19 AUG 16 – Executive Intelligence Summary 🔒 – Forward Observer Shop

19 AUG 16 – Executive Intelligence Summary 🔒


[wcm_nonmember]In this EXSUM…

  • NSA hacking group tools exposed
  • Continued fears over manipulated elections
  • Russia preparing for new Ukraine military campaign
  • Black Lives Matter forms incipient insurgency
  • Driverless cars, machines & economic disruption
  • And more…


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Before you read this week’s EXSUM, I’d like to invite you to take a brief, two-question survey.  I publish the EXSUM on Friday morning, however, I’m wondering if it would be better received on a Monday morning.  Also, I’m looking for feedback as to how the EXSUM can be improved.  You can take this survey here.

Bottom Line Up Front:  NATO may be nearing its make or break moment… Or, should I say, Russia may be forcing NATO’s make or break moment.  As of Friday morning, there are up to 40,000 Russian troops at eight staging locations along the Ukrainian border, according to Pentagon officials. Ukrainians are fearing another Russian campaign following last week’s allegations that the Ukrainian intelligence services were responsible for a foiled terror attack against Crimean critical infrastructure.  Whether the event was a false flag or not, that’s just the type of justification Putin needs to threaten an invasion of Ukraine.

Next month, the annual Kavkaz military exercise kicks off and it gives Putin a pretense to amass forces in Crimea, along Ukraine’s southeastern border, too.  Russia is no stranger to using military exercises to build up forces just before an invasion.  And that’s exactly why many think a new war with Ukraine could kick off soon.  The question for NATO is, “Do we come to the aid of Ukraine, which is not a NATO member state?”  If NATO decides yes, then we may see World War III.  If no, then the rest of Europe, especially the Baltics, should be very nervous.  Additional background and analysis is located in the Russia section of PIR2.


RCP National Average (Friday AM)

Clinton: 47.2 (+6)

Trump: 41.2


Priority Intelligence Requirements:

PIR1: What are the current indicators of systems disruption that could lead to a SHTF event?

PIR2: What are the current indicators of an outbreak of global conflict? (Russia, China, Middle East)

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

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


PIR1: What are the current indicators of systems disruption that could lead to a SHTF event?

NSA hacking group’s tools exposed

This week, a group calling themselves ‘Shadow Brokers’ published proof of hacking tools stolen from the NSA’s Equation Group.  Global cybersecurity firm Kaspersky says their capabilities “[surpass] anything known in terms of complexity and sophistication of techniques”.  Meanwhile, Shadow Brokers are offering to sell the cyber attack tools to the highest bidder, at the low, low price of $500 million.  NSA officials from the highly effective and secret Tailored Access Operations (TAO) confirmed that the published proof included known exploits.  Despite early skepticism, the hack appears to be legitimate.  Those familiar with cybersecurity are pointing the finger, once again, at Russia.

Edward Snowden, long suspected of being a Russian agent (witting or otherwise), took to Twitter with his argument that Russia is sending a message to the NSA and US leaders: pursue Russia at your own peril.  Given that Russia has TAO tools, Russian hackers may be able to identify NSA’s previous hacks.  Those hacks might include digital espionage against US allies, which has already soured relations within NATO.  According to Snowden, Russia is telling the US, Leave us alone or we might expose you spying — once again — on your own allies.  This leads former NSA counterintelligence agent John Schindler to believe that Russia is winning the war that hasn’t started.  I have to concur.  Additional information on Russia’s anti-West campaign is found under the Russia section PIR2.

Equally troubling is that it appears NSA failed to warn Cisco and other IT companies of the hacks, which had fallen into foreign hands.  In order to maintain their own capabilities, NSA put US infrastructure at risk.  There’s been no word on whether or not the NSA exploits have been used by the Russians or anyone else to target the US, however, other organizations may wind up with some of the same exploits as NSA, before the vulnerabilities are patched.


Continued fears of manipulated elections

“No doubt that further leaks will continue and contribute to the chaos of this already way too weird election. I think there is plenty of reasons to be concerned that the election itself would be manipulated. Results potentially only need to be changed in a dozen or so counties if it’s not a landslide election to have an impact. Even without direct manipulation of the vote. The claim from a credible hacking source of such manipulation could be enough to cast shadow on the legitimacy of the elected president. And weaken them, which ultimately plays into the hands of a certain leader of a large country in Europe [Russia].”  – Chief Technical Officer of cybersecurity firm CrowdStrike, Dmitri Alperovitch


US Intelligence to provide threat reporting to supply chain managers

This week the US National Counterintelligence and Security Center (NCSC) announced that they would begin sharing threat reporting with supply chain managers in an attempt to prevent and mitigate nefarious actors from gaining access to or exploiting the US supply chain.  As one example of a grave security threat, the Defense Department announced a decade ago that a supplier of microprocessors used in missiles were counterfeits sourced from China.  The Defense Department might trust its contractors, but it has less oversight on sub-contractors that provide parts to contractors to build defense systems.

And the same is true for corporations involved in computing, communications, energy, technology, and other critical infrastructure.  Adversaries able to manipulate parts used in defense or critical infrastructure would likely be able to alter the intended functions of the equipment or technology.  Hackers may also be able to exploit bugs in compromised or counterfeit parts.  And any group could steal industrial data or other information of intelligence value from critical infrastructure.

We’ve been vulnerable to this type of exploitation for years.  I think this move by the NCSC signals that China, Russia, and other adversaries have taken an increased interest in exploiting everything from defense equipment and infrastructure, to satellites and communications, to industrial control systems and the power grid.  I remain gravely concerned that in a conflict, we may experience widespread systems disruption.  Regardless if Russia or China feel they could win a regional conflict in their backyard, they’re likely to pursue asymmetric attacks to make it as difficult a war as possible for the US to prosecute.  That includes targeting both military operations and its enablers, like military and civilian infrastructure in the US.


PIR2: What are the current indicators of an outbreak of global conflict? (Russia, China, Middle East)

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.


There are two significant trends right now.  The first trend is that the Russian military continues to show strength and build up its military presence along the western border with Europe.  Ukrainian officials fear another Russian offensive, and it’s a logical concern.  Consider that in August of 2008, Russia used a pretense of holding war games in the border region before it intervened and invaded Georgia in the South Ossetia conflict (while the West was preoccupied with the Olympics).  What really concerns Ukraine and the rest of Eastern Europe is that the next large scale military exercise could spell invasion, especially if history repeats itself.  And following last week’s failed “terror attack”, for which Russia blames Ukrainian intelligence services, Putin has a chip on his shoulder and wants another feather in his cap.

In previous EXSUMs, I mentioned that Putin feels (and complains about being) boxed in by the West.  In the east and north, he has the US; to his west, he has NATO.  After the collapse of the Soviet Union, the Warsaw Pact dissolved;  NATO did not.  And not only did NATO not go away, it’s been expanding eastward ever since.  Putin’s landgrab is a second-to-last ditch effort to disrupt the Western global order and claw back some breathing room, and that’s why it will continue until the outbreak of war or until Putin feels reasonably confident that the West can no longer pursue is vice grip strategy on Russia.  (His last ditch attempt is something more catastrophic.  The most recent update to Russian military doctrine makes clear that nuclear weapons could be used in cases of threats to national sovereignty.)

Next month, the annual Kavkaz military exercise kicks off and it gives Putin a pretense to amass forces in Crimea, along Ukraine’s southeastern border.  This is exactly the invasion scenario that Ukraine fears.  And given NATO’s insistence that Ukraine will not be joining the Treaty Organization anytime soon, spelled out in no uncertain terms during the NATO Summit last month, we have to imagine that NATO may not be starting the next world war to stop Putin.  We at Forward Observer don’t do color-coded warning systems, however, I do think that we should approach the next few weeks going into September (and Kavkaz 16) knowing that the possibility of another round of invasion exists.  The October surprise could come early this year.

The second trend is that Putin’s goal is to destroy the NATO alliance; there is no doubt.  In previous weeks, we reported that Russian officials reached out to the Baltic nations to establish direct lines of communication.  Although it appeared that Russia wanted to make positive steps to deescalate tensions, the real goal, I believe, is to influence and negotiate directly and individually with those NATO member states.  Putin’s goal is to disrupt NATO unity from within, and by opening up discussions in piecemeal with NATO member states, Putin has the opportunity to peel back NATO’s hard line stance one country at a time.

One prime example of this is Putin’s ongoing attempts to recruit Turkey to subvert NATO’s strength.  Last week, I talked about Incirlik Air Base and the strategic importance to NATO and the US.  Although the Defense Department hasn’t acknowledged it, there are nuclear weapons at Incirlik.  Absent those US nuclear weapons and air power, Putin wins a gold medal back from NATO.



Late last month, the Chinese defense ministry said they would take “necessary measures” against Japan and South Korea’s plans to deploy US Terminal High Altitude Area Defense (THAAD) missiles in their countries.  We’re looking for a Chinese response, other than a verbal warning.  Given the proclivity of Chinese nationalist groups to launch cyber attacks, China’s dissatisfaction with the two countries’ decisions could bring about some cyber problems.  But South Korean protestors against the THAAD deployment are more worried about economic repercussions.  Japan and South Korea are China’s second and third largest trading partners, respectively.  Turning up the heat on trade, China may attempt to dissuade the THAAD deployments through economic leverage.  Failing that, and maybe regardless, China is likely to develop more advanced weapons to target the THAAD sites, should war break out in the future.

Meanwhile in the South China Sea, China continues to send fighter aircraft to its disputed island chains.  As new construction projects add buildings to the artificial island reefs, China shows that they have no plans to leave.  This year’s G-20 talks will be held during the first week of September, so it’s unlikely that conflict breaks out before then.  If any escalation is to occur this year, I think we should be looking at later in the election season as China probably feels that they can push the envelope while US politicos are hamstrung in early November.


North Korea

North Korea announced that they’ve resumed  the production of plutonium to increase the “quality and quantity” of its nuclear weapons arsenal.  And the North Korean State News continued to propagandize and accuse South Korea of building up military forces against the North, specifically condemning THAAD deployments.


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

Black Lives Matter Roll-Up

On Monday night, as “Elvis Week” ended outside Graceland in Memphis, TN; about a hundred Black Lives Matter protesters had gathered.  Previously, they’d threatened to “shut down” Elvis week over their sociopolitical concerns having been ignored by the city.  The group was particularly upset that the city was investing in a hotel in a black community instead of the black community itself.  Protesting Elvis Week did not further their goals, aside from being marginally disruptive from a distance.

Reports began surfacing this week that a Black Lives Matter fund called the Black-Led Movement Fund (BLMF) had raised more than $130 million for their projects.  The fund provides: “grants, movement building resources, and technical assistance to organizations working advance the leadership and vision of young, Black, queer, feminists and immigrant leaders who are shaping and leading a national conversation about criminalization, policing and race in America.”


Black Lives Matter’s incipient insurgency

Black Lives Matter has been making great strides to professionalize their political action campaign.  Earlier this month we saw a codified political platform, they’ve developed a blueprint for future action that they call the Blackprint Strategy, and now they have serious money to carry out their political campaign.  We’re likely to see increased and more coordinated efforts in the future to disrupt the political system, along with any other target they deem an obstacle to their advancement (which apparently includes Elvis Week).  After combing through their six point political platform, it’s apparent that they’ve become nothing but a pro-socialist, anti-capitalist, Marxist racial-identity movement, reminiscent of the African National Congress (ANC) in apartheid South Africa.  The ANC was a Marxist terrorist organization, and while I won’t yet say that’s the most likely course of action, it is the most dangerous.

If we look at popular insurgent movements, we should typically see two arms.  There’s a militaristic/terrorist, direct action arm, and there’s a political arm.  The two are rarely connected, but they advance in unison.  The direct action arm justifies its existence due to a lack of political success, while the political arm justifies itself as an alternative to violence, until national leaders compromise in order to stop the violence.  To be clear, I don’t believe that Black Lives Matter is this coordinated just yet, but if Marxist history repeats itself, we could be looking at this type of movement in the future.


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

Driverless cars, technology disrupt jobs and economy

On Tuesday, Ford Motor Company revealed that they’re going to manufacture for consumers a driverless vehicle within five years.  They join Google, Tesla, Honda, BMW, Mercedes, Audi, and a host of other corporations researching and testing driverless vehicles.  Just like the race to the moon between the US and the Soviet Union, there’s a fever pitch for these companies to field their vehicles as quickly as reasonably possible.  (Honda’s driverless car is expected to cost just $20,000, although most vehicles will be much more expensive.)  And this week, Uber announced that the first driverless cars will pick up riders in Pittsburgh, PA this month.  The driverless car revolution is here.

Regardless of the expert predictions — some of which say that within 20 years, one-third of US jobs will be replaced by robots and artificial intelligence — these technologies are already disrupting the jobs market.  (Just look at Detroit for a case study on automation and jobs.)  The US economy is going to shed millions of positions in the next decade; many of them are low-wage, menial positions that will be replaced by machines:  cashiers at Walmart, grocery stores, and fast food chains are great examples of the jobs that will slowly disappear.  For as long as we’re alive, this is going to disproportionately affect low-wage workers until those jobs are largely dried up.

The upside of innovation is great for convenience, but the downside is a lot of economic disruption.  What we’re talking about is eventually millions of unemployed Americans, who are likely to realize they need to be voting.  It’s no wonder that socialists are pushing for a livable income salary for just being alive — they’re already ahead of the future curve because that’s exactly what these people are going to be pushing for.  That spells additional socioeconomic instability, it’s an early warning indicator of upcoming civil unrest, and it’s ultimately going to threaten Liberty in America, if she lasts that long.


ANC: African National Congress

EXSUM: Executive Intelligence Summary

NATO: North Atlantic Treaty Organization

NCSC: National Counterintelligence and Security Center

NSA: National Security Agency

TAO: Tailored Access Operations



Mike Shelby 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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