Tag: U.S

What it will look like if China launches cyberattacks in the U.S.

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Top lawmakers, the U.S. intelligence community and cybersecurity officials have warned in recent weeks that if an invasion happens, China would likely try to hobble critical U.S. systems with cyberattacks on military transport systems like ports and railroads, or against key civilian services like water and electricity.
“If Xi Jinping moves on Taiwan, we should assume he’ll launch cyberattacks against the United States as part of the operation,” Rep. Mike Gallagher (R-Wis.), chair of the House Select Committee on China, said in an emailed statement. “This would likely include attacks on our electrical grid, water systems and communications infrastructure — especially near key military installations.”
Chinese hackers could also attack the networks of companies that provide services to the military or to critical infrastructure operators, holding their systems hostage for ransom payments.
“If you get the right supply chain, it can have a lot of effects against a lot of targets,” said John Hultquist, head of Mandiant Intelligence Analysis at Google Cloud.
China is viewed as one of the most dangerous nations in cyberspace, and its cyber espionage operations are among some of the U.S. government’s top cyber-related investigations. FBI Director Christopher Wray said in 2020 that his agency opens a new investigation into a Chinese counterintelligence effort every 10 hours, and half of the FBI’s counterintelligence investigations are related to China. And the intelligence community’s threats assessments have long warned that China is “almost certainly capable” of launching disruptive and destructive cyberattacks.
But China hasn’t fully demonstrated its destructive cyber capabilities to the world when compared with Russia or Iran. That makes knowing exactly how they’d go about it more difficult.
“Those will be resilience tests for us,” Mark Montgomery, director of the Cyberspace Solarium Commission’s succeeding group CSC 2.0, said of the range of potential cyberstrikes from China.
Here are what a few of the most likely scenarios could look like.

Military and transportation networks
Military systems and transportation methods for troops and supplies to come to Taiwan’s aid are likely to be at the top of the list for Chinese hackers.
President Joe Biden has committed multiple times to sending U.S. troops to Taiwan in the event of a Chinese invasion, something China would want to stop. This could include targeting the networks of ports on the West Coast, airfields, and other transportation networks that move troops.
“If Beijing feared that a major conflict with the United States were imminent, it almost certainly would consider undertaking aggressive cyber operations against U.S. homeland critical infrastructure and military assets worldwide,” the U.S. intelligence community’s annual threats assessment, released in February, warned.
The report stressed that “such a strike would be designed to deter U.S. military action by impeding U.S. decision making, inducing societal panic and interfering with the deployment of U.S. forces.”
Interrupting operations at ports would be a top priority. Gallagher and Rep. Carlos Giménez (R-Fla.) recently visited the Port of Miami to highlight Chinese investment in U.S. ports infrastructure. This included noting that the vast majority of cargo cranes at ports come from one Chinese company.
The lawmakers alleged that China could shut down the cranes to delay aid to Taiwan. Republican leaders of the House Homeland Security Committee subsequently sent a letter to DHS asking about cyber vulnerabilities at maritime ports.
“If an adversary exploits the operational technology (OT) system of these cranes, port operations could completely shut down,” the lawmakers wrote.
When House Republicans ran through a Chinese invasion of Taiwan scenario at their policy retreat in Florida last month, cybersecurity quickly came up as an issue. One member, playing the role of the secretary of Homeland Security, was forced to pick between three options on how to best use limited U.S. cyber defense resources: Defend networks critical to military deployment, focus on protecting networks used for day-to-day life or fight a widespread Chinese disinformation campaign online. The member chose the military networks.
Montgomery, who helped run the program, said the scenario made clear that while the member’s decision to defend military networks helped the U.S. win the fight, “we have insufficient cyber and physical critical infrastructure protection capacity in the United States.”
Energy
Chinese hackers also would be likely to zero in on U.S. critical infrastructure in order to undermine Americans’ support for Taiwan.
This could include going after electricity operators and fuel suppliers. A 2021 ransomware attack on a major East Coast gasoline supplier temporarily caused widespread gas shortages and led to long lines at the pump, illustrating the societal disruption that a cyberattack can cause.
Cybersecurity and Infrastructure Security Agency Director Jen Easterly predicted in February that Chinese hackers could go after systems like gas pipelines, warning that this type of attack would try to divide Americans. Easterly, whose agency is charged with protecting U.S. critical infrastructure against cyber threats, said China would use cyberattacks against the U.S. to sow “panic and chaos.”
“I think they, in the event that they go after Taiwan, are going to want to make sure they affect the unity that has been forged between the U.S. and our international partners, the unity that has been forged within the U.S.,” Easterly said of Chinese hacking threats.
Water
The water sector, widely viewed as one of the most vulnerable areas for attack, could also come under threat from China. The potentially disastrous effects of a cyberattack on this sector were demonstrated in 2021, when an unidentified hacker gained access to networks at a water treatment center in Oldsmar, Fla., and tried — but failed — to poison the water supply.
The Biden administration has begun to address security vulnerabilities in the sector, but it may not be enough to counter threats from China, which has shown interest in hacking the water sector in recent years. This has included alleged targeting of a water district in Southern California, the nation’s largest water agency, through a widely-used vulnerability.
Making things worse is how under-resourced many water sector organizations are, with many smaller groups having neither the funding or personnel to respond to cyber threats. This is making the crucial sector a sitting duck for attacks.
Businesses and Financial Markets
In China’s history of hacking U.S. companies, it has often prioritized financial gain and stealing intellectual property. China will likely continue to pursue these goals in an invasion of Taiwan, and try to hit U.S. financial markets, both in a bid to undermine U.S. support for Taiwan, and to cause chaos.
In the scenario run through by House Republicans last month, the finance sector was the main casualty of focusing cyber warfighting capabilities on military mobilization instead of protecting civilian networks.
“A side effect will be that it impacts the resilience of your financial services,” Montgomery said.
Hits to the financial sector, along with any companies critical to getting troops mobilized, could also play into China’s bid to slow down military operations.
“The Department of Defense, for military mobilization purposes, relies on the national critical infrastructure, power, water, transportation, even financial services, so to the degree that the national critical infrastructure is not ready, the military will be hampered,” Montgomery said.
Preparations on the home front
Should China pursue any of these avenues for crippling the U.S., it may not have an easy fight.
While experts warn that the U.S. has more vulnerabilities than most nations due to the highly interconnected and online nature of most organizations, this does not mean that the U.S. is defenseless.
The U.S. is seen as one of the most advanced nations in cyberspace, though specifics of these abilities are closely guarded intelligence secrets. The U.S. military blocked the internet access of Russia’s top troll farm on the day of the 2018 midterm elections to stop the spread of disinformation. And more than a decade ago, U.S. and Israeli intelligence likely carried out a joint cyberattack on an Iranian nuclear enrichment site that set the Iranian nuclear program back.
“China has to worry about our capabilities, and they have to put it as part of their equation,” Senate Foreign Relations Chair Bob Menendez (D-N.J.) said. “Every action has a reaction.”
Congress has its eyes firmly on China this year, in particular Chinese cyber threats. Gallagher told reporters in February that the new House Select Committee on China will make identifying Chinese cyber threats linked to an invasion of Taiwan a high priority. He said that the House Armed Services Committee’s Subcommittee on Cyber, Innovative Technologies and Information Systems, which he chairs, will also look into this.
“Part of CITI’s role,” Gallagher said, “is to ensure the Department of Defense and the private sector are moving with a sense of urgency to harden this critical infrastructure before it’s too late.”
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( With inputs from : www.politico.com )

April 16, 2023
Why the U.S. didn’t notice leaked documents circulating on social media

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Senior officials inside the national security apparatus were briefed on the documents on April 6, the same day the leak was first reported by The New York Times, according to two other senior U.S. officials. And the Biden administration began looking into the leak only last week.
The delay has current and former officials asking why the breach went unnoticed for so long. And it suggests that there may be a large online blind spot in the U.S. intelligence gathering process.
“Federal government agencies do not proactively monitor online forums looking for threat-related activity,” said John Cohen, the former acting undersecretary for intelligence and analysis at the Department of Homeland Security. “If a person or entity were to post classified information on one of those forums, there’s a high likelihood that government officials would not detect it.”
Officials at the top ranks of the Pentagon, the intelligence community and at the Department of Justice are still scrambling to understand who first leaked the documents, how many classified U.S. documents may still be circulating and why they went unnoticed.
Current and former officials said while each agency is responsible for investigating breaches of intelligence within their own departments, there is no one office that is responsible for monitoring, for example, social media sites for classified leaks.
The Central Intelligence Agency, the National Security Council, the Office of the Director of National Intelligence and the Pentagon declined to comment.
The U.S. government — including the Pentagon and agencies in the intelligence community — maintains that it does not spy on Americans, and there’s an argument that monitoring these online forums — even for illegally leaked materials — could be considered just that.
“Do we really want the government monitoring everything said on social media sites? The answer to that is no. If you do that, you automatically get into civil liberties issues,” said a former U.S. intelligence official familiar with the document probe. “We haven’t yet figured out a way to square that circle between on the one hand protecting people’s rights to speak and on the other hand finding out what’s going on.”

Cohen argued this leak is a potential crime and threat to national security that means the First Amendment may not apply. “Depending on the circumstances, it is possibly illegal and likely not considered protected speech,” he said.
It’s still unclear exactly when the original leak took place and who is responsible for disseminating the classified material. But the story of how the documents ended up online in recent days, including on Twitter and Telegram, can be traced back to a small group of users on the messaging app known as Discord, a platform popular with gamers.
Members of a now-defunct server on Discord first began seeing sensitive government information about global topics, including about the war in Ukraine, this winter, according to two people who viewed content from that group.
One of the users of the group — who has since deleted his profile — first started posting the information in written, summary form sometime in the winter. Weeks later, beginning in January, the user began to post images of what appeared to be internal U.S. classified documents that had been printed and folded in half. Some of them were labeled “Secret” and “Top Secret.”
Weeks later, in March, one of the users from the Discord server reposted the images on a second group on the platform known as WowMao.
“He posted 30 plus … documents concerning the Russia-Ukraine war,” said the person who started that group, a well-known Filipino YouTuber named Mao. Mao described his server as “edgy” and said the person who posted the documents might have been trying to be “cool” or “funny.”
“He must have been around circles where there were hackers,” Mao said. “There are Discord servers where people post hacks they found and stuff they found off the dark web and they are only shared within those circles. And sometimes stuff gets leaked out from there.”
After being posted on WaoMao, the documents appeared on other social media sites including Twitter, Telegram and 4Chan. At least one of the images that appeared on those sites was altered to show higher Ukrainian and lower Russian death totals.
Over the past several years, multiple government agencies have become aware of the potential upside of monitoring specific online forums, Cohen said. The problem, however, is that there are certain legal limitations on what government officials can do to track Americans’ social media activity.
The FBI is allowed to go onto social media sites and other online forums to monitor activity when it has opened a specific case, Cohen said. The Department of Homeland Security can also monitor certain online activity — but only on forums that are open to the public. The intelligence community can also monitor social media messages, as well as other communications, of foreigners.
But in this case, the individual was not threatening acts of violence and there aren’t signs that the person was known to law enforcement for any other reason.
Various agencies throughout the U.S. government often communicate with social media platforms about content that deals with everything from misinformation and disinformation to election security, hate speech and posts that threaten violence. But it is unclear the extent to which the government asks companies to remove specific content from their sites, and whether companies comply.
Discord said in an emailed statement that in regard to the breach of classified material, the company is “cooperating with law enforcement.”
“When we are made aware of content that violates our policies, our safety team investigates and takes the appropriate action, including banning users, shutting down servers and engaging with law enforcement,” said Discord spokesperson Madeline Sarver, adding that the company uses a “mix of proactive and reactive tools” to keep content that violates its policy off the platform.
Officials in Washington are wary of developing methods that would allow them to detect and analyze threats online — a stance that has sometimes disturbed lawmakers.
In a House congressional hearing in December with Ken Wainstein, the head of DHS’s office of intelligence and analysis, Rep. Elissa Slotkin (D-Mich.) said she was frustrated that she and other people in her state had to learn about threats posed by right-wing extremists from outside the government.

In a House congressional hearing in December, Rep. Elissa Slotkin said she was frustrated that she and other people in her state had to learn about threats posed by right-wing extremists from outside the government.
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Sarah Rice/Getty Images
“My district is where the raids happened for the plot to kidnap and kill my governor. But the government agencies — I understand it is a sensitive issue — but I couldn’t feel more strongly about the importance of you all getting left and right limits, getting really clear about it and then coming up to proactively talk to us about this issue,” Slotkin said. “No one wants to go after someone for free speech, but when you have double the incidents of antisemitism in my state, the question remains what is my government doing to help?”
Cohen argued that the government needs to find a way to more closely monitor activity online that does not threaten acts of violence or relate to terrorism but may still be illegal, such as the leaking of classified information. But he said that leaning on research or academic institutions that track illicit activity on the internet may be an easier path than asking law enforcement or intelligence agencies to do the monitoring.
In recent days, officials inside the Biden administration have also faced tough questions from allies about how the leak occurred and why the U.S. is just now racing to investigate. U.S. officials have also discussed with allies in Europe and Kyiv whether it plans to restrict the dissemination of classified intelligence about the war in Ukraine.
Top officials at the Pentagon and National Security Council have not answered detailed questions from the podium since the leaked documents appeared, but have said they take the leak seriously and are still investigating. NBC News reported Wednesday the administration is considering changing the way it tracks social media content.
It’s unclear exactly how many documents have circulated online since the original posting on Discord. Many of the users and servers where they first appeared have since vanished. But one person who viewed the documents on the original Discord server said they believe there are perhaps dozens of additional classified documents that have not been made public.
The winding trajectory of how the classified documents spread through social media is likely muddying the investigation into the leak.
“This is not your typical leak where it goes to the media or to a foreign power,” the former U.S. intelligence official said. “It’s going to make it a bit of a challenge for the FBI to try to figure out what’s going on here.”
Alexander Ward and Mohar Chatterjee contributed to this report.
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( With inputs from : www.politico.com )

April 13, 2023
The 5 best — and worst — places to work in the U.S. government, according to federal workers

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The rankings below are for what the survey calls “large agencies,” meaning organizations with 15,000 or more employees. Findings were organized by each of the 17 large agencies’ overall rank, as well as how each one fared in different categories.
The National Aeronautics and Space Administration has the top overall score and came in first in several categories such as pay and effective leadership, but trails behind the Intelligence Community for work-life balance.
Meanwhile, Department of Health and Human Services snagged second place in the overall rankings but was fourth place in pay and in two diversity and equity subcategories — NASA secured the top spot in those subgroups.
The Intelligence Community secured third overall, but was fifth in the performance: agency subcategory and fourth in effective leadership: supervisors. NASA again secured the top spot in both those subcategories.
The Department of Commerce placed fourth overall but was in 12th place for effective leadership: empowerment, 11th place for innovation, ninth for work-life balance and eighth for pay.
Rounding out the top five in overall rankings is the Department of Veterans Affairs. Despite the high score, the agency placed 12th for effective leadership: supervisors, 11th for work-life balance and eighth for innovation.
The top five
1. National Aeronautics and Space Administration
2. Department of Health and Human Services

3. Intelligence Community
4. Department of Commerce
5. Department of Veterans Affairs
The bottom five
13 and 14. Department of State and Department of Navy (tied)
15. Department of Justice
16. Department of Homeland Security
17. Social Security Administration
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( With inputs from : www.politico.com )

April 12, 2023
Russia jamming U.S. smart bombs in Ukraine, leaked docs say

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The Pentagon in December began sending Kyiv advanced equipment that could convert unguided air-dropped munitions into precision-guided “smart bombs” that can hit Russian targets with a higher degree of accuracy.
The guided bombs can be launched by a variety of aircraft such as bombers and fighters, and are called Joint Direct Attack Munitions or JDAMs. The longer-range version being sent to Ukraine is called a JDAM-Extended Range, or JDAM-ER.
But the weapons have experienced higher-than-expected dud rates and have missed their targets on the battlefield, according to a leaked slide prepared by the Joint Staff and confirmed by a U.S. official, who was granted anonymity to discuss a sensitive issue.
In some cases, the bomb fuzes were not arming when they were released, causing the weapon to fail to detonate. The Ukrainian air force put in place a fix to ensure the bombs are arming correctly, according to the slide and the official.
The document includes a diagram of the munition and lays out the technical issue the weapons are experiencing as well as the proposed fix. It also provides a detailed account of the weapon’s failure rate in several recent attacks, including the dates and the number of munitions it took to take out the target. However, POLITICO could not independently verify that information.
A larger problem is that Russia is using GPS jamming to interfere with the weapons’ targeting process, according to the slide and a separate person familiar with the issue who’s not in the U.S. government. American officials believe Russian jamming is causing the JDAMs, and at times other American weapons such as guided rockets, to miss their mark.
“I do think there may be concern that the Russians may be jamming the signal used to direct the JDAMs, which would answer why these munitions are not performing in the manner expected and how they perform in other war zones,” said Mick Mulroy a former Pentagon official and retired CIA officer.
A spokesperson for Boeing, which makes the guidance kits, referred questions to the U.S. government when asked for comment. Defense Department spokesperson Lt. Col. Garron Garn declined to comment on the content of the leaked documents.

“We have seen Ukraine use the security assistance the U.S. and our partners and allies have provided to great success in the defense of their sovereign territory,” Garn said. “We are not going to discuss battle damage or intelligence assessments due to operational security considerations.”
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( With inputs from : www.politico.com )

April 12, 2023
This Korean American Republican is trying to educate her party — in the U.S. and abroad

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It remains to be seen how comfortable the House GOP can be as a home for Steel and Kim, emigres from South Korea whose friendship long predates their service in Congress. These days, both represent districts that Democrats have targeted in recent campaigns.
Steel acknowledged that the women’s entry into the congressional Republican ranks hasn’t always been smooth.
“A lot of people, the first year, they couldn’t recognize the differences between Kim and me,” she recalled. “I had to mention that I’m taller than her, I have longer hair than her.”
Despite exit polls showing the Asian American electorate generally tilting leftward, Kim’s anti-communist rhetoric has helped her connect with conservative Asian American voters in her Orange County-area district — particularly Vietnamese Americans, who tend to lean more to the right. House Republican leaders, eager to diversify the party’s ranks, have pointed to Kim and Steel as valuable messengers and potential models.
What has worked for Kim in her district hasn’t quite translated into national success for the GOP, though.
Republicans still haven’t been able to break through among Asian American voters in other key races, with the fast-growing voting bloc still swinging decisively towards Democrats during the last election in swing states from Georgia to Nevada.
And Kim is plainly still finding her own way in Washington, too, even as Speaker Kevin McCarthy predicts she could rise to become a committee chair or senator.
In an interview, Chu, the chair of the Congressional Asian Pacific American Caucus, said Kim had initially expressed some interest in joining the all-Democratic group. Membership in CAPAC might have functioned as a useful platform for a junior lawmaker with hopes of closing the gap between the Republican Party and Asian Americans — and between the U.S. and East Asia.

But Kim ultimately opted against joining, Chu said, after realizing she would have been outvoted by the group’s executive board on any major decision.
Wu reported from Washington.
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( With inputs from : www.politico.com )

April 12, 2023
U.S., Philippines hold largest war drills near disputed waters

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MANILA, Philippines — The United States and the Philippines on Tuesday launch their largest combat exercises in decades that will involve live-fire drills, including a boat-sinking rocket assault in waters across the South China Sea and the Taiwan Strait that will likely inflame China.
The annual drills by the longtime treaty allies called Balikatan — Tagalog for shoulder-to-shoulder — will run up to April 28 and involve more than 17,600 military personnel. It will be the latest display of American firepower in Asia, where Washington has repeatedly warned China over its increasingly aggressive actions in the disputed sea channel and against Taiwan.
The Biden administration has been strengthening an arc of alliances in the Indo-Pacific to better counter China, including in a possible confrontation over Taiwan.
That dovetails with efforts by the Philippines under President Ferdinand Marcos Jr. to defend its territorial interests in the South China Sea by boosting joint military exercises with the U.S. and allowing rotating batches of American forces to stay in more Philippine military camps under a 2014 defense pact.
About 12,200 U.S military personnel, 5,400 Filipino forces and 111 Australian counterparts are taking part in the exercises, the largest in Balikatan’s three-decade history. America’s warships, fighter jets as well as its Patriot missiles, HIMARS rocket launchers and anti-tank Javelins, would be showcased, according to U.S. and Philippine military officials.
“We are not provoking anybody by simply exercising,” Col. Michael Logico, a Philippine spokesman for Balikatan, told reporters ahead of the start of the maneuvers.
“This is actually a form of deterrence,” Logico said. “Deterrence is when we are discouraging other parties from invading us.”
In a live-fire drill the allied forces would stage offshore for the first time, Logico said U.S. and Filipino forces would sink a 200-foot target vessel in Philippine territorial waters off the western province of Zambales this month in a coordinated airstrike and artillery bombardment.

“We will hit it with all the weapons systems that we have, both ground, navy and air,” Logico said.
That location facing the South China Sea and across the waters from the Taiwan Strait would likely alarm China, but Philippine military officials said the maneuver was aimed at bolstering the country’s coastal defense and was not aimed at any country.
Such field scenarios would “test the allies’ capabilities in combined arms live-fire, information and intelligence sharing, communications between maneuver units, logistics operations, amphibious operations,” the U.S. Embassy in Manila said.
Washington and Beijing have been on a collision course over the long-seething territorial disputes involving China, the Philippines and four other governments and Beijing’s goal of annexing Taiwan, by force if necessary.
China last week warned against the intensifying U.S. military deployment to the region. Chinese Foreign Ministry spokesperson Mao Ning said in a regular news briefing in Beijing that it “would only lead to more tensions and less peace and stability in the region.”
The Balikatan exercises were opening in the Philippines a day after China concluded three days of combat drills that simulated sealing off Taiwan, following Taiwanese President Tsai Ing-wen’s meeting with House Speaker Kevin McCarthy last week in California that infuriated Beijing.
On Monday, the U.S. 7th Fleet deployed guided-missile destroyer USS Milius within 12 nautical miles of Mischief Reef, a Manila-claimed coral outcrop which China seized in the mid-1990s and turned into one of seven missile-protected island bases in the South China Sea’s hotly contested Spratlys archipelago. The U.S. military has been undertaking such “freedom of navigation” operations for years to challenge China’s expansive territorial claims in the busy seaway.
“As long as some countries continue to claim and assert limits on rights that exceed their authority under international law, the United States will continue to defend the rights and freedoms of the sea guaranteed to all,” the 7th Fleet said. “No member of the international community should be intimidated or coerced into giving up their rights and freedoms.”
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( With inputs from : www.politico.com )

April 11, 2023
U.S., Philippines hold largest war drills near disputed waters

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That dovetails with efforts by the Philippines under President Ferdinand Marcos Jr. to defend its territorial interests in the South China Sea by boosting joint military exercises with the U.S. and allowing rotating batches of American forces to stay in more Philippine military camps under a 2014 defense pact.
About 12,200 U.S military personnel, 5,400 Filipino forces and 111 Australian counterparts are taking part in the exercises, the largest in Balikatan’s three-decade history. America’s warships, fighter jets as well as its Patriot missiles, HIMARS rocket launchers and anti-tank Javelins, would be showcased, according to U.S. and Philippine military officials.
“We are not provoking anybody by simply exercising,” Col. Michael Logico, a Philippine spokesman for Balikatan, told reporters ahead of the start of the maneuvers.
“This is actually a form of deterrence,” Logico said. “Deterrence is when we are discouraging other parties from invading us.”
In a live-fire drill the allied forces would stage offshore for the first time, Logico said U.S. and Filipino forces would sink a 200-foot target vessel in Philippine territorial waters off the western province of Zambales this month in a coordinated airstrike and artillery bombardment.
“We will hit it with all the weapons systems that we have, both ground, navy and air,” Logico said.
That location facing the South China Sea and across the waters from the Taiwan Strait would likely alarm China, but Philippine military officials said the maneuver was aimed at bolstering the country’s coastal defense and was not aimed at any country.
Such field scenarios would “test the allies’ capabilities in combined arms live-fire, information and intelligence sharing, communications between maneuver units, logistics operations, amphibious operations,” the U.S. Embassy in Manila said.

Washington and Beijing have been on a collision course over the long-seething territorial disputes involving China, the Philippines and four other governments and Beijing’s goal of annexing Taiwan, by force if necessary.
China last week warned against the intensifying U.S. military deployment to the region. Chinese Foreign Ministry spokesperson Mao Ning said in a regular news briefing in Beijing that it “would only lead to more tensions and less peace and stability in the region.”
The Balikatan exercises were opening in the Philippines a day after China concluded three days of combat drills that simulated sealing off Taiwan, following Taiwanese President Tsai Ing-wen’s meeting with House Speaker Kevin McCarthy last week in California that infuriated Beijing.
On Monday, the U.S. 7th Fleet deployed guided-missile destroyer USS Milius within 12 nautical miles of Mischief Reef, a Manila-claimed coral outcrop which China seized in the mid-1990s and turned into one of seven missile-protected island bases in the South China Sea’s hotly contested Spratlys archipelago. The U.S. military has been undertaking such “freedom of navigation” operations for years to challenge China’s expansive territorial claims in the busy seaway.
“As long as some countries continue to claim and assert limits on rights that exceed their authority under international law, the United States will continue to defend the rights and freedoms of the sea guaranteed to all,” the 7th Fleet said. “No member of the international community should be intimidated or coerced into giving up their rights and freedoms.”
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( With inputs from : www.politico.com )

April 11, 2023
U.S. in crisis mode with allies after Ukraine intel leak

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Meanwhile, officials in London, Brussels, Berlin, Dubai and Kyiv questioned Washington about how the information ended up online, who was responsible for the leak and what the U.S. was doing to ensure the information was removed from social media. They also questioned whether the Biden administration was taking steps to limit the distribution of future intelligence. As of Monday morning, U.S. officials had told allies the administration was investigating and that they were still trying to understand the full scope of the leak, the European officials said.
Ukraine has long worried about information it shares with the U.S. spilling out into the open. “This case showed that the Ukrainians have been absolutely right about that,” said one of the European officials, who like others was granted anonymity to speak about the sensitive leak. “Americans now owe the Ukrainians. They have to apologize and compensate.”
The saga has left the U.S. relationship with its allies in a state of crisis, raising questions about how Washington will correct what officials worldwide view as one of the largest public breaches of U.S. intelligence since WikiLeaks dumped millions of sensitive documents online from 2006 to 2021.
The distress over the leak is particularly problematic because the majority of the documents focus on the war in Ukraine — an effort the U.S. has repeatedly said hinges on collaboration among allies in NATO, Europe and elsewhere.
“The manner of the leak and the contents are very unusual,” said a former U.S. intelligence analyst who focused on Russia. “I can’t remember a time when there was this volume of a leak and this broad of a subject matter of authentic information that was just put on social media rather than say, the Snowden files, that went through a group of journalists first.”
The Pentagon, CIA, ODNI, and FBI declined to comment.
More than 100 U.S. intelligence documents were posted on Discord, a secure messaging app, as early as March 2 and contained sensitive, classified information about the war in Ukraine, Russian military activity, China and the Middle East. The photographed papers, which appeared to have been folded over and then smoothed out, contained top secret information, including from the Central Intelligence Agency.
POLITICO’s review of the documents shows some that appear to have been assembled into a briefing packet by the Joint Staff’s intelligence arm, known as J2, with summaries of global matters pulled from various U.S. intelligence systems. Some of the documents contain markings in the corners that correspond with specific wires with information that appear to be compiled in summary form — a practice often used by individuals inside the government to prepare briefing packets, the former U.S. intelligence analyst said.

It’s still unclear the extent to which the documents have been altered — and by whom. The documents posted in March do not appear to show any glaring alterations, but when some of those were reposted on Discord in April, at least one paper appears to have been altered to show significantly inflated Ukrainian death tolls.
Pentagon spokesperson Sabrina Singh said in a statement Sunday that the administration has assembled an interagency team “focused on assessing the impact these photographed documents could have on U.S. national security and on our allies and partners.” She confirmed that U.S. officials had engaged with “allies and partners” across the globe, adding that the department was still assessing the “validity” of the documents posted to social media.
It’s unclear who from the Biden administration is involved in that interagency effort. The senior U.S. official said only the highest levels of government were in discussions about how to manage the leak. Even those senior officials who work on Ukraine and Russia policy and on portfolios that pertain to countries mentioned in the documents did not know as of Sunday how the administration would respond.
“I have no idea what the plan is,” another senior U.S. official said. “I’d like to know myself how we’re going to handle.”
Meanwhile, in Kyiv where military leaders are busy preparing for a spring counteroffensive, senior officials blamed Russia for the leak and characterized it as a disinformation campaign.
“It is very important to remember that in recent decades, the most successful operations of the Russian special services have been carried out in Photoshop,” Andriy Yusov, the representative of the Ukrainian Defense Intelligence Main Directorate, said on Friday — adding that a preliminary analysis of the documents showed “distorted figures” on losses suffered by both Russia and Ukraine.
A senior Ukrainian lawmaker said the leak was “not seen as a big issue here.”
But elsewhere in Ukraine in the senior national security ranks, officials were angered by the leak, according to one of the European officials. While the documents are dated and likely have no immediate impact on the country’s battlefield operations, the publishing of the information was viewed internally as an embarrassment and potential long-term security problem for Ukraine’s military commanders.
It’s unclear the extent to which the U.S. will alter its intelligence sharing on the Ukraine war in the days and weeks ahead.
The U.S. has made it a habit of sharing intelligence with Ukraine and European allies since 2022. In the months leading up to the war, the U.S. intelligence community shared information with allies to build a coalition of support for Kyiv and to prepare targeted sanctions on Russian government entities and businesses. Senior U.S. officials have heralded that strategy as a major success — one that allowed the U.S., its allies in Europe and in Kyiv to better prepare for the eventual Russian assault.
Veronika Melkozerova contributed to this report.
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( With inputs from : www.politico.com )

April 10, 2023
U.S. adds a healthy 236,000 jobs despite Fed’s rate hikes

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Despite last month’s brisk job growth, the latest economic signs increasingly suggest that an economic slowdown may be upon us. Manufacturing is weakening. America’s trade with the rest of the world is declining. And though restaurants, retailers and other services companies are still growing, they are doing so more slowly.
For Fed officials, taming inflation is Job One. They were slow to respond after consumer prices started surging in the spring of 2021, concluding that it was only a temporary consequence of supply bottlenecks caused by the economy’s surprisingly explosive rebound from the pandemic recession.
Only in March 2022 did the Fed begin raising its benchmark rate from near zero. In the past year, though, it has raised rates more aggressively than it had since the 1980s to attack the worst inflation bout since then.
And as borrowing costs have risen, inflation has steadily eased. The latest year-over-year consumer inflation rate — 6% — is well below the 9.1% rate it reached last June. But it’s still considerably above the Fed’s 2% target.
Complicating matters is turmoil in the financial system. Two big American banks failed in March, and higher rates and tighter credit conditions could further destabilize banks and depress borrowing and spending by consumers and businesses.
The Fed is aiming to achieve a so-called soft landing — slowing growth just enough to tame inflation without causing the world’s biggest economy to tumble into recession. Most economists doubt it will work; they expect a recession later this year.
So far, the economy has proved resilient in the face of ever-higher borrowing costs. America’s gross domestic product — the economy’s total output of goods and services — expanded at a healthy pace in second half of 2022. Yet recent data suggests that the economy is losing momentum.
On Monday, the Institute for Supply Management, an association of purchasing managers, reported that U.S. manufacturing activity contracted in March for a fifth straight month. Two days later, the ISM said that growth in services, which accounts for the vast majority of U.S. employment, had slowed sharply last month.

On Wednesday, the Commerce Department reported that U.S. exports and imports both fell in February in another sign that the global economy is weakening.
The Labor Department on Thursday said it had adjusted the way it calculates how many Americans are filing for unemployment benefits. The tweak added nearly 100,000 claims to its figures for the past two weeks and might explain why heavy layoffs in the tech industry this year had yet to show up on the unemployment rolls.
The Labor Department also reported this week that employers posted 9.9 million job openings in February, the fewest since May 2021 but still far higher than anything seen before 2021.
In its quest for a soft landing, the Fed has expressed hope that employers would ease wage pressures by advertising fewer vacancies rather than by cutting many existing jobs. The Fed also hopes that more Americans will start looking for work, thereby adding to the supply of labor and reducing pressure on employers to raise wages.
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( With inputs from : www.politico.com )

April 7, 2023
An American Diplomat’s Web3 Warning: The U.S. Is Already Losing Smart Technology Allies It Needs

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Meanwhile, the Chinese fintech company AliPay is using its private blockchain to push aggressively into Pakistan and the Philippines, where U.S. rivals PayPal or Coinbase have no operations.
Late last summer, the People’s Bank of China partnered with the central banks of Hong Kong, the United Arab Emirates and Thailand to facilitate 160 cross-border payments totaling over $12 million in value on the “mBridge Ledger,” a blockchain system that uses China’s own central bank digital currency for cross border payment.
The dollar’s influence on the digital future is at stake. Just as the dollar has projected U.S. economic power in the analog world, digital assets pegged to the dollar, called stablecoins, project the dollar into the digital economy.
But if, say, an Indonesian natural resource exporter can only get paid on China’s own closed network and cannot be paid in U.S.-dollar-denominated digital assets such as dollar-backed stablecoins, the U.S. financial system will suffer.
Just as capitalist and communist trade blocs squared off in the 20th century, companies wishing to export their goods to select markets will soon have to navigate competing trade blockchains. They’ll have to choose between permissionless — or interoperable — systems built on open blockchains versus firewalled, permissioned closed systems like those preferred by China. Given that China is becoming the largest trading partner for most of the world, many nations will be tempted to opt into its system. If U.S. regulators continue to antagonize open blockchain systems, economic participants will continue to view them as legally risky, making China’s closed alternative that much more appealing by comparison.
So far, the U.S. has not risen to the challenge.
The September release of the White House’s framework for digital asset development was a step in the right direction, but it was not enough. While the framework calls for U.S. agencies to “message U.S. values related to digital assets” in international forums, it otherwise remains vague on foreign policy.
At best, the United States merely endorses a nebulous paper-based exercise called the “G20 Roadmap for enhancing cross-border payments.” In reality, this amounts to innovation theater. The word “Web3” does not appear anywhere in the latest joint statement from State Department-organized U.S.-Japan “Internet Economy Dialogue.” On the economic policy side, the U.S. posture on digital assets is skewed to benefit domestically oriented financial sector incumbents at the expense of promising innovations. Risk-averse lawyers hold too much sway in the policy debate at the expense of technologists and informed foreign policy hands. Viewed from abroad, the signals from American policymakers suggest that the United States has turned anti-innovation. While digital assets pose real risks, those risks are currently being overemphasized while potential benefits get overlooked. The result is erratic “regulation by enforcement” and onerous tax policies that drive away commerce.
Take “staking.” Staking is a process by which the owners of blockchain tokens temporarily give up control of the tokens as part of a process called “proof-of-stake” that some blockchains use to ensure network reliability. To compensate people who pledge their tokens for staking, these networks provide stakers with fees paid in tokens, something vaguely akin to interest paid on a bond. Because staking requires some technical skill, investors often make use of services that stake the tokens on their behalf.

One benefit of staking is that it serves as a substitute for the energy-intensive “mining” process employed by Bitcoin. But, because nothing quite like staking has existed before, its exact regulatory status remains unresolved.
In February, the Security and Exchange Commission charged the U.S crypto exchange Kraken, saying it had failed to treat its staking service as an investment contract. As a result, the country’s second-largest crypto exchange has stopped offering this service to customers. This means that American investors have lost an important avenue for participating in, and benefitting from the governance of global blockchain networks.
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( With inputs from : www.politico.com )

April 4, 2023