Strategic Intelligence Summary for 08 December 2017 – Forward Observer Shop

Strategic Intelligence Summary for 08 December 2017

Strategic Intelligence Summary for 08 December 2017


Priority Intelligence Requirements:

PIR1: What are the new indicators of political or governmental instability that could lead to collapse or failure?

PIR2: What is the current situation report and risk of war in each of the four flashpoints?

PIR3: What are the new indicators of systems disruption to the economic or financial industry that could lead to instability?

PIR4: What are the new indicators of systems disruption to the critical infrastructure that could lead to instability?

PIR1: What are the new indicators of political or governmental instability that could lead to collapse or failure?

Defense Department still vulnerable to outside threats: IG

Four years after former NSA contractor Edward Snowden’s high-profile leaks of highly classified information, the Pentagon remains vulnerable to insider threats, the Defense Department’s Office of Inspector General noted in a recent report. Employees’ ability to steal and disseminate troves of data has rocked the Pentagon, which has since taken steps to make its data more secure and guard against theft. However, the IG report says, “This access [authorized access to U.S. government resources] can provide insiders a unique opportunity to damage the United States through espionage and unauthorized disclosures of national security information.” The IG says that DoD has made some progress in securing its classified data, but “more progress is needed.” For instance: “Despite efforts to limit insider risks, two contractors working for the National Security Agency removed classified information in 2017, and in at least one instance disclosed classified information detrimental to national security.” [source]

Trump administration considering private spies?

The White House is said to be weighing whether to use a private spy network in order to circumvent U.S. intelligence agencies at a time when politically motivated leaks are increasingly becoming a problem for CIA Director Mike Pompeo and President Trump. Supporters of the plan say it is a means of countering “deep state” operatives who are aligned against the Trump White House. “Pompeo can’t trust the CIA bureaucracy, so we need to create this thing that reports just directly to him,” said a former senior U.S. intelligence official with firsthand knowledge of the proposals, in describing White House discussions. “It is a direct-action arm, totally off the books,” meaning the intelligence collected would not be shared with the rest of the CIA or the larger intelligence community. “The whole point is this is supposed to report to the president and Pompeo directly.” The proposals were ostensibly developed by Blackwater founder Erik Prince and a retired CIA officer — with assistance from Oliver North, a key figure in the Iran-Contra scandal. North was specifically tapped to sell the idea to the administration because of his previous experience as a national security operative for the Reagan administration. The White House has denied involvement or knowledge of the alleged plans, but there are other indications it could be legitimate. Prince has ties to the White House — he’s a major donor to the Trump election campaign and to Vice President Mike Pence, and his sister, Betsy DeVos, is Trump’s education secretary. Also, he advised the transition team on intelligence and defense appointments. [source]

PIR2: What is the current situation report and risk of war in each of the four flashpoints?

South China Sea SITREP

China is continuing to fortify its ‘claims’ in the South China Sea

Early this week we reported on The Watchfloor that Chinese state media has confirmed for the first time the existence of J-11B fighter planes on Woody Island, which is part of the contested Paracel chain. This is a significant development for a number of reasons.

First, it should be noted that China has deployed these fighter jets, which are capable air-superiority aircraft modeled on the Russian Su-27, to the island in the past, but did not base them there permanently because of the harsh tropical climate. That problem has since been addressed. Chinese media reported that “thermostabilized” hangars have been built, improving “the jet fighters’ durability and resistance to the island’s humidity and high temperatures.” “The special hangar helps to realize regular deployment of fighter jets in the Xisha Islands,” the Global Times quoted commentator Song Zhongping as saying.

Then Song said, “Other islands in China could also use such aircraft hangars and China’s overall control of air and sea in the South China Sea would be greatly improved as well.” An important admission, because it indicates China’s long-term objective of ‘controlling’ the airspace and sea lanes regionally. The addition of the fighters, with a range of more than 2,000 miles, is a significant improvement in the capability to accomplish Beijing’s South China Sea objectives.

In addition to the planes, China has also maintained HQ-9 surface-to-air missile systems on Woody Island and has also deployed anti-ship cruise missiles there on at least one occasion.  [source]

But Woody is not the only island being militarized and fortified by China. And China didn’t just start fortifying them. As early as January 2015 reports noted that China had begun constructing at least five manmade islands in the South China Sea. “Dredging around Fiery Cross Reef, a former outcropping in the Spratly Islands, over the last year has created a new island nearly 2 miles long and several hundred yards wide. U.S. officials say it is large enough for China to build its first airstrip in the remote archipelago, one long enough for most of its combat and support aircraft. Satellite photos also reveal a small port under construction.”

“China appears to be expanding and upgrading military and civilian infrastructure — including radars, satellite communication equipment, antiaircraft and naval guns, helipads and docks — on some of the man-made islands,” according to a report in December 2014  by the U.S.-China Economic and Security Review Commission, which was set up by Congress. [source]

Outlook: The Chinese media report that discussed the J-11B deployment also noted that China needed to build similar hangars on other islands, which is Beijing telegraphing its intentions to do just that. Bottom line: China has spent no small amount of money and is dedicating a sizable portion of its military resources to these island fortresses, meaning it isn’t going to simply relinquish its claims on an entire body of water that just happens to see about $5 trillion worth of commerce annually.

Militarily it doesn’t seem like a smart play in the age of stealth bombers and long-range ballistic missiles to build a fixed military base in the middle of the ocean. But China is gambling that its regional rivals (think Japan, Australia, and India, primarily) aren’t going to be powerful enough anytime soon to dislodge her, and the U.S. won’t risk war with the Asian behemoth, giving it de facto control over all of the South China Sea, and thus allowing China to make the rules — economically and militarily.

But we don’t see this as something the U.S. can or will tolerate indefinitely. Or India, which is already jittery about China’s growing military power. Or global trade. Something will have to give, and we’re betting it’s going to have to be China, sooner or later.

That said, it’s obvious China’s dead set on making good on its claims to one of the world’s most profitable sea lanes.


Russia may once again be focusing on mass mobilization

Judging by the actions and comments of the federal government and local officials, it appears as though they’ve decided Russia has entered a new phase of confrontation with NATO and the West and as such must prepare for war. On Nov. 22 during a meeting with the defense ministry and defense firms, President Vladimir Putin said one of the main goals of the recently-completed Zapad (West) 2017 exercises, which provoked a negative reaction from NATO member countries, was to evaluate “our mobilization readiness and the ability to use local resources to meet troop requirements.”

Continuing, Putin said, “Reservists were called up for this exercise, and we also tested the ability of our civilian companies to transfer their vehicles to the armed forces and provide technical protection to transport communications.”

That differs from Moscow’s ‘official’ description of the exercise, said to have involved only about 12,700 troops. Clearly, Putin’s statement denotes that the exercises were far more in-depth and comprehensive. For instance, nothing was said prior to or during the September exercises that there was a mass mobilization of reserve forces. In fact, local media in the Kaliningrad region reported mobilization had been conducted in secret, noting that reservists were required to sign non-disclosure agreements.

The call-up of reservists was thought to be a substitute for having to transfer troops from elsewhere around Russia. However, in addressing the defense industry and defense ministry, Putin noted that the mobilization activities during Zapad 2017 were not successful and had to be corrected.

Putin also said this during his address: “I want to say that the economic ability to increase the production of defense products and services quickly is a vital element of military security. All strategic and simply large companies, regardless of the type of ownership, must be able to do this.” That suggests that he would return the country to the Stalin-era model of a mobilization economy.

Josef Stalin required every Soviet industry that produced civilian goods to be able to also switch to military production during a prewar period — a policy and concept that allowed the Soviet Union to quickly mobilize and produce combat gear and military supplies during World War II. That said, the same concept also led to the economic collapse of the Soviet Union, as “civilian” enterprises were required to create and maintain redundant production lines and hire the extra workforces to staff them, while keeping a large reserve of strategic materials, all of which was expensive. (Source: Jamestown Foundation’s Eurasia Daily Monitor, December 6, 2017 — Volume 14, Issue 158.)

Outlook: Some have suggested that Russia may not actually be ramping up to a war footing, but there are few reasons to believe this isn’t the case. For one, preparing the country for war can only be done in the context of there actually being an enemy lurking, and in this case that would be NATO — a scenario that helps Putin as he seeks the presidency once again.

And while public statements by Putin — such as his desire to move away from a conscript army — seem to contradict the notion that Russia is moving to a war footing, it’s clear that there is likely a struggle going on behind the scenes as to whether the country should adopt the mass-mobilization model of defense. Economically it does not make sense, given the expense of doing so, especially while Russia suffers under the weight of economic sanctions from the U.S. and elsewhere.

But to secure power once again, it makes perfect sense for Putin to create a Western bogeyman, if nothing else. And putting Russian industry on notice that it may soon be required to produce war stocks is practical as well, given the current threat environment.

Middle East SITREP

Israel enforcing its ‘red line’ against Iran

In the early morning hours of December 2, reports across the Middle East claimed that missiles had struck an ammunition storage warehouse south of the Syrian capital of Damascus. Almost immediately, foreign media blamed the strike on Israel. But unlike previous strikes, some of which Israel has publicly admitted to carrying out, the strike in question was launched against a site that was well known.

The attack or, rather, the timing of the attack, raised questions in some Israeli circles: Since the site was so well-known to belong to Iranian forces, why did it take so long to target, and why was it only targeted well after other published reports acknowledged its existence?

For more than a year region and Western media had been reporting that Iran intended to expand its military presence and influence in Syria once President Bashar al-Assad’s forces, with Russia and Iranian proxy help, beat back ISIS and Syrian rebels. For instance, one Western source reported specifically that Iran was “building a permanent base in Syria.” This report was accompanied by three satellite images showing gradual construction over the course of several months.

The site was located some 50 km (approx. 31 miles) from Israeli forces on the Golan Heights. Previously, Israeli military officials and government leaders had said they would never allow Iran to establish a permanent military foothold in Syria from which it could launch strikes or offensives into Israel proper.

Next thing we know, the Dec. 2 early morning missile strike occurred. Russian and Middle Eastern media reported that Israeli warplanes carried out the strike, targeting several sites near the Iranian base in the El-Kiswah area.

“The attack raises several questions. Why wait so long to strike the Iranian base? What did “western intelligence sources” hope to accomplish by publishing information on the Iranian base? Why were the Iranians at the site given time to leave by their base becoming so public?” [source]

By Dec. 5, we got more confirmation of the attack. Israeli satellite company ImageSat International published images purporting to show destruction at what was positively identified as an Iranian base, complete with battle damage. The follow-up report estimated that according to the amount and type of buildings at the base, it could hold as many as 500 troops. Several additional Arab media reports noted that strike killed at least a dozen Iranian military personnel. Said Israeli PM Benjamin Netanyahu: “We will not allow a regime hell-bent on the annihilation of the Jewish state to acquire nuclear weapons. We will not allow that regime to entrench itself militarily in Syria, as it seeks to do, for the express purpose of eradicating our state.” [source]

A separate intel community source confirmed to us that the strike did indeed occur, and that Syrian air defenses targeted Israeli warplanes during the strike, unsuccessfully.

Outlook: If indeed Israel is responsible for this strike — and by all accounts we’ve seen thus far, that appears to be the case — the Jewish state just sent its strongest signal to date to Tehran that it won’t allow Iranian forces to set up camp so close to Israeli borders. This attack, coupled with President Trump’s announcement this week that the U.S. would be moving its embassy to Jerusalem in recognition of the being the Israeli capital, means the Middle East is the most likely hotspot for a new conflict out of all the other PIRs.


North Korea SITREP

Expect a North Korean crisis in 2018

As we reported last week, this PIR 2 hotspot became much more likely to erupt into full-scale war following Pyongyang’s test of an ICBM analysts believe is capable of striking all of the U.S. That assessment has not changed. In fact, by next year we should probably expect a full-blown crisis on the Korean peninsula, based on what we believe are a couple of certainties.

For one, North Korea isn’t going to stop testing ballistic missiles. The missile fired last week was the 89th test since Kim Jong-un assumed power six years ago, so that’s not going to stop. For another, it’s becoming obvious that economic sanctions are never going to work because as we’ve reported in this space and on the Watchfloor in recent months, China and Russia — neither of whom have an interest in helping the U.S. out or having an American ally on their borders — is going to do all they can to ensure that the regime in Pyongyang is completely cut off. Besides, Kim would starve his own people (as has happened in the past) in the pursuit of his nuclear weapons capability.

Which brings us to a third certainty: If the North does indeed successfully develop that capability, President Trump will find a way to destroy it, one way or another — either by secret op or full-on preemptive strike. We believe him and every single one of his top national security advisors when they say they will never allow Pyongyang to threaten Washington or the American nation with a nuclear weapon. “No U.S. president, and certainly not Donald Trump, will put the security of New York, Chicago and Los Angeles into the hands of Kim Jong-un,” says one analysis. [source]

This all means we are very likely going to face a crisis on the Korean peninsula by mid-2018 on a scale similar to the Cuban missile crisis of 1962.

Outlook: Kim is not simply working on a land-based nuclear weapons capability, he’s also working to develop a submarine-launched capability as well, and there is some evidence to suggest he’s getting assistance either from China, from Russia, or both. And again, know this: Moscow and Beijing have no interest in helping the U.S. absolve itself of this threat, despite what their leaders say in public or even to Trump’s face.

Once the North conducts an atmospheric test of a nuclear warhead, as we and many others expect them to, the clock should begin ticking in Washington for a military solution, the Trump administration having figured that all else, by then, will have failed to bring Kim to heel.

Defense in brief:

Air Force

Smart bombs away

Raytheon has been tapped to build the F-35A’s new smart bomb, following the awarding of a $60 million contract. The company is tasked with integrating the new GBU-49 Enhanced Paveway II, a laser-guided smart weapon, into the stealth aircraft. The contract calls for 1,200 guidance kits for the bomb, which is designed to strike moving targets, in addition to hardware testing, logistics, engineering, and technical data support. “The F-35 is operational and combat ready, and integrating the GBU-49 with the aircraft makes the F-35 even more lethal than it already is,” Brig. Gen. Todd Canterbury, director of the Air Force F-35 Integration Office, said an official release. The bomb will allow the F-35A to strike moving targets when integrated into the plane’s Block 3F, scheduled to be added in 2018. Flight testing is scheduled to begin this month. [source]


Navy not ready for prime time in a major war: Officials

How would the U.S. Navy hold up in a major war? Not well, according to former experienced ship captains and former Deputy Secretary of Defense Bob Work. “Navigation and seamanship, these are the fundamental capabilities which every surface warfare officer should have, but I suspect if called to war, we’ll be required to do a lot more than safely navigate the Singapore Strait,” where the destroyer USS McCain collided with an oil tanker, said retired Capt. Kevin Eyer, former skipper of the cruisers Shiloh, Chancellorsville, and Thomas Gates. “If our surface forces are unable to successfully execute these fundamental blocking and tackling tasks, how can it be possibly be expected that they are also able to do the much more complex warfighting tasks?” Long and short: We’re good at battling pirates and firing cruise missiles at static targets, but not some much at fighting and beating a near-peer competitor’s naval forces, like China or Russia. [source] (Analyst comment: Years of continuing resolutions in place of actual annual budgets, along with the Budget Control Act of 2011, have combined to substantially reduce U.S. military readiness overall, and at a time when the world is becoming more dangerous and unstable. Too much to do and not enough training and warships to accomplish the mission has led to more deaths at sea from naval accidents — the being the most obvious sign the Navy is at its breaking point.)


Artificial intelligence comes to the Stryker Fighting Vehicle

Army weapons developers have completed a “proof-of-principle” exercise with Strykers using wireless devices along with faster computing speed, cloud technology and AI to speed up vehicle health monitoring and to anticipate future needs for the weapon platform. The testing was linked to the Army’s recent $135 million Army Logistics Support Activity renewing of a deal with IBM, which is providing the cloud services, software development and cognitive computing. “We see huge potential benefits with cloud computing from artificial intelligence,” Col. John Kuenzli, LOGSA commander said. The report noted further: “The concept behind the exercise with Stryker vehicles is to use AI to accelerate development of a fast-moving, data analytics-based wireless connectivity between sensors used for conditioned-based maintenance (CBM) and corresponding data analysis.” [source] (Analyst Comment: AI will make Strykers — and all weapons platforms — more lethal and survivable.)

How the Army plans to fix its vulnerability to space attack

Army planners know ground forces would become much more vulnerable to enemy formations if they lost their ability to rely on space-based assets. Concern has only grown at a time when Russia, China and other nations are working to develop anti-satellite weapons. So to fix the vulnerability, the Army is, in part, reintroducing…map reading. With paper maps. You know, like land navigation. [The Navy is doing something similar — they’re breaking out their sextants.] “A lot of folks, when you say ‘degraded GPS’ or ‘contested GPS,’ immediately think about, ‘Oh, you’ve got to get back to your map-reading skills,’” said Col. Rick Zellmann, the commander of the U.S. Army’s 1st Space Brigade. “But they don’t think of some of the nuanced parts of degradation of GPS and what that means.” If an adversary were to deny Army units access to space-based assets over the long term, it would force a change in the way troops fight. Satellite-fed systems like drones and communications would have to be replaced by terrestrial radios, for instance. It would also mean loss of precision-guided weapons that rely on satellite feeds. [source] (Analyst comment: The Russians are apparently concerned about the same thing. They reportedly practiced map-based land navigation during the Russian military’s recent large-scale Zapad-17 exercise.)

Marine Corps

Assault ship shortage harming readiness

Senior Pentagon officials said this week that the Navy does not have enough ships to train Marines adequately or effectively. Marine Lt. Gen. Brian Beaudreault, the deputy commandant for plans, policies and operations, said the current number of 32 amphibious assault ships is inadequate to meet the number necessary to meet all operational requirements. As such, the shortfall negatively impacts the ability of joint naval forces to train, especially in large formations, which harms readiness. We can do some training…through virtual systems, but at some point you have to put the ships to sea and go through a mission rehearsal,” he testified to the House Armed Services Subcommittee on Readiness. “The ability to generate the number of ships required to train at a Marine expeditionary brigade level just simply isn’t there, so we take it in bite-size chunks.” He added the Navy and Marine Corps need 38 assault ships to meet rising operational demands, but the Navy isn’t likely to reach that number until 2030 due to budget constraints. [source] (Analyst comment: In a pinch, no doubt the Navy could scrounge up some amphibious assault ships in an emergency to meet war demand, but the problem in the meantime — without those extra ships — is that not enough Marines are getting enough training, making the “ready bench” less deep.) 


PIR3: What are the new indicators of systems disruption to the economic or financial industry that could lead to instability? 

It’s getting harder to tell state-sponsored cyber warriors from cyber criminals

FBI Director Christopher Wray told the House Homeland Security Committee last week that U.S. intelligence is seeing a divergence of cyber crime and state-sponsored hacking, as the lines between the two are getting blurrier. That’s the one message the FBI wanted to send when it indicted a pair of Russian intelligence officers and two co-criminal defendants following a major breach of the Yahoo email service in March, Wray said. “We are seeing an emergence of that kind of collaboration which used to be two separate things — nation-state actors and criminal hackers. Now there’s this collusion, if you will.” Acting Homeland Security Secretary Elaine Duke said her department is following the trend. “What we’re having to do is really understand, as the director said earlier, the difference between state actors, people [who are] maybe just looking for financial gain and those hybrid actors and that’s become more difficult,” she noted. DHS leads civilian government cybersecurity and helps critical infrastructure providers, such as airports, banks and hospitals, secure their computer networks. U.S. intelligence and law enforcement officials have long believed that Russia-based cyber criminals could be empowered by the Kremlin to do its cyber-bidding. [source]


PIR4: What are the new indicators of systems disruption to the critical infrastructure that could lead to instability?

Thousands participate in grid security incident response exercise

More than 6,000 people representing some 400 electric power companies and government organizations across North America participated recently in a North American Reliability Corporation (NERC) energy grid and security incident response exercise recently. The drill, GridExIV, was a two-day even that analyzed organizations’ and companies’ responses to an incident affecting the power grid. “Protecting the nation’s energy grid and ensuring a reliable supply of energy are top priorities for the electric power industry,” Edison Electric Institute (EEI) President Tom Kuhn said. Past exercises have led to the adoption of policies and procedures aimed at mitigating a grid emergency, such as might be created by a hack or nuclear attack. [source]

One possible solution to protecting power infrastructure

A proposed microgrid at Great Falls in New Jersey will help ensure survivability of critical infrastructure such public safety and medical centers during blackouts — accidental or caused by hacking/cyberattack. Richard Mroz, president of the New Jersey Board of Public Utilities said that the organization will provide $173,000 in funding to the city in order to conduct a feasibility study to transform the existing hydroelectric plant there into a microgrid that will provide power to vital government and school district buildings, should the existing grid go down. “As we learned from Superstorm Sandy, keeping diverse critical facilities such as medical centers, police and fire departments, shelters and schools powered and operational is critical during a natural disaster,” said Mroz. “I’m excited this project proposes to use the historic Great Falls as a central component of the town center microgrid. In doing so, we will build upon Thomas Edison’s Electric Company plan of a 4,849-kilowatt hydroelectric facility that operated from 1914 until 1969.” [source] (Analyst comment: This is definitely an “outside the box” solution, as noted by Rep. Bill Pascrell, who supports the idea. Without power we would be forced to live an 19th century life in the 21st century, and frankly, the percentage of Americans who could do that long-term is smaller than the percentage of American who have or are serving in the armed forces — currently around 7 percent. What we can’t do is study this to death; if this proof-of-concept works out, hopefully it will be rapidly emulated nationwide.)

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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