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Here’s How the British Government Is Planning to Come After the Guardian

Every day, the National Security Agency's massive surveillance apparatus hoovers up nearly 5 billion records drawn from the location data of cell phones around the world. That's according to the Washington Post's latest installment in their coverage of the documents leaked by former NSA contractor Edward Snowden.

Meanwhile, across the Atlantic, the Snowden saga has taken a very different turn. On Tuesday, Alan Rusbridger, the affable, rumpled editor of the Guardian appeared before a Parliamentary committee to testify about his paper's articles based on the Snowden documents. Wednesday's article in the Post about the NSA's collection of geolocation data is one of the most aggressive articles since the Snowden documents began appearing in public. The article details specific tactics used by the NSA in utilizing cell phone data and exposes several innovative methods used by the agency in tracking its targets. It also reveals that Americans' geolocation data are often "incidentally" hoovered up as well. Despite all this, it is all but unimaginable that Marty Baron, the editor of the Post, would be dragged before Congress and made to testify about his editorial decisions.

When he was asked on Tuesday whether he loves "this country," Alan Rusbridger, the Guardian's affable, rumpled editor scoffed at the question. "We live in a democracy. Most of the people working on this story are British people who have families in this country, who love this country," he said. "But yes, we are patriots, and one of the things that we are patriotic about is the nature of a democracy, and the nature of a free press, and the fact that one can, in this country, discuss and report these things."

Rusbridger was speaking before a Parliamentary hearing on the stories his paper and others have run about the documents provided by Edward Snowden. Those articles have shed unprecedented light on the massive data collection and surveillance tools employed by the National Security Agency and its allied agencies. Critics of Snowden and the papers who have run stories based on those documents have repeatedly argued that they pose a dangerous threat to national security and expose intelligence practices that they say have prevented another major terrorist attack like those of Sept. 11, 2001. On Wednesday, the Washington Post published the latest installment in their coverage of the Snowden leaks when they revealed that the NSA is gathering nearly 5 billion records every day on the location of cell phones around the world.

On Tuesday, the British government and its allies in Parliament made clear to just what lengths they may be willing to go in order to prevent additional such stories from being published. While they aren't about to admit it outright, that response is based on large part on a doctrine known as prior restraint, aimed at suppressing material before it is published.

That's a doctrine that's been largely discredited and outlawed in the United States. The same can't be said for the United Kingdom.

"Prior restraint, legally, can work two ways," Jesselyn Radack, the national security and human rights director at the Government Accountability Project, told Foreign Policy. "The first is preventing a journalist from publishing. The second is by criminally prosecuting a journalist after the publishing, because it has a chilling effect. And this hearing is an example of this kind of prior restraint." On Tuesday, it emerged directly after his testimony that Rusbridger and the journalists of the Guardian are facing a possible investigation for terrorism offenses over how they handled the trove of some 58,000 documents that they obtained from Snowden, the former NSA contractor.

Ever since the Supreme Court ruling in the Pentagon Papers case prevented the Nixon administration from blocking the New York Times and the Washington Post from publishing the government's damning account of the Vietnam war, the idea that the U.S. government would ever step in to stop a newspaper from running an article has become a nearly inviolable principle of American media law. The government can certainly request that papers not publish sensitive stories, but they cannot legally compel them to do so.

But the brewing fight between the Guardian and the British government is showing that prior restraint is far from dead in the British Isles. While British courts still have powers of prior restraint, rather than charging the journalists outright for publishing classified material, British prosecutors may come after the Guardian for sharing its non-redacted files with the New York Times. Communicating information about British intelligence and security officials is considered a crime under the Terrorism Act. "It isn't only about what you've published, it's about what you've communicated," said Michael Ellis, a conservative member of Parliament. "That is what amounts, or can amount, to a criminal offence."

The fact that Rusbridger faced a line of questioning about how information was stored and transferred was evidence that a potential prosecution would focus on technical grounds, according to Radack. "Substantively it's absurd for them to go after a journalist for the actual publishing," she said.

Ever since the initial publication of the Snowden documents, the Guardian has been under pressure from the government, said Rusbridger. Using an angle grinder and a drill, Guardian were in July forced by the British government to destroy the MacBook Pro that held the paper's copies of the Snowden files. And it has been subject to myriad pressures to halt publication of further details. "They include prior restraint, they include a senior Whitehall official coming to see me to say: 'There has been enough debate now,'" Rusbridger said. "They include MPs calling for the police to prosecute the editor."

But according to Rusbridger, intimidating journalists would do nothing to stop the release of secret information -- it will only make those disclosures less discriminating. "These days whistleblowers are spoiled for choice. They don't, in fact, need to 'go' anywhere: they can simply publish themselves," Rusbridger wrote last month in the New York Review of Books. What journalists offer, he argued, is a way for a large trove of information to be published thoughtfully and responsibly, for maximum impact and with minimum damage to legitimate national security interests.

On Tuesday, Rusbridger detailed the ways that the Guardian has exercised caution in their handling of the Snowden files. They have consulted with government agencies ranging from the White House, to the FBI, to Britain's GCHQ, and to the Home Cabinet more than 100 times for the 26 documents the paper has published over the past six months. He also noted that the Defense Advisory Notice system, the British body responsible for flagging damage done to national security, told him that nothing in those stories put British lives at risk. More pointedly, he said that the paper refused to look at the trove as a source for outside of Snowden's original intent. Stories about U.S. and British actions in Iraq and Afghanistan, Rusbridger said, were considered included off limits because they strayed beyond the scope of an over-reaching surveillance state that the leak had intended to expose.

The most pressing security problem isn't that there are journalists that are willing to publish leaks, but rather that the lack of meaningful oversight of the surveillance state creates the will to leak it in the first place, argued Rusbridger in his closing remarks. "As long as you've got people amongst those hundreds of thousands of people who are so troubled that they're going to leak these public," he said, "then you've got no security."

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Wall Street's Bad Old Days Could Be Back If the Banks Win this Lawsuit

It's Wall Street's latest counterstrike against Washington and its attempts to rein in the financial industry after the crisis that plunged the U.S. economy into recession in 2008. And if the legal attack is successful, it could leave an opening for banks to return to some of the dangerous deals that were a Wall Street hallmark before the crash.

The trade groups, which represent U.S. and international banks, filed a lawsuit Wednesday aimed at one of the central parts of the regulatory overhaul intended to prevent another financial crisis like 2008. It's the latest step in a long campaign by global banks to push back on stricter U.S. regulation and oversight of trades done in other countries. If a judge agrees with the Wall Street groups, it could spell the end for a central plank of the law meant to curtail risky trading and make the banking system safer.

Wall Street's chief trade group, the Securities Industry and Financial Markets Association, along with two international trade groups, sued to stop the United States from regulating deals American banks do abroad. In a complaint filed Wednesday, the trade groups ask the court to "halt an unprecedented and unlawful effort" by U.S. regulators to "regulate financial activity around the world."

Regulators have beat back some of Wall Street's legal challenges, like a suit by Bloomberg LLP over other trading rules. But this suit comes at a vulnerable time. The chief regulator who pushed for the provision is about to step down. If it's shot down, it's unlikely to be passed again in the same form.

The lawsuit challenges one of the most controversial aspects of the regulatory overhaul: rules for complex contracts called derivatives. Derivatives are financial contracts linked to the value of something else, like interest rates or currency exchange rates. Companies and financial firms use the contracts to offset risk in their business or to bet on the fluctuating values. After the financial crisis, lawmakers targeted derivatives as an accelerant to the financial crisis and decided to rein in the market with regulations aimed at making it more transparent and less risky.

Derivatives brought insurance giant American International Group to its knees during the financial crisis. Too many derivatives deals souring at the same time nearly killed the insurance giant, but they also linked the failing company to lots of other firms on Wall Street, threatening to bring them all down with it. The U.S. government opted to rescue the insurer, rather than face a possible financial market collapse.

Some of those AIG derivatives deals were done in London. That's been an oft-repeated talking point for the regulator charged with writing the new derivatives rules, Commodity Futures Trading Commission Chairman Gary Gensler. Gensler has agued that if U.S. regulations don't apply to U.S. banks and hedge funds doing deals in other countries, you might as well "blow a hole out of the bottom" of the new oversight regime.

Gensler has faced pushback not only from Wall Street lobbyists, but also fellow Democrats and other U.S. regulators. But by far his most vocal critics have been European and Asian officials, who have argued that the United States is overstepping its jurisdiction. Gensler compromised with his critics in July, delaying part of the new regulatory regime, but now he faces a new challenge in court just as he is about to leave the agency at the end of the year.

A spokesman for Mr. Gensler's agency declined to comment.

U.S. and international banks, through their trade groups, are arguing that the agency is hurting global derivatives markets. The trade groups said regulators were "harming the business relationships of U.S. companies" by "dictating private parties' obligations through sudden and unpredictable regulatory fiat." Stephen O'Connor, chairman of the International Swaps and Derivatives Association, said on a conference call that the rules would be "harmful to the global economy" because non-U.S. banks will stop doing business with American ones because they don't want to get roped into the U.S. regulatory system. 

The lawsuit is the latest in a series of challenges to the financial overhaul law, which have targeted rules on everything from mutual funds to the labeling of products that contain minerals from conflict-torn countries. The suits have been successful in some cases and have forced regulators to move more slowly and carefully in rolling out the new rules. But if this challenge is successful, it'll be the biggest blow yet to the regulator that has moved swiftest in completing its post-crisis rules.

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