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Apple chief calls on US government to slash US corporate tax


Tim Cook warns Congress that he would refuse to repatriate $100bn stashed offshore unless US severely reduced its 35% tax rate

Apple has called for US corporate tax rates to be slashed after it admitted sheltering at least $30bn (£20bn) of international profits in Irish subsidiaries that pay no tax at all.

In a dramatic display of how threats from multinational corporations are driving down taxes across the world, chief executive Tim Cook warned Congress that he would refuse to repatriate a total of $100bn stashed offshore unless it acted to slash the 35% US rate.

Cook said the tax rate for repatriated money should be set "in single digits" to persuade companies to bring it back. Standard tax for US profits should be, he said, in the "mid 20s".

He also revealed that Apple had struck a secret deal with the Irish government in 1980 to limit its domestic taxes there to 2%.

Three subsidiaries based in Ireland are also used to shelter profits made in the rest of Europe and Asia but are not classed as resident in any country for tax purposes – a tactic dubbed the "iCompany" by critics.

Cook's testimony to a Senate sub-committee investigating multinational tax practices largely confirmed its findings that Apple had taken tax avoidance to a new extreme by structuring these companies so they did not incur tax liabilities anywhere.

Phillip Bullock, the California company's head of tax, estimated that just one of these subsidiaries – Apple Operations International – had channelled $30bn in global profits over the last five years without filing a single income tax return.

The only taxes paid were on the interest earned by the cash pile and small sums in local markets. Senate investigators allege a total of $70bn has been sheltered this way in four years.

Despite heated exchanges with committee chairman Carl Levin, Apple largely shrugged off criticism of the practice, insisting it was acting "in the letter and the spirit of the law".

An independent tax professor, Richard Harvey, testified that its tax avoidance was "probably legal" and could have been much more aggressive.

The Apple chief used his appearance to renew lobbying for Congress to cut a deal with multinationals to encourage them to bring back, or repatriate, the billions of dollars kept offshore to avoid tax.

Cook said he had no plan to bring back the $102bn built up by Apple at current tax rates, and recently opted to return money to shareholders by borrowing money instead. "I have no current plan to do so at the current tax rates.

"Unlike some technology companies, I am not proposing a zero rate," he said. "My proposal is that we have a reasonable tax for bringing back money from overseas.

"A permanent change is materially better than a short term tax holiday."

Cook said he "personally doesn't understand the difference between a tax presence and a tax residence".

He was even defended by some members of the committee who accused Levin and Republican John McCain of "bullying" Apple. "I am offended by the tone and tenor of this hearing," said fellow Republican and presidential hopeful Rand Paul.

The hearing was seen as a watershed in the increasing tense clashes between governments and multinationals, particularly technology groups such as Apple, Amazon and Google.

Edward Kleinbard, professor of law at USC Gould School of Law, said: "Apple is not an outlier in its efforts to produce 'stateless income' – income that is taxed neither in the United States nor in the countries where its foreign customers are located – but it is an outlier in the baldness of its strategies. Apple shifted tens of billions of dollars of income without even breaking into a sweat.

"The hearing will forcefully remind policymakers that international tax reform will require the implementation of really thoughtful anti-abuse rules, ideally developed in conjunction with other OECD member states.

Every country is the worse off when they facilitate multinationals aggressively pursuing stateless income strategies, just as every country is worse off when they all engage in trade wars."

Corporate tax expert Jennifer Blouin at University of Pennsylvania's Wharton business school said the Apple revelations were "extraordinary but not surprising".

"We have seen versions of this with Microsoft and with Google," she said. "I hope it gooses the notion that we need to fix the worldwide system."

She said Apple was working within the law but that the law was written before huge profits could be made by companies that trade not in goods and manufacturing but in ideas.

"I have worked in this area for years and it's been largely an obscurity. But it's at the forefront now, and it needs to get fixed."


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Tim Cook defends Apple tax policy in Senate hearings – live blog


Apple has denied findings by congressional investigators that they use 'highly questionable' tax minimization strategy. Follow it live here


    


John Kerry to visit Middle East this week to revive peace talks


British foreign secretary William Hague to join the US secretary of state's fourth visit to region in two months

US secretary of state John Kerry arrives in the Holy Land this week on his fourth visit in two months amid deepening scepticism on all sides about his chances of breathing life back into the moribund peace process, and an acknowledgement by European diplomats that there is no "Plan B" in place in the event of its failure.

The British foreign secretary William Hague will also join the Middle East diplomatic merry-go-round this week, with a visit to Israel and the Palestinian territories beginning on Thursday. The focus of Hague's trip, in which he is expected to meet politicians from both sides, is to support Kerry's mission to bring the two sides back to negotiations after an impasse of almost four years.

Kerry's efforts have produced no tangible results so far, apart from both parties consenting to refrain from actions which could set back his efforts. But while the Palestinians have stuck to their agreement to postpone pressing their case for statehood at international bodies, Israel has infringed its unannounced de facto moratorium on settlement expansion with recent moves on the retroactive legalisation of four unauthorised outposts and the construction of 300 houses at Beit El.

Following his last visit, Kerry said he was working on a package to boost the Palestinian economy as part of a framework of measures. No details were given.

Israeli and Palestinian political and diplomatic sources are privately sceptical about the chances of negotiations resuming but are unwilling to publicly dismiss such a high-profile effort. "It's not going to happen. We know that, they know that, but Kerry doesn't know it yet," said one.

European diplomats are also reluctant to express confidence in the likely success of the mission, speaking instead about giving Kerry "space" and "encouragement" to pursue his efforts.

"The EU wanted American engagement in this issue, and now we should support and encourage him, and give him space to develop something," said a senior European diplomat. "We know exactly what the situation is but we are not speaking of a Plan B because we want Plan A to succeed."

Another European diplomat was blunter. "There is no Plan B, or at least not one that all 27 [EU] states can agree to. If Kerry fails, it will be up to individual countries to try to change the dynamic."

International hopes were raised when the Arab League last month spoke for the first time about a Palestinian state on 1967 borders with "comparable and mutually agreed minor swaps of the land". The statement, from the Qatari foreign minister, was the first time the League had acknowledged the possibility of some Jewish settlements in the West Bank being on Israel's side of any agreed border.

Kerry has pushed the 2002 Arab Peace Initiative – which offered normalised relations between all Arab states and Israel in return for a Palestinian state – as a basis for renewed talks. He welcomed the new statement, as did former Israeli prime minister Ehud Olmert, who said: "We are speaking of an opportunity that must be seized to renew the diplomatic process."

However, Binyamin Netanyahu, the current prime minister, has not even acknowledged the move, let alone seized it as an opportunity. Referring to a Haaretz front page headline which read "John Kerry's upcoming visit to Israel is fourth attempt to push stone up the hill", one western diplomat quipped: "It's more like pushing water up hill. At least with a stone you have a chance."

Much of the secretary of state's attention will be focussed on Syria during his four-day trip to the Middle East, which includes visits to Oman and Jordan. He is expected to discuss with Netanyahu Israel's recent airstrikes on weapons stores near Damascus and the risks of such action internationalising the civil war, now into its third year.

Netanyahu has refused to rule out further action aimed at preventing advanced or chemical weapons being transferred to Islamic militants, despite the Syrian regime's threats to retaliate on the next occasion.


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Beleaguered Obama looks to fight back as critics ask: is he a lame duck already?


IRS, AP, Benghazi … this past week, the president has been forced to confront a series of damaging scandals that could derail his second term before it has really begun

It is not a comparison that many people thought would ever get much traction.

But, assailed this week by multiple scandals and at the mercy of a furious press, President Obama has endured a legion of pundits wondering if he is the 21st-century Richard Nixon – and whether his second term is already a lame-duck disaster.

Certainly conservative writers have leapt at the idea that the now beleaguered Obama can be mentioned in the same breath as the shamed 37th president who left office early after the Watergate scandal.

They have looked at revelations that the Internal Revenue Service singled out conservative groups and that the Justice Department targeted AP journalists in a secret sweep of their phones as signs that Obama's administration is paranoid and over-reaching its power. Then they have added a healthy dose of outrage over whether or not the White House manipulated reaction to the death of four Americans in an attack on the US diplomatic mission in Libya.

"Benghazi, IRS – son of Watergate?" wrote conservative writer Cal Thomas amid a plethora of similar headlines. But it was not just the right wing. Liberal Democrat congressman Michael Capuano reacted to the IRS reports by saying: "There's no way in the world, I'm going to defend that. Hell, I spent my youth vilifying the Nixon administration for doing the same thing."

Indeed, even Buzzfeed used an animation of Obama's face morphing into Nixon's.

Long-time Washington observers have been shocked at how rapidly it seems that Obama's second term appears to have come off the rails. It has been barely six months since he was celebrating a comfortable win over Republican challenger Mitt Romney in the 2012 election and delighting his liberal base with a promise of four years of progress and reform.

"It has been downhill since the state of the union address in February, and it is going to be a tough road from here on in for him. It is a very bleak period for the White House," said Professor David Cohen, a political scientist at the University of Akron.

The three scandals that have dominated the headlines this week – the IRS, the spying on AP and the latest Benghazi revelations – have also only added to series of other problems that the Obama White House has encountered as it seeks to map out a meaningful second term.

Obama has been hit by intense criticism from his liberal base and rightwing Republicans over his enthusiastic use of unmanned drones to kill suspected Islamist militants abroad. A hunger strike at Guantánamo Bay has also highlighted his failure to fulfil a long-standing promise to close the controversial base. Finally, in the wake of the tragic Newtown school shooting, Obama staked a huge amount of political capital on tightening gun controls. Yet, despite huge public backing, he was defeated by intense lobbying from the gun industry.

It has added up to a sense, for some, that Obama's second term has been cut adrift and is watching its influence drain away. "His lame-duck status has come a couple years early. The defeat on the gun control issue was a real embarrassment," said Cohen.

Experts say that Obama's problems lie not so much with a newly galvanised Republican party that scents political blood in the water, but with his own Democratic party. As the White House becomes increasingly distracted and focused on damage control – for example, suddenly releasing a 100 emails linked to Benghazi on Wednesday and sacking the IRS chief – its ability to keep its own members of Congress disciplined diminishes.

With half an eye on the mid-term elections of 2014, many Democrats will now be wary of being too closely linked to a scandal-tainted Obama. Getting them to vote to pass the White House's desired legislation will be difficult. "It is going to be harder for him to rally his own party to get behind him. A president's power always diminishes with each day of a second term but a scandal speeds up that process," said Larry Haas, a political commentator and former aide in the Clinton White House.

The situation is also likely to get worse. The Republican party controls the House of Representatives and so has the power to hold committee hearings and issue subpoenas as part of investigations it chooses to pursue on any of the scandals. It has already this week publicly grilled attorney general Eric Holder on the IRS and AP situations – setting a tone that is likely to be repeated in the months to come and ensure the scandals get regular boosts of life.

"The House will continue to have investigation after investigation. This will be going on for years," said Steve Mitchell, a Republican political pollster and founder of Mitchell Research.

However, there are some who warn that the tides of Obama's political fortunes could turn again. He still wields a lot of power in the White House, including the ability to push an agenda using presidential executive orders.

He is also likely to still be able to pursue his ambitious aim of securing immigration reform as a landmark achievement of his second term to match his healthcare law during his first period in office.

Mindful of demographic changes and the fast-growing power of Hispanic voters, many Republicans are aware that signing up with immigration reform is good politics for their party. They are unlikely to let a desire to win political points over a weakened Obama get in the way of the broader aim of improving their image with Hispanic communities.

"The politics of immigration changed dramatically after the presidential election. That continues to be the case. Both parties want to do it," said Haas.


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CIA chief John Brennan makes surprise Israel visit for Syria talks


Unannounced meeting with PM Netanyahu and senior Israeli figures comes amid concerns over Syrian weapons

The CIA chief has made an unexpected visit to Israel to meet senior political and military figures to discuss the deteriorating security situation in neighbouring Syria.

John Brennan, who took up his post two months ago, met the Israeli prime minister, Binyamin Netanyahu, defence minister, Moshe Ya'alon, military chief of staff, Benny Gantz, and Mossad chief, Tamir Pardo, according to reports in Israel media.

The unannounced meetings followed two Israeli air strikes on weapons stores near Damascus a fortnight ago. Israel has repeatedly warned it will take action to prevent advanced or chemical weapons being transferred to the Syrian regime's Lebanese ally, Hezbollah, or falling into the hands of jihadist groups fighting alongside the Syrian opposition.

According to a report in the Israeli paper Yedioth Ahronoth, the visit stemmed from "the American fear of escalation in the region against the backdrop of [Hezbollah leader Hassan] Nasrallah's threats to act against Israel in the Golan Heights and the American sense that Israel is disappointed by the ineffectuality of the Obama administration with regard to the ongoing deterioration in Syria.

"It is assessed that Brennan was sent to Israel to co-ordinate a joint policy between the two countries and prevent Israel from taking action on its own in Syria."

The Syrian government has warned it will retaliate against further military action by Israel, which would risk embroiling the US ally in a regional conflict.

Two shells landed in the Israeli-occupied Golan Heights this week. An unknown Palestinian group, the Abdul Qader al-Husseini brigades, said it had fired the missiles, which, if true, would make it the first time Israeli-controlled territory had been targeted. "We are avenging all our martyrs that we lost in our war with the Zionist enemy," the brigades said.

Three observers with Undof, the UN peacekeeping force in the Golan, were abducted by Syrian opposition forces and later released on Wednesday, the third such incident in the past two months.


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Internal Revenue Service acting commissioner Steve Miller fired – as it happened


US attorney general is grilled over IRS tax targeting and the DoJ swoop on the AP's phone records


    


Obama fires IRS acting chief over ‘inexcusable’ tax targeting scandal


President moves to quell furore over IRS's scrutiny of conservative groups by firing acting commissioner Steven Miller

Barack Obama fired the most senior tax official in the US on Wednesday in an effort to bring a speedy end to a scandal over the targeting of Tea Party organisations and other conservative groups for special scrutiny.

Obama, speaking at the White House, described the conduct of the employees at the Internal Revenue Service office in Cincinnati, Ohio, as "inexcusable".

The president said that the Treasury secretary, Jack Lew, had asked the acting commissioner of the IRS, Steven Miller, to resign in the light of a critical report from the inspector general. "Americans are right to be angry about it. I am angry about it. I will not tolerate this in any agency, especially in the IRS," Obama said.

The inspector general's report found that ineffective management at the IRS had allowed agents in the Cincinnati office to target conservative groups inappropriately for more than 18 months. Officials had picked out groups with the words Tea Party or Patriots in their titles and subjected their requests for tax-exempt status to extra scrutiny.

"The IRS has to operate with absolute integrity," Obama said in his White House statement, saying he would hold those responsible accountable.

"Today secretary Lew took the first step by requesting and accepting the resignation of the acting commissioner of the IRS because, given the controversy surrounding this audit, it is important to institute new leadership that can help us restore confidence going forward," Obama said.

He added that new safeguards would be put in place to prevent similar abuse in future and he would work with Congress to fix the problem.

The Obama administration over the last five years has successfully managed to avoid a damaging series of sackings and resignations. Miller is one of the biggest victims yet of political scandal.

The move came as the White House battled on three fronts – the IRS, the seizure of phone records of the Associated Press and the Benghazi killings. The administration hopes that by acting to remove Miller, it will at least be able to quell the furore over the IRS.

In a sign that the firing may dampen the row, Republican congressman Darrell Issa, a leading critic of the Obama administration, described on CNN the sacking as "an extremely good first step" and that Obama had set the right tone.

The Republican leader in the Senate, Mitch McConnell, was less upbeat, saying: "More than two years after the problem began, and a year after the IRS told us there was no problem, the president is beginning to take action. If the president is as concerned about this issue as he claims, he'll work openly and transparently with Congress to get to the bottom of the scandal – no stonewalling, no half-answers, no withholding of witnesses."

Miller, in an effort to save his job, had earlier identified two employees in Cincinnati as being "overly aggressive" in handling requests for conservative groups.

At a bumpy congressional hearing on Tuesday, Eric Holder, the attorney general, was confronted with questions on a range of thorny issues, including the IRS.

Holder, who has already announced an FBI investigation into the affair, told the House judiciary committee that people would be held accountable. "As of Friday last week, I ordered that a criminal investigation begin … the facts will take us wherever they take us," he said.

All 45 Republican senators signed a letter to Obama asking his administration to fully comply with the congressional investigation into the IRS.

"The American people deserve to know what actions will be taken to ensure those who made these policy decisions at the IRS are being held fully accountable and more importantly what is being done to ensure that this kind of raw partisanship is fully eliminated from these critically important non-partisan government functions," they said.

House speaker John Boehner, at his weekly press conference, echoed that sentiment. "My question isn't about who's going to resign, my question is, who's going to jail over this scandal?"

Former White House adviser David Axelrod, in a television interview, insisted those in the IRS responsible had not been put up to it by the White House.   "Also, one prima facie evidence that nobody political was involved in this, was that if anybody political was involved in this, they would say: 'Are you kidding me? Are you nuts? What are you doing?'" Axelrod said.


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Diplomatic cables reveal aggressive GM lobbying by US officials


Review of more than 900 cables reveals campaign to break down resistance to GM products in Europe and other countries

American diplomats lobbied aggressively overseas to promote genetically modified (GM) food crops such as soy beans, an analysis of official cable traffic revealed on Tuesday.

The review of more than 900 diplomatic cables by the campaign group Food and Water Watch showed a carefully crafted campaign to break down resistance to GM products in Europe and other countries, and so help promote the bottom line of big American agricultural businesses.

The cables, which first surfaced with the Wikileaks disclosures two years ago, described a series of separate public relations strategies, unrolled at dozens of press junkets and biotech conferences, aimed at convincing scientists, media, industry, farmers, elected officials and others of the safety and benefits of GM products.

The report offers a further glimpse of the power of the agricultural and biotech industries in America, after the supreme court came down on the side of Monsanto in its effort to enforce its patented GM soybeans.

The court ruled on Monday that an Indiana farmer had to buy new seeds directly from Monsanto every time he planted the GM Roundup Ready soybeans.

The public relations effort unrolled by the State Department also ventured into legal terrain, according to the report. US officials stationed overseas opposed GM food labelling laws as well as rules blocking the import of GM foods.

The report notes that some of the lobbying effort had direct benefits. About 7% of the cables mentioned specific companies, and 6% mentioned Monsanto. "This corporate diplomacy was nearly twice as common as diplomatic efforts on food aid," the report said.

Wenonah Hauter, the executive director of Food and Water Watch, said it was unsettling to see the State Department investing so much effort into promoting industry. "I'm especially concerned to see how much of the cables have to do with changing laws and regulations of many of those countries," she said. "Instead of focusing on security and promoting democracy, they are focusing on pressuring foreign governments."

In some instances, there was little pretence at hiding that resort to pressure – at least within US government circles. In a 2007 cable, released during the earlier Wikileaks disclosures, Craig Stapleton, a friend and former business partner of George Bush, advised Washington to draw up a target list in Europe in response to a move by France to ban a variety of GM Monsanto corn.

"Country team Paris recommends that we calibrate a target retaliation list that causes some pain across the EU since this is a collective responsibility, but that also focuses in part on the worst culprits," Stapleton wrote at the time.

"The list should be measured rather than vicious and must be sustainable over the long term, since we should not expect an early victory. Moving to retaliation will make clear that the current path has real costs to EU interests and could help strengthen European pro-biotech voices," he wrote.


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Eric Holder defends AP seizure citing major security threat to public


US attorney general says story related to subpoena of phone records was 'very, very serious' while Obama faces scrutiny on press rights

The US attorney general, Eric Holder, has defended the Obama administration's controversial seizure of phone records from the Associated Press, saying that a story run by the news organisation had posed a major security threat to the American public.

Holder, speaking at a press conference at the Department of Justice on Tuesday, said an AP story published last year about an alleged Yemeni terrorist plot to blow up a US plane was the result of "a very, very serious leak" that justified "very aggressive action".

The White House meanwhile attempted to portray Barack Obama as a strong supporter of press freedom on Tuesday, in the face of strong condemnation of the DoJ's action. The blanket seizure amounted to one of the biggest challenges to the US media yet by the Obama administration, which has prosecuted more whistleblowers than the regime of any other recent incumbent of the White House.

Both Republican and Democratic members of Congress lined up to condemn the move against the AP, as did civil rights organisations and groups representing journalists.

At the Department of Justice, Holder said the decision to seize the phone records was connected to a criminal investigation into the leak that led to the AP's story about the Yemeni terror threat. "It put the American people at risk and that is not hyperbole," Holder said. "Trying to determine who was responsible required very aggressive action."

The AP story was embarrassing for the Obama administration as it contradicted a White House claim that there had been no plots to coincide with the first anniversary of the killing of Osama bin Laden.

Holder said he had recused himself from the investigation into the leak last year and had left it to the deputy attorney general. Holder knew the people involved and was confident they had done things properly, abiding by department rules, he said.

The phone records were taken, without informing the AP, in April and May and related to calls made from the offices of the AP in New York, Washington and Hartford, Connecticut. In a move that angered members of Congress, it also tracked calls from the AP's office in the House of Representatives press gallery. The AP described it as a "massive and unprecedented intrusion" into newsgathering operations.

Jay Carney, the White House spokesman, insisted that Obama remained a strong believer in the first amendment that protects journalists' rights, and supported reporters in their unfettered freedom to mount investigations. As a senator, Obama had supported a bill to protect journalists in pursuit of their work, Carney said.

But he added that Obama had to balance this freedom against a need to maintain secret and classified material. Carney said he could not answer any details about the seizure as it was a criminal matter and it would not be right for him to comment. Obama had only learned about it on Monday afternoon as he visited New York on a Democratic fundraising visit, Carney said. He referred questions about the details of the investigation to the Department of Justice.

The row comes as the White House was fighting fires on a number of fronts. It is being pressed by Republicans over details of how the White House and State Department handled the aftermath of last year's attack on the diplomatic mission in Benghazi that left four Americans dead. More damaging still is a fast-growing scandal over the Internal Revenue Service, whose officers targeted conservative groups seeking tax-exempt status.

It is shaping up as one of the worst weeks in office for Obama since he became president in January 2009.

Asked about criticism that Obama could now be compared to Nixon and Watergate, Carney said: "People who make this kind of comparison need to check their history."

Civil rights organisations and groups representing journalists have condemned the move against the AP.

The American Civil Liberties Union said the use of subpoenas for a broad swath of records has a chilling effect both on journalists and whistleblowers who want to reveal government wrongdoing. Laura Murphy, spokeswoman for the ACLU, said: "The attorney general must explain the Justice Department's actions to the public so that we can make sure this kind of press intimidation does not happen again."

Arnie Robbins, executive director of the American Society of News Editors, said: "It's also troubling because it is consistent with perhaps the most aggressive administration ever against reporters doing their jobs – providing information that citizens need to know about our government."

Veteran Democratic senator Patrick Leahy, chairman of the Senate judiciary committee, said in a statement: "I am very troubled by these allegations and want to hear the government's explanation."


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Associated Press: seizure of phone records an unprecedented intrusion


Obama administration took records in apparent effort to track down source who disclosed alleged Yemen terrorist plot story

The Obama administration has opened up a new front in its battle against media freedom by seizing phone records from the offices of the Associated Press news agency in what appeared to be an effort to track down the source who disclosed an alleged Yemen terrorist plot story.

The US attorney's office for the District of Columbia confirmed on Monday that subpoenas had been issued for phone records. It said it valued press freedom but it had to balance this against the public interest.

AP revealed on Mondaythat the justice department, without informing the organisation in advance, had obtained two months worth of phone records of calls made by reporters and editors.

Lawyers for AP said the records, which the justice department appears to have obtained from the phone companies earlier this year, listed every call made by about 100 reporters from AP's main offices in New York, Washington and Hartford, Connecticut, and from its office in the House of Representatives press gallery between April and May last year. The justice department informed AP last Friday. AP described it as a "massive and unprecedented intrusion" into news-gathering operations.

The attorney's office refused to say why the seizure had been made but it is almost certainly in relation to an AP exclusive report on 7 May last year in which it reported the CIA had stopped a plot by an al-Qaida affiliate in Yemen to destroy a US-bound airliner.

AP at the time agreed to White House and CIA requests to hold back publication because they said an intelligence operation was still under way. After being satisfied that these concerns had been met, AP published on the Monday,ignoring a request from the Obama administration to wait until Tuesday for the official announcement.

The justice department has since launched an investigation into the leak. The phone records of five of the reporters plus an editor involved in the Yemen story were among those taken.

AP's president and chief executive officer Gary Pruitt sent a letter of protest to the attorney-general Eric Holder. "These records potentially reveal communications with confidential sources across all of the newsgathering activities undertaken by the AP during a two-month period, provide a road map to AP's newsgathering operations, and disclose information about AP's activities and operations that the government has no conceivable right to know," Pruitt said.

He described it as "serious interference with AP's constitutional rights to gather and report the news".

Although Obama was elected on a liberal ticket in 2008 and again in 2012, his administration has mounted a sustained campaign through the courts and other means against whistleblowers, particularly in relation to what it claims are sensitive intelligence matters.

Media organisations and civil rights groups complain that many of the cases it appear to have to do with administrative secrecy than matters of national security.

The Obama administration has brought six cases against people suspected of leaking classified information, which AP described as being more than under all previous presidents combined.

A former CIA officer found himself in trouble for revealing details to journalists about waterboarding while a former member of the National Security Agency was prosecuted for disclosing that the agency was about to spend millions of dollars on a software programme that he argued was more expensive than a similar programme developed in-house.

The justice department, in its statement, defended the AP seizure. "Because we value the freedom of the press, we are always careful and deliberative in seeking to strike the right balance between the public interest in the free flow of information and the public interest in the fair and effective administration of our criminal laws," it said.

The justice department said that it had, as required by law, made every reasonable effort to obtain the information through alternative means. Normally too, it would have had to notify the media in advance unless, as in this case, "doing so would pose a substantial threat to the integrity of the investigation".

The CIA director John Brennan in February described the Yemen story as "an authorised and dangerous disclosure of classified information" and that disclosure was "irresponsible".

The alleged plot, apparently aimed to coincide with the first anniversary of the killing of Osama bin Laden, contradicted a claim by the Obama administration earlier that it had no knowledge of any plans for attacks to mark the anniversary.


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