06 JAN 17 – Executive Intelligence Summary

EXECUTIVE INTELLIGENCE SUMMARY – 06 January 2017 🔒

[wcm_nonmember]In this EXSUM… (3164 words)

  • More than 30 nations building offensive cyber capabilities
  • Russia & China SITREPs
  • DOD prepares to test ICBM interceptor in response to North Korean announcement
  • Chicago kidnapping streamed on Facebook Live
  • Effects of new leadership at US Border Patrol
  • Coats: Rising national debt unsustainable
  • And more…

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Bottom Line Up Front: Here’s a quick update on some new features I’ve been working on.  (1) I’m bringing on an old friend and fellow intelligence analyst to begin writing the weekly Gang, Cartels, & Transnational Threats Report.  That report is scheduled to be published on Tuesdays, and significant reporting and links will appear in PIR 3 of this EXSUM.  You should see that first report published this coming Tuesday, 10 January.

(2) We are actively working on building out a new Members Area to help you navigate our website and make use of our expanding resources.  I expect that page will be designed and on the site in the next 30 days.  I’ll be sure to send an email about it, because it really will make site navigation a breeze.

(3) I spent last week working on spreadsheets to build out a new indicator system that will aid in early warning and really help me as an analyst gauge how close we are to conflict, whether it’s domestic or foreign.  I stumbled on an idea that I think would not only be of great service to you, but it would also help me display the indicator system.  What I envision is having a wiki page for each PIR, and then pages for topics, individuals, and organizations (like Wikipedia does).  For instance, if you wanted to see how the NATO-Russia conflict has progressed, then you can click on that specific page and see all previous intelligence reporting on that topic.  On that page, I can list out specific trends and indicators that I’m seeing to give a more holistic view of the situation than I can in one weekly report.  It will also save subscribers an incredible amount of time in getting caught up to speed because you can read a one page synopsis (with links) on that topic instead of that section in the previous 50 EXSUMs.  In addition, I can also begin displaying a scale on each page to show how close we might be to a domestic conflict or a war with Russia or China (kind of like a temperature gauge).

In the future, we can expand to begin displaying regional, state, and/or local reporting on this wiki project as well.  So with that in mind, I’d like to get your feedback.

 

Priority Intelligence Requirements:

PIR1: What are the current indicators of systems disruption that could lead to civil unrest?

PIR2: What are the current indicators of an outbreak of global conflict?

PIR3: What are the current indicators of military, government, political, or social-related instability or violence that leads to domestic unrest or conflict?

PIR4: What are the current indicators of economic, financial, or monetary instability that lead to worsening economic conditions or civil unrest?


PIR1: What are the current indicators of systems disruption that could lead to a civil unrest or domestic emergency?

More than 30 nations building offensive cyber capabilities

In Capitol Hill testimony, Director of National Intelligence James Clapper said that 30 nations are currently developing offensive cyber capabilities and the US will face a national security challenge that grows in complexity as a result.  A prepared statement also claimed that offensive cyber capabilities would encourage preemptive first strike because of the ability to rapidly escalate a conflict.  The statement also said that Russia “poses a major threat to US government, military, diplomatic, commercial, and critical infrastructure and key resource networks because of its highly advanced offensive cyber program and sophisticated tactics, techniques, and procedures”.  Due to advancing capabilities that outpace the ability to maintain adequate defenses, the cyber threat is expected to proliferate and continue to challenge US national security.  The likelihood that a criminal, terrorist, nationalist, or state-sponsored hacking group will target the US is HIGH, and therefore represents significant risk to critical infrastructure leading up to and during the Trump administration.

 

* NRC cites Diablo Canyon over broken switch that left cooling system inoperable

The U.S. Nuclear Regulatory Commission cited the Diablo Canyon Power Plant in Avila Beach, California, December 29 for the plant’s failure to adequately maintain an aspect of its emergency core cooling system, which resulted in a low-to-moderate safety risk at the facility after workers discovered in May 2016 that a broken switch left a reactor cooling system for Unit 2 inoperable for up to a year and a half. (SOURCE)

 

* Computer outage disrupts customs at US airports

The U.S. Customs and Border Protection’s processing systems for arriving international travelers experienced an outage for roughly 4 hours January 2 due to a computer glitch that resulted in delays at airports nationwide. During the outage, customs officials processed international travelers through alternative measures and assured that all travelers were screened in accordance with security standards. (SOURCE)

 

* San Francisco’s main water supply shut down for 60 day inspection

Officials from the San Francisco Public Utilities Commission will shut down access to the city’s main water supply, the Hetch Hetchy water system, January 3 for a 60-day period while authorities inspect an 18-mile long tunnel that transports water from the reservoir into the Bay Area after a previous inspection revealed deterioration of the tunnel’s lining. Five regional reservoirs have been put into service and officials expect no
interruptions in water services during the inspection. (SOURCE) (Analyst Comment: In a report from last year, DHS warned that aging infrastructure would be the greatest cause of systems disruption going into the future.  We can expect to see more of these types of events.)

 

* These reports are sourced from the Daily Open Source Infrastructure Report published by DHS.  We read each daily report for significant threats and vulnerabilities to critical infrastructure, and include those events in this EXSUM.  Please use this reporting section to form a baseline for the type and frequency of threats to critical infrastructure, and then make a determination of how future events could affect you.


PIR2: What are the current indicators of an outbreak of global conflict?

The prospects of global conflict continue to revolve around the usual players: Russia, China, and the Middle East. The ways in which global conflict could cause or contribute to a SHTF scenario in America are myriad and they largely depend on which conflict is initiated. We’re certainly at risk of cyber attack in the event of conflict in any of the three regions. Systems disruption, like the price and availability of fuel, is also a top concern that could cause a SHTF event.

NATO-Russia SITREP

In response to Russian hacking, the Obama administration expelled 35 Russian intelligence officials operating under diplomatic cover in the US, and closed down two US-based facilities used for the purposes of Russian intelligence gathering.  Despite the murky facts and events surrounding the alleged “election hacks”, the US, NATO, and Russia are undeniably locked in a high stakes battle of espionage.  I’ve maintained the possibility that one, any, or all of the leaked email cases (DNC, Hillary, and Podesta) could have been the result of virtually anyone other than Russian intelligence services.  But let’s set aside the election-focused email leaks for a moment, and examine known instances of Russian cyber exploitation.  The Russians are absolutely engaged in a campaign of online and physical espionage through which they’re gaining access to very substantial amounts of very sensitive and/or classified intelligence information.  In a previous EXSUM, I noted that all governments attempt to do this in order to gain diplomatic and operational advantages in navigating the sea change in global power now taking shape.  For the past several years — well before the 2016 election season — we’ve seen members of Congress and intelligence officials express dismay at Russian intelligence activities directed towards the US.  So if this has been going on for years, why is this issue just now (since Summer 2016) making international headlines?  A number of reasons, but mainly because the nature of ‘Inside the Beltway’ decision making is to ignore everything until it smacks you in the face, and then deal with it.

If you’ll recall, Obama made hay in 2012 over presidential candidate Mitt Romney’s assertion that Russia was America’s greatest “geopolitical foe”.  “The 1980s are now calling,” Obama stated smugly.  So we probably have a case of cognitive dissonance that has continually plagued the Obama administration.  A major geopolitical foe didn’t fit into the Obama world view and so Obama ignored it, despite continued warnings from intelligence officials.  There’s absolutely no doubt in my mind that Russian intelligence activities inside the US were reported frequently in the Presidential Daily Brief.  So the Obama administration knew that Russian intelligence activities directed towards the US were a problem all along, as were Chinese intelligence activities, and probably a host of other foreign intelligence services.

I spent the majority of Thursday combing through articles regarding the email exposures.  (You can read all the related documents here.)  I believe that the election-related email hacks and/or leaks were just a very convenient time for the Obama administration to take solid steps to curb Russian cyber espionage activity.  There absolutely have been accounts of Russian cyber exploitation prior to the election season, even if the Russian government wasn’t behind what very well could have been insider leaks. Still, as I explained in the last intelligence summary, Russian intelligence services could have also been behind an insider leak.  As is the case with espionage and other clandestine activities, the entire point is actually not to cover your tracks but to leave no trace.  One of the ways that intelligence services leave no trace is to pose as a third party organization and then motivate someone else with placement and access to do their work.  (Consider this… Few Arabs would ever work with the Israeli Mossad, yet Mossad continually runs very high level Arab sources.  How do they do this?  They pose as non-Israeli intelligence officers, such as Egyptian or Jordanian Mukhabarat, and then recruit the unwitting Arab sources.)

It could be that the Russians are being blamed for a series of insider leaks because it’s a convenient time to accuse somebody. And it would probably be the case that the US is going to accuse the Russians because Russian intelligence services have a solid and recent history of exploiting Americans and American critical infrastructure to gather intelligence.  In previous intelligence summaries, I’ve reported on the cases of Russian intelligence services breaking into the homes of American diplomats and in at least one case, defecating on the pillow of an American diplomat. In other instances, American diplomats have been assaulted by Russian security service officers, and there’s no doubt that the US and Russian governments have increased tensions due to high intensity espionage activities.

So consider this: even if Russia was not behind the election-related email exposures, we still very much have a Russian intelligence problem.  Unfortunately, many Americans (especially on the Right) are accusing the Obama administration of sanctioning Russia over the election-related emails (which may be partly true), when in reality (and in the interest of fairness) these sanctions have been put into place for a number of other activities as well.

 

China SITREP

US policy on the South China Sea may be slowed until 20 January, but Chinese policy won’t be.  In the past week, the People’s Liberation Army Navy (PLAN) deployed their only aircraft carrier group to hold drills in the South China Sea region to test weapons and equipment.  This week, the US Navy announced the deployment of the USS Carl Vinson.  In response, a Chinese military official recently told China Daily, “We will see how long the USS Carl Vinson will stay here [in the region]. Is it just a cruise or a long stay or to hold exercises? And how far is it from the Chinese-occupied islands? We’ll keep a close watch.” Another Chinese official said that the PLAN will take “countermeasures” should the USS Carl Vinson represent a threat.  A US Navy statement reported that the Carl Vinson Carrier Strike Group would conduct “anti-submarine warfare [drills], maneuvering drills, gunnery exercises, and visit, board, search and seizure subject matter expert exchanges.”  US Navy officials declined to say whether or not the USS Carl Vinson would enter into the South China Sea.  It’s widely expected that Trump will be tough on China, which is why Pentagon officials recently announced that the US may seek a strategy of deploying weapons systems to the South China Sea region.

 

DOD prepares to test ICBM interceptor in response to North Korean announcement

As the threat of a North Korean nuclear intercontinental ballistic missile (ICBM) looms into the future, the Department of Defense (DOD) is set to test a ground-based ICBM interceptor called the Capability Enhancement-II Block I Exoatmospheric Kill Vehicle.  This will be the first ever attempt by the DOD’s Defense Missile Agency to intercept an ICBM from a ground-based platform.  Set to take place in “early 2017,” it’s likely in response to North Korean leader Kim Jong-Un’s announcement that his country’s military will be flight-testing an ICBM launch this year, as well.  North Korea is widely expected to develop an ICBM capable of reaching the mainland US within the next three years, and has conducted five nuclear tests over the past eight years.  We should expect to hear quite a bit about North Korea during the Trump presidency.


 

PIR3: What are the indicators of military, government, political, or social-related instability or violence that could lead to domestic unrest or conflict?

Chicago kidnapping streamed on Facebook Live

On Tuesday afternoon (o3 January), a black woman in Chicago named Brittany Herring used the Facebook Live feature to stream video of a white, special needs man who had been kidnapped and bound.  The 40-minute live video showed the victim being cut with a knife and made to drink toilet water.  The kidnappers, who were shouting, “F*** Trump” and “f*** white people”, may have also injected the man with an unknown substance.  Several news outlets also report that the captors had been texting the victim’s parents using the victim’s phone.  His parents had last seen him on 31 December, and police say that the victim had been held captive for 24-48 hours.

By Wednesday evening, the Chicago police department released a statement saying that four individuals had been arrested and are awaiting charges.  The most recent statements made by law enforcement officials indicate that the four won’t be charged with a hate crime because they didn’t target the victim because of his race.  Regardless, social media erupted in responses, most of which condemned the attack.  Yet there were also vitriolic comments that were racist in nature against both whites and blacks.

According to a Gallup poll from last year, race relations in the US were at the lowest point since as least 2001, and this is largely the pretext for the coming Trump protests.  Donald Trump has made it a point to convene with influential blacks like NFL Hall of Famer Jim Brown, who afterward took to CNN to say that Trump ‘has my admiration’ and support.  Both Jim Brown and future NFL Hall of Famer Ray Lewis said that, after meeting with Trump, they feel that he deserves a chance.  Unless the Trump administration is able to work with black leaders to restore worsening race relations under Obama, the trend is likely to continue downward, which means increased civil unrest.  Throughout the campaign, Trump said that conditions in black communities need to improve, so we should see an attempt by the administration to enlist more black celebrities to promote a plan to restore inner city communities.

Of a particularly interesting note, online commenters were very quick to associate this kidnapping event with Black Lives Matter, despite no overt relationship other than race.  If I had to attribute this to any one factor, it would be rise of the Alt-Right as an intellectual movement.  On social media, Alt-Right leaders picked up the use of the hashtag #BLMKidnapping to describe Tuesday’s event.  The rise of the Alt-Right is directly related to events like this that don’t receive equal media coverage as do events where the races are opposite, i.e., white kidnappers who torture a black special needs victim.  That event would have garnered international mainstream coverage and outrage for days on end, so the Alt-Right has an especially valid point.

 

Effects of new leadership at US Border Patrol

The US Border Patrol (USBP) is a mess.  Despite having the largest budget ever, USBP is not fulfilling its responsibilities to ensure national security, instead having taken on a humanitarian role under the Obama administration.  It’s not certain whether or not USBP officials have adopted a policy of taking in illegal immigrants or it’s a policy dictated by the Obama administration; however, 100% of unaccompanied minors are being re-settled throughout the US and the number of detainments of illegal border crossers are at historic lows.  The USBP is currently undergoing a capabilities gap study to identify areas of improvement, and is expected to make national security the top priority under new leadership at the Department of Homeland Security.  (READ THE FULL DISPATCH REPORT)

 


PIR4: What are the current indicators of economic, financial, or monetary instability that lead to worsening economic conditions or civil unrest?

Goldman Sachs: the US Treasury will have to borrow more money

Financial firm Goldman Sachs released a revised statement on their outlook for the US Treasury, saying that the US budget deficit will increase to $650 billion in 2017, up to $1.05 trillion by 2020.  Despite a growing budget deficit and national debt, Goldman analysts write, “We think that the policy backdrop in the US will be particularly favorable for the economy, with looser fiscal policy, relatively easy monetary policy and a less stringent regulatory environment. We expect US growth to continue through 2017.”  The note continues, “In Donald Trump, the US has elected an unconventional president in many respects, including his more US-centric approach to China. If China responds to, say, imposition of US tariffs on imports of Chinese products by sharply devaluing the renminbi, significant downside volatility and tighter global financial conditions will follow.”  You can read the entire note here.

 

Coats: Rising national debt unsustainable

Senator Dan Coats, who chairs the Joint Economic Committee in Congress and is retiring this week, warned in his outgoing address that US dependence on national debt is unsustainable.  “…[O]ur country simply cannot keep borrowing money we do not have. Today, our national debt is nearly $20 trillion and continues to grow by the second. Meanwhile, programs that millions of Americans depend on — Social Security and Medicare — are creeping ever closer to insolvency. America’s looming fiscal storm is bearing down upon us, and the alarms are sounding louder each day. One day, if not addressed, this debt bomb will explode and have a devastating effect on our country’s economy and on our children’s future.”

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Samuel Culper is a former military intelligence NCO and contract Intelligence analyst. He spent three years in Iraq and Afghanistan and is now the intelligence and warfare researcher at Forward Observer.

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