The Ridiculous — and Chilling — IP3 Plan for Saudi Economic Diversification

Last week, I pointed out that the retired military generals of IP3, one of the companies that Michael Flynn dabbled with while looking into Saudi Arabia’s plan to develop nuclear power, viewed the US strategy in the Middle East as one of “resourcing conflict“.  I then looked a bit further into the security aspect of IP3’s proposals. But as we see in slide 9 of the IP3 PowerPoint presentation for the Saudi king from August of 2016, IP3 derives its name from “Peace” (the security plan), “Power” (the nuclear power plant construction) and “Prosperity”:

It seems that IP3 views “Prosperity” as encompassing diversification of the Saudi economy, and that somehow it will come about from the lower costs involved in nuclear power, a newly skilled workforce, water desalination and a “smart city”. But, if we also look at the IP3 article at Medium that I found earlier, we see more information on this economic plan. In fact, part of it is found in the same sentence as the “resourcing conflict” phrase:

We need a strategy that doesn’t rely solely on resourcing conflict with weapons sales, arms agreements, or new deployments of U.S. military forces, but one of empowerment through the intellectual capital and industrial might of our nation’s private sector.

Let that soak in for a second: we are talking here in the context of diversifying the Saudi economy, and IP3 is saying that the Saudis will be “empowered”, but that will come about “through the intellectual capital and industrial might of our nation’s private sector”. It’s the business brainpower and the actual businesses themselves from the US that are to drive building a vibrant Saudi economy that relies on more than just oil. From another part of the article:

The people of the Middle East and North Africa need clean, reliable electricity. They need water. They need more career opportunities, and jobs that do not rely on fossil fuel exports alone. They have bold ambitions for a more prosperous future and more inclusive societies.

Note also that this pitch from IP3 is meant to provide the US as an alternative to growing Russian influence in the Middle East. The PowerPoint presentation suggests working with China, although the Medium article proposes a US-only plan. [Side note: I’m currently very deep in the rabbit hole of the various corporate groups and their changing alliances through the past few years, along with the various power plant agreements that countries in the area have executed to date. It’s very complex and has changed very many times. If I find anything useful in the analysis, especially how Flynn fits into the various groups, it will be another post in this series.] In that context, IP3 laments that the US is at a disadvantage, because the competing operations from Russia and China are state-supported:

As a recent report from the Carnegie Endowment for International Peace notes, both countries “receive significant state support for their ambitious technology export plans,” …

It really seems that what IP3 wants is a situation in which the the company gets all the benefits of “free enterprise” but also enjoys the sizable advantage of being the “chosen one” to get the imprimatur of the US government so that competing groups are excluded. That would explain why Flynn faces so much more potential legal trouble if the reports of him continuing to push one or more of the competing proposals once he became National Security Advisor turn out to be true, especially if he still stood to profit from the work.

But why nuclear in the first place? Of course, peak oil is coming, and so the Saudis know they have to wean themselves from their dependence on oil for domestic energy consumption. The World Nuclear Association gives some hard numbers for Saudi needs and the evolution of their plans for diversification:

Saudi Arabia’s population has grown from 4 million in 1960 to over 31 million in 2016. It is the main electricity producer and consumer in the Gulf States, with 338 TWh gross production in 2015, 150 TWh from oil and 189 TWh from gas. It consumes over one-quarter of its oil production, and while energy demand is projected to increase substantially, oil production is not, and by 2030 a large proportion will be consumed domestically, much of it for electricity generation. Its per capita consumption is about 9000 kWh/yr, heavily subsidised.

Generating capacity is over 30 GWe. Demand is growing by 8-10% per year and peak demand is expected to be 70 GWe by 2020 and 120 GWe by 2032, driven partly by desalination increase.

I was pretty surprised by this. I viewed Saudi oil production as being much larger than domestic consumption, so the fact that they already consume a quarter of their production and their domestic generation capacity will need to expand up to four fold in only 15 years puts them on the brink of catastrophe. Their planning to diversify has started, but changed recently:

It had plans to install 24 GWe of renewable electricity capacity by 2020, and 50 GWe by 2032 or 2040, and was looking at the prospects of exporting up to 10 GWe of this to Italy or Spain during winter when much generating capacity is under-utilised (cooling accounts for over half the capacity in summer). The 50 GWe in 2032 (later: 2040) was to comprise 25 GWe CSP [Ed note: CSP = Concentrated Solar Power], 16 GWe solar PV, 4 GWe geothermal and waste (together supplying 150-190 TWh, 23-30% of power), complementing 18 GWe nuclear (supplying 131 TWh/yr, 20% of power), and supplemented by 60.5 GWe hydrocarbon capacity which would be little used (c10 GWe) for half the year. The nuclear target date has now been put back to 2040. In 2016 renewables targets were scaled back from 50% to 10% of electricity (by 2040?) as plans shifted more to gas, so that it would increase its share from 50% to 70%.

That earlier plan looked pretty reasonable, with most of the increases in power generation coming from a mix of renewable sources. But that all changed in 2016, with renewables getting cut substantially, from a 50% target down to only 10% and the share of generation accounted for by natural gas actually increasing from 50% to 70%. So what happened to cause this switch away from renewables and back to natural gas (even while some of the discussions on nuclear are continuing)? [Note that a 1.2 GWe solar power plant is opening soon elsewhere in the Middle East, so the Saudis are falling behind on solar.] For one thing, the price of natural gas dropped by about 60% from early 2014 to the beginning of 2016. That timeframe also coincides with the rising influence of Mohammed bin Salman, as his father became king in 2015 and MBS was named Crown Prince this summer.

As Vox explained to us recently, MBS’s “purge” was all about Saudi life after oil. But like his best buddies in the Trump Administration, he can’t really seem to get anything right. Note that gas prices have now re-stabilized at only about 25% lower than they were during most of 2013 to 2015. Also, remember the “smart city” in the IP3 presentation? Bruce Riedel described that and other bits of MBS’s “reforms” to the New Yorker:

“The Saudi Vision 2030 is increasingly turning out to be a failure in economic terms. It has more and more the characteristics of a Ponzi scheme. This new city, Neom, in the Gulf of Aqaba that is supposed to attract five hundred billion dollars of investment and where normal rules of Saudi society aren’t going to apply—meaning women can do things—will have more robots than people. This isn’t serious. This is the kind of thing used to divert people from the real issues,” Riedel said.

The Crown Prince’s regional strategy has also either stalled or backfired, too. “His signature policy is the Yemen war, which has come home to haunt Riyadh,” Riedel, now at the Brookings Institution, said. “Its Qatar blockade is a failure. It wants Qatar to be like Bahrain, just an appendage. And Qatar hasn’t given in.”

That’s pretty much how it seems to me, too. I really don’t buy any of the lip service that the changes MBS is bringing about are aimed at bringing more liberal thought into the kingdom or improving the lives of the general population. I see a huge power grab at a level that makes Trump and MBS buddy Kusher jealous. A purge that results in torture of those detained looks much more like consolidation of power than a move toward a more open society.

And that’s why the collection of technology aimed at “security” of the proposed nuclear sites makes me think it’s all about keeping the population in line as more and more rivals are eliminated. I also think that’s why various US companies have been jostling to be in line when contracts start getting handed out.

As a postscript, I would also note this Intercept article on Erik Prince and the push for privatized intelligence sources. Recall I felt like he had a hidden hand in the Iron Bridge model of security ostensibly around the power plants, as well. Somehow, all these plans with private companies and governments working together in new areas starts to get pretty creepy.

Retired Generals of Flynn-Associated IP3: “United States Mideast Strategy Is Resourcing Conflict”

Yesterday, I decided that I should take a deep dive into a couple of issues that are playing big roles in current political drama: the Middle East nuclear power plant plans that Michael Flynn “represented” in some travel but did not note in his security disclosures and the manufactured controversy over Uranium One. I’m still reading and hope to post regularly on these and other topics, but want to point out one passing reference that made my jaw drop.

In Monday’s Washington Post article on Flynn’s troubles, we have this passage:

Around June 2016, according to his financial disclosure, Flynn ended his association with ACU and began advising a company called IP3/IronBridge, co-founded by retired Rear Adm. Michael Hewitt, a former ACU adviser.

IP3 initially proposed partnering with China and other nations, rather than Russia, to build nuclear power plants, according to a company spokesman, who said the China component has since been dropped.

In August 2016, the company produced a PowerPoint presentation that included Flynn’s photo and former government title on a page titled “IP3/IronBridge: Formidable US Leadership.” The document was labeled as a “Presentation to His Majesty King Salman Bin Abdul Aziz” of Saudi Arabia and displayed the seals of Saudi Arabia and the United States. The presentation was obtained by Democrats on the House Oversight Committee, who made it public.

After reading this, I started digging a bit into IP3, to see what they have been up to. I found this fascinating piece in Medium, written by the all-star trio of Jack Keane, Keith Alexander and Bud McFarlane. The article dates from October 31 of this year, so it comes over a year after the PowerPoint referenced in the Post article. The Medium article opens with the basis for the US-Saudi relationship going back more than seven decades:

In 1945, President Roosevelt and King Abdul Aziz of Saudi Arabia forged a partnership under which the United States provided security for the Kingdom to assure the flow of oil to global markets. While the United States has never wavered from this commitment through 13 Presidents and 6 Saudi monarchs, the core themes of arms and oil alone no longer cover the full scope of our countries’ goals and mutual interests.

That’s pretty blunt language, but yes, the core theme of US-Saudi relations does indeed seem to be “arms and oil”. But a bit further down, we have this:

Any new U.S. strategy for the Middle East will fail unless we move beyond fighting terrorism or reacting to the influence of evolving regional encroachment from Russia and Iran. The United States must approach the Middle East in ways that promote diversified, strong economies. We need a strategy that doesn’t rely solely on resourcing conflict with weapons sales, arms agreements, or new deployments of U.S. military forces, but one of empowerment through the intellectual capital and industrial might of our nation’s private sector. We must better enable the stabilizing visions of our GCC partners, Egypt, Israel, and Jordan as part of a reimagined Middle East economy.

I have to admit that on my first reading of this paragraph, I chuckled. I was convinced that it contained a very revealing typo. I mean, surely these retired generals would never just come out and say that the US strategy in the Middle East is to “resource conflict”, would they? Didn’t they mean that the weapons sales, arms agreements and troop deployments are aimed at resolving conflicts even though they certainly provide the resources to prolong them? That’s how the US presents these moves, after all. Who even uses “resource” as a verb anyway?

I continued in my reading, and in this copy of a letter from the Democrats on the House Oversight Committee posted by Politico (always read the footnotes; the URL is in footnote 21) I hit paydirt with the URL for IP3 PowerPoint referenced in the Post article above. Here is the slide that the Post refers to on the IP3 team including Flynn:

That is slide number 3 in the presentation. Here is slide number 5:

And there we have it. The Medium article did not have a typo. Over a year earlier, the PowerPoint says the US should “shift toward resourcing stability” rather than resourcing conflict. I find that to be a remarkably candid statement, considering who is saying it.

For quite some time, my line on US strategy for any trouble spot in the world has been that the US asks “What group can we arm?”. Here we have a huge collection of retired generals saying very much the same thing in slightly different language. I follow my observation by saying our question should rather be “What can we do to address the concerns of those who are moved to violence in this trouble spot?” And again, this group is offering their alternative. I see this as a massive improvement in outlook and perhaps a bit of slowly dawning self-awareness on behalf of the generals for what their actions have wrought.

Of course, once we dive into the IP3 team’s vision for how we “resource stability” things go right back to the track history of these generals proposing policies that are almost the exact opposite of what should be done. But that is fodder for later posts.

Just a couple of closing notes seem in order. First, it is clear from the committee letter in which I got the PowerPoint URL that the file actually was sent to the committee by an employee of ACU, which is a competitor of IP3. Further, the cover slide contains the cryptic note “2016 MSH Proprietary and Confidential”. I haven’t found an explanation for “MSH”. I thought it might refer to Michael Hewitt, but his middle initial is W. It doesn’t seem to fit any of the companies involved or the ACU employee who sent the file.

Also, in all the articles I’ve read about Flynn’s involvement in this effort, it appears that he consistently and publicly advocated for the building of the power plants to avoid Russian involvement and to be undertaken as an approach to reducing Russia’s influence in the Middle East. That makes Flynn’s June 2015 trip sponsored by ACU very confusing, since ACU is the group advocating Russian involvement in the building and running of the power plants. It would, however, align with his move to IP3 once it was formed. Also, the stories now seem to suggest that within the White House, IP3’s approach was quashed based on Flynn’s conflicts of interest rather than any White House preference for Russian involvement in building the plants. Will that story change? After all, Russia eventually got the contract for Egypt.

[US Oil Fund ETF via Google Finance]

The Curious Timing of Kushner’s visit to KSA and the U.S.’ EITI Exit

Trump’s son-in-law Jared Kushner — he of the shaky memory and a massive debt in need of refinancing — met with Crown Prince Mohammed bin Salman within the same week the U.S. withdrew from an anti-corruption effort and Saudi Arabia cracked down on corruption. What curious timing.

Let’s look at a short timeline of key events:

Tuesday 24-OCT-2017 — Saudi Arabia’s Crown Prince Mohammed bin Salman helms a three-day business development conference at the Ritz-Carlton in Riyadh, referred to as “Davos in the desert.” Attendees include large investment banks as well as fund representatives; one of the key topics is the impending IPO for Saudi Aramco.

Wednesday 25-OCT-2017 — Jared Kushner departed for an unpublicized meeting with government officials in Saudi Arabia.

Wednesday 25-OCT-2017 — Treasury Secretary Steve Mnuchin and Undersecretary for Terrorism and Financial Intelligence Sigal Mandelker traveled separately from Kushner to participate in bilateral discussions, which included the memorandum of understanding with the Terrorist Financing Targeting Center (TFTC). The U.S. and Saudi Arabia chair the TFTC while Gulf States form its membership.

Friday 27-OCT-2017 — Reports emerged that at least one Trump campaign team will be indicted on Monday.

Monday 30-OCT-2017 — Jared Kushner met with Crown Prince Mohammed bin Salman, discussing strategy until 4:00 am. News reports didn’t indicate when exactly Kushner arrived or when discussions began. (Paul Manafort, Rick Gates, George Papadopolous were indicted this day, but not Kushner; good thing “excellent guy” Papadopolous as a former Trump campaign “energy and oil consultant” wasn’t involved in Kushner’s work with Saudi Arabia, that we know of.)

Thursday 02-NOV-2017 — U.S. Office of Natural Resources Revenue sent a letter to the Extractive Industries Transparency Initiative (EITI), a multinational effort to reduce corruption by increasing transparency around payments made by fossil fuel companies to foreign governments. The U.S. had been an implementing member since 2014.

Saturday 04-NOV-2017 — At 7:49 am EDT, Trump tweets,

“Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!”

Saturday 04-NOV-2017 — (approximately 5:00 pm EDT, midnight Riyadh local time) At least 10 Saudi princes and dozens of government ministers were arrested and detained under what has been reported as an anti-corruption initiative. Prince Alwaleed Bin Talal, a critic of Trump and a tech industry investor of note, was among those arrested this weekend.

Saturday 04-NOV-2017 — At 11:12 pm EDT Reuters reported Trump said he had spoken with King Salman bin Abdulaziz about listing Saudi Aramco on the NYSE. The IPO is expected to be the largest offering ever.

But wait…there are some much earlier events which should be inserted in this timeline:

Friday 03-FEB-2017 — Using the Congressional Review Act to fast track their effort, Senate passes a joint resolution already approved by the house, disproving the Securities and Exchange Commission’s Rule 13q-1, which implemented Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 1504, the bipartisan product of former senator Richard Lugar and Sen. Ben Cardin (now ranking Democrat on the Foreign Relations Committee),

“…a public company that qualified as a “resource extraction issuer” would have been required to publicly disclose in an annual report on Form SD information relating to any single “payment” or series of related “payments” made by the issuer, its subsidiaries or controlled entities of $100,000 or more during the fiscal year covered by the Form SD to a “foreign government” or the U.S. Federal government for the “commercial development of oil, natural gas, or minerals” on a “project”-by-“project” basis. Resource extraction issuers were not required to comply with the rule until their first fiscal year ending on or after September 30, 2018 and their first report on Form SD was not due until 150 days after such fiscal year end.” (source: National Law Review)

Section 1504 and SEC rule 13q-1 enacted the U.S.’ participation in the EITI’s anti-corruption effort.

Monday 13-FEB-2017 — Trump signed the disproving resolution. (Probably just another coincidence that Michael Flynn resigned this day as National Security Adviser.)

From the earliest days of this administration, both the Trump White House and the GOP-led Congress have been ensuring that extractive industries including oil companies will not be accountable for taxes, fees, and other miscellaneous payments (read: dark money donations and bribes, the latter being a bone of contention to Trump) paid to foreign governments.

Some of the immediate beneficiaries are Exxon Mobil, for which Secretary of State Rex Tillerson used to work, and the Koch brothers, among U.S. oil companies which claimed additional reporting requirements under Rule 13q-1 would make them less competitive with overseas oil producers.

What’s not yet clear: How is this reduced openness supposed to help track financing of terrorism, which Treasury was supposed to be working on?

What of transparency related to arms deals involving Saudi money or Aramco? What of transactions between U.S. oil companies and other foreign companies involved in deals with Russian fossil fuel firms like Gazprom?

Can Trump, Jared Kushner, their family and minions, and members of Congress profit from this increased lack of transparency?

What happens to the U.S. and global economy when oil prices rise without adequate transparency to the market to explain price increases?

Also not yet clear: what happened to the 19.5% stake in Rosneft sold last year, allegedly bought by Qatar’s sovereign wealth fund and Glencore (the same Glencore now embroiled in Paradise Papers scandal)? This massive chunk of Russia’s largest oil company has increased in value in tandem with crude oil’s rise, especially since the Saudi crackdown on Saturday. What’s to keep this massive amount of Rosneft shares from being laundered through stock markets as Deutsche Bank did between 2011 and 2015?

It’s all just so curious, the unanswered questions, the odd timing: Aided and abetted by GOP-led Congress, Trump pulls out of an anti-corruption initiative while Treasury Department appears to work on anti-corruption, and Kushner meets on the sly with the Saudi crown prince just days before an anti-corruption crackdown.

Hmm.

Three Things: So Many Questions, September Edition

It’s been a little busy in my neck of the woods, trying to tackle a long accumulation of honey-dos. But questions piled up, needing answers, so much so that I had to take time out to put bits and pixels to digital paper. Let’s begin, shall we?

~ 3 ~
PUERTO RICO POST-MARIA

Where the hell is the USNS Comfort, dispatched in 2010 to help after Haiti’s earthquake, and why isn’t it docked in San Juan, Puerto Rico, right the fuck now?

Why did we send 24,000 military personnel to help Japan after the 2011 earthquake but can’t muster them for a U.S. territory with a former navy facility and an active facility at Fort Garrison in San Juan?

Is Trump deliberately ignoring Hillary Clinton’s plea to send the USNS Comfort to PR because — well, it’s Hillary? (Yeah. Check that link. Even Fox News noted Hillary’s request.)

Has Trump deliberately ignored Puerto Rico’s urgent plight out of personal pique over the bankruptcy and losses from a Trump-branded, Trump-managed golf course located in Rio Grande, PR? He was trying to prop it up on Twitter back in 2013.

Are Trump’s tweets complaining about Puerto Rico’s debt yet more projection, since the failed golf course was built with government-issued bonds?

Why did the Senate approve as FEMA director — who only left to tour the island FIVE GODDAMNED DAYS AFTER MARIA MADE LANDFALL — the man who was the Hurricane Program Manager for FEMA under the Bush administration during Hurricane Katrina?

This, from The New York Times:

The head of the Federal Emergency Management Agency, Brock Long, has received widespread praise for his handling of the federal response to Hurricane Harvey, the first major natural disaster faced by the Trump administration.

Somebody get me a concrete citation of a real accomplishment attached to some of this “widespread praise” for anything besides being “a calming presence in press briefings.” Has the bar slipped this low that calmly stringing together cogent sentences is worthy of accolades? Can the NYT stop fluffing Trump and his band of co-conspirators?

Because right now American citizens are suffering and likely dying as a result of this administration’s gross ineptitude and negligence, if not outright malignance.

Now Trump says he’s going to Puerto Rico next Tuesday. That’s TWO WEEKS after the storm. Can’t disrupt his golf game over last or the next weekend, don’t you know. What I particularly despise about Trump’s response to this crisis is that he makes this guy’s fly-by two days after Katrina look so much better.

Call your members of Congress and demand action. Yeah, that’s not a question. Suck it up; you’ve got electricity, communications, and access to clean water if you’re reading this. Millions of your fellow Americans in Puerto Rico don’t. Let’s fix this.

~ 2 ~
GRAHAM-CASSIDY-HELLER-JOHNSON NOT-A-HEALTH-CARE BILL

Have you called your senator and asked them to vote NO on the debacle Sen. Bill Cassidy can’t explain and over which Sen. Lindsey Graham is ruining any cred as a rational human being, while disabled health care activists recover from being hauled away by capitol police yesterday before the Senate Finance Committee’s hearing on the bill?

Have you documented and shared publicly your senators’ position on Graham-Cassidy, especially if they are up for re-election in 2018?

The number is (202) 224-3121 if you don’t have it memorized already.

Need a script to make it easier? Here you go.

As wretchedly bad as this obscene joke of a bill is, I can’t help wonder if GOP members of Congress and their staff are gaming this. Have they been working on something even worse than previous attempts at ACA repeal just to game the stock market and make a few bucks on the backs of worried citizens?

[graphic: Health Insurance stock chart, via Google Finance]

For grins you should look at Aetna’s chart for last Friday and note the jump it took when Sen. McCain expressed his reluctance to support Graham-Cassidy. Price jumped about the same time capitol police arrived to arrest protesters. Easy money, that, conveniently ahead of the market’s close.

~ 1 ~
IRAN ~AND~ PUERTO RICO

What question do these two disparate places prompt?

First, Trump tweeted about an Iranian missile launch as if it had ~just~ happened, within 24 hours of a reconstituted travel in which Iran is listed. But the missile launch ~didn’t~ just happen; it took place more than six months ago but was mentioned only this week in Iranian news.

Second, Trump took his fucking sweet time ensuring FEMA went to Puerto Rico; Hurricane Maria made landfall on September 20th, visible to anyone who watched weather networks, NOAA, and NASA reporting.

Is Trump ignoring any and all U.S. intelligence and government experts on matters foreign and domestic, relying instead on some other criteria for responding to events, including cable TV? Should we believe for a second he’s simply and accidentally flooding his source of information?

In the case of Iran’s missile program, it looks more like he deliberately used stale news to defend a new travel ban while making propagandistic false statements to the public. The Supreme Court canceled hearing the travel ban after the travel ban was rejiggered — does this suggest his manipulation of perception worked, not only on the public but on the Supreme Court?

~ 0 ~
One more time: call your Senators to ask NO on Graham-Cassidy and get their position on the record. Call your members of Congress to ask for urgent response and funding for aid to Puerto Rico. The number is (202) 224-3121. Put it on speed dial.

Viajar bien, mis amigos y amigas.

Three Things: Mas Gas, Las Vegas and Sass

I’m not even going to touch the massive stream of news out of Washington over the last 24 hours, from the Washington Post piece featuring ‘leaked’ transcripts of Trump’s whack doodle conversations with Mexico’s and Australia’s presidents to the impaneled grand jury and subpoenas. Plenty of other material not getting adequate air time.

Speaking of air time, hope you have a chance to catch Marcy on Democracy Now. She spoke with Amy Goodman about the confirmation of Chris Wray as FBI Director as well as former Fox News contributor Rod Wheeler’s lawsuit against Fox News.

Onward…

~ 3 ~

Venezuela’s state-run oil producer PDVSA is cutting oil sales to U.S. refining unit Citgo Petroleum. At the same time it is increasing shipments of oil to Russia’s largest oil producer, Rosneft. Venezuela is using its oil to pay down a $1.6 billion loan extended to PDVSA last year. Rosneft has loaned an even larger sum of money in the not-too-distant past, but the terms aren’t known; payments in oil as well as a hefty minority stake in Citgo were believed to be included in negotiations.

The threat to U.S. gasoline supply: though at lower levels than a decade ago, Venezuela is the third largest supplier of oil to the U.S.

Citgo has, however, been shifting its purchasing wider afield than just PDVSA:

Citgo last year started sending gasoline and other fuels to Venezuela in exchange for a portion of its crude supply. But Citgo has increased the volume of U.S. oil it refines, and has also has also expanded its crude import sources.
[…]
U.S. President Donald Trump’s administration has promised strong economic sanctions against Venezuela’s government after a Constituent Assembly was elected last week in what United States called a “sham” vote. The new body will have power to rewrite the constitution and abolish the opposition-led Congress.

If those sanctions were to constrain Venezuela’s oil shipments to the United States, Citgo could be ahead of its competitors in finding new supply sources.

The public will feel at the pump whatever happens to Citgo and other gasoline producers. Gasoline prices are already $0.16-0.24 per gallon higher than they were last year.

Who is profiting from this?

~ 2 ~

I’ve been thinking about the tagline, “What happens in Vegas, stays in Vegas” right about now after the arrest of Marcus Hutchins, a.k.a. MalwareTechBlog following Defcon’s end in Las Vegas. You’ve probably read Marcy’s piece already (catch up if you didn’t); since she published her post the information security community has been digging into Hutchins’ past and stewing about why/what/how.

Some speculate this was an aggressive recruitment effort; this might explain why the U.K. didn’t arrest him before he left for Defcon. Or did the U.K. and the U.S. agree not to spook any Defcon attendees by stopping Hutchins before he arrived in Vegas? Responses by U.K. authorities are annoyingly banal:

A spokesman for the Foreign and Commonwealth Office said: “We are in touch with local authorities in Las Vegas following reports of a British man being arrested.”

The UK’s National Crime Agency said: “We are aware a UK national has been arrested but it’s a matter for the authorities in the US.”

Others speculate he was framed as the target of revenge by someone caught up in Alphabay’s seizure. How does shutting down WannaCry fit into this scenario?

I don’t have a favorite theory right now. All I know is that WannaCry’s heat map sticks in my craw.

One thing which should come out of this situation is a dialog about coding, malware, and intent; the infosec community is having that discussion now, but it needs to be wider. If a white hat codes malware in part or whole to investigate capabilities, they are only separated from criminal malware producers/sellers/distributors by intent. How does law enforcement determine intent?

~ 1 ~

Your opinion is constantly shaped by the media you consume. Some consumers aren’t conscious of this shaping; neither are some producers.

And some producers know it but are just plain jerks.

A very important way in which opinion is shaped is by the perspective presenting a viewpoint. If only the members of one-half of the population ever gets a chance to present a perspective, consumers’ opinions are narrowed by that same factor. This is why gender equity in media is critical; if you’re only hearing men you’re not getting but part of the picture.

WIRED magazine knows that gender equity in content is important, but their last issue contained only male-written content. As a twisted tribute to the women who helped produce the issue, WIRED stuck a colophon listing important females.

Including a dog.

Really? The women of WIRED are on the same footing as a pet?

Somebody/ies at WIRED need a kick in the sass; I don’t give a fig if half the staff is female if the content itself is all-male. I’m going to do my best this next month not to cite WIRED.

Don’t think for a moment this is just WIRED, either. The VIDA Count measures annually gender equity in literary arts. There’s progress though slow.

~ 0 ~

That’s a wrap on this open thread. Let’s hope with Tiny Hands McGolfer on vacation that news slows a bit as we enter this weekend. I’m not holding my breath though. Behave.

A Sword Never Kills: The Trump Administration’s Increasing Deadliness

This was absolutely revolting news:

It’s but one example of the increasing mortality under Trump’s administration. A Dreamer — an example of the former magnanimity of U.S. policy who could have been a stellar spokesperson for this country — baked to death in a trailer.

But wait, there’s more. Much more:

… Monitoring group Airwars, in new figures provided to The Daily Beast, estimated that the coalition killed over 2,200 civilians in ISIS-held territory in Iraq and Syria between Trump’s inauguration on January 20 and July 13. This represents more than 360 civilian deaths a month and at least 12 a day since Trump entered the White House.

According to the coalition’s figures, its strikes have killed 603 civilians since the beginning of the airstrike campaign against ISIS in 2014. Of those, Airwars estimates that around 40 percent of them came after Trump’s inauguration, alluding to the possibility of a greater disregard for civilian life at a time when ISIS’s hold on its self-styled caliphate is coming to an end. …

More unnecessary, unwarranted civilian deaths, at least double the rate of the previous administration since Inauguration Day — the utter sloppiness with which the military has now been authorized to operate against ISIS will only increase radicalization as it sows death.

This sloppiness was foreshadowed early in this administration with the January 29 raid in Yemen, resulting in the death of a Navy SEAL and 30 civilians including mothers and children. Whether any truly ‘actionable intelligence’ was obtained is up in the air; Trump, however, obtained public relations material for his first State of the Union address. How fortunate for him.

Yes, how fortunate for Trump that the American public has yet to realize he is not careful and judicious when it comes to human life. He is, instead, cruel, mean, selfish and reckless.

Today the Senate votes on a Motion to Proceed with the next iteration of Trump’s desired Repeal-and-Replace-ACA attempt. If the GOP succeeds in carrying out Trump’s aims to end ACA, people will be forced off health insurance keeping them alive today.

We’re all in the back of an over-warm trailer. We’re all in a house in ISIS-held Syria. But we don’t have to be.

Seneca the Younger said, “A sword never kills anybody; it is a tool in the killer’s hand.”

Take the sword out of the killer’s hand. It’s within our power.

Call your senator and ask them to reject any effort to repeal and replace the ACA, for starters. Millions of Americans will thank you, some of whom you surely know, many of whom we can save from death. We can start there.

And Now Akmetshin, or Why the Hell *Didn’t* Obama ‘Tapp’ Team Trump?

A couple days ago Marcy pointed out that Donnie Trump Jr.’s meeting with Russian lawyer Natalia Veselnitskaya on June 9, 2016, offered proof the Obama administration didn’t ‘wiretapp’ the Trump campaign.

Which is all fine and dandy until today’s revelation that a former-GRU-agent-cum-campaign-hacker-now-lobbyist present at the same meeting.

What. The. Actual. Fuck?

It’s bad enough contacts with foreign nationals have to be teased out one by one from Team Trump, but to appear to hide multiple Russian contacts attending one meeting, particularly those with background in military and/or intelligence, is utterly ridiculous.

If this meeting was completely on the up-and-up, wouldn’t Junior have included the names of ALL the attendees in his online spill-fest?

It’s almost as if Junior and the rest of Team Trump knew that the presence of more than one Russian, particularly Rinat Akhmetshin, wasn’t a good thing.

It’s almost as if Natalia Veselnitskaya knew Akhmetshin’s presence wasn’t a good thing, either, since the communications Junior dumped online don’t indicate her intention to bring Akhmetshin with her to the June 9th meeting.

Read the AP’s reporting and see if you don’t come away with a bunch of new questions about Junior’s meeting. I sure did…

— Did Veselnitskaya leave documents with Junior and the rest of Team Trump? Akhmetsin is very sketchy on this point.

— Did any U.S. law enforcement or intelligence agency have any indication that Akhmetshin as well as Veselnitskaya were in NYC let alone at Trump Tower? Keep in mind the Evgeny Buryakov case and the “others known and unknown” who had been supporting Buryakov and two other Russian spies in 2013.

— Were members of the Gang of Eight, including Mitch McConnell and Devin Nunes, told last summer before the election of the multiple Russians meeting with Junior and Team Trump, even without any ‘wiretapp’ used on foreign national attendees? Is this one of the issues which riled up former Sen. Harry Reid, encouraging him to send a letter to former FBI Director Jim Comey to ask for an investigation?

— Are U.S. intelligence agencies not following Akhmetsin because he was believed to be a registered lobbyist, in spite of the fact he’s accused of being a hacker AND the U.S. government had been repeatedly hacked by Russia in 2015-2016?

— Has Team Trump been in contact with DHS’ Mike Kelly at all about Akhmetsin, especially since Sen. Chuck Grassley sent a letter to Kelly [pdf] in April this year asking for more information about Akhmetsin?

If I think about this much longer, I’m sure I’ll come up with a few more questions. I don’t know how there wasn’t some form of ‘tapp’ following so many Russians in one spot, considering the Prevezon money laundering case was still open in the background. I get it — wiretapping defense lawyers is a no-no. But a meeting at which Rinat Akhmetsin was present, in a building where Russian money laundering had been conducted?

The whole situation stinks like a week-old kulebyáka left in the sun.

Trump Was Worried HR McMaster or Fiona Hill Would Spy on His Conversation with Putin

There were two infuriating stories earlier this week in preparation of today’s meeting between President Trump and Vladimir Putin.

The Daily Beast reported that Trump’s aides wanted top NSC Russia expert Fiona Hill in the meeting between the presidents.

According to two White House aides, senior Trump administration officials have pressed for Hill—the National Security Council’s senior director for Europe and Russia and the author of critical psychological biography of Putin—to be in the room during the president’s highly anticipated meeting with Putin.

If Hill is there, these officials believe, it will help the White House avoid the perception that the president is too eager to cozy up to the Kremlin. The hope is to avoid a repeat of Trump’s last meeting with top Russian officials, during which he disclosed classified intelligence to two of the country’s top diplomats—and was pictured by Russian state media looking particularly friendly with them.

But it used linguistic gymnastics to avoid stating who might decide to keep Hill out of the meeting.

Then Axios reported that just Trump, Rex Tillerson, and a translator would represent the US.

There will likely only be six people in the room when President Trump meets President Putin on Friday at the sidelines of the G-20 meeting in Hamburg, Germany.

According to an official familiar with the meeting’s planning, it will be Trump, Putin, the Secretary of State Rex Tillerson, the Russian foreign minister Sergey Lavrov, and translators.

But it, too, remained silent about who decided to keep the attendee list so small (though admittedly, that detail was a less crucial part of their story).

Thankfully, the NYT has finally revealed that it was Trump, not Putin, who chose to limit attendees.

Only six people attended the meeting itself: Mr. Trump and his secretary of state, Rex W. Tillerson; Mr. Putin and his foreign minister, Sergey V. Lavrov; and two interpreters.

The Russians had agitated to include several more staff members in the meeting, but Mr. Trump’s team had insisted that the meeting be kept small to avoid leaks and competing accounts later, according to an administration official with direct knowledge of the carefully choreographed meeting, who spoke on the condition of anonymity because of the sensitivity around the matter.

And he did so specifically to avoid leaks about what would transpire.

This means that Trump (personally, given the NYT portrayal) decided to exclude his National Security Advisor and top Russian advisor. And he did so, again, based on the NYT reporting, because he didn’t want a competing account from coming out. He basically excluded the key staffers who should have been in the meeting, in spite of the wishes of aides, to avoid having Russian critics describing what really happened in his meeting with Putin.

Remember, this is not the first time Trump has excluded McMaster from a key meeting: he also left McMaster sitting outside his meeting with Bibi Netanyahu, after belatedly inviting Tillerson in.

Three Things: Day 6, Bombs Away, Get Carter 2

As long as my schedule permits I’ll continue to post Three Things each day at least through next Tuesday. Here we go…

Day 6: Countdown to Tax Day deadline continues
There’s a clear trend in interest about Trump’s tax returns since the election with a spike reflecting two pages leaked from Trump’s 2005 return on Rachel Maddow’s show last month. Stretching out the Google Trends period to five years and a seasonal bump can be seen each year. This year’s seasonal bump is completely distorted by discussion of Trump’s returns.

59 Tomahawk missiles launched at Syria and a GBU-43/B MOAB dropped on Afghanistan aren’t going to change this picture. Where are your tax returns, Trump?

Bombs away
Speaking of missiles and bombs, I sure hope somebody is watching transactions related to military industrial complex stocks. The image here includes just three companies, one of which is Raytheon, the maker of Tomahawk missiles in which  Trump may or may not own shares. How convenient for shareholders of record last Friday the stock went ex dividend this Monday after a spike in price late last week when 59 missiles were aimed just off a Syrian runway.

Considering both Russia and Syria knew in advance the US was deploying missiles, one would be foolish not to wonder if any one with vested interest in NYSE:RTN or competitors might also have known in advance to buy before the 01:40 UTC launch with a sell order for Monday’s open. For those of you mentally checking off time zones of key cities and major stock markets:

Damascus Fri 07-APR-2017 4:40:00 am EEST UTC+3 hours
Washington DC Thu 06-APR-2017 9:40:00 pm EDT UTC-4 hours
Moscow Fri 07-APR-2017 4:40:00 am MSK UTC+3 hours
Tokyo Fri 07-APR-2017 10:40:00 am JST UTC+9 hours
Shanghai Fri 07-APR-2017 9:40:00 am CST UTC+8 hours
Corresponding UTC(GMT) Fri 07-APR-2017 01:40:00

Get Carter 2
I’d much rather talk about a second installment of the 1971 movie featuring Michael Caine but no, it’s all about Carter Page and his less-than-stellar ability to prevaricate about his dealings with Russians. While quizzed by ABC’s George Stephanopolous about the chances sanctions were discussed by Page and Russians during the 2016 campaign season, Carter replied, “Something may have come up in a conversation…”

Uh-huh. Imagine somebody at the FBI cutting to a taped conversation or two at that point. Page insists he didn’t ask or offer about the sanctions, but he’s wholly unconvincing. It’s no wonder at all known Russian spies in the Buryakov case were skeptical about Page, a.k.a. ‘Male-1’. Whatever Page claims there was enough there to pass the threshold requirements for a FISA warrant.

Why is Page talking to media now anyhow? Is he somebody’s canary-in-the-coal-mine? Definitely not a FISA warrant canary.

That’s Three Things. By the way: about 22 percent of taxpayers wait until the last two weeks before the deadline to file. Tick-tock — only a handful of hours until Day 5 before deadline.

(p.s. treat this like an open thread)

Of Spies and Casinos

[photo: liebeslakritze via Flickr]

Many have forgotten the case of Russian spies arrested in the U.S.

Not the ten from the Illegals Program sleeper cell spy ring rounded up in 2010, whose integration into the U.S. formed the backbone of the cable drama, The Americans.

No, the ones in New York City who attempted to recruit college students and collect economic intelligence.

Three in total were arrested a year ago January — Evgeny Buryakov, Igor Sporyshev and Victor Podobnyy — the latter two shipped out as they were here under diplomatic visas while the first was prosecuted and jailed.

The story is rather interesting though it didn’t garner much attention outside New York. The spies were tasked with not only recruiting but gathering intelligence in the financial sector about market destabilization and the status of development and investment in alternative energy.

Buryakov, who was not under diplomatic protection, wasn’t the sharpest pencil in the box. He was a little put out at having a less than glamorous gig, and he was rather imprudent. He was recorded easily, and his words used as evidence against him.

One interesting bit was thinly fleshed out in the USDOJ’s complaint.

Buryakov toured casinos in Atlantic City.

But which casinos?

In July 2014, a confidential contact working on behalf of the FBI, “posed as the representative of a wealthy investor looking to work with Bank-1 [the Russian bank for which Buryakov posed as an employee] to develop casinos in Russia,” and approached Buryakov about casino development in Russia. A tour of Atlantic City casinos was taken in August.

Combing through the complaint looking for the colleges from which they attempted to recruit revealed no mention of Trump University.

But the casinos visited aren’t clear. The Trump Plaza (closed September 2014) or the Trump Taj Mahal (closed October 2016) can’t be ruled out as sites visited by Buryakov — the Plaza closed only a few weeks later.

The skepticism with which they viewed the casino gambit was amusing (excerpt from complaint, p. 23-24):

It was a trap, just as suspected; did the confidential source not give off the right vibe, or were the Russians skeptical of any investment in casinos developed in Russia? Trump, after all, didn’t get his Trump Towers Moscow off the ground even after his 2013 trip for the Miss World Pageant. Did the skepticism worry the FBI they might lose their targets? Or did the FBI finally have enough of toying with these guys and decide it was time to drop the hammer? Was some other trigger which forced the FBI to wrap up this investigation?

A few other points worth noting:

• “Others known and unknown” were also involved in spying or supporting spies but were not included in the warrant according to the complaint (ex: CC-1 and CC-2 in complaint). Who were they and where are they now? Has the FBI continued to watch them? Were any of them among the Russians who were escorted out of the U.S. after former president Obama announced new sanctions this past December?

• “And then Putin even tried to justify that they weren’t even tasked to work, they were sleeper cells in case of martial law,” Victor Podobnyy remarked in a conversation about the Illegals Program sleeper cells. What did he mean by, “in case of martial law”? Is this a continuing concern with regard to any remaining undetected sleeper cells?

• A “leading Russian state-owned news organization” was mentioned in the complaint, “used for intelligence gathering purposes.” Which news outlet was this? How did this news organization figure into advanced methods used by this operation? It would be interesting to know if this was RT (formerly Russia Today) given Michael Flynn’s and Jill Stein’s attendance at an RT event in December 2015.

• The spies used an office in Manhattan for conveying information to their superiors. How was this done apart from phone calls; what technology and networks if any were involved?

There’s an important bit about aeronautics, but I’ll tackle that in another post. It’s important enough to be broken out on its own.

Oh, one last thing about this case: timing.

— On January 21, 2016 UK’s public inquest announced its final conclusions into the PO-210 poisoning death of Alexander Litivinenko, attributing the murder to orders from the top of Russia’s FSB — including Vladimir Putin.

— The next day, January 22,  the UK froze the assets of the escaped henchmen accused of the poisoning while seeking their extradition.

— A sealed complaint and a request for warrants were filed in Southern District of New York for the three Russian spies on January 23, 2016.

— The arrests of the spies was reported publicly on January 26, 2016.

These events on either side of the Atlantic didn’t happen in a vacuum. The casinos’ tour and the hand-off of government documents happened nearly six months before the complaint and warrants were filed and issued. But the Litvinenko inquest conclusion and the arrests happened within a couple of days — mere hours apart.

It shouldn’t be surprising to find coordinated retaliation occurred against both the UK and the US.

image_print