing requestsfrom the DRC government to publish contracts.

Asset sales in the DRC do appear to have slowed after the flurry of sales between 2009 and mid-2011.

Have we missed any contracts from our data? Email aliceross@tbij.com and let us know.