Old Hacks Make Comeback

The U.S has charged three Chinese with stealing M&A information from law firms, then using that information to buy into the companies that were being bought.  A Wall Street Journal article puts the gains at somewhere over $4 million, a paltry sum, no doubt much smaller than they actually got.  The Journal article also points to which law firms they think were hacked, since none were named in the indictments.

The three individuals named in the indictement are not in the U.S custody and good luck with getting them back from China.  The Justice Department says the reason they made the case was to warn other law firms that they were being subjected to this type of targeting on M&As.  Really?  That must have come as a big surprise :) when they have been targets for as long as any of us can remember.

China Gouges GM

There has to be some justice in the world, but it won't be found in China.  For reasons only they can say, China kept it a secret over who was going to be charged with price fixing in the auto industry, dragging on for a week or so before announcing that it was SAIC-GM.  The Wall Street Journal article today says the fine was $29M.

How does anyone fix prices in an economy like China's?  GM had to team with SAIC in order to start a car business in that country and SAIC controls the distribution of cars to Chinese controlled dealers.    Apparently, those very dealers were setting prices for their cars - the same as they do everywhere else in the world - and that was a sin, punishable by fine.  Rediculous.

GM is the first car dealer to sell Chinese made cars in the US.  Maybe we should shut that down and go back to a system that everyone understands.  Kick your best auto partner in the nose and see what happens.  Something will, and it won't likely be what they are expecting in the new world of U,S politics.  It is outrageous and China cannot get away with treating foreign companies differently than it does it owns domestic markets.  We are still missing the key element of trade with China - reciprocity.

New China Policies

I never thought I would see Peter Navarro brought to the White House Trade Council, but it must be making all those China experts I have heard from over the years cringe.  They need to.

We live in a dream world with China, making commerce with them while they steal our intellectual property and put it back into competition with us.  We should notice that Xi has not been engaged on social media talking about what President-elect Trump has to say, but it didn't take long for Vladimir Putin to catch onto it.  Now the press thinks we have a nuclear arms race which is not even close to being true.  They are going to have a lot of trouble from this President because he is not a model for what a President is supposed to be.  We should add - get over it.

Anyway, Peter Navarro has a couple of books out that blast China for doing exactly what they were doing.  Political correctness and diplomatic niceties are probably not going to get by for them in the next few years, and those so-called experts are going to find themselves out in the cold.  China is not our friend, and they are not neutral towards us.  Either of those would be preferable but that seems not to be what they want.  The South China Sea is only one example of how that cooperation has worked out so far.

When I wrote my first book 5 years ago, the Chinese were building up islands and starting to put airfields on them.  Then came weapons and soldiers.  Now, they seem to be testing the waters for a fight.  They always back off, but they never back down.  This White House at least recognizes that diplomacy only works when the opponent knows you are prepared to take some real action.  That starts with understanding what they are up to and how to stop them.  Bringing in military leaders and Peter Navarro are part of that.

The News from Facebook Stats

News sources have produced a discussion about fake news and a lot of statistics showing nearly everyone gets their news from Facebook.  Will Oremus from Slate clarified the Pew Research Report that led to the conclusion that "nearly half of the people on Facebook get their news from that platform".  Oremus looked at the report, as should any serious researcher, and came to the conclusion that the report is often incorrectly cited.  Not that many people actually get any news from Facebook, and it looks like he is right for more reasons than he cited.

The report says "social media" is often a source for about 18% of people who use it.  The term social media means Facebook, Twitter and a whole bunch of other sources.  But, the first page of the report also says 56% never, or hardly ever, get their news from social media.  Second, social media postings are often made by news outlets themselves.  If someone subscribes to ABC news on Facebook or Twitter are those people getting their news from the social media or ABC?  ABC writes it, puts video into it and delivers it to outlets.  They are the source of the news.  If I watch ABC News on their website, it is basically the same content, but the delivery vehicle is different.  If I watch it live on TV, or do on-demand TV from FIOS, I still am getting the news from ABC, not FIOS.

Where this becomes more important is with fake news and the responsibility for content on delivery channels.  Fake news is a misnomer.  If I write a story on social media that says "I heard that my cousin went to jail for DUI." Is that fake news if he didn't go to jail?  If a staffer for Hillary Clinton writes that Donald Trump didn't pay any income taxes -ever- and ABC picks that up and writes a story that they have sources that say Donald Trump has never paid income taxes, that is news, but its it fake news?  The difference is in the source of the news.  If one person heard about his cousin going to jail when he didn't, that is an internal family problem.  The ABC story is different because they have a responsibility for the content.  We excuse this too often as news reporting, when publishing a knowingly false story carries legal penalties.  

What complicates this further is state-sponsored news.  The China News outlet says their Navy picked up a drone out in the South China Sea because they thought it might be a navigation hazard for shipping there.  News outlets in the U.S say this drone was seized in international waters in an act that amounts to piracy.  Which story is fake news?  They both are.  State-sponsored news agencies deliver supporting material for narratives, story lines they want us to believe.  Big chunks of our news come from bending news to fit the narrative.  Is that fake news?  You bet it is.

The Presidential election reminds me that news outlets used to be better at detecting and reporting the real story and not the narrative bending news.  They have lost that ability and the trust of their readers because they just do what Facebook does, conveying what they hear about my cousin and Donald Trumps taxes, without checking on the real story.  Now the Russians come along and hack the Democratic National Committee, releasing that information to the public. Are those emails fake news?  No, they aren't.  A good investigative report might have discovered the inconsistencies of what both parties said in public and what they said in private.  As it is, we have only ourselves to blame for only having one side of that story.  

Suspending Belief

In today's Wall Street Journal, Andrew Browne, says China has thrown out the rule book on the South China Sea by seizing a drone controlled by a U.S ship.  But, he went further by saying  the explanation offered, i.e that it was a navigation hazard that was picked up to make sure it did not interfere with sea traffic "beggars belief", a term that is apt even if not intended.  Even the Chinese people cannot believe that China goes around picking up underwater vehicles to insure safety of the seas around them.

This is the kind of in-your-face explanation that is more prone to be from the Russian press which manufactures scenarios to explain their country's actions.  Truth is a secondary consideration in this kind of narrative.  Something that sounds good, and has the feel of being right, is OK even if it bears no resemblance to what actually happened.

This is similar to the Iranians taking U.S personnel off a disabled ship in the Straits of Hormuz.  They offered the same kind of explanation but video taped the whole incident to belittle US forces.  There was no good story that could explain that.  "Rescue" sounded hollow after the tape was shown.

At times, we choose to suspend belief to avoid confrontation.  We accept these stupid explanations without pointing out that they are not only untrue, but manufactured by a political apparatus that has to know they are false.  We accept them anyway.  Well, some do.  The ability to describe the truth and discredit the lies is not just a political choice.  The free press in the parts of the world that have one, should be fact checking these kinds of ridiculous claims instead of one political candidate said in 1985.  Where are the New York Times and Washington Post of old that could dig out the true things and expose the lies.  Now they are no different than the Russian and Chinese press, telling us a story they want us to believe instead of trying to find the truth.  

Anti-aircraft Weapons on Chinese Islands

I have used the Asia Maritime Transparancy Initiative as a source since they started.  They watch those little islands in the South China Sea and report on what they see.  This time, they say, the Chinese have raised the prospect of "defending their territory" with large anti-aircraft guns  and close-support weapons.  They have nice pictures from DigiGlobe to prove their point.  It is hard to get away from satellite photos.

The Chinese are applying escalation to their work on the islands, steadily making them into military bases that promise to challenge any aircraft that fly into those areas.  As I have said before, it is one thing to get the verbal warnings that the BBC got flying a small plane through those air spaces, and quite another to see the radars from ground units painting a target.  Only military aircraft with air defenses can see those radars at work.  If we don't start laying the ground work for some retaliation before we have our aircraft challenged, we are going to have U.S aircraft painted on radar of Chinese weapons from territory that we do not recognize as theirs.  This is like a ship in the middle of the ocean targeting an aircraft flying over it.  We can't have it.  But, we are going to have it, anyway.  Let's hope our military is prepared to counter the kind of engagements that are coming.  The Chinese are not going to stop what they are doing and seem prepared to go to war over territory they claim, even though the rest of the world does not agree with them.

Trade Squabbles Grow with China

In what turns out to be another way of keeping U.S goods out of China, the implementation of trade rules has been challenged by the Obama Administration - in what will be one of its final acts.  The Chinese have been putting tariffs on rice, wheat and corn that favor things grown in their own country, and keep the U.S out.  The Obama Administation filed its 15th - and last- complaint with the World Trade Organization.  China then finds other ways to work around the complaints, sometimes by making cosmetic changes to their policies that promise more than they deliver;  other times, doing nothing until right before the matter comes up for review, then getting voluntary compliance from its own state-owned businesses.  In either case, their response is not going to make the new administration very happy about trade rules.  There are going to be some pretty savy traders in key positions in the new government who have seen all of this from the inside.  It will not take quite so long for these new folks to see what is going on and take action to stop it.

Retaliation or Deterrence?

The U.S President does not seem to see any difference between deterrence and retaliation in cyber events.  It would be nice if he had a deterrence strategy that would prevent things like the hacking of the Democratic National Committee during an election.  Deterrence puts markers out on the ground to indicate what will happen given certain types of events - you want to try a certain category of event, then you can expect a response of some type.  It does not mean that it is a response of the same kind, but a response with a similar affect on the country doing whatever was done to us.  Credible deterrence prevents others from taking the step to begin with because others know what will happen to them .  It does not have to be public knowledge, but it does have to be communicated to those who are most likely to be involved.

When deterrence fails (here I do not mean when we have no deterrence strategy) there is retaliation where it is clear why we are responding to the event, and to what country.  In personal terms, retaliation is like revenge.  It has a way of escalating from one revenge event to another on both sides, and can become something like the Hatfields and the McCoys shooting each other every week or so.  Israel and the Palestinians come to mind.  

Deterrence always comes first, except with this President.  Perhaps the next one will do better.    

Just a Little Bit of War

So, the Chinese take an underwater survey vehicle right off the cables attaching it to a U.S. Ship and ignore the protests of the Navy.  This is seizure of a naval vessel on the high seas, an act of war.  The reaction to it is a little short of war.  As John Bolton said today, a fitting end to the Obama Administration.

The Chinese have promised to return the undersea "drone" which was captured by them.  They will give it a good look over as they did the US aircraft which collided with a Chinese fighter in 2001.  The Chinese gave the crew back and blamed the whole incident on the U.S, not the pilot of the Chinese fighter that hit the slower moving surveillance aircraft.  We are going to continue to have these kinds of incidents which should be routine to the military unites carrying them out.  I described an incident similar to this one in my first book.  The Chinese tried to grab hold of a towed array with a hooked pole and got the cable up on the desk.  Why somebody doesn't shoot at them says a lot for the restraint of our seamen.  Even a water cannon would have stopped the boat from taking that drone.  

Keeping Secrets II

As I said in my second book, this White House seems unable to keep any important secret for very long, and they prove it over and over with the discussions yesterday of the Russian hacking of aspects of the U.S. Presidential election.  It is not something that should be talked about in public although the White House seems to do it anyway.

We heard yesterday from, of all people, the White House Press Secretary that Vladimir Putin was "directly involved" in the operation to hack the Presidential campaign.  That is an amazing revelation and one that certainly is known to only a few individuals in Russia.  No doubt the Russians will be looking around for who that might be, and will not be treating the individual with the due process so famous in US courts.  Should anything happen to that person, our Intelligence Community should make that public too - if the Russians don't.  Then we can have a few of the departed Obama Administration officials apologize to the living relatives of that person.

Have we ever seen such a bunch of idiots as these folks appear to be?  You don't have to be a favorite of either political party to recognize ineptness when it bongs you on the head as many times as we have seen it done with this group.  At least the end is near.  Let's hope that the incoming people know when to talk and when to keep quiet about state secrets.  The Russians certainly do.

Intelligence Makes Decisions Better

I got a kick out of all the buzz in Washington over Donald Trump's reaction to statements about what was said behind closed doors related to Russia hacking the Democrats to help Trump get elected.  I doubt that that ever happened the way it has been portrayed, but the President-elect may be pointing fingers at the wrong people.  Intelligence reports are abused a lot inside the Beltway around Washington D.C.

Intelligence reports usually express the facts as they are known and include how they knew these facts to be true, e.g. A reliable source who provided accurate information in the past, and is highly placed in government said this:  We saw this:  We assess that:  There are always a lot of "ifs" in any statement or report, but it is the best information they have at the time, and is subject to change.
Slamming the Intelligence Community for making a report is a little like shooting the messenger because you don't like the message.

But first, I doubt that anyone in the Intelligence community said Russia did this to help elect Trump President.  It doesn't sound like something an Intelligence report would say.  They might say that it was the Russians and they have reliable information to indicate who in Russia and why, but the inference that it was the Russian government and not just somebody in Russia is a little harder to come by.  It sounds like speculation that the reason for the hacking was to help elect Trump, and speculation is not in those reports.  That can be said by Congressmen without pointing to any report or facts presented to the committtes of Congress and nobody in the Intelligence Community can reply to the statements being made.

Several news outlets pointed to the lack of detail about how the hacked material was given to Wikileaks and published.  That would indicate that a lot about the operation is not known.  Some of those things are important to an assessment of why it was done and whether the Russian government was really behind it and not some bunch of hackers who got caught by the Obama Administration and will spend time in jail.  They had good reason to seek revenge.

As I noted in my third book, the Russians have meddled in our elections before and have tried to favor one person over another.  In each case, they were trying to keep strong Republicans from getting elected.  In each case, they failed.

A New Aixtron

In today's Wall Street Journal, there is an article about the demise of the deal between Aixtron and a Chinese conglomerate that tried to buy it.  Now is appears the Chinese have changed the names of the players and will try again.  this time, it is Lattice Semiconductor, and the new Chinese entity is Canyon Bridge Capital Partners.  In case this set-up sounds familiar, the Chinese created a new company to buy Aixtron, then manipulated orders to lower the share price.  The New York Times reported the details, much to their credit.  This time, they created a new company to set out to buy up certain technologies they want.  If they keep these companies names moving around, they are harder for the U.S government to keep track of and less likely to find interference.  If they successfully buy through any one of them, the government then owns the asset.   It is a shell game they can play forever, since they are state-owned enterprises.

The evidence suggests that somebody is keeping track of these deals and letting Congress known.  Twenty-two Congressmen sent a letter to Jack Lee to let him know that they wanted this investigated, and it is not often that you can find 22 people to put their name on something on the Hill unless there is something going on.

Shoe on the Other Foot

A Reuters exclusive story today is showing a reef that Vietnam has decided to dredge.  The goal, of course is to make it bigger and put people and equipment on it.  There is a nice picture with the article that shows a spot that is probably not habitable unless you bring your own food, water and portable toilets.  It is sparse.

The other problem for them is China which claims almost everything in that part of the world, having made the world's largest land grab in the South China Sea.  They don't actually own this property anymore than Vietnam does - they just claim it.  So, now we come down to which state is going to be able to enforce their claim.  The excitement is already building.

Vietnam has clashed with China several times and my bet is on them.  It one thing to claim the sea for fishing and have boats clash with each other over that, but quite another to have a real stake in the ground and put substance to it.  The Chinese have a fear that kind of idea might catch on and will try to put an end to it.  It is going to make for some real drama at a time when the news chains are pretty slow.

A Historical Reminder

Today is the 75th anniversary of Japan's attack on Pearl Harbor.  We don't want to diminish the impact of that event since it was a surprise attack that killed 2400 people, most the victims of bombs or drowning when their ships sank.  It was a terrible day.

But, I was reminded of another sunny day, in 2001, when over 3000 people died in a sneak attack on buildings in New York and Washington D.C.  I hope we continue to remember 9/11 the same way we remember Pearl Harbor.  

Obama Nixes Aixtron, SE Deal

The Wall Street Journal reported today that the deal for Aixtron, SE a maker of chip making technologies, by Fujian Grand Chip Investment Fund, was forbidden by the U.S. President.  This was only his second intervention in such a deal.  I have a couple of previous posts on this, so this is really the end to a continuing story of the purchase of sensitive technology companies by Chinese-owned state businesses.  This is a tricky area because it is not the same as a commercial business buying into those same technologies.  This is China buying them, and in this case, using some pretty clever manipulation of market dynamics to make it appear to be a good purchase.  The New York Times exposed the story behind that, to their credit.  Now the Chinese are playing dumb about all of that and  thrashing around threatening the U.S over this kind of action.  Considering the restrictions China has on US buying of the same technologies in China, that is barking up the wrong tree.  The tree they should be looking for is the reciprocity tree.  There is none between us and China and it is about time to start some.

New. CitizenLab Report on WeChat

Citizenlab, the part of Toronto University that looks into various aspects of the Internet has been into Chinese censorship for several months now.  They have reports on various browsers that are being used too extract user data that goes way beyond anything we could forgive as part of a normal business operation.  This is spying by any standard.  The latest report looks at WeChat, the Chinese equivalent of Messenger looks to focus more on just censorship.

Let's be clear that WeChat is censored.  What the report documents is how it is censored, the kinds of words that result in automatic censorship and the extent of censorship outside China - which, for a change, is somewhat different than inside.  The types of censorship for this registered to telephone numbers outside of China does vary from that with telephone numbers inside.  This seems odd since it would be easy to register with a number that was not really yours.

Anyway, you will find this an interesting read with lots of detail and thoroughness of reporting, typical of Citizenlab.

Sanctions on North Korea Mean Little

So, according to the Wall Street Journal today, the U.S has been negotiating with China over what to do to North Korea after they exploded another nuclear bomb in September of this year.  In diplomatic terms, this agreement to restrain North Korea went at lightening speed.

If there is any question about the status of North Korea, this agreement points to it.  North Korea doesn't do anything unless China agrees, so negotiating with China to get North Korea to do anything carries that relationship in the background.  This case in point makes it clear.

The goal here is get revenue from coal down by 60%.  That is one of the few sources of foreign currency North Korea is supposed to have.  So, who buys all of North Korea's coal?  China.  So, if China wanted to cut North Korea's revenue from coal, they would not have to do very much to do it.  They could just unilaterally cut the purchase of coal and announce it to the world.  Instead, they want to "negotiate a milestone agreement" which is 17 pages long.  This is the kind of negotiation that we have to wonder about.

Since 2009, China has steadily increased its purchase of coal from North Korea from $200M to $1.2B.  Since it is one of the few sources of revenue the North has, they have effectively kept them in foreign currency by buying goods, and supplying them with oil and natural gas.  Nobody does more to keep them going than China, and nobody has more influence.  Yet, the North continues to explode bombs and build up its missile capabilities, all the while threatening the U.S and very few others.   So now, in a magnanimous jesture of good will, the Chinese have agreed to cut back on coal purchases.  That isn't good enough.

How about getting the Chinese to get together with the North and tell them to stop building bombs and missiles, and doing all that testing?  It is fairly obvious the Chinese benefit from having the North do what they do best - saber rattling- and we have accepted their role without blaming their chief benefactor.

2016 Report to Congress US-China E&SRC

I just received the new U.S. China Economic and Security Review Commission Report to Congress for 2016.  It is nice to have it in print, but researchers also need it on-line for a searchable reference.

It is not light reading, but as a researched report it is easier reading than most academic papers or theses and covers a lot more ground.  It is sourced and has references that will keep you reading all year.  Most reports to Congress are the "look what we did" variety but this one is not.  It is well worth reading.

Let me give you a little food for thought with this quote from the Executive Summary:  "China appears to be conducting a campaign of commercial espionage against U.S. companies involving a combination of cyber
espionage and human infiltration to systematically penetrate the information systems of U.S. companies to steal their intellectual property, devalue them, and acquire them at dramatically reduced prices."

Forgetting Chernobyl

It has been 30 years since Chernobyl was famous as a nuclear power plant, so a new generation has forgotten what it was, or where.  In yesterday's Financial Times is a widely reported story of a 36,000-ton "safety shield" to be put on top of the site, a human engineering feat that will not go unnoticed, since these stories say it will dramatically cut the amount of radiation being leaked into the atmosphere.  Of course, that means there was a considerable amount still leaking for that whole 30 years.  We had forgotten about that too.  Former President Gorbachev said that the Chernobyl accident was a more important factor in the fall of the Soviet Union than Perestroika.  

RT reports that for the more adventureous of people, there are tours of the city, though there will not be many people there to look at.  Animals and humans still do not live very close to this radioactive site.  An area of 30,000 Kilometers around the site was evacuated and over 116,000 people did not come back to their homes.  You can Google Map it at Chernobyl Nuclear Power Plant.  

It is odd that RT mentions it because Chernobyl was under Russian control when it dissolved into a molten mess.  The World Nuclear Association is clear that it was a faulty Russian design operated by less than competent people, that caused it to melt down.  The fact that it is under Ukraine's control now hardly passes our notice.

This radioactive area is about 500 miles south-west of Moscow.  The Russians can run tours there all they want but it is not a tourist area that very many people will want to go to.  Radiation exposure, according to my training, is cumulative- it never goes away and builds up each time you are exposed. That is a good reason to forget about Chernobyl.

China: Where to Start

If there is going to be a trade war with China, it has to start somewhere, and there are some obvious things that need to be addressed.  Steel and aluminum are being dumped, in spite of tariffs put on them, though deals with countries like Vietnam who are allowed to treat the metals with chemicals that should have been done before it left China, and reship it as if it was produced in their own country.  We can't be a stupid as we look on this totally transparent work-around the Chinese have been using.  It took a year to figure out that transshipping steel was happening, and another six months try to figure out what will be done about it.  So far, nothing.  The Commerce Department is supposed to be watching this kind of thing.

Second, there are several industries that China has developed by stealing the technology from the U.S and a few other countries.  Our businesses already know what those technologies are.  Solar panel electrical management comes to mind.  As I outlined in a long story in my first book, the Chinese stole that technology, put manufacturing of stolen goods into their own companies, then continue to drag out a court case filed by the original owner of the intellectual property.  In the meantime, they export that same technology to the rest of the world.  This is just one example.  Resins were an example I wrote about previously.  I would bring business leaders in to discuss what has been stolen and used to build competing industries - in a time period of the last 10 years - then levy tariffs on every one of those industries.

Third, counterfeits need to be confiscated and the selling of counterfeit goods curtailed.  We allow counterfeits to be sold as "generic" manufactured goods.  That needs to stop.

Fourth, stop the abuse of visa programs to bring Chinese nationals into the US to work in our Universities and tech companies.  They use these visa programs to bypass export controls on intellectual property and government secrets.  They become US nationals under some of them, and use their status to steal even more.  Why we allow these kind of arrangements is beyond comprehension.

US Gets into German Sale

I have written two other summaries of what happened in the aborted sale of Aixtron the German electronics maker to a Chinese conglomerate, but was a little surprised to see the US involved in this.  CFIUS, the Committtee on Foreign Investment in the US, usually only weighs in on concerns about the sale of US companies to foreign governments or firms.  They do have an interest since Aixtron sells chip manufacturing technology to the US government, but that generally doesn't get much notice from CFIUS.  Something got the Germans to reconsider the deal after approving it.  Maybe this interest gives us a clue as to what might have happened.  

Talk About Ousting Director of NSA

A curious story of politics showed up in the Wall Street Journal today - and it says the Director of National Intelligence and the Secretary of Defense have both pushed for removal of the Director of the National Security Agency, Admiral Mike Rogers.  This is less about doing something worthy of removal than the facts of life in politics.  Rogers' crime was going to visit Donald Trump's Transition Team, doubtlessly for the job of Director of National Intelligence.

It's likely he was invited and didn't just go up to see if he could get in.  So, what makes that a crime worthy of removal from your job?  Of course, there is nothing that says a sitting military person cannot go an do an interview for a position in business or government without telling their bosses about it.  So, it really can't be that.  Somebody in the White House apparently felt strongly enough about it that they were able to influence two of the people who supervise him to call for his removal.  There is only one person high enough to be able to pull that one off.  Of course, we also have to wonder about his motivation for wanting to do that.

James Clapper Leaves DNI

There are few people I admire more than James Clapper who had the world's most thankless job at a time when very few people wanted it.  They had good reason.

The Director of National Intelligence sits on top of a huge, splintered group of 16 agencies.  When he took over, he had already had experience with one of them, the National Geospacial Intelligence Agency which was a mishmash of assets from several other agencies.  At least he knew what he was getting into.  Multiply that problem by 16 and you get what I'm talking about.

The Director of Central Intelligence used to run things in the Intelligence Community (IC), and from my experience, that was a better idea.  But, it was Congress that decided in 2010 to add this new function to get better control of the IC.  How you get better control by adding a new office on top of everything else, was a mystery to all, but just look at Homeland Security to see why that idea fails more than it succeeds.

They put together an executor of sorts, gave billets to the office and waited for something to happen.  The Intelligence Agencies did not put the people they loved and wanted into the DNI.  They did what all bureaucratic leaders do - as a general rule, they sent people they wanted to get rid of.  Try managing an office of misfits who aren't used to working together, yet are dealing with Congress on one side, and the Intelligence Agencies on the other.  It could not have been fun, but he did it well.

Each agency has parochial interests and fights for money from the same basic pot, although DoD has two pots and uses them both for the same programs sometimes.  One of the DNI main functions is figuring out the money supply and where it actually is spent.  Not even God can do that on a good day.

Eventually, it worked out better than Congressional leaders could have guessed.  He answered their questions and gave them insight into some of the operations that would be impossible to get otherwise.  Sometimes he did not have the right answer, but he usually gave a truthful one.  He held meetings with the other leaders and got a basic understanding of what his role would be both to help them, and to function in his own role.  He managed to survive in the job when very few others wanted him to.

I worked with a guy who worked directly for him years ago and he said he had to be on top of his game every day to keep up.  He was smart and quick and got quickly to the point.  You had better make sure you had your act together or he would know.  And, he rarely forgot what you told him.  In bureaucracy, everyone assumes you will not remember the last briefing or the last report you made.  You can use the same slides from year to year and just update the numbers.  Those days are gone now.

We should appreciate a man who does his job well when others would like to see him fail.  Not one among those who wished for his failure ever wanted his job.

Chinese Spying is Big

Brian Krebs reported yesterday on software made by Shanghai ADUPS Technology that was sending back call records and text messages to China.  The University of Toronto has done extensive reporting from its Citizen Lab that shows browsers from Baidu, and a host of others, are sending back much more from anything using those browsers.  It seems apparent the Chinese government is influencing what is being sent back and requiring vendors to put hooks into software to collect data for them.  In that instance, it was more than just text messages.  Some software sends information on the hard drive, WIFI connections used, location data, cell phone unique identifiers, and numerous things like those to China.  Why they need to know my hard drive serial number is a mystery only to those not hacking individual systems in the countries they are getting this information from.  So, while the Chinese mock us for what Edward Snowden said the US does, they try to equal, or exceed that capability without anyone raising a fuss.      

This fits with an even bigger problem that I described earlier and repeat here:

It isn't hard to figure out why China is stealing source code and then signing it with certificates that look like they are legitimate.  Symantec has published an interesting report on something called Suckfly [a better name might be nice] which uses compromised signing certificates to make the code look valid by someone thinking the certificate was valid and therefore from someone who made the software.

Symantec's report [http://www.symantec.com/connect/blogs/suckfly-revealing-secret-life-your-code-signing-certificates]  began to be written when they discovered a code signing cert from a mobile software developer on something that wasn't for mobile devices.  One thing led to another, and eventually to Chengdu, China where other certs were traced.

The Chinese are stealing us blind and undermining the Internet infrastructure with bogus domains and bogus software.  Sometimes they are doing this to resell software they have stolen and sometimes just to control their own people and keep them from using the real Internet.  If they stuck to their own people and not populated certs across the Internet, we might conclude they were doing it for internal security.  They aren't.

When Google stopped accepting certs from the China NIC, the world should have been paying attention to what they were doing.  They are spreading their own software on the Internet that can monitor anyone they choose.  They are not content to monitor just their own.

Peace on Our Terms

I have not counted Angela Merkel in the Left camp, so found it hard to believe she would have peace with the President elect of the United States only on her own terms.  There seems to be variations on the theme of peace with conditions that she imposed on Donald Trump last week.  We are glad to get along well with you but you must honor a commitment to people of different religions, sexual preferences and nationalities.  This is exactly the rhetoric of the Left in the U.S.

We don't need foreign leaders staking out conditions for a chance to be good partners on the world stage.  We have had several mayors of large cities say they will be sanctuary cities allowing illegal immigrants to live there whether the rest of the country wants it or not.  The leader of New York said yesterday, in what was the most pious speech ever given, that he had expressed the concerns of people everywhere in New York when he said that he would not allow certain types of behavior by this new upcoming administration and would watch it closely for deviations from his standards.  Not even the Pope uses this kind of language and the Pope has more reason for doing it.

In President Obama's first week in office he said to a group of Republican opposition members there to discuss issues, "I won."  These are the terms of this office, whether you disagree or not.

World leaders and mayors of large cities do not get to decide the conditions under which they will cooperate with the United States government.  What Obama was describing was a political reality that some seem to think is optional:  The Winner Makes the Rules.  I won;  I set the rules.  Let me add to that:  Get over it.

The arrogance of some of these so-called leaders is beyond imagination.  We had too much of that and elected another party to do things differently.  Brexit happened for the same kinds of reasons.  The French national election will see more of the same.  Austria may lead them to the same result.  Immigration influenced both of those and will be a driving force in politics for quite a while.  For those who say enough of letting these people into our countries, supporting them with tax dollars, and tolerating their lack of assimilation into our culture, consider the votes that are coming up.  The winner makes the rules.

The Seed Corn Saga

In the press release from the Justice Department about the conviction of Mo Hailong, a citizen of China granted U.S. Resident status by a government that seems to allow this kind of thing all the time, is an interesting topic of forfeiture.  Mo was convicted of stealing trade secrets from DuPont Pioneer and Monsanto, mostly seed corn, and sending it back to China where he was also employed.  He was a Director of International Business of the Beijing Dabeinong Technology Group Company.  Part of the forfeiture was two farms, one in Iowa and one in Illinois.  Where better to get seed corn than on a farm where it can be grown? 

The ability to come to the U.S and get resident alien status allows a foreign national to act as a US Person, where in this case, he really represents a foreign company.  We have already seen this used to give money to political parties, illegal had they been treated as Chinese citizens.  They can also buy into businesses that prohibit foreign nationals owning interests.  This whole set up is a farce.  We can't have people employed in China - even people who are on the equivalent of our Congress - and then granting them U.S status.  Somebody in our government should be held accountable for this kind of thing and removed.  This is a case where party politics have replaced national security.  

Chinese Student Visas

I have never been one to say that student visas are bad things, but I heard a story over the weekend that made me wonder if they are as good as I thought.  I ran into a student from Florida who went to one of their majors schools.  He said he was tired of having Chinese students get "a free ride" and he has to work to pay his tuition.  I was naturally curious.

He said the graduate students he was competing with were getting scholarships from his school that required them to pay no tuition or board on campus and he could barely make it by working two jobs and going to school.  He said the rationale by the school was Chinese students make a school better because they are going to be the leaders of the future.

So, I looked up student visas and found that 331,000 were Chinese students, and they were the largest single group from any country.  There are over a million students in this country from countries I am not too sure about, and China is one of them.

Do we really want Chinese students getting to come to school free of charge while we make our own students pay full fare?  I wondered who is making these kinds of decisions until he said the faculty and administrators were mostly Chinese.  What are we thinking here?  Maybe it might be better to think about this a little and start looking at why we would do such a thing.

What Didn't Happen at the End

Well, some of us were surprised that nothing happened to disrupt the election process in the United States.  That will lead some to say that the Russians must have realized something none of us knew until very late, that Donald Trump would win.  Credit them with being clairvoyant and way ahead of our analysts in this country.  The Russians even released a video of celebrations in Moscow when Trump won, acting like they had something to do with it.  

They couldn't have known who would win because we didn't know either until almost 2 AM this morning.  They may have influenced some voters, but turned off many more.  Meddling in elections has not been very successful for them in the past, and there is a good indication that this one wasn't much better.  That does not mean that anyone here will forget the hacking of the political candidates, any more than we forgot the Chinese did it before them.  Remember the curses that come with this kind of behavior:  May you live in interesting times.  May all your wishes come true.  

First Aluminum, Now Steel

Well, the Chinese are finally being investigated for something they have been doing for over a year - dumping cheap metals in the U.S by going through other countries to mask the source.  Several news sources like Nasdaq and the Wall Street Journal had articles on the latest with Vietnamese steel being dumped into the US to avoid sanctions and tariffs put on for doing previous dumping.  [both of these articles are by John Miller but they cover different aspects]. The amazing part of this is the length of time between the dumping and the action by the Commerce Department, over a year.  They only did something when it became obvious that Vietnam had increased its exports from 36,000 to 556,000 tons.  Somewhere along the way you would think that kind of  would stand out enough for someone to notice long before the year was up.

There is a complication to this that made then hesitate, since Vietnam was actually treating the steel to make it more corrosion resistant, something normally done when it is made.  Totally transparent.  The Vietnam Steel Associasion says they are cutting back on steel igot sales because boron and chromium have been found in some of them.  They claim to not be importing that much cold-rolled steel but the numbers are there for everyone to see.  And, of course, Vietnam is now our friend and we have to be nice to them since President Obama made his visit there this year.

Now, think about this a little.  China produces steel so cheaply that it can afford to ship it to Vietnam, treat it and transship it to the U.S and still make money....  that is cheap steel.  Of course, Vietnam is cooperating in this ruse, and knows the deal with China is good for them too.  Our Commerce Department needs to move faster for our own protection.  While they are doing it, let's do some checking for boron and chromium in our ingot steel imports.  That could be a health risk we don't need.

The Rght to an Opinion

One thing the U.S election has shown us is a reluctance on the part of segments of the electorate to accept any opinion other than their own.  You do not have a right to disagree with them, even if you provide reasons for doing so.

The problem with this is the similarity between Russia, China and the United States, which should not go unnoticed.  In none of these places is it acceptable to have a contrary opinion.  The media is managed to filter out views that differ from the government's own.  An elite at the top of the central government manages their power to preserve a single view.  Local political figures apply "rules" that discourage dissent.  Social media is watched and political parties contribute pieces to keep their views in channels used by the population.  The people are managed; they know it, and the resentment spills out on occasion.

A single party rules the political elite.  All three claim to be democracies of a type, yet they have elements of something less.  We have always believed our country was better than these others because of its tolerance for different views and different religions.  Stand on a soapbox in a local park and proclaim that just to see how it is received.

A Question of Attribution

There was an interesting story by James Bamford that was carried yesterday by Reuters.  In it, he speculated that the Russians might not be behind the data thefts in either the Democratic National Committee or other things they get blamed for.  It is something to think about because attribution is so speculative these days.  If you like Bamford's writing, you can search on it and read it.

Our Intelligence Community has allowed our government to speak about this and those comments say it is the Russians.  I don't like this very much and have said so a number of times.  The Intelligence Community is often not allowed to speak for itself, granting that to Congressmen and Administration officials at various levels.  All those people can say is what they heard in closed-door briefings that are classified.  What makes them classified is what the Director of National Intelligence said in open session about attribution:  to be sure, we want to know where the event really came from, who ordered it, and where they were located when the attack was launched.

For specific events, these are not the kind of things we should be talking about in public since it raises the "How did you know that?" Question and discloses sources and methods that others would love to know.  The people who do the attacks want to know how we know who they are, and would be glad to hear that news.

So, for sure, there is some "trust me" in this but we don't need to find out that there is an informant in the place where this group launched its attack, that they were being monitored by some fancy new black box, or that a satellite picked them up when they came home from the school they were attending.   All we really need to know is the real source, and even that is not very specific to what was being done.  But, usually, if the Intelligence Community of any country says it knows who is responsible, they usually know a lot more than they are saying.  They could be wrong, but the odds are the US is not making the statement to fit any political agenda.  It really was Russia.

China's J-20 and the Press Reports

I read several stories today about the J-20, China's new stealth fighter, and was shocked.  Not that the fighter was not a nice airplane, but that it was news.  The fighter appeared on the tarmac and in the air during a visit by our Defense Secretary almost 5 years ago.  Pictures of it were almost everywhere, and that time, I said I was surprised to see it in the Wall Street Joiurnal which is not well known for its coverage of new airplanes.  The airplane seems to be used for show whenever there is a need.

The Daily Mail of London says the plane was built from stolen secrets of the F-22, something every vendor says when they are competing in world markets where the secrecy of a plane can make a difference now and again.  The Chinese must think people will buy this plane if they talk about it enough.  Saying it is built from stolen technology is not a good selling point, in case you hadn't noticed.  Now everyone in the world knows you stole the technology instead of developing it yourself.  If we bought cell phones the way we buy airplanes, we might say the fight between Samsung and Apple shows us something about whether we should buy an iPhone or a Galaxy.

Germans Say "Reciprocity"

The Wall Street Journal has an article on the increasing tensions between Germany and China over trade, quoting as follows:

"German Chancellor Angela Merkel’s spokesman, Steffen Seibert, said Monday that Germany was 'right in being open toward investments from abroad and, of course, from China,” but stressed a need for “fair investment and competition conditions in an international context.'

'The key here is reciprocity,' Mr. Seibert said. Germany 'must be protected effectively against unfair competition,' he said."

Finally, somebody is saying the right word about trade with China.  China has done every kind of international deal favoring only their own country and expects the rest of the world to live with it.  The U.S would do well to view what they are doing in the same light.  

New Report on Chinese Censorship

You can read the executive summary of a new report from Citizen Lab that characterizes censorship over live-streaming services, one of the most difficult challenges any government can try to tackle.  It is virtually impossible to real-time censor any content by running it through a central monitoring activity - though the Chinese certainly try.  What this report shows is that the Chinese decentralize live streaming censorship and embed key words in the filtering censorship software.  They leave actual censorship to the local entity - called self-censorship - and hold those entities accountable if they don't.  One example cited is the downloading of a VPN, which would give the user some security from this type of oversight.  I guess they don't need a policy that bans VPNs if they have thousands of service providers enforcing what they think that keyword might mean.

This is typical of the policies used by China on companies operating there.  The policies are vague, "draft", and enforced differently by different localities.  This creates doubt in the minds of those operating there and leads to over enforcement by self-regulators.

A Lesson of War

There is a good piece in the Wall Street Journal Opinion section today, quoting University of Pennsylvania professor Arthur Waldron.  It is interesting because the root of the story is not quite what the quote seems to convey.  The quote is:  “Compromise” is a scarce concept in Chinese theories of conflict. Rather the phrase they use is ni si wo huo—“you die, I live.” That is not “win-win.” . . .

It is what I have been saying about China for many years now.  They pretend to be cooperating with the rest of the world, but their main course of action is to look out for their own interests, very diverse and complicated as they are.  The South China Sea comes to mind.  They have managed to militarize the area without admitting to it, change the mind of their protagonist the Philippines, and lay claim to territory that any number of other countries claim as their own.  They live;  those other claims die.  Just in case the little dictator in the Philippines has not noticed, his interests are their interests as long as he does what they want - no more or less.

As to the United States, those lessons will be lost after the next election and we will reengage, almost as if the whole thing just started on January 20th with the swearing in of a new administration.  This is supposed to be why we have career government employees - to span the comings and goings of politicians and still do the job.  As we have been finding out, too many of those people are becoming politically aligned, and more than just the rising number of political appointees allowed to any new administration.  That class used to be our continuity of government, but it is largely gone now.  We should think more about making some agencies like the Department of Justice exempt from appointing anyone who might not place the administration of justice above politics.  Republicans and Democrats both decry the situation we have, but neither of them wants any part of changing it.

The lesson of war is that political systems like ours are not well suited to defeating the Chinese who are centrally managed and ruthlessly consistent in their application of their world view.

Chinese Aluminum Goes to WTO (at last)

In the Wall Street Journal today is the story of one of those hard-working people who has decided to take a stand on aluminum being dumped by the Chinese, and go to the World Trade Organization to take up this travesty.  We can sure tell it is the silly season when some of the top Democrats in Congress decide they want to clamp down on China for something they have been doing for the last five years. Elections do that to them.  However, we should not look a gift horse in the mouth.

An article by the Aluminum Insider, says the current duties on Chinese aluminum have been in effect since 2011, so their must not be hurting anyone in China very much.  I'm at a loss to say what those figures are, since the formula for calculating this kind of thing is mysterious and complicated.  All we can say for sure is there are duties.

Along the way of enforcing these duties comes another story of even greater consequence.  Fortune says while the U.S. has lost 600 jobs with the closing of the Alcoa smelter, the Chinese were stockpiling $2 Billion in aluminum in Mexico trying to get it into this country without paying the duties on their aluminum coming from China.  We have to wonder how long they managed to pull that off.  Ingots of aluminum seem to all have pretty much the same look to the casual onlooker like me, so they could be doing that in every one of their friend's businesses all over the world.

So, it turns out that leaders who are concerned about the message being spread by voters seems to indicate Congress is not doing enough, does something to appear to be doing something.  What it is doing could have been done five years ago.  What the Chinese have always done when confronted by WTO is to back down, turn around, and come back another way.  Green Dam has just come back after a layoff of a few years.  Aluminum exports will not be far behind a temporary setback of WTO saying "don't do that" to them.  Vigilance is essential to keeping them from doing it.  Congress is far too patient.

The Pace of Justice

The use of phone scams in the United States, especially among the elderly, has come along nicely as a business.  We know this from the number of calls coming to our homes, and parents homes where they usually go unanswered.  My mother stopped answering the phone which gives merchants and her plumber no end of grief.  There isn't a state government that isn't up in arms over the calling which has been going on for years to get to this point.  Nobody seems to want to stop it.

So, we finally see yesterday (The Justice Department announced it and articles appeared in several newspapers) the cracking of a "major" ring located in India, with participation of 20 suspects arrested in the U.S and a total of 56 indictments all in all.  This is what people do when they can't stop the calls being made.  They arrest a few of the many - the usual suspects - and declare victory.  It should not take three years to do that.

There are several groups doing this, and we can tell that from the differences in phone calls rejected or accepted by answering machines.  I have heard computer generated voices, recorded hunan voices and real human beings (or very good imitations).  They all say call this number or you will be arrested.  So, if for any reason, you think they will stop or even slow down a little, guess again.  This one little raid will do about as much as arresting a couple of hackers stealing from banks will stop that kind of activity.

We could stop it, but it would take a different approach than criminal prosecution - find out who is doing it (how hard can it be when they leave their number?) make the cost of doing business higher than the revenue stream. The phone companies are partially at fault for not blocking the callers at the networks.  Yes, it is whack-a-mole, but nobody is doing it.  They want to put the burden on the user to block them individually because they don't want to spend the money to take this on.  It is abuse of the telephone system which they own.  They treat it as a user problem.  To those in computer security, that sounds familiar.

We are supposed to have great people doing public service in consumer protection. What are they doing about this?   Why can't we get the numbers of people who call the scam number and warn them?  Personally call victims before they actually pay. The thieves will change the number, but start it again.  They will move to another state or country.  Start again.  It is called crime prevention.

Second, where is the real IRS in this?  They should be out investigating people pretending to be IRS.  Then, last but not least, do criminal investigations of the one that still operate.

Last, this is not resource intensive.  A couple of people in government can be spared to get something going instead of studying the problem.  One state could start.  Take the first step.  Do something.

Chinese Steal Rice Seeds

Well, I thought I had heard everything when the Chinese stole seed corn out of the ground in Iowa, but I guess that was just one more notch in the agricultural theft by Chinese businesses.  They know no shame and no limits on what they try to steal.

The latest, documented by the Depaertment of Justice, is the theft of rice seeds from a laboratory  in Stuttgart Arkansas.  Fox news has a story on this too and says there were two culprits cooperating in the theft of rice seed: "Yan was a geneticist for the U.S. Department of Agriculture at the Dale Bumpers National Research Center in Stuttgart, when he was originally charged in December 2013. He and another scientist Weiqiang Zhang were charged with conspiracy to steal trade secrets and theft of trade secrets. Zhang is a U.S. permanent resident and Yan a naturalized U.S. citizen."  

Two things are wrong here.  One is the number of Chinese-Americans who cooperate with China in the theft of technology from the United States.  We take them in, give them citizenship, and they give back by stealing from us.  But the real theft involves the whole area of permanent residents created by the E5B program which is used for more than stealing technology.  Ninety-two hundred of the 10,000 visas granted in 2014 were Chinese.  We need to abolish this program which allowed political parties to say they were getting money from "US Citizens" when they were only granted citizen status by this policy of the previous Clinton administration.  

China Playing the Game with Apple

There is a good story by the BBC today on China's twist on Apple.  Even though Foxconn employees thousands of people in China, some companies have banned the new iPhone 7.  It would be one thing if those bans were symbolic and not really enforced, but it appears "you're fired" actually means what it says.

Of course the Chinese have every excuse you can think of, from the South China Sea to it being a status symbol to justify what is really about Apple encryption and the ability to defeat the iPhone in other parts of the world.  China will not admit that it is bent on having access to every phone and computer in the world, but that is the way it works out.  When Apple said it was not going to cooperate, things started to happen, and this is part of the result.  The Chinese will keep the heat on until Apple does more than build a new technology center there.  It is a sign that they are still enough concerned about Apple that they won't compromise with one of their best long-term partners.

Think about what this means to other cell phone makers.  The Chinese have not complained about hardly any other companies except Apple.  That should tell you something about (1) their control of the technology in cell phones of the world and (2) their respect for Apple's ability to keep secrets in their phones.  Yes, the phones are made there and the Chinese intelligence services can do most anything to them without us knowing, but Apple will know.  Eventually, we will all find out.  Then, Apple can make their phones somewhere else or sell them only in China.  I guess it would be my preference for a phone made in the US where Chinese national interests were not the first thing that was considered, but Apple has a billion reasons to think about it awhile.

Blocking China's Acquisitions

Yesterday, the Financial Times had a good article on the growing resistance to China's purchases, mentioning both Aixtron (see my blog from yesterday) and Syngenta as cases in point.  The article [ Western resistance to China blocks $40bn of acquisitions by James Kynge] claims Germany and the Swiss "took into account security and competition concerns".  And, though many of these deals seem to be on the table, more and more countries are taking a closer look.

These main issue in both the EU and the US is whether a purchase by a State Owned Enterprise is really a purchase by another business or China itself.  In my first book, I went through some of the issues with Chinese businesses not being like ours.  Some of the foreign businesses in China have levels of Chinese ownership and control specified in law.  Conglomerates are so diverse as to make you wonder if any of them had business plans when they started.  They buy other entities that bear no relationship to anything the company currently does.  That alone would raise some eyebrows in the M&A markets.  But diversity is only one aspect.

The other issue is security.  Australia recently blocked the sale of Ausgrid, part of their core electric grid.  What the rest of the world should be looking at is the tech that goes into 5g, advanced networks and any long-haul communications.  The Chinese are looking to control the Internet and use it to collect intelligence needed to meet their political and economic objectives.  They do it well in their own country and are using that model to seep into the rest of the world.  When they buy something, there is almost always a reason.

Aixtron German-Chinese Sale Unplugged

In today's Wall Street Journal is an article that notes the German government has withdrawn its approval of the purchase of German high-tech company, Aixtron.  I have repeated a portion of my prior post on Aixtron which quotes the New York Times story about how the purchase came to be sidetracked to begin with.  The real issue is the difference between state owned enterprises buying something, and a private investor.  Try as they might, the Chinese are not able to convince the world that their businesses are independent, when the world's business community knows better.

There was a good article in the New York Times on Saturday that describes the turmoil for a company called Aixtron, a German high-tech business.  What the Times article does is give the back story to how this purchase came to be.  If we want to play with Chinese investments, it is a good thing to know how they play.  

The cancellation of an order at the last minute put Aixtron's stock on a downward spiral.  The company that pulled the plug on that order was San’an Optoelectronics, another Chinese company with funding from some of the same people who worked out the M&A on Aixtron.  The story in the Times documents the connections between the different companies that were related both to the purchaser and the business relationships Aixtron had in China.  This purchase and one other major one made Germany the biggest recipient of Chinese capital in Europe.  German concerns about technology transfer are well founded.  

The biggest mistake we make in dealing with China is believing their businesses are just like ours - independent of government, managed by Boards with their own independence, and acting in their own self-interest.  The only interests they serve are those of the central government.  

A Little Conversation with the CPC

One of the funniest pieces I have ever seen on China was done today by the BBC.  The Communist Party was hosting an open dialog with the world, or so they said.  If this is what passes for "open" then we might understand why there has not been one of these before.  It will have you rolling on the floor, if you don't take it too seriously.  Some of the handlers were obviously not getting the memo.

Memories

I am reading an interesting book called Dark Territory, by Fred Kaplan.  The subtitle of it The Secret History of Cyber War tells most of what it is about, and Kaplan is reporting from his own knowledge and interviews with people who were involved at the higher levels of government.  For me, this is a book of memories, some new, some old, and some recalled for the benefit of the teller.

He tells the stories of how the political side of cyber war came to be defined by the people, mostly military, who were at the top level of NSA and RAND.  I think MITRE should have been mentioned a little more, but in that company were many more organizations and people with interests on the offensive and defensive side (I still have more than half to read).  More about this book later.

I met a lot of these people at one time or another, speaking at conferences and working in National Missile Defense.  I met Robert Morris Sr, Chief Scientist at NSA, that way.  He used to sit in the front row of a conference, where there were usually plenty of seats.  At one Canadian IT Security Symposium I used him as an example of UNIX expert, saying his credibility would carry the day for most arguments made for how to secure a UNIX system and he made a good source.  Since he was sitting not more than 3 feet from me, I walked over to him while I was talking.  I caught him off guard.  He fumbled, thought about it, and said, loudly enough that everyone in the auditorium could hear it, "I wouldn't be too sure about that, if I were you." The audience started to laugh and went on for a little too long for him to be comfortable.  He was as humble a Chieft Scientist as I have ever known, but he was smart as a man can be.

It reminds me of the number of experts I see today who are doing the work but can never talk about what they are doing or why they do it.  I raise my glass to all of you.  Some of our country's best resources fall into that category.  They can't write about it.  They can't speak about it.  Yet they are the ones between us and our enemies.  They are frustrated by politics, and nobody can blame them.  Yet, they do the right thing, sometimes over the objections of politicians who wouldn't understand much of what they were doing even if they explained it.  It is heroic.

All Politics is Local (except the money)

We have a saying in this country that all politics is local.  Maybe everyone in the world could agree with that, since even the most strictly controlled countries have some dissent among their own populations.  People naturally grumble and too tight of a lid on that can lead to revolutions of various types.  Law Enforcement usually intervenes, the smoke clears, and a few leaders end up in jail.

But, as we find today in the Wall Street Journal the law enforcement may be part of the problem when it fails to be independent and honest.  This case involves the same Governor of Virginia, Terry McAuliffe, who was involved with the Chinese in funneling money to the Clinton Campaign, which is still being investigated by the FBI.  They may have difficulty being objective.  

The Journal article tells a tale of political support for the wife of a Deputy Director of the FBI.  He just happens to be the one leading the investigation of Hillary Clinton's emails.  The FBI and the political hacks that oversee it at the Justice Department have stepped into something here that will not go over well with the electorate.  Though it is too late to influence the outcome of the campaigns, politics is not a game the FBI should play.  That is why we have an independent national law enforcement entity to deal with political corruption.  

One of our political parties selected the wife long before anyone knew her husband would be leading the investigation, but the appearance which will dominate the news for a day, is one of corruption of the major law enforcement agency in the US.  That is on top of the appearance of a leadership in the Justice Department that will go to the end to make sure there is not a prosecution of the reigning nominee.  It is appearance, not facts of any nature, that make political revolutions. 

However this turns out, it will not be good for the FBI which relies on its independence to do its investigations fairly.  The FBI has always been a place where that appearance was important to the leadership and to the agents that do the work in the field.  Allowing a person whose wife has just run for a major political office to participate in the investigation was clearly bad judgement, at the least.  She was selected by the party and asked to run.  One third of her money came from the party.  The word stupid comes to mind here because we would hope that it was just a miscalculation and not politically motivated.  I vote for stupid.  No pun intended.  

Nothing Like Public Email

  In Email 101 every college student is taught that what you say to a person on email may not be interpreted quite the way you thought it would be, or it might be exposed by someone with a political agenda.  Office politics is sometimes just as vicious as what we see at the national level.

What we are seeing in the exposure of the Democratic National Committee and the Clinton campaign is a stream of statesments that do not fit the narrative being told by the candidate.  That is because the candidate did not say the same thing to different groups, which is apparently a sin of some sort, and may have set out to undermine the opposition by a series what some call  "dirty tricks" and others call "politics as usual".  Neither of these are at the root of the problem. We have had those since the 1800s. What we have not had was theft of the internal communications of political organizations on this scale.

I wonder what would have happened if the email and data stored in the DNC and campaign had been secure.  Secure means nobody can read it unless they are on the distribution for it.  They can copy and send it to someone else, but it will retain the original source.   That would have been good for them and for all of us who have to listen to the endless nonsense being spewed out by every major network.  But, email is not very secure when they choose to not secure it, use devices that can easily be hacked, and get their political buddies to do computer services for themselves.  They get what they deserve.

However, the other aspect of this is the writing side.  Email should be written for the public, and I do mean the public at large, not just posterity.  If it cannot be secured, it must be written as if for the public, because it will be sooner than later.  Some of the things being said in those emails are clearly not written for anyone outside the inner circle in the campaign.  These are things that only friends say in the quiet of their own home, and they better be good friends too;  cocktail friends are not close enough.

There used to be a rule about Top Secret information that made a lot of sense.  If you have something really, really sensitive to talk about, make that an in-person talk, briefing, or exchange.  Don't write it down unless you have to, and then only when that is recorded and tracked by who had access to what.  It is burdensome and difficult to do this, but it will keep secrets secret.  People find it too hard to do basic security of their secrets, and for that they also get what they deserve.

So, while others consider the meaning of those emails, I find it has more meaning than the content.  It means we have forgotten how to keep secrets secret.  It is too hard, I guess.

China All In

Anjani Trivedi's article in the Wall Street Journal today is about China's shift to buying their mid tier goods used in manufacturing, from Chinese vendors instead of ours.  The example he uses is resins from Dow Chemical and Eckard Effect Pigments in Germany.  They now get these from local suppliers.  Of course we all know why.

It is the same reason our trade deficient hit a record with China last year.  They have stolen our technology and propriety information and use it to build their own businesses that compete with ours, and the Germans too.  The have laws that restrict what foreign companies can do in their country to grow business, and they made business intelligence, competitive business information about competitors, a national secret.  If a business keeps competitive data, it risks going to court.

They demand proprietary secrets from any business operating in China, including source code and encryption technologies that protect it.  They are aggressive and persistent.  They use those to shortcut their own production cycles and move out more quickly into other markets.

The natural result is they can buy more goods from themselves, because they make more goods and don't buy ours.  That makes for huge deficients which both Presidential candidates ignore.  We can't pretend that we can outthink or innovate ourselves out of this mess because the damage has largely been done.  What we lack is reciprocity in our trade relations with China.  They have had it both ways during this sprint, and only the power of political interest can stop them.

Justice Delayed is Something Else

 I don't see how the press release yesterday from the Justice Department tells us anything about the reasons for prosecution of Retired General James E. Cartwright, except that he was retired.  It says he was prosecuted for lying to a Federal investigator, which is a catch-all phrase used to justify a prosecution for something nobody wants to talk about.  Partly, it is because the incidents in question took place so long ago, it is obvious this is one of those loose ends being tied up before this administration leaves office.  

Politico updated their story today to say what this is about and the name in that story is David Sanger, the noted New York Times writer with very good sources in cyber, and Barack Obama, who was said to be close to Carwright.  The information disclosed was Top Secret/SCI, some of our most secret things.  Cartwright was represented by Greg Craig, the President's former White House Counsel.  

The Justice letter back to Carwright's lawyer notes a charge of "abuse of authority" which carries a 2 year sentence, along with the primary charge of lying to a federal investigator, which gets 6 if the judge is so inclined.

Something is not right here.  The Politico story reflects the Cartwritght legal view, that he did not make the disclosure to begin with, and only tried to keep the story from being published.  That usually doesn't end in prosecution.  They could have just said, "bad call" and given him a letter of reprimand, ending his career.  That would have fit the narrative better than a criminal prosecution.  

Movies Now a National Security Issue

I had to flinch when I saw the article today in the Wall Street Journal about Wang Jianlin and Jack Ma's purchases in the Hollywood movie business.  We are now going to ask CIFIUS, which tracks and occasionally tries to manage foreign purchases in the US, to see if this grab for movie studio control has national security implications.  The theory here is that we should be concerned about the Chinese manipulating content of movies to produce products that more favor the Chinese view of the world and are thus fit for Chinese consumption.  

It seems like the Chinese would be more interested in the means of production of movies so they could make more of their own.  They have a huge audience and a crying need for content, since they ban all but 34 foreign films every year.  In case you missed it, this is all part of the effort to control content of anything in print, film or sound that might be sold in China.  This is all part of a new set of laws governing anything not made or controlled by Chinese media companies.  Apple fell victim to this type of control and had to give up its iTumes sales in China.  They are trying to buy into our media companies and ban US participation in theirs.  This is the reciprocity in trade relations that we seem to have put aside for the election.  Let the next President deal with it.  In normal times, CIFIUS can hold a meeting and make a decision in a couple of months, but this one is going to drag out.  It isn't about a national security concern for Chinese purchases of studios;  it is about allowing them to buy technology that they wouldn't buy from the manufacturers in the United States.  

Too Many Secrets

We seem to have too many secrets being exposed in this U.S. election.  On the one side, we have the collection and presentation of videos that purport to show gross behavior toward women, some of which occurred 30 years ago.  On the other side, we have the internal emails of a political campaign that talk about attitudes towards various groups within the opposition, like Catholics and Christians.  This is not a face we want to show to the rest of the world, but it is the state of politics since the alignment of political parties and media  channels favoring one candidate over another.

What prompts this kind of activity in the U.S. is the First Amendment to the Constitution [see https://www.law.cornell.edu/constitution/first_amendment for a broader explanation]

"The First Amendment guarantees freedoms concerning religion, expression, assembly, and the right to petition.  It forbids Congress from both promoting one religion over others and also restricting an individual’s religious practice.  It guarantees freedom of expression by prohibiting Congress from restricting the press or the rights of individuals to speak freely.  It also guarantees the right of citizens to assemble peaceably and to petition their government.

Amendment I

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances."

So, this delicate balance of press and freedom of expression is easy to document, but the harder to describe in terms of what is happening today.  What is allows the press to do is sandbag videos and voice recordings of any potential candidates and play them when they choose to.  It allows other governments to steal information and feed it into a free press which does not care about the source, accuracy, or context of such things.  With every right there should be some responsibility, which seems to be lacking everywhere in what used to be called "yellow journalism" when it was more fashionable than it is today.

George William Alger wrote a rather long explanation of the law and this form of print where he said the press shows its ethics, more than its respect for law, when it does these kinds of things.  Nobody in 1903 could foresee the storage capacity of a terabit drive or the interconnection of groups over the Internet.  It took years of law and public discourse to change the way the press operated in the late 1800s.  Nobody could have guessed that we would have to deal with it all over again.  

Green Dam All Over Again

You have to give the Chinese credit for perseverance.  They never give up, and when their policies don't work, they wait for a better time to implement them.  They change the names of products or the way the rules are written, but they make them vague enough that they can be interpreted broadly.  We have to stop falling for this nonsense.  [see http://www.wsj.com/articles/china-aims-to-strengthen-internet-child-safety-policies-1476282383 for some insight on this matter].

The Green Dam was a censorship and intelligence collection tool which was characterized by its full title, Green Dam Youth Escort.  Put this on every computer made in China, or made for use in China, and our children will never have to worry about content that is not controlled by the State.  The actual person on the street in China sees a need for this kind of thing, without even looking at how the software worked.  In my last book, I went into the background of this software and the analysis of its real capabilities.  The real intent was not just to allow only content the State thought was good for children.  It blocked religious websites, politically sensitive sites, and some specific individuals who favored political reforms in China.  Not many of our children go looking for some of these things on computers.  About the only sensible thing it blocked were pornographers.

The real issue with Green Dam was the attempt by China to require vendors outside China to help them defend Chinese children by putting the software on their computers too.   At least the Obama Administration had the sense to explore taking this to the World Trade Organization, which finally made them back down - partially.  They still allowed vendors to put the software on "voluntarily".

All the Chinese did was put this aside for awhile and now want to bring it back with a few tweaks.  Maybe they figure with the elections coming, nobody will notice a few little changes in Chinese policy.  

Europe Flails Russia over Syria - Finally

When I worked with NATO over the years, we used to marvel at the pace of activity, most particularly policy decisions.  We could work at a job overseas for an entire four-year tour before an issue that was broached when we arrived was finally considered.  No wonder it took so long for the French and Germans to come to the same conclusions about Russia's help to Syria.

Maybe it came from the heat generated when the Russians bombed a hospital - twice - or when the regime they were supporting used barrel bombs on the folks who are left in Aleppo.  How anyone lives there is a mystery.  After those drone pictures released last week showed next to nothing but a bombed out city.  Finding anyone alive there must be like finding a family safe after a crushing earthquake.

Maybe the Europeans are starting to realize the Russians are interfering in more than just Syria.  They are trying to influence people in Europe to back their causes and going after those who opposed them, not the least of which was accomplished through cyber attacks on TV5 in France.  In Germany, they organized the harassment of political figures who opposed them.  It is one thing when they do it in the Ukraine, but quite another when they do it at your own front door.  We are finding that out in the U.S elections where the level of interference is substantial and largely unappreciated.  Not that we have done much about it.  France might not have the same degree of tolerance that the Obama Administration has shown.