Lima Charlie’s Weekly Review: U.S. Politics Edition – Highlights of the week in U.S. domestic, geo, cyber, politics – March 17, 2018.
US Domestic Politics
Marine-Vet Conor Lamb Clinches Narrow Victory in Pennsylvania Special Election
By a margin of less than 0.3%, Marine Veteran and former JAG Officer Conor Lamb (D) won a particularly close special election in Pennsylvania’s 18th Congressional District. President Trump had carried the district by 20 points in the past presidential election, despite the state being part of the Rust Belt. Lamb’s campaign tone was particularly moderate, raising eyebrows when he announced he would not support House Minority Leader Nancy Pelosi in 2018. He also expressed support for the Second Amendment and mentioned that, although he respects the power of Roe v. Wade, he does not believe in abortion.
President Trump has weighed in on the win, congratulating Lamb but suggesting that while he “campaigned like me” he would “vote with Pelosi.” Many will be keeping a keen eye on how the young Congressman votes in the upcoming months.
While Republicans have maintained intent to challenge the results, many believe the results will hold.
First Russian Election Sanctions Amidst First Chemical Weapons Offensive On Western Europe Since Cold War
On Thursday, Treasury Secretary Mnuchin announced a series of sanctions for election meddling and efforts to undermine the country’s energy grid, under the Countering America’s Adversaries Through Sanctions Act, against 19 Russian individuals and 5 companies, including the 13 indicted nationals under Robert Mueller’s investigation.
Among the sanctions are those directed at “Putin’s Chef,” an individual known as Yevgeny Prigozhin, who has been connected to the Russian troll farm, the Internet Research Agency (IRA). The group provided the central source of attack for Russia’s social media offensive during the election.
In response to the move, Russia announced it would add to its current “blacklist” of US actors, vowing to apply the “principle of parity.”
While some have called the sanctions a “middle ground,” the punitive measures have hit two Russian intelligence agencies, including the Federal Security Service and the Main Intelligence Directorate.
Of note, the UK’s recent sanctions come on the heels of American action as Britain slapped sanctions on Russia following a Russian nerve-gas attack on one of its own past intelligence officers on UK soil. The attack marked the first chemical weapons offensive on Western Europe since the Cold War.
Rex Tillerson Out as Secretary of State
US Secretary of State Rex Tillerson delivered his final official State Department briefing on Tuesday as he announced his departure from his 14-month tenure at the State Department.
President Trump had delivered news of his decision to dismiss Tillerson through Twitter, noting that the two had positive communication but disagreed on key issues such as the Iran nuclear deal and its efficacy.
The former Exxon-Mobil CEO expressed his support for the “selfless leaders” he guided during his term and also delivered a cautionary note across the globe, saying “We must establish a clear view of the nature of our future relationship with China.”
Tillerson has previously touted some of his accomplishments during his first year, such as updated trade caps imposed on North Korea with the assistance of UN allies and efforts to bolster the South Asia strategy and build up strength against the Taliban.
Gina Haspel, current Deputy Director of the CIA, will replace Mike Pompeo as CIA Director, the first woman in history to hold the position. Mike Pompeo, Director of the CIA, will become US Secretary of State.
US Cyber Politics
Cybercrime Holds Up a Mirror to Geopolitical Events
On Tuesday, Comodo, a cyber security company and the largest issuer of SSL certificates, released its 2017 Global Malware Report. While the top ten countries of detection were Russia, the US, Brazil, India, Canada, Germany, China, Poland, Turkey and the UK, a more curious finding was the clear correlation between critical events in geopolitical hotspots (elections, trade deals, military strategy-making decisions) and cyber crime.
As the report suggests, many major real-world events have a corollary in cyberspace.
Lima Charlie presents some highlights from the report in China, Japan, Mexico, North Korea, the Philippines, Saudi Arabia, and the US (Credit | Comodo):
China | The country experienced shocking spikes in Trojan attacks right around the Silk Road summit in Beijing and during the flaring of North Korea/China tensions, and two other enormous upticks during the August 10th event during which a US Navy destroyer carried out freedom of navigation operations to the rebuke of Beijing in the South China Sea.
Japan | The nation witnessed massive Worm affronts during the trilateral US-India-Japan naval exercises in the Bay of Bengal during the Malabar 2017 exercise. Even larger Trojan attacks occurred during the North Korea missile-firing over Japan.
Mexico | Striking Trojan activity was displayed right around the time of the US-Mexico border wall dispute and the US-Mexico NAFTA dispute.
North Korea | The apex of activity can be seen around the time of President Trump’s visits to Japan, South Korea, and Beijing, in which Backdoor and Other cyber crime spiked.
Philippines | Markedly increased activity can be seen from Worm attacks during the remote battle on the island of Mindanao in Marawi, once home to the largest Muslim-majority in the country.
Saudi Arabia | During President Trump’s visit to the kingdom, increased Worm activity displayed spikes, as the President landed for his first foreign trip since being inaugurated, during the Riyadh summit.
US | During the summer months after the presidential election, Trojan attacks made shocking gains, as they did during the 2017 off-year elections as the Democrats picked up wins from Virginia to New Jersey to Washington State.
The figure below presents a more holistic picture of Comodo’s detections for backdoor cyber attacks, matching attack family with country of detection in abbreviations. Backdoors are hidden corridors to circumvent standard user authentication and gain remote access to a cryptosystem or algorithm:
Code Malfunction Saves Cyber-Controlled Explosion of Saudi Petro Plant
A malfunctioned attack code was likely the only obstacle that stopped a petrochemical plant in Saudi Arabia from a lethal explosion by cyber attack. As first reported by the New York Times, the source of the attack has not yet been confirmed but experts say that the only countries with the capability to launch such a strike would be Russia, Israel, Iran, China, and the US.
The event comes as a sequence of attacks has been launched against the kingdom on economic targets. Many experts believe that it’s only a matter of time before the attackers evolve the code to work in the next instance.
Perhaps one of the most recent events which gleaned worldwide coverage was the attack on the National Industrialization Company. What many credit to be an Iranian affront wiped hard drives of the company’s electronics and replaced them with a picture of three-year-old Alan Kurdi. Kurdi was a Syrian child who drowned just off the shores of Turkey during his family’s attempt to leave the country during the civil war. The heartbreaking photo circulated globally as Kurdi took on the face of the Syrian Crisis.
Geopolitically, the attack occurred around the same time that leader, Saudi Crown Prince Mohammed bin Salman, has encouraged foreign investment in the kingdom, to the dismay of many rivals. The Prince will visit the US officially next week, meeting in particular with Silicon Valley technology leaders, LA entertainment executives, oil tycoons in Texas, and finance leaders in New York.
The Crown Prince has recently likened Iran’s leader to Hitler and even pledged to develop its own uranium if Iran does, as well.
The friction between Iran and Saudi Arabia is particularly increasing as Iran resumed its cyber attacks on the kingdom just last year. Tehran has long held a plan to take over the oil-rich territory and friend to the United States. In its most famous attack, called “Shamoon”, Saudi state oil producer Aramco was the victim. Many believe that US companies with computers in the region are likely the next targets.
From a geopolitical standpoint, the attacks are carried out in the name of subsuming the kingdom under Iranian territory and retaking the location of Islam’s holy sites, as many experts project. Many intelligence officials also portend that Iran’s aid of the Houthi rebels has resulted in the nation placing sea mines on the strategic Yemeni coast within proximity of the Red Sea. The section of land in this area is referred to as Bab-el-Mandeb—a tactical geopolitical shipping lane at the confluence of the Seven Brothers Islands, Djibouti, Yemen, and Eritrea. The strait is a key economic and militarily strategic point which gives way to a waterway that must be navigated to access the Egyptian-controlled Suez Canal.
With the Horn of Africa as one of the world’s most tactically crucial maritime regions in the narrow strait before the Red Sea joins the Indian Ocean, Bab el-Mandeb or “The Gate of Tears” presents 3 key choke points which are the biggest nautical loci in the world for commerce.)
Data Breach Victims Granted Power to Sue Yahoo in US
According to a Silicon Valley US District, Judge Lucy Koh, data breach victims are allowed to sue Yahoo in the jurisdiction of the United States.
3 key data breaches occurred on the internet platform between 2013 and 2016 and Yahoo delayed notice of this to affected customers, risking identity theft and placing the financial burden of credit freeze and other precautionary services on the consumers. While the breach was initially projected to impact a smaller segment of users, 1 billion, it was later discovered that the attack actually affected all 3 billion of its users.
2 Russian agents were charged in connection with the attack, while an untold number of assisting hackers remain at large in Russia.
Judge Koh found that, “Plaintiffs’ allegations are sufficient to show that they would have behaved differently had defendants disclosed the security weaknesses of the Yahoo mail system.”
US Maritime Industries Hit by Chinese Espionage “Leviathan” on the Cyber Playing Field
Cyber security company FireEye has detected increased attempts in the last two months made by Chinese cyber espionage actors, under the name TEMP.Periscope or “Leviathan”, to strike the US maritime and engineering industries with robust malware.
Of particular interest are the targets with ties to the South China Sea, given the ongoing territorial disputes in the region.
The shipping corridors in this part of the world are of particular importance to Beijing, and confirming the country’s involvement in the attacks will be key to preempting future affronts and securing maritime interests at home and abroad.
BlackTDS Operation Enables Paying Hacker Customers to Buy Cyber Attacks A La Carte
Paying cyber criminals can now outsource their affronts, using a new “traffic distribution system” known as BlackTDS which performs short, guerilla-style attacks on systems for a specific going-rate.
According to enterprise security company Proofpoint the service first appeared on black markets at the end of last year in advertisements on hacker-frequented websites. A short snippet of the advertisement via Proofpoint is presented below:
“Cloacking antibot tds based on our non-abuse servers from $3 per day of work. You do not need your own server to receive traffic. API for working with exploit packs and own solutions for processing traffic for obtaining installations (FakeLandings). Dark web traffic ready-made solutions. Placed in 1 click hidden code to use the injection in js on any landings, including on hacked websites.” “Cost – $6 per day, $45 per 10 days, $90 per month, FREE place on our server, FREE hosting of your file on green https:// domain. 3 DAYS FREE TEST”
The advertisement goes on to offer cost breakdowns for a variety of services as well as contact information for customer service, as gleaned from ProofPoint below.
TDS technology is built to drive user traffic from a variety of starting points and filter it by user agent, browser, and location. The users are then redirected to malicious websites and payloads. The service emphasizes the importance of reinforcing networks on multi-dimensions.
Software company Symantec provides a concise description of the process of attack shown below in an illustration from its 2011 Report, “Web-Based Malware Distribution Channels: A Look at Traffic Redistribution Systems.”
According to McAfee’s 2018 Labs Threats Report, the healthcare sector experienced a 210% increase in security incidents in 2017, suggesting that patient information is increasingly at risk in today’s digital economy, as shown below.
Healthcare threats top those in Public and even Finance sectors, especially in the 1st and 2nd quarters, according to these publicly disclosed figures.
It is clear from this report that MRIs, ultrasounds, and other medical electronics are growing strikingly vulnerable to such attacks, prompting the need for healthcare professionals to receive adequate training to preempt such affronts.
According to the State of Cybersecurity in Healthcare Organizations in 2018 report, hackers target patient medical records at a 77% rate over clinical trial and other research information at around 45% of the time.
Russia to Hold 2018 Presidential Election in Four Days in Crimea on Anniversary of Illegal Seizure of Crimea
On Wednesday, the US State Department announced it would be calling attention to the illegitimacy of the recently staged Russian “referendum” to officially legitimize its apparent annexation of Ukrainian land.
The statement includes support for the “Crimean Tatars, ethnic Ukrainians, pro-Ukrainian activists, civil society members, and independent journalists,” as the US vowed to reaffirm that Crimea is, in fact, still Crimea—a part of Ukraine—and not a newly acquired territory of Russia.
Of note, Ukraine has recently appealed to the UN, in a letter which can be found here, requesting a decision on Russia’s plan to schedule its presidential elections on March 18, the anniversary of the illicit signing of Crimea and Sevastopol’s seizure by Russia. The elections are to take place in Crimea, and the Ukraine has spoken out against the act, saying that any result of such an illegal election will be null and void.
President Putin is widely expected to emerge victorious for a fourth term with essentially no opposition. He made a trip to the illegally acquired land just three days ago, touting his move to seize the peninsula in the Black Sea an an example of “real democracy.”
Panama Papers Law Firm Closes For Business
Panamanian Law firm Mossack Fonseca, made famous by the Panama Papers investigation, announced it will officially be closing down permanently on Wednesday.
An important signpost in the geopolitics of corruption, the Firm became the poster child for the process by which elite, wealthy individuals use offshore corporations to evade taxes through the use of shell corporations. Its offices in El Salvador were raided, implicating innumerable individuals and corporations, especially political leaders, in its scheme of corruption. 2.6TB of data were revealed, making the event the largest leak in history.
At the time of the initial investigation, Russian President Putin, British Prime Minister David Cameron, Azerbaijani President Aliyev and Saudi King Salman were implicated in the document dump, exposing many to the geopolitical impact of corruption scandals. Nations can use information gleaned from these investigations to place diplomatic pressure on one another, with the West placing particular pressure on Putin, Bashar al-Assad and Zuma of South Africa, all named in the papers.
China in particular was the largest market for the law firm, with the China-located shell corporations accounting for almost 1/3 of Mossack Fonseca’s globally active businesses.
For a closer look at the countries implicated in the Panama Papers, the Statista image below provides some of the key countries involved.
International Consortium of Investigative Journalists, McClatchy and Miami Herald received a joint Pulitzer Prize for their work in the uncovering and reporting on the infamous case.
A skeleton staff will remain in place as continued investigations take place, according to the firm.
The State of World Peace
According to the nonpartisan Institute for Economics and Peace, the most recent Global Terrorism Index for 2017 provided some key insights into prospects for peace and global cooperation and stability around the world. Opportunities to permeate alliances across preformed boundaries such as Western Europe, the Americas, MENA, and ASEAN are ever critical in the current geopolitical context. As such, metrics to measure capacity for alliance formation, decreasing external threats of terrorism, and shared intent in social and economic policies throughout all four corners of the world are crucial in overcoming conflict with diplomacy.
Highlights from the report below:
Terrorism deaths by Boko Haram dropped by 80%, under military pressure from outside forces.
Four of the five countries most affected by terrorism—Syria, Pakistan, Afghanistan, and Nigeria—experienced 33% fewer deaths.
According to the Institute’s Positive Peace Report 2017, all regions (excluding North America) have relatively improved in Positive Peace since 2005, with Russia and Eurasia leading the group).
The same report, which classifies “Positive Peace” as “the absence of violence/fear of violence and the presence of attitudes, institutions and structures that create and sustain peaceful societies” demonstrates that countries with high levels of peace tend to contribute to high levels of Positive Peace too. The report showcases the world’s countries split along lines of High Peace, Mid-Peace, and Low-piece in the following figure:
Finally, another important measure of peace is the ability to form bridges across nations based on shared intent, social policy, and economics. The report provides such an Analysis of Intent, demonstrating that similarities across nations can reflect citizens’ receptivity to alliances with other countries and receptivity to resolving conflict with diplomacy and peace over the alternative. The report’s findings and categorizations are presented below:
Latin America Secures World’s First Treaty for Environmental Protectors
According to the UN Dispatch, 24 Latin American and Caribbean Countries signed the “Regional Agreement on Access to Information, Public Participation and Access to Justice in Environmental Matters in Latin America and the Caribbean.”
The document marks a watershed moment in history, providing provisions to protect environmental activists. Insightcrime.org released a report stating that Latin America is the most murderous region for land and environmental activists in the world.
As the figures from Global Witness show below, killings of environmental defenders in 2016 were prevalent.
From a financial perspective, according to the group, much of the onus falls on global investors to take a stand. For example, Dutch and Finnish development banks progressed with their funding of the harmful Agua Zarca dam in Honduras despite threats of groundwater contamination and support from activists to stop the project. Berta Caceres became perhaps the most famous face of the movement, having been brutally shot and killed by a former military intelligence officer in March of 2016 for her activism against the dam. Just last year, an estimated 197 activists, all located in South America, were killed. While Colombia and Brazil have yet to sign on to the treaty, their support as giants in the region could throw a significant weight behind the effort worldwide.
Justice for Caceres, her fellow supporters, and her family was officially reached as her killer was located earlier this month and the historic treaty was signed into action just days ago. Enforcement is planned to take effect from a national standpoint with a commission to actually monitor events at the more local level.
Unraveling Maritime Boundaries in Oceania: East Timor as a Catalyst for Redrawing the Nautical Map?
Just last week, for the first time in global history, Australia and East Timor sat down at the UN negotiating table to definitively delineate their maritime borders.
Geopolitically, many believed the decision would be a catalyst for Indonesia, as well as other countries, reconsidering their borders as well, in what is a strategically advantageous location.
This week, Jakarta officially announced it would be revisiting its 1971 agreement with Australia regarding the border agreement between the two nations.
Strategically, the neighboring countries need one another as forces for counter-terrorism in the region. Indonesia, with a population just above 260 million, constitutes the world’s largest Muslim population and Australia’s government describes its relations with Jakarta as one of the country’s most important.
Geographically, Indonesia is located at the fringe of the meeting between the Pacific and Indian Ocean and it holds the key to four crucial maritime corridors—the Sunda, Lombok, Makassar, and Malacca straits. Indonesia, thus, has the authority to set the tone for a range of negotiations between the two countries moving forward.
(The image above demonstrates some of the key maritime chokepoints in the region, a crucial negotiating topic in any discussion of maritime boundaries in Oceania. | Credit Churls Gone Wild)
From a natural resource perspective, the Joint Petroleum Development Area that sits between Indonesia and Australia will serve as a contentious point of discussion in determining where the boundaries lie between the two nations.
Gas prospects and a fear of a rising China also propel the need to adequately secure maritime boundaries and keep disorder at bay in the region.
Both Jakarta and Canberra have agreed to discuss the boundaries, with the recent Timor Treaty signaling a keen hope for Indonesian prospects in Oceania.
Claims to Cobalt and Political Rumblings Amidst New Ethnic Strife in the Congo
This week, ethnic conflict began anew in the Democratic Republic of Congo, leaving dozens killed in bloodshed between Lendu farmers in Ituri and Hema herders.
The violence traces its inception to December, with upwards of 25,000 fleeing the region to neighboring Uganda to the east. The fighting has been ongoing for decades, however, with thousands killed between 1998 and 2003.
Kabila recently signed a new mining code into law, this Friday, declaring cobalt and coltan as “strategic minerals”. The move comes despite sharp opposition from global mining companies. The code will allow royalties given to the government to increase from 2% to 10%. While violence in the region is partly directed toward his leadership, the need to gain control over the land replete with the resource is also crucial.
Countries worldwide import the DRC’s most valuable resource. For a graphical perspective, view Comtrade’s map below.
The renewed violence in the region, coupled with the recoding of laws at the political level represent the pressure of the opposing ethnic groups and government to gain possession of parts of the land that carry this globally valuable mineral—a material that brings with it economic as well as geopolitical power.
For more on the DRC’s attempts to increase revenue from rising cobalt prices, check out Lima Charlie’s reporting on the country here.
Stocks, Oil, and Currencies
The stock market closed higher by week-end, although, on the whole experienced a loss. The S&P broke a 4-day losing streak rising 4.68 points to end at 2,752.01. The Dow Jones Industrial Average rose 72.85 points to close at 24,946.51. The S&P 500 rose 4.68 points to end at 2,752.01.
Boeing, the military and passenger jet giant, was on track to drop more than 5%. It would mark the first time the company has traded under the 10-week moving average since October 2016.
Uncertainty in foreign exchange markets were a key factor in the dollar’s edging lower. By Friday, however, the dollar recovered from a longer than seven day low to reach more optimistic figures.
The British pound was relatively stable at $1.3942 from 1.3936 on the previous day. The Australian and New Zealand dollar dropped to $0.7712 from $0.7798 and $0.7210 from $0.7276, correspondingly.
Oil prices spiked Friday, with Brent reaching its highest in more than two weeks. Investors look toward plans for Saudi Arabia’s Crown Prince to meet with President Trump next week as a factor in the jump.
LIMA CHARLIE NEWS
[Edited by Nikita Roach]
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