Foreign Espionage Silicon Valley and Presidio

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One of the more corrupt locations in the country is San Francisco. Within the Bay Area is a former military base now turned all elite real estate known as Presidio. Within Presidio is the Presidio Trust. Yikes, taxpayer dollars pay out big bonuses there. The largest Federal bonus was paid to Bart Ferrell, a Human Resources Manager, who processes the payroll for the Presidio Trust.

Presidio Trust endorses museum, hotel and theaters for the ...

What the heck is going on in the Bay Area? Point to Senator Feinstein for those answers. But here is a BIG clue. Dianne sits on the Senate Intelligence Committee…..sheesh….as you read below, it becomes evident of the expulsion of several Russians….but no Chinese?

As you read through this chilling summary, consider the Hillary Russian conspiracy/collusion operation with Skulkovo.

The Clintons also strengthened their coffers. Three key transactions compose their pro-Kremlin graft.

• “The Ex-Im Bank would welcome an application for financing from Rosavia to support its purchase of Boeing aircraft,” Hillary said in Moscow on October 13, 2009. Three days later, according to the Washington Post, “Boeing formally submitted its bid for the Russian deal.” Kremlin-owned Rostekhnologii decided on June 1, 2010, to buy up to 50 Boeing 737s for Aeroflot, Russia’s national airline. Price: $3.7 billion.

That August 17, Boeing gave the Clinton Foundation $900,000 to “help support the reconstruction of Haiti’s public-education system” after a severe earthquake the previous January.

• Hillary pushed Skolkovo, “a high-tech corridor in Russia modeled after our own Silicon Valley,” as she explained in Moscow in October 2009. Her State Department colleagues encouraged 22 top American venture capitalists to tour Skolkovo in May 2010.

State convinced Cisco, Google, and Intel, among others, to open shop in Skolkovo. By 2012, 28 “Key Partners” from the U.S., Europe, and Russia supported this project.

But the U.S. Army Foreign Military Studies Program warned in 2013: “Skolkovo is arguably an overt alternative to clandestine industrial espionage.” Lucia Ziobro, a top FBI agent in Boston, explained in 2014: “The FBI believes the true motives of the Russian partners, who are often funded by their government, is to gain access to classified, sensitive, and emerging technology from the companies.”

'Silicon Valley' season 3 opening sequence - Business Insider

How Silicon Valley Became a Den of Spies

The West Coast is a growing target of foreign espionage. And it’s not ready to fight back.

SAN FRANCISCO—In the fall of 1989, during the Cold War’s wan and washed-out final months, the Berlin Wall was crumbling—and so was San Francisco. The powerful Loma Prieta earthquake, the most destructive to hit the region in more than 80 years, felled entire apartment buildings. Freeway overpasses shuddered and collapsed, swallowing cars like a sandpit. Sixty-three people were killed and thousands injured. And local Soviet spies, just like many other denizens of the Bay Area, applied for their share of the nearly $3.5 billion in relief funds allocated by President George H.W. Bush.

FBI counterintelligence saw an opening, recalled Rick Smith, who worked on the Bureau’s San Francisco-based Soviet squad from 1972 to 1992. When they discovered that a known Soviet spy, operating under diplomatic cover, had filed a claim, Smith and several other bureau officials posed as federal employees disbursing relief funds to meet with the spy. The goal was to compromise him with repeated payments, then to turn him. “We can offer your full claim,” Smith told the man. “Come meet us again.” He agreed.

But the second time, the suspected intel officer wasn’t alone. FBI surveillance teams reported that he was being accompanied by a Russian diplomat known to the FBI as the head of Soviet counterintelligence in San Francisco. The operation, Smith knew, was over—the presence of the Soviet spy boss meant that the FBI’s target had reported the meeting to his superiors—but they had to go through with the meeting anyway. The two Soviet intelligence operatives walked into the office room. The undercover FBI agents, who knew the whole affair had turned farcical, greeted the Soviet counterintelligence chief.

“What,” he replied, “You didn’t expect me to come?”

We tend to think of espionage in the United States as an East Coast phenomenon: shadowy foreign spies working out of embassies in Washington, or at missions to the United Nations in New York; dead drops in suburban Virginia woodlands, and surreptitious meetings on park benches in Manhattan’s gray dusk.

But foreign spies have been showing up uninvited, to San Francisco and Silicon Valley for a very long time. According to former U.S. intelligence officials, that’s true today more than ever. In fact, they warn—especially because of increasing Russian and Chinese aggressiveness, and the local concentration of world-leading science and technology firms—there’s a full-on epidemic of espionage on the West Coast right now. And even more worrisome, many of its targets are unprepared to deal with the growing threat.

Unlike on the East Coast, foreign intel operations here aren’t as focused on the hunt for diplomatic secrets, political intelligence or war plans. The open, experimental, cosmopolitan work and business culture of Silicon Valley in particular has encouraged a newer, “softer,” “nontraditional” type of espionage, said former intelligence officials—efforts that mostly target trade secrets and technology. “It’s a very subtle form of intelligence collection that is more business connected and oriented,” one told me. But this economic espionage is also ubiquitous. Spies “are very much part of the everyday environment” here, said this person. Another former intelligence official told me that, at one point recently, a full 20 percent of all the FBI’s active counterintelligence-related intellectual property cases had originated in the Bay Area. (The FBI declined to comment for this story.)

Political espionage happens here, too. China, for example, is certainly out to steal U.S. technology secrets, noted former intelligence officials, but it also is heavily invested in traditional political intelligence gathering, influence and perception-management operations in California. Former intelligence officials told me that Chinese intelligence once recruited a staff member at a California office of U.S. Senator Dianne Feinstein, and the source reported back to China about local politics. (A spokesperson for Feinstein said the office doesn’t comment on personnel matters or investigations, but noted that no Feinstein staffer in California has ever had a security clearance.) At the Aspen Security Forum last week, FBI director Chris Wray acknowledged the threat Chinese spying in particular poses, saying, “China from a counterintelligence perspective represents the broadest, most pervasive, most threatening challenge we face as a country.”

Making it even more complicated, said multiple former U.S. intel officials, many foreign intel “collectors” in the Bay Area are not spies in the traditional sense of the term. They aren’t based out of embassies or consulates, and may be associated with a state-owned business or research institute rather than an intelligence agency. Chinese officials, in particular, often cajole or outright threaten Chinese nationals (or U.S. citizens with family members in China) working or studying locally to provide them with valuable technological information.

“You get into situations where you have really good, really bright, conscientious people, twisted by their home government,” said a chief security officer at a major cloud storage company whose company maintains sensitive government contracts. U.S.-based Chinese employees of this company have had Chinese government officials attempt to “leverage” these individuals’ family members in China, this person told me. The company now requires employees working on certain projects to be U.S. citizens.

And yet, it’s not clear that the Bay Area—historically famous for its liberalism, and now infamous for its madcap capitalism—is prepared to handle this escalation and these new tactics. Tech firms, especially start-ups, lack incentives to report potential espionage to U.S. officials; and businesses and universities are often ignorant about the espionage threat, or so attuned to local political sensitivities they may fear being accused of stereotyping if they attempt to institute more stringent defensive security and screening measures.

As Silicon Valley continues to take over the world, the local spy war will only get hotter—and the consequences will resonate far beyond Northern California. This story is based on extensive conversations with more than half a dozen former intelligence community officials with direct knowledge of, or experience with, U.S. counterintelligence activities in the Bay Area. All requested anonymity to discuss sensitive matters more openly. A few other individuals, all of whom worked counterintelligence in the Bay Area from the early 1970s through the mid-2000s, agreed to be interviewed on the record.

As one former senior intelligence official put it: “San Francisco is a trailblazer—you see the changes there in foreign counterintelligence first. Trends emerge there.” If we want to understand a world where Russian and Chinese are ramping up their spy games against the United States, then we need to pay attention to what’s happening in San Francisco.

***

Russian intelligence has had an intensive interest in San Francisco stretching back to the beginning of the Cold War. In those days, the Russians were primarily gathering information on local military installations, said former officials, including the Presidio, the strategically located former military base set on a wind-swept northern tip of the San Francisco peninsula, overlooking the Golden Gate Bridge.

Since then, Russian operations have become bolder, with one notable exception: the immediate post-Cold War period. “The only time there was a collective sigh regarding Russia, like maybe things have changed, was under Gorbachev,” said LaRae Quy, who worked on Russian and Chinese counterintelligence in the Bay Area from 1985 to 2002. “We even put in a big ‘Going Out Of Business’ sign in the Palo Alto squad room.”

But this optimism quickly faded when Putin was elected in 2000, recalled Quy, who retired in 2006. “Russia has been steadily escalating since then.”

As the Bay Area transformed itself into a tech hub, Russia adapted its efforts accordingly, with Russian spies increasingly focused on obtaining information on valuable, sensitive or potentially duel-use technologies—those with both civilian and military applications—being developed or financed by companies or venture-capital firms based in the region. Russia’s espionage activities have traditionally been centered on its San Francisco Consulate, which was forcibly closed by the Trump administration in early September 2017.

But even with the consulate shuttered, there are alternative vehicles for Russian intelligence-gathering in Silicon Valley. One potential mechanism, said three former intelligence officials, is Rusnano USA, the sole U.S. subsidiary of Rusnano, a Russian government-owned venture capital firm primarily focused on nanotechnology. Rusnano USA, which was founded in 2011, is located in Menlo Park, near Stanford University. “Some of the [potential intelligence-gathering] activities Rusnano USA was involved in were not only related to the acquisition of technology, but also inserting people into venture capital groups, in developing those relationships in Silicon Valley that allowed them to get their tentacles into everything,” one former intelligence official told me. “And Rusnano USA was kind of the mechanism for that.”

Rusnano’s interests, said this former official, have extended to technology with both civilian and potential military applications. U.S. intelligence officials were very concerned about contacts between Rusnano USA employees and suspected Russian intelligence officers based at Russia’s San Francisco Consulate and elsewhere, this person said. “The Russians treated [Rusnano USA] as an intelligence platform, from which they launched operations,” said another former U.S. intelligence official. (Rusnano USA and the Russian Embassy in Washington, did not respond to requests for comment.)

Russia also employs older, tried-and-true methods locally. Intel officials have suspected that Russian spies were enlisting local high-end Russian and Eastern European prostitutes, in a classic Russian “honeypot” maneuver, to gather information from (and on) Bay Area tech and venture-capital executives. Sex workers targeting executives at high-end bars and nightclubs such as the Rosewood Sand Hill, an ultra-luxury hotel located near many of Silicon Valley’s top financial firms—infamous for its raucous, hook-up oriented Thursday nights—the Redwood Room, a tony bar located in the Clift Hotel in downtown San Francisco, and other spots have been identified as potentially reporting back to Russian intel officers, said another former official. “If I were a Russian intelligence officer, and I knew that these high-end girls were dragging CEOs of major companies back to their rooms, I’d be paying them for info too,” said this person. “It’s that whole idea of concentric rings: You don’t need to be on the inside, you just need somebody on the inside that you have access to.”

***

Russia’s interference in the 2016 presidential election has given Putin’s regime an outsized role in the national conversation on espionage. But talk to former intel officials, and many will say that China poses an equal, if not greater, long-term threat. “The Chinese just have vast resources,” said Kathleen Puckett, who worked counterintelligence in the Bay Area from 1979 to 2007. “They have all the time in the world, and all the patience in the world. Which is what you need more than anything.” (China’s Embassy in Washington, did not respond to requests for comment.)

Because of California’s economic and political importance, as well as its large, well-established, and influential émigré and Chinese-American communities, the People’s Republic places great weight on its intelligence activities here, said multiple former intelligence officials. Indeed, two told me that California is the only U.S. state to which the Ministry of State Security—China’s main foreign intelligence agency—has had a dedicated unit, focused on political intelligence and influence operations. (China has had a similar unit for Washington.)

And if California is elevated among Chinese interests, San Francisco is like “nirvana” to the MSS, said one former official, because of the potential to target community leaders and local politicians who may later become mayors, governors or congressmen. Their efforts are becoming increasingly sophisticated.

Sometimes these recruitment efforts have been successful. According to four former intelligence officials, in the 2000s, a staffer in Senator Dianne Feinstein’s San Francisco field office was reporting back to the MSS. While this person, who was a liaison to the local Chinese community, was fired, charges were never filed against him. (One former official reasoned this was because the staffer was providing political intelligence and not classified information—making prosecution far more difficult.) The suspected informant was “run” by officials based at China’s San Francisco Consulate, said another former intelligence official. The spy’s handler “probably got an award back in China” for his work, noted this former official, dryly.

Or take the case of Rose Pak. Pak, who died in September 2016, was for decades one of San Francisco’s preeminent political power brokers. Though she never held elective office, she was famous for making and unmaking mayors, city councilmen (or “supervisors,” as they’re known in San Francisco), and pushing city contracts to her allies and constituents in Chinatown.

According to four former intelligence officials, there were widespread concerns that Pak had been co-opted by Chinese intelligence, and was wielding influence over San Francisco politics in ways purposefully beneficial to the Chinese government. Another worry, U.S. officials said, was Pak’s role in organizing numerous junkets to China, sometimes led by Pak in person and attended (often multiple times) by many prominent Bay Area politicians, including former San Francisco Mayor Ed Lee, who died while in office in 2017. Political junkets are used by Chinese intelligence for surveillance (“every single hotel room is bugged,” one former official told me) and collection purposes, as well as for spotting and assessing potential recruits, said former intel officials. (There is no indication that Pak herself participated in, or had knowledge of, specific intelligence-gathering efforts.) Concerns about Pak’s links to the Chinese Communist Party occasionally percolated into local political debate, but the intelligence community’s identification of Pak as a likely agent of influence for Beijing is being reported here for the first time.

Occasionally, Chinese intelligence activities in San Francisco burst into plain view. Consider the story—and it is an incredible one, also told here for the first time—of the 2008 Olympic Torch Run. San Francisco was the only U.S. city to host the Olympic torch as it made its way, tortuously, to Beijing. And Chinese officials were very concerned about disruptions to the run by protesters, as well as in managing the image China projected to the rest of the world in the run-up to the games.

So they decided to leave nothing to chance. According to three former intelligence officials, Chinese MSS and Ministry of Public Security (MPS) officers flew in to San Francisco from abroad for the occasion, joining suspected MSS officers based in the Bay Area. (At the time, the diplomat responsible for Overseas Chinese Affairs at China’s San Francisco Consulate was a suspected MSS officer, said two of these former officials.) U.S. officials watched as Chinese intelligence officers filmed Tibetan monks on their march across the Golden Gate Bridge, and known Chinese spies surveilled a pro-Tibet rally downtown featuring Desmond Tutu and Richard Gere. Chinese spies also recorded participants in a Falun Gong rally in Union Square, and shot footage of protestors at the torch run itself.

Most brazenly, said former intelligence agents, Chinese officials bussed in 6,000-8,000 J-Visa holding students—threatening them with the loss of Chinese government funding—from across California to disrupt Falun Gong, Tibetan, Uighur and pro-democracy protesters. (They even provided these students with a box lunch.) “I’m not sure they would have pulled out these stops in any other city, but San Francisco is special” to China, said a former senior U.S. official.

Counterintelligence officers possessed advance knowledge about some aspects of this operation and observed Chinese intelligence officers, who often wore earpieces connected to a radio, managing the movements of counterprotesters, directing blocs of pro-PRC students to intimidate, disrupt and overwhelm anti-Beijing protesters across the parade route. Chinese intelligence officers would “communicate with each other, and say, ‘We’ve got three Tibetan monks about to do a reading on Pier 39—I need you to move bloc A and bloc B to that location so we can drown them out,’” recalled another former official. “So they’d move these groups around to prevent any protests along the Embarcadero.”

“We got pissed off,” said the same former intelligence official, because the Chinese “were interfering with the free expression of opinion” at the torch relay—their operation was, in essence, an effort by a hostile foreign intelligence service to forcibly suppress First Amendment activities in a major American city.

Disagreements between the FBI and the State Department, which counseled a more restrained approach, prevented U.S. intelligence personnel from interfering directly in Chinese activities during the torch run itself, said this former intel official. (The State Department said it does not comment on intelligence matters.) The same source noted that U.S. intelligence officials did, however, pass information about the torch run to their Australian counterparts—the torch was later scheduled to pass through Canberra—which denied visas to some of the Chinese intelligence officers responsible for the melee in San Francisco.

Chinese intelligence has long focused on surveilling, and attempting to control, Chinese nationals studying abroad. One well-documented mechanism for this effort has been the use of Chinese Students and Scholars Associations groups on university campuses. The connectivity between individual campus CSSAs and local Chinese diplomatic facilities varies. Some groups are unreceptive to the intercession or influence of Chinese government officials, but many consider themselves to be under the direct “guidance” of their local consulate or embassy, receiving funds from these institutions. “Intelligence officers in diplomatic facilities are the primary point of contact for students in CSSAs,” said one former official.

But some of these links between these student groups and Chinese officials are covert, and even coercive. In one case in the mid-2000s in the Midwest, a student affiliated with a CSSA reported another Chinese student’s contact with the FBI to an MSS officer operating under diplomatic cover in Chicago, said a former intelligence official. The student was quickly flown out of the country. And, roughly half a decade ago in the Bay Area, counterintelligence officials believed that a graduate student affiliated with the Berkeley CSSA was working for the MSS, and reporting on the activities of other Chinese students on campus, said another former official.

***

When it comes to economic espionage in particular, Chinese intelligence employs a more decentralized strategy than Russia does, former intelligence officials told me. China draws from a much larger population pool to achieve its objectives—using opportunistic businessmen, ardent nationalists, students, travelers and others alike. One former intelligence official likened China’s approach to an “Oklahoma land rush”—an attempt to grab as much targeted proprietary technology or IP as possible, as quickly as possible, through as many channels as possible.

Chinese intelligence also undertakes very intentional efforts to recruit insiders placed within organizations whose technologies they are interested in, said the same former intelligence official. “They are very good at softly recruiting people, and taking advantage of vulnerabilities”—including via threats—“and they are very patient in putting different parts of it together. We’ve seen them repeatedly save money and time that the U.S. spends on research and development.”

The July 2018 arrest of Silicon Valley-based Apple employee Xiaolang Zhang, who allegedly stole proprietary information about Apple’s self-driving car program to benefit his new employer, a China-based competitor, appears to fit this pattern. (Zhang was charged with theft of trade secrets and has not been accused of any espionage-related crimes. He maintains his innocence.)

The case of Walter Liew, a Bay Area local who was found guilty in 2014 of selling a highly valuable proprietary pigmentation formula owned by DuPont to a state-owned Chinese conglomerate, is a clearer example.

Liew was found guilty of violating the Economic Espionage Act,a landmark 1996 federal law that strengthened penalties for trade theft benefiting a foreign government. San Francisco has played an outsized role in cases involving this law. In fact, the first conviction under the act occurred in San Francisco, in 2006; as did the first sentencing under the law, in 2008; as did the first jury conviction—of Liew himself—in 2014. All three cases involved China.

The Chinese have pursued this strategy “brilliantly” for years, said Puckett. “They put all their efforts into espionage, and get everything for free.”

Chinese cyberespionage operations have also targeted a number of Silicon Valley-based technology giants. During a number of attacks, two former intelligence officials told me, Chinese intelligence immediately sought the files of U.S. companies’ legal counsel or other legal documentation, to access Foreign Intelligence Surveillance Act warrants or National Security Letters previously issued to these institutions. In other words, the paramount Chinese interest was finding out the extent of the U.S. officials’ knowledge about China’s own intelligence operatives—and in adjusting their behavior accordingly. “If in fact the person in question was Chinese intelligence,” said this former official, “they could then alter their approach.” This strategy began being observed during a hack of Google, said two former officials, that occurred about a decade ago.

While China and Russia demand the lion’s share of counterintelligence resources in the Bay Area, a number of friendly intelligence services are also active in Silicon Valley, said former intelligence officials. South Korea, according to one, has become “formidable” in the realm of economic espionage, with particular sophistication in cyberespionage. U.S. officials have had to issue “stern warnings” to South Korea to “stop hacking” within the United States, said this person. (The South Korean Embassy in Washington, D.C., did not respond to requests for comment.)

Israel is also active in the Bay Area—but it’s complicated. According to one former intelligence official, Israel has “a culture that facilitates and encourages acquisition of targeted companies”—in other words, it will use information it has gathered locally to cajole or incentivize private Israeli firms to purchase specific start-ups or other Silicon Valley-based tech companies. Throughout the 2000s, said former officials, French intelligence employed a similar strategy.

In an email response, a spokesperson for the Israeli Embassy in Washington, D.C., wrote that “the allegations are totally untrue and downright ridiculous. Israel does not conduct espionage in the United States.” A spokesperson for the French Embassy declined to comment.

There is disagreement, however, within the U.S. intelligence community about the amount of resources that should be devoted to what is, in essence, a “soft” form of spying by U.S. allies. “I get they try to get advantages from economic espionage,” said another former senior intelligence official, “but is French espionage worth that much emotional discharge, given what the Russians are up to?”

***

There’s another big challenge to doing counterintelligence work in the Bay Area, say these officials: getting the cooperation of local private-sector actors, especially in tech. Indeed, said former intelligence officials, not only do many cases of economic espionage not reach the prosecution stage here, they often go unreported entirely.

This has been a longstanding source of friction in the Valley. “The biggest problem we had—really, seriously—with a lot of these companies is that they wouldn’t prosecute,” said Larae Quy, the former Palo Alto-based FBI counterintelligence agent who retired in 2006. “They would have an employee sell technology to, say, the Russians or the Chinese, and rather than let their stockholders or investors know about it, they just let it walk. So, we’ve caught the guy, or we have information and we’d like to take it to the next level, and they don’t want to push it because of the bad press that gets out. It’s the most frustrating thing in the world.”

Silicon Valley firms continue to downplay, or outright conceal, the extent to which the theft of trade secrets and other acts of economic espionage occur, said multiple former officials. “Coming forward and saying you didn’t have controls in place—that totally impacts shareholder or investor value,” noted one former intelligence official. “Especially when you’re dealing with startups or mid-level companies that are looking for funding, that’s a big deal. You’re basically announcing to the world, especially if you’re potentially going forward with a public trial, that you were not able to protect your information.”

The open, start-up culture in the Bay Area has also complicated U.S. counterintelligence efforts, said former officials, because Russian and Chinese operatives have an easier time infiltrating organizations without any security systems or hierarchies in place. These services like penetrating young companies and start-ups, noted one former official, because “it’s always better to get in at ground floor” when seeking to pilfer valuable information or technology.

The exorbitant cost of living in Silicon Valley, however, means that opportunities for tech employees—and potential spies or co-optees—to “get in at the ground floor” are becoming increasingly uncommon. The tech industry, chasing talent and lower overheard, is now spread more widely across the country than ever before. And this diffusion will create new vulnerabilities. Consequently, places like Chapel Hill, North Carolina and Boulder, Colorado—both midsized cities with thriving tech industries—will likely see an uptick in counterintelligence cases. (One former intelligence official noted that the FBI’s office in Austin, Texas, has built up its counterintelligence capacities.)

But spies will never leave Silicon Valley. As the region’s global clout grows, so will its magnet-like attraction for the world’s spooks. As one former U.S. intelligence official put it, spies are pulled toward the Bay Area “like moths to the light.” And the region will help define the struggle for global preeminence—especially between the United States and China—for decades to come.

 

 

Russia/China Owning the Arctic, U.S., Allies Behind

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Hat tip to Senator Sullivan of Alaska for recognizing the mission and threat of Russia that he brought legislative attention to Russia’s military activity in the Arctic. As a side note, this activity is not without China participating with Russia. As noted below from the NDAA 2019:

Icebreakers and Arctic Policy:

Senator Sullivan included a number of provisions in the FY2019 NDAA to advance U.S. interests in the Arctic region, including the authorization of 6 Heavy Polar-class Icebreakers for the Coast Guard and a requirement that each military service – the Air Force, Army, Navy, and Marine Corps – produce their own strategy for the Artic region. The NDAA also includes language to urge the Secretary of Defense and the Secretary of State to examine the implications of Russian military activity in the Arctic as it related to U.S. military force posture in the region.

“Two authoritarian states with very concerning track records have pushed all-in on the Arctic,” said Senator Sullivan. “While China and Russia seem to recognize the Arctic’s economic, resource, and strategic importance, unfortunately, the U.S. has been late to see it. Thankfully, that does not include my colleagues on the Senate Armed Services Committee and, during the markup, we voted to authorize six U.S. Coast Guard Icebreakers and require each U.S. military service to complete their own individual Arctic Strategy. Slowly but surely, we’re finally beginning to wake up to the Arctic’s growing geopolitical significance.”

This advances to the point of what is going on in the Arctic. A big railroad system. Could it be that President Trump’s announcement with the EU for the United States to sell LNG to Europe is an energy coup against China and Russia?

Russia eyes new Arctic shipping route for trade with China

Related reading: What’s behind China’s decision to invest in a Russian LNG project above the Arctic circle?

China Wants To Build a Rail Line to USA - Supply Chain 24/7

RUSSIAN Railways (RZD) and Gazprom signed an agreement on March 30 to jointly finance the construction of the Northern Latitudinal Railway (NLR) in western Siberia.

The agreement was signed by the president of RZD, Mr Oleg Belozerov and the chairman of the board of Gazprom, Mr Alexey Miller. The line runs from Obskaya to Korotchaevo, stopping at Salekhard, Nadym, Pangody and Novy Urengoy.

The line will reduce the journey time to ports in the northwest and facilitate improved freight transport from the northern regions of western Siberia, carrying an estimated 23.9 million tonnes of predominately gas condensate and oil per year.

The project will be funded through a private investors under a concession scheme. RZD, Gazprom and Yamalo Nenets Autonomous Okrug, the main participants, will upgrade the existing infrastructure while the new facilities will be built by SPC-Concessionaire, a subsidiary of RZD.

SPC-Concessionaire will finance, build and operate the Obskaya – Salekhard – Nadym line, with a particular focus on the bridge across the Ob River, the bridge across the Nadym River, and the new 353km Salekhard – Nadym section.

RZD will reconstruct the adjacent Konosh – Kotlas – Chum Labytnangi sections of the Northern Railway as well as the Ob station and the Pangody – Novy – Urengoy – Korotchaevo line of the Sverdlovsk Railway.

Construction of the 707km line will begin in 2018 and is expected to be completed in 2022.

***

Could it be that China’s Silk Road mission is more that includes Russia? Yes.

China and Russia have reportedly agreed to jointly build an ‘Ice Silk Road’ along the Northern Sea Route in the Arctic.

Chinese President Xi Jinping met with Russian Prime Minister Dmitry Medvedev in Moscow on Tuesday to discuss further bilateral cooperation, according to Xinhua.

Xi said Russia is an important partner in the construction of the Belt and Road initiative – referring to Beijing’s new Silk Road project – and urged the two countries to “carry out the Northern Sea Route cooperation so as to realise an ‘Ice Silk Road’, and to implement various connectivity projects”.

The Xinhua report did not give further details about the cooperation along the Northern Sea Route, which is a shipping lane running between the Pacific Ocean and the Atlantic Ocean along Russia’s northern coast.

The announcement however comes shortly after China formally included the Arctic Sea to its Belt and Road initiative, which seeks to boost trade through massive investments in railroads, ports and other infrastructure linking Asia to Europe and Africa.

China’s National Development and Research Commission and State Oceanic Administration said in a document published on June 20 that a “blue economic passage” is “envisioned leading up to Europe via the Arctic Ocean”.

The other two passages run through the South China Sea and the Indian Ocean to the Mediterranean and through the South China Sea to the Pacific.

The document said China hopes to work with all parties to conduct research of navigational routes as well as climatic and environmental changes in the Arctic, and to explore the region’s potential resources.

It also encouraged Chinese companies to take part in the commercial use of the Arctic route and stated that China will actively participate in the events organised by Arctic-related international organisations.

China-Russia cooperation in the Arctic

Xi’s visit to Russia follows Beijing’s increased diplomacy in recent months with Arctic countries, including Norway, Finland, Denmark and Iceland.

Although China is not a littoral Arctic state, it has shown interest in exploring and developing the region, which is estimated to hold 13 percent of the worlds undiscovered oil resources and a third of its undiscovered natural gas resources. More here.

 

Putin’s Threat During the Press Conf with President Trump

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London – The Moscow lawyer said to have promised Donald Trump’s presidential campaign dirt on his Democratic opponent worked more closely with senior Russian government officials than she previously let on, according to documents reviewed by The Associated Press.

Scores of emails, transcripts and legal documents paint a portrait of Natalia Veselnitskaya as a well-connected attorney who served as a ghostwriter for top Russian government lawyers and received assistance from senior Interior Ministry personnel in a case involving a key client.

Politics: Natalia Veselnitskaya, Lawyer Who Met Trump Jr ... photo

The data was obtained through Russian opposition figure Mikhail Khodorkovsky’s London-based investigative unit, the Dossier Center, that is compiling profiles of Russians it accuses of benefiting from corruption. The data was later shared with journalists at the AP, the Swiss newspaper Tages-Anzeiger, Greek news website Inside Story and others.

Veselnitskaya has denied acting on behalf of Russian officialdom when she met with the Trump team, telling Congress that she operates “independently of any government bodies.”

But recent reporting has cast doubt on her story. In an April interview with NBC News, Veselnitskaya acknowledged acting as an “informant” for the Russian government after being confronted with an earlier batch of emails obtained through the Dossier Center.

Meanwhile, Putin carries through on those comments he made during the press conference with President Trump. More details below.

Translated: MOSCOW, July 17 – RIA Novosti. The Prosecutor General’s Office of the Russian Federation on Tuesday announced the names of American citizens who need to be interrogated in the case of the head of the Hermitage Capital foundation, William Browder, convicted in Russia. Among them, the head of the Office of the Prosecutor General’s Office, Alexander Kurennoy, called the former US Ambassador to Russia Michael McFaul, several US intelligence personnel, two ex-assistants to the US Secretary of State, US financiers of the Siff brothers. The list also included an agent of the British Mi-6 Christopher Steel.

These names were announced by the Russian Prosecutor General’s Office the day after the Russia-US summit in Helsinki, where Russian President Vladimir Putin at a press conference asked US investigators to make inquiries to Russia for questioning 12 alleged Russian intelligence agents, “and maybe even come to Russia for survey “. At the same time, the Russian president stressed that then the American side expects similar steps on the principle of reciprocity: in response, the Russian side will wait that in the US in the presence of Russian investigators will question those individuals, including representatives of the US special services, whom Moscow suspects of committing crimes in the territory of the Russian Federation.

Earlier, Deputy Attorney General Rod Rosenstein said that the US Justice Department put forward new charges against 12 Russians allegedly working for the GRU in the framework of the investigation conducted by the special prosecutor Robert Muller on the imputed Russian interference in the elections in the US.

Representatives of the State Department and special services

“We are ready to send another request to the US asking them to interrogate these people, as well as other employees of American special services, a number of state employees and entrepreneurs,” the head of the Office of the Prosecutor General’s Office, Alexander Kurennoy, told reporters.

Among American officials, whom Russia would like to interrogate in the case of the head of the Hermitage Capital foundation William Browder, Kurennoy called the former US ambassador to Russia Michael McFaul. He noted that under the leadership of McFaul “in 2009-2010, compiled a memorandum to the US State Department from Moscow on the progress of the investigation in the Magnitsky case.”

The head of the RF State Department also called the employees of the US National Security Agency Todd Hayman, Svetlana Engert and Alexander Shvartsman, CIA agent Jim Roth.

“These are the employees of the US National Security Agency Todd Hyman, he signed an oath to the US court on Browder’s words, Svetlana Engert – took the stolen materials of the criminal case from Russia, Alexander Shvartsman, took care of Browder during his stay in the US Jim Root, CIA agent , the financial manager of Browder, “- said Kurennoy.

The list includes two former assistants to the US Secretary of State, David Kramer and Jonathan Wiener, and Robert Otto, “until January 2017 – deputy head of the intelligence department of the US State Department, headed the Bureau of Intelligence and Research of the US Department of State on Russian domestic policy in the department for Russia and Eurasia” . In addition, the RF GP would like to interrogate and who was in 2009 an employee of the US Helsinki Commission Kayla Parker.

Browder’s “Trustees”

Kurennoy explained that the Prosecutor General’s Office wants to question the employees of the US special services who swore false allegations against businessman Denis Katsyv and guarded the head of the Hermitage Capital William Browder, convicted in the Russian Federation.

“As part of the investigation of one of the criminal cases against Browder, which continues to be investigated by the investigative authorities in Russia, and his criminal group, we are ready to send another request to our American colleagues in order to question these officers of the US intelligence services, a number of government employees, entrepreneurs and other persons involved to the illegal activities of Browder.All that I said above, we can confirm the documents, and if colleagues from the US will turn to us for relevant information, then we are within the framework of the international legal cooperation are ready to provide the necessary assistance and assistance, but I will emphasize on a parity basis, and not unilaterally, “Kurennoy said.

He added that they refer to those employees of the US special services who participated in the formation of false evidence of the guilt of the “citizen of Russia” in the US legal proceedings against Prevezon and took care of convicted businessman Browder.

Partners in crime

The list also includes American financiers brothers Ziff, whom the official spokesman of the RF State Duma called Browder’s “partners” for “criminal business.”

“They are recipients of illegal incomes, the Ziff brothers themselves, long-term partners in the criminal business of Browder,” Kurennoy said, referring to people whom he would like to interrogate the RF State Duma.

Not only Americans

Among those whom the Russian General Prosecutor’s Office would like to interrogate before the Browder case, not only US citizens, but also an employee of the British special service Mi-6 Christopher Steel.

“By the way, we have questions not only for US citizens, but I would also like to mention the employees of the special services of other countries who interacted with the people I mentioned earlier, for example, I would like to talk with Christopher Steele, an agent of the British Mi- 6. For a long period of time, he had contacts with a group of lobbyists of the “Magnitsky Act” and, interestingly, it was through this person that the very investigation of the special prosecutor (Robert) Müller, who is known as “Trump Dossier”, was initiated.

400 thousand instead of 400 million

Kurennoy also said that the criminal group Browder had withdrawn from Russia over 1.5 billion US dollars, of which about 400 thousand dollars, and not 400 million, as it was said earlier, fell on the accounts of the US Democratic Party.

“Browder’s criminal group with the help of offshore schemes withdrew money and shares from the Russian Federation for a total of more than $ 1.5 billion, of which $ 400,000 were transferred to the accounts of the Democratic Party,” he said.

Russian President Vladimir Putin said at a news conference on Monday after talks with US President Donald Trump in Helsinki that Browder’s business partners illegally earned more than $ 1.5 billion in Russia and sent $ 400 million to Hillary Clinton’s election campaign.

“Later, the president asked us to correct his reservation, which he made yesterday, not 400 million, but 400,000, but that’s quite a huge sum,” he said.

The Browder case

Browder is an international financier and investor, a former employer of the auditor Sergei Magnitsky. In 1995-2007, Browder was the largest foreign portfolio investor in Russia, now lives in London, Russia is declared an international wanted list.

In 2013, Browder was convicted in Russia for tax fraud. The court found that Magnitsky in the interests of Browder in 1997-2002 implemented an illegal scheme of tax evasion, using companies registered in Kalmykia and managed by Hermitage Capital. He is not going to return to Russia, so the verdict is in absentia – the opportunity to execute it will appear only if Browder is in Russia.

At the end of 2017, the Tverskoi Court of Moscow found Browder guilty of tax evasion and the bankruptcy of the Dalny Steppe enterprise, but did not tighten the sentence at the age of nine that was obtained under the previous sentence.

 

Mass Graves Covered up in Iran

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Iran: Road to be built over individual and mass graves

The families of political dissidents who were forcibly disappeared and extrajudicially killed in Ahvaz, southern Iran, in the 1980s are suffering untold mental anguish and distress as the authorities are destroying the individual and mass graves of their loved ones. They are afraid of facing further persecution if they speak out.

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Amnesty International reports that Iran’s regime is destroying a mass grave of the victims of the 1988 massacre. According to estimates from the opposition, these victims number in the 10s of 1000s (the vast majority from the MEK).

Meanwhile:

The Trump administration must now prepare for near-term Iranian terrorist attacks against the U.S. homeland, because the leader of Iran’s revolutionary guards, or IRGC, external action force gave a very aggressive speech on Thursday.

Addressing followers in the ancient city of Hamedan (a location probably chosen as a metaphor of Iranian durability), Qassem Soleimani warned Americans, “We are closer to you than what you think. You should know that I am your foe. The Quds Force alone and not all the Armed Forces is enough to be your rival. You are aware of Iran’s power in asymmetric war.”

Soleimani means for his words to be taken as references to terrorist attacks. In specific terms, IRGC modus operandi and tactical capability render “closer to you than what you think” and “asymmetric war” as references to Quds force attack cells and cyber-strike teams in the U.S. homeland, South America, and Europe.

But Soleimani wasn’t done there.

Again emphasizing “We are so close to you in places that you might not even think of,” Soleimani declared “You should know that there is not even a single night that we don’t think of destroying you.” Soleimani also drew a sharp reference to his role subjecting U.S. forces in Iraq to explosively formed penetrator attacks, stating “”have you forgotten when you had provided adult-size diapers for your battle tank crews?” EFP attacks killed hundreds of Americans and wounded many more.

Soleimani loved the EFPs for their brutality. In David Finkel’s The Good Soldiers, we hear about U.S. Army Specialist Joshua Reeves, whose vehicle was hit by an EFP in Baghdad. Reeves “wasn’t breathing, his eyes weren’t moving, his left foot was gone, his backside was ripped open, his stomach was filling with blood …” Reeves died the same day that his wife had told him that she had given birth.

And in a reference to Iranian martyrdom ideology, deeply vested in the revolution’s theological appropriation of the Battle of Karbala, Soleimani concluded, “We are thirsty for martyrdom and annihilation of arrogant powers.”

He wants the U.S. to know the IRGC will proudly die for their cause.

The U.S. may now have to help them on that course, because the U.S. must respond deliberately to this speech.

First off, President Trump should recognize that the Iranians aren’t playing around here. Soleimani has the pedigree to render very bloody terrorist attacks into action. He also has no qualms about massacring U.S. civilians (the Quds force nearly blew up a Washington, D.C., restaurant in 2011) and recently tried to blow up a Paris conference attended by U.S. officials. Indeed, Soleimani’s words exemplify why we argued this week that Trump must be more focused in his red-line warnings to Iran.

But what specifically should be done?

Both Trump and Secretary of State Mike Pompeo should take the lead in warning that any terrorist attacks on the U.S. will result in two immediate effects.

First, aggressive U.S. military strikes on IRGC infrastructure belonging to the Quds force and the IRGC at large. Pompeo’s role is important here because the former CIA director took a tough line against the IRGC, and Soleimani knows he means business.

Second, the U.S. should make clear that Soleimani and his senior leadership figures will be personally targeted. While some, like former Obama administration official Tommy Vietor, believe such threats would be outrageous, it is important that the Iranian hardliners know any terrorist attacks will not meet a standard fare response. They must know that the U.S. will metaphorically gut them if they come for our citizens. If Soleimani and his cadre do not understand that U.S. deterrent posture, they will kill innocent Americans. Evidencing their willingness to up the ante, the Quds Force directed Houthi rebel forces in Yemen to target cargo vessels passing through the Red Sea on Wednesday.

But the Trump administration should also be clear about where this is heading. As it attempts to destabilize the Iranian regime with economic pressure, the Iranian regime is showing that it will not go down without a fight.

Ultimately, Qassem Soleimani’s threats should be taken very seriously. He is a skilled commander with significant terrorist capabilities and an ideologically vested hatred for America. He must be dealt with as such.

 

 

United Front, China’s Weapon Against the West/Allies

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“United Front Work is an important magic weapon for the victory of the party’s cause.”
                                     – Xi Jinping, October 2017

Related reading: A Weapon Without War: China’s United Front Strategy

A Weapon Without War: China’s United Front Strategy ... photo

Senators Cruz and Rubio have been sounding the alarms on the Confucius Institution that has found homes on U.S. college campuses. They have both done the same with regard to the Chinese Students Association.

Australia, Taiwan, Japan, Taiwan and New Zealand are sounding the same warnings.

Xi Jinping’s rule to date has been characterised by, among other things, a return to the basics of Party rule as established by Mao. These include a renewed emphasis on United Front 统战 work, which Mao called one of the ‘three secret weapons’ 三个大法宝 (along with the armed forces and Party-building) that helped the Chinese Communist Party (CCP) to power in 1949. (For an overview of the United Front, see the China Story Yearbook 2014: Shared Destiny, pp.128–132.) The year 2015 was the most important one since 1990 for the United Front, a collection of strategies overseen by the United Front Work Department (UFWD) 统战部 by which the Party seeks to strengthen its authority and legitimacy, especially among the more marginalised, independent, and minority sectors of the Chinese population.

Explain the primary role of the United Front Work in the Chinese Communist Party (CCP).

The United Front Work Department of the CCP is an integral part of the Party structure, down to sometimes the lowest levels and coordinated at the very top by a United Front Leading Small Group initiated by Xi Jinping. The Department works to reach out, represent, and guide key individuals and groups within both the PRC [People’s Republic of China] and greater China, including Chinese diasporas. The goals include to have all such groups accept CCP rule, endorse its legitimacy, and help achieve key Party aims. Because United Front Work has officially been extended to those who emigrated after 1979 as well as those Chinese studying abroad, some 50 million or more, United Front Work is now of direct relevance and sometimes concern to an increasing number of foreign governments, notably Australia, Zealand, Canada and the United States. United Front Work abroad is not limited to only these countries though.

Related reading: China Built an Army of Influence Agents in the U.S.

How does the United Front Work fashion China’s image and influence overseas?    

An important role of United Front Work since Xi Jinping became CCP general secretary in 2012 has been to help tell the CCP’s preferred “China story” by encouraging overseas Chinese of all sorts to become active promoters of the Party-state’s views in their own domiciles. This promotion includes using material from China in publications, forming associations to highlight positions on issues like Taiwan or more recently, the One Belt, One Road policy, meeting local politicians and winning them over, and using the status of voters in democracies to influence domestic policies in ways that promote CCP interests.

The promotion of Confucius Institutes to win greater influence over what and how Chinese is taught has been yet another success story, particularly in the developing world where this initiative allows Party-state views much more leeway.

Encouraging all of sorts of influential foreigners to visit China under supervision has also been a very successful tactic. Such visitors are treated lavishly and often come to modify their positions or end up airing official Chinese positions despite themselves. Even retired politicians are seen as valuable because of their institutional knowledge and the assumption, usually valid, that they can still wield significant influence in their party or more broadly.

Explain the function of CCP propaganda machinery in Chinese foreign policy.  

The current CCP propaganda push abroad can be summed up as helping ‘make the international environment safe for achieving the Party-state’s goals’ and shifting the terms of discussion of China to ones that the CCP prefers. Even forcing or achieving small shifts in language can be very significant.

The recent attacks on Marriott Hotels and foreign airlines for using terms such as Taiwan and thus treating Taiwan as an independent country have been rewarded with immediate backtracking by the companies concerned. The result of these efforts is to help isolate and delegitimize Taiwan’s status in the eyes of foreign publics. Note that these effects are the opposite of how the CCP uses United Front Work and propaganda in regards to itself, but isolation and delegitimization or at least neutralization of real and perceived enemies are important goals of both. The success of these efforts would be to reduce the costs of other actions intended to bring Taiwan under PRC sovereignty, such as boycotts, blockades, or even invasion.

The CCP would emphasize any such actions as merely “internal” affairs. This “legitimacy” would be repeated by innumerable Chinese diaspora groups around the world, not least by the Associations for the Peaceful Reunification of China – run out of Beijing but now spread worldwide. Even the translation from Chinese of tongyi or “unification” as “reunification” is an effective almost subliminal technique of reframing the issue in the CCP’s favor. Another salient example of the success of these techniques is how foreign news organizations and broadcasters now often feel the need to add a rider to any discussions of Taiwan, adding, “which China regards as a renegade province.” It might be true at one level, but is deeply wrong and misleading at another.

Why are Chinese influence efforts increasingly under government scrutiny in Australia?

The CCP’s United Front Work and stepped up propaganda activities in Australia have been only belatedly recognized as potentially dangerous at a number of levels. These include the emergence of a new group of wealthy Chinese who, having made their fortunes in China, were seeking political access and influence in Australia. The major problem has been with the sometimes very strong United Front links of such people and hence the motives of their actions were called into question. The influence of some of these people on Chinese media in Australia, now almost overwhelmingly pro-Beijing, was another worry as it left only a few independent voices speaking directly to Chinese communities in Chinese and promoting values not in line with Beijing’s.

Another concern has been around fears of stepped up activities and surveillance of Chinese students on Australian campuses. This followed the formalization of PRC students abroad as a specific united front work target in 2015 and a number of well publicized incidents where Chinese students had confronted lecturers about, for example, treating Taiwan as a country.

While much of this work with students and post graduates is likely aimed at surveillance to ascertain whether students are being attracted to Western ideals and values, Christianity, or Falun Gong, the potential clearly exists to push universities or teachers to tone down or omit courses which teach things the CCP regards as dangerous or subversive. Similarly, there are recurrent concerns that the Confucius Institutes on university campuses may pose dangers to academic freedom and promote pro-Beijing lines.

Perhaps the latest and largely unspoken concern relates to a growing realization that the dramatic increases in Chinese emigration to places like Australia and New Zealand etc., particularly since the 2000s, have given rise to large groups of citizens with voting power and sometimes able to sway even general elections, who often remain largely under the sway of the PRC Party-state via its propaganda and United Front Work. Having left China as beneficiaries of the reform period, these groups have no reason to oppose it and many good reasons to support it even if they had no vote there. This is very different, for example, from those who migrated or fled in the wake of the brutal suppression of the student movement of 1989. Moreover, these new migrants are often highly educated and economically successful, unlike many of the generations of Chinese before them, and hence much more able and likely to demand commensurate influence more or less immediately. There is no need for a transitional generation to build up such social, political, and economic capital. This unforeseen consequence of business and student migration is only now becoming obvious to local politicians but how to respond is unclear.