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Looking Ahead To 2019

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INHERITANCE OF THE 2018 TRANSFORMATIVE TRENDS AFFECTING 2019

The main transformative trends in 2018 that will affect next year will concern at least the following three different global and interconnected sectors: Economic & Financial Area; Security; Dismantling of the Old World Order.

Economic & Financial Area

Regarding the economic and financial area, it will be necessary to monitor the growing importance of advanced technologies and their applications in the production cycles of the most industrial nations. In the next year, we will face a sort of rationalization of these production processes that will profoundly change the evolution of the current social equilibrium within nations and also the relations between states and large financial organizations. According to some analytical studies, a third of US workforce (about 50 million people) could be transformed by 2020. Furthermore, we will witness the explosion of new markets based on the technological needs of the elderly and the disabled people. We will also face the increase of cryptocurrencies. The knowledge and management of new technologies – ICT, AI, blockchain. 3D printing mainly – will constitute the challenge of the next decade between the major world powers and the main investment groups.

Security

The impact of the advanced technologies on geostrategic decisions will increase. The new technologies will contribute to impressing, in 2019, a decisive turning point in what we can define henceforth as a new global revolution in military affairs. The military-industrial-financial complexes of the major world powers will undergo a complete transformation starting from 2019.

Dismantling of the Old World Order

Another important trend that will affect the global level concerns the dismantling of the old world order based on the criteria of multilateralism. In 2019, we will witness the weakening of large global organizations such as the UN and the reorganization of multilateral consultations regarding international trade, climate issues and regulations on the use of new technologies. This will happen for two main reasons. The first is due to the growing presence and importance of global players of nations like China, Russia, and India, who obviously try to implement their 360 degree spheres of influence, even outside the old institutions born in the so-called bipolar era, when the destinies of the world were substantially decided in Moscow and Washington. The second reason is due to the putting into practice of the “Trump Doctrine,” which, over the past two years, has placed a particularly bilateral strategy on U.S. foreign policy, upsetting the old equilibria.

2019: KEY GEOPOLITICAL CHALLENGES

European Union

A very important transformative trend will concern the European Union. 2018 has been a very critical year for the EU, both on the economic level, but above all on the political and social ones. 2019 will be a year in which the fate of the “European Common House” will be decided. As a consequence of the neopopulist waves and the so-called sovereignist ones that marked the social and political life of the Europeans during 2017-2018, most likely, the elections for the renewal of the European Parliament will reward the anti-European parties. 2019 will therefore be a very unstable year for the economy and politics of the European Union.

Regarding Europe’s role at global level, we have to consider that the contentious relations between the U.S. and China as well as with Russia will impact the European Union in 2019.

For different and divergent aspects, the U.S., Russia, and China have an interest in weakening the European Union.

For the U.S., with Europe in the grip of a political, economic, and financial identity crisis, this situation would allow Washington to “manage” the U.S. economic recovery, especially now that the traditional British ally, thanks to Brexit, is released from the obligations that tied it to Brussels. Moreover, at a geostrategic level, the continuing European crisis allows the U.S. to gain time in making costly decisions and responsibilities in financial terms in the theatres of North Africa and the Middle East.

For Russia, the issue is more delicate and problematic. A weak European Union, according to the Kremlin, would be more malleable in relation to the Ukrainian issue and the sanctions regime that has influenced the Russian economy since 2014. But this could be true, for the short term. In fact, a European Union weakened in the medium and long term would be at the mercy of the strategic interests of the U.S., since the EU is the eastern periphery of the U.S. geopolitical system, built at the end of the Second World War. Ultimately, in the absence of a political EU, the true European “glue” would consist only of NATO’s military-diplomatic device: something that Moscow certainly should not wish.

A fragmented Europe, unable to have a coherent and unitary policy of infrastructural development, does not realistically have the useful force to negotiate – on the basis of equal geopolitical dignity – with China on the great project of the New Silk Road. For this reason, at the moment, a weak Europe is convenient for China. For Beijing it is easier and cheaper to negotiate with individual EU countries and, in some cases, even with regional administrations. Moreover, the absence of a truly European foreign policy allows China to operate in Africa without real competitors, apart from the U.S. and Russia.

Asia

The main geopolitical challenges in Asia will concern relations between the U.S., Japan, and China. Tokyo, although in line with U.S. policies, could be a point of mediation between the different positions of Washington and Beijing.

On the geostrategic level, Washington will have to follow up on the initiatives launched in 2018 with Pyongyang for a complete normalization of relations. It will be a bumpy route, because the conflicting interests of the U.S. and the People’s Republic of China remain in the background of the North Korean issue.

Another very controversial issue about the relations between the U.S. and China will concern Tibet. In particular, in the first months of 2019 Beijing and Washington will have to find a mediation in reference to the effects of the “Reciprocal Access to Tibet Act” (signed by President Trump at the end of 2018) that promotes the access to Tibet of U.S. diplomats, journalists and citizens and denies U.S. visas to Chinese officials considered responsible for blocking access to Tibet.

Another issue that will have considerable geopolitical impacts at regional and global levels is related to the Chinese project of the New Silk Road. Beijing – in order to achieve its objectives – will consolidate its relations with the Islamic Republic of Iran and the Russian Federation.

U.S.-China trade tensions impact

During 2018, the Trump administration has conducted a real trade war against China. In the next year this war will be in a certain way perfected. We have already had warnings of such kind: the arrest of Meng Wanzhou, chief financial officer and daughter of founder of high-tech giant Huawei, constitutes an example of the escalation of the U.S.-China tensions. The tensions between the U.S. and China are not just commercial, but strategic. The U.S. and China compete for technological supremacy. This strategic confrontation will affect the entire global system, impacting the worldwide financial system and determining choices of field between the various countries of the globe.

North Africa, Near and Middle East

In North Africa (particularly in Libya), Moscow’s stabilizing function is destined to grow in importance.

In 2019, we will witness a rearrangement of forces within the quadrants of the Near and Middle East. Despite the Kashoggi affair, the United States will strengthen its ties with Saudi Arabia and will target the new Israeli government to counter Iran’s presence.

The geopolitical and strategic dynamics concerning the area, however, will be affect by the increasing influence of the Russian Federation, Iran and Turkey in the course of the next year.

Central and South America

Although the US has regained some positions in South America, the Chinese presence and, partially also the Russian one, in the area will produce effects on the hegemonic attempt of the Trump Administration. The issue of migration is destined to play an increasing crucial role in Trump’s Central American policy.

An early version of the text appeared with The Diplomat magazine (interview with Kuo Mercy)

Intelligence

Hacking of the Newswires connected with Trading: A refresher for the business community

Bob Budahl

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This case I am touching on is regarding Leonid Momotok in which he and other traders used insider trading information from not yet released press releases to amass windfalls in illegal trading. He pleaded guilty to conspiracy to commit wire fraud in his role to hack into three business newswires and obtain through theft the information related to finance that enabled illegal trading advantages. Their trades resulted in at least $30million in illegal profits. He pleaded guilty and faced up to 20 years in prison, restitution, a fine and criminal forfeiture.

The crux of the enabling operation to obtain an illegal advantage was gained through computer hackers in Ukraine who gained intrusion into Marketwired L.P, PR Newswire Association LLC (PRN) and Business Wire (Newswire Companies).Marketwired is owned by NASDAQ Inc., Business Wire is part of the billionaire Warren Buffet’s Berkshire Hathaway and PR Newswire is a Cision unit. The hackers used cyber-attack methods to obtain entry into the Newswire Companies’ networks. Once in, they stole upcoming press announcements about earnings, gross margins, confidential and material financial information and revenue information. They even sent messages regarding their activities. They went on to state they had gained access to the log-on to 15 wire business employees. While the traders made lists of what information they wanted, the hackers provided instructions on how to access and use the overseas server networks. And by having insider information before the public release the traders capitalized by placing trades prior to release date of the press releases. Caterpillar, Hewlett Packard, Panera Bread, Home Depot and others were some of those affected regarding nonpublic information. The hackers received a percentage of the profits and received it through shell corporations.       

The Dubovoy Group defendants tried to avoid detection by spreading their trading to more than 10 brokers firms in various names, etc. They helped each other with the activities as much as able. They stole over 100,000 unpublished press releases. Leonid Momotok owned 1% interest in two of Arkadiy Dubovoy’s companies.“He advised Arkadiy Dubovoy how to trade using the stolen information, and he had formal trading authority for brokerage accounts used in the scheme but held in the name of other members of the Dubovoy Group, …p 12.’

Involvement in the apprehension and prosecution of the perpetrators included many government agencies. The President’s Financial Fraud Enforcement Task Force had a leading hand in the pursuit and prosecution.

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9-11 Terrorist Attack: Defensive countermeasures of deter and detect

Bob Budahl

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On September 11, 2001 at 8:46 a.m. an airliner slammed into the North Tower of the World Trade Center in New York City. At 9:03 a.m. a 2nd airliner slammed into the South Tower. The planes carried thousands of gallons of jet-fuel aboard in effect making them lethal weapons. Tens of thousands of people worked in these buildings daily and both buildings fell to the ground within 90 minutes. More than 2,600 people died in the World Trade Center tower attacks. Then at 9:37 a.m. a 3rd airliner rammed into the western side of the Pentagon. 125 people died in the Pentagon attack. And a 4thairliner was intended for attack in either the U.S. Capitol or White House but the heroics of passengers crashed the plane, hence thwarting the attack. A total of 256 people died in the four planes. The death toll even surpassed the Pearl Harbor attacks of 1941.

Those responsible for the horrific attack were 19 Arabs carrying out Islamist extremists plans. Their headquarters were located in Afghanistan. They were resourceful and some had lived in the United States for some time and four of them had trained to be pilots. They were not well educated. They carried out the terrible attacks with knives, cutters, mace, etc. And they had tried to bring down the World Trade Center in 1993 but failed however in the result killed six people and wounded a thousand. It was an effort led by Ramzi Yousef. Others including Omar Abdel Rahman who had plans to blow up the Lincoln and Holland tunnels and other New York City landmarks, but they were arrested. Ramzi Yousef and others had various other terror plans of which some succeeded and some fortunately did not.

Bin Ladin was known and thought to be a financier but not thought of as a terrorist leader until later. In 1998 Bin Ladin and four others issued a fatwa in which it was publicly declaring it was God’s order that Muslims should try to kill any American they could. Bin Ladin was a wealthy Saudi and had conducted jihadist activities against the Soviet Union. But he also held grievances against the United States such as a U.S. troop presence in Saudi Arabia. He recruited and trained followers in Afghanistan and continued carrying out acts of terror, including on the United States. His people attacked embassies, hotels, and even attempted to sink the USS Cole Navy Ship by a terrorist attack. His rhetoric is derived from Islam, history and the economic and political disorder in the area. He formed an alliance between the al Qaeda group he led and the Taliban. The Clinton administration had tried cruise missile strikes against al Qaeda in Afghanistan and tried to get the Taliban to force Bin Ladin to leave Afghanistan. The U.S. unsuccessfully utilized CIA paid foreign agents to try to capture or kill Bin Ladin and his group.

As early as 1998 or 1999 Bin Ladin had been contacted by Khalid Sheikh Mohammed with an idea of using the planes as a method of attacking the World Trade Center and other targets. The original plans were for 10 planes to target both east and west coasts of the United States. The CIA did uncover some reports of Bin Ladin’s intent on attacks. The U.S. continued its disruption attempts globally and also utilized diplomacy with countries. The “predator drone” was eventually fitted with a missile should an attack on Bin Ladin provide an opportunity. Some of the reasons and connections to the actions of the perpetrators of the planned 9-11 terrorist attack became apparent after the attack. Unrest had come to the surface in the time before the attack as the Taliban leader opposed attacking the United States, in contrast to Bin Ladin’s wishes.

On 9/11 the terrorists were successful in hijacking the four planes. The planes were being used as terrorist weapons and confusion was present with air control. But eventually the FAA and NORAD who controlled airspace did receive a “shoot down order” but it was after the plane in Pennsylvania had been forced down by passengers in the only way to stop the plane from being used as a weapon.      

The enactment of the United States “Patriot Act” removed barriers that had impeded terrorism investigations in their outlay, scope and means. And in effect sped up the investigation and prosecution of the defendants. The FBI was point on the investigation that followed the attack and the operation was named Operation PENTTBOM. At one time more than half of the FBI’s personnel worked on the case. They followed through on more than one-half million leads. It was the largest crime scene in the FBI’s history.  Also in the time period following the 9/11 attack the Department of Homeland Security was created in March 2003, which brought together 22 separate agencies and offices into a Cabinet level department. The 9/11 Commission had made several recommendations and in this report some details are brought forward. These would be included under the defensive counterintelligence support mode of operation and include the principles of deter and detect within the countermeasures. It included recognizing 72 fusion centers throughout the country which acts as a focal point for receipt, analysis and sharing of threat related information. Also establishing related training and informational programs to deal with threats. One such example is the National Terrorism Advisory System. And the DHS developed and implemented a risk-based transportation security strategy. An action taken such as strengthening airline passenger’s pre-screening and targeting terrorist travel will deter terrorists as they become aware of increased security measures and thwart terrorists from attempting to board airlines for terrorist activities. The airliner’s cabin cockpit doors have been hardened post-911 and Air Marshalls are used appropriately as well as some flight crew being eligible to carry firearms. The TSA behavior detection officers use non-intrusive behavior observation to identify people who may be high risk. The TSA also utilizes detection methods such as canine teams to sniff for explosives on passengers and in luggage. Post 9/11 all cargo on U.S. planes is screened commensurate with their checked luggage. The flights coming into the U.S. from foreign countries are required to provide information prior to departure and checks all passengers against watch lists the government utilizes such as the Secure Flight Program. It also increases efficiency by allowing those cross-checked with biometrics to have expedited travel.

Today a significant defensive countermeasure post-911 is that airlines now screen all checked and carry-on baggage for explosives. The U.S. has increased security of U.S. borders and identification documents. Certain areas are closely watched and critical security improvements along the Northern and maritime are emplaced. The Dept. Of Homeland Security has taken aggressive action to enhance the security of the nation’s infrastructure and also cyber infrastructure and networks. There in a federal government system cyber intrusion detection system which includes EINSTEIN and the National Cybersecurity and communications integration center is the nation’s hub for organizing cyber response efforts. DHS and DOD are working together to protect against threats to military and civilian computer systems and networks. This is another example of defensive countermeasures. DNDO is affiliated with nuclear detection and back in 2003 only 68% of arriving trucks and passenger vehicles were scanned along the northern border with no system on the southwest border. But today the systems scan 100% of all containerized cargo and personal vehicles arriving in the U.S. through land port of entries and up to 99% of sea containers. Counter-proliferation of nuclear and biological threats is a high priority of the DHS. The tragic occurrence of 9-11 has brought about real focus on the danger of leaving vulnerabilities open to exploitation. The DHS also has importantly increased efforts to track and disrupt terrorist financing through programs such as ECTF or Electronic Crimes Task Force.

Another action taken post-9/11 was the creation of the National Counterterrorism Center or NCTC which was to serve 5 functions which were; Threat Analysis, Identity Management, Information sharing, Strategic Operational Planning and National Intelligence Management.

The U.S. Department of Justice charged ZACARIAS MOUSSAOUI with numerous terrorism charges and indicates others involved in the terrorist acts. The United States Department of Defense obtained a video tape of Bin Ladin basically accepting responsibility of the 9-11 attacks and the DOD has a transcript of the video and a portion I will quote is as follows. UBL refers to Osama Bin Ladin: “UBL: The brothers, who conducted the operation, all they knew was that they have a martyrdom operation and we asked each of them to go to America but they didn’t know anything about the operation, not even one letter.  But they were trained and we did not reveal the operation to them until they are there and just before they boarded the planes.UBL: (…inaudible…) then he said: Those who were trained to fly didn’t know the others.”

Bin Ladin, America’s most wanted terrorist was killed by United States Special Forces in a compound in Pakistan on May 2, 2011. The CIA had been involved in investigating Bin Ladin for years.      

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Counterintelligence Threat Brief for Turkey

Bob Budahl

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I will provide a Counterintelligence threat brief on traditional and non-traditional Counterintelligence threats to non-security cleared individuals who are traveling to Turkey as business travelers or for personal reasons. MIT, the official Turkey intelligence agency is active. And non-traditional threats also exist as Turkey includes diverse elements of persons from different Muslim nations. Some of which include terrorist groups with their main base of operation located in a different country but also operating within Turkey. As seen in EurAsia Review, conflicts that were usually based on national interests today are based typically on non-national interests such as ethnicity, religion and culture. Asymmetric warfare rather than having a clear issue now has several. And a weaker enemy will use it strengths against a superior adversaries weaknesses.

Using OSINT (Open Source Intelligence) to conduct my research I uncovered motive for Turkey seeking intelligence from the United States. Turkey is a NATO ally and an American ally. However, that is the crux of their relationship. It has never encompassed social and economic theology. They are predominately a Muslim country and have disagreements about many aspects of wars and conflicts that the US had interests in such as Iraq and Syria. Turkey targets Kurd fighters in Syria while we support them. And they opposed the action President Trump put in place of recognizing Jerusalem as Israel’s Capitol. There is a great amount of suspicion and mistrust regarding the failed coup of President Erdoğan. And Fethullah Gülen, the suspected leader of the attempted coup resides in the United States and refuses to extradite him. They believe Gulen is responsible for the assassination of Russian ambassador Andrey Karlov. They have typically bought US military products and technology but have made a deal with Russia to purchase an advanced missile defense system. Andrew Brunson who is an American Pastor is being held and faces spying charges and thus far efforts to release him are unsuccessful. They are suspicious of everyone. They will not hesitate to leverage information acquired through their intelligence services from the United States or any source. Turkey has long been thought of as torn between the East and West. In Turkey if you access the internet via a local ISP they can install spyware on your computer that can control it. Charter Schools are being targeted by Turkey since Gulen was instrumental in them and that tie is enough for Erdogan to lash out. MIT-Turkey’s intelligence agency places agents in journalist positions as cover which often leads to someone divulging information that is considered private.

If Turkey has decided to spy on you it probably originates from passport screening. Some things that a US visitor should be aware of are to self-assess if you could be thought of as a terrorist, narcotics trafficker or criminal. Black market activity. Do not be caught with suspicious or incriminating luggage. Do not identify known associations that Turkey may find incriminating. They may utilize any of these ways to recruit you as an asset of theirs. Usually direct and indirect activities used in conducting their intelligence operations are non-threatening and unobtrusive. Beware of local laws and customs as one example is in Turkey derogatory comments regarding government and its leaders are prohibited. It may be illegal to use insulting language.

Information Turkey may covet and target from a target such as a defense contractor non-intelligence employee may include customer data, employee data, vendor information, pricing strategies, propriety information, technical plans, corporate strategies, financials, computer access protocols, acquisition strategies, investment date, business directories of phone and emails. They may be subtle and use elicitation to gain information slowly and by gaining your trust. Be alert for tips. Throw them off their own game by asking why they ask. Refer them to public sources if specifically targeted questions are posed. Or say you cannot discuss it or just do not know. Examples of things I would consider for combating their intelligence collection efforts are to use rental electronic devices. Disable the Wi-Fi. And on the flight travel with the device as carry-on luggage. Do not use foreign storage devices in your devices. Do not leave documents and information in your hotel room. Do not use the hotel safe. Select your own cab.

But sometimes harassment incidents are utilized and obviously are meant to intimidate or test a US citizen’s reactions. If harassment is selected to be used on a prospective recruit it can be used in a variety of means.

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