The Kill Shot Against Gen. Flynn was Not Russia, it was Iran

RussiaGate was concocted. RussiaGate was globally choreographed. But it was never about Russia, the real covert truth and story is Iran.

Lee Smith has confirmed what I knew in my gut to be true. Smith authored titled The Plot Against the President. I read it and Smith was gracious enough to come on my radio show to discuss the book, which you must read. Congressman Devin Nunes knew in his gut the RussiaGate story did not compute either.

A huge high five to Nunes and Smith and on with the story. It is a long one. Once you sit back and read it all, the clue, tips and indicators begin to fall into place. But we must go back several years for context, patterns and the cunningness of politicians and powerplayers.

1. Remember the first set of WikiLeaks cables where it was determined that Hillary had her staff collect as much oppo-research as possible on her adversaries and foreign dignitaries such that she had to go on an apology tour after the cables were published?

2. Remember the scandal that surrounded Sharyl Attkisson and the computer intrusion(s) she experienced during the Obama administration that she is still fighting legally? She too wrote a book titled Stonewalled telling that story.

3. Remember the journalists that collaborated with Edward Snowden, one being Barton Gellman? By the way I have zero use for what Snowden did but there is an interesting part of the story that Gellman tells in The Atlantic magazine. He too was a victim of major computer intrusions perhaps more significant than that of Sharyl Attkisson.

4. Remember when President Obama had to apologize to German Chancellor Merkel and and French President Hollande for surveilling their phones?

5. Remember when Eric Holder had to admit he issued subpoenas for journalists phone and email records?

6. Remember when the Obama administration ‘scooped-up’ the communications between members of Congress and Israeli leaders during the Iran nuclear deal talks?

7. Remember when CIA Director, John Brennan spied on Senator Dianne Feinstein staffers working the on the torture reports, lied about it and then had to admit it?

8. Remember Operation Cassandra that was shut down completely by the Obama White House? The Former DEA Special Agent on this operation and I have become friends in the last couple of years. This was a global investigation into Hezbollah, narcotics and used cars. (This too included Bruce Ohr)

Okay, so the rest of the story. It is a big one but it holds all the truths. Again, a HUGE hat tip to Lee Smith and Devin Nunes.

*** It started in 2009, took of in a big way in 2012 and Oman was the back channel.

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Barack Obama warned his successor against hiring Michael Flynn. It was Nov. 10, 2016, just two days after Donald Trump upset Hillary Clinton to become the 45th president of the United States. Trump told aide Hope Hicks that he was bewildered by the president’s warning. Of all the important things Obama could have discussed with him, the outgoing commander in chief wanted to talk about Michael Flynn.

The question of why Obama was so focused on Flynn is especially revealing now. The Department of Justice recently filed to withdraw charges against the retired three-star general for making false statements to the FBI in a Jan. 24, 2017, interview regarding a phone call with a Russian diplomat. The circumstances surrounding the call and subsequent FBI interview have given rise to a vast conspiracy theory that was weaponized to imprison a decorated war hero and a strategic thinker whose battlefield innovations saved countless American lives. There is no evidence that Flynn “colluded” with Russia, and the evidence that Flynn did not make false statements to the FBI has been buried by the bureau, including current Director Christopher Wray.

So if the Obama administration wasn’t alarmed by Flynn’s nonexistent ties to Russia, why was he Obama’s No. 1 target? Why were officials from the previous administration intercepting his phone calls with the Russian ambassador?

The answer is that Obama saw Flynn as a signal threat to his legacy, which was rooted in his July 2015 nuclear agreement with Iran—the Joint Comprehensive Plan of Action (JCPOA). Flynn had said long before he signed on with the Trump campaign that it was a catastrophe to realign American interests with those of a terror state. And now that the candidate he’d advised was the new president-elect, Flynn was in a position to help undo the deal. To stop Flynn, the outgoing White House ran the same offense it used to sell the Iran deal—they smeared Flynn through the press as an agent of a foreign power, spied on him, and leaked classified intercepts of his conversations to reliable echo chamber allies.

In March 2017, after seeing evidence of the Obama administration’s surveillance of Trump associates, Congressman Devin Nunes said it had nothing to do with Russia or the FBI’s ongoing Russia investigation, or similar Russia probes conducted by congressional committees. Nunes’ contention was difficult to make sense of at the time. Wasn’t everything about Russia and whether or not there was, as Congressman Adam Schiff said, more than circumstantial evidence of collusion?

In fact, as Trump prepared to take office after his 2016 upset victory, the Obama White House was focused on the Middle East. “Russia collusion” was the narrative that Hillary Clinton operatives seeded in the media and fed to the FBI to obtain a warrant to spy on the Trump campaign. After the election, the Obama team took it over and used it to hobble the incoming administration.

That Obama has publicly criticized the Justice Department’s decision to withdraw its case against the retired general shows how personal the anti-Flynn campaign still is for the former president. In leaking his supposedly off-hand comments to Michael Isikoff, a journalist whose work was central in pushing the Trump-Russia collusion conspiracy theory, Obama was effectively taking credit for pushing the larger anti-Trump operation that grew out of the anti-Flynn campaign. While the Russia collusion story was a handy instrument for many to advance all manner of personal and political interests, for Obama the purpose of Russiagate was simple and direct: to protect the Iran deal, and secure his legacy.

Obama and his foreign policy team were hardly the only people in Washington who had their knives out for Michael Flynn. Nearly everyone did, especially the FBI. As former director of the Defense Intelligence Agency, the Pentagon’s spy service, and a career intelligence officer, Flynn knew how and where to find the documentary evidence of the FBI’s illegal spying operation buried in the agency’s classified files—and the FBI had reason to be terrified of the new president’s anger.

The United States Intelligence Community (USIC) as a whole was against the former spy chief, who was promising to conduct a Beltway-wide audit that would force each of the agencies to justify their missions. Flynn told friends and colleagues he was going to make the entire senior intelligence service hand in their resignations and then detail why their work was vital to national security. Flynn knew the USIC well enough to know that thousands of higher-level bureaucrats wouldn’t make the cut.

Flynn had enemies at the very top of the intelligence bureaucracy. In 2014, he’d been fired as DIA head. Under oath in February of that year, he told the truth to a Senate committee—ISIS was not, as the president had said, a “JV team.” They were a serious threat to American citizens and interests and were getting stronger. Former Director of National Intelligence James Clapper and Undersecretary of Defense for Intelligence Michael Vickers then summoned Flynn to the Pentagon and told him he was done.

“Flynn’s warnings that extremists were regrouping and on the rise were inconvenient to an administration that didn’t want to hear any bad news,” says former DIA analyst Oubai Shahbandar. “Flynn’s prophetic warnings would play out exactly as he’d warned shortly after he was fired.”

Flynn’s firing appeared to be an end to one of the most remarkable careers in recent American intelligence history. He made his name during the Bush administration’s wars in Iraq and Afghanistan, where soldiers in the field desperately needed intelligence, often collected by other combat units. But there was a clog in the pipeline—the Beltway’s intelligence bureaucracy, which had a stranglehold over the distribution of intelligence.

Flynn described the problem in a 2010 article titled “Fixing Intel: A Blueprint for Making Intelligence Relevant in Afghanistan,” co-written with current Deputy National Security Adviser Matt Pottinger. “Moving up through levels of hierarchy,” they wrote, “is normally a journey into greater degrees of cluelessness.” Their solution was to cut Washington out of the process: Americans in uniform in Iraq and Afghanistan needed that information to accomplish their mission.

“What made Flynn revolutionary is that he got people out in the field,” says Shahbandar, who served in Iraq under Flynn in 2007-08 and in Afghanistan in 2010-11. “It wasn’t just enough to have intelligence, you needed to understand where it was coming from and what it meant. For instance, if you thought that insurgents were going to take over a village, the first people who would know what was going would be the villagers. So Flynn made sure we knew the environment, the culture, the people.”

Influential senior officers like Gens. David Petraeus and Stanley McChrystal credited Flynn for collecting the intelligence that helped defeat al-Qaida in Iraq in 2007. In 2012, he was named DIA chief. The next year he secured access for a team of DIA analysts to scour through the documents that had been captured during the 2011 operation to kill Osama bin Laden.

“The bin Laden database was unorganized,” says a former senior DIA official. “There had been very little work on it since it was first captured. The CIA had done machine word searches to identify immediate threats, but they didn’t study it for future trends or strategic insight.” Flynn arranged for a team from United States Central Command, based in Tampa, Florida, to come up to Washington. The subject of their investigation was a potentially sensitive one. “We were looking for ties between al-Qaida and Iran,” says Michael Pregent, a former Army intelligence officer who was working on the bin Laden documents as a contractor. “We’re arguing with everyone—NSA, whoever else—telling them what we wanted and they kept saying ‘there’s nothing there, we already went through it.’ The CIA and others were looking for immediate threats. We said ‘we’re DIA, we’re all-source analysts and we want everything to get a full picture.’”

Just as the CENTCOM team was preparing for their trip to Northern Virginia, they were shut down. “Everything was set,” says Pregent. “we had our hotel reservations, a team of translators, and access to all of the drives at the National Media Exploitation Center. Then I get a call in the middle of one of the NCAA basketball tournament games from the guy who was running our team. He said that [CIA Director John] Brennan and [National Security Adviser Susan] Rice pulled the plug.”

The administration was, it appears, clearing space for Obama to implement his big foreign policy idea—the Iran nuclear deal. Another aide, Ben Rhodes, had said in 2013 that the Iran Deal was the White House’s key second-term initiative. Evidence that Tehran was coordinating with a terror group that had slaughtered thousands in Manhattan and at the Pentagon would make it harder to convince American lawmakers of the wisdom in legitimizing Iran’s nuclear weapons program.

What was the information about al-Qaida’s ties to Iran that Flynn wanted his CENTCOM team to get out? According to published news reports, the bin Laden database included “letters about Iran’s role, influence, and acknowledgment of enabling al-Qaida operatives to pass through Iran as long as al-Qaida did its dirty work against the Americans in Iraq and Afghanistan.” One of those letters showed that “Al-Qaeda was working on chemical and biological weapons in Iran.”

After decades of anti-Iran campaigning, Republicans were expected to oppose Obama’s deal, but didn’t have the numbers to stop it in the Senate. What concerned the White House therefore was their own party. Senior Democrats on Capitol Hill were uneasy about the deal, as were large numbers of Jewish voters—more than half of whom identify as Democrats.

Jewish organizations offered two major objections to the deal: First, the outlines of Obama’s nuclear deal suggested that it might legalize a bomb pointed at the Jewish state. Second, in striking an agreement with Iran, the White House might normalize relations with a regime that embodies anti-Semitism.

In return, Obama confronted Iran Deal skeptics in his own party with a hard choice—either support the deal, or you’re out. There would be no room in the Democratic Party for principled disagreement over the keystone of Obama’s foreign policy legacy. Opponents were portrayed in harsh, uncompromising terms: They had been bought off, or were warmongers, or Israel-firsters.

In a meeting of Senate Democrats in early 2015, Obama had his eye on New Jersey Sen. Robert Menendez when he spoke of pressures “from donors and others” to reject the deal. Menendez was offended. He said he’d “worked for more than 20 years to curb Iran’s nuclear ambitions and had always been focused on the long-term implications.”

The way that Obama framed it, it was only the money laid out against the initiative by lobbyists and donors that kept Americans from seeing how excellent his deal truly was. “If people are engaged, eventually the political system responds,” Obama told Jon Stewart. “Despite the money, despite the lobbyists, it still responds.”

Obama kept talking about money, donors, and lobbyists as if a secret cabal was tossing bags of dark foreign cash around Washington. What he was referring to was the American Israel Public Affairs Committee (AIPAC)—an American organization run by American Jews to promote America’s alliance with its most important Middle East ally.

AIPAC’s leadership trusted Obama to do the right thing. They described him as a great friend of Israel and assured themselves he wouldn’t put the Jewish state in danger by giving the bomb to a regime that regularly called for its destruction. But Obama didn’t trust AIPAC or the capacity of the American people to recognize the excellence of the Iran deal, which is why he kept the deal and its contents hidden from public view for as long as possible.

In 2012, the administration began secret negotiations with Iran. At the same time, the administration called off a multi-agency task force targeting the billion-dollar criminal enterprise run by Iran’s Lebanese ally, Hezbollah. The administration told Congress that the nuclear deal would not grant Iran access to the U.S. financial system, but a 2018 Senate report showed how the Obama White House lied to the public and was secretly trying to grant Iran that access. The Obama administration had misled Congress about secret deals it made regarding verification procedures, and then secretly shipped $1.7 billion in cash for Iran to distribute to its terror proxies.

The administration’s promise that the deal would prevent Iran from ever getting a bomb was validated by their communications infrastructure: The messaging campaign brought together friendly journalists, newly minted arms-control experts, social media stars, and progressive advocacy groups like the regime-friendly National Iranian American Council (NIAC). As Obama’s top national security communications lieutenant Ben Rhodes told The New York Times: “They were saying things that validated what we had given them to say.”

One strategy employed by Rhodes’ echo chamber assets was to engage critics in esoteric debates over details of the Iran deal. For instance, how many centrifuges would Iranian reactors be allowed to spin? Had Iran’s supreme leader declared a genuine fatwa against nuclear weapons? Was this or that nuclear site a military facility?

Among the handful of honest reporters covering the deal, most didn’t have enough information, time, or energy to continue fighting a wall of static noise. And that was the point of Obama’s media campaign—to drown out, smear, and shut down opponents and even skeptics. Thus, echo chamber allies purposefully obscured the core issue. The nature of the agreement was made plain in its “sunset clauses.” The fact that parts of the deal restricting Iran’s activities were due to expire beginning in 2020 until all restrictions were gone and the regime’s nuclear program was legal, showed that it was a phony deal. Obama was simply bribing the Iranians with hundreds of billions of dollars in sanctions relief and hundreds of billions more in investment to refrain from building a bomb until he was safely gone from the White House, when the Iranian bomb would become someone else’s problem. The Obama team thought that even the Israelis wouldn’t dream of touching Iran’s nuclear program so long as Washington vouchsafed the deal. They called Israeli Prime Minister Benjamin Netanyahu “chickenshit.”

If Obama was just kicking the can down the road, why did he expend so much effort to get the deal? How was it central to his legacy if it was never actually intended to stop Iran from getting the bomb? Because it was his instrument to secure an even more ambitious objective—to reorder the strategic architecture of the Middle East.

Obama did not hide his larger goal. He told a biographer, New Yorker editor David Remnick, that he was establishing a geopolitical equilibrium “between Sunni, or predominantly Sunni, Gulf states and Iran.” According to The Washington Post’s David Ignatius, another writer Obama used as a public messaging instrument, realignment was a “great strategic opportunity” for a “a new regional framework that accommodates the security needs of Iranians, Saudis, Israelis, Russians and Americans.”

The catch to Obama’s newly inclusive “balancing” framework was that upgrading relations with Iran would necessarily come at the expense of traditional partners targeted by Iran—like Saudi Arabia and, most importantly, Israel. Obama never said that part out loud, but the logic isn’t hard to follow: Elevating your enemy to the same level as your ally means that your enemy is no longer your enemy, and your ally is no longer your ally.

Obama demonstrated to Jerusalem the gravity of his intentions every time an administration official leaked reports of Israeli raids on Hezbollah and other Iranian allies in Syria and Lebanon. That put the Israelis on the defensive, and also showed the Iranians that Obama could and would bring Israel to heel. Therefore, Tehran should trust him.

“Obama wants this as the centerpiece of his legacy,” an American diplomat told the press in Vienna where Secretary of State John Kerry and his team came to terms with the Islamic Republic. “He sees himself as a transformative president in the Reagan mold,” said a former Obama adviser, “who leaves his stamp on America and the world for decades to come.”

For all of Obama’s talk of money and lobbies, he was himself creating a large international constituency for the deal. Sanctions on Iran had kept foreign companies out of the country for decades, but the promise of new markets for major industries, like energy and automotive, had European and Asian industry chomping at the bit. The American president not only promised to relieve sanctions, but also to help drum up business by assuring the world that it was safe to invest in Iran. John Kerry was keen to turn the State Department into Iran’s Chamber of Commerce.

Obama’s talk of the pro-Israel lobby only got louder as his negotiators came closer to striking the deal. He was talking about the Jews, and to them. If they didn’t back the deal, the sewers would spill over with traditional anti-Semitic conceits about Jewish money and influence, dual loyalties, Jews leveraging their home country on behalf of their co-religionists, and fomenting war. This wasn’t a fringe White nationalist figure, but a popular two-term Democrat. John Kerry said it outright: If Congress failed to pass the deal, it would put Israel at risk of being “more isolated and more blamed.” There was no alternative to the deal, said Kerry, except war.

Jewish community leaders complained about how the debate over the deal was being framed. “If you are a critic of the deal, you’re for war,” a senior official at a pro-Israel organization told me at the time. “The implication is that if it looks like the Jewish community is responsible for Congress voting down the deal, it will look like the Jewish community is leading us off to another war in the Middle East.”

Nonetheless, Obama kept hammering away at his chosen messaging. In a speech at American University he argued there are only two choices: The Iran Deal or war. The one government that did not think this is “such a strong deal” was Israel.

If the smear campaign targeting Iran Deal opponents as rich, dual-loyalist, right-wing warmongers was the public face of Obama’s push for the deal, there was an even less savory component hidden within the advanced technology of the U.S. Intelligence Community: The administration was spying on its domestic opponents, American legislators, and pro-Israel activists. Noah Pollak—formerly head of the Emergency Committee for Israel, a nonprofit organization that opposed the nuclear agreement with Iran—says, “I was warned that my conversations with senior Israeli officials were possibly being monitored.”

Speaking to me for my 2019 book The Plot Against the President, Pollak said that “the administration did things that seemed incontrovertibly to be responses to information gathered by listening to those conversations.” He continued: “At first we thought these were coincidences and we were being paranoid. Surely none of us are that important. Eventually it simply became our working assumption that we were being spied on via the Israeli officials we were in contact with.”

A 2015 Wall Street Journal story provided details of the administration’s domestic espionage operation. “The National Security Agency’s targeting of Israeli leaders and officials also swept up the contents of some of their private conversations with U.S. lawmakers and American-Jewish groups,” explained writers Adam Entous and Danny Yadron. “That raised fears—an ‘Oh-s— moment,’ one senior U.S. official said—that the executive branch would be accused of spying on Congress.”

The names of Americans are minimized in transcripts of intercepted foreign communications to protect their privacy. For instance, an American swept up in an intercept might be referred to as a “U.S. Person.” It is not illegal or even necessarily improper for U.S. officials to deminimize, or “unmask,” their identities and find out who “U.S. Person” is, provided there are genuine national security reasons for doing so.

The story the Journal tells is evidence Obama officials knew what they were doing was wrong. In the account shaped by the Obama team, responsibility fell on the shoulders of the National Security Agency, responsible for the bulk of America’s signals intelligence. White House officials “let the NSA decide what to share and what to withhold,” according to the Journal story. “We didn’t say, ‘do it,’” a senior U.S. official said. “We didn’t say, ‘don’t do it.’”

Any use of NSA intercepts to target Jewish organizations and anti-Iran Deal legislators would not be an innocent mistake. Obama aides would know they were abusing surveillance programs ostensibly pointed at Israeli officials if they used them to know which US lawmakers and pro-Israel activists were planning to oppose the deal, what they were saying, and who they were talking to. Indeed, it appears that to get in front of the possibility that their domestic spying operation would be exposed, Obama officials leaked it to friendly reporters in order to shape the story to their advantage: OK, yes, we heard, but only by accident. And in any case, it was the NSA that passed it on to us.

In June 2015, a month before the deal was struck in Vienna, Michael Flynn was on Capitol Hill testifying about Iran and the deeply flawed deal on the table. He described Iran’s destabilizing actions throughout the region, how the regime killed American troops in Iraq and later Afghanistan. He warned about Iran’s ties to North Korea, China, and Russia. Flynn emphasized that Iran’s “stated desire to destroy Israel is very real.” He said Obama’s Iran policy was one of “willful ignorance.”

As the 2016 election cycle approached, a number of Republican candidates solicited his advice—including Ben Carson, Carly Fiorina, and Ted Cruz. In a sense, the retired general chose Trump as much as Trump chose him. At the time, the candidate’s understanding of what he called “the swamp”—a confederation of bureaucrats, elected officials, consultants, and contractors enriching themselves at the expense of the American taxpayer, was mostly theoretical. From Trump Tower in New York City more than 200 miles away, Washington sure looked wasteful. But Flynn had detailed knowledge of how the Beltway worked.

The two hit it off and Flynn traveled with the candidate regularly. He was vetted for the vice presidency, but Trump decided instead on Mike Pence, a congressman from Indiana who could help win both the evangelical and the Midwestern vote. Still, outside of Trump’s own family, Flynn was his closest adviser. The foreign policy initiatives he articulated were the president-elect’s and when he spoke to foreign officials, he was speaking for Trump.

Flynn not only made it clear that he wanted to undo the Iran Deal, he also broadcast his determination to find the documents detailing the secret deals between Obama and Iran, and to publicize them. With Flynn on the march, the outgoing administration was keen to shield the JCPOA. Obama diplomats consulted with their European counterparts and gave the clerical regime more sanctions relief, even after the Senate agreed with a 99 to 0 vote to renew the Iran Sanctions Act. Kerry called his Iranian counterpart to tell him not to worry.

Notably, Russia weighed in on the Obama team’s side. It would be “unforgivable,” according to the Russian Foreign Ministry, if the incoming Trump administration forfeited the JCPOA. The White House agreed to let Russia export more than 100 tons of uranium to Iran—enough to make more than 10 bombs, according to some estimates. “The point was to complicate any effort to tear up the deal,” says a senior U.S. official involved in the fight over the JCPOA. “It gave Iran an insurance policy against Trump.”

By early December 2016, only weeks after Trump’s surprise election, the anti-Flynn campaign was well underway. A December 3, 2016, New York Times article portrayed Flynn as a martinet who brooked no disagreement, and insisted his subordinates corroborate the intelligence assessments he sought. In his worldview, wrote the Times, “America was in a world war against Islamist militants allied with Russia, Cuba, and North Korea.” The piece carried the bylines of Matthew Rosenberg, Mark Mazzetti, and Eric Schmitt, with additional reporting by Adam Goldman and Michael S. Schmidt—reporters who would share in the Times’ 2018 Pulitzer Prize for national reporting on the Russiagate conspiracy theory.

Parts of the Times story were then recycled in a joint statement signed by progressive advocacy groups allied with the Obama White House in the Iran deal fight, like MoveOn.org and J Street, demanding Trump withdraw his appointment of Flynn. Among other concerns, the statement cited Flynn’s work on behalf of Turkish interests and, incongruously, his ostensibly negative views on Muslims, as expressed in his book—as well as his position on Iran.

A one-time USIC lawyer and editor at the national security bureaucracy blog Lawfare, who was destined to become a leading Russiagate conspiracy theorist, highlighted sections from Flynn’s book on social media. “Shocking,” tweeted Susan Hennessey. It had only been a year and a half since the Obama team had steamrolled congress to win the JCPOA and now their communications infrastructure had swung into action again to protect the Iran Deal from the Trump White House.

It was in this early December 2016 period when the Iran deal spying and media operation merged into Russiagate. The structure of the two operations was identical—only some of the variables had changed. Opponents were no longer tagged as Israel-firsters, now they were Putin assets. The message, however, was the same. Opponents are not simply wrongheaded, or mistaken, or even dumb—rather, they are disloyal; agents of a foreign power.

Clandestine spying targeting Flynn began no later than Dec. 2. That day, DNI James Clapper and U.N. Ambassador Samantha Power unmasked Flynn’s name from a classified U.S. intercept of communications between Russian officials. It seems the Obama officials were interested in a Trump Tower meeting Flynn and Jared Kushner held with Russia’s U.S. Ambassador Sergey Kislyak. The envoy then reported his meeting to Moscow, communications that U.S. officials appear to have leaked to Pulitzer Prize-winning Washington Post reporters Greg Miller, Ellen Nakashima, and Adam Entous, who had moved over from The Wall Street Journal.

Leaking information from classified intercepts is a felony. Concerned U.S. officials’ use of the press to illuminate government crimes and abuses is a keystone of the American political process. However, the many times that Flynn’s name was illegally leaked from intercepts during the transition period and the first several weeks of the new administration shows that the classified information passed to journalists was not whistleblowing but was instead an aspect of the political surveillance operation targeting the Trump team.

According to a recently declassified document, there were 39 Obama officials who unmasked Flynn’s identity a total of 53 times. Power led the list with seven unmaskings of Flynn—a small part of her sum total of more than 330 unmaskings between 2015-16, making her, according to former Congressman Trey Gowdy, the “largest unmasker of U.S. persons in our history.”

Power was one of 30 Obama officials who unmasked Flynn between Dec. 14-16. The list includes Clapper, Brennan, FBI Director James Comey and Treasury Secretary Jacob Lew, as well as six other Treasury officials including Patrick Cronin, the director of the Office of Intelligence and Analysis—Treasury’s intelligence shop. It appears they were interested in a Dec. 15 meeting in which Flynn, Kushner, and Steve Bannon hosted the crown prince of the United Arab Emirates, Sheikh Mohammed bin Zayed al-Nahyan.

Obama’s former National Security Adviser Susan Rice also unmasked Flynn for this meeting, though she’s not on the declassified Flynn unmasking list. She said that she was irked Emirati leadership had come to the United States without notifying the Obama White House. Rice’s description of her emotional state may well be accurate, though it doesn’t explain why she requested the identities of presidential transition officials.

But it’s not hard to figure out why she and 30 other Obama officials wanted to know about that meeting. Spying on the Trump team’s conversations with Arab officials would tell them how the next administration’s Middle East policies would affect Obama’s, especially the JCPOA. Seven Treasury officials spying on the same meeting suggests they wanted to know about Trump’s plans for Iran sanctions. Sure, John Kerry told the Iranians not to worry about sanctions, but what could the Obama team do to counter Trump if he was planning to restore them?

On Dec. 22, Flynn spoke with Russian Ambassador Kislyak about the vote scheduled to take place at the United Nations the next day. The Obama team had coaxed Egypt into introducing U.N. Security Council Resolution 2334, holding that Israel was occupying the territories it had taken in the June 1967 war. Israel, according to 2334, was in “flagrant violation” of international law. Under the terms of the resolution, even the Western Wall of the Temple Mount was an illegal Israeli settlement.

President-elect Trump got Egyptian President Abdel-Fattah el-Sissi on the phone on Dec. 22 and convinced him to withdraw the proposal. But the transition team knew someone else would sponsor the resolution. Flynn was speaking with foreign officials from Israel, Egypt, and Senegal—which at the time held one of the rotating positions on the security council. Flynn later told the FBI that he knew the math and at least five countries had to abstain to block the resolution and he didn’t think his calls would affect the final vote. He compared the exercise to a battle drill, to see how quickly he could get foreign officials on the phone.

The FBI knew that Flynn had called Kislyak, too. It’s not clear when the bureau learned of the call but they asked him about it during his pivotal Jan. 24 interview. Flynn said he didn’t try to influence the Russian envoy, but just wanted to know where the Russians stood.

The next day UNSCR 2334 passed 14-0, with Samantha Power casting a vote to abstain, forsaking America’s customary role of blocking anti-Israel actions at the U.N. Obama had reinforced his regional realignment strategy by balancing opposing forces—weakening Israel and empowering the Palestinians. That’s the generous reading. It was the 44th president’s parting shot at America’s most important regional ally.

Within the week, Obama aides were zeroing in on Flynn. The outgoing White House claimed it wanted to know why Putin announced on Dec. 30 that he would refrain from responding to the expulsion of dozens of Russian diplomats. The FBI said it had an answer—the bureau had a record of a phone call between Kislyak and Flynn from the day before Putin made his decision public.

Former FBI Deputy Director Andrew McCabe writes in his 2019 book, The Threat, that he was alerted to the information by an analyst and passed it on to Comey, who told Clapper, who briefed Obama. Comey corroborated McCabe’s account in congressional testimony, while Clapper swore under oath that he did not brief the president.

Clapper may be telling the truth. The unmasking list shows that Obama officials were listening in on Flynn’s conversations in real time. It’s possible Obama didn’t need Clapper to tell him about the call. According to former Deputy Attorney General Sally Yates, Obama knew about the Flynn-Kislyak call no later than Jan. 5, when he was discussing it in an Oval Office meeting. She says Comey was the only other official present—which contradicts Susan Rice’s account. Obama’s former National Security Advisor said she and Vice President Joe Biden were also there.

This week, acting DNI Richard Grenell declassified a previously redacted passage from an email Rice sent to herself on inauguration day 2017 regarding the Jan. 5 meeting. The newly unredacted section showed that Obama was fully read into the anti-Flynn operation.

According to the Rice email, Obama asked if the FBI director was saying that they “should not pass sensitive information related to Russia to Flynn.” Obama knew at the time there was no evidence that Flynn had any untoward relationship with Russia—the FBI had been investigating the allegations for more than four months and found “no derogatory information” on Flynn.

On Jan. 7, the DNI official who gave Obama his daily intelligence briefing requested to have Flynn’s name unmasked, making the information accessible to numerous Obama officials with whom the briefing was shared, and thus expanding the pool of possible sources.

Adam Entous was offered the leak of the Dec. 29 call early on. “I didn’t know what to make of it,” the writer, now at The New Yorker, told a Georgetown audience. “There were divisions within the newsroom. At that point, I’m at The Washington Post. There are divisions about this: Why is it news that Michael Flynn is talking to the Russian ambassador? He should be talking to the Russian ambassador.”

Then the leak was offered to Entous’ Post colleague David Ignatius. “This is something a columnist can do, unlike me as a news reporter,” said Entous. “He was able to just throw this piece of red meat out there.” Indeed, it’s how the Obama team intended to bloody the waters. On Jan. 10, according to Flynn’s lawyer Sidney Powell, Clapper told Ignatius to “take the kill shot on Flynn.” Ignatius published the leak in his Jan. 12 column, describing Flynn’s Dec. 29 conversation with Kislyak. “According to a senior U.S. government official,” wrote Ignatius, “Flynn phoned Russian Ambassador Sergey Kislyak several times on Dec. 29, the day the Obama administration announced the expulsion of 35 Russian officials … What did Flynn say, and did it undercut the U.S. sanctions?”

The story ignited the Trump-Russia collusion narrative, which was intended to damage Flynn while disguising the nature and purpose of the campaign. The criminal leak of a classified intercept was evidence that the Obama White House was spying on the transition team, and for the same reason they’d spied on lawmakers and pro-Israel activists—to know the plans of Iran deal opponents.

To conceal their illegal surveillance of the incoming NSA and other Trump officials, Obama aides repurposed Hillary Clinton’s Trump-Russia collusion narrative, which had fed dozens of pre-election news reports and won the FBI a warrant to spy on the Trump campaign. Now the media had the Trump White House on the defensive, identifying likely “points of collusion” everywhere, while covering up Obama’s spying operation.

The outgoing administration caught another break when the transition team made an unforced error. Days after the Ignatius story broke, Vice President Mike Pence said on TV that Flynn had assured him there was no talk of sanctions. Either Pence had misunderstood, or Flynn didn’t explain himself clearly enough. Later Flynn took responsibility for the mix-up. He was sorry he’d put Pence “in a position,” and he “should have said, ‘I don’t know. I can’t recall,’ which is the truth.” Flynn further elaborated on the call with Kislyak: “It wasn’t about sanctions. It was about the 35 guys who were thrown out.” Flynn said that he told the Russian envoy when they come to office, “’We’ll review everything.’ I never said anything such as, ‘We’re going to review sanctions,’ or anything like that.”

There was no promise to relieve sanctions on Russia and tamper with Obama’s policy before Trump came to office, never mind collusion. But the discrepancy between Pence’s statement and the transcript of Flynn’s conversation with Kislyak gave Comey and McCabe a window of opportunity. On Jan. 24, they sent two FBI agents to interview Flynn at the White House. They came back and reported that they didn’t think Flynn lied. That didn’t matter either. The FBI edited the record of the interview.

Meanwhile, Flynn continued to do the job the president had chosen him for. After Iran conducted a ballistic missile test and its Yemeni proxies attacked a Saudi naval ship, he announced in the White House press room: “As of today, we are officially putting Iran on notice.” Former Obama aides fumed: The Trump administration had no choice but to stay in the JCPOA. Then they flipped through the dog-eared pages of the Iran Deal playbook and pushed into the press rumors regarding the loyalties of a combat veteran who served his country in uniform for more than three decades. Had Michael Flynn sold out his country to Russia?

On Feb. 9, Entous finally got his chance to publish the leaked intercept of the Kislyak call. He and Washington Post colleagues Greg Miller and Ellen Nakashima found nine current and former U.S. officials to confirm that Flynn had discussed sanctions with the Russian. It went unremarked that the article provided evidence of yet another leak of Flynn’s name from a classified intercept, and thus proof of a massive spying operation targeting the Trump team.

Trump had been warned. Obama was serious when he told him not to bring on Flynn. The new president’s hand was forced, and the national security adviser left the White House on Feb. 13. Within the year, prosecutors from Robert Mueller’s special counsel investigation threatened to charge Flynn’s son with lobbying violations if he didn’t plead guilty to making false statements to the FBI.

By then, Russiagate was in overdrive—one of the most destructive conspiracy theories in U.S. history was well on its way to poisoning minds around the country. It appeared to cast an even deeper spell on the elite urban classes whose peers in the press and government had fueled it in the name of “resisting” Trump. And yet only a small fraction of those who imagined themselves to have the inside story of the Trump team’s secret collusion with Russia to defeat Clinton understood the origins of the fantasy world they had been engulfed by.

Russiagate was not a hoax, as some conservative journalists call it. Rather, it was a purposeful extension of the Obama administration’s Iran Deal media campaign, and of the secret espionage operation targeting those opposed to Obama’s efforts to realign American interests with those of a terror state that embodies the most corrosive forms of anti-Semitism.

It’s not hard to see why the previous president went after Flynn: The retired general’s determination to undo the Iran Deal was grounded in his own experience in two Middle Eastern theaters of combat, where he saw how Iran murdered Americans and threatened American interests. But why Obama would choose the Islamic Republic as a partner and encourage the tactics typically employed by third-world police states remain a mystery. (reprinted in full from The Tablet)

 

 

 

Google Sent Users 40,000 Warnings

Primer questions: Did other tech companies do the same and if so, how many? What does Congress know and where are they with a real cyber policy?

Google’s threat analysis group, which counters targeted and government-backed hacking against the company and its users, sent account holders almost 40,000 warnings in 2019, with government officials, journalists, dissidents, and geopolitical rivals being the most targeted, team members said on Thursday.

The number of warnings declined almost 25 percent from 2018, in part because of new protections designed to curb cyberattacks on Google properties. Attackers have responded by reducing the frequency of their hack attempts and being more deliberate. The group saw an increase in phishing attacks that impersonated news outlets and journalists. In many of these cases, attackers sought to spread disinformation by attempting to seed false stories with other reporters. Other times, attackers sent several benign messages in hopes of building a rapport with a journalist or foreign policy expert. The attackers, who most frequently came from Iran and North Korea, would later follow up with an email that included a malicious attachment.

Color-coded Mercator projection of the world.

“Government-backed attackers regularly target foreign policy experts for their research, access to the organizations they work with, and connection to fellow researchers or policymakers for subsequent attacks,” Toni Gidwani, a security engineering manager in the threat analysis group, wrote in a post.

Top targets

Countries with residents that collectively received more than 1,000 warnings included the United States, India, Pakistan, Japan, and South Korea. Thursday’s post came eight months after Microsoft said it had warned 10,000 customers of nation-sponsored attacks over the 12 previous months. The software maker said it saw “extensive” activity from five specific groups sponsored by Iran, North Korea, and Russia.

Thursday’s post also tracked targeted attacks carried out by Sandworm, believed to be an attack group working on behalf of the Russian Federation. Sandworm has been responsible for some of the world’s most severe attacks, including hacks on Ukrainian power facilities that left the country without electricity in 2015 and 2016, NATO and the governments of Ukraine and Poland in 2014, and according to Wired journalist Andy Greenberg, the NotPetya malware that created worldwide outages, some that lasted weeks.

The following graph shows Sandworm’s targeting of various industries and countries from 2017 to 2019. While the targeting of most of the industries or countries was sporadic, Ukraine was on the receiving end of attacks throughout the entire three-year period:

Sandworm’s targeting efforts (mostly by sector) over the last three years.
Enlarge / Sandworm’s targeting efforts (mostly by sector) over the last three years.
Google

Tracking zero-days

In 2019, the Google group discovered zero-day vulnerabilities affecting Android, iOS, Windows, Chrome, and Internet Explorer. A single attack group was responsible for exploiting five of the unpatched security flaws. The attacks were used against Google, Google account holders, and users of other platforms.

“Finding this many zeroday exploits from the same actor in a relatively short time frame is rare,” Gidwani wrote.

The exploits came from legitimate websites that had been hacked, links to malicious websites, and attachments embedded in spear-phishing emails. Most of the targets were in North Korea or were against individuals working on North Korea-related issues.

The group’s policy is to privately inform developers of the affected software and give them seven days to release a fix or publish an advisory. If the companies don’t meet that deadline, Google releases its own advisory.

One observation that Google users should note: of all the phishing attacks the company has seen in the past few years, none has resulted in a takeover of accounts protected by the account protection program, which among other things makes multifactor authentication mandatory. Once people have two physical security keys from Yubi or another manufacturer, enrolling in the program takes less than five minutes.

Rogue Nations Competing with the X-37B

The Air Force’s X-37B Orbital Test Vehicle Mission 5 successfully landed at NASA’s Kennedy Space Center Shuttle Landing Facility Oct. 27, 2019. The X-37B OTV is an experimental test program to demonstrate technologies for a reliable, reusable, unmanned space test platform for the U.S. Air Force. (Courtesy photo) source

America’s four greatest adversaries are investing in systems that can take out satellites on orbit, including funding laser systems, nuclear power and satellites that shadow American space vehicles.

Russia, China, Iran and North Korea are each researching counterspace capabilities — kinetic or nonkinetic ways to taking out systems in space — according to the annual Global Counterspace Capabilities report, released by the Secure World Foundation.

Defense News was given an exclusive preview of the report, which will available later today and was edited by Brian Weeden and Victoria Samson.

For the first time, the report includes data on the space situational awareness (SSA) capabilities of countries — that is, the ability of nations to track what is moving in various orbits. Japan and India are two nations investing heavily in that area, according to the report, while Iran appears to lag behind.

“This is important because you can’t protect [against] what you can’t see,” said Samson, the organization’s Washington office director. “This doesn’t mean that developing an SSA capability is an indication of an offensive counterspace program, as there are many reasons why you would want that capability. But it is needed if you want to go offensive.”

  The Indian Space Research Organisation’s (ISRO) GSAT-9 on board the Geosynchronous Satellite Launch Vehicle (GSLV-F09), launches in Sriharikota in the state of Andhra Pradesh on May 5, 2017. / AFP PHOTO / ARUN SANKAR (Photo credit should read ARUN SANKAR/AFP/Getty Images)

She also highlighted the fact that in the last year, four of the countries with counterspace investments — India, Japan, France and the U.S. — have launched new military organizations specifically to deal with space-related issues, including a focus, at least in part, on counterspace efforts. In addition, the NATO alliance declared space an “operational domain” in December.

The vast majority of counterspace capabilities continue to reside with Russia, China and the United States, but other nations are funding programs as well. France, India, Japan, Iran and North Korea are all known to be at least investing some money in counterspace efforts, whether through ballistic missile programs or non-kinetic means such as cyberattacks.

The most prominent counterspace example of the last year came from India, which in March controversially launched a missile at one of its satellites, blowing it up and spewing shrapnel around low-earth orbit.

So is a counterspace arms race underway? The authors say no, at least in the context of the nuclear arms race where each country is trying to match the other capability for capability.

Instead, “this is about developing a range of offensive and defensive capabilities to go after an opponent’s space assets while protecting your own,” said Weeden, the organization’s director of program planning. “And I think that’s unfortunately inevitable because more and more countries are using space for military purposes. That drives increased interest in how to counter those uses.”

Added Samson, “it now seems that if you want to be considered a major space power, it’s not enough to have your own satellites, or the ability to launch them, or even the ability to launch other country’s satellites. You want your own counterspace capability.”

The big three

When Pentagon and White House officials talked about the need for a Space Force last year, leaders emphasized a growing threat in space.

“For all their posturing about who’s ‘weaponizing’ space, the big three are all working on a lot of the same technologies and doing a lot of the same things,” particularly rendezvous and proximity operations (RPO) where satellites can maneuver near another nation’s system, said Weeden.

The big three in this case are China, Russian and the United States.

China has run multiple maneuvers with its space-based systems that may be RPO-related, but it’s hard to know whether those capabilities are being developed for counterspace use as opposed to intelligence gathering, the report said.

When it comes to Chinese capabilities, Weeden said to focus on the ground-based anti-satellite weaponry — perhaps not a surprise, given China declared itself a player in counterspace technology by destroying one of its own satellites in 2007.

Beijing is investing in at least one, and perhaps as many as three, kinetic anti-satellite capabilities, “either as dedicated counterspace systems or as mid-course missile defense systems that could provide counterspace capabilities,” according to the report.

“It was robustly tested and appears to be operationally deployed,” Weeden said of those capabilities. “As long as the U.S. still relies on small numbers of very expensive satellites in LEO, I think it will prove to be a significant deterrent.”

While China often becomes the focus of public comments from Defense officials, Weeden said to keep an eye on Moscow, as he was “a bit shocked by the breadth of Russian counterspace programs. For all the concern and hype in the U.S. about China, Russia seems to be putting the most into counterspace.”

Those efforts include the Nudol, a ground-launched ballistic missile designed to be capable of intercepting targets in low-earth orbit; three different programs focused on RPO capabilities; the rebirth of an 1980s era program involving a large laser, to either dazzle or damage a satellite, carried about an IL-76MD-90A transport aircraft; a newly-discovered program called Ekipazh, which involves a nuclear reactor to power a large payload of on-orbit jammers; and what Weeden describes as a “massive” upgrade to SSA capabilities.

“All of that spells a very potent, more operationally-integrated, and more battle-tested package than what I’m seeing in China,” he warned. He added that he believes the public focus on China to be “part of the broader narrative the Trump administration is trying to push with China being the long-term threat they want to focus on. It also helps sell the narrative they’re trying to push on human spaceflight and exploration as well.”

As for the United States, the military has focused more on SSA and defensive counterspace capabilities, a trend Weeden says is due to America being the most reliant on space of the three countries, and hence must “protect its capabilities if it hopes to win a future conflict against Russia or China.” America’s SSA capabilities, in particular, remain well ahead of the rest of the world.

Which isn’t to say the U.S. is skipping out on counterspace investments either. America has a number of options for electronic warfare in space, including proven capabilities to jam enemy receivers within an area of operations; assets with RPO capabilities; and operational midcourse missile defense interceptors that have been demonstrated against low orbit satellites. In addition, there are plans to invest in prototyping directed energy capabilities for space.

One capability to keep an eye on is the X-37B, a spaceplane program that has made five trips into orbit and back to earth. In total, the spacecrafts have spent 2,865 days on orbit cumulatively over its five missions, with its last trip consisting of 780 days in space — more than two years.

The Air Force has been secretive about X-37B missions, often talking broadly about it conducting experiments in space; analysts have long believed that the mission set has at least something to do with counterspace capabilities. That belief was only strengthened by what happened during its last trip during which researchers believe it was used to launch a trio of small cubesats which were not registered in international tracking databases.

“The secret deployment of multiple small satellites raises additional questions about the mission of the X-37B. It suggests that the X-37B may have a mission to serve as a covert satellite deployment platform. The secrecy surrounding both the X-37B and the deployment may indicate they are part of a covert intelligence program, but it may also indicate the testing of offensive technologies or capabilities,” the authors wrote in the report. “The failure to even catalog the deployed satellites, something that is done even for classified U.S. military and intelligence satellites, calls into question the trustworthiness of the public SSA data provided by the U.S. military.”

And that creates potential diplomatic issues, at a time that the need for open discussions about space capabilities across nations should be growing, warned Samson.

“The Russians and Chinese have always pointed at the secrecy surrounding the X-37B program as evidence of malevolent intentions by the United States,” she said. “The fact that the U.S. released objects from the X-37B and didn’t register them feeds absolutely into that narrative and causes ripple effects that harm other multilateral discussions on space security and stability.”

Govt Report on Prevention of Nationwide Cyber Catastrophe

A good first step for sure, however there needs to be a government-wide decision on cyber attacks being an act of war and how to respond.

***

The Cyberspace Solarium Commission’s proposes a strategy of layered cyber deterrence. Our report consists of over 80 recommendations to implement the strategy. These recommendations are organized into 6 pillars:
  1. Reform the U.S. Government’s Structure and Organization for Cyberspace.
  2. Strengthen Norms and Non-Military Tools.
  3. Promote National Resilience.
  4. Reshape the Cyber Ecosystem.
  5. Operationalize Cybersecurity Collaboration with the Private Sector.
  6. Preserve and Employ the Military Instrument of National Power.

Click here to download the full report.

A much-anticipated government report aimed at defending the nation against cyber threats in the years to come opens with a bleak preview of what could happen if critical systems were brought down.

“The water in the Potomac still has that red tint from where the treatment plants upstream were hacked, their automated systems tricked into flushing out the wrong mix of chemicals,” the Cyberspace Solarium Commission wrote in the opening lines of its report.

“By comparison, the water in the Lincoln Memorial Reflecting Pool has a purple glint to it. They’ve pumped out the floodwaters that covered Washington’s low-lying areas after the region’s reservoirs were hit in a cascade of sensor hacks,” it continues.

So begins the report two years in the making from a congressionally mandated commission made up of lawmakers and top Trump administration officials, pointing to the vulnerabilities involved with critical systems being hooked up to the internet.

The report, which includes more than 75 recommendations for how to prevent the cyber doomsday it spells out, and the commission that made it were both mandated by the 2019 National Defense Authorization Act (NDAA).

The commissioners, who include co-chairmen Sen. Angus King (I-Maine) and Rep. Mike Gallagher (R-Wis.), highlight a range of issues to address, but zero in on election security as “priority.”

“The American people still do not have the assurance that our election systems are secure from foreign manipulation,” King and Gallagher wrote in the report. “If we don’t get election security right, deterrence will fail and future generations will look back with longing and regret on the once powerful American Republic and wonder how we screwed the whole thing up.”

The focus on shoring up election security, and the agreed-upon recommendations for how to do this, sets the report apart from the approach to the subject on Capitol Hill, where it has been a major issue of contention between Republicans and Democrats since Russian interference in the 2016 presidential election.

Beyond election security, the commissioners call for overarching government reform to address cyber vulnerabilities. Chief among these is calling on the White House to issue an updated national strategy to address cyber threats and to establish a national cybersecurity director position to coordinate efforts.

In terms of congressional action, commissioners recommend that Congress create cybersecurity committees in both the House and Senate, establish a Bureau of Cybersecurity Statistics, and establish an assistant secretary position at the State Department to lead international efforts around cybersecurity.

“While cyberspace has transformed the American economy and society, the government has not kept up,” commissioners wrote in calling for reforms.

The commission also zeroed in on “imposing costs” to adversaries who attempt to attack the U.S. online. In order to do so, it recommended that the Department of Defense conduct vulnerability assessments of its weapons systems, including nuclear control systems, and that it make cybersecurity preparedness a necessity.

The Cybersecurity and Infrastructure Security Agency, the Department of Homeland Security’s cyber agency, would be empowered as the “lead agency” at the federal level.

The report’s recommendations were debated on and pinpointed by a group of high-ranking commissioners who also included FBI Director Christopher Wray, Deputy Secretary of Defense David Norquist, Transportation Security Administration Administrator David Pekoske, Sen. Ben Sasse (R-Neb.), and Rep. James Langevin (D-R.I.).

Langevin said in a statement on Wednesday that the report is intended to shore up the nation’s cyber “resiliency for years to come.”

“Our charge in drafting this report was to prevent a cyber event of significant national consequence, and we know that the short- and long-term recommendations we crafted will better position us to realize the promise of the Internet, while avoiding its perils,” Langevin said. “The sooner our recommendations are implemented, the better positioned the country will be to prevent and respond to incidents that can disrupt the American way of life.”

The report’s recommendations may soon have real-world consequences on Capitol Hill.

Rep. John Katko (R-N.Y.), the ranking member on the House Homeland Security Committee’s cyber panel, told The Hill this week that there “definitely will be some legislation” stemming from the report’s recommendations, and that hearings would likely be held.

Katko noted that he had talked with Senate Homeland Security Committee Chairman Ron Johnson (R-Wis.) about the Senate also taking action around the report.

“This report screams of the need for bipartisan action on this, and I hope that we can leave the politics out of it, and I hope we can attack these problems quickly and effectively,” Katko said.

Rep. Cedric Richmond (D-La.), the cyber subcommittee’s chairman, opened a hearing on Wednesday by praising the report’s recommendations and saying he looked forward to working to “codifying” the ideas alongside House Homeland Security Committee Chairman Bennie Thompson (D-Miss.).

Industry groups also reacted positively to the report’s recommendations. Tom Gann, the chief public policy officer of cybersecurity firm McAfee, told The Hill in a statement that he agreed with most of the report’s findings and hoped that they are “acted upon with speed.”

Protect Our Power, a nonprofit with the goal of protecting the electric grid, also praised the report.

“These are compelling recommendations, echoing issues we have highlighted for several years now, and action is long overdue,” Jim Cunningham, executive director of the group, said in a statement. “Without a reliable supply of electricity before, during and following a disabling cyberattack, none of our critical infrastructure can function.”

While there may be legislative action soon – and praise from industry groups – both Gallagher and King emphasized in the report that their main aim was for it to open the eyes of Americans to the dangers posed by cyberattacks on critical systems.

“The status quo is inviting attacks on America every second of every day,” the co-chairmen wrote. “We all want that to stop. So please do us, and your fellow Americans, a favor. Read this report and then demand that your government and the private sector act with speed and agility to secure our cyber future.”

Lebanon is Tail-Spinning into Default

BEIRUT (Reuters) – Lebanon announced it cannot meet its debt payments and halted a March 9 bond payment of $1.2 billion on Saturday, setting the heavily indebted state on course for a sovereign default as it grapples with a major financial crisis.

In a televised address to the nation, Prime Minister Hassan Diab said foreign currency reserves had hit a “critical and dangerous” level and were needed to meet basic needs. He called for “fair” negotiations with lenders to restructure the debt.

Lebanon to default on debt payments amid financial crisis ... source

The default will mark a new phase in a crisis that has hammered the economy since October, slicing around 40% off the value of the local currency, denying savers free access to their deposits and fuelling unemployment and unrest.

The crisis is seen as the biggest risk to Lebanon’s stability since the end of the 1975-90 civil war.

“How can we pay creditors abroad when the Lebanese cannot get their money from their bank accounts?” Diab said. “Our debt has become greater than Lebanon can bear, and greater than the ability of the Lebanese to meet interest payments.”

The long-brewing crisis came to a head last year as capital inflows slowed and protests erupted over decades of state corruption and bad governance.

“We are paying the price for the mistakes of the past years. Must we bequeath them to our children?” Diab said.

The Lebanese had “lived a dream that was a delusion as though things were just fine, while Lebanon was drowning in more debt”, he said.

There has been no sign of a bailout from foreign states that aided Lebanon in the past. Western governments insist Beirut first enact long-delayed reforms to fight waste and corruption.

Diab was appointed in January with backing from the Iran-backed group Hezbollah and its allies. Former prime minister Saad al-Hariri, a traditional ally of the West and Gulf Arab states, stayed out of the government.

NOT PRODUCTIVE ENOUGH

Diab, a little-known academic when he became prime minister, said corruption had drained the state while also criticizing economic policies adopted since the war. Lebanon was importing 80% of its needs and was not productive enough, he said.

Lebanon: near the Central Bank, new demonstrations against ...

He took aim at a banking system that drew capital to the country with dollar interest rates five to 10 times greater than those offered abroad.

“We do not need a banking sector four times the size of our economy. We will have to come up with a plan to restructure the banking sector,” he said.

The gross public debt has reached around 170% of gross domestic product, meaning Lebanon is close to being the world’s most heavily indebted state, he added.

Citing the World Bank, Diab said more than 40% of people could soon find themselves under the poverty line. Lebanon has a population of around 6 million, including about 1 million Syrian refugees.

Lebanon has a total of some $31 billion in dollar bonds that sources told Reuters on Friday the government would seek to restructure.

A set of Lebanon’s bond holders are to step up efforts to form a creditor group in the coming days, one of the members of the group said.

“From what we understand the government wants to be reasonable and so do most creditors. They understand the country is in a difficult situation,” the member said.

Lebanon’s public debt is worth about $89.5 billion, with around 37% of that in foreign currency.

Lebanon has sought technical but not financial assistance from the IMF, though many analysts believe that the only way for the country to secure financial support would be through an IMF program.

“Watch now if bondholders can block any deal,” said Nick Eisinger, principal, fixed income emerging markets at Vanguard, which holds some Lebanese debt but has been underweight in the market for a long time.

“It’s unclear how quick they can go down the restructuring route or get a deal because they need reforms first or at the same time,” he said.

Banks began restricting cash withdrawals and transfers abroad four months ago. Diab indicated the controls could soon be standardized, saying a draft law would “regulate the relationship between the banks and their customers, for it to become more fair and just”.