National Intelligence Bulletin for 16 March 2018

The National Intelligence Bulletin is a weekly look at national security, domestic systems disruption, the risk of failing critical infrastructure, and threats to social, political, economic, and financial stability in the United States. This report is available each week for National Intelligence subscribers.


In this National Intelligence Bulletin… (3,667 words)

  • InFocus: Considerations regarding cyberattacks against the U.S.
  • Background briefing on cyberattacks and national security
  • The human terrain of immigration makes domestic conflict more likely
  • Study: 29 percent of Americans show support for ‘authoritarian government’
  • Ferguson shares dire warning for conservatives ahead of the mid-term elections
  • Vox: Only gun confiscation will solve gun violence, and other gun data
  • House passes school safety act
  • U.S. faces $82 trillion entitlement shortfall over the next 30 years
  • Commerce Secretary on potential of a trade war
  • And more…

In Focus: Senior officials from the FBI, DHS, and Treasury Department gathered yesterday for a background briefing on national security in light of recent news of cyber attacks against the United States. Earlier in the day, Trump administration officials formally accused Russia of engaging in cyber exploitation (“network reconnaissance”) of the U.S. power grid and brought sanctions against a number of Russian officials in retaliation. [source] We here at Forward Observer have for years warned about the vulnerability of our power grid against exploitation by peer and near-peer competitors like Russia, China, North Korea, Iran, and potentially others. In fact, this alone was the impetus for me to start the Forward Observer intelligence service, and to begin providing Americans with analysis and early warning of these types of threats.

The past week has been the most significant diplomatic breakdown moving us towards conflict in recent memory. Earlier this week, British officials formally accused Russia of being behind an attempted murder of a former Russian spy who defected to the West. Russia balked at a deadline to respond to the accusation, and U.K. Prime Minister has threatened both an overt and covert response. The Brits already expelled 23 Russian diplomats from the country in an overt response. Recently, U.S. officials including President Trump joined the British, French, and Germans in confirming that Russia was behind the attempted assassination (the two victims are still in critical condition), and are presumably joining the U.K. in overt and covert retaliation against Russia. [source] In response, Russian officials have also declared that they will retaliate against the U.S. and U.K, announcing today that they will also be expelling British diplomats from Russia. [source] This is escalatory behavior that could be pushing us to war, but it’s just the top of the iceberg. NATO and Russia have been at deliberate Cold War for nearly a decade — though much more pronounced in the past several years — but it could easily be considered an extension of the first Cold War.

Jon and I will tackle the outbreak of war, if it comes to that, in Strategic Intelligence; but I want to answer what this could mean for us in the United States. The Russians aren’t likely to end their cyber activities, or their information operations, or their making preparations to go to war. NATO isn’t going to stop their activities directed towards Russia, either. And Russia isn’t really in a position to stop what they’re doing, because they see themselves as facing an existential threat from the West. These measures are being taken to prevent regime change in Russia, as Putin sees it, by taking the fight and keeping it directed towards the West. U.S. officials are already warning that Russia intends to ‘meddle’ in U.S. elections this November. In fact, I’m looking for Russia to continue, and perhaps increase, their asymmetric war against the West, especially in using information as a weapon. The West, so far, is primarily interested in appealing to the United Nations, applying sanctions, and other legal and diplomatic measures to rather illegal and undiplomatic activity. Once Putin is re-elected on the 18th, I would look for him to cement his legacy. He likely wants to cause a collapse of the United States similar to the geopolitical effects of what the Soviet Union experienced; a period of time he described as “a major geopolitical disaster of the [20th] century”. That ‘collapse’ probably doesn’t mean a literal collapse of the country, but rather a collapse in diplomatic power, global hegemony, and ability to sting Russia within their own sphere of influence. Putin causes that collapse by, among other things, undermining democracy and trust in government (as we’ve heard, ad nauseum), forming wedges among allies, causing political and societal disruption, and embarrassing the West — and in particular the United States. I’m making no predictions here, other than to say that if the premise I’ve outlined above is accurate, then I don’t expect the “Russia problem” to go away. Embarrassing the president (hint: more leaks?), undermining the administration, and fomenting unrest in the U.S. might all be on the table.


Priority Intelligence Requirements

PIR1: What are new the indicators of systems disruption and threats to critical infrastructure?
PIR2: What are the new indicators of potentially disruptive social, cultural or political conditions or events?
PIR3: How are state and federal agencies preparing for domestic conflict, emergencies, or other instability?
PIR4: What are the new indicators of systems disruption and threats to the economic or financial industry?


PIR1: What are new the indicators of systems disruption and threats to critical infrastructure?

Background briefing on cyberattacks and national security

In a background briefing yesterday, officials from the FBI, DHS, and Treasury Department gathered to talk to the press about what the Trump administration was doing with regard to retaliation against Russia. One official assured reporters that the administration is “[pushing] back in meaningful ways,” and described a few of those ways. Recently, the U.S. officials formally blamed Russia for the NotPetya cyber attacks on Europe, calling them “the most destructive cyber attack in our history”. The attack also affected the U.S., as one Treasury official said: “It resulted in billions of dollars in damage across Europe, Asia, the United States, and significantly disrupted global shipping, trade and the production of medicines. Additionally, several hospitals in the U.S. were unable to create electronic records for more than a week as a result of that attack.”  The official added that, “since at least March 2016, Russian government cyber attacks have also targeted U.S. government entities and multiple U.S. critical infrastructure vectors.”

One DHS official spoke on a series of attacks targeting the U.S. energy sector, presumably the power grid. “This is also an update to a previously issued alert about targeting — an advanced persistent threat actor targeting energy and other sectors. Based on forensic analysis, DHS assess the threat actor sought information on network and organizational design and control systems capabilities within organizations… [T]he campaign is long-term and still ongoing… [A]fter obtaining access, these actors conducted network reconnaissance… and collected information pertaining to industrial control systems, the systems that run our factories and our grid.” A national security officer later attributed this cyber campaign to Russia.

Some details of the campaign are available in a joint Technical Alert issues by the US Computer Emergency Readiness Team (CERT). Among those details is information that Russia targeted “U.S. Government entities as well as organizations in the energy, nuclear, commercial facilities, water, aviation, and critical manufacturing sectors.” The alert also describes “indicators of compromise”, showing how “Russian government cyber actors… compromised victim networks”. [source]

As for retaliation, the Treasury official said, “I just want to make it clear, without getting into details, [sanction efforts are] just one of a series of ongoing actions that we’re taking to counter Russian aggression… There will be more to come, and we’re going to continue to employ our resources to combat malicious Russian activity”.

(Analyst Comment: The most significant take away in all this is that Russia continues to map out our power grid and the locations of industrial control systems. This is in part my reasoning for warning that Russia could or would target the U.S. energy sector in a potential conflict, as a means of disrupting a U.S. response to an invasion of the Baltics, for instance. For decades, nuclear power has been the ultimate deterrent to aggression, but cyber has surpassed the potential for devastation. A series of cyber attacks could cripple the United States, and being so interconnected and interdependent on electricity and the internet, we would have much more to lose in a cyber attack than would Russia. This “network reconnaissance” is a pre-operational phase — essentially intelligence gathering — whereby cyber actors seek to better understand their target networks and vulnerabilities, or stage future attacks. One problem for Russia is that remote access to a lot of these targets is not enough to cause the widespread catastrophic damage they intend — the hurdle for that is physical access. Via access to a control room, or industrial control systems that aren’t internet-facing, Russian hackers, witting agents, or even unwitting agents could cause widespread catastrophic damage through something as simple as a USB flash drive, as was the case with Stuxnet. If Russia were to pursue the “nuclear cyber” strategy, it would almost certainly require this type of physical access and activity. Still, this campaign is quite significant, it’s apparently still active and on-going, and this is a very good reason to prepare for potential systems disruption.)


PIR2: What are the new indicators of potentially disruptive social, cultural or political conditions or events?

The human terrain of immigration makes domestic conflict more likely

One of the cases I’ve attempted to make on Forward Observer Radio over the past several days is that immigration is more than race. Yes, skin color and race are the easiest, cheapest, and most obvious difference to identify, so the Left’s criticism of strict immigration policies quickly devolves into claims of racism. But underneath skin color, race, and ethnicity are a bunch of human factors that aren’t readily apparent. They’re overlooking the differences of language, cultural norms, family values, social mores, political views, opinions of rightful authority, work ethic, attitudes and biases, and these things count when it comes time to vote. In my view, conservatives and those who favor strict immigration aren’t peddling white supremacy, they believe in cultural supremacy.

And that’s very apparent when I see data coming out of Pew Research, which shows that citizens who live under more authoritarian regimes tend to give higher marks on “respect for personal freedoms” for countries like Russia and China. In research published earlier this month, Pew found that citizens of countries like Vietnam, Nigeria, Indonesia, Philippines, Tunisia, Ghana, Kenya, and others were more likely to say that Russia and China respected the personal freedoms of its citizens. [source] One could state the case that the United States is more likely to draw immigrants who want more freedom, but we don’t screen immigrants for those kinds of factors, meaning that we are likely allowing some immigrants who don’t understand, respect, and ultimately assimilate into the values of liberty and freedom described by our founding documents. We certainly can’t expect the public education system to teach these values to second generation immigrants, and the rate of immigration as it is combined with political beliefs that more frequently create Democrat voters means that immigration is absolutely shifting the political landscape. Frankly, this is something conservatives can’t deny, and I believe they’ll ultimately have to choose between losing their country at the national level (i.e., no more Republican presidents within 10-20 years) or creating a new country (or countries) more aligned with their political beliefs. Because of amnesty, which has a decent chance at passing within the next 5-10 years, there’s not much middle ground here.

Study: 29 percent of Americans show support for ‘authoritarian government’

According to research from the Democracy Fund Voter Study Group, 29 percent of Americans say that they support, at some level, authoritarian government, which includes a “strong leader” operating without restraint and elections, or military rule. In fact, the amount of support for military rule has steadily increased over the past 20 years. A large majority of American still prefer democracy to any other form of rule, “[b]ut in the midst of historic levels of polarization and new pressures on our constitutional checks and balances, the reality that more than a quarter of the American public seems open to turning away from democracy should worry anyone who cares about a healthy, responsive political system.” According to researchers, “The highest levels of support for authoritarian leadership come from those who are disaffected, disengaged from politics, deeply distrustful of experts, culturally conservative, and have negative views towards racial minorities.” The researchers point to five factors to explain the support for more authoritarian government:

  1. Donald Trump and the Emergence of Illiberal Populist Demagoguery
  2. Rapid Social Change: Race, Immigration, Globalization, and Inequality
  3. Close Competition Between Two Hyperpartisan Parties
  4. The Disruptive Influence of Technology on Our Democracy
  5. Foreign Interventions Aimed at Undermining Democracy [source]

(Analyst Comment: In one interview, the study’s authors don’t seem too worried, finding some solace in that an “overwhelming majority of Americans choose democracy”. But if the findings of this study are correct, then there’s clearly some resentment towards the system as it is, and it’s one indicator that the wheels could be coming off the country. Roughly 30 percent is a significant part of the population; far more than is required to carry out organized political violence or sustain it should conditions propel the electorate to political violence.)

 

Ferguson shares dire warning for conservatives ahead of the mid-term elections

(1) Author and historian Niall Ferguson was giving an interview about his new book The Square and the Tower – Networks and Power, from the Freemasons to Facebook (which is excellent, by the way), and he spoke about how social media platforms in Silicon Valley are planning to keep drowning out conservative voices:

“If we do nothing, the mid-terms are going to be worse than you already think. A lot worse, because never again will the network platforms in Silicon Valley allow conservative candidates to use them as Donald Trump’s campaign used them in 2016. The sound of heads exploding on November the 9th, 2016, was deafening in California… I don’t think [Trump] would have become president without Facebook… Conservatives are simply going to be at a disadvantage. The algorithm is already, in some ways, skewed against Far Right elements, for sure, but who decides who is Alt-Right and doesn’t belong in the public sphere? … Silicon Valley chief executives decide and if they don’t like the cut of your jib — goodbye, you’ll be on page 10 of the search.” [source]

(2) Sir Time Berners-Lee, credited for creating the world wide web, recently warned that the domination of a few social media platforms is a threat to free speech. “These dominant platforms are able to lock in their position by creating barriers for competitors. They acquire startup challengers, buy up new innovations and hire the industry’s top talent. Add to this the competitive advantage that their user data gives them and we can expect the next 20 years to be far less innovative than the last. What’s more, the fact that power is concentrated among so few companies has made it possible to weaponise the web at scale.” [source]

(Analyst Comment: I haven’t seen the entire Ferguson interview yet, but I’ll watch it this weekend. I can tell you that the book so far has been fascinating, and based on Ferguson’s insights into social networks, both online and face to face, we should take his warning into advisement. Already, we’ve seen fairly mild comments as the reason for Facebook and Twitter bans. Sometimes, as in the case of white nationalist Jared Taylor and his American Renaissance account on Twitter, caustic, derogatory, or harassing language is not even a requirement for a permanent ban. And we’ve also seen “ghosting” and “shadow banning,” through which social media platforms limit the reach and decelerate the virtality of a post. This has far reaching implications, as Ferguson points out, for the reach of political speech in America. Beyond that, we’re already seeing an “Alt-Tech” movement which is building platforms to compete with traditional online social networks. Gab (gab.ai), for instance, competes with Twitter, however, they’ve been unable to get their smartphone app into the Apple app store. Why? Because Gab allows the absolute freedom of speech, to include hate speech and incendiary comments. That goes against Apple’s Terms of Service, and so the absolute freedom of speech is an impediment to Gab’s more widespread use. The Left has come to build and control an entire ecosystem with nearly ubiquitous adoption, and is akin to the bias we see in mainstream media. In fact, social media now competes directly with traditional media outlets, which is why those media outlets push their content through social media platforms. In many ways, social media has decentralized the production of content, but, unfortunately, it still centralizes the flow. And when gatekeepers have a vested interest in closing the gates on certain speech, and opening them for others, we get into the major problem that Ferguson is now warning against.)

Vox: Only gun confiscation will solve gun violence, and other gun data

(1) Vox, the media website, is a cultural bellwether of the Left. Vox pushes Leftist thought, Leftist culture, Leftist politics, and Leftist future, so when they run an article about gun control, our ears perk up. In an opinion piece entitled, “What no politician wants to admit about gun control”, author Dylan Matthews writes:

Realistically, a gun control plan that has any hope of getting us down to European levels of violence is going to mean taking a huge number of guns away from a huge number of gun owners.

Claiming that America’s gun problem is that Americans own too many, the solution is naturally gun confiscation. The author cites a UCLA law professor who says, “Courts have consistently upheld bans on military-style semiautomatic rifles because other firearms are equally useful for self-defense… Gun control isn’t stalled because of the Second Amendment. It’s stalled because elected officials won’t pass effective new laws to reduce gun violence.” Short of outlawing and confiscating guns, the author also floats licenses for gun ownership. Our concern is not immediate; the assault weapons ban is very unlikely to be brought back, perhaps not until Democrats control all three branches of government. We know that progressives ultimately want to ban guns outright, and looking at the demographic shifts leading to a major political shift, it’s only a matter of years before the Democrats can actually threaten significant gun legislation, and it might eventually lead to some form of gun confiscation.

(2) Meanwhile, political ads related to gun ownership are on the rise — a majority of them favoring gun rights — potentially creating a real wedge issue for many races in the 2018 mid-terms and beyond. [source]

 

(3) Lastly on the topic of guns, there’s been a significant increase in the number of political commentators and elected officials calling for lowering the voting age. Just this morning, I saw a video of Rep. Luis Gutierrez (D-IL) implying that millennials would lead the way on gun reform if the U.S. would only lower the voting age. [source] Late last month, Bloomberg columnist Jonathan Bernstein said that teenagers as young as 13 or 14 should be able to vote, while later modestly admitting that teenagers are more likely to vote Democrat than Republican. [source] And the Washington Post most recently ran an article putting forth the notion that student voters would have an impact at the ballot box. [source] In the wake of school shootings — which, although are horrific, are actually pretty rare — prominent Democrat voices are saying that school children should have a say in banning guns for school safety. These are just three of a handful that I can recall reading. This is not yet a serious consideration, but it’s a proposition that’s being taken seriously by some.


PIR3: How are state and federal agencies preparing for domestic conflict, emergencies, or other instability?

House passes school safety act

While school children were out protesting current gun laws on Wednesday, the House passed the School Safety Act (H.R. 1636) which reauthorizes the Community Oriented Policing Services Secure Our Schools grant program. The law would enact a matching grant program and other parts of the Omnibus Crime Control and Safe Streets Act of 1968, aimed at granting funds to reduce crime in schools.


PIR4: What are the new indicators of systems disruption and threats to the economic or financial industry?

U.S. faces $82 trillion entitlement shortfall over the next 30 years

Over the next 30 years, Social Security and Medicare spending will face an $82 trillion spending shortfall. According to the Congressional Budget Office (CBO), the national debt will grow from $20 trillion to $92 trillion over the same period of time. [source] [Analyst Comment: The government has two options: it can enact restrictions, like capping total benefits at total contributions, raising the retirement age, and raising mandatory contributions, or it can do nothing to correct the actual problem. The latter would likely lead to national theft until it leads to national default. French economist Frederic Bastiat (1801-1850) famously referred to government appropriation as “legal plunder” — and one of the federal government’s few options to deal with this massive waterfall of debt is to plunder. We can’t predict which option the Congress will ultimately choose, however, we can certainly identify the primary cause. In his book Collapse: How Societies Choose to Fail or Succeed, author and professor Jared Diamond points out that societies are likely to fail when decision makers are insulated from the consequences of their decisions. Then ask yourself why members of Congress are exempt from Social Security.]

Commerce Secretary on potential of a trade war

Commerce Secretary Wilbur Ross was on Fox News Channel last week to talk down the prospects of a trade war. Here are some of his comments:

I think the president proved by the statements that he made regarding Canada and Mexico we’re not looking for a trade war… Our interests at the end of the day is in the end result. There’s too much steel being produced on a subsidized basis. It’s not fair competition. We need a level playing field, and this is a good start toward getting it. We need reciprocity in trade.

And if every country would rally around, stop the trans-shipment, stop overproduction, stop all these unfair and inappropriate tactics, that would be a great solution. The U.S., through this, is going to start to reassert its leadership in solving trade problems in the world.

Well, anybody who doubts the president’s sense of conviction and his willingness to be very, very aggressive really misses the boat. He is deadly serious… This is the first time an American government has really pushed back on this kind of scale. And it’s taking some of the other countries, both our allies and those who are less allied with us, it’s taking them a little while to realize this is not the old administrations in the U.S. This is a different administration. It’s forceful, it is determined, it’s serious, it’s thoughtful, it’s deliberative about the issues. But make no mistake about it. At the end of the day, we need and we will get lower trade deficits, and we will stop exporting jobs and start exporting more products instead.

 

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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