National Intelligence Bulletin for 29 June 2018 – Forward Observer Shop

National Intelligence Bulletin for 29 June 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… (3,627 words)

  • Survey: Critical infrastructure cybersecurity problems continue in the U.S. 
  • Two critical dams in the U.S. at high risk of insider cyber threats 
  • DHS employees warned about personal safety over family separation policy at border 
  • Leading Democratic lawmaker calls for ‘harassment’ of all Trump administration officials 
  • Shooting at Annapolis newspaper spurs backlash from media against Trump
  • More…

InFocus: While cyber security threats to our critical infrastructure and financial sector remain an issue, the biggest danger facing America today comes from within. Our coarsening political discourse and rising levels of anger are creating conditions for violence not seen in our country since the turbulent 1960s. In fact, some analysts and observers think today’s discourse is worse or, at least, has the potential to become far worse than that earlier time when Vietnam and the civil rights movement created massive political divisions.

There are some who have even made comparisons to the 1850s, the decade leading to our Civil War, when abolitionists and pro-slavery factions actually began a shooting war against each other in states like Kansas and at places like Harper’s Ferry. Today the issue is immigration — or illegal immigration, more accurately. Like abolitionists in the 19th century who sought to free the slaves, one faction today seeks to “free” all migrants and allow them unfettered access to the U.S., for any reason whatsoever. They view immigration law enforcement as the imposition of a cultural and social standard they disagree with. They see ‘federalist’ America-firsters as xenophobic, racist, bigoted people who are trying to preserve the ‘old order’ for themselves by denying opportunity to others. 

There are other similarities. “Sanctuary cities” openly defy federal authorities attempting to enforce immigration law. There are secessionist movements taking place in various parts of the country but most notably in California, which has been ‘at war’ with the Trump administration since Day One. There is open hostility being directed at Trump administration figures and the president himself. There is a siege mentality engulfing the White House when it comes to dealing with an ‘enemy’ media. 

Throughout it all, however, the country is responding more positively to Trump than the opposing faction. His job approval ratings continue to remain high — higher at this point in his presidency than Presidents Obama and Bush at the same time in theirs — meaning the larger ‘federalist pro-union’ faction again outnumbers the rebellious faction. 

That said, there is no reason to believe all of this hostility will simply dissipate. There are too many people — elected leaders, entertainment types, and political commentators — keeping the hate and the rage at boiling levels. Now that Trump has another Supreme Court nominee to appoint — which the Democrats cannot stop — the anger has ratcheted up even more. If Trump’s party does well in the midterms, which for now looks more and more likely, the rage will escalate further and we may begin to see real-deal violence.

If not sooner.

Welcome to this week’s National Intelligence Bulletin. Thank you for subscribing. — JD

[ADMIN NOTE: Samuel Culper is out this week.]

Priority Intelligence Requirements

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

Survey: Critical infrastructure cybersecurity problems continue in the U.S.

A survey conducted by a California-based cybersecurity firm found a disturbing lack of integration of operational with information technology professionals within critical infrastructure facilities in the United States, which could lead to hacking and failures of vital facilities. “Thousands of networked devices installed in critical infrastructure facilities are improving operating efficiency but increasing cyber risk,” said Carey Smith, President of Parsons’ Federal business unit. “The perfect storm has already formed, with more connected devices in the industrial controls environment creating numerous points of access for increasingly sophisticated attacks.” The survey was performed in order to assess the state of cybersecurity risk in U.S. facilities after the Department of Homeland Security noted that cyber crime damage would reach $6 trillion annually by 2021, or about 10 percent of the global economy. Some 90 percent of American critical infrastructure is privately-owned. In the survey, 66 percent of the respondents indicate their organizations are adding more connected industrial internet of things (IIoT) devices to industrial control systems in the OT environment. Seventy-eight percent said they were not highly involved in ICS cybersecurity. [source]

Two critical dams in the U.S. at high risk of insider cyber threats

The Interior Department’s Inspector General released a report recently stating that two of the nation’s five dams deemed part of the national critical infrastructure while seeming secure from being attacked remotely, operate “at high risk from insider threats.” Dams considered part of the national critical infrastructure are the Glen Canyon Dam in Arizona, the Shasta or Folsom Dams in California, the Hoover Dam in Nevada, or the Grand Coulee Dam in Washington State; the report does not name the two dams out of national security concerns. It does, however, list a number of rudimentary cybersecurity practices that were not being followed. These included limiting system administrator access to the control systems and conducting rigorous background checks on individuals’ granted system privileges. [source] Analyst comment: There are an estimated 100,000 dams in the U.S., many of which, were they to be compromised, would threaten millions of people. 

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

DHS employees warned about personal safety over family separation policy at border

Homeland Security issued a warning to all employees they may face increased threats to their personal safety amid backlash over the Trump administration’s border enforcement policies, which for a time included separating children from accompanying adults when they were caught crossing illegally into the country. “In recent days, DHS has determined there may be a heightened threat against DHS employees in response to U.S. Government actions surrounding immigration,” wrote Claire M. Grady, the acting deputy secretary of homeland security, in an email to all employees. “This assessment is based on specific and credible threats that have been levied against certain DHS employees and a sharp increase in the overall number of general threats against DHS employees — although the veracity of each threat varies. In addition, over the last few days, thousands of employees have had their personally identifiable information publically (sic) released on social media.” [source] Analyst comment: Since this email was published by U.S. media, other DHS personnel have been threatened. The department reported that one official living in Washington, D.C., found a decapitated and burnt animal carcass on his porch. Also, DHS and Immigration and Customs Enforcement offices are increasingly being targeted by angry protesters. In such a hyper-partisan political environment, it is easy to see how someone — a civilian or a DHS/ICE employee/agent — could eventually resort to violence for pushing too hard or being pushed too far.   

Leading Democratic lawmaker calls for ‘harassment’ of all Trump administration officials

Last weekend during a political rally, Democratic Rep. Maxine Waters of California called for supporters to harass and molest members of President Trump’s administration wherever they see them. “I have no sympathy for these people that are in this administration who know it’s wrong for what they’re doing on so many fronts. They tend to not want to confront this president or even leave, but they know what they’re doing is wrong. I want to tell you, these members of his cabinet who remain and try to defend him, they won’t be able to go to a restaurant, they won’t be able to stop at a gas station, they’re not going to be able to shop at a department store,” Waters said. “We’ve got to push back. We’ve got to say no. I, for example, have stepped way out there. I said this man needs to be impeached. I know a lot of people think we’re not ready to say that. Some people have said a long time ago he would become presidential. He will never be presidential. This man does not have any good values. I believe he needs to be impeached. As a matter of fact, a long time before he’s doing what he’s doing now with these children. I think he had done enough to undermine this country and to have us understand we cannot trust him, that we should have come with an impeachment resolution. So, I believe we cannot wait until the next presidential election. We have to resist him. I want to see him impeached.” [source] Analyst comment: Waters’ remarks came after White House spokeswoman Sarah Huckabee Sanders was asked to leave a restaurant in rural Virginia, then harassed by the owner of that restaurant as she and her party attempted to dine at another restaurant close by. The remarks also come after DHS Secretary Kirstjen M. Nielsen was forced out of a restaurant in Washington, D.C., by a group of Democratic Socialists, one of whom works as a paralegal for the Justice Department. After being criticized by Trump and members of Congress from both parties, Waters essentially doubled down and refused to apologize. 

We can’t state this clearly enough: This is a direct threat to the health and wellbeing of presidential staff, and it’s surprising given that a year ago a fanatical supporter of Sen. Bernie Sanders’ 2016 presidential candidacy shot and nearly killed House Majority Whip Steve Scalise, R-La. Waters’ strategy may be to separate the president from those closest to him. But it’s a strategy that is putting those same staffers at grave risk. 

Shooting at Annapolis newspaper spurs backlash from media against Trump

On Thursday a single shooter walked to the front of the offices of the Annapolis-based Capital Gazette newspaper and opened fire with a shotgun, according to witnesses. At least five were killed and several others were wounded. A motive had yet to be announced in the hours after the incident but some journalists immediately blamed President Trump’s oft-contrarian rhetoric directed at a press he does not believe treats him fairly. One journalist even blamed conservative author and provocateur Milo Yiannapolous who tweeted, “I can’t wait for the vigilante squads to start gunning journalists down on sight,” to the New York Observer when asked to respond to a separate, snarky story the publication wrote about a New York eatery where Trump, Republicans, and their supporters allegedly gather. Rob Cox, the global editor for Reuters, tweeted out that he held Trump directly responsible, but he deleted the tweet and apologized in another claiming he should not have jumped to any conclusions. [source] [source] Analyst comment: The media is a critical part of our society and can certainly be considered a critical resource that can be weaponized against certain factions of our country. The Russian government has been working to effectively divide American public opinion on a number of issues during the current hyper-partisan times in which we live. That journalists would politicize an act of violence directed at some of their own before investigators have even an inkling of the motivation is a sign of these hyper-partisan times. You can be sure our enemies are watching with interest and learning what triggers us most, for maximum effect.

NSA has ‘wiretap rooms’ used for spying in eight major cities

A published media report claimed this week that the National Security Agency has secret “wiretap rooms” hidden in buildings located in eight major U.S. cities it uses to intercept virtually all electronic communications. The rooms are operated with cooperation from AT&T. Atlanta, Chicago, Dallas, Los Angeles, New York City, San Francisco, Seattle, and Washington, D.C., have been identified as NSA spy hubs. AT&T facilities contain networking equipment that transports large quantities of internet traffic across the United States and the world. A body of evidence – including classified NSA documents, public records, and interviews with several former AT&T employees – indicates that the buildings are central to an NSA spying initiative that has for years monitored billions of emails, phone calls, and online chats passing across U.S. territory. [source] Analyst comment: These new revelations are likely to lead to new calls for transparency from some members of Congress and new privacy legislation from civil liberties groups. But it’s not at all clear that in the digital age the Trump administration and many in Congress want to hamper the efforts of the NSA to monitor communications from around the world that pass through the United States, especially given the cyber threats posed by great and regional powers. One fact lost in dire predictions of a “big brother” government by the media is that neither the NSA nor the 16 other U.S. intelligence agencies have the personnel and the resources — combined — to monitor all routine electronic communications between Americans who are not otherwise suspected of plotting a crime or acts of terrorism. The Constitution’s privacy rights matter, of course, and should always be honored. But there are legitimate security concerns in the cyber- and electronic-digital realm and the NSA is legally empowered to address them.

Media figure refers to Trump supporters as ‘Nazis’ 

In an interview last week on MSNBC, contributor Donny Deutsch said President Trump’s voters who support his border enforcement and immigration policies were “standing at the border like Nazis.” In a critique aimed primarily at Trump’s supporters, Deutsch claimed that if they continued to back the president they were the “bad” guys. “This can no longer be about who Trump is. It has to be about who we are. If we are working towards November, we can no longer say Trump is the bad guy. If you vote for Trump, you’re the bad guy. If you vote for Trump, you are ripping children from parents’ arms. The mistake that we’ve made in the past is, ‘Look at that bad guy over there, look at that bad guy.’ What the Democrats have to do is make the next election a referendum on not who Trump is, but who you are. That’s the big difference. You can no longer now as a voter — because it’s not about taxes, it’s not even about some abstract term of immigration or nationalism. If you vote for Trump then you, the voter, you, not Donald Trump, are standing at the border, like Nazis, going ‘you here, you here.’ ” Deutsch’s comments come amid increasing animosity towards the president, his staff, and his supporters by members of the media and even some elected Democrats (as noted above). [source] Analyst comment: Is the so-called “establishment” press attempting to encourage violence and threaten the civil society? Calling the president a Nazi is inflammatory enough, but to directly insinuate that his supporters are akin to a political organization that killed six million Jews and was responsible for the deaths of millions of others seems like more than just hyperbole. Already, opponents of the president are justifying their increasingly coarse rhetoric and treatment of him, his Cabinet members, and other elected office-holders who support him and his party. It seems to be getting worse.

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

Most cyber security experts don’t think government can defend critical infrastructure

Just 15 percent of cyber security researchers believe the U.S. government is capable of defending the nation’s critical infrastructure against attacks aimed at the energy or financial sectors. Only 13 percent of researchers “believe that Congress and the White House understand cyber threats and will take steps for future defenses,” according to the poll of attendees at the Black Hat cybersecurity conference. Just 15 percent of the researchers believe the U.S. government and private industry are prepared to respond to a major breach of critical infrastructure. Forty-three percent said they believe the biggest cyber security threat to critical infrastructure is posed by another country. [source] Analyst comment: The survey comes as DHS warned in a new report that the U.S. could not adequately defend its CI from a Russian cyberattack. Not that the government should abandon cyber security efforts, but it just may be impossible to defend everything all the time. That means other nations can’t defend their CI all the time, either. That’s not much comfort but it’s no worse than the “mutually-assured destruction” (MAD) concept understood by opposing superpowers during the Cold War when it came to the use of nuclear weapons.  

California approves data privacy bill social media giants opposed

California Governor Jerry Brown on Thursday signed data privacy legislation aimed at giving consumers more control over how companies collect and manage their personal information. Under the proposal, large companies like those with data on more than 50,000 people, would be required starting in 2020 to let California consumers view the data they have collected on them, request deletion of data, and opt out of having the data sold to third parties. Every violation carries a $7,500 fine. While the law affects every business, social media companies especially are impacted because they play an increasing role in collecting such personal data for marketing purposes, mostly. [source] 

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

Immigration changes causing shortages of low-skilled immigrant workers

Record-low unemployment across the country and caps on immigrant workers has created a tight labor market that is having an effect on local businesses that rely on foreign seasonal workers for agricultural and landscaping jobs at below prevailing wages for American workers. Congress has capped the annual number of H-2B visa — for mostly migrant workers — at 66,000, which is split between the winter and summer seasons. Also, workers from previous years used to be excluded but Congress stopped that practice last year. This year, the traditional first-come, first-served system was replaced by a lottery after the government was swamped with applications. Local businesses, meanwhile, have to deal with the fallout, and in some cases a 2.5 percent unemployment rate which leaves them with virtually no to choose from. [source] Analyst comment: To many American small business owners who hire migrant workers, this is a labor issue, not an immigration issue. But obviously it’s both: Not all migrant workers return home after their visas expire, and not all H-2B visa applicants are on the level. Worse, neither party in Congress seems interested in solving the problem, though the president has called on both to do so. They’d rather use immigration, generally speaking, as a wedge issue for votes and political support. At some point, however, the public’s frustration with congressional intransigence will play out at the ballot box, and those seen as obstructing resolution of the issue will be the first to pay a political price.   

Potential trade wars and upcoming midterm elections likely to cause losses on Wall Street

The potential for a legitimate trade war with China has had a negative effect on stocks, with the Dow Jones, S&P 500, and Nasdaq all suffering losses in recent weeks. But because trade issues loom with China, it is increasingly likely that stocks could be further battered for the remainder of the year. While markets historically rise following national elections (the midterms this year), the downturn could last much longer if Washington and Beijing engage in an escalating, tit-for-tat tariff exchange. “Typically on average, what’s happened is the S&P suffers a correction of about 18 percent in mid-term election years, and so what is interesting about that is typically after the election, when there’s more clarity of who is in charge, the market tends to rally,” said Michael Arone, chief investment strategist at State Street Global Advisors. “In fact, every mid-term election year since the 1940s, the market has had a positive return.” [source] Analyst comment: Opinions vary, but we believe the U.S. has the best chance to win a ‘trade war’ against China if it ever comes to that mostly because China relies so heavily on exports to the United States for most of its annual economic growth. That is not to say that the U.S. economy wouldn’t suffer; many goods that come from China are more affordable for American consumers than domestically-produced items if they’re even produced in the U.S. at all these days. At this point, however, we’re not at all convinced that the Trump administration is ready to take this ‘war’ any higher, and the Chinese certainly don’t want to.

Russia, Saudis team up to boost oil production as prices reach 5-year highs

The Russians and Saudis have formed somewhat of an alliance within an alliance — OPEC — to boost oil production by about 1 million barrels per day, but each country had their own self-interested reason for doing so. The Saudis sought the increase in response to calls from President Trump and also from large consumers India and China to help keep prices down somewhat and avoid shortages by year’s end. Russia, meanwhile, was under pressure from its own energy companies to bolster output and avoid sharp increases in domestic fuel prices seen as hurting President Putin’s popularity. [source] Analyst comment: The Russian move helps Putin at home but it also helps Trump as well, ahead of the midterm elections in November. Further, the combined output of the Saudis, Russia, and the U.S. have eroded OPEC’s ability to influence global oil prices and production. Whereby the cartel once controlled 40-50 percent of the world’s supply in the early 1970s, that has decreased to about 30 percent today.

Jon E. Dougherty is a political, foreign policy and national security analyst and reporter with nearly 30 years of experience in both fields. A U.S. Army veteran of Operation Enduring Freedom, he holds BA in Political Science from Ashford University and an MA in National Security Studies/Intelligence Analysis from American Military University.

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