Interesting article in the New York Times – “How China meddled with the Internet,” based on a report to Congress by the United States-China Economic and Security Review Commission. The Times article talks about an incident where IDC China Telecommunication broadcast inaccurate Web traffic routes for about 18 minutes back in April. According to the Times, Chinese engineering managers said the incident was accidental, but didn’t really explain what happened, and “the commission said it had no evidence that the misdirection was intentional.” So there was a technical screwup, happens all the time, no big deal? Or should we be paranoid?
No doubt there’s a lot to worry about in the world of cyber-security, but what makes the Times article interesting is this contention (not really attributed to any expert):
While sensitive data such as e-mails and commercial transactions are generally encrypted before being transmitted, the Chinese government holds a copy of an encryption master key, and there was speculation that China might have used it to break the encryption on some of the misdirected Internet traffic.
That does sound scary right? China has an “encryption master key” for Internet traffic?
Except it doesn’t seem to be true. Experts tell me that there are no “master keys” associated with Internet traffic. In fact, conscientious engineers have avoided creating that sort of thing. They use public key encryption.
So why would the times suggest that there’s a “master key”?
Phi Beta Iota: We have three thoughts:
1) There's been a movie on the idea, and a low-rent mind might have been led to use the idea for spin.
2) Much more seriously, we have been told that many routers strip security as a routine means of increasing speed. We do not know the truth of the matter, since encrypted emails do arrive with encryption, but as a general proposition, security does seem to have been sacrificed to speed, and it may be there is no need for an Internet key in general.
3) Finally, we would observe that 80% of signals intelligence is pattern analysis, and being able to pull a massive amount of Internet into a place where pattern analysis of who is talking to who can take place, might, conceivably be worth doing.
Sneaking subs into waters off the west coast — its happened before
By Wayne Madsen
The firing of a submarine-launched ballistic missile by a Chinese Jin-class submarine off the coast of southern California last Monday at the height of evening rush hour in Los Angeles was not the first time the U.S. Navy's anti-submarine warfare sensors in the Pacific have failed.
In 1981, a Soviet Victor-class nuclear submarine successfully evaded the Navy's Sound Surveillance System (SOSUS) network of underwater hydrophones, Towed Array Sensor System (TASS) ships, and P-3 sonobuoy-equipped aircraft and popped up off the Oregon coast alongside a Soviet fishing fishing trawler.
Phi Beta Iota: We only know that we do not know the full story. We do believe that China and Russia are furious over Wall Street to Washington financial irresponsibility. The Chinese have a sense of humor, having previously popped a submarine up directly behind a US carrier after sneaking through an entire carrier battle group. This could be related to blocking any further US military exercises in the waters around Taiwan. The US Government really does not “understand” how quickly Taiwan is going to follow Hong Kong into mainland control. Sadly, we cannot rely on the US Navy or the US Government to be open with its own public on what is known about this matter.
Complete Madsen reprint below the line so our military colleagues do not have to visit the other site.
This article by Bill Gertz needs to be seen in perspective. During the Cold War the Soviet Union as well as a number of other countries, including China were constantly engaged in trying to acquire U.S. Technology of all types through various means from industrial espionage to bribery. The U.S. Department of Defense (DOD) was extremely concerned about this and the subject of illicit ‘international technology transfer’ to the Soviet Bloc (as well as a few other countries) generated numerous DOD requirements to such agencies as NSA and CIA. Much of the urgency of these requirements was downgraded precipitously when the Cold War ended. Also the number of incidents of foreign powers trying to acquire U.S. technology has declined in the 21st Century for a very sinister reason: the U.S. is no longer the sole leader in the research and development of advanced technologies that it was after WWII. Although incidents still occur, as the Chinese Huawei example shows, they are much less common than once was the case. So DOD no doubt does not see the need for the same emphasis on loss of U.S. origin technology.
Yet financial intelligence is more than technology loss it also involves major illicit financial operations, such as money laundering, and financial operations in support of espionage and terrorism against U.S. interests. This of course includes the financial infra-structure supporting al Qaeda. If Ferguson is shutting this effort down as well he is making an unbelievable mistake.
This incident is symptomatic of an Intelligence System that is indeed out of control. In the absence of a viable strategic plan for intelligence collection, analysis, and production, every time some new crises occurs the U.S. Intelligence Community (IC) resembles an ant hill that somebody has just stepped on. In the absence any real leadership or clearly defined purpose, the big four of the IC (CIA, DIA, NGA, and NSA) will continue to waste billions of dollars for minimal returns while resisting an efforts at meaningful reforms. At the same time the IC institutional bias against using non-classified (open) source information will ensure that they will only be able to provide very small windows that are of only limited usefulness to decision makers. What a way to go!
Phi Beta Iota: We are truly surprised that someone of Jim Clapper's caliber would allow an Acting Undersecretary no one has ever heard of to be named Acting in the first place; or that such an individual would do something this dumb without clearance from the DNI. There are a couple of variations on a theme: a) Clapper wants to make it obvious that Treasury is in enemy hands and DoD wants nothing to do with Treasury intelligence which does not exist–Treasury, like Energy and the other non-national security departments are patronage stove-pipes receiving direction from ideological idiots–they don't do “evidence-based” policy; b) Clapper is finally thinking about holistic intelligence in support of Whole of Government, and having DoD drop financial intelligence is a preamble to elevating the Financial Intelligence Center in some manner. On balance, as much as we admire the DNI, we think he has blown it–he will not accomplish anything consequential in the next few years by continuing to do the wrong things righter, and that is a shame, because so much could be accomplished in a mere 90-180 days, if he would empower those with the right mind-set to do the right things, which is to say, M4IS2 simultaneously with Whole of Government intelligence-support operations and the creation of a Smart Nation.
The Pentagon's intelligence directorate is killing off one of its most strategically important mission areas: monitoring efforts by foreign governments to buy U.S. firms and technology, such as the multiple efforts by China's military-linked equipment company Huawei Technologies to buy into the U.S. high-technology sector.
Defense officials tell Inside the Ring that Thomas A. Ferguson, acting undersecretary of defense for intelligence (USDI) and a former Defense Intelligence Agency (DIA) space analyst, initiated the dismantling of the financial-threat intelligence monitoring.
Phi Beta Iota: US Intelligence is out of control–as good as some of the leaders are in terms of diversity of experience within the OLD system, they simply do not have the mind-set nor the authorities to restructure intelligence to the point that it can meet all appropriate needs. The person ostensibly responsible for strategy, a CIA body, has just been made deputy director of DIA, and we have no doubt that a “strategy” exists that might ultimately turn DIA into the analysis center and CIA into a collection management center (while NSA becomes the all-source processing center, all as outlined in Chapter 13 of ON INTELLIGENCE: Spies and Secrecy in an Open World) as well as all subsequent books such as INFORMATION OPERATIONS: All Information, All Languages, All the Time, this is all too little, too slow, too incoherent, and too expensive. An Open Source Agency (OSA) under diplomatic auspices, and a voluntary shift of $200 billion from Program 50 to Program 150 as a lure for Newt Gingrinch coming into the 2012 coalition cabinet under Obama running as an Independent (miracles do happen), are both essential.
Does a Green Speed Bump Block the Road to Energy Independence?????? In this remarkable and remarkably unwelcome opinion piece, my good friend Robert Bryce, author of Power Hungry, explains why the subsidization of green technologies that are dependent on rare earth elements should not be justified as pathway toward energy independence, and in fact, could actually make the US more dependent on foreign energy related imports.
Over the past few months, industry and government officials in the U.S. and Japan have been increasingly alarmed as China, which has a near-monopoly on rare earths, has reduced its exports of those elements by some 40 percent. Adding yet more anxiety to the situation are projections about a possible shortfall in the supply of these elements. London-based Roskill Consulting Group, a research firm that specializes in metals and minerals, recently predicted that demand for rare earths could outstrip supply as soon as 2014. Rare earths are important because they have special features at the quantum mechanics level that allow them to have unique magnetic interactions with other elements. A myriad of “green” technologies — from electric and hybrid-electric cars to wind turbines and compact fluorescent light bulbs – depend on rare earths. And there are no cost-effective substitutes for them.
Clinton’s willingness to question China about rare earths is indicative of just how seriously the U.S. is taking the rare earths issue. But it also underscores a fundamental miscalculation by the U.S. and other countries when it comes the reconfiguration of their automotive fleets.
Over the last few years, a growing number of environmentalists and national security hawks have teamed up to denounce America’s dependence on foreign oil. Their solution: all-electric and hybrid-electric vehicles. Those vehicles, they insist, will help the environment while reducing oil imports from countries in the Persian Gulf and elsewhere.
While that vision appeals to certain segments of the political class and to a myriad of subsidy-seeking corporations, the push to build more electric and hybrid cars will simply result in the U.S. trading one type of import dependence for another.
Those vehicles might cut oil consumption but they will dramatically increase America’s thirst for rare earth elements. And therein lies a crucial choice: We can continue to rely on the liquidity, price transparency, and diversity of the global oil market, the biggest market in human history. Or we can choose the “green” route. And in doing so, we will have no choice but to rely on the market for lanthanides, which is rife with smuggling, has no price transparency, and depends almost wholly on a single producer, China.
The Chinese control about 95 percent of the global market in rare earths, a group of 17 elements that includes scandium, yttrium, and the 15 lanthanides, the elements that occupy the second-to-last row of the Periodic Table. The most famous of the lanthanides is probably neodymium, a critical ingredient in the high-strength magnets used in motor-generators in hybrid cars and wind turbines.
Phi Beta Iota: This is a perfect example of what happens when a government is both ideologically driven and therefore not intelligence-driven, and when a government lacks a strategic analytic model that can clearly demonstrate how what might be good for one part of the system is bad for other parts of the system. This is called system INTEGRITY. Not only is the US bankrupt, according to the last Comptroller General to brief Congress on the subject in 2007, David Walker, but what the US government is borrowing and spending on in our name makes no sense at all from a public interest point of view.
Mikhail Gorbachev, who has been neutralized by the succession of Russian rulers, especially Putin) has just advised President Obama to get out of Afghanistan. Jonathan Steele suggests here (also attached below) that Obama ought to heed that advice, because Obama is in a similar albeit somewhat worse position than Gorbachev was in 1985-6.
Analogies are dangerous, because they can capture your thinking and take you off the cliff. But here goes.
If Steele's analogy is accurate, it suggests some pregnant ramifications that are not addressed directly by Steele: Russia (Putin and Medvedev) appear to be helping US/Nato in Afghanistan with training programs and by providing access routes for northern logistics lines of communication. This cooperation serve both parties by improving relations in the short term, but it also helps US/Nato stay on its disastrous course in Afghanistan. Are there other reasons why would Putin, an ardent nationalist, would what the US to remain stuck in Russia's backyard?
Russia needs help in staunching spillover of Sunni radicalism into its Moslem areas and its Central Asian sphere of influence (a variation of the original reason USSR invaded Afghanistan in 1979). The US war on the Taliban serves that interest. So from Putin's point of view, keeping US/Nato bogged down in Afghanistan serves Russian national interests for free.
Putin, a former member of the KGB and an ardent nationalist, certainly knows the US fomented Sunni extremism in Afghanistan to sucker the Soviets into invading Afghanistan with the aimed of bogging the USSR down in its own VietNam-like quagmire (a policy proudly acknowledged by President Carter's National Security Advisor,Zbigniew Brzezinski in his notorious interview in Le Nouvel Observateur, January 1998). Putin must also know that the US/Nato engagement in Afghanistan, is (1) a huge resource drain that is weakening US economically and militarily, as well as (2) weakening the bonds giving the US political control over its Nato allies. From his point of view, these two outcomes would certainly improve Russia's relative power with respect to Europeans (especially Germany) and in the world, at the expense of the US. Moreover, in Putin's eyes, these outcomes might seem to be justified as payback to the US. After all, did not the US unleash the Islamic radicalism with its efforts to maneuver the USSR into Afghanistan in 1979 and did not the US humiliate Russia by the exploiting Russia's economic misery and military weaknesses, after Gorbachev had done the the US and the West a huge favor by precipitating collapse of the Soviet Union and ending the Cold War without bloodshed?
So, who should Obama and his advisors listen to? Putin the nationalist and go for a short term political gain at expense of remaining stuck in the quagmire that serves Russia's interests, or Gobachev the statesman who advises Obama to bite the bullet and absorb short-term political pain to gain long term benefits of exiting a quagmire that is weakening the US economically and militarily?
Of course the war advocate could counter by saying this is based on an analogy run amok. We are not making the gross mistakes the Soviets made in Afghanistan, and besides, it is cutting and running that weakens us. After all, Gobachev is just an old man who refuses to see that his time has past and is struggling futilely to remain relevant.
Designed to press the “reset” button after east-west tempers flared over the war in Georgia, the meeting ended with several agreements, the most dramatic of which was Russia's nod for the US to send military supplies across Russian territory to its forces in Afghanistan. Dmitry Medvedev and Vladimir Putin wanted to give Obama a reward for taking a calmer view of Russia than George Bush, in particular for accepting Georgia's share of blame in the South Ossetian crisis and for cancelling the most provocative aspects of Bush's missile defence scheme which Moscow viewed as a threat.
