China is Bullying India and Australia over Maldives for Silk Road

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China is bullying India, Australia and the United States to change the balance of power globally. Anyone paying attention?

Related reading: Indian Ocean Geopolitical Contest in the Spotlight

Maldives crisis: China sends a naval task force to muscle India, Australia out of power game

CHINA is muscling its way into Australia’s backyard. With an island paradise deep in crisis, the superpower sees a chance.

CHINESE warships have entered the Indian Ocean, marking a significant shift in regional power. They’re there to keep India away from Beijing’s interests in the strife-torn Maldive Islands.

And their presence has implications for Australia.

Naval posturing is nothing new. Gunboat diplomacy has been a major player in great power games of thrones for centuries.

But it is odd for it to be played out so close to home.

A scattering of pristine coral islands in the Indian Ocean is becoming the next flash point between New Delhi and Beijing.

The Maldives islands are in the throes of a constitutional crisis.

The little democracy has traditionally been part of India’s “sphere of influence”. And the eastern Indian Ocean is, of course, of significant strategic importance to Australia.

But recently a new kid has arrived on the block.

And now Beijing’s grown enough confidence to let its presence be felt in the area’s affairs.

A naval force of at least one modern destroyer, a frigate, an amphibious assault ship and a support tanker entered the Indian Ocean last week. It is believed destined to linger off the scenic scatterings of coral, sand and palm trees.

International affairs analysts believe they’re there to stop India from intervening.

Beijing, after all, has big plans for these little islands. And it doesn’t want the locals getting in the way.

Blue skies. White sand. Clear water. The international tourist resorts of the Maldives have been sidelined by the archipelago’s strategic importance. Picture: AFP

Blue skies. White sand. Clear water. The international tourist resorts of the Maldives have been sidelined by the archipelago’s strategic importance. Picture: AFPSource:AFP

TROUBLE IN PARADISE

These islands are unlikely to appear on anyone’s radar — unless you’re after an idyllic island paradise getaway.

But the Maldives have suddenly become the centre of a struggle for international influence.

It’s in the grip of a constitutional crisis.

Opposition leader Mohamed Nasheed recently dared to state that China was “buying up the Maldives” through President Abdulla Yameen. He highlighted the tiny nation was massively in debt to Beijing, and faced seizure of public assets — such as ports — to help pay it back.

It wasn’t long after this Yameen had key opposition figures arbitrarily arrested.

Then Yameen sprung a state of emergency on his people on February 5. It came as the Supreme Court ordered the opposition leaders be released as their arrests had been politically motivated.

So Yameen sent his security forces to arrest the Supreme Court’s judges.

Maldivian police detain a protester demanding the release of political prisoners during a protest in Male, Maldives. Picture: AP

Maldivian police detain a protester demanding the release of political prisoners during a protest in Male, Maldives. Picture: APSource:AP

This has Beijing bothered. It has invested big in a major port project there.

But it’s not the money it’s worried about.

Nor is it the potential collapse of a fragile democracy.

It has implications for its grand ‘One Belt, One Road’ infrastructure campaign. This is intended to vastly expand China’s economic network — and influence — through Asia, the Middle East and into Europe.

“Although traditionally within India’s strategic sphere, in recent years the Maldives has become unstable, impoverished and increasingly desperate,” says the Lowy Institute’s Dr David Brewster.

“Indeed, much of the nation could soon disappear beneath rising sea levels. We may soon see China’s ‘magical island-building ship’ pay a visit to the Indian Ocean.”

India has always been a roadblock in these plans. But now Beijing’s bypass via the Maldives may be in trouble.

Which is why it wants to New Delhi to keep out.

A screen capture of Chinese media footage showing the naval task force currently operating in the eastern Indian Ocean. It includes an amphibious assault ship, a guided missile destroyer and frigate, and a supply ship. Picture: CCTV7

A screen capture of Chinese media footage showing the naval task force currently operating in the eastern Indian Ocean. It includes an amphibious assault ship, a guided missile destroyer and frigate, and a supply ship. Picture: CCTV7Source:Supplied

BELT AND ROAD AMBITIONS

Every day, more than 40 million barrels of oil passes through the strategic “chokepoints” at either end of the Indian 0cean. This includes the Straits of Hormuz, the Gulf of Aden and the Malacca Strait.

All pass through the waters between the Maldives and Ceylon, to India’s south.

It’s a vital arterial supply line. Not least of all to Beijing.

Chinese media is boasting about its new naval presence in the Indian Ocean. It’s been proudly displaying photos and video of its modern ships refuelling and reprovisioning at sea on a mission that is certainly a long way from home.

It’s by no means the first time a Chinese task force has entered the Indian Ocean.

This time things may be different.

The Australian Strategic Policy Institute says Beijing’s infrastructure activity is part of a determined strategy to extend its influence across the Indian Ocean — at the expense of India.

“India has long been concerned about China’s growing maritime interest in the Indian Ocean region,” says ASPI executive director Peter Jennings. “Over the last decade the PLA-Navy has transited through the region many times to participate in UN and EU backed counter-piracy missions off the Horn of Africa. China has established its first overseas military base at Djibouti and is using the ‘One Belt One Road’ strategy to build extensive port infrastructure in Pakistan and Sri Lanka.”

In that context, the timing of this task force’s arrival in the eastern Indian Ocean is likely to be significant.

A Chinese Type 052D guided missile destroyer tests its antimissile gatling gun during a recent exercise. One of these potent warships is among Beijing's task force in the eastern Indian Ocean. Picture: Xinhua

A Chinese Type 052D guided missile destroyer tests its antimissile gatling gun during a recent exercise. One of these potent warships is among Beijing’s task force in the eastern Indian Ocean. Picture: XinhuaSource:Supplied

“Sending warships to operate off the Maldives is a new and concerning development, because it shows that China is trying to exercise influence over a small state more usually within India’s strategic view. New Delhi will read this as a worrying move. It will intensify strategic competition and increase mistrust between China and India.”

Some international observers had been expecting New Delhi to send its own task force to exert influence over the tiny islands’ fate. Instead, it has taken a hands-off approach through an appeal to the United Nations. It wants help to help pressure Yameen into restoring democratic values.

So Beijing has stepped into the power vacuum with a task force of its own.

But does India have a strong enough presence to keep Beijing out of its own backyard?

The presence of four modern Chinese warships near the Maldive Islands has significant implications for the balance of power in the Indian Ocean. Picture: CCTV7

The presence of four modern Chinese warships near the Maldive Islands has significant implications for the balance of power in the Indian Ocean. Picture: CCTV7Source:Supplied

OPTIONS OPEN

The chances of any clash between India and China are very low.

But the true impact of the Beijing’s warships is being felt in the corridors and back rooms of power throughout the region.

The warships give Beijing options. And status.

If things take a sudden turn for the worse in the Maldives, it can present itself as an international hero by quickly landing its troops in a “humanitarian intervention”.

It could lift its own citizens out of trouble — and those of other nations. It could impose in a “peace keeping” force to support the local political entity of its choice.

That such acts would irreparably damage India’s influence and status is an unspoken benefit.

It would also cement Beijing’s intimidating presence in what is a key “chokepoint” for its “belt” project.

The under-construction China Maldives Friendship Bridge is pictured near the city of Male. The international community has censured Maldives President Abdulla Yameen for imposing a state of emergency. Picture: AFP

The under-construction China Maldives Friendship Bridge is pictured near the city of Male. The international community has censured Maldives President Abdulla Yameen for imposing a state of emergency. Picture: AFPSource:AFP

If, however, the Maldives crisis does not worsen, the mere presence of Chinese warships acts as a deterrent to Indian intervention. It’s also a neon-sign of Beijing’s determination to wield its new-found influence worldwide.

The force Beijing appears to have deployed may seem small. But it is capable.

The Type 052D guided missile destroyer (Luyang-III class) is among its most modern combat ships. With a crew of 280 and weighing some 7500 tons, it carries a helicopter, land-attack cruise missiles, surface-to-air missiles, surface-to-surface missiles and anti-submarine missiles.

The Type 054A frigate (Jiangkai II) is one of more than 21 of these modern frigates deployed by Beijing. It is a stealthy design, intended primarily to supplement the air defence of a task force, though it also has some anti-surface and submarine capability.

The Type 071 amphibious transport dock is ideal for humanitarian relief — and landing forces of troops. It can carry a variety of amphibious assault vehicles and landing craft, along with two helicopters. But it also operates hospital and command-and-control facilities. It has accommodation for up to 800 troops.

It’s also backed-up by China’s 28th Anti-Piracy Task Force out of Africa. It’s believed to have wandered closer to the middle of the Indian Ocean in recent weeks.

Indian Navy personnel stand on the INS Vikramaditya, a modified Kiev-class aircraft carrier, similar to the aircraft carrier Liaoning operated by China. Picture: AFP

Indian Navy personnel stand on the INS Vikramaditya, a modified Kiev-class aircraft carrier, similar to the aircraft carrier Liaoning operated by China. Picture: AFPSource:AFP

DEEP IMPLICATIONS

India has not been sitting idle. It has been modernising its own navy. Like China, it is one of just a few nations operating fixed-wing aircraft carriers.

Neither is currently operating near the Maldives.

But New Delhi has also just signed a deal with the Seychelles islands to establish a mid-Indian Ocean naval facility of its own.

“Despite these dramatic developments, the shape and future purpose of China’s naval presence in the Indian Ocean remains an open question,” Dr Brewster says. “We should not automatically assume that the Chinese navy intends to challenge the US Fifth Fleet, at least in the short term. China will remain at a big geographic disadvantage in the Indian Ocean.”

This is because it does not have the complex and extensive supply network that the other major international influence in the region — the US 5th Fleet — has.

But it’s working on it.

Royal Australian Navy ships HMAS Adelaide, Toowoomba and Darwin in formation as part of the Joint Task Group for Indo-Pacific Endeavour 2017. Picture: Defence

Royal Australian Navy ships HMAS Adelaide, Toowoomba and Darwin in formation as part of the Joint Task Group for Indo-Pacific Endeavour 2017. Picture: DefenceSource:Supplied

There’s also bound to be pushback.

“China’s move may reinforce a growing Indian interest to co-operate more closely with Australia,” Mr Jennings says.

“The idea of quadrilateral co-operation between India, Australia, Japan and the US — which was abandoned a decade ago because of worries it would be seen to contain China — is now firmly back on the agenda.

“It would be ironic if China’s rather amateurish attempts to build political influence in the Maldives led to enhanced co-operation between the democracies on Indian Ocean security.”

5 Former Venezuelan Officials Charged, Money Laundering/Bribery

5 former government officials from Venezuela charged in Houston federal court with money laundering scheme involving foreign bribery

Criminal complaint is here.

Some of the vendors lived in the United States, the DOJ said, or owned and controlled businesses incorporated and based in the United States.

The defendants allegedly laundered some of the bribe money through real estate transactions and other investments in the U.S.

The indictment alleges two PDVSA vendors sent over $27 million in bribe payments to an account in Switzerland.

De Leon and Villalobos controlled the account.

Some of the money went to another “foreign official” who wasn’t named in the indictment. That’s the basis for the FCPA conspiracy charges against De Leon and Villalobos.

Related reading: Venezuela’s PDVSA: The World’s Worst Oil Company

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HOUSTON — Five former government officials from Venezuela were charged Monday for allegedly participating in an international money laundering scheme involving bribes made to corruptly secure energy contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA).

Two of the five defendants are also charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA). U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated this case.

In October 2017, Spanish authorities arrested four of the following defendants on arrest warrants based on a 20-count indictment returned Aug. 23, 2017, in the Southern District of Texas:  Luis Carlos De Leon Perez (De Leon), 41, Nervis Gerardo Villalobos Cardenas (Villalobos), 50, Cesar David Rincon Godoy (Cesar Rincon), 50, and Rafael Ernesto Reiter Muñoz (Reiter), 39.

On Feb. 9, Cesar Rincon was extradited from Spain and made his initial appearance Monday in federal court in the Southern District of Texas. De Leon, Villalobos and Reiter remain in Spanish custody pending extradition. A fifth defendant, Alejandro Isturiz Chiesa (Isturiz), 33, remains at large; a warrant remains outstanding for his arrest. All five defendants are citizens of Venezuela. De Leon is also a U.S. citizen.

De Leon, Villalobos, Reiter and Isturiz are each charged with one count of conspiracy to commit money laundering; Cesar Rincon is charged with two counts of conspiracy to commit money laundering. De Leon, Cesar Rincon and Reiter are charged with four counts of money laundering; Villalobos and Isturiz are charged with one and five counts of money laundering, respectively. De Leon and Villalobos are each also charged with one count of conspiracy to violate the FCPA.

“This case is an example of what can be accomplished when international law enforcement agencies work together to thwart complex cross-border crimes,” said Mark Dawson, special agent in charge of HSI Houston. “HSI is committed to upholding the rule of law and investigating those that would participate in illegal practices.”

The indictment alleges the five defendants, all of whom were officials of PDVSA and its subsidiaries or former officials of other Venezuelan government agencies or instrumentalities, were known as the “management team” and wielded significant influence within PDVSA.

According to the indictment, the management team conspired with each other and others to solicit several PDVSA vendors, including vendors who were U.S. residents and who owned and controlled businesses incorporated and based in the United States, for bribes and kickbacks in exchange for providing assistance to those vendors in connection with their PDVSA business.

The indictment further alleges the co-conspirators then laundered the proceeds of the bribery scheme through a series of complex international financial transactions including to, from or through U.S. bank accounts. In some instances, they allegedly laundered the bribe proceeds in the form of real estate transactions and other investments in the United States.

The indictment also reads that the following two PDVSA vendors sent more than $27 million in bribe payments to an account in Switzerland for which De Leon was a beneficial owner, and De Leon and Villalobos were authorized signers:  Roberto Enrique Rincon Fernandez (Roberto Rincon), 57, of The Woodlands, Texas, and Abraham Jose Shiera Bastidas (Shiera), 54, of Coral Gables, Florida. The indictment alleges those funds were later transferred to other accounts in Switzerland. Both Roberto Rincon and Shiera previously pleaded guilty to FCPA charges in connection with a scheme to bribe PDVSA officials. According to admissions made in connection with their pleas, Roberto Rincon and Shiera paid bribes and provided other things of value to PDVSA officials to ensure that their companies were placed on PDVSA bidding panels and ensure that they were given payment priority so that they would get paid ahead of other PDVSA vendors with outstanding invoices. Roberto Rincon and Shiera are awaiting sentencing.

On Feb. 12, the indictment was unsealed. Fifteen individuals were charged, and 10 have pleaded guilty as part of a larger and ongoing investigation by the U.S. government into bribery at PDVSA.

HSI Houston is conducting the ongoing investigation with assistance from HSI Boston, HSI Madrid and the IRS Criminal Investigation.

The Criminal Division’s Office of International Affairs, the Swiss Federal Office of Justice and the Spanish Guardia Civil also provided assistance.

Estimating the Costs of Cyber Attacks Against the U.S., Billions

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Cyberattacks cost the United States between $57 billion and $109 billion in 2016

The report published by the White House Council of Economic Advisers examines the cyberattacks cost that malicious cyber activities cause to the U.S. economy.

The report analyzed the impact of malicious cyber activities on public and private entities, including DoS attacks, sabotage, business disruption, and theft of proprietary data, intellectual property, and sensitive financial and strategic information.

Damages and losses caused by a cyber attack may spill over from the initial target to economically linked organizations. More exposed are critical infrastructure sectors, at attack against companies and organization in this industry could have a severe impact on the US economy.

The document warns of nation-state actors such as Russia, China, Iran, and North Korea, that are well funded and often conduct sophisticated targeted attacks for both sabotage and cyber espionage.

***

The forecast of the cost damage in coming years….

In part from Forbes: In 2015, the British insurance company Lloyd’s estimated that cyber attacks cost businesses as much as $400 billion a year, which includes direct damage plus post-attack disruption to the normal course of business. Some vendor and media forecasts over the past year put the cybercrime figure as high as $500 billion and more.

From 2013 to 2015 the cyber crime costs quadrupled, and it looks like there will be another quadrupling from 2015 to 2019. Juniper research recently predicted that the rapid digitization of consumers’ lives and enterprise records will increase the cost of data breaches to $2.1 trillion globally by 2019, increasing to almost four times the estimated cost of breaches in 2015.

The World Economic Forum (WEF) says a significant portion of cybercrime goes undetected, particularly industrial espionage where access to confidential documents and data is difficult to spot. Those crimes would arguably move the needle on the cyber crime numbers much higher.

Large banks, retailers, and federal agencies make the headlines when they are hacked – but all businesses are at risk. According to Microsoft, 20% of small to mid sized businesses have been cyber crime targets.

For anyone who wants to tally their own bill from cyber crime, check out Cyber Tab from Booz Allen. It is an anonymous, free tool that helps information security and other senior executives understand the damage to companies inflicted by cyber crime and attacks. More here.

 

13 Russians Indicted, Election Interference

Hoorah for Rosenstein and Mueller!

Rosenstein: “No Allegations That Any American Had Any Knowledge” Of Russian Election Influence Operation

The Department of Justice indictment is here.

Image result for internet research agency Internet Research Agency, St. Petersburg, Russia NBC

The Department of Justice has issued charges against 13 Russian nationals involved with the Internet Research Agency, an organization at the center of fake news and trolling during the 2016 presidential election.

The US Justice Department has filed charges against 13 Russian nationals and three Russian groups for interfering with the 2016 presidential election.

In an indictment released on Friday (.pdf), the Justice Department called out the Internet Research Agency, a notorious group behind the Russian propaganda effort across social media. Employees for the agency created troll accounts and used bots to prop up arguments and sow political chaos during the 2016 presidential campaign.

Facebook, Twitter and Google have struggled to deal with fake news, trolling campaigns and bots on their platforms, facing the scorn of Capitol Hill over their mishandlings.

The indictment lists 13 Russian nationals tied to the effort. Prosecutors said the efforts began as early as 2014 to interfere with US politics, with trolls posing as Americans, creating false personalities and spreading fake news across Facebook, Twitter and YouTube.

“These groups and pages, which addressed divisive U.S. political and social issues, falsely claimed to be controlled by US activists when, in fact, they were controlled by defendants,” the indictment said.

 

List of Companies, Amicus Brief Against Trump’s Sanctuary City Policy

The Senate defeated a GOP proposal based on President Donald Trump’s immigration framework.
The plan would have offered a path to citizenship for “Dreamers” and increased border security while also cutting legal immigration.
The vote was 39-60, with 60 votes needed for approval.

I say GOOD. It was fraught with loopholes and the actual number of illegals in question remained unknown.

Meanwhile, there is more going on with the whole sanctuary city thing. Hold on, you wont like this.

In 2017, State Atty. Gen. Xavier Becerra on Wednesday filed a brief in support of a Santa Clara County lawsuit challenging President Trump’s executive order targeting “sanctuary” cities that refuse to help federal authorities enforce immigration laws.

The amicus brief cites Trump’s threat to withhold federal funds from sanctuary cities and counties as well as the state’s interest in protecting state laws and policies that promote public safety and protect the constitutional rights of residents, Becerra said.

*** It gets worse… to read how the brief is cherry-picked on facts, go here.

So, there is a pile of companies that have filed an amicus brief against the Trump administration position on sanctuary cities.

The full list of tech companies (and a few others) that signed the amicus brief opposing President Trump’s executive order on immigration.

The full brief is available online.

1. AdRoll, Inc.

2. Aeris Communications, Inc.

3. Airbnb, Inc.

4. AltSchool, PBC

5. Ancestry.com, LLC

6. Appboy, Inc.

7. Apple Inc.

8. AppNexus Inc.

9. Asana, Inc.

10. Atlassian Corp Plc

11. Autodesk, Inc.

12. Automattic Inc.

13. Box, Inc.

14. Brightcove Inc.

15. Brit + Co

16. CareZone Inc.

17. Castlight Health

18. Checkr, Inc.

19. Chobani, LLC

20. Citrix Systems, Inc.

21. Cloudera, Inc.

22. Cloudflare, Inc.

23. Copia Institute

24. DocuSign, Inc.

25. DoorDash, Inc.

26. Dropbox, Inc.

27. Dynatrace LLC

28. eBay Inc.

29. Engine Advocacy

30. Etsy Inc.

31. Facebook, Inc.

32. Fastly, Inc.

33. Flipboard, Inc.

34. Foursquare Labs, Inc.

35. Fuze, Inc.

36. General Assembly

37. GitHub

38. Glassdoor, Inc.

39. Google Inc.

40. GoPro, Inc.

41. Harmonic Inc.

42. Hipmunk, Inc.

43. Indiegogo, Inc.

44. Intel Corporation

45. JAND, Inc. d/b/a Warby Parker

46. Kargo Global, Inc.

47. Kickstarter, PBC

48. KIND, LLC

49. Knotel

50. Levi Strauss & Co.

51. LinkedIn Corporation

52. Lithium Technologies, Inc.

53. Lyft, Inc.

54. Mapbox, Inc.

55. Maplebear Inc. d/b/a Instacart

56. Marin Software Incorporated

57. Medallia, Inc.

58. A Medium Corporation

59. Meetup, Inc.

60. Microsoft Corporation

61. Motivate International Inc.

62. Mozilla Corporation

63. Netflix, Inc.

64. NETGEAR, Inc.

65. NewsCred, Inc.

66. Patreon, Inc.

67. PayPal Holdings, Inc.

68. Pinterest, Inc.

69. Quora, Inc.

70. Reddit, Inc.

71. Rocket Fuel Inc.

72. SaaStr Inc.

73. Salesforce.com, Inc.

74. Scopely, Inc.

75. Shutterstock, Inc.

76. Snap Inc.

77. Spokeo, Inc.

78. Spotify USA Inc.

79. Square, Inc.

80. Squarespace, Inc.

81. Strava, Inc.

82. Stripe, Inc.

83. SurveyMonkey Inc.

84. TaskRabbit, Inc

85. Tech:NYC

86. Thumbtack, Inc.

87. Turn Inc.

88. Twilio Inc.

89. Twitter Inc.

90. Uber Technologies, Inc.

91. Via

92. Wikimedia Foundation, Inc.

93. Workday

94. Y Combinator Management, LLC

95. Yelp Inc.

96. Zynga Inc.

ADDED Feb. 6, 2017

97. Adobe Systems Inc.

98. Affirm, Inc.

99. Ampush LLC

100. Brocade Communications Systems Inc.

101. Bungie, Inc.

102. Casper Sleep, Inc.

103. Cavium, Inc.

104. Chegg, Inc.

105. ClassPass Inc.

106. Coursera

107. EquityZen Inc.

108. Evernote

109. Gusto

110. Handy Technologies, Inc.

111. HP Inc.

112. IAC/InterActive Corp.

113. Linden Lab

114. Managed by Q Inc.

115. MobileIron

116. New Relic, Inc.

117. Pandora Media, Inc.

118. Planet Labs Inc.

119. RPX Corporation

120. Shift Technologies, Inc.

121. Slack Technologies, Inc.

122. SpaceX

123. Tesla, Inc.

124. TripAdvisor, Inc.

125. Udacity, Inc.

126. Zendesk, Inc.

127. Zenefits