30 JUN 17 – Executive Intelligence Summary – Forward Observer Shop

30 JUN 17 – Executive Intelligence Summary


[wcm_nonmember]In this EXSUM… (3374 words)

  • CIA: Intel leaks on the rise and expected to continue
  • NATO may consider cyberattacks a call to arms
  • Russian military modernization continues
  • Russia’s energy play in the Arctic
  • U.S.-Russia tit-for-tat
  • Defense in Brief
  • Montreal Antifa “fight back against gentrification”
  • Portland: America’s most politically violent city
  • And more…


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Bottom Line Up Front:  According to an unclassified version of a report published by the Defense Intelligence Agency (DIA), Russian leaders are convinced that the U.S. is pursuing regime change at the Kremlin, which is driving tensions with the US.  The report cites Russia’s “deep and abiding distrust of U.S. efforts to promote democracy around the world and what it perceives as a U.S. campaign to impose a single set of global values.”  What follows are reported quotes:

“The Kremlin is convinced the United States is laying the groundwork for regime change in Russia, a conviction further reinforced by the events in Ukraine.”

“Moscow worries that U.S. attempts to dictate a set of acceptable international norms threatens the foundations of Kremlin power by giving license for foreign meddling in Russia’s internal affairs.”

“The Russian military today is on the rise — not as the same Soviet force that faced the West in the Cold War, dependent on large units with heavy equipment,” the report says. It describes Russia’s new military “as a smaller, more mobile, balanced force rapidly becoming capable of conducting the full range of modern warfare.”

“Within the next decade, an even more confident and capable Russia could emerge.”

(Analyst Comment: These quotes were taken from the linked source report, although as of Wednesday night I have not been able to find a copy of the original report.  I’m trying to obtain this report in its entirety.) (SOURCE)


Priority Intelligence Requirements:

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

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

PIR3: What are the current indicators of organized political violence?

PIR4: What are the current indicators of economic, financial, or monetary instability?

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

CIA: Intel leaks on the rise and expected to continue

CIA Director Mike Pompeo said that leaks of highly classified and sensitive intelligence information — to the U.S. media and to organizations like WikiLeaks, among others — has risen dramatically over the past few years, and because such leaks are in part due to “worship” of the leakers (like former NSA contractor Edward Snowden), they are likely to continue.  He believes serious efforts need to be undertaken by the Trump administration to staunch leaks of classified data.  “It’s tough. You now have not only nation states trying to steal our stuff, but non-state, hostile intelligence services, well-funded — folks like WikiLeaks, out there trying to steal American secrets for the sole purpose of undermining the United States and democracy,” he said.  “I think we’ll have some successes both on the deterrence side — that is stopping them from happening — as well as on punishing those who we catch who have done it,” he said.

Analyst Comment: One of the drivers of the leaks is that in 2001, the U.S. Supreme Court in Bartnicki v Vopper reaffirmed that the media is permitted to publish material that may have been obtained illegally, while simultaneously reaffirming the press’ First Amendment interests and the public’s right to know.  One step the Trump administration could take, or may already be taking, is empowering the FBI to obtain Foreign Intelligence Surveillance Act (FISA) warrants to conduct counterintelligence surveillance against reporters of foreign outlets or suspected foreign agents, with the express purpose of catching leakers while not punishing the media.  That would likely intensify calls for President Trump’s impeachment and could absolutely be exploited by this or future administrations, as it has been exploited by the previous two administrations.

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

The prospects of global conflict continue to revolve five geopolitical actors: Russia, China, North Korea, Iran, and the Middle East. In the event of war with any of these nations, consider domestic systems disruption a distinct possibility.


NATO may consider cyberattacks a call to arms

NATO Secretary-General Jens Stoltenberg warned potential adversaries this week that should they launch cyber attacks against any member nation, it could trigger Article V of the NATO charter, the mutual defense commitment.  He re-issued the warning after another worldwide ransomware attack that reportedly originated in Ukraine and Russia, spreading across Europe to the U.S. and then to Asia.  Last month the “WannaCry” ransomware attack spread to 200,000 users in 150 countries; this week’s attack appears to be very similar.

Stoltenberg also reminded reporters that the alliance last year agreed that cyber attacks may be considered serious enough to warrant a unified NATO response under the Article V defense commitment. In addition, cyber was made a NATO military domain on the same level as traditional air, sea and land combat arms.

Ukraine was the first country to be hit with a cyber attack, one believed to have been launched by Russia. That attack targeted a Ukrainian power station offline for several hours.

Analyst Comment: Just in the past few years Western powers are finally waking up to the destructive threat posed by cyber warfare. This is a direct result of the increasing use of malware and other cyber warfare tools to infiltrate and disrupt information systems around the world — by Russia, Iran, North Korea and China, in particular.  NATO is attempting to warn adversaries that destructive cyber attacks will be met with equally destructive attacks.  That response could include cyber to more traditional military responses, however, most NATO members are widely considered to be far behind the curve of Russian cyber capabilities.

Russian military modernization continues

At a recent breakfast event sponsored by Politico, General Petr Pavel, chairman of the NATO Military Committee, warned that the Russian military was rapidly modernizing, but that it doesn’t necessarily pose threats to the alliance. “We in uniform, we define the threat based on two major elements. One is the capability, the other is the intent,” he said during a Q&A.  He went on to note that Russia is improving both its conventional military and nuclear capabilities, and that Moscow is able to project power great distances.

“When it comes to exercises, their ability to deploy troops for long distance and to use them effectively quite far away from their own territory, there are no doubts,” Pavel said.  But is Russia planning to challenge NATO anytime soon? On this, Pavel said the alliance is less clear.  “When it comes to intent, it’s not so clear because we cannot clearly say that Russia has aggressive intents against NATO,” he said, adding that NATO has been busy bolstering its own offensive and defense capabilities, which has been mostly concentrated in Eastern Europe.  “There are elements that have to worry us and we have to stay ready,” he noted. “We face a huge modernization of all Russia military.”

Analyst Comment: Following the collapse of the Soviet Union, Russia’s military fell into a state of deep disrepair and obsolescence, so it only stands to reason that, once the Russian economy began to benefit from high oil prices about a decade ago that Moscow would pour new resources into its military.  And indeed, as the Russian military has improved, it has also returned to Cold War-era tactics of buzzing U.S. and NATO warships and planes, stalking NATO countries with its nuclear submarines, and otherwise using newfound military might to spread influence, especially in the Middle East, as the U.S. withdrew during the latter Obama years.  But any future conflict with NATO would rest on the age-old principle that drives most nations to war: national interests. And those depend largely on what NATO does.  NATO’s continued admittance of eastern European nations into the alliance pushes Putin to consider these actions against Russia’s national interest, making war more likely.

Russia’s energy play in the Arctic

Few people have heard of the tiny island of Vargo, Norway, but it is the location of a vitally important radar installation operated jointly by the U.S. and the host nation.  Its purpose is to keep a watchful eye on activity near Russia’s Kola Peninsula, where a fleet of nuclear-armed submarines operate as part of Moscow’s effort to beef up its Arctic military presence.  Norway responded to an increase in Russian activity in the region by developing highly sophisticated intelligence-gathering ships including the Marjata IV, which have been described as “the most sophisticated…in the world.”

Analyst Comment: Two things are occurring: Russia is investing major military resources in bolstering its Arctic presence, and NATO countries are simultaneously investing in capabilities aimed at countering Moscow.  At stake is untold billions of dollars’ worth of untapped energy. The U.S. Geological Survey believes 13 percent of the world’s undiscovered oil and 30 percent of its untapped natural gas may lie buried in the Arctic. Melting ice in some parts is expected to make drilling — and shipping — that oil and gas much easier.  As one report noted, “Russia is trying to claim 460,000 square miles of the Arctic Ocean as its national territory — an area that includes the North Pole. Russian divers even planted a national flag on the North Pole seabed in a symbolic claim to the region’s energy riches.”  Given the Pentagon’s recent focus on planning for the military defense of the Arctic, there will be a third front in the potential NATO-Russia conflict.

Russian ship, helicopters allegedly harass US merchant ship

US Transportation Command acknowledged an allegation that a Russian ship and helicopters ‘harassed’ a US merchant ship in the Baltic Sea in late May.  “We are aware of an alleged situation on May 25, involving a contracted, U.S.-flagged vessel, and Russian military ship and aircraft.  The commercial ship was bound for Lithuania, and was contracted by the U.S. Department of Defense to transport equipment for an upcoming planned exercise,” said a statement released by the command.  According to an internal report, the ship’s commander described the encounter as “intense and threatening”.  (SOURCE)


U.S.-Russia tit-for-tat

Russian planes have been increasingly buzzing U.S. and NATO warships and air space, just like during the Cold War. And now a report notes that a Russian military helicopter buzzed an American diplomat’s car on a mission in northern Russia, ostensibly as payback for a major Washington Post story last week claiming massive Russian hacking involvement in the United States’ November presidential election.  The Post’s report included an unusually large amount of leaked classified data, and said that in response to a report by the CIA, then-President Obama mulled over several options on how best to respond to Moscow’s alleged hacking attempts.

In recent days a NATO fighter — a Polish F-16 — buzzed the plane of Russia’s defense minister, Sergei Shoigu, before being chased away by a Russian fighter escorting the minister’s plane.  NATO’s official response claimed that “three Russian aircraft, including two fighters, were tracked over the Baltic Sea earlier today.  As the aircraft did not identify themselves or respond to air traffic control, NATO fighter jets scrambled to identify them, according to standard procedure. NATO has no information regarding who was on board.”  It’s unclear as to whether that was the case or NATO is becoming more aggressive towards Russian aircraft in the region.  NATO added that once member nation fighter planes identify the unidentified target, they traditionally back away.  We expect more of these challenges in the future as Russia and NATO continue to vie for influence regionally and globally.


Putin’s southwest strategy and Armenian defense

As the U.S. and NATO work to position military assets along the alliance’s Eastern European border with Russia, Moscow is working to improve its own position in the west opposite NATO.  The defense ministers from the Kremlin and neighboring Armenia signed a joint basing agreement for Russian troops at the country’s second-largest city and the capital of the Shirak Province in the northwestern part of the country.

“The main task of the United Group of Troops is to identify preparation of military aggression against Armenia and Russia in a timely manner and to repel it jointly with the armed forces of Armenia and Russia,” said the Armenian defense minister.  The force’s objectives and mission will be decided by commanders of Russia’s southern military district and the Armenia armed forces general staff.  During times of peace the force commander will answer to the Armenian general staff; during war the commander may also answer to the Commander, Southern Military District of Russia.

Analyst Comment: Armenia borders Turkey, Georgia and Azerbaijan.  While Russia certainly has other interests and history in the region with Turkey and Georgia, it’s the Armenia-Azerbaijan nexus that is most intriguing.  The two nations have an ongoing conflict surrounding Armenian separatists.  Russia is neutral but it’s apparent that Putin is playing both sides.  Putin wants to ensure that war does not break out, so this defense agreement includes allowing Russian troops to patrol Armenia’s entire land border.  The agreement also contains a mutual defense clause, so any attack on Armenia will be viewed as an attack on Russia.  By funneling weapons to both sides, Putin is attempting to secure a detente on his southwestern border, leaving him free to pursue economic deals with Turkey and neuter NATO by selling energy directly to European nations.


North Korea SITREP

President Trump released a statement today saying that “The era of strategic patience with the North Korea regime has failed. That patience is over.”  Further, he called on Japan, South Korea, and other regional nations to help implement stricture economic and diplomatic sanctions against North Korea.  For decades, the South Korean government has pursued a sunshine policy towards North Korea, which is taken from an Aesop’s Fable tale.  The sun and the wind, the story loosely goes, were competing against each other to see who could force a man to take off his jacket.  The wind blew hard, forcefully trying to blow the man’s jacket off, which didn’t work.  Then the sun shown bright, and after the man became hot, he took the jacket off voluntarily.  South Korea’s policy has been “sunshine” but the Kim regime has not responded as desired.  Trump has repeatedly expressed his displeasure that “strategic patience” isn’t working.


Defense in Brief:

The US Navy’s latest aircraft carrier is set to be commissioned in July.  The Gerald Ford will undergo trials before being deployed around 2022. This is the first carrier to feature the electromagnetic launch system, as opposed to the steam launch system currently in widespread use.  (SOURCE)

The Pentagon this week accused the Syrian military of “active preparations for chemical weapons use” amid stern warnings from the US and French militaries that future chemical weapons attacks would not be tolerated.  White House Press Secretary Sean Spicer on Monday said the the Pentagon had “identified potential preparations for another chemical weapons attack by the Assad regime that would likely result in the mass murder of civilians, including innocent children.”  SECDEF Mattis, so far, has remained adamant that the US will not be drawn further into the Syrian conflict. (SOURCE)

NATO member Poland wants to purchase Patriot missile batteries, but those plans will likely be derailed over technology concerns. The Polish military wants the Patriot version with the Integrated Battle Command System, a technology that not even the US Army currently fields.  (SOURCE)

PIR3: What are the current indicators of organized political violence?

Montreal Antifa “fight back against gentrification”

For the past seven years, Antifa members in Montreal have fought against gentrification by defacing and destroying surveillance cameras.  Members also vandalized and ‘pillaged’ new shops that opened in a gentrified area of the city.  (Gentrification refers to the “whitening” of an area where large scale investment and development other efforts clean up rough neighborhoods; invariably where whites start to move in and minorities move out.)  Referring to violence and property crime, the author writes: “Mass resistance breaks the spell of peaceful acceptance of development and gentrification, and helps us shake off the fatalism and despair that they inflict on us.”  A “preferred tactic” of Antifa members is paint-filled fire extinguishers, which gush paint from the pressurized canisters.

A Leftist communique recommending the tactic of basing windows and then painting the inside of a store.  “By destroying these windows and ruining this merchandise with paint, we engage in an act of war. We will not let these boutiques install themselves here peacefully. This facade of peace is nothing more than an attempt to make invisible the war in progress against poor and marginalized people.”  At least two Montreal shops were attacked using this tactic.  (Source: https://itsgoingdown.org/how-angry-people-are-fighting-gentrification-in-montreal/)


Portland: America’s most politically violent city

In November 1979, KKK members used rifles and shotguns to attack a Communist protest in Greensboro, North Carolina.  According to the source article, this memory remains alive among Antifas in Portland, where recent riots have caused millions of dollars of damage. Officially founded in 2007, Rose City Antifa has employed noise demonstrations and shout-downs to protest what it says are racist and fascist events.  But increasingly so, the group has been open to adopting preemptive violence.  According to their Facebook page, “We are unapologetic about the reality that fighting fascism at points requires physical militancy.  Anti-fascism is, by nature, a form of self-defense: the goal of fascism is to exterminate the vast majority of human beings.”  But resorting to violence hasn’t caused the success they’d hoped for.  “It just makes [antifa] feel good—they think they made a point,” the ADL’s Pitcavage said. “But their tactics are counterproductive. They haven’t made any dent over the years with those tactics. … And it gives the white supremacists an unbelievable amount of publicity.”  Showing no signs of abating, Leftist violence is likely to continue, and probably worsen.  “My big concern is sooner or later is that we’re going to have another Greensboro Massacre type of event,” Pitcavage said. “This is so unlikely to end well.”  (SOURCE)


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

Fed’s Yellen says financial crisis unlikely in our lifetime — but not so fast!

Federal Reserve chairwoman Janet Yellen said on Tuesday that the US is unlikely to face another significant financial crisis in our lifetime.  (Analyst Comment: This statement is almost beyond belief given the likely future of the US dollar and debt levels.  Perhaps Yellen doesn’t consider default through inflation a significant financial crisis.)  But in an oped published by CNBC, financial analyst Dick Bove writes, “The next downturn will be far more devastating than what happened in this country a decade ago.”  He writes that new financial regulations ‘demand that banks fail’ because these regulations bar the federal government from preventing bank failures.  “If one believes that a small group of people operating behind closed doors, in private, a group that totally failed to protect the system from the last collapse, knows best about the direction of funds in the United States economy, Ms. Yellen is right.”  Otherwise, “this new system is a disaster.”


Bank branches to become as common as Blockbuster stores

Ex-Barclays chief executive Antony Jenkins used an interesting analogy to make a prediction about the devolution of bank branches nationwide: He says they’re going to become as common as “a Blockbuster video store in a few years time.”  Now running a financial technology firm called 10X, Jenkins says rapidly advancing artificial intelligence will profoundly impact banking and thus could make bank branches obsolete as banks fail to keep up with tech innovation.

A few years ago Jenkins correctly predicted that banks would begin closing as many as 50 percent of their branches while dramatically downsizing their workforces. But in reality, the transition has been faster than he first believed.  “I mean the trend is moving even faster than I predicted in the U.K., now we’re seeing 15 percent of branch traffic falling per annum. That’s a huge effect,” he said, adding banks that fail to recognize and adapt to the rapid advance of new technology will face a “Kodak” moment soon — a reference to the one-time global leader in the manufacture of film for cameras (Kodak filed for bankruptcy in 2012; analysts believe the company had every opportunity to adapt to advancing film-less digital camera technology but didn’t).


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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