Category Archives: Presidential campaign

Cheat Sheet on the Defense Authorization Bill

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Guantanamo Bay:

Since Congress specifically provided the president with the authority to acquire the U.S. Naval Station at Guantanamo Bay, Chairman Royce’s legislation asserts Congress should have to approve any decision to give it away, which certainly shouldn’t happen with this communist and hostile Cuban government.

As Chairman Royce has said, “the U.S. Naval Station at Guantanamo Bay is critical to our national security and humanitarian operations that have saved countless lives.  We must protect against executive overreach during this administration, and the next, and the next.”

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DefenseNews/WASHINGTON — Responding to fears the US military’s technological superiority is at risk, the Senate Armed Services Committee advanced an annual defense policy bill that would open competition to commercial industry, seen as a spur to innovation and cost-efficiency.

The marquee change, if the SASC’s version of the 2017 National Defense Authorization Act passes Congress and is signed by the president, is the proposed closure of the Pentagon’s chief weapons buyer’s office and reassignment of its duties to two new defense undersecretaries for innovation and acquisitions management. It also contains far-reaching language to curb a major concern of SASC Chairman John McCain: cost-plus contracts.

In February, McCain made headlines when he vowed not to authorize the Air Force’s Long Range Strike-Bomber so long as it was procured using a cost-plus contract. The SASC bill does not check that box, but it promises a broader impact, to discourage cost-plus contracts, where a contractor is paid for all of its allowed expenses to a set limit, plus additional payment to allow for a profit.

In a background briefing on Monday, a senior committee aide — who likened DoD’s dependence on cost-plus to a drug addiction — said the venerable contracting vehicle has its uses, but too often fuels cost overruns and is out of step with the way commercial firms in Silicon Valley and elsewhere do business. Fixed-price contracts, on the other hand, give firms an incentive to work as efficiently as possible to maximize their profits.

“All of this reform is because the Cold War has ended, and post-Cold War, American technological military dominance is over, and not only can our adversaries see that they can replicate what we can do with the traditional defense marketplace, they are seeing there is a lot of technology in the commercial marketplace,” said the aide. “If they can access that quicker than we can access that and derive defense products from that new base, they can potentially leap ahead of us.”

The bill, which the SASC voted to advance to the full Senate last week, contained 130 acquisition reform provisions — a continuation of the committee’s work last year. Some language aimed at curbing bid protests would mean any large firms that lose a protest they file would have to pay a penalty, while other provisions would curb barriers to entry for so-called non-traditional firms.

Complex, DoD-unique cost-accounting standards geared toward the minutiae of cost-plus contracts have not only created a barrier for commercial firms but an auditing backlog within DoD that is preventing 30- and 40-year-old contracts from being closed, the Senate aide said.

To address this, the bill would set up a new accounting standards board aimed at pro-competition changes.

“We’re looking to move more and more companies away from that [accounting standard], and make sure the way accounting looks in the department is more and more commercial-like, so companies aren’t creating new accounting systems just to deal with the Department of Defense,” the aide said.

For a company like SpaceX, which is developing its own rocket engine, assessing a reasonable price is a tricky proposition, the Senate aide said. For DoD, which uses cost-plus contracting, it’s the agreed-upon cost of production plus a reasonable profit, while for a commercial firm, it’s about what the market will bear.

“In the fixed-price world, your profit margin is about how well you execute,” the aide said. “A government contractor is more like a utility, and the argument is who’s more innovative, someone with a high margin or a public utility?”

A four-year pilot program established by the bill would exact fees to fund advanced prototypes purchased through fixed-price contracts. The penalties would amount to, for a cost-plus technology development contract, an additional 1 percent of DoD’s year-to-year obligation, and on a procurement contract, 2 percent. This requirement would begin in 2018.

Among other measures, the bill would establish a phased-in, internal approval process for cost-plus contracts, which by 2020 would apply to any cost-plus contract over $5 million.

Ultimately, the Defense Department will not be kept from using cost-plus contracts where needed, particularly for defense-unique platforms like, say, a nuclear submarine. However, the aide stopped short of saying the proposed bill, if enacted, would have precluded the current acquisition strategy for the bomber. Instead, the bill reinforces the signal that arrangements of this type will face new scrutiny.

“We would hope the department would look at that in a different manner,” the aide said. “Ultimately it will be discretionary. We don’t want to impinge on the [defense] secretary.”

Bid Protests

Acknowledging the value of the bid protest process as a policing function for defense acquisitions, the aide said it also creates a risk-averse culture among acquisitions officials that is stymying innovation. Hence the proposed “loser pays” provision.

That language would apply to a protest-losing company with more than $100 million in annual revenue, or an incumbent firm that protests the loss of a contract, keeps the business via a bridge contract and then loses. The penalty would equal the Government Accountability Office’s cost to process the protest.

What’s driving the language, the Senate aide said, is that Wall Street analysts have begun to tout protests as being part of the fiduciary responsibility of a losing firm. Members of the committee fear that this thinking, unchecked, will fuel a boom in protests.

Another concern was that the risk aversion among contracting officers was leading to contract awards for lowest-price, technically acceptable, offerings over offerings that were neither the most innovative or the best value for the government.

 

Table 1. FY2017 National Defense Authorization Act (H.R. 4909)

amounts in millions of dollars of discretionary budget authority

Bill Title Budget Request HASC reported bill (H.R. 4909) Senate committee- reported bill Conference Report
National Defense Base Budget
Procurement 101,971.6 103,062.3
Research and Development 71,391.8 71,629.8
Operation and Maintenance 171,318.5 169,325.3
Military Personnel 135,269.2 134,849.8
Defense Health Program and Other Authorizations 36,557.0 37,025.6
Military Construction/Family Housing 7,444.1 7,694.0
Subtotal: DOD Base Budget 523,952.1 523,586.9
Atomic Energy Defense Activities 19,240.5 19,512.1
Other Defense-Related Agencies 211.0 300.0
TOTAL: National Defense Budget Function (050) Base Budget 543,403.6 543,399.0
DOD OCO Budget 58,798.0 58,793.5
GRAND TOTAL: FY2017 NDAA 602,201.6 602,192.5

9/11 Saudi Supported Memo Released

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Memos on Alleged Saudi-Affiliated Support of the 9/11 Attacks

The National Archives released a series of memos written by Sept. 11 Commission staff members, a compilation of numerous possible connections between the hijackers and Saudis inside the United States. The document appears to be a glimpse into what is still contained in the classified 28 pages of the congressional inquiry into the 2001 attacks.

Judicial Watch Begins Interrogatories on Hillary’s Team

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Interviews of Clinton aides in email case to begin this week

 Lukens  Mills

 Mull  Pagliano

 Abedin  Kennedy
TheHill: A conservative legal watchdog’s interviews with current and former aides to Hillary Clinton about her use of a private email server while serving as secretary of State will begin Wednesday and stretch into late June, the group announced.

The first person to be deposed as part of a court case concerning Clinton’s bespoke email setup is Lewis Lukens, a former executive director of the State Department’s executive secretariat, Judicial Watch said in a court filing Tuesday.

Sworn testimony with Cheryl Mills, Clinton’s former chief of staff, is set to follow and has been scheduled for next Friday.
In subsequent weeks, the watchdog group will question former department executive secretary Stephen Mull, IT expert Bryan Pagliano, an official representative from the State Department, longtime Clinton adviser Huma Abedin, and sitting Undersecretary for Management Patrick Kennedy.

Kennedy’s interview, scheduled for June 29, is slated to be the final interview as part of the Freedom of Information Act case.

Each interview could last for as long as seven hours, Judicial Watch predicted.

The depositions are the first of two separate court-ordered processes for Judicial Watch to obtain evidence as part of different open records cases concerning Clinton’s email setup. The twin court cases were launched to obtain separate documents from Clinton’s time in office but have evolved as judges have raised questions about whether the likely Democratic presidential nominee’s arrangement allowed her to circumvent open records laws.

“This court-ordered testimony could finally reveal new truths about how Hillary Clinton and the Obama State Department subverted the Freedom of the Information Act,” Tom Fitton, Judicial Watch’s president, said in a statement Tuesday.

In addition to the officials scheduled to testify as part of the Judicial Watch lawsuit, Judge Emmet Sullivan has said that Clinton herself could be forced to answer questions under oath, depending on information learned through other interviews.

In the second Freedom of Information Act case launched by Judicial Watch, the organization has asked a federal judge to interview Clinton about her email setup. The request would have to be approved by the judge and is likely to face opposition from the State Department.

If it is granted, Clinton’s testimony has the potential to dramatically upend the presidential race, given the simmering concern about her email practices while in office.

Clinton and her campaign have dismissed concerns about the setup, claiming that it was used merely for convenience and that all work-related emails have been handed back to the State Department for record keeping.

Panama Papers: Soros Beyond the Reach of Scrutiny

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Perspective of Soros political donations in 2012

May 2016: George Soros donates $8 million to boost Hillary

2014 was the year that launched the full ‘climate change’ mission.

TheHill: Adviser to President Obama John Podesta met with billionaires Tom Steyer and George Soros for a lunchtime meeting at the White House in February, according to meeting records. The White House visitor documents show that shortly after Steyer had committed to spend upward of $100 million on the 2014 election cycle for environmentally friendly candidates who helped put climate change on the map, he met with Podesta and Soros. The three met to discuss global climate change negotiations, and the process of the 2015 United Nations climate change convention to be held in Paris, a White House official told The Hill in an email.

The administration is looking to build momentum going into the talks where 120 nations will work to form a global climate treaty, and set emission reduction targets. President Obama will attend the UN climate summit in New York next month to build on negotiations.

Records show that Steyer met with Podesta again in March. The administration has received criticism from Republicans for its ties with the hedge fund manager turned climate activist.

Panama Papers reveal George Soros’ deep money ties to secretive weapons, intel investment firm

FNC: Billionaire George Soros, who has spent millions of dollars financing Democrats and left-wing causes, used a controversial Panamanian law firm to establish a web of offshore investment partnerships that operate around the world and out of the scrutiny of U.S. regulators, according to leaked documents.

The so-called Panama Papers, a trove of 11.5 million financial documents tracing the Mossack Fonseca law firm’s efforts to help politicians, celebrities and criminals shield their money from taxes, contain links to Soros, who funds the journalism group that is disseminating the information. So far, the International Consortium of Investigative Journalists (ICIJ) has been silent on its benefactor’s ties to the law firm.

Three offshore investment vehicles controlled by Soros are catalogued in the Panama Papers. Soros Finance, Inc. was incorporated in Panama; Soros Holdings Limited was set up in the British Virgin Islands and a limited partnership called Soros Capital was created in Bermuda.

The laws of Panama, Bermuda, the British Virgin Islands and a score of “tax havens” allow foreign firms to hide ownership of cash, real estate and other assets from securities regulators and tax collectors in the countries where they are physically headquartered.

On May 9, client data stolen from the Mossack Fonseca law firm in Panama was published online by the ICIJ as part of its Offshore Leaks database. The searchable database contains a portion of the offshore financial records given to the journalists by anonymous whistle-blowers since 2013; it does not include leaked emails and other explanatory data that ICIJ reporters use to write about the offshore financial holdings of newsworthy individuals.

News stories about offshore bank accounts revealed by the Panama Papers brought down Iceland’s prime minister last month. Heads of state, Hollywood stars, heiresses, arms dealers and drug lords who established secret offshore companies and bank accounts are outed almost daily by the ICIJ. Incorporating a business offshore is not illegal, but President Obama has called for the tax loophole to be sealed shut, saying everyone should “pay their fair share.”

Soros, 86, is worth an estimated $25 billion. His Open Society Institute is one of ICIJ’s main funders, granting it $1.5 million last year. The Panama Papers data reveals only the tip of Soros’ offshore iceberg, the Quantum Group of Funds. The ICIJ’s leader, journalist Gerard Ryle, said he had not noticed Soros’ companies in the Offshore Leaks database until FoxNews.com called the matter to his attention.

“I suspect we would have more information [on Soros] because the public database … does not contain the underlying data,” Ryle said in an email FoxNews.com.

FoxNews.com has requested access to that data.

Because it is based offshore, the Quantum Group of Funds is not normally subject to regulation by the United States Securities and Exchange Commission. But in the mid-1990s, Soros Capital bought several SEC-regulated firms, an act which required it to disclose the basic design of the Quantum network of interlocking offshore companies and bank accounts that shield Soros’ billions.

Soros Capital set up an offshore company in the Cayman Islands for the purpose of investing private equity with the Carlyle Group, alongside members of Saudi Arabia’s Bin Laden family. Carlyle’s partners include ex-heads of state and former CIA officials. The private equity partnership specializes in buying and selling weapons manufacturing and intelligence gathering companies with government and military contracts and it also uses secret offshore companies to conduct business.

Offshore Leaks does not include SEC information, but it reveals Soros Capital as a major investor and corporate officer of AIF (Indonesia) Limited. AIF combines private investments with public funding contributed by Asian governments to develop massive infrastructure projects. The database links Soros Capital to Dongya Ports Limited, owned by a tangle of offshore entities.

Soros is certainly newsworthy. In 1992, the self-styled philosopher-economist nearly bankrupted the Bank of England by manipulating the price of the pound. Five years later, he exacerbated a regional economic crisis by betting against Thai and Malaysian currencies. Billions of dollars in profits from Soros’ currency-pummeling moves flowed through the Quantum Group of Funds.

Soros is the sole proprietor of Manhattan-based Soros Fund Management LLC, which controls his offshore empire. In July 2011, Soros closed the multibillion-dollar fund to all but members of his immediate family, allowing him to escape the Dodd-Frank Act mandate for hedge funds to disclose investors and conflicts of interest. A few months later, Soros lost the final appeal of his 2002 conviction by a French court for insider trading. But he remains a potent political force.

In 2014, Soros donated $381 million of Quantum Group of Funds shares to his Open Society philanthropy. The New York-based charitable foundation supports hundreds of advocacy groups, academic research and investigative journalists that align with Soros’ oft-stated goal to promote globalized capitalism and democracy.

On the other hand, the Panama Papers’ leaker, known as John Doe, said that he had exposed the vast cluster of offshore firms and bank accounts, because “income inequality” and “massive, pervasive corruption” are “the defining issues of our time.”

Soros’ offshore companies may not pay U.S. taxes (his spokesperson, Michael Vachon, declined to answer that question), but the billionaire donates lots of money to Democrats who write and enforce the tax laws. In the 2004 presidential election, he contributed $24 million to George Bush’s opponents. He is the largest donor to Hillary Clinton’s campaign for the presidency, plunking down $8 million, so far. He has donated “up to $1 million” to the Clinton Foundation. And Secretary of State Clinton’s emails reveal that Soros has lobbied her on behalf of his interests, which encircle the globe, mostly in the dark.

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There is more, and it deals with Hedge Funds, Soros and even political action committee cooperatives.

HuffPo: On the list of the largest U.S. companies by market value, those in the $30 billion to $45 billion range are household names: Capital One Financial, DirecTV, Phillips 66, Yahoo.

But far fewer people know much, if anything, about Citadel Multi-Strategy Equities Master Fund Ltd., with a gross asset value of $33 billion, or Elliott International, L.P., at $30.8 billion, or AQR Style Premia Master Account, valued at $16.6 billion. All are hedge funds organized under the laws of the Cayman Islands.

They’re also just a handful of the funds under the control of some of the biggest political donors in the nation: Kenneth C. Griffin, Paul Singer and Cliff Asness.

Hedge funds — partnerships of big-money investors that, put simply, try to beat the market by pursuing riskier-than-normal investments, often using debt and other forms of leverage — have boomed in recent years, with many producing huge financial gains for an elite pool of individuals, pension funds or other repositories of great wealth. Private and exclusive, the funds are not for the average American; often, the customers are not Americans at all.

The industry has made certain Americans very, very rich, though — and has helped create a new class of megadonors in U.S. politics. Besides Griffin (of Citadel Advisors LLC), Singer (Elliott Management Corp.) and Asness (AQR Capital Management), they include Robert Mercer and James Simons (Renaissance Technologies), Donald Sussman (Paloma Partners) and Seth Klarman (Baupost Group). These seven individuals who lead six hedge fund firms have together given at least $60 million to candidates, super PACs and political party committees since the beginning of 2015.

(The fund once managed by George Soros, another major industry donor, is now a family office and has no SEC Form ADV on file.)

The release of the Panama Papers has brought fresh reminders of the stunning amount of wealth held offshore, but that’s a world these donors and their firms navigate routinely as part of a rarefied investment community far more wealthy and sophisticated than the market to which most people have access.

OpenSecrets Blog analyzed hundreds of pages of reports filed with the Securities and Exchange Commission by the six firms. The reports give new insight into these donors whose money is increasingly dominating political giving, thus allowing them disproportionate access to policymakers.

All told, the value of their 151 hedge funds is as high as $390 billion. Most of that is in the funds based overseas, mostly in the Cayman Islands. Of the 151 funds in the firms’ SEC reports, 67 are organized under the laws of the Caymans, where the firms manage some $282 billion in current asset value. About $103 billion of the wealth is held in Delaware-based hedge funds.

The six management companies reported that they themselves owned stakes in the hedge funds totaling approximately $38 billion. Don’t even think about trying to buy in with a few hundred thousand you may have lying around: The average minimum ante for an “accredited investor” is $5.4 million.

A quarter of the funds report greater than 50 percent ownership by non-U.S. investors (which could include offshore holding companies and other entities), and foreign investors own at least part of 41 percent of the funds. By far, most of the funds catering to these offshore entities are organized in the Cayman Islands.

In the presidential contest, hedge fund managers have played an enormous role in plumping up the coffers of several candidates’ super PACs. Sussman, for instance, who has given out more than $7 million this cycle in all, has contributed $4 million to Priorities USA Action, the group backing presumptive Democratic presidential nominee Hillary Clinton. Sussman and Simons combined have given Priorities $16 million in the past two cycles. (Priorities supported President Barack Obama’s second campaign for the White House before it pivoted to Clinton.)

Mercer, who socked $13 million into Keep the Promise I, one of the super PACs supporting Sen. Ted Cruz‘s (R-Texas) recently suspended run for the White House, is the largest individual donor to super PACs so far this cycle. Griffin provided $5 million to Conservative Solutions PAC, which backed Florida GOP Sen. Marco Rubio‘s presidential bid before he dropped out; add in gifts from Singer, Asness and Klarman and the total jumps to $11.6 million.

These seven major hedge fund industry donors whose firms filed Form ADVs with the SEC in recent months have made $135 million in political contributions since 1989, as far back as the Center for Responsive Politics’ data go. But it’s only since 2010, when super PACs came into being in the wake of the Supreme Court’s Citizens United ruling, that the big money has really flowed.

Every firm but Renaissance has funds organized in a tax haven like the Caymans or Bermuda. But their offshore dealings don’t mean they’re engaging in tax evasion or anything similarly nefarious, says Steven Rosenthal, a senior fellow at the Urban Institute and an expert on tax policy. Rosenthal wrote in 2012 that while managers can benefit from organizing their investment vehicles overseas, they often do so to cater to special kinds of clients like tax-exempt entities and foreign investors.

The larger point, though — rather than any illegal or hidden activity by the hedge fund managers — remains one of a few staggeringly affluent individuals investing heavily in the political system, giving many times what the average American could imagine contributing.

Their largess, in turn, could have an impact on how the government treats the rich — especially when it comes to the tax code. Capital gains tax rates levied on investment returns, for instance, are far lower than taxes on income. Indeed “tax issues affecting hedge funds” was one of the top issues listed on Renaissance Technologies’ lobbying reports in 2015, for example. (Sussman, the Priorities USA Action donor, it should be noted, has supported closing the carried interest loophole that allows hedge fund managers’ income to be taxed at the capital gains rate.)

“The world of capital is divided between those who have it and those who don’t,” Rosenthal said. “we’re taxing capital lightly. We tax labor fully. And so I think it fuels a lot of inequality.”

“I think the problem is how we look at capital,” he said. “When you look at the size of these investments by hedge funds, it’s eye-boggling.”

Beware: Lil Blue Men Militia, S. China Sea

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The only estimate of the size of the Maritime Militia obtained during the course of this research was from a source published in 1978, which put the number of personnel at 750,000 on approximately 140,000 craft.5 In its 2010 Defense White Paper, China stated that it had 8 million primary militia members nationwide.6 The Maritime Militia is a smaller unique subset since it performs many of its missions at sea. Since an accurate number is not available this chapter takes more of a grassroots approach and attempts to determine the average size of a unit at the local level. It is important to note that the Maritime Militia is distinct from both China’s coastal militia (shore based) and its naval reserve, although some coastal militia units have been transformed into Maritime Militia units. Full white paper is here.

While Russia has employed “Little Green Men” surreptitiously in Crimea, China uses its own “Little Blue Men” to support Near Seas claims. As the U.S. military operates near Beijing’s artificially-built South China Sea (SCS) features and seeks to prevent Beijing from ejecting foreign claimants from places like Second Thomas Shoal, it may well face surveillance and harassment from China’s maritime militia. Washington and its allies and partners must therefore understand how these irregular forces are commanded and controlled, before they are surprised and stymied by them.

China has long organized its civilian mariners into maritime militia, largely out of necessity. Recent years have seen a surge of emphasis on maritime militia building and increasing this unique force’s capabilities; however it is difficult to ascertain who or what entity within China’s government has ordered such emphasis. One can point to Xi Jinping’s visit to the Tanmen Maritime Militia in 2013, after which maritime militia building oriented toward the SCS has seen growth in places like Hainan, Guangdong, and Guangxi. Yet local militia training and organization plans prior to this date had already emphasized the training of maritime militia units.

Unit Composition and Organization

China’s militia has two major subcomponents: an “ordinary” reserve of registered male citizens akin to the U.S. Selective Service pool, and a “primary” force more readily mobilized to respond to various contingencies. The primary force receives dedicated resources, troops demobilized from active duty, and training. Within the primary force, maritime militia units—formed solely at the tactical level of organization—are smaller and more specialized on average than their land-based counterparts. Within the maritime militia, a small but growing elite set of units are the ones most likely to be deployed on more sophisticated operations that involve monitoring, displaying presence in front of, or opposing foreign actors. They do so in part by supporting China’s navy and coast guard in such efforts. Some cities with large mobilization potential—i.e., a large maritime industry or fishing community—will form battalion-sized units. Most localities create company-sized units, however. These companies are divided into platoons and squads, with the smallest grouping based on each individual vessel.

Chain of Command

Militia management begins broadly at the General Staff Department’s Mobilization Department, which oversees and formulates regulations for nationwide militia work. Uniquely a local military force, the maritime militia falls within the hierarchical People’s Liberation Army (PLA) army local force command structure that runs through all levels of local military organs. As stipulated in China’s “Militia Work Regulations,” real command of the militia begins at the Provincial Military District (MD) level and below. The thousands of county- and grassroots-level People’s Armed Forces Departments (PAFD) established in county-level cities, townships, villages, and maritime enterprises (fishing companies, shipyards, etc.) directly execute the organizing and training of maritime militia. Grassroots-level PAFDs report to county-level PAFDs, which report to Military Sub-district (MSD) Headquarters, themselves reporting to MD Headquarters. Maritime militia building also receives attention by Military Region-level Command, albeit in a supervisory fashion. Higher levels of military commands likely view the maritime militia as a subset of military organization within the broader ecosystem of local militia, with particular focus on broader mobilization efforts. Additionally, militia battalions and companies form party branches to ensure Party control at the grassroots levels.

It must be emphasized that maritime militia command authority resides within multiple entities, including both the local military organs (MD, MSD, PAFD) and their government/party counterparts. This is referred to as “双重领导” in Chinese, connoting the “dual-leadership” system by the local military and government’s principal leaders. It is thus common to see a city party secretary acting in his role as first-party secretary of the local military party committee overseeing the PAFD’s efforts at managing the maritime militia. An easily visible example: Sansha City’s mayor/party secretary Xiao Jie and his military counterpart Commander Cai Xihong both attended the founding ceremony of Sansha City’s Maritime Militia Company. “Dual-leadership” is further reinforced by the fact that local governments fund militia construction.

Since both military and government leaders are involved in local armed forces building, the National Defense Mobilization Committee System (NDMC) established at each corresponding level plays the critical role in binding them into one decision-making body. The NDMC brings together these leaders to organize, direct, and coordinate nationwide national defense mobilization, ensuring that national resources can be rapidly mobilized for defense or emergency needs. Local NDMCs can also establish civilian-military joint command structures facilitated by national defense mobilization communications networks. As a militia force, the maritime militia would need a specified duration to mobilize and gather in the area designated by their superiors. Localized mobilization orders transmitted to the maritime militia could originate from a variety of sources. Regardless, they would be sent down the chain and delivered to the maritime militia via the PAFDs managing them.

While county-level PAFDs are manned by active duty PLA officers, grassroots-level PAFDs are manned by civilian government cadres. Training and education efforts target a “select group of militia cadres” (专职人民武装干部), units’ leaders (company, platoon, and squad) and “information personnel” (信息员). This group of personnel forms the backbone of the maritime militia and helps implement party control, command and control, and maintain unit cohesiveness. Essential to successful command and control of the maritime militia are the “boat captains”—often termed “船老大”—and the information personnel, which provide dedicated personnel for onboard leadership, identification, and communications. This is further facilitated by increasing incorporation of satellite communications technologies into the fishing fleet and thereby into the maritime militia.

Mission-based Command Authority

Although maritime militia are built out of the regular command structure of coastal military organs, they also serve naval and maritime law enforcement forces (MLE). The command relationships for the maritime militia may vary with the mission they are employed in. For example, maritime militia reconnaissance detachments report their findings directly to MD Headquarters, while another detachment summoned to assist with maritime law enforcement would be commanded by the Chinese Coast Guard (CCG) “in cooperation with their MD.” Similarly, support detachments serving roles for China’s navy would be under the command of the PLA Navy in cooperation with the detachment’s MD. It is clear that the maritime militia are controlled by their land-based local military organs, an arrangement flexible enough to serve a variety of supporting roles for the Chinese Navy and MLE forces. Many Chinese sources use a phrase that succinctly states such arrangements: “the military organ expresses its requirements, the NDMC coordinates, and the government implements” (军事机关提需求、国动委搞协调、政府抓落实), referring to the cooperation that occurs between civilian and military leaders in building the maritime militia.

More than One Way to Tie the Knot

Organization and command of maritime militia likely varies by locality. This stems largely from a given locality’s maritime industry and its influence on militia composition, requiring local leaders to plan maritime militia missions from what is available. Making command and decision making arrangements based on local conditions is critical to the proper functioning of such a force. Many ad hoc leading small groups are formed to handle a certain issue area, or provide temporary guidance for certain missions. The multiple organizations supporting maritime militia building (e.g., the CCG, Fisheries Bureau, and Maritime Safety Administration) are likely to enter these command structures in some fashion.

The 300,000-troop reduction that Xi announced at Beijing’s 3 September military parade will likely send additional personnel to the maritime militia, and could even further shape their command and control. Specifically, efforts to streamline the current long reporting chain through land-based forces might ensue. All the more reason that it’s vitally urgent to understand how China’s “Little Blue Men” get their sailing orders, and what those orders might be.

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