The bipartisan "Gang of Eight" Senators continued discussions on a fiscal deal as the Fed survey found flat consumer spending and hiring. Romney improved in polls after the first debate while Biden and Ryan clashed on issues in the Vice Presidential debate. The House committee heard testimony on security lapses in Benghazi and Romney criticized Obama's foreign policy. Turkey forced down a Syrian plane carrying military cargo.

1. October 12, 2012
DOMESTIC POLICY MATTERS
Budget, Sequestration & The Economy. The bipartisan “Gang of Eight” Senators met again this week to
continue discussing a possible fiscal deal to address the pending expiration of the “Bush tax cuts” and avoid
automatic spending cuts under sequestration. The group’s private negotiations have intensified recently, with
the goal of having a plan to offer in the lame-duck session after the November elections. Wednesday, the
Federal Reserve (Fed) released a survey on business conditions around the country collected by the Fed’s 12
regional banks. Although the survey found increased auto sales and stronger housing markets in most parts of
the country, it also cited flat or only slightly improved consumer spending and unchanged hiring statistics in
most of the Fed’s regional banking districts.
2012 Elections. Following last week’s Presidential debate, regarded by most media accounts as having been
won by Republican Presidential candidate Mitt Romney, the Romney-Ryan ticket improved in polls this week –
enough to put them ahead in some national surveys and to tighten the race in certain key battleground states.
On Thursday, Vice President Joe Biden and Republican Vice Presidential nominee Paul Ryan participated in
the campaign’s only Vice Presidential Debate. During the 90-minute exchange, Vice President Biden and
Representative Ryan clashed on issues such as job creation, taxes, Medicare, Social Security, abortion, and
U.S. foreign policy in the Middle East. Non-partisan political analysts largely concluded that both candidates
generally made their points effectively, despite the contrast in styles between the more animated Vice
President and the more even-keeled Wisconsin Congressman. Incumbent Democratic Representative Howard
Berman (California), current Ranking Member of the House Foreign Affairs Committee (HFAC), announced
endorsements from ten California Republican colleagues in Congress this week in his race against
Representative Brad Sherman, a fellow senior HFAC Democrat who has stressed his local Democratic and
Republican endorsements. The California Congressmen participated in a heated debate on Thursday that
included a confrontation calmed by a police officer on stage.
Over the weekend, the Washington Post published a report on its investigation into whether Members of
Congress benefitted from legislation they supported. The Post found 73 current members of Congress
have sponsored or co-sponsored legislation in recent years that could benefit businesses or industries in which
they or their family members are involved or invested, a practice permitted under Congressional ethics rules as
long as they are not the lone beneficiaries. On Monday, President Obama traveled to Keene, California, to
dedicate the Cesar E. Chavez National Monument in honor of the deceased civil rights and farm worker
activist. The U.S. Supreme Court heard oral arguments Wednesday about whether a University of Texas
affirmative action policy that considers race as a factor in admissions decisions is discriminatory. The number
of people who have died in a national meningitis outbreak reportedly linked to injections of a potentially
contaminated pain drug continued to rise this week. Lawmakers called for a Congressional inquiry into the
origins of the epidemic, which so far has killed 14 people and affected at least 170 others. On Thursday, the
first lawsuit was filed against the maker of the potentially tainted pain medication in a Minnesota federal court.
Thursday, federal authorities designated the Mara Salvatrucha (MS-13) as a “transnational criminal
organization,” marking the first time a U.S. street gang has received that designation. The designation will
give federal authorities more tools, including the seizure of assets, to fight MS-13, which has ties to Central
American and has taken root in California, Virginia, and elsewhere in the United States.
FOREIGN POLICY MATTERS
On Wednesday, the House Oversight and Government Reform Committee met during the Congressional
recess to hold a hearing on the security lapses at the U.S. Consulate in Benghazi, Libya. As the leader of
the White House National Security Council-authorized Site Security Team (SST) in Libya, Lieutenant Colonel
Andrew Wood shared the State Department refused to extend the team’s mandate past August 5, despite his
assessment that security for U.S. diplomats was weak. Then-Regional Security Officer Eric Nordstrom, who
was in Libya until August 14th, acknowledged he had requested an extension of the SST mandate through
September or October, which State eventually denied. Nordstrom further testified that additional security and
structural reinforcements could not have prevented the attack. Meanwhile, Under Secretary of State for
Management Patrick Kennedy defended the Department’s security decisions, saying the assault on the U.S.
compound was "an unprecedented attack by dozens of heavily armed men." In a speech Monday in Virginia,
Republican Presidential candidate Mitt Romney said the attack illustrates that President Obama's policies have
made the United States less influential and more vulnerable around the world. Former Clinton Administration
Secretary of State Madeleine Albright responded that Governor Romney’s approach to Libya and other foreign

2. policy concerns was “full of platitude and free of substance.” Thursday evening, Governor Romney’s running
mate Congressman Ryan continued the Republican theme, suggesting a Marine detachment should have
been authorized to protect U.S. Ambassador Chris Stevens around the anniversary of September 11th,
especially when intelligence validated al-Qaeda’s presence in Libya. Vice President Biden had commented on
the attack earlier in the debate, stating, “One, we will find and bring to justice the men who did this. And
secondly, we will get to the bottom of it…because whatever mistakes were made will not be made again.” On
Wednesday, the White House announced counterterrorism adviser John Brennan had travelled to Tripoli to
meet with senior Libyan officials, including President Magariaf, to discuss the Consulate attack and to
encourage them to “move quickly on refining their policies and advancing government capabilities….”
Meanwhile, Tuesday, Libyan government forces claimed to have surrounded Ansar al-Sharia, the Islamist
group believed to be behind the attack, asking for back-up in order to advance on the militants.
Iran. Tuesday, President Obama issued a new Executive Order designed to enable the President to freeze all
bank accounts and stop any related financial transactions of a “sanctioned person.” This week, the media
reported Senator Lindsey Graham (R-South Carolina) plans to introduce a non-binding resolution next month
that would call on the Administration to support Israel “militarily, economically and diplomatically” if the Israelis
launch a pre-emptive attack on Iran’s nuclear facilities. Iran was also a topic at the Vice Presidential debate.
On Iran sanctions, Congressman Ryan claimed, “The [Obama] Administration was blocking us [Congress]
every step of the way,” while Vice President Biden countered, “Iran is more isolated today than when we took
office.”
On Thursday, Hezbollah claimed to have launched the drone shot down last week in northern Israel.
Hezbollah leader Sheikh Hassan Nasrallah claimed the drone was assembled in Lebanon but made in Iran. On
Tuesday, Israeli Prime Minister Benjamin Netanyahu announced his decision to call for early elections, citing
the government’s inability to successfully negotiate the national budget for 2013.
Syria. Over the weekend, Syrian shells continued to fall inside the Turkish border, with Turkey targeting
Syrian regime targets in response. On Wednesday, the Turkish air force forced a Syrian civilian jetliner on a
Moscow-to-Damascus flight to land in Ankara, reportedly acting on an intelligence tip the airline was carrying
illicit munitions. President Recep Tayyip Erdoğan later confirmed the plane was carrying “… military tools,
equipment and ammunition to the Syrian Defense Ministry”, allegedly from the Russian government. The
Syrian government accused Turkey of air piracy, while the Russian government “continues to insist on an
explanation of the reasons for such actions by the Turkish authorities." Meanwhile, the E.U. appears to be on
the verge of approving new sanctions that reportedly will ban European companies from importing,
transporting or insuring arms sales from Syria, and will ban Syrian airlines from landing at European airports.
On Tuesday, the Taliban shot a schoolgirl activist, Malala Yousufzai, on her way home from school in the Swat
Valley of Pakistan, reportedly for spreading Western ideals. Malala gained international recognition for her
advocacy of women’s rights. White House Press Secretary Jay Carney said President Obama “found the
news reprehensible and disgusting and tragic”. Also Wednesday, the White House announced General John
Allen, the Commander of U.S. Forces and NATO International Security Assistances Forces (ISAF) in
Afghanistan, will be nominated as the next Supreme Allied Commander Europe (SACEUR); and Commander
of U.S. European Command. Assistant Commandant of the U.S. Marine Corps General Joseph Dunford was
announced as General Allen’s replacement. At Thursday’s debate, Republican contender Congressman Ryan
and Vice President Biden also clashed on Afghanistan. Vice President Biden said the U.S. military will leave
Afghanistan in 2014, following the training of Afghan troops. Congressman Ryan cautioned against
announcing a firm deadline, in order to help prevent U.S. and Afghan forces from losing gains.
Last weekend, Abu Hamza and four other terror suspects were extradited to the United States from Great
Britain. Last Sunday, Venezuelan President Hugo Chavez won a third consecutive six-year term by a
reported 55%-44% margin over opposition leader Henrique Capriles. After an 11-month investigation by the
House Permanent Select Intelligence Committee into Huawei Technologies Co Ltd (“Huawei”) and ZTE
Corp. (“ZTE”), Chairman Mike Rogers (R-Michigan) and Ranking Member C.A. Dutch Ruppersberger (D-
Maryland) released the Committee’s public findings on Monday. The report alleges Huawei and ZTE pose
risks to U.S. national security and warns U.S. companies against doing business with them. Huawei and ZTE
strenuously deny that their technologies pose a threat, noting the report presents little evidence to the contrary.
Wednesday, the State Department welcomed Somali President Hassan Sheikh Mahamud’s Saturday
appointment of Somalia’ new Prime Minister-designate, Abdi Farah Shirdon. Thursday, a drive-by shooting
killed a top Yemeni security officer, Mr. Qassem Aqlani, on his way to work at the U.S. Embassy. Also
Thursday, Russia cast doubt on its renewal of the Nunn-Lugar Cooperative Threat Reduction Program when it
expires next year. This week, Canada officially joined the Trans Pacific Partnership trade negotiations.
For more information, visit www.pattonboggs.com