China is Buying America with and without CFIUS

Statistics found here.

When China is not buying America, they are busy in other parts of the globe buying places like Europe. That is how China is expanding, including stealing intelligence, espionage and hacking. The parts of Britain not owned by Russia are being gobbled up by China. Russia has a long plan and China has a long plan, not too sure about the United States, Britain or other allies.

There has been many discussions in Congress to reform CFIUS, Committee on Foreign Investment in the United States. The most widely noticed scandal with CFIUS was the Uranium One deal.

U.S. watchdog expands scrutiny to more Chinese deals ... photo

Anyway, John Carlin recently spoke with the National Law Journal about bipartisan legislation introduced in November in the U.S. Senate and House of Representatives by U.S. Sen. John Cornyn, R-Texas, and U.S. Rep. Robert Pittenger, R-North Carolina, respectively, to overhaul the CFIUS review process. CFIUS reviews, which are voluntary, are meant to protect the nation from business transactions that pose a national security or strategic risk to the United States. The panel has the authority to require the transaction’s parties to undertake risk mitigation, such as carving out a specific location or element of the deal.

The panel can also recommend that the president block a deal entirely. President Donald Trump, for example, in September blocked the sale of Oregon-based Lattice Semiconductor Corp. to a Chinese company. A deal by Anthony Scaramucci, briefly a White House communications director, to sell his stake in SkyBridge Capital to Chinese company HNA Group Co., which is partly government-owned, appears to be in jeopardy after not yet clearing its nearly yearlong CFIUS review, according to reports in financial media including Bloomberg News in mid-December.Treasury Secretary Steven Mnuchin, who chairs the panel, has urged toughening CFIUS reviews.

While leading the DOJ’s National Security Division, Carlin oversaw the indictment in 2014 of five Chinese military members for economic espionage for hacks against several big U.S. companies, among them United States Steel, Westinghouse, Alcoa Inc. and SolarWorld from 2006 through 2014. The division also investigated the cyberattack on Sony Pictures Entertainment in late 2014 that the U.S. government determined originated in North Korea; and brought charges with the FBI against seven Iranians working for computer companies under contract to the Iranian government and military that conducted cyberattacks between 2011 and 2013 against 46 financial institutions including Wells Fargo and JPMorgan Chase & Co. More here.

The CFIUS review process also appears to be affecting efforts by China Oceanwide Holdings Group Co. Ltd. to acquire Genworth Financial Inc.

BusinessInsider: In 2016, General Electric sold its appliances business to Qingdao-based Haier. China’s Zoomlion made an unsolicited bid for heavy-lifting-equipment maker Terex Corporation, and property and investment firm Dalian Wanda announced a deal to buy a majority stake in Hollywood’s Legendary Entertainment.

On Friday, a Chinese-led investor group announced it would buy the Chicago Stock Exchange. And then there’s ChemChina’s record-breaking deal for the Swiss seeds and pesticides group Syngenta, valued at $48 billion according to Dealogic.

There have already been 82 Chinese outbound mergers-and-acquisitions deals announced this year, amounting to $73 billion in value, according to Dealogic. That’s up from 55 deals worth $6.2 billion in the same period last year.

Last year was a record-breaker for Chinese outbound deals, with 607 deals valued at $112.5 billion in total. Just over one month into 2016, and China is more than halfway to breaking that record.

So what’s going on?

One interpretation is that Chinese companies are simply hungry for growth as that country’s economy slows, and they’re feeding themselves by buying other companies.

“With the slowdown of the economy, Chinese corporates are increasingly looking to inorganic avenues to supplement their growth,” Vikas Seth, head of emerging markets in the investment-banking and capital-markets department at Credit Suisse, told Business Insider.

Last year, investment bankers earned $558 million in revenue from Chinese outbound M&A deals, according to Dealogic. This year, that number is at $121 million to date.

But there are, of course, a number of challenge these deals will face — especially in the US.

M&A deals in the US are subject to scrutiny by the Committee on Foreign Investment in the United States, or CFIUS. It recently prevented the $3.3 billion sale of Philips’ lighting business to a group of buyers in Asia.

feb 5 total china m&a deal value
The 82 Chinese outbound deals announced so far in 2016 are worth more than half of 2015’s total Chinese outbound-deal value.
Andy Kiersz/Business Insider

“I would be very surprised if CFIUS did not have an interest in taking a look at this deal,” said Anne Salladin of law firm Stroock & Stroock, referring to the Chicago Stock Exchange deal.

Facebook Suggested Friends Feature Recruited for ISIS

Ooops, call it Artificial Intelligence or an automated outcome friend feature because Mark Zuckerberg thinks connecting people to be friends globally is a good thing. In this case, not so much and who was paying attention? Further, has it been fixed? Nah.

Remember the time when Islamic State has mastered social media to exploit their jihad successes including their videos and publications? The world was in shock and yet, it continues today.

What about al Qaeda, or other domestic militant groups? Facebook says there is no easy fix, what? Anyone considering other social media platforms or the tech companies such as Google?

Facebook (FB) is being accused of inadvertently helping Islamist extremists connect and recruit new members. A new report in The Telegraph cites research suggesting that the social media giant connected and introduced thousands of extremists through its “suggested friends” feature. One writer who spoke to CBSN says “it’s cause for concern.”

The research was conducted by the Counter Extremism Project, a non-profit organization that pressures companies to remove extremist content online. It plans to release its findings in an extensive report later this month.

“The failure to effectively police its platform has allowed Facebook to become a place where extensive (Islamic State of Iraq and Syria or ISIS) supporting networks exist, propaganda is disseminated people are radicalized and new supporters are recruited,” researcher Gregory Waters told The Telegraph.

Facebook is already facing criticism for failing to remove terrorist material from its platform. The platform has also been blamed for spreading disinformation that stokes violence in Myanmar.

“There is no place for terrorists on Facebook,” a Facebook spokesperson said in a statement. “We work aggressively to ensure that we do not have terrorists or terror groups using the site, and we also remove any content that praises or supports terrorism. 99 percent of ISIS and Al Qaeda-related content we remove is found by our automated systems.”

J.M. Berger, author of “Extremism” and a fellow with the Counter-Terrorism Strategic Communications program, told CBSN’s Elaine Quijano that this issue is something that’s been known for some time and says “it’s cause for concern,” but further analysis of the research is needed. Berger said that “the online environment for ISIS and other jihadist extremists is much more difficult than it was just a couple of years ago.”

“It’s a problem we’ve known about for a long time … I first wrote about it in 2013,” Berger said. “All of the social media platforms use algorithms that allow them to suggest content that you might be interested in. It’s a key, integral part of their functioning and what we’ve seen is that these algorithms will recommend whatever kind of content … whether it’s extremist content or normal content. Managing that is a slightly different problem than managing extremist content where you go in and look for keywords.”

“You can be on Facebook and be an ISIS supporter and not post content that would get you suspended — if you don’t put anything publicly than you’re not going to get caught,” Berger explained. “But if you’re part of a social network that supports ISIS, then once a person becomes friends with you — Facebook is going to suggest that they all become friends.”

Berger elaborated: “It used to be that it was extraordinarily easy to find this content — to find other people doing active recruiting who are being open supporters — now that is no longer the case. We can’t realistically hope for 100 percent elimination of this content on these platforms, but now the question is how much is left?”

From the APP Store, Notifica ICE Raids

Ah yes those pesky apps found on iTunes and Google Play, funded by George Soros. This app helps illegal immigrants avoid federal immigration authorities. The group behind this scheme is United We Dream and guess what? That organization receives taxpayer funding. Uh huh…

Notifica is a project of United We Dream

***

In Case of an ICE Raid, Undocumented Immigrants Can Use ...

Notifica, is a new app that will act as a panic button for undocumented immigrants who are detained by Immigration and Customs Enforcement (ICE), Wired reports.

To help immigrants who have been detained, the organization United We Dream, which is led by young immigrants, and digital agency Huge developed the Notifica app. When immigrants are detained by ICE their families and loved ones might not even know what happened, but Notifica aims to change that.

“You have the right to be prepared,” says the app’s site. “Be prepared with Notifica, an app that sends out secure messages to your support network when you need it most.”

How The Notifica App Works

With Notifica, users can select contacts they want to notify in case they are taken by ICE. The app allows users to set up a personalized notification to each recipient, for example, a message to your mom or sibling would be different than the one you send to your attorney. After you write the preloaded messages, others will not have access to them and will not be able to read them. There is also a pin that seals off the messages in case your device is lost or stolen.

If the user is taken by ICE, a single click will send all messages via text in less than two seconds. Huge has also launched a phone hotline for those who don’t have a phone in reach but may be able to make a call afterwards. More here.

***

A division of the Justice Department awarded at least $206,453 to the National Immigration Law Center, which advises illegal immigrants on their rights, according to records obtained by Judicial Watch.

The Office of Justice Programs awarded the grants between fiscal years 2008 and 2010, the records cited by the conservative government watchdog group show. That would overlap the administrations of both Presidents George W. Bush and Barack Obama.

One of the projects of the National Immigration Law Center is United We Dream, which describes itself as a youth program for “undocumented” immigrants.

The Laredo Morning Times quoted Adrian Reyna, director of membership and technology strategies for United We Dream, as saying that “when something actually happens, most people don’t know what to do at that moment.”

The Texas newspaper also reported that United We Dream is working on a second version of Notifica that will include the ability to use more languages besides Spanish and English.

The second version, set to be released this summer, would include Vietnamese, Korean, and Chinese. The updated app also will be able to determine where an illegal immigrant is being detained, the newspaper reported.

United We Dream pushes to give legal status to so-called Dreamers, illegal immigrants brought to the United States when they were children. The organization, which has a hotline, advises illegal immigrants against cooperating with agents from U.S. Immigration and Customs Enforcement.

In a press release, the group says: “United We Dream calls on our communities to defend their rights, not open the door to ICE, and to report ICE activities to the United We Dream MigraWatch hotline.”

The April release adds: “United We Dream has also developed the mobile app, Notifica, which immediately alerts your loved ones and legal advocates to the user’s location in cases of detention. Text ‘Notifica’ to 877-877 for a link for download.”

The Soros-backed Open Societies Foundations don’t have a direct role in the app, but doesn’t find it objectionable, said Angela Kelley, the senior strategic adviser on immigration at the Open Society Foundations.

El Chapo Charged on his Drug Empire, but what About Murder?

Remember when Sean Penn decided he could befriend El Chapo Guzman and successfully plotted to interview him? Was Sean Penn ever debriefed by DEA or other law enforcement officials for more intelligence gathering on El Chapo? In fact this case is so dangerous that the jurors are to be sequestered and protected by U.S. marshals.

Related reading: 2009 Indictment from Illinois

Related reading: The case against Guzman in the Eastern District of New York does not have murder charges, only all offenses relating to the drug empire.

 

Moving ahead…         Mexico's El Chapo: From most wanted kingpin to extradited ... photo

Mexican drug lord Joaquin “El Chapo” Guzman may face murder charges after several former Mexican police officers accused him of killing six Americans and a DEA agent within a nine-week span in late 1984.

Three former Mexican police officers told the U.S. Attorney’s Office in Los Angeles they witnessed Guzman carry out the killing spree between late 1984 and early 1985. Jorge Godoy, one of the former cops who is now under witness protection, told WFAA that Guzman took pleasure in killing people.

“He likes to cut the people,” Godoy told the news site.

Four Americans who were Jehovah’s Witnesses — Benjamin Mascarenas, 29; his wife Pat Mascarenas, 27; Dennis Carlson, 32; and his wife Rose Carlson, 36 — were murdered during a missionary trip in Guadalajara, Mexico. Godoy said he was the bodyguard of drug kingpin Ernesto Fonseca at the time and the missionaries made the wrong decision of knocking on a drug lord’s door on Dec. 2, 1984.

He told WFAA he saw them rape the women and torture the Americans. He added that Guzman shot each person and watched their bodies fall into an open grave. Former DEA agent Hector Berrellez also said Guzman was involved in their deaths.

“He shot them with his Uzi 9mm and I have witnesses that were there that saw ‘El Chapo’ kill these four Americans after they had been severely tortured,” Berrellez told WFAA. “The women were even raped. We’re talking about an animal here.”

But the killings didn’t end there, according to Godoy. Two other Americans, John Walker, 35, and Albert Radelat, 33, were the crazed drug lord’s next targets in Jan. 30, 1985. Walker was a Vietnam veteran and two-time Purple Heart recipient in Guadalajara writing a novel at the time. He and Radelat went to La Langosta restaurant to have dinner — in what turned out to be a fatal mistake.

Drug lord Rafael Caro Quintero mistook the two for DEA agents and ordered them in the restaurant.

“[Walker and Radelat] passed by me and I said, ‘Oh my God,’” Godoy recalled.

He said Guzman cut Walker’s throat. He then wrapped them and buried the two people in a nearby park, according to the report.

The last killing involved DEA agent Enrique “Kiki” Camarena, who busted the cartel’s marijuana fields and torched 10,000 tons of marijuana that cost them about $5 billion. He and a pilot who took him to the fields were tortured, killed and their bodies dumped on the side of the road. “Absolutely, he [Guzman] tortured both of them,” Berrellez said. “[Guzman] was seen by two witnesses slap, kick and spit in Camarena’s face. He was involved in physically torturing Camarena.”

Camarena’s death sparked one of the biggest manhunts by the U.S. government.

The families of the six Americans told WFAA they want to see “El Chapo” charged with the murders. The drug lord had murder charges dropped before he was extradited to the U.S. The U.S. Attorney in Los Angeles did not comment on the possible charges to WFAA. A spokesman for the U.S. Attorney for the Eastern District of New York, where Guzman is awaiting trial, also declined to comment.

“El Chapo” pleaded not guilty to drug-related charges including money-laundering, use of firearms and murder conspiracy.

*** There is also the case of Rafael Caro Quintero : Despite being wanted in the U.S. for Camarena’s murder, Mexico’s Supreme Court in 2013 overturned the ruling that voided Caro Quintero’s conviction and led to his release. Once freed, Caro Quintero quickly disappeared and his current whereabouts are unknown.

The Drug Enforcement Administration is offering a reward of up to $5 million for information leading to his arrest and/or conviction.

“DEA and Treasury utilize every possible tool to attack and dismantle violent, deadly criminal organizations such as that of Rafael Caro Quintero, who is responsible for the 1985 murder of DEA Special Agent Enrique ‘Kiki’ Camarena,” DEA Deputy Administrator Jack Riley said. “Thanks to this Treasury action, Diana Espinoza Aguilar has been exposed as a key enabler and facilitator for Caro-Quintero and his vicious global drug trafficking and money laundering regime.”

A founder of the now-defunct Guadalajara cartel, Quintero spent 28 years in jail for the 1985 murder of DEA agent Kiki Camarena, but was unexpectedly released in 2013 – to the disgust of the US government – and promptly disappeared. Today the ageing narco is said to be hiding out somewhere in the golden triangle, intent on reimposing old school narco order in Sinaloa. “There is no logic to what is happening,” the record producer said. “The sense I get is of an atmosphere of pending war.” Luís agrees. He spent 10 years as one of El Chapo’s gunmen, loading drugs on to planes heading to the US as well as torturing and killing cartel members who stepped out of line. Luis has retired and complains of nightmare flashbacks to his days as a killer, but he still keeps in contact with the few members of his old crowd who are still alive. They tell him all is not well in the cartel. “Before all the cows went in one direction. Now there are too many cowboys,” he said, sipping a beer and fiddling with a joint. “There will always be drugs moving, for as long as it is not legal, but I see a lot of weakness, a lot of internal disputes and mistreatment of the local population and that creates problems too.” Luis said that while the police were as accommodating as ever, new tactics being used by the federal government were causing problems. Time was, he said, when soldiers would help cartel members load up drug shipments “for a beer and a woman”. Now, however, he said army units were rotated so often that deals with corrupt commanders had to be constantly renegotiated.

 

 

Approval Process for Cyberwarfare Challenged

Cyber is a real battlefield and yet it gets almost zero ink in the media. The reason is due in part to exposing vulnerabilities, forced ransoms and stolen data.

NotPetya could be the beginnings of a new kind of ... photo

Just a couple of years ago: Chet Nagle, a former CIA agent and current vice president of M-CAM, penned an article in the Daily Caller, stating, “At FBI headquarters in July, the head of FBI counterintelligence, Randall Coleman, said there has been a 53% increase in the theft of American trade secrets, thefts that have cost hundreds of billions of dollars in the past year. In an FBI survey of 165 private companies, half of them said they were victims of economic espionage or theft of trade secrets — 95% of those cases involved individuals associated with the Chinese government.”

The threats all appear to have a foreign genesis and the United States does not have a real cyber policy due in part to debates over whether cyber attacks are acts of war. Can the United States fight back with her own cyber weapons? Not really, kinda, maybe.

Tracking the theft is left to the FBI, while responding is left to the U.S. Cyber Command. Army Lt. Gen. Paul Nakasone is the head of Cyber Command facing strategic threats from Russia, China, North Korea and Iran. During his confirmation hearings, Nakasone was grilled on how he would position the agencies to confront mounting Russian aggression in cyberspace, whether through attempted interference in U.S. elections or targeting the electric grid and other critical industrial systems.

Members of the White House’s National Security Council are pushing to rescind Presidential Policy Directive 20, an important policy memorandum that currently guides the approval process for government-backed cyberattacks, three current U.S. officials familiar with the matter tell CyberScoop.

The effort is driven in part by a desire from some NSC staff to create a more streamlined channel for military leaders to get their offensive cyber operations greenlit, insiders familiar with the matter said. The sources spoke under the condition of anonymity to freely discuss sensitive national security matters.

The move comes as lawmakers openly question whether U.S. Cyber Command, the nation’s premier cyber warfare unit, is hamstrung from responding to Russian meddling due to bureaucratic red tape. CyberScoop previously reported that multiple congressional committees are considering policies that could empower the military’s cyber mission.

But the push for change faces resistance from the intelligence community and several other federal agencies involved in cybersecurity.

Senior U.S. intelligence officials have expressed concerns over what rescinding the directive will mean for their own active computer spying missions. These covert operations, which are typically pursued by intelligence agencies like the CIA or NSA, could be exposed by the launch of “louder” disruptive-style attacks from the military. The presence of multiple hacking teams simultaneously targeting a single network often makes it easier for them all to be discovered by the victim.

Prior reporting by CyberScoop has shown that a long-running turf war exists between different federal agencies regarding the proper use of hacking tools in order to protect the homeland.

Even before Trump came to office though, the framework in question was considered a source of frustration inside the Pentagon.

Signed by President Barack Obama in 2012, the directive’s critics say that it was written in a confusing manner that leaves open-ended questions. In addition, critics tell CyberScoop that too many federal agencies are allowed to weigh in on proposed cyber operations, causing “even reasonable” plans to be delayed or outright rejected.

Insiders who are resistant to eliminating the directive admit that PPD-20 is flawed, but fear change because they’ve not seen a replacement plan.

“Better the devil you know, or something like that,” a former U.S. official said. “This is such a crucial decision because whatever comes next will dictate how arguments are settled inside government … you have the military on one side and the IC on the other.”

The NSC, CIA and Office of the Director of National Intelligence declined to comment. The NSA referred CyberScoop to U.S. Cyber Command, who in turn did not respond to a request for comment.

Currently, PPD-20 requires U.S. government agencies to run approvals for offensive operations through a chain of command that stretches across the federal government. The process is largely focused on controlling those operations that go beyond the confines of everyday digital espionage, or computer exploitation, to simply collect information.

According to PPD-20, if an operation is considered “of significant consequence,” it requires the direct blessing of the president in addition to the interagency group. Hacking operations that, for example, shut down a power grid or cause equipment to explode would fit into such a description. But experts say it also includes less flashy tactics like deleting data or corrupting software in a destructive manner.

“This directive pertains to cyber operations, including those that support or enable kinetic, information, or other types of operations,” PPD-20 reads. “The United States has an abiding interest in developing and maintaining use of cyberspace as an integral part of U.S. national capabilities to collect intelligence and to deter, deny, or defeat any adversary.”

After coming under scrutiny last month, outgoing NSA Director Adm. Michael Rogers told lawmakers that there’s an “ongoing policy discussion” about redrawing the regulations looming over military cyber operations. Unlike conventional military activities, the internet makes it difficult for policymakers to draw clear cut boundaries. This challenges also runs up against longstanding laws that underpin, and therefore divide, the work of soldiers and spies.

Historically, intelligence agencies — empowered by Title 50 of the U.S. Code — have led the way on U.S.-backed hacking that occur in countries like Iran or China; where armed conflict is absent. Military operations fall under the purview of Title 10 of the U.S. Code.

It’s not clear whether giving military leaders more leeway to conduct hacking operations will ultimately make those units more effective at their missions. The details surrounding these activities are always classified, which inhibits the public from having a substantive policy debate.

Ultimately, the decision to eliminate PPD-20 falls solely to the executive branch. Sources tell CyberScoop no final decision has been made.

What makes PPD-20 difficult to analyze is the fact that it remains a classified document, despite it being leaked by NSA whistleblower Edward Snowden. The classification means current officials are barred from publicly commenting on it.

Thomas Rid, a professor of strategic studies at Johns Hopkins University, said that Snowden’s PPD-20 leak was notable because it revealed the U.S. government’s thought process behind “the rise of unwanted norms caused by escalatory cyberattacks.”

“Reading between the lines, the framework acknowledges the negative effect on global cyber norms that events like Stuxnet can cause because of escalation,” said Rid.

Rid also believes the directive was “naïvely constructed,” relying too much on the idea that cyberattacks only impact other machines, and not people.

“When you look at what’s happened in 2016, and really since then, it makes the people who wrote PPD-20 seem like they don’t understand the current threat environment where Russia, and to some degree Iran, are combining active measures with cyber to change public perception,” he told CyberScoop. “Russia is basically kicking the U.S.’ ass.”