Allowing Kaspersky Labs in the U.S. Defies Logic

Posted on July 4, 2017July 4, 2017 by Denise Simon

Germany next:Germany big target of cyber espionage and attacks: government report

Barack Obama’s sanction and executive order hardly went far enough on Russia. For Russian Laws and Regulations and Implications for Kaspersky Labs and certificates, go here.

Documents link Russian cybersecurity firm to spy agency

WASHINGTON — U.S. intelligence agencies have turned up the heat on Kaspersky Lab, the Moscow-based cybersecurity giant long suspected of ties to Russia’s spying apparatus.

Now, official Kremlin documents reviewed by McClatchy could further inflame the debate about whether the company’s relationship with Russian intelligence is more than rumor.

The documents are certifications issued to the company by the Russian Security Service, the spy agency known as the FSB.

Unlike the stamped approvals the FSB routinely issues to companies seeking to operate in Russia, Kaspersky’s include an unusual feature: a military intelligence unit number matching that of an FSB program.

“That strikes me as much more persuasive public evidence,” said Paul Rosenzweig, a former deputy secretary for policy at the Department of Homeland Security. “It makes it far more likely that much of the rumor and uncertainty about Kaspersky are true.”

For years, suspicions that Kaspersky is connected to Russia’s spying network have dogged the company, a leading global seller of anti-virus programs. Founder and CEO Eugene Kaspersky studied cryptography, programming and mathematics at an academy operated by the KGB, the FSB’s Soviet-era predecessor, and then worked for the Ministry of Defense.

Since he established the company, it has grown to serve more than 400 million users worldwide, according to its website, and is the largest software vendor in Europe. Its security software is also widely available in the United States.

U.S. agencies also use it, with Kaspersky a subcontractor on federal software contracts. The Democratic National Committee has also used the software, even after its emails were breached last summer by Russian hackers.

But during investigations into Russia’s meddling in last year’s U.S. elections, concerns have grown that Kaspersky software could somehow be used to launch a cyberattack on the U.S. electric grid or other critical infrastructure, such as railroads, airlines or water utilities. ABC News reported in May that the FBI warned industry leaders about those risks last year at a meeting confirmed by McClatchy.

One of Kaspersky’s certificates that carries a military intelligence unit number.
GREG GORDON/MCCLATCHY/TNS

In recent days, two events kept Kaspersky in the news: FBI agents fanned out to interview Russian Kaspersky employees based in the United States, and a Senate committee approved legislation to curb federal use of the company’s products.

Even so, no proof has ever been made public to refute the company’s denials that it has connections to Russian intelligence.

The documents obtained by McClatchy, however, could provide additional evidence that the clandestine FSB has a tight relationship with Kaspersky.

In a statement to McClatchy, the company did not directly address the reference to an FSB military unit number in several of its certificates dating to 2007. The certificates are posted on Kaspersky’s website.

Kaspersky said the FSB’s certification review “is quite similar to that of many countries,” including those of the European Union and the United States. It includes an analysis of the company’s source code “to ensure that undeclared functionality and security issues — like backdoors — do not exist,” the company said.

However, Russia’s certification reviews do not require the company to divulge “the necessary information to permit those (spy) organizations to bypass products’ security mechanisms,” Kaspersky said.

After this story was initially published, the company said it and other high-tech companies that seek to sell products to the Russian government receive their certifications from the Center for Information Protection and Special Communications, known by the FSB military unit number on Kaspersky’s certificates.

A former Western intelligence official who examined the documents for McClatchy described as “very unusual” the assignment of a military intelligence number on Kaspersky’s certificates.

In Russia’s closed society, the FSB retains the right to access any company’s data transmissions, and no firm is allowed to use encryption to block the intelligence agency’s intrusions, the former Western spy said.

Kenneth Geers, a former NATO expert who is a fellow at the Washington-based Atlantic Council, also reviewed the company’s FSB certificate.

Geers said he could not say with certainty the degree to which the documents show a connection between Kaspersky and the FSB.

But “the suggestion is that this is a government op (operation), a unit with a direct government affiliation,” he said.

“No one should be surprised if there are closer relationships between IT vendors and law enforcement, worldwide, than the public imagines,” Geers said.

Case in point: Whistleblower Edward Snowden revealed that American telecommunications companies shared vast amounts of personal data with the U.S. National Security Agency, where Geers once worked.

It’s possible, Geers said, that Kaspersky’s software contains a secret “backdoor” to allow Russian special services access for law enforcement and counterintelligence purposes.

“If such a secret backdoor exists, I would not be shocked,” Geers said. “A worldwide deployment of sensors may be too great a temptation for any country’s intelligence services to ignore.

“Kaspersky may also have been required by Russian authorities to participate in a quiet business partnership with the government,” he said.

A former CIA station chief in Moscow agreed that Kaspersky may have had little choice.

“These guys’ families, their well-being, everything they have is in Russia,” said Steve Hall, who later headed the agency’s Russian operations before retiring in 2015.

Kaspersky is “a Russian company,” Hall said. “Any time (Russian President Vladimir Putin) wants Kaspersky to do something — anything — he’ll remind them that’s where their families are and where their bank accounts are. There’s no doubt in my mind it could be, if it’s not already, under the control of Putin.”

Kaspersky has rejected any notion that it might be an intelligence front, citing its years of delivering quality products.

“As a private company, Kaspersky Lab has no ties to any government, and the company has never helped, nor will help, any government in the world with its cyber espionage efforts,” Eugene Kaspersky said in May during an “Ask Me Anything” session on the website Reddit.

Many cyber experts, including those with federal government backgrounds, have praised the quality of Kaspersky software. The company also has a record of exposing cyberattacks, including the U.S. government’s Stuxnet attack that disabled Iran’s nuclear weapons development even though the Iranian equipment wasn’t connected to the Internet.

But several other experts said they were “not shocked” by the disclosure of the language in Kaspersky’s FSB certificate.

“It is common view around the intelligence community that (Kaspersky) is treated (by the Kremlin) like an arm of the Russian government,” said a former Obama administration cyber official, who asked for anonymity because of the sensitivity of the matter.

Kaspersky has attracted an unwanted spotlight lately in the Justice Department’s investigation headed by special counsel Robert Mueller into whether the Kremlin colluded with President Donald Trump’s 2016 campaign.

At a Senate Intelligence Committee hearing in May, Sens. Marco Rubio, R-Fla., and Joe Manchin, D-W.Va., raised concerns about Kaspersky.

Rubio asked of intelligence agency chiefs, “Would any of you be comfortable with the Kaspersky Lab software on your computers?”

Before him were, among others, the leaders of the FBI, CIA and the National Security Agency.

Each said “no.”

The FBI interviews of Kaspersky employees were conducted June 27, after disclosures that the company paid retired Army Lt. Gen. Michael Flynn more than $11,000 in consulting fees last fall before he began a short-lived stint as Trump’s national security adviser.

The day after the interviews, the Senate Armed Service Committee approved legislation that would bar the Pentagon from buying Kaspersky products.

“The ties between Kaspersky Lab and the Kremlin are very alarming,” said Sen. Jeanne Shaheen, D-N.H. “This has led to a consensus in Congress and among administration officials that Kaspersky Lab cannot be trusted to protect critical infrastructure, particularly computer systems vital to our nation’s security.”

Her amendment to the defense authorization bill prohibiting Pentagon purchase of the software as of October 2018 won overwhelming approval.

If the amendment becomes law, there could be consequences, a Russian news agency reported. It quoted a top Kremlin communications official, Nikolai Nikiforov, as warning that if the United States freezes out Kaspersky, Putin’s government could not rule out retaliation.

The FBI declined to comment. But the bureau has long suspected that some of Kaspersky’s American-based employees were engaging in intelligence activities, said a U.S. government official, who declined to be identified because of the sensitivity of the matter.

Federal agencies have at least 20 contracts in which Kaspersky products are used. The General Services Administration makes them available on an approved product list for much of the government.

CDW, a top government tech contractor that has provided Kaspersky software and maintenance through four contracts with the Consumer Safety Product Commission (as recently as May 23), declined to say whether it plans to continue offering Kaspersky software.

Dell, the giant computer manufacturer, offers Kaspersky in many of its products. The company did not respond to a request for comment.

So why do federal agencies still use Kaspersky software if there has been such uneasiness about it inside national security circles?

“Under acquisition rules, it is very difficult for an agency to rely on classified information in order to make purchasing decisions,” said J. Michael Daniel, White House cybersecurity coordinator during the Obama administration.

“A lot of acquisition officers didn’t seek out that information because they couldn’t use it in the decision-making process,” said Daniel, now president of the Cyber Threat Alliance, a group committed to improving cyber defenses.

The U.S. intelligence community’s conclusion that Russian cyber operatives pirated thousands of emails from the Democratic National Committee beginning in 2015 helped trigger the inquiries into possible Kremlin interference in the election.

But two months after the DNC disclosed that its servers had been hacked — in an apparent attempt to help prevent further intrusions — the party purchased Kaspersky software on Aug. 25, 2016, for $137.46, according to Federal Election Commission records. It was the only federal political committee that reported buying Kaspersky software in the 2016 cycle, according to FEC records.

A DNC spokesman did not respond to a request for comment.

For its part, the company publishes a blog that advises consumers about computer viruses. The U.S. government official said, though, that in the past Kaspersky has aroused suspicions as to why it warns about some computer bugs but not others.

The firm’s presence has become so embedded in the U.S. economy that the company sponsors a Ferrari Formula One racing team, robotic competitions for children and is among the corporate sponsors of an upcoming conference of the National Conference of State Legislatures.

“They have a big public relations wing,” said the U.S. government official who spoke on condition of anonymity. “They’re fully aware they’re under the microscope.”

Supreme Court and the no-croak Frog

Posted on July 4, 2017July 4, 2017 by Denise Simon

And you think government is not broken? Hold on for this one. It is legal terrorism.

The phone call came out of the blue in 2011.

A federal biologist on the other end of the line told Edward B. Poitevent II that the U.S. Fish & Wildlife Service intended to designate a large swath of Louisiana woods that had been in his family for generations a “critical habitat” for the endangered dusky gopher frog.

Poitevent was confused because the frog had been neither seen nor its croak heard on the land since the 1960s. Later he would learn that his land is not, in fact, a suitable habitat for the frog anyway.

“No matter how you slice it or dice it, it’s a taking of my land in that I can’t use it or sell it now,” said Poitevent, a New Orleans lawyer.

A half century after disappearing from the 1,500-acre parcel in Louisiana, the dusky gopher frog will likely appear this month in filings urging the U.S. Supreme Court to settle the matter after years of costly litigation.

The dusky gopher frog.

United States Fish and Wildlife Service

In one sense, the case illustrates the conflicts that arise as conservationists and the government use the Endangered Species Act to protect privately held lands. But legal scholars say the absent amphibian could provide a broader test of just how far the government’s regulatory reach can extend under the Constitution.

The case offers the high court a chance to revisit its “Chevron deference” precedent, named for a landmark 1984 ruling involving the oil giant and environmental activists. It held that when a federal law contains ambiguous language, the courts should defer to the agency’s interpretation unless it is unreasonable. Given that many laws contain ambiguous language – and that “unreasonable” is also a squishy term – Chevron gives federal agencies wide authority not just to interpret but to make law, many critics say.

Although the Trump administration has declared its intentions to rein in the regulatory state, the Interior Department declined to comment on this case, as did the Justice Department’s Office of the Solicitor General. Regardless, only the Supreme Court can overturn Chevron, and it is unclear how the addition of Justice Neil Gorsuch, a noted Chevron skeptic, may influence the litigation. But Columbia Law School professor Philip Hamburger, a trenchant critic of America’s administrative law system, doubts the dusky frog will join Brown, Roe and Citizens United in the annals of court history.

“I would love for them to take it up and overturn Chevron — and this is an opportunity for them to do so if they were so inclined,” he said, “but they’ve shown remarkable dexterity in avoiding it.”

Nevertheless, the case’s history demonstrates how Chevron can force judges to rule against what some perceive as simple common sense. From the outset of this process, some judges who have ruled against Poitevent and fellow plaintiffs have insisted their hands were tied.

“The Court has little doubt that what the government has done is remarkably intrusive and has all the hallmarks of government insensitivity to private property,” U.S. District Judge Martin L.C. Feldman wrote in his 2014 decision siding with the wildlife service and environmental advocacy groups. “The troubling question is whether the law authorizes such action and whether the government has acted within the law. Reluctantly, the Court answers ‘yes’ to both questions.”

The dusky gopher frog, a largely subterranean critter, is on a long list of species whose endangered designations restrict private land use. Currently, development rights are being challenged to protect the habitats of at least four other creatures: the Riverside fairy shrimp (California); the Northern spotted owl (Oregon, Washington and California); the Gunnison sage grouse (Colorado and Utah); and the jaguar (Arizona and New Mexico).

But the Louisiana case stands out because of the frog’s long absence from the land in question.

M. Reed Hopper, an attorney with the Pacific Legal Foundation, which sued in 2013 on behalf of some of Poitevent’s relatives, called the gopher frog case an “extreme example” of officials enforcing the Endangered Species Act “contrary to its terms, without regard for other social values such as housing, jobs, food, and production, or when the burdensome cost of species protections fall unfairly on a few landowners that should be shared by society as a whole.”

Fifteen states have filed amicus briefs with the plaintiffs seeking some restriction on federal regulatory reach within critical habitats. But Feldman, an advocate of judicial restraint appointed by President Reagan, wrote in his ruling that in his view a court would be overreaching were it to side with the property owners. He hinted, perhaps facetiously, that what the land owners really needed was an activist judge. Otherwise, he said, Congress would have to amend the Endangered Species Act for the co-litigants to get relief.

Edward B. Poitevent II

Credit: Stone Pigman

Other jurists disagree. U.S. Appeals Court Judge Priscilla Owen, who dissented in the 5th Circuit’s initial upholding of Feldman’s ruling, said there must be regulatory limits. Otherwise the wildlife service would be able to declare any land at all “critical habitat.”

“If the Endangered Species Act permitted the actions taken by the Government in this case, then vast portions of the United States could be designated as ‘critical habitat’ because it is theoretically possible, even if not probable, that land could be modified to sustain the introduction or reintroduction of an endangered species,” she wrote.

What seems highly impractical is the reintroduction of the dusky gopher frog on the Louisiana tract. The dark, warty creature has very particular needs. It can only breed in ephemeral, or temporary, ponds, so no pesky fish can eat its tadpoles. It lives much of its life burrowed underground beneath a longleaf pine canopy. At the moment, about 100 of the creatures are believed to inhabit a small area in and around the DeSoto National Forest in Mississippi, some 80 miles due east of the Poitevent family’s land in St. Tammany Parish, near the Mississippi-Louisiana border.

Ephemeral ponds do form on the Louisiana tract, but the canopy of loblolly pines isn’t conducive to their survival. Additionally, the lack of regular fires creates underbrush the frog dislikes. In other words, the land could become a suitable habitat only if the landowners spent heavily to transform the foliage and re-introduced the frog – steps the government concedes it cannot compel.

So how did the Louisiana tract become entangled with the dusky gopher frog in the first place? Poitevent believes, and the record seems to support, that the case wouldn’t exist but for the prodding of the Center for Biological Diversity, a national environmental advocacy group. The frog was added to the endangered list in 2002 as a result of a lawsuit filed by the center against federal agencies, and it was another center lawsuit that first secured “critical habitat beyond the frog’s main home pond” in 2007. But the center felt those steps were insufficient for the frog’s survival and threatened yet another lawsuit in 2010. Poitevent’s land appears to have been a sacrificial pawn in this maneuvering, and the fateful call to him from the federal biologist came soon after.

Collette Adkins, a senior attorney with the advocacy group, said the frog’s needs trump a landowner’s rights. The fact that its former Louisiana home became uninhabitable because of natural rather than manmade changes does not mean people bear no responsibility for keeping the critter alive, she said. Taking a larger and longer view, she argues that human activity in that region over the centuries has reduced the frog’s habitat. “We are the ones who drove them to extinction,” she said.

At present, the lumber company Weyerhaeuser owns 5 percent of the land in question and has a timber management contract on the remainder with Poitevent and some of his relatives. But the land’s potential value lies in much more than timber. The wildlife service’s own economic impact study estimated the value at some $33 million – if development were unrestricted. But because the wildlife service decided there was no other potentially suitable gopher frog habitat besides his land, no buyer will touch it, Poitevent said.

Campers in DeSoto National Forest in Mississippi, habitat of the dusky gopher frog.

U.S. Forest Service

At least one outside environmentalist thinks a more compromising approach in such conflicts could satisfy the ambitions of landowners and the needs of endangered animals. “This isn’t about biological diversity; this is about land management,” said Reed Watson, executive director of the Property and Environment Research Center in Montana.

The wildlife service disputes the notion it is “taking” any land. The owners aren’t losing their title, regulators insist, just facing limits on what they can do with it. In comments made five years ago that the service says still reflect its position, an assistant regional director for ecological services said regulators would be happy to work with the Poitevents and other land owners.

“We don’t want to take his land,” assistant director Leopoldo Miranda said in a wildlife service video in 2012. “It’s his land to manage. This designation does not stop future development or land use.

“In fact, the service regularly works with landowners around the country to accommodate development while finding creative ways to save the wildlife that our citizens demand we protect.”

Poitevent is unconvinced. “This is a land grab by radical environmentalists,” he said.

Investigating the Other Collusion Case

Posted on June 23, 2017June 23, 2017 by Denise Simon

Seems it at least began in 2015, long before Donald Trump was campaigning for the Oval Office.

Also, as an aside, John Podesta is testifying before the House Intelligence Committee next week. He too has financial ties to Moscow operations.

The Vnesheconombank is Russian owned and has been under a sanctions architecture due to the annexing of Crimea. In Russia, by law, the bank’s board chairman is the Prime Minister of Russia. Vladimir Putin increased leading when he became the bank’s chairman in 2008. Now precisely why is Russia investing at all in the United States in the first place? Well soft power and doing business with the Export Import Bank, an agency that is corrupt to the core. Further, Sergei Gorkov is head of the bank and is is/was a Russian spy.

Image result for Vnesheconombank ABC

BusinessInsider:The U.S. Treasury has added a bunch of entities to its Russia sanctions list, including a sovereign wealth fund that used to be connected to some pretty high-profile U.S. billionaires.

The Treasury’s Office of Foreign Assistance Control on Thursday added The Russian Direct Investment Fund to the list, along with a number of entities linked to RDIF parent Vnesheconombank and energy giant Rosneft.

Vnesheconombank was first sanctioned last year, but RDIF hadn’t been explicitly targeted until the announcement on Thursday.

Private equity moguls Steve Schwarzman of Blackstone, David Bonderman of TPG, and Leon Black of Apollo Global Management all served as board members for RDIF when it was established in 2011, according to a press release at the time.

At some point, those names were removed from the RDIF website.

The Wall Street Journal first reported that the investors’ names had disappeared from the site in September 2014, but said that they still served on the board at that time. There are currently no names listed on the international advisory board on RDIF’s website.

Back in 2011, each board member issued statements about joining the board. Here are some highlights:

“We believe there are many attractive investment opportunities in Russia — the RDIF will provide the strong and experienced local partnership needed for investors to realize those opportunities.” — David Bonderman

“Russia has strong fundamentals that will continue to fuel its growth trajectory and offer attractive investment opportunities. We believe the Russia Direct Investment Fund will help further align U.S. and Russian objectives in terms of identifying paths toward partnership in the private sector.” — Leon Black

“It’s always good to have friends when you are going to a place that you are not as familiar with.” — Stephen Schwarzman

Bonderman has spoken publicly about investing in the country in recent months, telling an audience at the Milken Global Conference this year that the Russian market remains attractive, according to a report by CNN Money.

He is quoted as saying: “Sanctions are perfectly set up not to work at all but to make a political statement.”

Spokespeople for Blackstone and TPG declined to comment. Apollo could not be reached for comment.

A spokesperson for the Russian Direct Investment Fund said: “For Vnesheconombank subsidiaries the new clarification by the US Department of the Treasury is essentially a technical repetition of sanctions imposed a year ago, which targeted a number of Russian companies including Vnesheconombank and its subsidiaries.

“Given the nature of the Fund’s activity, RDIF has never attracted financing in the USA, it invests its own funds. Since the introduction of sanctions last year RDIF has continued to invest into the Russian economy and build new international partnerships.”

So what you ask?

Image result for sergei gorkov Sergei Gorkov

Well due to sanctions, those on the Trump campaign team, transition team and now in the White House may have violated sanctions. If so, the reason would be why, to what end and how many may be involved? It should also be added that many Republicans have ties to Russians and oligarchs, not all is as it seems. We can only hope, while not knowing details, the Senate is also investigating Hillary Clinton in much the same condition. Yet as Secretary of State, Hillary and Obama had the ability to sign waivers to finesse sanctions. This was likely the case between Hillary and the Kremlin regarding Skolkovo.

Remember, don’t shoot the messenger. Furthermore, it seems some on the Senate committee are leaking too.

Senate investigators are examining the activities of a little-known $10-billion Russian investment fund whose chief executive met with a member of President Donald Trump’s transition team four days before Trump’s inauguration, a congressional source told CNN.

The source said the Senate intelligence committee is investigating the Russian fund in connection with its examination of discussions between White House adviser Jared Kushner and the head of a prominent Russian bank. The bank, Vnesheconombank, or VEB, oversees the fund, which has ties to several Trump advisers. Both the bank and the fund have been covered since 2014 by sanctions restricting U.S. business dealings.

Separately, Steve Mnuchin, now Treasury Secretary, said in a January letter that he would look into the Jan. 16 meeting between the fund’s chief executive and Anthony Scaramucci, a member of the transition team’s executive committee and a fundraiser and adviser for Trump’s presidential campaign. At the time, Mnuchin had not yet been confirmed as Treasury Secretary. The Treasury Department did not respond to a request for an update.

Two Democratic senators had asked Treasury to investigate whether Scaramucci promised to lift sanctions — a policy shift that would help the fund attract more international investment to Russia.

The questions draw attention to the Russian Direct Investment Fund, a government investment arm that has helped top U.S. private-equity firms invest in Russia and that was advised by Stephen Schwarzman, who is now chairman of Trump’s Strategic and Policy Forum, an advisory group of business leaders.

Schwarzman, chief executive officer of Blackstone Group, was named in 2011 to the fund’s International Advisory Board along with other leaders of major equity companies and sovereigh-wealth funds who reviewed the fund’s operations, plans and potential investments. Schwarzman declined to comment. A source close to him said Schwarzman has not spoken to anyone on the fund “for some time.”

The fund also worked with Goldman Sachs, whose former president Gary Cohn is Trump’s chief economic adviser and where Kirill Dmitriev, the fund’s chief executive, worked as an investment banker in the 1990s. Goldman was part of a consortium created in 2012 to invest in large Russian businesses preparing to go public, and was hired in 2013 to burnish Russia’s investment image. The company declined to comment.

‘I would reach out to people to help him”

Senate and House investigators are looking into various Russian entities to determine whether anyone connected to the Trump campaign helped Russians as they meddled in the 2016 presidential election, and whether Trump associates discussed sanctions with Russian officials.

The congressional inquiries, along with a criminal investigation by special counsel Robert S. Mueller, have shadowed the Trump administration. Trump has denied any connection to Russia’s election-meddling, calling the criminal probe “a witch hunt.”

Scaramucci, the founder of SkyBridge Capital, minimized his January meeting with Dmitriev in the resort town of Davos, Switzerland, at the celebrated annual gathering of the World Economic Forum. Scaramucci had met Dmitriev at previous Davos meetings, although at the gathering in January, Scaramucci was expecting to be named White House liaison to the business community.

Dmitriev “came over to say hello in a restaurant, and I was cordial,” Scaramucci said in a recent email to CNN. “There is nothing there.”

The day after the meeting, Scaramucci told Bloomberg TV that he had “as a private citizen” been working with Dmitriev on bringing a delegation of executives to Russia.

“What I said to him last night, in my capacity inside the administration, I would certainly reach out to some people to help him,” Scaramucci said before describing a thicket of ethical clearances he would face. “The idea was many months ago to have more outreach with Russia but also other countries, not just Russia. China, other countries.”

Scaramucci’s comments alarmed Democratic Senators Elizabeth Warren of Massachusetts and Ben Cardin of Maryland, who asked Mnuchin investigate whether Scaramucci sought to “facilitate prohibited transactions” or promised to waive or lift sanctions against Russia.

In a reply Jan. 30, before he was sworn in, Mnuchin said he would “ensure the appropriate Department components assess whether further investigation of this matter is warranted.”

A spokeswoman for the Russian fund said the two men did not discuss sanctions, and that the discussion itself did not violate sanctions that U.S. imposed in 2014 after Russia annexed part of neighboring Ukraine. The spokeswoman declined to describe the conversation, saying, “We do not comment on private meetings.”

An advocate for lifting sanctions

Since Trump’s election, Dmitriev has been one of Russia’s most vocal officials in calling for an end to U.S. sanctions and arguing that joint U.S.-Russia projects can create jobs in the United States.

The fund hired two U.S. lobbying firms in September 2014, after sanctions were imposed, paying them a combined $150,000 over two months for public relations work. The fund has not hired any lobbyists since then.

With a history of helping U.S. manufacturers and asset management companies invest in Russia, the fund is a logical starting point for Russia’s push to lift U.S. sanctions, former State Department chief economist Rodney Ludema said.

“If you’re going to get your nose under the tent, that’s a good place to start,” said Ludema, a Georgetown University economics professor. “I’m sure their objective is to get rid of all the sanctions against the financial institutions. But RDIF is one [sanctioned organizations] where a number of prominent U.S. investors have been involved.”

Scaramucci also questioned U.S. sanctions while he was in Davos and echoed Trump’s statements about improving relations with Russia.

Two weeks after the meeting between Scaramucci and Dmitriev, when President Trump spoke by phone to Russian President Vladimir Putin, the fund announced it would open an office in New York in May.

No New York office has been opened but the fund “still expects to open a representative office in the US this year,” the spokeswoman said.

Global Blackouts, Anywhere in the World, Courtesy Russia

Posted on June 22, 2017June 22, 2017 by Denise Simon

Fitful sleep last night after reading a very long detailed piece on Russian hackers versus Ukraine. Why, well the same tools and language they use have been found on American infrastructure and systems. Last thoughts before sleep were those of life before the internet and how people get emails with attachments that should never be opened. The short summary is just below. The more detailed and terrifying truth follows. It is a long summary, must be read…it is something like a cyber Hitchcock Twilight Zone disaster thriller, but it happened and happened often.

Image result for cyber war russia and us

Further, during a hearing in the House with former DHS Secretary, Jeh Johnson revealed a couple of key facts. One is told that during the election cycle, when the DNC hack, officials on numerous requests refused assistance, cooperation and discussions with DHS and FBI about foreign cyber intrusions. What was the DNC hiding? The other fact is Obama had the full details in intelligence briefings daily leading into November and December and refused to tell the country about Russian interference. He waited until after the elections and into December to take action. Why?

Okay, read on….

Image result for ukraine blackout CommentaryMagazine

Russia’s New Cyber Weapon Can Cause Blackouts Anywhere in the World

Hackers working with the Russian government have developed a cyber weapon that can disrupt power grids, U.S researchers claim. The cyber weapon has the potential to be absolutely disruptive if used on electronic systems necessary for the daily functioning of American cities.

The malicious software was used to shut down one-fifth of the electric power generated in Kiev, Ukraine last December. Called ‘CrashOverride’ the malware only briefly disrupted the power system but its potential was made clear.

With development, the cyber weapon could easily be used against U.S with devastating effects on transmission and distribution systems.

Sergio Caltagirone, director of threat intelligence for Dragos, a cybersecurity firm that examined the malware said, “It’s the culmination of over a decade of theory and attack scenarios, it’s a game changer.”

Dragos has dubbed the group of hackers who created the bug and used it in Ukraine, Electrum. The group and the virus have also been under scrutiny by cyber intelligence firm, FireEye, headed by John Hultquist. Hultquist’s company has nicknamed the group Sandworm and are keeping watch for clues of another attack.

The news of the malware comes in the middle of the ongoing investigation into Russia’s influence on the recent Presidential election. The Russian government is accused of trying to influence the outcome of the election by hacking hundreds of political organizations and leveraging social media.

While there is no hard evidence yet, U.S. officials believe the disruptive power hackers are closely connected to the Russian Government. U.S. based energy sector experts agree the malware is a huge concern and concede they are seeking ways to combat potential attacks.

“U.S utilities have been enhancing their cybersecurity, but attacker tools like this one pose a very real risk to reliable operation of power systems,”said Michael Assante, who worked at Idaho National Labs and is former chief security officer of the North American Electric Reliability Corporation.

CrashOverride

CrashOverride is only the second known instance of malware specifically designed to destroy or disrupt industrial control systems. The U.S. and Israel worked together to create Stuxnet, a bug designed to disrupt Iran’s nuclear enrichment program.

Robert M. Lee, chief executive of Dragos believes CrashOverride could be manipulated to attack other types of industrial control such as gas or water, though there has been no demonstration of that yet. But the sophistication of the entire operation is undeniable. The hackers had the resources to only develop the malware but to test it too.

The malware works by scanning for critical components that operate circuit breakers, then opening these breakers, which stops the flow of electricity. It continues to keep the circuit breakers open, even if a grid operator tries to close them. CrashOverride also cleverly comes with a “wiper” component that erases the existing software on the computer system that controls the circuit breakers. This forces the grid operator to revert to manual operations, which means a longer and more sustained power outage.

Potential outages could last a few hours and probably not more than a couple of days as U.S. power systems are designed to have high manual override capabilities necessary in extreme weather.

As mentioned above, you need to read the full detailed version here and just how the FBI, global cyber experts at the request of Ukraine worked diligently for accurate attribution to a Russian cyber force intruding on power systems. Hat tip to these experts and the story needs to go mainstream, as we are in a cyber war, the depths impossible to fully comprehend. Ukraine is the target and cyber incubation center for Russian cyber terrorists where they test, review, adapts and keep going without consequence.

Image result for ukraine blackout

Okay, read it all here. Hat tip for the detailed summary and the people doing quiet investigative cyber work.

Illinois is Broke, Don’t Bother with a Lottery Ticket

Posted on June 20, 2017June 20, 2017 by Denise Simon

No wonder the Obama’s chose not to move back….seems that community organizing resulted in a financial collapse…Rahm? You have a call holding on line 3.

Illinois careens into financial meltdown – and not even the lottery is safe

Illinois is grappling with a full-fledged financial crisis and not even the lottery is safe – with Republican Gov. Bruce Rauner warning the state is entering “banana republic” territory.

Facing billions in unpaid bills and pension obligations, the state is hitting a cash crunch that is rare even by Illinois standards.

A top financial official just warned 100 percent of the state’s monthly revenue will be eaten up by court-ordered payments. Rauner is calling a special session of the Democrat-led General Assembly in a bid to pass what he hopes will be the first full budget package in almost three years.

And Illinois will – literally – lose the lottery if the budget fails.

The state lotto requires a payment from the legislature each year. The current appropriation expires June 30, meaning no authority to pay prizes. In anticipation of a budget deadlock, the state already is planning to halt Powerball and Mega Millions sales.

“It is disappointing that the legislature’s inability to pass a budget has led to this development and will result in Illinois lottery players being denied the opportunity to play these popular games,” Illinois Lottery Acting Director Greg Smith told Fox News.

“We’re like a banana republic,” Rauner said earlier this month, after the General Assembly failed, yet again, to pass a budget package by the regular session deadline. “We can’t manage our money.”

The governor has called for a special session starting Wednesday. The state so far is operating on a series of stopgap spending packages.

But the problems are years in the making, caused in large in part by the state’s poorly funded pension system— which led Moody’s Investors Services to downgrade the credit rating to the lowest of any state. The state currently has $130 billion in unfunded pension obligations, and a backlog of unpaid bills worth $13 billion.

Reports have suggested the state could be the first to attempt to declare Chapter 9 bankruptcy — but under the law, that’s impossible unless Congress gets involved.

“Nobody here in Illinois is considering bankruptcy—first of all, it’s not allowed,” said Steve Brown, press secretary for Illinois House Speaker Michael Madigan. “Second of all, it would damage the reputation of the state and it’s just not necessary.”

U.S. Sens. Dick Durbin and Tammy Duckworth, both Democrats from Illinois, declined to respond to Fox News’ request for comment on whether they would consider getting involved in introducing a measure allowing state bankruptcy.

“Illinois is the fiscal model of what not to do,” Rep. Peter Roskam, R-Ill., told Fox News, while not commenting on the bankruptcy question. “This avoidance in behavior toward dealing with our challenges is what leads to the devastating impacts we are seeing today.”

Just last week, the Illinois comptroller, who is responsible for paying the state’s bills, warned the office would be paying out 100 percent of Illinois’ monthly revenue, leaving negative funds for “discretionary spending. ”

But Rauner claims the Republicans have a new plan that could remedy the state’s crippling financial situation.

“Republicans in the General Assembly have laid out a compromise budget that I can sign,” Rauner said, calling it a “true compromise.”

The plan incorporates reforms like property tax relief, term limits, and spending caps, which have caused an “ongoing confrontation” between Madigan and the governor, one Republican leader told Fox News, adding that the two have been in a “stalemate” since Rauner took office two years ago.

“Gov. Rauner inherited this financial mess when he took office, and his proposals have been met by resentment from the speaker,” Deputy House Republican Leader Dan Brady said.

Brady added, “we are asking that the speaker allow for a date and a vote before June 30.”

But Brown told Fox News the governor isn’t making enough concessions.

“He’s not walking many back—the financial issues are serious enough, and he’s forcing things that have nothing to do with state government,” Brown said. “The biggest problem here is that the governor keeps associating a lot of things that do not have anything to do with the budget.”

Rauner has pushed for structural reforms, government consolidation and pension reform—some components that were able to pass on the Senate side.

“The people and businesses of Illinois deserve stability, not this ongoing chaos,” Senate President John J. Cullerton, a Democrat, told Fox News. The Illinois State Senate approved a balanced budget before the initial May 31 deadline that “matches” the governor’s spending proposal.

If the General Assembly fails to pass a budget package, they do have an option to pass another stopgap package, which lawmakers say is an option, but “not a good one.”

“We have a very real deadline looming,” Senate Republican Leader Christine Radogno told Fox News. “The alternative to not finding a compromise will be devastating to Illinois.”

The Associated Press contributed to this report.