29 September 2017 – Executive Intelligence Summary – Forward Observer Shop

29 September 2017 – Executive Intelligence Summary


In this EXSUM… (4652 words)

  • Russia, China, North Korea, and Middle East Situation Reports (SITREPs)
  • Defense in Brief
  • Far Left Roll-Up
  • And more…

ADMIN NOTE: Last week I announced that the EXSUM is splitting into two reports:  Strategic Intelligence and Low Intensity Conflict. The first report, Strategic Intelligence, will continue to focus on monitoring the risk of war.  Going forward, your Strategic Intelligence subscription will include:

  • Risk of war and pre-war indicators
  • Developments in the potential conflicts with Russia, China, North Korea, and Iran/the Middle East
  • Reporting on threats to U.S. national security, to include critical infrastructure and economic/financial systems disruption, and extremist violence that poses a threat to national or regional security
  • Quarterly intelligence reports that provide a cumulative view of the situations with Russia, China, North Korea, and Iran/the Middle East
  • Defense in Brief, which we will be expanding to cover more developments in the U.S. military and defense industry

The second report is Low Intensity Conflict, and will launch on Thursday, 05 October and be published on Thursdays thereafter. This report will chronicle the development and likelihood of a domestic conflict, specifically where it concerns Alt-Left groups like revolutionary communists and radical anarchists. Proposed Priority Intelligence Requirements include:

  • PIR1: How is the Alt-Left movement growing in size and strength?
  • PIR2: How is the Alt-Left movement increasing their capabilities?
  • PIR3: What are the new indicators of future Alt-Left activities?
  • PIR4: What is the current threat index score for the Alt-Left movement?

Starting in October, Jon Dougherty will be taking over as editor of Strategic Intelligence, with weekly input from me. I expect to hire another analyst by the end of this year to help out with the additional workload, as we will soon begin producing three intelligence reports each week (Strategic Intelligence & Defense in Brief; and Low Intensity Conflict). Your continued support, whether you subscribe to one or both of our subscription packages, will help us provide the absolute best intelligence that any company has to offer.

  • If you’d like to remain a subscriber to Strategic Intelligence/Defense in Brief, then you will continue to receive this report for the duration of your subscription.
  • If you’d like to transfer your existing subscription to Low Intensity Conflict next week, then respond to this email and we’ll transfer the remainder of your subscription.  You will no longer receive Strategic Intelligence/Defense in Brief on Fridays, and will receive Low Intensity Conflict on Thursdays.
  • If you’d like to add Low Intensity Conflict to your existing subscription, we would certainly appreciate your support. Here are the links to sign up:

Whether you’ve been a subscriber for a week, a month, a year, or since the very beginning, please accept my sincerest gratitude. We’re working on new pages for Strategic Intelligence and Low Intensity Conflict to help you more easily access our reporting and new features.  I will let everyone know once those pages are up and running.

Priority Intelligence Requirements:

PIR1: What are the new indicators of systems disruption or instability that could lead to civil unrest or violence?

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

PIR3: What are the new indicators of organized political violence and domestic conflict?


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

China banning cryptocurrency ahead of introducing its own electronic renminbi 

The Chinese government recently made the decision to shutter a number of Bitcoin and other cryptocurrency exchanges throughout the country, which is an indication of how much the ruling Communist party leadership perceives them as a threat to future social order and stability. Beijing released an initial list of 60 initial coin offering platforms, ordering local agencies to ensure all of them are closed down. The move is substantial, given that China is the world’s biggest cryptocurrency exchange market, with 80 percent of Bitcoin transitions taking place in yuan. Why was it done? China is planning to introduce its own digital currency at some point in the future, and it is believed that the impact on the global economy will be major. “Not only will it challenge the existing global payment systems and establish China as a leading rule maker in this area, it will also enhance the importance of the renminbi as a global reserve currency.” [source]

Analyst comment: China hopes to someday replace the dollar as the world’s reserve currency with a currency that Beijing controls.- JD

Alternative analysis: Yes, China absolutely sees cryptocurrencies as a national security threat. By implementing strict capital controls and clamping down on non-sanctioned exchanges, the Central Committee of the Chinese Communist Party is trying to stem the massive currency outflows to other nations. As China has become even wealthier, its citizens are diversifying their wealth abroad. One way to do this is via cryptocurrencies because these transactions exist outside the banking system, are much faster than traditional international money transfers, and can be more difficult to track. The Central Committee is expected to hold its national congress meeting in November, where they very well might devalue the Yuan. China’s move to ban crypto-exchanges probably has more to do with capital controls — ensuring that Chinese money stays in the Chinese economy — than with their own digital currency. – MS


Russians involved in fomenting NFL protests?

Are the Russians using the NFL protests to sow discourse among the American electorate? One U.S. senator thinks so. Sen. James Lankford, R-Okla., said paid social media users, or “trolls,” were hashtagging “take a knee” and “boycott NFL” to amplify the issue. “They were taking both sides of the argument this past weekend, and pushing them out from their troll farms as much as they could to try to just raise the noise level in America and to make a big issue seem like an even bigger issue,” Lankford said at a hearing of the Senate Homeland Security and Government Affairs Committee. Earlier this month, Facebook execs said hundreds of fake accounts spent perhaps $100,000 on ads within the past year that were designed to spark debates over gun control, Black Lives Matter, and other social and political issues. Notes The Associated Press: “As a member of the Senate intelligence committee, Lankford is privy to intelligence that Russian troll farms have used social media to create doubt and chaos in U.S. institutions and government, according to a congressional aide.” – JD

Analyst comment: All aspersions involving the 2016 election aside, we do know that Russia is deeply involved in information operations (IO) to inform and influence the electorates and national sentiments across Europe and the United States. We know this as a fact. Unfortunately, the accusations surrounding the elections overshadow the real threat here. Russia excels in manipulating public opinion and we should expect Russian IO to continue exploiting the sociopolitical rift in the United States. – MS

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


This week the Trump administration threatened to restrict Russia’s military observation flights over the United States. The U.S. carries out the same kinds of flights over Russia, which are part of the Open Skies Treaty. But earlier this year, the Russian observation aircraft were upgraded with high tech sensors — over and above what the U.S. currently employs in its flights over Russia — which caused quite a bit of heartburn at the Pentagon. The Trump administration recently leveled accusations that Moscow blocked U.S. flights over Kaliningrad, where Russia had deployed the Iskander-M, a mobile, short-range ballistic missile system capable of being armed with a nuclear warhead.

In another sign of deteriorating — and this point, beyond irreparable — relations, on Tuesday the Russian Embassy charged the U.S. with teaching its soldiers how to counter Russia’s hybrid warfare, accusing the U.S. of preparing for a war with Russia. In a document prepared by the Army’s secretive Asymmetric Warfare Group (AWG), the “Russian New Generation Warfare Handbook” (DOWNLOAD) describes what to expect during a Russian hybrid war and how to counter the quasi-irregular tactics employed during this style of warfare. “It is worrying that the U.S. Defense Department document intended for internal use seriously allows the possibility of fighting between U.S. and Russian armed forces. This can only be imagined in a terrible delirium,” said the Russian Embassy statement. “This evidence of training the U.S. troops for direct conflict with Russia looks very alarming, especially in the current and already difficult situation in European security.”

But the other side of the coin shows that Russia, too, is preparing for war with the U.S. and NATO.  At least some of Russia’s electronic warfare (EW) units received upgraded equipment, aimed at jamming and otherwise disrupting U.S. communications, should a war break out. Additionally, the Russian air force began bombing exercises on Tuesday near the North Korean border.  Meanwhile, NATO and Atlantic Council officials recently toured strategic nuclear forces in Scotland; a show of force in preparation of war with North Korea and/or Russia.

Outlook: The more I look at how this situation with North Korea is shaping up — namely the extreme interest displayed by China and Russia — the more I believe that China and Russia will support the North Korean regime in a U.S. conflict. The situation between NATO and Russia is intense, as recent and continued military exercises show both sides are actively preparing for war, or at least the appearance that they will fight a war. My eyes remain set on oil prices as one determining factor. The Russian economy is hurting due to Western sanctions and low oil prices. They won’t see relief from sanctions until they meet Western demands in Ukraine, so the most likely economic and financial relief will come from rebounding oil prices.  Once that happens and Russia can afford to fight a war, then I think conditions will become much more serious. – MS



There was lots of activity in the region over the past week, with some noticeable trends emerging. One of them is increased cooperation, militarily and strategically, between Russia and China.

Russian and Chinese warships participated in more joint naval exercises, this time in the Sea of Japan, and, for the first time the Okhotsk Sea, the latter of which is a body of water located off the Russian coast that is north of Japan’s northernmost large island, Hokkaido. The drills were meant to further strengthen the continually evolving strategic military-to-military cooperation between Moscow and Beijing, particularly in the realm of naval operations. The exercises focused primarily on submarine rescue and anti-submarine warfare, but the drills involved a maritime and coastal phase.

As Russia and China move closer together, it’s forcing traditional allies of the U.S. to shore up relations with Washington. For instance, Australia has made a decision to join the U.S., Japan, and India in countering Chinese expansionism, in large part to protect the country’s vast regional trade network. Last week Australia sent a half-dozen warships steaming towards the South China Sea, but did not publicize their destination, for the purpose of engaging in military exercises. Australian media has called the mission Canberra’s largest in three decades, making it very significant.

Russian and Chinese activity in the region has also led Japan to increase its maritime law enforcement capabilities via its Coast Guard in the East China Sea. Meanwhile, India and Japan are offering security assistance to some of China’s maritime rival claimants, including Vietnam and the Philippines. Both countries are largely in the sphere of the West and are increasingly suspicious of China’s aggressive, outsized regional maritime claims, as well as Beijing’s attempts to enforce seasonal fishing moratoriums while placing military assets on its manmade islands.

Meanwhile, recently-departed political advisor to President Trump, Steve Bannon, a former naval officer, traveled to Hong Kong where he spoke to a hosted by CLSA, China’s biggest state-owned brokerage firm. His speech focused on “American economic nationalism and the populist revolt in Asia,” according to a CLSA spokeswoman. His speech was more focused at Chinese ascendancy, where Beijing is in the world today and where the Communist leadership wants to take China in the future. Much of what he had to say informs the positions he advocated with the president on China, and are worth noting, as they foretell an ominous future.

Bannon’s trip preceded an official U.S. government visit by Secretary of State Rex Tillerson, who travels there this week to discuss with Chinese leaders Trump’s upcoming visit, the situation with North Korea, trade, and investment.

Outlook: Despite China’s recent diplomatic overtures, Beijing’s overarching goal of becoming the hegemonic power in the South China Sea region and beyond hasn’t changed. Bannon is acutely aware of this, judging by what he has said in recent days. If the U.S. does not step up and challenge Chinese ascendancy, he said, China could take a similar path as Nazi Germany. “A hundred years from now, this is what they’ll remember — what we did to confront China on its rise to world domination,” said Bannon, who once lived in China. “China right now is Germany in 1930. It’s on the cusp. It could go one way or the other. The younger generation is so patriotic, almost ultranationalistic.”

These comments follow a prediction Bannon made in March 2016: “We’re going to war in the South China Sea in five to 10 years.” And last month, in an interview with The American Prospect, Bannon said that China is already at economic war with the U.S. He says China is interested in nothing less than “the reordering of the economic relationship” it has with the U.S. and the world. It’s “the central issue that has to be addressed,” and “only the U.S. can address it.” We agree with Bannon’s viewpoint. – JD

[ADDENDUM: Earlier this month in The Watchfloor, we highlighted the fact that China is preparing to reduce the size of the People’s Liberation Army by some 300,000 troops, while increasing its marine corps by a factor of five — from 20,000 to 100,000. Why? “China is a maritime country and as we defend our maritime rights and develop our interests, the ­status of the navy will be more ­important,” Liu Xiaojiang, former navy political commissar, said. Along those lines, China began construction earlier this year of the Type 075, the largest amphibious warfare ship in the People’s Liberation Army Navy (PLAN), with a similar displacement as the U.S. Navy’s Wasp class Landing Helicopter Deck (LHD) amphibious assault ships. At the same time, the PLAN is building two new Type 055 destroyers, an indigenously designed and built aircraft carrier, and additional ships for amphibious operations. The Chinese are rapidly expanding their force-projection capabilities via their navy. While the expansion has much to do with protecting China’s global economic interests, clearly is a dual-use capability: Protection of economic interests and as a military threat capability. – JD]

[ADDENDUM: State-owned China Aerospace and Science Technology Corp., which traditionally has concentrated and missiles and other aerospace technology, is set to offer for export the D3000, a fully autonomous “robotic” warship that is triple-hulled and armed with auto cannons and anti-ship missiles, as well as launch tubes for small unmanned underwater vehicles, mines, or torpedoes. The ship is 98 feet in lengthy, stealthy, and designed to operate autonomously for months at a time. Analysts, using available photographs, estimate the ship displaces about 100-150 tons (for comparison, a U.S. Navy super supercarrier displaces about 100,000 tons). The Defense Advanced Research Project Agency, or DARPA, currently operates the largest autonomous warship — the 100-foot Sea Hunter, which is designed to look for submarines. Significant resources are being placed into autonomous, robotic systems for land, sea, and air operations, not yet as stand-alone systems replacing humans on the battlefield, but rather as force multipliers and force enhancement tools. – JD]


Korean Peninsula SITREP

Within 48 hours of the United States sending a sortie of B-1B bombers and F-15C fighters in international airspace to the farthest point north of the border between North and South Korea last weekend, North Korea’s foreign ministry issued a statement accusing President Trump of declaring war on Pyongyang — a political action that is reserved to Congress, not presidents — and claimed the right to shoot down any American aircraft Pyongyang claimed was threatening the country, even in international airspace. “The whole world should clearly remember it was the U.S. who first declared war on our country,” said Foreign Minister Ri Yong Ho. “Since the United States declared war on our country, we will have every right to make countermeasures, including the right to shoot down United States strategic bombers even when they are not inside the airspace border of our country,” he added. U.S. officials, of course, quickly denied such allegations, even calling the assumption that a declaration of war had been made “absurd.”

The North Koreans were reacting to a tweet that Trump sent on Sept. 23, which said, “Just heard Foreign Minister of North Korea speak at U.N. If he echoes thoughts of Little Rocket Man, they won’t be around much longer!” Little Rocket Man is Trump’s derogatory nickname for North Korean leader Kim Jong Un. That, Ri said, amounted to a declaration of war.

Outlook: There is clearly a war of words taking place between Washington and Pyongyang, though the latter is taking its threats to the next level. While there is always the possibility of a miscalculation, any preemptive action by North Korea against the United States or its allies would almost certainly draw an immediate and massive military response from the Trump administration. The president has been very clear about his objective — a nuclear-free Korean peninsula — and firing upon U.S. military planes or troops would give Trump all of the legal, constitutional authority he needs to respond.

Right now, however, we assess the risk of war as low. The Trump administration appears to be relying primarily on economic pressure for the time being, followed by diplomacy, although President Trump has yet to fill the position of U.S. ambassador to South Korea or assistant secretary of state for East Asian and Pacific Affairs. – JD

[ADDENDUM: According to sensitive sources, smuggling is making up ground for the North Korean economy in the wake of sanctions on the country. Vladivostok in Russia, which is just outside the border area with China and North Korea, continues to be a major hub for gangs to smuggle goods into North Korea. On a more interesting note, the North Korean government remains wary of South Korean gangs involved in the smuggling business, out of fear that they may be infiltrated by South Korean intelligence sources. – MS]


Middle East SITREP

Israel is stepping up military action in Syria as the civil war there winds down and pro-regime forces, aligned with Russia and Iran, take root.

For the third time in as many weeks, Israel’s air force bombed targets inside Syria, with televised footage after the sorties showing fires burning at a facility near the international airport in the capital of Damascus. Multiple reports also noted that the IDF air force strike came after Syrian government air defense systems locked onto, then fired on an Israeli aircraft, possibly a drone. Syrian officials claimed its army downed an Israeli drone during the attack on the weapons depot, which was denied by the IDF. Still, it’s obvious that the proxy forces and militias formed and supplied by other governments, including Russia and Iran, will have some sort of post-civil war role in the country as well, if for no other reason than to help Assad maintain control.

On that note, Israel is of the mind that Tehran is succeeding in its efforts to hold influence in post-war Syria, and as such is mobilizing its forces as a response to the regional realignment that will most likely occur in the weeks and months ahead. This is after Israeli diplomats have failed to secure assistance and guarantees from either Russia or the U.S. to ensure Iran does not gain a foothold along its border. But that’s clearly happening, and the implications are dire. Said one report, “With the prospect of pro-Iranian forces reaching Bukamal on the Syrian-Iraqi border, this opens up the possibility of the much-reported Iranian ‘land corridor’ stretching uninterrupted from Iran itself to a few kilometers from the Israeli-controlled Golan.”

Outlook: Israel is witnessing a major shift underway in the regional balance of power, and it’s shifting in Iran’s favor. There is a Tehran-controlled bloc of nation-states, rump states, and militant proxies that are all being allowed to solidify regional territorial advances and align themselves in a position to strike at the Jewish state.

Throughout its existence, Israel has historically been surrounded on all sides by enemies. Iran, which is an arch-enemy of Israel, was not one of those nation states on Israel’s border. That’s changed, however, and because it has, Israel will not tolerate a substantial Iranian presence on its doorstep, especially one that is only likely to grow more powerful if allowed to do so. – JD


Defense in Brief

The Defense Intelligence Agency (DIA) recently established a “counter-space” office where it’s taking aim at Russian and Chinese efforts to weaponize space. “The Russians and the Chinese see space as an area they absolutely want to challenge the United States,” said one DIA official. The goal is to “understand not only what [Russia and China] want to do to us, but also understand to some extent their dependency and their vulnerabilities.” Meanwhile, the National Reconnaissance Office, which oversees a constellation of U.S. intelligence satellites, says they’re also involved in the fight. – MS

Chairman of the Joint Chiefs of Staff (CJCS) Gen. Joe Dunford was previously quoted as saying, “We frankly need an effective deterrent model for the 21st century to deal with the kind of threats that we are now seeing in Russia because, quite frankly, I think that kind of asymmetric threat is one we will continue to see in the future and certainly we are going to continue to see that in the European context.”  Dunford said that the U.S. military continues to improve its ability to counter “Russian malign influence operations,” and that responding to Russia’s style of hybrid warfare requires a “whole-of-government” approach. – MS

In what is very likely a first, at least since World War II, when developmental platforms were rushed to battle, the U.S. Air Force is sending two of the four planes involved in its OA-X light attack aircraft competition to war. The service will send the Embraer/Sierra Nevada A-29 Super Tucano and the Textron AT-6 Wolverine to a yet-to-be-determined war zone under a program nicknamed Combat Sent III. Accompanying the aircraft will be 70 pilots and aircraft maintenance personnel. The goal is to test the planes under combat conditions. The goal of OA-X, which stands for observer-attack experimental, is to select a light attack plane that can be used for low-risk missions against an enemy with little anti-air capability. The prop-driven planes are capable of remaining in flight for prolonged periods of time and can deliver missiles, rockets, and laser-guided bombs. It’s not yet certain where the Air Force will send the planes, but operations against ISIS in Syria seem like a good fit. – JD


PIR3: What are the new indicators of organized political violence and domestic conflict?

The fate of the communist soldier?

By now, you have likely heard the name Spenser Rapone, or at least seen his picture (below). Once an enlisted soldier in the 75th Ranger Regiment (who was released for failure to uphold standards; RFS), and most recently a West Point cadet who received his commission last year; 2nd Lieutenant Spenser Rapone is being investigated for several violations of the Uniform Code of Military Justice. In a series of posts to Instagram and Twitter, Rapone made political statements in uniform, some of which included his support for communism. After the posts were discovered, Rapone was reported to both West Point and his command at Fort Drum, N.Y., where he was on a field training exercise. According to those familiar with the case, the charges are serious, and they could result in the end of Rapone’s military career.

More curious to me, however, is the transition Rapone made from being a Ron Paul supporter around 2012 (according to his Tweets) to becoming a communist and an “official socialist organizer” of the Democratic Socialists of America by 2014. According to West Point’s own website, a professor by the name of Rasheed Hosein became Rapone’s mentor. (AC: That information has since been removed from West Point’s website.) Professor Hosein is currently on administrative leave, although a West Point spokesperson said it was for an unrelated matter. The two took a trip together to India in 2014 and remained close until Rapone’s graduation in 2016. [source]

(Analyst Comment: This is speculation, however, it’s also informed speculation. It’s very common for communists to infiltrate colleges to recruit angry or disillusioned kids to communism. Kim Philby, the U.K.’s greatest defector to the Soviet Union, and the Cambridge Five immediately come to mind. I remained suspicious about Professor Hosein, as he was the most likely agent of conversion; however, upon learning that the two traveled to India together, there’s little doubt that Professor Hosein wasn’t involved in Rapone’s recruitment and conversion to communism. In espionage circles, these kinds of trips are often the work of an access agent — in this case Professor Hosein — arranging a meeting between a recruit and his eventual handlers. I’m not accusing Rapone of engaging in espionage, however, recruitment to communism and to defection work in similar ways. This is the blinking, neon light for the Trump administration, and specifically Secretary Mattis, to go after sympathizers of communism within the military ranks. If history is indication, today they’re sympathizers, and tomorrow they’re working towards the coup and eventual overthrow of the government. When we read their literature, they make their intentions explicitly clear: through mass revolution, overthrow the government and install a communist one. Regardless of Rapone’s contact with socialist and communist organizers, he may end up being a revered member of the Alt-Left, especially if he’s ejected from the military.)


Berkeley PD shifts tactics due to Antifa violence

While Berkeley is of zero tactical import to us, Antifa tactics and police responses are certainly of strategic importance. One recent article quotes a UC Berkeley spokesperson as saying that law enforcement will change their tactics. “We can’t turn a blind eye to what happened here, or in the city of Berkeley or any other city across the country for that matter,” the spokesperson said. Berkeley police allegedly added more security at recent rallies, after being caught flat-footed and outnumbered at previous events. “There are also a number of other tactics that we’ve modified. Things about how we staff, our rules of engagement and other things that I can’t go into for what should be obvious reasons.” Additionally, Berkeley police are now sharing intelligence with with law enforcement agencies across the nation. (AC: That type of intelligence undoubtedly includes tactics, improvised weapons, and communications.) [source]


Alt-Left Roll-Up:

REMINDER: “Deface Columbus Day” is 09 October

CA: Antifa/BAMN organizer Yvette Felarca arrested in Berkely

CA: Skirmishes break out as three arrested at Patriot Prayer rally on Tuesday

CA: Berkeley Antifa stalks Republican students at dinner (“Antifa has taken pictures of me, followed me on the street, and tracked my location using social media.”)

CA: CSUSM hosts former Black Panthers

LA: Judge rules BLM cannot be sued; dismisses case

LA: NFL/Saints receiver flashes ‘black power’ sign during football game

MI: Man urinates on BLM chalking; manhunt underway in Ann Arbor

NC: “Radical Rush” at UNC Asheville

NY: BLM leader to sue NYPD

OH: Cincy BLM rallies at PD headquarters

PA: Philly’s BLM leader; loud, growing louder

TN: Think Progress says church shooter not race-related, just a good Christian guy who shot people

TX: Arrests made at Austin Antifa protest

TX: HTown Holds It Down: Security, Defense Movement

UT: University of Utah BLM plans to shut down Ben Shapiro speech

VA: Black nationalist lawyer to investigate city response to Charlottesville Unite the Right rally

Russia bought BLM ads, fomenting unrest


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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