China’s Way of Negotiation

So, when the US wanted to talk to China about their rediculous demand on making Taiwan listings in US air carriers Taiwan, China, the Chinese said no.  This is the way they have negotiated things they want to establish as “non-negotiable” so we should expect this kind of behavior.  The problem with this, of course, is that China has too many things that are put into that category.  Those fighters on one of their man-made islands (just self-defense) those claims in fishing rights that have gone astray, and a host of other things that are dwarfed by the South China Sea where a piece of water half the size of China is at stake.  That piece of water includes a lot of territory in Taiwan and probably South Korea, though few have asked the question, not wanting to hear the response.  When there is no negotiations, you can bet there will be actions on both sides that do not allow for backing down.  Taiwan is not going to be Taiwan, China on very many US carriers.  If it is listed that way when you purchase your ticket, I would prompt you to just say no.  Try another carrier until they get this right.  

From Fiction to Reality

The only novel I wrote was one about a Chinese venture capitalist who was from Silicon Valley.  He funded companies and spied on them for his mother who ran a spy ring and lots of businesses in China.  Today, Reuters has a story on venture capital in the Valley and it sounds like what I envisioned in that book.

Venture capital can be passive or active, depending on what is allowed by our government.  I had a piece on trusts being used in port facilities and passive investment is lot like that.  We only get from these arrangements what we are willing to devote in overseeing them.  We don’t want passive investors bringing spies into the country to “audit” acitivities or “help” the developers beyond how to produce and sell the products they are funding.  That is really hard to oversee.  We want the companies to be successful, and they need capital to get there, but do we really need Chinese investors setting up shop in Silicon Valley and buying up our future?  That is partly what the limitations being discussed on Chinese investment in the US are all about.

The Committee on Foreign Investment in the US (CFIUS) is not very well equipped to handle this kind of state-sponsored company incursions.  The laws have been changed to help that aspect, but more needs to be done.  CFIUS is not a regulator of foreign investment in the US, except for that aspect that deals with National Security.  We hear that word thrown around a lot with such things as steel production being a National Security issue this year, when it has never been one before.  This Silicon Valley financing is another matter.  A struggling firm does not always check its backers backgrounds beyond the amount of cash they can provide.  It is like taking money from the Devil, hoping for a chance to buy him out.  Good luck with that.  

Negotiations with North Korea

So, before the North Koreans met with the US in Singapore they already had plans underway to upgrade their weapons capability.  A story today in the Wall Street Journal (with graphic pictures) shows what has been done and the possible implications of doing it.  It has been reported by almost every press outlet there is.

I beleive, and have said often, nothing works when negotiating with China.  They promise; they delay; they debate.  In the end, they do what they want, not what was agreed to.  A stream of US sanctions agreements attest to that better than anything else.  The only thing that achieves any results is action they can see.

Russia/Syria Bombs Hospitals Again

Since the Russians teamed up with Syria the Syrians have been bombing hospitals, something the Russians probably learned in Chechnya, or maybe Stalin’s era practices where Russia bombed German field hospitals.  Their rationale was if you can’t treat the wounded, they die or tie up resources taking care of them.

The US. Bombed a hospital in Aleppo, the Saudis bombed one in Yemen.  I wonder if any of these folks heard of the Geneva Convention?  What was that for?  So we could stop the kinds of things we thought gave war a bad name.  That was naive.

Currency Wins Global Trade Battle

There is a good article in today’s Wall Street Journal that tells us all the reasons why China doesn’t just sell off Treasury notes and allow the US to strangle.  They own 8% that can be traced to them, (and much more through beneficial ownership), but if they sell it off the US would not be buying nearly as much from China.  The whole piece is very good reading.

What they did do instead, which the Journal commented on its opinion section, was allow its currency to devalue a little - enough to get our attention - and offset the tariffs the US imposed.  Tariffs or no, they win with this strategy.  It took only a week to convince the US that it was not such a good idea to do tit-for-tat tariffs.  That puts China back in the lead on negotiations.  We can’t beat China on our own.  I don’t like saying it, or even thinking it, but the President is right that the world has allowed China to prosper giving it breaks and help and allowing it to become a world power in trade, yet globally, we still act like it is a third world trading partner.  When will that end?

The US President announced $200 million in new tariffs today.  Let’s see how that goes.

Computer Crime That Keeps On Giving

The Justice Department announced indictments of 8 people today in the Western District of Tennessee in the US Midwest.  The indictments are attachments to the press release. 

What surprised me about a couple of these is the age of some of the scams these people continue to foist on people in the US.  On the other hand, they have upgraded considerably in their capability to go after businesses, and in the words of the indictment, "an intruder monitors email to determine when a large financial transaction is going to take place.  After initial transfer or wiring instructions are conveyed between legitimate parties to the transaction, the intruder sends a follow-up email that appears to be coming from the original legitimate sender.  The "spoofed" email contains a a change of plans, instructing that the money be wired to different account - one that is under the intruder's control and set up for the purpose of receiving the redirected funds." 

Among the others were the old "romance scam" tricking people into believing there is a relationship forming with someone outside the country, and the "advance-fee" scam which I first saw in 1985.  Pay me a fee and you can have the money put aside for you.  It is amazing that these kinds of tricks still work on people who don't know any better, and people outside the US can take advantage of our citizens to benefit themselves.  The FBI did good work on this one. 

China Wants to Fight

Chairman Xi has addressed a forum of American and European business leaders, telling them he wants to fight rather than bow to US pressure.  That was not what they wanted to hear, but that terminology has been used before in a number of matters that have nothing to do with trade.  One of his military leaders said the US should "get a bloody nose" for venturing into the South China Sea on these "freedom of navigation" runs that declare our interest in protecting the rights of the US and others in that sea.  This time, we are trying to disrupt the China 2025 initiatives, which is a principle pillar of China's trade and technology future.

Those multi-national business leaders are the ones who will be damaged by trade disputes played out in public the way the current one is, and the Chairman knows that very well.  He is trying to get business leaders to influence their friends in the Trump Administration, and their business partners who are most likely to suffer.  It is the kind of approach that business leaders understand.  They like to do their influencing behind the scenes, in board rooms and private meetings of their peers.  They will win with that strategy.

I have heard business leaders reference the number of Chinese customers they have relative to the US.  By sheer numbers, the trade war favors the Chinese, but that trade comes with a cost that most business leaders have not considered.  They continue to think about numbers, while the Chinese trade for influence and technology - that is their 2025 direction.  So, Chairman Xi establishes himself as the leader of the customer base of many large businesses, and that fits their business model.  His strategy is to take over a sector at a time until China dominates world trade.  Tell me how many domestic computer manufacturers are still around in your country?  How many network technology sectors are dominated by the Chinese?  Who makes all the telephones and smartphones? Add to that all of those technology sectors in 2025.

The business leaders need to think about the future and not just the number of customers that will help them look good in the short run.  Xi will use you now to exert influence, but in 10 years he will be making your products in his own country and you will be retired from a failing business.  Ask the computer, network and phone OEMs of the world.

How Much Trust in Trusts?

A couple of days ago I saw something in the Wall Street Journal about Chinese investors buying a port and offering to put it in a trust.  That scared me, because it showed two things:  first, that China was buying up ports around the world while they lay claim to the South China Sea, and second, the Chinese understand the rules for trusts, not just here but around the world, and use them against us. 

While The Committee on Foreign Investment in the US (CFIUS) looks into the US purchases, China is busy buying ports in other parts of the world, like Hong Kong and Sri Lanka.  It seems they want to control the places where commerce is shipped from one country to another.  There are many more ports that China is buying.  That is part of Economic Warfare, and not a part that we should be comfortable with.  They will have the capability to slow down trade with any country that crosses them.  They can initiate strikes, slow down loading of selected ships, or ban or authorize certain political entities.   The Chinese have always understood trade and the importance of shipping to commerce.  Being able to influence that trade is an important aspect. 

Trusts are only of value if we understand the parties involved.  My experience with trusts started in the 80's with Industrial Security Trusts which were supposed to isolate foreign owners from US Boards of Directors.  Those trusts were made between cooperating countries - they didn't include China or Russia, or any country hostile to us for good reason - we didn't want those countries buying an interest in national security related activities of the US government.  There were occasional times when companies violated the trust agreements, sometimes through ignorance, but mostly through wanting a relationship that our government did not approve of.  These are big international companies that can always find a way around rules.  That made sense to everyone at the time, but oversight appears to have lost momentum over the years.  Now, we let China buy ports and make investments in critical infrastructure in the US, even though we have rules against doing just that. 

One thing I do know about companies is they do business without regard to what governments may think about their activities.  The US businesses have traded away technology for access to Chinese markets, while blaming Chinese rules for doing so.  That is just cover for them.  Business arrangements, like those in Chinese manufacturing, are loosely defined and enforced in only one direction.  The US has known that for 15 years or more, yet businesses continue to turn over their technology. 

China, however, mixes its business and government interests in ways that make them unreliable as partners in such things as government-to-business trusts.  Who is it we are trusting?  With most businesses we trust a company, but monitor it.  We can't monitor that portion of a deal that involves the Chinese government, and we should not trust them to keep their word.  We would have to believe that Chinese businesses are just like ours, when we should know better. 

ZTE, China and Iran Nuclear Agreement

While China was in the process of negotiating with the US, Russia, UK, & Germany on the Iran Nuclear Agreement, ZTE was already violating the principles that were being laid down.  By being a part of the negotiations, China knew what plans were being made to restrict Iran's nuclear capabilities, and set out to violate them even before the agreement was formally drawn up.  The US sanctioned ZTE for those violations, but the real culprit was China's leadership.  The US noted violations started in 2010, and continued though 2016, the year after the Nuclear Agreement was made. 

China pretends that its businesses are independent, just like those of the rest of the world, when we know they are not.  When we sanctioned ZTE, we were sanctioning the central government of China.  Do we think they can change their behavior because they sign agreements between our trade representatives?  China does what it wants.  Agreements and negotiations are useless. 

Chinese Miltary Lasers

There is another crop of laser stories in the news cycle today, and I think many people who read them have no idea what a military laser really is.  There is a good May article on China's military lasers in the South China Morning Post, and they are not the kind of lasers kids use to flash in the eyes of airline pilots, a weird pass-time that they should think about before doing.

The Chinese have come up with a set of lasers that are supposed to destroy drones, small aircraft and helicopters.  These are good size lasers and cannot be carried in your pocket.  You would have to put the on a trailer and haul them around with your SUV - they are that big.  The last few lines of that article says a lot about how these lasers are going to be used, "China has also developed several types of low-power laser guns, which are used to dazzle or blind the enemy from a short range, or to damage the enemy’s night-vision devices. Four types of laser guns – the BBQ-905 Laser Dazzler Weapon, the WJG-2002 Laser Gun, the PY132A Blinding Laser Weapon and the PY131A Blinding Laser Weapon – were revealed in a report by state-run Global Times in 2015."

I'm sure the Chinese must know that two can play at this game.  There are several weapons shown on the Internet that come from the US arsenal, and the Chinese versions look almost exactly like the ones shown last year.  You can do the comparison yourself by looking at the Post article and the YouTube video, the year before, as one example.  No doubt about where the Chinese got theirs.  The difference is, the Chinese are actually using the ones they have to target our aircraft.  Apparently, they are good for something, though I am skeptical of both sides saying how effective these weapons are.  In one of my previous books, I recounted the story of the Airborne Laser, an aircraft-mounted laser.  When one of our senior officials at Ballistic Missile Defense was asked how well it performed, she said "The only way that will hit the target is if the pilot flies into it."  Of course, a lot can happen in the 20 years since....

Krebs Article on Location Data

Brian Krebs has a good article today on the sale of location data by some of the larger phone companies like AT&T, Verizon et al selling location data to third parties.  Verizon said it would stop and AT&T said it would not, though changed its mind after the actions by Verizon were announced. 

These were third party agreements that allowed various companies to use location data for some unusual reasons, one being the tracking and monitoring of prisoners in the US justice system.  The New York Times exposed this last month.  Nobody mentioned social media in this, when the same types of third-party arrangements were more common with social media than we thought a year ago.  Congress exposed a lot of them, and will probably be looking into this sooner than later.   

I remember hearing the Facebook list of third-party agreements and saying, "Why would they sell them information about my friends?"  The answer was obvious - because they could.  Then, we found out that not only were they selling data that they had permission from users to share, but they had additional third-party arrangements that didn't require customer consent to share.  Facebook has yet to see all the fallout from that one. 

If I were in Congress, I would be looking at other agreements these telecoms had to share data with third parties.  I know I didn't sign up for blanket consent to share my data with someone else, but as Facebook would say, "It's not your data."  The difference is I pay my mobile fees every month so they aren't providing me a free service like Facebook used to. I dropped my Facebook account over the third-party arrangements with no consent, and would do the same for any service provider that sells location data to others. 

Panama Papers Law Firm

Everyone who follows the news knows the name Mossack Fonseca, the law firm that got hacked and had their customer records published on the Internet. They managed to put the term "shell companies' on the map of most millennials, at least for a short time. 

 BBC has a story on that today, with a new twist - it turns out that the firm did not know the owners of many of the shell companies it set up.  Once they were paid for setting them up, the real owners changed and they could not find them.  I didn't find that unusual, given the nature of the purpose of some of these companies - to hide money or stock ownership from someone else, including the law firm.  As Mossack Fonesca pointed out, it was all strictly legal.  Those with that information exposed determined that however legal it was to set one up, having it exposed was a greater sin than any of the business transactions of the shell companies.  You can bet other law firms are looking at better security since this incident happened, but you can also guess it was too late and most of them still don't know it. 

Although it has been a long time in coming, three months ago, the firm announced it was closing down, due in part to 'reputational damage'  a casualty of its own business model that exposed China's Xi and family, Russia's Putin, and a number of friends of both to public review of where that money was going.  The article has many of the other famous examples. 

It is just another reason to fear disclosure of information as much as compromise to a third party. 

White House on China Threats

For those wanting to read the White House 36-page report on China's exploitation of different methods of stealing foreign technology is is on the White House website, but not easy to find. 

It carries simplified versions of the ways the Chinese have managed to steal intellectual property and puts all of them in one place.  It is short and easy to read.  It has current examples and exposes some of the more complex technology diversions without going into a lot of detail about any of them.  It was good reading and I recommend it to anyone interested in the subject. 

ZTE Standoff

The Senate and House of Representatives in the US have both passed bills that differ greatly on the subject of ZTE.  So, before anyone jumps to the conclusion that ZTE stock should be falling off the big board because the Senate decided to reinstate controls on ZTE, that won't happen.  The President and the Chairman have talked about this and decided what needed to be done.  Both of them have some problems to deal with to make that happen, but unless we are naive, we have to believe the agreement to allow ZTE to continue will win out in the end. 

New Round of Trolls

We seem to be again getting drips of information about the use of trolls by Russia to influence different groups in the US through social media.  If they are doing it here, you can bet they are doing it in many other countries where my readers are located.  Today, the Wall Street Journal and a few others have published stories on the latest, a series of 1100 names of accounts that were on Twitter, adding to the total of 3800 that have been announced.

I have said many times that the Intelligence Community (in this case, the House Intelligence Committee) should be involved in identifying these troll accounts and getting them cleaned up.  It will take a few minutes to get more accounts for the Russian groups doing this, so slowing them down is not the objective. It is because we get to see what kinds of things these trolls have been supporting.   It can't just be the Internet Research Agency doing it because the Russians are smarter than that.   Tracking them down is no small feat, but the intelligence services of the world are capable of doing it.  All they have to do is cooperate.  The UK, Germany, France, Italy, Ukraine, Latvia, and others we don't know so much about, all need to cooperate to identify, and sabotage, these operations.  That is the only way to discourage further interference. That is what the social media services do not like.

I wonder what the motivation for allowing this to continue might be?  In the US, it seems clear the opposition party that released this information believes the Russians were helping the US President get into the job, a myth they perpetuate even though it is just as clear that the Russians were trying to keep Hillary Clinton out of that job - for what they thought were good reasons.  Those are not the same thing.  Anybody but Hillary was their slogan, and stirring up trouble was just a side benefit of creating channels for communications about divisive issues.  This article shows what they did in that regard, and it looks like it was successful in getting thousands of people to forward their statements and opinions to others on Twitter.  We already have been through the additional fake accounts on Facebook and there were plenty of those.  Hundreds of thousands of fake messages every day, on both sides of issues, just to keep the pot boiling on divisive issues.

We have only scratched the surface of what was really being done because the social media vendors do not want to know the answers to who was doing this and why.  I noticed yesterday that Fox News is saying 40% of people indicate they have cancelled at least one social media account in the last year.  If true, it would be a lesson to those companies that intentionally hid the real results of those reviews they did after getting hammered by one Congressional Committee after another.  I suspect that part is only starting.

Cybersecurity Workforce Assessment

GAO has a report that is downright frustrating to anyone in the cyber workforce of the Federal government.

We have OPM, those brilliant people who lost all the security clearance data to the Chinese and have yet to correct the problems that led to that, leading the charge to find out what to do about coding the cyber security workforce so Personnel Departments can find the people who have certain skills.

We have NIST, which is basically clueless about classification of these kinds of positions still calling for "certifications" of every cyber person, putting them in vague categories of skills that look like a laundry list of what they wish somebody could do, but nobody can do.  They have fragmented the career field into subelements and knowledge/skills/abilities that tell the average person almost nothing about what kind of things they would have to be able to do to do this kind of work.

When we were trying to start a career field for cyber, none of this was ever contemplated.  It shows you what can be accomplished by people who don't do the work that is being described and want to help others figure out what the career field should look like.  I thought we did that pretty well in 1986.  At that time the need was driven by the financial community which was trying to identify the skills needed to secure financial systems.  They looked to the Feds to help them, going to NSA to lead the effort.  NSA would not do it.  They shuttled this off to NIST.  NIST is the place we used to send things that we did not want done.  The spin off of this effort was a certification requirement, which became an outlet for the CISSP to begin.  Has this helped?

Fake News is Easy

Pew has a new survey that looks at the ability of the average media reader to distinguish facts and opinions in articles.  What makes this important is the Information Warfare strategy to use statements in social media, backed up by news articles supporting the position, and extending the spin cycle by feeding both sources of information.  The Russians and Chinese both use similar methods to support their positions on such things as territories they have seized, political issues, economic matters, and undermining contrary positions.  Their techniques are different, but the end result is the same.

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Note from the survey:  "A new Pew Research Center survey of 5,035 U.S. adults examines a basic step in that process: whether members of the public can recognize news as factual – something that’s capable of being proved or disproved by objective evidence – or as an opinion that reflects the beliefs and values of whoever expressed it."

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The Wall Street Journal makes that easy by putting commentary in an Opinion section, but many news outlets confuse the two by putting articles on the front page that should be in an identified opinion section.  Social media has no place for this kind of separation.  What complicates the whole thing is readers cannot tell the difference between opinion and fact.  News outlets reporting on the Pew study tended to focus on the 26% who could identify which statements were factual and which opinion, but the numbers were actually better in some ways than that number would indicate.  Identifying opinions was about 44% for some groups, though still less than half of the people who were studied.

When readers cannot tell the difference between fact and opinion, they put themselves at risk from writers who want to influence opinions in one direction, by any means necessary.  Facts matter, but only if the reader can accurately identify them.    What the data shows is that a higher number of people can tell the difference than that 26% would indicate, but the categories created by Pew showed something counter-intuitive:  that people who had high political awareness, were digitally savvy, and had less interest in news, actually did better on making the determination than those who distrusted the news media and were more interested in it.  Forty-three  percent could discover the opinions, but did less well on facts.

Press Watching

There are two places where press watching is pretty useless, North Korea and Russia.  You can pretty well expect that in both of those the press speaks to what the government wants to say, regardless of fact, one way or another.  The Wall Street Journal seems to find it interesting that North Korea put Trumps visit on the front page, when they did too.  Historical events are of interest to many countries with controlled press, but we don't want to put much stock in it.  Tomorrow, President Trump could be replacing the Devil in Hell and that would be on the front pages of North Korea but not the US. 

Time has an article last month on the Russian influence using social media in the US. and I was a little surprised that it left out the same influence by the press on public perception.  In each case, the Russians have used the press to reinforce its bogus reports in social media.  So, the social media starts the story, the press follows up or precedes the story and the the spin follows by referencing the stories in the press and starting all over.  A series of leaks follows using private information that is made public.  It is like a formula for a B movie.  It isn't great, but it works well enough to make more. 

Taiwan, China

It seems some airlines are not playing the game the Chinese want them to play.  Delta and others have decided listing Taiwan as part of China is a bridge too far, and avoid the issue altogether by referring the matter to the US government.  Some companies, including Chinese companies, are not playing either, probably because nobody cares as much as the Chinese central government.  Bureaucrats try to make them care by calling them out, but it is just beyond what the average customer cares about and not something they want to participate in.  I don't blame them. 

Give China an inch and try to stop them.  The companies they are manipulating are not all Chinese companies.  How US companies list Taiwan is in dispute, and the debate over it does not mean we accept Chinese policy on it just because they trade with people in China.  Anyone can see the South China Sea being next. 

We have carried this idea far too long.  The whole mess with forcing the conveyance of intellectual property has finally hit the wall in the US and other countries who have decided to put a foot down.  That issue has infected a whole host of others, this one with Taiwan being just one.  Now, more people and more countries are saying NO to China on these ridiculously biased policies.  It takes time to get to this stage, and it is going downhill faster now.  Trade and tariffs are the public issues between us and the Chinese, but at the root of all of it is the IP problems with Chinese companies and government agencies stealing us blind.  They aren't backing down, and the US is not going to either.  Taiwan is just a little pawn in the grand scheme of the South China Sea, but it is not going to go away because it is part of something much bigger. 

Apple Vs Law Enforcement

An article today in the Wall Street Journal describes the continuous battle between law enforcement and Apple.  Apple seems to be the only major phone maker playing the game.  It says security is important and being able to crack the iPhone security for law enforcement is a threat to every person who owns an iPhone.  So, as a user, I like that.  As a former law enforcement person, I don't like it, so I am conflicted.  Welcome to the club. 

The story is about Greyshift LLC, a company that makes an iPhone cracker.  You remember the FBI trying to do the same thing by bringing Apple into court, mainly because they weren't willing to do the work to crack it themselves.  They claim to have gotten an Israeli company to do it for them, at a cost of around $1million.  That is outrageous, as the article points out.  They overpaid. 

Apple is now prepared to make that harder by not allowing use of the external interface after the phone password has been tried too often, and one hour has passed.  More than a few customers are not going to like that in the end, but Apple is thinking they will get over it.  This will stop recovery by services that can do it with boxes like Greyshift makes, but it will stop legitimate efforts to recover my stuff when I get locked out.   

Before you feel sorry for the good guys (you have to figure out who that is), this game has been going on for ages, and nobody ever wins.  Greyshift is not going to shrivel up and go away because Apple makes it harder.  They will find a different route in.  Law Enforcement is not going to quit hacking phones to get the information that is in them, and they will get help wherever they can.  Apple can only do so much, and believe me, they are not going to make a tamper-proof phone in my lifetime.  I give them credit for trying, but I give Greyshift the same credit.  Free enterprise is really something. 

Sanctions on Russians and Syrians

If you are getting a little confused about the number of sanctions the US has put on various people for violations of sanctions put on specific countries for their actions, join the club.  Russians are sanctioned;  Chinese companies are sanctioned; Iranian government officials, North Koreans, et al are sanctioned too.  It is very confusing even to keep up on the number of sanctions that are the basis for these kinds of actions.  The latest one is jet fuel to Syria, which I actually did not know was on anyone's sanctions list.

Anyway, the US has sanctioned 5 Russians and 3 Syrians for moving jet fuel to Syria.  The Russians worked for a freight forwarder who was identified as a violator, and set up a shell company to continue their activities.  They must have thought, like ZTE and an unnamed co-conspirator, that setting up shell companies was the best way to avoid being discovered on violations.  It didn't work for ZTE and it didn't work for those Russians either, but it does seem to be a very popular way to try to avoid detection.  Those of you who remember the Panama Papers remember how many of these shell operations were set up all over the world, and this was only one law firm, in one country that ranked 4th in the creation of shell companies.  That means there are a boat load of these things out there.  Anyway, you can read all about this particular case in the Wall Street Journal, if you are so inclined.  Those who don't own a shell company should probably check it out.  Everybody else you know has one.

Norway Gets US Marines

Wow, Norway has apparently opened up its borders to US Marines for winter training.  There is nobody better at it than Norway, so the Marines will learn a lot of valuable skills.  Before people panic over US Marines being so close to Russia, there is a reminder in this story from Reuters that there will only be 300 people involved.  They could not hold very much territory, but remember that Norway is a long-time member of NATO so they will have help, not that I'm sure they would need to ask for it.  Norway has a good military and can fight their own battles pretty well. 

Reuters Describes "Embassy in Taiwan" for U.S.

A couple of days ago, Reuters ran a story that I thought better of publishing until I saw a reaction from China.  The South China Morning Post quotes the Global Times as saying China must prepare for a military engagement with the US over Taiwan.  Reuters did not quote that part of the Times story.  There were few other comments and the South China Morning Post did not have much to add to the GT writings.  So, Chinese press guidance must have told the papers to lay off the story, which said the US was opening what amounted to an embassy in Taiwan.  It will  be called a "representative office" and have close to 500 employees.  We have to admit that is a lot of staff for a stake-in-the-ground office. 

There are a number of representative offices listed on the State Department site, and I now know why the State Department has so many employees.  They need to screen these places now and again and limit the number they have.  I took a sample of these to give my readers an idea of where the tax dollars go:

Special Representative for Global Partnerships
Special Representative for the Great Lakes Region of Africa
Special Representative for International Labor Affairs
Special Representative to Muslim Communities
Special Representative of North Korea Policy* (also Deputy Assistant Secretary in East Asia and Pacific Affairs Bureau)
U.S. Special Representative to the Organization of Eastern Caribbean States (OECS) (Linda S. Taglialatela)* (also Ambassador to Barbados)
U.S. Special Representative for Religion and Global Affairs

Now we can add a special representative to Taiwan, and add about 499 people to help this person out.  They could have two embassies for what this one is costing.  If the Chinese took the advice from the Global Times, it would take weeks to evacuate all the people and their families.  We better hope they don't. 

Death Threats for Policy Decisions

The Hill has a story today that the Chairman of the Federal Communications Commission (FCC), Ajit Pai,  missed a conference recently because of death threats, seeming made over his policy decision to end net neutrality rules.  The Hill said a bomb threat happened during the vote the FCC took to overturn the rules made during the Obama Era. 

People in law enforcement or counter terrorism will often have their lives threatened for things they do.  They wear masks when they do those kinds of arrests.  A friend of mine had his wife and kids threatened and the consequence was a long running divorce and separation, partly for their safety.  Russian gangs and Al Qaeda kill people for this kind of thing.  But it doesn't happen that often in net neutrality.  Really people, what is going on here? 

It is one thing to disagree with a policy and say so, but the idea of threatening the life of a family member or principal is unacceptable and out of bounds.  Even the people who disagree with the policy decision have to wonder what is going on when a member of their community threatens the life of a government official over it.  I didn't see net neutrality as a life threatening issue.  This is extreme behavior that cannot be tolerated by civilized people.  They usually realize when they have gone too far, and I hope they take actions to stop this kind of behavior.  Don't say they can't do that, because we know they can. 

Find these people and report them to law enforcement before they actually do what they are saying they will do.  I used to think it would not happen just because it was threatened, but then a gunman asked a guy on the street near where I live if those baseball players were Republican or Democrats. 

ZTE Deal Tangles with US Congress

The Wall Street Journal today has a story that indicates the Senate, led by Marco Rubio, wants to amend the National Defense Authorization Act to block the deal the Administration made with ZTE to resume their trading with the US.  The House has no such provision in its bill which means there is some time left to think about this whole issue.  It will go to a Conference Committee to resolve if it passes the Senate in this form. 

I was not in favor of lifting the sanctions on ZTE, but some things have made it more difficult to continue them.  First, Xi Jinping has inserted himself in this and made an appeal directly to the President.  It has been described by several news outlets as a direct appeal on a problem that he was having with ZTE being sidelined, and a lot of Chinese people were out of work (the President said this in a Tweet). 

Several Senators have said ZTE was spying on the US, and a few of them have said they did so as agents of the Chinese Central Government.  There is no doubt about that, so you can ignore any denials made by ZTE and the government.  When you mix state owned companies and government entities together as the the Chinese do, there is no line separating what the government wants and what a Board might want to do in their own business interests.  The fact is, they got caught - clearly, as plain as printed documents telling their employees how to do it and what to do to get around sanctions.  ZTE did what they were told to do, and not what the leaders of the company might have wanted to do.  When Alibaba sold Alipay without telling Yahoo, a major shareholder, we saw what can happen when business thinking got in the way of government strategy.  Businesses lose every time.  We often forget that Chinese businesses are not like ours, and policy decisions have to take that into consideration. 

Last, as much as I would like for Senator Rubio to succeed, the boat has left the pier and the ship is far out to sea.  The President has an absolute right to do deals with the Chinese and he did one.  I don't like it and the Senator doesn't like it, but the deal is done.  Get over it and move on. 

Those Killer Apps

So, your name is mentioned on an app, like What'sApp in India, and you end up dead, killed by an angry bunch of people who use that app and believe you are guilty.  Truth of the accusations against you are not considered by the audience of people who mass together to take revenge.  This is mob justice, not unfamiliar to the USA, particularly in our history of rounding up the horse thieves and hanging them at the nearest tree.  We might find that those campers were on their way home from a roundup, and the mob that hung them would say how sorry they were to have made such a mistake.  It didn't happen often enough to stop them from lynching people on the spot, and India's use of this form of communication will not likely change the behavior either. 

We blindly accept what we read on the Internet when we should know better.  Our confidence in our national news media is not very high;  or confidence in elected officials is not very high;  our confidence in what we read on the Internet is not getting better (see Pew's Study on this ).  Yet, a BBC story about two men who are suspected of kidnapping children, summarizes the reasons for their death - a video edited by God knows who - shows two men riding up on group of children and kidnapping one.  The video was made in Pakistan as part of an awareness program, sadly needed to warn children and their parents that there are such people who do these kinds of things.  Seven people in two months have been killed by rumor mongering that led to their deaths. 

So think that you might be walking along, minding your own business, when a mob runs out from an ally and beats you to death for trying to kidnap a child.  That turns out to be wrong, but you can have that added to your tombstone - killed by mistake July 18th 2018.  The people of India have a lot of soul searching to do on this kind of behavior. 

Other People’s Money

There was a clever movie with this title and it said a lot about the use of money that someone else was putting up.  Always a big risk for both parties, and the movie played out that theme.  We get the same thing with the Iran Nuclear Deal and the Obama Administration making concessions and exceptions to the banking restrictions it put on Iran, so it could look good in the deal it was making for Iran to get cash in exchange for making an agreement nobody wanted.  Today, that story is a little different now that it involves not just Yemen, Saudi Arabia, Iran and the US, but Oman too.

It seems that Iran had $5.7 Billion worth of Omani rials that it wanted to convert to Euros, a decidedly more fluid currency than the one they had.  The Obama Administration said that Iran would not have access to the US banking system in any of the transfers, which explained the US putting cash on an airplane and flying it to Iran. So too did it seem like a great idea to allow a one-time access to the US to get that conversion done, adding billions more to the bank account of Iran.  Why, I don’t know, since Iran had its money and didn’t need help converting it.  Iran has its own banks.

When the Administration approached two US banks about doing this for the Iranians, both said No.  That should have given some pause.  Not for these guys.  They plowed ahead, in spite of knowing that the Oman government was actively helping Iran transfer missiles, UAVs, and small arms through their country to the rebels in Yemen.  We have to remember that the Saudis were not best friends with Obama’s White House, so they must have thought Iran was a better friend.  That level of naive thinking was everywhere in that Administration.  Above all else, they wanted that Iran nuclear deal, even if it meant doing damage to other countries in the process.  John F. Kerry was out stumping to keep that agreement this year in what was certainly a violation of the Logan Act, if not just foolhardy.  That is singleness of purpose - at least.  

Iran ended up with their money conversion so it had at least the $1.7 Billion the US flew over on that famous midnight run, and another $5.7 Billion in this deal.  The Iranians did well on that deal and use it to finance terror all over the Middle East.

Chinese Steal More from US Defense Contractor

It seems like we have so many instances of the theft of information from contractors that we might want to do something about how contractors protect information they are given.  The Defense Department (DoD) has the ability and programs to do something, but they don’t.  This is gross negligence.

I started to keep track of the instances of theft by the Chinese, but it took up too much of my time.  They were doing it repeatedly, in various industries, different armed services, with greater and greater gains each time.  When the same thing happens over and over, somebody at the top or somewhere else in the Administration needs to get this under control.

We do have an Industrial Security Program that can do much more more but it’s charter is classified information and the latest story to hit us Does not involve classified information, even though it should have.  The aggregate of large quantities of unclassified data often is a higher classification than the individual pieces, something the Navy alludes to here.  The fact is all the large contractors have huge amounts of sensitive data given to them on a range of programs that make that data classified.  The services don’t want to call this out, and the contractors don’t either.  Contractors are doing work on this data at home, on their personal and corporate computers, and they don’t want to change that.  So, they ignore aggregation and take a chance.  Now they are just beginning to realize what huge targets theses contractors make, even though they should’ve been figuring this out ten years ago.  Defense doesn’t want to spend the money to do oversight of contractors.  That is not just stupid;  it is reckless.  It requires work in two large areas of security, classification of aggregations and computer security.

The first thing is a government problem since contractors cannot classify anything.  The second is a contractor problem because the government cannot protect information they give to contractors.  The government is unwilling to oversee the latter, or do much about the former.  In the meantime, the Chinese steal us blind, and build weapon systems that can defeat ours.  The bulk of that kind of thing is in the DoD.  Get it together and do something.

Insider in Senate Arrested

James Wolfe, Director of Security for the Senate Select Committee on Intelligence, has been indicted for lying to the FBI about his contacts with “repeated contacts” ... “with three reporters”, including some using encrypted messaging applications.  Wolfe is a 29-year employee of the Senate.

What is a real crime here is that the reporters were not indicted along with him.  This is a conspiracy of at least four people, who sought to hide their game by using encrypted apps which could not be detected easily.  All of them knew what they were doing, and all of them should go to jail together.  This is not what we have a press for.  They were actively participating in the distribution of classified information to people they knew should not have it.  We cannot wring our hands and say how bad it is that government employees violate the trust we place in them, without remembering that we have no faith in the press because of this kind of thing.

What Ever Happened to Adjudication?

The Wall Street Journal had the wrong emphasis on a story running today.  Paying people to spy on their employers is as old as intelligence collection.  The slant was that people in other countries, especially China, are buying people here and collecting information they can’t steal any other way.  That part is old news.

What isn’t is the Chinese now have our security clearance information which, among many other things, includes financial records and concerns by investigators of financial discrepancies - like living beyond your means, or having credit problems.  They don’t need to go far to find out who to target.

To me, this is not the problem it should be.  We have allowed this by giving the Chinese the security clearance records ( total malfeasance) but more importantly by doing nothing about the issues raised by these investigations.  If the Chinese can pick out a guy whole owes thousands of dollars in bad debts, the agency that employed that person should be able to.  That should lead to a reinvestigation, calling the person in, stating the facts and getting the situation fixed.  Without that, the person thinks the investigators thought his debts were OK, when they probably didn’t.  The process requires a readjudication of the person’s access to classified information.  The person knows about the concern; the government knows the concern, and they track progress.  That is a good deterrent to selling secrets to an enemy, but we aren’t using it very well.

ACLU Supports American Fighting for ISIS

Bizarre story today in the Wall Street Journal.  The American Civil Liberties Union (ACLU) has decided to defend an American suspected of fighting for ISIS in Syria. That, in itself, is bizarre and puts the ACLU in a bad light already.  But, this case is far worse than just having the US  legal do-gooders trying to protect the rights of a guy who turned himself in at a Syrian Democratic Forces checkpoint probably hoping to avoid being killed by the slow strangulation of ISIS in Syria.

Already the ACLU has challenged the US to keep the individual from being transferred to Saudi Arabia.  Now, they want to challenge his release in Syria.  Hey, they are letting him go, and the ACLU wants to stop it.  They call it a “death warrant” for this guy if he is freed in Syria.  So, what is it the ACLU wants the government to do?  I hesitate to ask a question I don’t want to hear the answer to.

The ACLU is off the rails quite a bit on some things, but this one seems to beat all the others.  What we don’t need is attorneys following terrorists around trying to figure out who is a US Citizen and who not, setting up defense funds, and getting these people lawyers.  Anybody thinking of giving money to the ACLU might pause to think about this case first.  

Maybe we need a bill that says when you join a terrorist organization you lose your citizenship.  Others have already done that, and it looks like we need to.   The ACLU would probably pay to have that challenged too.  In the meantime, the ACLU created a situation where it is too expensive to keep this potential terrorist who is having US courts decide what to do with him.  The US wants to let him go, and the ACLU doesn’t want that either.  Having created the situation that allows him to be released, the ACLU now realizes what a mistake it made.  

When Irony Bites the Hog

So just about every country in trade disputes with the US, including China, have decided to make pork a target of their retaliation.  Trade disputes have never made sense, so tit-for-tat ignores the logic of banning a product where the largest producer, Smithfield Foods is owned by a Chinese company, WH Group, LLC.  Steel and aluminum are not even close to pork.  So while it may sound like it is really hurting the base of the Republican Party to slap tariffs on farmers who can’t do much to defend themselves, China suffers the losses in revenue.  China says nothing.  They agree to buy pork and soybeans as a way to overcome this whole deal on trade imbalances with the US.  Of course, they would like for those prices to drop a little befoe they do buy those things, so trade disputes add to their blessing.

The whole target of tariffs was CHINA, but we lost that in the beginning and now it is something else.  China has carefully avoided sanctions on their steel and aluminum (see my post yesterday on this) but seems OK with allowing US hog farmers to get whacked in retaliation.  One of the bad things about being bought by a Chinese company is the politics on both sides.  Let that be a lesson to you Smithfield.

ZTE Agreement Pending

Reuters is saying today that there is a deal afoot to get ZTE back into the trading game again, after being sanctioned by the US for violating the terms of an agreement to reinstate them during the Obama Administration.  They get a big fine and a “never do that again” slap.

Maybe we have forgotten some of what ZTE was doing.

First, they were buying. U.S. computers from U.S. companies and sending them to Iran to help their nuclear program (and a lot more), in violation of UN sanctions that China voted for.  

Second, they were selling other things to other countries with sanctions - places like Cuba, North Korea, Sudan, and Syria through front companies set up just to do that.  It was clear they knew what they were doing, and how to do it.  China’s government knew they were doing it.  Now, all of a sudden, China says they are sorry they got caught, and we could do something to help them in the furtherance of good trade relations.   How ridiculous is that?

Third, there was another company doing the same thing, but that company was never named by the Obama Administration.  There was speculation at the time that it might be Huawei.  Why weren’t they named and sanctioned along with ZTE?

The real national security issue is that China votes for sanctions in the UN, then gets its own companies to violate them before the ink is dry on the agreement.  We can’t trust them to keep their word on anything they agree to, which makes “trade negotiations” a lot more difficult.

China Beats Steel and Aluminum Tariffs

China has been doing a runaround US tariffs on steel and aluminum for a long time.  We saw huge quantities of aluminum stacked up in Mexico, and steel in Vietnam as examples of how they are doing it.  But, in today’s Wall Street Journal there is another place mentioned that is even more ridiculous to US audiences - Malaysia, Indonesia, and (of all places) Serbia - are getting into the same business of making steel from Chinese capital and selling it to the US to avoid sanctions.  To me, it is just adding new countries to the list of those who cooperate with China to flood the world’s markets with steel and aluminum.  Our President may have been right in calling this a national security issue.  China is trying to put the world’s ability to produce steel and aluminum under Chinese control.

Strike Three

I see the mess with Facebook giving data to their “partners” with Partnership Agreements that are supposed to make it alright to give our data and data about our friends to third parties - not us and not Facebook - as fraud against me and my friends.  Facebook has maintained all along that it had “user acceptance’ for the data it was transferring around, when that was hard to believe.  Now we know for sure that it had other types of agreements with companies overseas and domestic that allowed that sharing.  Facebook still has not been hit in the pocketbook by any of this horse trading of data.  For me, this was it.  In American baseball, you get three strikes and you are out, and for Facebook, this is it.  I may be the only only one dumping them over this but I lived long enough with the fake promises and sincere jesters at Facebook who seem to be willing to wave away objections with the “Facebook Experience”.  The Facebook experience, as it turns out was them selling data to almost anyone who wanted it, for almost any reason, while they held out the idea that we were approving that data sharing by our overt consent.  Partnerships have nothing to do with my consent.  Dropping out of Facebook is my only recourse to this kind of action by them.  I hope more people do it, but this time I don’t really care about what others do.  

Mattis Warns Chinese on SCS

In today’s Wall Street Journal there is a warning to China about the intensified buildup in the Spratly Islands from none other than the Secretary of Defense.  The article quotes him as saying “...despite China’s claims to the contrary, the placement of these weapons systems is tied directly to military use for the purposes of intimidation and coercion.”  That is completely contrary to the rhetoric of China in saying it is just a “self- defense” role to protect its own territorial integrity.  
Mr. Mattis is pointing out that China does not own those islands and their claim to them is not accepted to the UN, the US, or to many of the countries making claims to that land.  China churns on ignoring all.  Of course, someday that will end.  The buildup is not going away until several countries challenge China on its claims, and things get a little more tense a long way from home for China and anyone else in the region.  

Taiwan is the ultimate prize for this dispute.  The Chinese have manage to draw us away from the real claim by making others so grand that they can even be taken seriously.  But, behind all that is the claim to Taiwan as part of China, which it has stepped up of late.  China forces businesses to say that Taiwan is part of China whether they believe it or not.  It’s diplomats force countries into saying Taiwan is part of China and the “consensus” is that.  This is complete hogwash, but hogwash repeated often enough becomes fact.  They repeat it a lot.  

Over the weekend, I heard someone say that the US could tear down those buildings if necessary.  I can’t imagine that happening and it seems to be wishful thinking, but it is thinking about a subject long ignored.  If we do nothing, will the Chinese stop colonization of the islands?  If we tried to tear down those buildings, would they sit by and watch?  Obviously Freedom of Navigation patrols are not working.  Talking is not working.  

Google Stands Againt War

Politics and business do not mix well.  I know there are a lot of people who believe they can have a say in how products are used after they are sold to a client.  That is not true.   Once it is sold, there is very little anyone can do to influence how that product is used.  Google has tried to break new ground and the wrong time, right when the Federal government is trying to decide what cloud provider it is going to use.  This is a billion dollar business deal that will be undone by a smaller project stopped on principle.  Today the news stories can applaud Google, but while I do favor them most of the time, on this I don’t.  I doubt that the majority of Google employees are going to be happy with a decision that hurts their bottom line more than they can imagine.

This whole thing is over  Project Maven, which is supposed to help drones find and follow their targets better, using artificial intelligence.  The Feds do not need Google to do that, but apparently found something useful in the way Google did it.  Somebody in Google must have thought they were indispensable in this process, but drones have been finding and tracking targets for as long as there were drones with missiles mounted on them.  Some people at Google have big heads to believe that Google can change that by cutting off their noses to spite themselves.  That is not good business.

Aside from that, very few of us who actually did this kind of work would say that the goal of counter-terror operations was evil.  And, it isn’t war either.  Terrorists are people who come to your neighborhood and plant bombs on innocent children and blow people up for their political beliefs.  They would certainly bomb Google if they could.

The Feds are not going to go deaf between now and the time the bigger contract is let for cloud services, especially when Amazon has the inside track on that already.  Google was fighting an uphill battle that is made more difficult by their own actions against a major player in the cloud decision.  If I were sitting on judgement of the various bids, I certainly would take into account that Google wants to have a say in how their services are used once they are sold to a client.  I want those cloud services to do what they are supposed to do, not what Google thinks is politically acceptable.

FSB Collaborators in Yahoo Breach

Dmitry Aleksandrovich Dokuchaev, 33, a Russian national and resident; Igor Anatolyevich Sushchin, 43, a Russian national and resident; Alexsey Alexseyevich Belan, aka “Magg,” 29, a Russian national and resident; and Karim Baratov, aka “Kay,” “Karim Taloverov” and “Karim Akehmet Tokbergenov,” 22, a Canadian national and a resident of Canada.  Confused? Wait for it.  

Karim Baratov, aka Kay, aka Karim Taloverov, aka Karim Akehmet Tokbergenov, 23, was sentenced to five years in prison and ordered to pay a fine, which encompasses all of his remaining assets.  This is from the press release on the Yahoo hackers who were paid by the Russian FSB to get accounts and passwords from Yahoo.  The story fits well with the Russia, Russia, Russia fixation and makes a good story.  It does take a long time ( the hack was in 2014) to get Justice for these guys, but maybe that was justified to find out what the FSB was really up to.  The numbers of accounts keeps going up every month or so.  What were they doing with all those accounts?