The CIA does or doesn't confirm or deny or both or neither...

2010-02-23T16:37:27-05:00

The Central Intelligence Agency recently declassified records concerning Project Azorian also known as Project Jennifer. For those who never heard of Project Azorian (including myself), it was a secret operation in 1973-74 to raise a sunken Soviet submarine from the floor of the Pacific Ocean.

In March 1968, a Soviet Golf-II submarine, the K-129, carrying three nuclear-armed ballistic missiles, sailed from the naval base at Petropavlovsk to take up a patrol position northeast of Hawaii. The submarine along with the missiles sank in 16,000 feet deep water and all hands were lost. The sunken vessel was located by the US Navy using an underwater sonar system.

The CIA began to develop a plan to recover the submarine in 1969 and a special-purpose vessel, the Hughes Glomar Explorer was built at the Sun Shipyard in Chester, Pennsylvania beginning in 1971. After a series of events, including cost overruns, union strikes and political delays tied to the growing détente between the US and the Soviet Union, the recovery work by the vessel commenced on July 4, 1974. Amazingly, arrangements were made with the reclusive Howard Hughes to use a bogus deep seabed mining venture as a cover story thus attaching his name to the vessel.

A portion of the vessel was recovered and brought the remains of the submarine to Hawaii for analysis. There are varying accounts as to how much of the vessel was recovered and whether the US recovered any of the missiles, which they were most interested in. Many sources report that an accident of some kind, possibly a stress fracture of the lifting claw, caused more than half of the submarine's hull to break off and fall back to the sea floor, never to be recovered. According to many accounts, two nuclear-tipped torpedoes and the remains of six (or eight) Soviet sailors were recovered. Some report that as many as 70 bodies were recovered, and some believe that the entire submarine, complete with ICBMs, was recovered successfully. The CIA returned the bodies of K-129's sailors to the sea, with full Soviet Military honors, and videotaped the ceremony. This video was made public after it was presented by CIA director Robert Gates to Russian President Boris Yeltsin in 1992.

The story was first broken in 1975 by New York Times journalist Seymour Hersh, and soon thereafter, there were numerous newspaper accounts linking the Glomar Explorer with a secret US government operation.

My favorite part of this story is tied to legal wrangling. A Los Angeles Times journalist named Harriet Ann Phillippi, filed a Freedom of Information Act request with the CIA for records that might exist that would reveal contact by the CIA with members of the media to persuade them to drop stories concerning the vessel. The CIA’s response was to refuse to neither confirm nor deny the existence of any responsive records. This is the first known instance of the US Government using a “can neither confirm nor deny” response to a FOIA request and these types of responses are now commonly known as “Glomar Responses” or “Glomarization”.

Another Day, Another International Price Fixing Conspiracy!

2010-02-18T18:46:59-05:00

The US Department of Justice announced that Parker ITR, an Italian subsidiary of U.S.-based Parker Hannifin agreed to plead guilty and to pay a $2.29 million criminal fine for participating in a conspiracy to rig bids, fix prices and allocate market shares of marine hose sold in the United States and elsewhere. According to the Justice Department's press release:

Under the terms of the plea agreement, which is subject to court approval, Parker ITR has agreed to pay a criminal fine and to cooperate fully in the Department’s ongoing antitrust investigation. Parker ITR is the fourth company to be charged in the investigation. To date, nine individuals have been convicted for their involvement in the marine hose conspiracy.

Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities. The victims of this conspiracy included companies involved in the off-shore extraction and/or transportation of petroleum products, as well as the U.S. Department of Defense. During the conspiracy, the cartel affected prices for hundreds of millions of dollars worth of marine hose and related products sold worldwide.

This guilty plea follows several others by other participants in the conspiracy. Previously, Dunlop Oil & Marine Ltd. paid a fine of $4.5 million and Manuli Rubber Industries, Trelleborg and Bridgestone have been caught up in the matter as well.

I first heard about the marine hose price fixing scandal in 2007 from a friend at a tanker carrier who was looking into a suit against one or more of the perpetrators. While It is a truly interesting case and has embroiled several well known companies, it is hardly the stuff of the evening news or even the cable news channels. That got me thinking about the most notorious price fixing conspiracies (it didn't hurt that I just saw The Informant!) and I found this humorous look by mental_floss at some high profile price fixing conspiracies. The sheer chutzpah of these companies and individuals astounds me.

Proctor in Admiralty

The CIA does or doesn't confirm or deny or both or neither...

Another Day, Another International Price Fixing Conspiracy!