2 Congressmen Watched Voting Machines Being Hacked

Posted on August 2, 2017August 2, 2017 by Denise Simon

Primer

33 states accepted DHS aid to secure elections

The Department of Homeland Security (DHS) provided cybersecurity assistance to 33 state election offices and 36 local election offices leading up to the 2016 presidential election, according to information released by Democratic congressional staff.

During the final weeks of the Obama administration, the DHS announced that it would designate election infrastructure as critical, following revelations about Russian interference in the 2016 election.

Since January, two states and six local governments have requested cyber hygiene scanning from the DHS, according to a memo and DHS correspondence disclosed Wednesday by the Democratic staff of the Senate Homeland Security and Governmental Affairs Committee.

The information is related to the committee’s ongoing oversight of the DHS decision to designate election infrastructure.

The intelligence community said back in January that in addition to directing cyberattacks on the Democratic National Committee and top Democratic officials, Russia also targeted state and local electoral systems not involved in vote tabulating.

In June, DHS officials told senators investigating Russian interference that there was evidence that Russia targeted election-related systems in 21 states, none of them involved in vote tallying.

Officials have previously confirmed breaches in Arizona and Illinois, though it remains unclear whether other systems were successfully breached. Lawmakers such as Sen. Mark Warner (D-Va.) have demanded more information on the specific states targeted.

Homeland Security and Government Affairs ranking member Claire McCaskill (D-Mo.) wrote then-Secretary of Homeland Security John Kelly back in March, asking for more information on his plans for the critical infrastructure designation. The information released Wednesday is drawn from his response on June 13. Kelly has since left his post to serve as President Trump’s chief of staff.

“Prior to the election, DHS offered voluntary, no-cost cybersecurity services and assistance to election officials across all 50 states. By Election Day, 33 state election offices and 36 local election offices requested and received these cyber hygiene assessments of their internet-facing infrastructure,” Kelly wrote.

“In addition, one state election office requested and received a more in-depth risk and vulnerability assessment of their election infrastructure.”

Given the critical infrastructure designation, the DHS is providing cyber hygiene assessments, which include vulnerability scanning of election-related systems excluding voting machines and tallying systems, which the department recommends being disconnected from the internet.

The department also offers risk and vulnerability assessments, which include penetration testing, social engineering, wireless discovery and identification, and database and operating systems scanning. The DHS is also responsible for sharing threat information with owners and operators of critical infrastructure, which now include state and local election officials.

“Following the establishment of election infrastructure as critical infrastructure, several state and local governments requested new or expanded cybersecurity services from DHS,” Kelly disclosed in June, according to the letter. “Specifically, an additional two states and six local governments requested to begin cyber hygiene scanning (one state has, however, ended its service agreement). DHS also received one request for the risk and vulnerability assessment service.”

Many state and local election officials have opposed the designation, saying that the DHS has not offered enough information about what it means. The department has insisted that assistance will be given only to states that request it.

In the letter, Kelly, who has acknowledged objections, said there are “no plans to make any changes to the designation of election infrastructure as a critical infrastructure subsector.”

All of the Democratic members of the Senate Homeland Security and Governmental Affairs Committee have called for a full investigation into Russian election interference. The matter is already under investigation by the House and Senate Intelligence committees. The memo issued by Democratic staff on Wednesday was sent to the full committee.

Background at a Las Vegas Convention:

LAS VEGAS—For the first time in the 25 years of the world’s largest hacker convention, DefCon, two sitting U.S. Congressmen trekked here from Washington, D.C., to discuss their cybersecurity expertise on stage.

Rep. Will Hurd, a Texas Republican, and Rep. Jim Langevin, a Rhode Island Democrat, visited hacking villages investigating vulnerabilities in cars, medical devices, and voting machines; learned about how security researchers plan to defend quantum computers from hacks; and met children learning how to hack for good.

On Sunday, the last day of the conference, Hurd and Langevin delivered their own message: We come in peace. Please help us.

During a fireside chat-style conversation moderated by Joshua Corman, director of the Cyber Statecraft Initiative at the Atlantic Council, Hurd, chairman of the House Subcommittee on Information Technology, and Langevin, co-founder and co-chair of the Congressional Cybersecurity Caucus, called for the more than 2,000 hackers in the audience to “develop a dialogue” with their local representative in Congress.

“Never underestimate the value that you can bring to the table in helping to educate members and staff of what the best policies are, what’s going to work, and what’s not going to work,” Langevin said, pointing to Luta Security CEO and bug bounty expert Katie Moussouris’ ongoing advocacy for changes to the Wassenaar Arrangement, a decades-old international accord on how countries can transport “intrusion software” and other weapons across international borders.

Moussouris and Iain Mulholland of VMware have effectively convinced Wassenaar member countries to delay their adoption of proposed revisions to the agreement, as they’ve pushed for new language to better protect security researchers’ work.

The conversation between hackers and Congress has never been monosyllabic. But it has been frosty for decades, as federal prosecutors have used American antihacking laws such as the Computer Fraud and Abuse Act and Electronic Communication Privacy Act to punish people conducting legitimate security research.

As many security researchers continue to worry about how these laws might affect them, some have begun to use their expertise to influence the laws—and the lawmakers behind them.

Langevin and Hurd’s plea for hacker-legislator collaboration follows calls by hackers at last year’s DefCon for greater government regulation of software security.

“We don’t have voluntary minimum safety standards for cars; we have a mandatory minimum,” Corman told The Parallax at the time. “What tips the equation [for software] is the Internet of Things, because we now have bits and bytes meeting flesh and blood.”

Hurd said security researchers could play an important role in addressing increasingly alarming vulnerabilities in the nation’s voting apparatus. DefCon’s first voting machine-hacking village this weekend hosted a voting machine from Shelby County, Tenn., that unexpectedly contained personal information related to more than 600,000 voters. Village visitors managed to hack the machine, along with 29 others.

“We have to ensure that the American people can trust the vote-tabulating process,” Hurd said, acknowledging that DefCon attendees were able to hack each machine in the village. “The work that has been done out here is important in educating the secretaries of state all around the country, as well as the election administrators,” about secure technologies and practices.

Langevin and Hurd’s comments seemed to strike the right notes with hackers in attendance. Following Edward Snowden’s leaking of NSA documents and Apple’s refusal to create an encryption backdoor for law enforcement to the iPhone, relations between the hacking community and Washington have been strained at best, notes Herb Lin, a computer security policy expert and research fellow at Stanford University’s Center for International Security and Cooperation. But markedly improving the relationship will require more than a plea for collaboration, he warns.

“It’s better than what’s happened in the past, which is both nothing and active hostility,” he says. “One act by itself is not a game changer.”

The chat ended with assurances of more action from both sides. Corman said he’d like to see members of Congress attend more hacker conferences, such as ShmooCon in Washington, and Hurd promised that he wouldn’t let his experiences this past weekend go to waste.

“These conversations are going to lead me to hold hearings on many of these topics in the subcommittee that I chair,” Hurd said.

*** More details that were recorded at the convention:

DEF CON 2017 – Are voting systems secure? In August 2016, the FBI issued a “flash” alert to election officials across the country confirming that foreign hackers have compromised state election systems in two states.

Although the US largely invested in electronic voting systems their level of security appears still not sufficient against a wide range of cyber attacks.

During an interesting session at the DEF CON hacking conference in Las Vegas, experts set up 30 computer-powered ballot boxes used in American elections simulating the Presidential election. Welcome in the DEF CON Voting Village!

Bradley Barth‏ @BBB1216BBB

At the 1st ever Voting Village at #DEFCON, attendees tinker w/ election systems to find vulnerabilities. I’m told they found some new flaws

The organization asked the participant to physically compromise the system and hack into them, and the results were disconcerting.

“We encourage you to do stuff that if you did on election day they would probably arrest you.” John Hopkins computer scientist Matt Blaze said,

Most of the voting machines in the DEF CON Voting Village were purchased via eBay (Diebold, Sequoia and Winvote equipment), others were bought from government auctions.

In less than 90 minutes hackers succeeded in compromising the voting machines, one of them was hacker wirelessly.

“Without question, our voting systems are weak and susceptible. Thanks to the contributions of the hacker community today, we’ve uncovered even more about exactly how,” said Jake Braun, cybersecurity lecturer at the University of Chicago.

The analysis of the voting machines revealed that some of them were running outdated OS like Windows XP and Windows CE and flawed software such as unpatched versions of OpenSSL.

Some of them had physical ports open that could be used by attackers to install malicious applications to tamper with votes.

Even if physical attacks are easy to spot and stop, some voting machines were using poorly secured Wi-Fi connectivity.

The experts Carsten Schurmann at the DEF CON Voting Village hacked a WinVote system used in previous county elections via Wi-Fi, he exploited the MS03-026 vulnerability in Windows XP to access the voting machine using RDP.

Robert McMillan‏ @bobmcmillan

Greetings from the Defcon voting village where it took 1:40 for Carsten Schurmann to get remote access to this WinVote machine.

Another system could be potentially cracked remotely via OpenSSL bug CVE-2011-4109, it is claimed.

kate @ ‏Verified account @kateconger

huge cheer just went up in @votingvilllagedc as hackers managed to load Rick Astley video onto a voting machine #defcon25

The good news is that most of the hacked equipment is no longer used in today’s election.

North Korea Kim Jung un, Cyber Theft of Currency

Posted on July 31, 2017July 31, 2017 by Denise Simon

Going back to the 1970’s, North Korea was counterfeiting U.S. currency. In 2006, it was the super note, a perfect $100 dollar bill.

Training for such skills as counterfeiting, illicit drugs, weapons, cyber warfare and bootleg merchandise comes out of Office 39. Clandestine and fraudulent transactions including management operations flowing through Office 39 is estimate in the $6-8 billion range.

In 2014, one defector fleeing to Russia had $5 million of the Office 39 funds money with him.

Those highly selected North Koreans assigned to Office 39 arrive from having received an education in these specialties from elite universities or academies in China and Russia. Other highly selected North Koreans are also required to attend an in country school known as Mirim College. This school was founded by Kim Jong Il in 1986.

According to a defector:

this college has a highly confidential mission—education of world-class IT warriors—its security is so exhaustively kept that individual guard units are dispatched to the college solely for security. The security manual distributed to guards indicates that, “Without the permission of the college commander, no car should be allowed entrance to college grounds except for that of Kim Jong Il.”

Students of the college wear the same uniform as military officials, but on their shoulders they brandish special stars, on which hak (meaning is learning) is printed. A “Kim Il Political Military University” badge is worn on the left side of the chest.

Kim Jung Il lived the high life while his own people suffered to not only beatings but to death by starvation. His son, Kim Jung Un, taking over the country lives much the same yet due to sanctions and isolation by the international community, illicit activities continue.

Counterfeiting of currency is not so much a common practice in North Korea and the country has been dabbling in bitcoin fraud and now through cyber activity, they steal currency.

Just recently, Reuters published an item referring to a report analyzed suspected cyber attacks between 2015 and 2017 on South Korean government and commercial institutions, identified another Lazarus spinoff named Andariel.

“Bluenoroff and Andariel share their common root, but they have different targets and motives,” the report said. “Andariel focuses on attacking South Korean businesses and government agencies using methods tailored for the country.”

Pyongyang has been stepping up its online hacking capabilities as one way of earning hard currency under the chokehold of international sanctions imposed to stop the development of its nuclear weapons program.

North Korea has cooperated with China, Russia and Iran to improve their cyber capabilities. China is especially complicit in that cooperation by providing the communications network inside the DPRK and inside China. Additionally, China has provided hardware, servers, routers. Russia is not without major blame and shares the guilt by dispatching Russian professors from Frunze Military Academy to train North Koreans to be professional hackers.

Additionally, Russia has sold to North Korea GPS jamming equipment in the area of sea navigation and also provides financial aid to North Korea supporting it’s abilities to interfere and disrupt command and control systems.

North Korea operates yet another location known as Office 91. It has four units:

110= Technology Reconnaissance Team for DDoS attacks

35= External Offensive Cyber Operations

121= Strictly assigned for cyber attacks on South Korea

204= Enemy Secret Cyber Psychological Warfare Unit

In total, it is estimated that North Korea has close to 10,000 people assigned the the cyber and hacking operations in country. Additionally, North Korea maintains a force of up to 1000 in China performing cyber warfare.

While it is common for headlines to refer to Kim Jung Un as a nutcase, that is hardly a fitting description for him. While he may be militant and spontaneous, he is well educated. He attended Liebefeld-Steinhölzli Schule, a Swiss state school gaining access to Western culture, but had lousy grades. He has two degrees, one in physics from Kim il Sung University and another as an Army officer obtained from the Kim Il Sung Military University.

He does maintain an asymmetrical military strategy that has astounded the West and countries in the region with his advanced missile systems and launch abilities. All this is funded by cyber theft of currency and information and cooperation with Iran, China and Russia. North Korea does have IP proxy locations for operations that include New Zealand, Malaysia, Indonesia an several others. The ‘darknet’ is full of countries co-opting servers and jump points all doing the same thing.

The Frunze Military Academy Panorama

Rick Perry: Corporate Espionage going by Russia and China

Posted on July 13, 2017July 13, 2017 by Denise Simon

Rick Perry: Russian, Chinese Corporate Espionage ‘Shouldn’t Surprise Anybody’

Russia and China are engaging in underhanded business practices involving American oil and gas companies, according to Energy Secretary Rick Perry.

During an appearance on Fox Business Tuesday morning, Perry said it “shouldn’t surprise anybody that there is corporate espionage going on” in Russia and China, particularly with U.S. companies that are involved in hydraulic fracturing or fracking.

The secretary also addressed a recent column from Fox Business contributor James Freeman, which detailed a congressional investigation into allegations of a Russian effort to undermine and “suppress our domestic oil and gas industry, specifically hydraulic fracking,” according to a statement from House Science Committee Chairman Lamar Smith.

“When you think about Russia and China a lot of the businesses there have direct links back to their government,” Perry said. “So the idea that there are people trying to manipulate, to put propaganda out on a particular type of fuel, that doesn’t surprise me.”

He added that his case highlights the importance of cybersecurity.

“We need to be sophisticated when it comes to how we deal with Russia, how we deal with China,” he said. “Those are our competitors out there and we know that they may play with a different set of rules and we just need to be smart enough to identify.”

***

Rick Perry is more than right.

Primer 2013:

China’s cyber espionage against the U.S. government and defense industrial bases poses a major threat to

U.S. military operations, the security and the well being of U.S. military personnel, the effectiveness of

equipment, and readiness. China apparently uses these intrusions to fill gaps in its own research

programs, map future targets, gather intelligence on U.S. strategies and plans, enable future military

operations, shorten research and development (R&D) timelines for military technologies, and identify

vulnerabilities in U.S. systems and develop countermeasures.

China’s cyber espionage against U.S. commercial firms poses a significant threat to U.S. business

interests and competiveness in key industries.

General Keith Alexander, Director of the National Security Agency and commander of U.S. Cyber Command, assessed that the financial value of these losses is about $338 billion a year, including intellectual property losses and the down time to respond to penetrations, although not all those losses are to Chinese activity. Chinese entities engaging in cyber and other forms of economic espionage likely conclude that stealing intellectual property and proprietary information is much more cost

effective than investing in lengthy R&D programs.

***

Example/2015: WASHINGTON—Six Chinese citizens, including two professors who trained together at the University of Southern California, stole sensitive wireless technology from U.S. companies and spirited it back to China, the Justice Department charged.

Example/2014: In one of the most notable actions, Dongfan “Greg” Chung, a naturalized American citizen who worked on NASA’s space shuttle program, was convicted in 2009 after investigators found hundreds of thousands of sensitive papers under his California home. Prosecutors said he gave some of the documents to Chinese officials, revealing details of military and space-related technology. Chung, a former Boeing employee, was sentenced to more than 15 years in prison.

***

Chinese Industrial Espionage: Technology Acquisition and Military Modernization provides the most thorough and insightful review to date of the covert and overt mechanisms China uses to acquire foreign technology. Delving into China’s “elaborate, comprehensive system for spotting foreign technologies, acquiring them by every means imaginable and converting them into weapons and competitive goods,” the book concludes that “there is nothing like it in the world.” (2-3) The People’s Republic of China (PRC) is implementing “a deliberate, state-sponsored project to circumvent the costs of research, overcome cultural disadvantages and ‘leapfrog’ to the forefront by leveraging the creativity of other nations,” thereby achieving “the greatest transfer of wealth in history.” (78, 216)

Although PRC espionage is global in scope, the most important target is the United States. Relying primarily on Chinese-language government and non-government sources, the coauthors intend to raise awareness of the threat nationally and alert decisionmakers to the gravity of the problem. Trained as Chinese linguists, with considerable experience dealing with Chinese affairs, they are uniquely qualified for the task. William C. Hannas has a Ph.D. in Asian languages, published two books on Asian orthography and served in various US government posts, including at the Joint Special Operations Command. James Mulvenon is a leading expert on Chinese cyber issues and has published widely on China’s military affairs and communist party-army relations. Senior analyst Anna B. Puglisi studied in Beijing and subsequently was a visiting scholar at Nankai University, where she studied China’s science and technology (S&T) policies and infrastructure development.

Download PDF for complete review. [PDF 264.1KB*]

New G20 Action Plan on Counter-Terrorism

Posted on July 8, 2017July 8, 2017 by Denise Simon

We, the Leaders of the G20, strongly condemn all terrorist attacks worldwide and stand united and firm in the fight against terrorism and its financing. These atrocious acts have strengthened our resolve to cooperate to enhance our security and protect our citizens. Terrorism is a global scourge that must be fought and terrorist safe havens eliminated in every part of the world.
We reaffirm that all measures on countering terrorism need to be implemented in accordance with the UN Charter and all obligations under international law, including international human rights law.
Implementing international commitments and enhancing cooperation
We call for the implementation of existing international commitments on countering terrorism, including the UN Global Counter-Terrorism Strategy, and compliance with relevant resolutions and targeted sanctions by the UN Security Council relating to terrorism. We commit to continue to support UN efforts to prevent and counter terrorism.
We will address the evolving threat of returning foreign terrorist fighters (FTFs) from conflict zones such as Iraq and Syria and remain committed to preventing FTFs from establishing a foothold in other countries and regions around the world. We recall UN Security Council Resolution 2178 (2014), which requires a range of actions to better tackle the foreign terrorist fighter threat.
We will facilitate swift and targeted exchanges of information between intelligence and law enforcement and judicial authorities on operational information-sharing, preventive measures and criminal justice response, while ensuring the necessary balance between security and data protection aspects, in accordance with national laws. We will ensure that terrorists are brought to justice.
We will work to improve the existing international information architecture in the areas of security, travel and migration, including INTERPOL, ensuring the necessary balance between security and data protection aspects. In particular, we encourage all members to make full use of relevant information sharing mechanisms, in particular INTERPOL’s information sharing functions.
We call upon our border agencies to strengthen cooperation to detect travel for terrorist purposes, including by identifying priority transit and destination countries of terrorists. We will support capacity building efforts in these countries in areas such as border management, information sharing and watch-list capability to manage the threat upstream. We will promote greater use of customs security programs, including where appropriate, the World Customs Organization’s (WCO) Security Programme and Counter-Terrorism Strategy, which focus on strengthening Customs administrations’ capacity to deal with security related issues and managing the cross-border flows of goods, people and means of transport to ensure they comply with the law.
We will address in close coordination the evolving threats and potential vulnerabilities in aviation security systems and exchange information on risk assessments. We recall the UN Security Council’s Resolution 2309 (2016) which urges closer collaboration to ensure security of global air services and the prevention of terrorist attacks. We will promote full implementation of effective and proportionate aviation security measures established by the International Civil Aviation Organization (ICAO) in partnership with all its contracting states as necessary. We call to urgently address vulnerabilities in airport security related measures, such as access control and screening, covered by the Chicago Convention and will act jointly to ensure that international security standards are reviewed, updated, adapted and put in place based on current risks.
We highlight the importance of providing appropriate support to the victims of terrorist acts and will enhance our cooperation and exchange of best practices to this end.
Fighting terrorism finance
We underline our resolve to make the international financial system entirely hostile to terrorist financing and commit to deepening international cooperation and exchange of information, including working with the private sector, which has a critical role in global efforts to counter terrorism financing. We reaffirm our commitment to tackle all sources, techniques and channels of terrorist financing and our call for swift and effective implementation of UNSCR and the Financial Action Task Force (FATF) standards worldwide. We call for strengthening measures against the financing of international terrorist organisations in particular ISIL/ISIS/Daesh, Al Qaida and their affiliates.
There should be no “safe spaces” for terrorist financing anywhere in the world. However, inconsistent and weak implementation of the UN and FATF standards allows them to persist. In order to eliminate all such “safe spaces”, we commit to intensify capacity building and technical assistance, especially in relation to terrorist financing hot-spots, and we support the FATF in its efforts to strengthen its traction capacity and the effectiveness of FATF and FATF-style regional bodies.
We welcome the reforms agreed by the FATF Plenary in June and support the ongoing work to strengthen the governance of the FATF. We also welcome the FATF intention to further explore its transformation into a legal person, which recognises that the FATF has evolved from a temporary forum to a sustained public and political commitment to tackle AML/CFT threats. We also appreciate FATF commencing the membership process for Indonesia that will broaden its geographic representation and global engagement. We ask the FATF to provide an update by the first G20 Finance Ministers and Central Bank Governors meeting in 2018. We call on all member states to ensure that the FATF has the necessary resources and support to effectively fulfil its mandate.
We welcome that countering terrorist finance remains the highest priority of FATF, and look forward to FATF’s planned outreach to legal authorities, which will contribute to enhanced international cooperation and increased effectiveness in the application of FATF’s standards.
We will advance the effective implementation of the international standards on transparency and beneficial ownership of legal persons and legal arrangements for the purposes of countering financing terrorism.
Low cost attacks by small cells and individuals funded by small amounts of money transferred through a wide range of payment means are an increasing challenge. We call on the private sector to continue to strengthen their efforts to identify and tackle terrorism financing. We ask our Finance Ministers and Central Bank Governors to work with FATF, FSB, the financial sector, Financial Intelligence Units, law enforcement and FinTech firms to develop new tools such as guidance and indicators, to harness new technologies to better track terrorist finance transactions, and to work together with law enforcement authorities to bridge the intelligence gap and improve the use of financial information in counter-terrorism investigations.
We call upon countries to address all alternative sources of financing of terrorism, including dismantling connections, where they exist, between terrorism and transnational organized crime, such as the diversion of weapons including weapons of mass destruction, looting and smuggling of antiquities, kidnapping for ransom, drugs and human trafficking.
Countering radicalization conducive to terrorism and the use of internet for terrorist purposes
Our counterterrorism actions must continue to be part of a comprehensive approach, including combatting radicalization and recruitment, hampering terrorist movements and countering terrorist propaganda. We will exchange best practices on preventing and countering terrorism and violent extremism conducive to terrorism, national strategies and deradicalisation and disengagement programmes, and the promotion of strategic communications as well as robust and positive narratives to counter terrorist propaganda.
We stress that countering terrorism requires comprehensively addressing underlying conditions that terrorists exploit. It is therefore crucial to promote political and religious tolerance, economic development and social cohesion and inclusiveness, to resolve armed conflicts, and to facilitate reintegration. We acknowledge that regional and national action plans can contribute to countering radicalisation conducive to terrorism.
We will share knowledge on concrete measures to address threats from returning foreign terrorist fighters and home-grown radicalised individuals. We will also share best practices on deradicalisation and reintegration programmes including with respect to prisoners.
We will work with the private sector, in particular communication service providers and administrators of relevant applications, to fight exploitation of the internet and social media for terrorist purposes such as propaganda, funding and planning of terrorist acts, inciting terrorism, radicalizing and recruiting to commit acts of terrorism, while fully respecting human rights. Appropriate filtering, detecting and removing of content that incites terrorist acts is crucial in this respect. We encourage industry to continue investing in technology and human capital to aid in the detection as well as swift and permanent removal of terrorist content. In line with the expectations of our peoples we also encourage collaboration with industry to provide lawful and non-arbitrary access to available information where access is necessary for the protection of national security against terrorist threats. We affirm that the rule of law applies online as well as it does offline.
We also stress the important role of the media, civil society, religious groups, the business community and educational institutions in fostering an environment which is conducive to the prevention of radicalisation and terrorism.

C’mon White House, NEVER Trust China

Posted on July 6, 2017July 6, 2017 by Denise Simon

Primer: Moscow hired thousands of North Koreans to build the infrastructure for the Sochi Olympics. Russia still uses North Korean slaves for mining and forestry. The North Koreans are hired slaves that have to send their pay checks back the the Kim regime. Not to be outdone, Qatar is doing the same with slaves from the DPRK, as they are hired to build the stadium for the FIFA World Cup Soccer games in 2020.

North Koreans are hired out to foreign corrupt governments to work 20 hours a day with a pay rate of $100 per month (US$) and 70% of that goes back to Pyongyang as a loyalty payment.

By the way, China, Kuwait, Libya, Africa, Oman and several other countries hire the slaves and their living conditions don’t even qualify as slums, they are much worse.

So, while there is much worry about the missile and nuclear program at the hands of North Korea, China is a major culprit in full assistance and cooperation in that regard. Further, China has aided North Korea and other terror regimes in skirting not only United States sanctions, but those from applied by other nations.

Over the last eight years, the Obama administration has hardly taken any aggressive stance with regard to North Korea and consequences except to shut off humanitarian exports to the country. President Trump meanwhile is trusting Russia and China to deal with North Korea? Worse mistake yet.

Deeper dive…

The Global Web That Keeps North Korea Running

Pyongyang’s ties with 164 countries help it amass money and know-how to develop nuclear weapons

By: Jonathan Cheng in Seoul, Jeremy Page in Beijing and Alastair Gale in Tokyo

July 6, 2017 12:28 p.m. ET

WSJ: North Korea may be one of the world’s most isolated countries, but the tightening sanctions regime it has lived under for the past two decades is anything but impermeable.

An examination of North Korea’s global connections reveals that even as it becomes increasingly dependent on China, Pyongyang maintains economic and diplomatic ties with many nations. Those links—from commercial and banking relationships to scientific training, arms sales, monument-building and restaurants—have helped it amass the money and technical know-how to develop nuclear weapons and missiles.

The nature and extent of North Korea’s global ties comes from current and formal officials, researchers, North Korean defectors, U.N. decisions, NGO’s and an analysis of economic statistics.

North Korea: What Comes After the ICBM Test?

In some cases, North Korea leans on old allies, particularly those like Cuba from the former Communist bloc, or those like Syria that are similarly hostile to the U.S. In others, notably in Africa, it has more transactional relationships to supply items such as cheap weaponry or military training. In the Middle East, it supplies laborers for construction work and pockets almost all their earnings.

Sanctions against North Korea haven’t been as broad as those applied to Iran over its nuclear program, nor as rigidly enforced.

David S. Cohen, undersecretary of the Treasury for terrorism and financial intelligence during the Obama administration, wrote in an op-ed in April that “North Korea has gotten off relatively easy, especially as compared with Iran.”

Trying to crack down on North Korean business activities is like a game of Whac-A-Mole. North Korean defectors have detailed how the regime uses front companies to conceal its commercial activities in foreign countries, or adopts business names that obscure their identity by avoiding using North Korea’s full name, thereby benefiting from confusion over whether the entity is North or South Korean.

Pyongyang maintains diplomatic ties with 164 countries and has embassies in 47, according to the National Committee on North Korea, a Washington-based nongovernmental organization, and the Honolulu-based East-West Center.

Although it lags far behind China, India has been North Korea’s second biggest trade partner in the past couple of years, buying commodities including silver and selling it chemicals among other goods. Russia has exported petroleum products to North Korea and imported items such as garments and frozen fish. Last year, North Korea attempted to export military communications equipment to Eritrea via front companies in Malaysia, according to a recent U.N. report.

Most North Koreans abroad are involved in providing funds for the state, defectors say. One of the primary roles of North Korean diplomats is to help develop and maintain cash flows for the regime, according to former embassy officials. North Korea missions typically have to be self-financed to maximize revenue for the state, these people say.

In recent months, under pressure from the Trump administration, there are signs more countries have begun to clamp down on North Korea. In February, Bulgaria had Pyongyang send home two diplomats in its embassy in Sofia, in line with U.N. Security Council resolutions passed in September calling on countries to reduce the number of North Korean diplomats abroad.

Italy this year moved four North Koreans studying at the International Center for Theoretical Physics in Trieste to switch to less-sensitive majors in line with a Security Council resolution calling for member nations not to provide education that could aid Pyongyang’s weapons program.

In March, Senegal said it suspended issuing visas for artisans from North Korea’s Mansudae Art Studio, a state-run organization that has erected monumental sculptures across Africa.

This image, from North Korea’s KRT, shows what it said was the launch of a Hwasong-14 intercontinental ballistic missile. Photo: /Associated Press

More than 50,000 North Korean workers are employed abroad, according to the Asan Institute for Policy Studies, a Seoul-based think tank, many in construction or factory jobs. For these workers, wages are paid directly to North Korean officials, raising hundreds of millions of dollars a year for the state, human-rights groups say.

These ties are under scrutiny as Pyongyang’s success at launching a missile that could reach Alaska is escalating the crisis over its weapons program. This week’s missile test took place on the back of a Chinese truck imported to North Korea for logging purposes, according to analysts.

U.N. sanctions are primarily intended to block North Korea’s illegitimate trade and revenue streams that have a suspected link to its weapons programs. The U.N. doesn’t target all of Pyongyang’s business activities abroad, such as the chain of restaurants it operates in Asia and the Middle East, or its dispatch of laborers.

U.S. sanctions go further in trying to disrupt North Korea’s trade and revenue, including a recent move to block access to the U.S. financial system for a bank in China on which Pyongyang relied. The U.S. has sanctioned North Korean leader Kim Jong Un, a move that would freeze any of his assets in America.

Secretary of State Rex Tillerson on Tuesday called on the global community to stop doing business with Pyongyang.

Video from a North Korean state news bulletin Tuesday was said to show leader Kim Jong Un applauding after the launch. Photo: Yonhap News/Zuma Press

This week, Sen. Cory Gardner (R., Colo.), chairman of the Senate Foreign Relations Committee’s subpanel on East Asia, said he was drafting legislation that he says would create a “global embargo” on North Korea.

“We need to shut off North Korea’s access to oil, to trade, to currency, to financial institutions,” he said in an interview Thursday, calling for “Iran-style” sanctions. “They are far from being ‘sanctioned out.’ They are certainly isolated, but they have to recognize they ain’t seen nothing yet.”

China has had close ties to North Korea since the 1950s when it sent troops to fight U.S.-led forces backing the South in the Korean War.

In 2001, China accounted for around 18% of North Korea’s exports and 20% of its imports, ranking behind Japan on both measures, according to customs figures compiled by Harvard University’s Atlas of Economic Complexity.

Since U.N. sanctions on North Korea were tightened in 2009, Japan and other countries have curtailed commercial ties with Pyongyang, leaving China as by far its biggest trade partner.

For the past five years, China has accounted for more than 80% of North Korea’s imports and exports, providing an economic lifeline even as political relations between Beijing and Pyongyang have deteriorated.

During that period, China has imported mostly industrial raw materials from North Korea, especially coal, but also seafood and clothing such as men’s suits and overcoats.

In recent days, President Donald Trump has expressed frustration with China for expanding trade with North Korea despite U.S. appeals to exert more pressure.

China says it enforces U.N. sanctions and since February it has banned imports of North Korean coal—one of Pyongyang’s main sources of hard currency.

However, U.N. sanctions still allow trade that isn’t deemed to benefit North Korea’s nuclear and missile programs, and China’s customs figures show that its exports to North Korea have increased this year. Crucially, China continues to be North Korea’s biggest source of crude oil, according to diplomats and experts on the region.

Much of North Korea’s trade takes place over the 880-mile land border with China, which is porous and sparsely guarded. Small Chinese and North Korean companies quietly ferry coal, iron ore and other resources over the border, far from checkpoints.

U.N. sanctions introduced in March 2016 banned exports of North Korean iron ore unless they were exclusively for “livelihood purposes”—a loophole China continues to exploit.

While North Korea gained notoriety in the early 2000s for state-backed exports of illegal drugs and counterfeit U.S. dollars, Pyongyang has mostly shifted its strategy to allow private North Korean enterprises to take the lead, with the regime collecting bribes from these enterprises in a primitive system of taxation, says Justin Hastings, a lecturer at the University of Sydney who has researched North Korea’s overseas smuggling networks.

The shift in strategy means that North Korea can outsource some of the risk involved in the trade while continuing to fill its coffers.

“North Korea is not infinitely adaptable, but it’s far more adaptable than people have thought and its ability to adapt to sanctions has not been reached yet,” Mr. Hastings said.

One informal Chinese trader that Mr. Hastings interviewed for a soon-to-be-published academic paper was importing truckloads and boatloads of North Korean iron ore and other minerals across the river into China for resale as recently as a year ago, when the interview took place.