GENERAL KEITH ALEXANDER
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Former Director,
National Security Agency
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 "The Cipher Brief is
comprehensive, providing in-depth expertise that spans globally relevant
issues. In a world that is constantly changing, The Cipher Brief is
proactive in identifying the crucial conversations and engaging subject
matter experts in the public and private sectors to help drive
solutions."
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Today's Insight
DIY Defense Tech: More
Countries Seek Advanced Homegrown Weaponry | Will Edwards, The Cipher
Brief
A domestic defense industry has several benefits. Many countries view a
robust defense industry as a source of national pride. Countries such as
Israel, Taiwan, or South Korea face existential security threats, and
building weapons domestically hedges against isolation from the world
arms market in the event of a conflict.
Expert Commentary
India's Defense Industry:
Reach Still Outpaces Grasp | Vinay Kaushal, Distinguished Fellow, Institute for
Defence Studies and Analyses
"The broad goal of [Narendra Modi's] initiative is to encourage
Indian companies to participate more in the development and production of
platforms and systems in a cost-effective manner that is best suited for
specific Indian needs."
South Korean Defense Industry:
Time to Take Off the "Training Wheels?" | Daniel Yoon, Senior Market Analyst, Avascent Analytics
"The Republic of Korea harbors high ambitions for its defense
industrial base. The official rationale, of course, stems from the
existential threat provided by its northern neighbor and the real
possibility that Pyongyang will develop the ability to launch a
miniaturized nuclear warhead on a long-range ballistic missile within the
next decade."
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Today's Column: Fine Print
The More Said, the More
Questions Raised in Flynn Firing | Walter Pincus, The Cipher Brief
White House Chief of Staff Reince Priebus, during three Sunday television
interview programs, gave different and sometimes confusing stories about
what activities led to President Trump’s firing of his National Security
Advisor, Michael Flynn, and what still may be going on about that
situation.
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Podcasts
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15 Minutes
This week, The
Cipher Brief’s Executive Producer and Reporter Leone
Lakhani speaks to Vince Houghton, the curator and historian for The
International Spy Museum. With all the intrigue and mystique
surrounding the world of spies, the museum attracts hundreds of
thousands of visitors each year. But as Vince tells Leone, its main
mission is to educate the public about the real-life world of espionage
– and how spies have shaped the course of history.
Listen to 15 Minutes
with the Spy Museum's Vince Houghton on How Spies Shaped History -
or listen on iTunes
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The Cipher Take
Washington Post: North
Korean Officials May Come to U.S. for Talks
The Washington Post reported on
Sunday that North Korean officials may come to the United States to meet
with former U.S. officials in what is known as a Track 1.5 dialogue. This
would be the first such meeting in more than five years, and it could be
in indication North Korea perceives it has a new opportunity for dialogue
with a new U.S. president in power.
The Cipher Take:
Track 1 dialogues
occur between current officials on both sides and can result in binding
agreements, while Track 2 dialogues are normally between former officials
and/or subject matter experts. Although a Track 1.5 dialogue has current
officials from one side, no policy decisions can be made. However,
such a meeting could be a precursor for more substantive talks in the
future if it goes well. Trump has mentioned the possibility of
negotiations, and Pyongyang has kept the anti-U.S. rhetoric to a minimum.
While the conditions could be right for dialogue, the odds of any lasting
agreement are very low. In the past, a new administration has been an
opportunity for a blank slate in discussions, but in the end it has never
gone well. George W. Bush burned his bridges early on when he listed
North Korea as one of the nations that was part of the “Axis of Evil.”
Barack Obama made the Leap Day Agreement with North Korea in 2012 that
was supposed to halt North Korean nuclear and intercontinental ballistic
missile (ICBM) tests. North Korea tested an ICBM under the guise of a
satellite launch about a month later.
China Bans Coal Imports
from North Korea for All of 2017
Beijing’s Ministry of Commerce announced that, as of last Sunday, it will
ban all coal imports from North Korea in 2017. The decision aims to put
China in compliance with the UN’s November resolution that was a response
to North Korea’s fifth nuclear test in September.
The Cipher Take:
It will take some time
to tell whether this will have any impact on North Korea’s economy and
therefore, its belligerent behavior. The effects will also be tempered if
China does not enforce the ban, something that has occurred in the past.
That being said, China’s demand for North Korean coal has waned as the
country seeks cleaner energy generation, so North Korea’s revenue from
coal exports were already declining. And North Korea has a history
of making do under sanctions, and this probably won’t change that fact.
What may be more important for long term progress in denuclearizing North
Korea is whether China effectively upholds the ban. A tougher stance by
China, which has the most extensive dealings with North Korea, could bode
well in any future multilateral denuclearization negotiations.
Mattis Visits Iraq as
Assault on West Mosul Begins
U.S. Defense Secretary James Mattis made a surprise visit to Baghdad on
Monday, just one day after the Iraqi Prime Minister announced the
beginning of the battle to liberate western Mosul from ISIS. Mattis met
with top Iraqi officials, including Iraq’s defense minister, as well as
key U.S. officials. During a press conference, the U.S. defense secretary
affirmed American commitment to the effort to defeat ISIS, saying, “I
imagine we’ll be in this fight for a while and we’ll stand by each other.”
Mattis also attempted to walk back some of President Trump’s more
controversial statements and policies, suggesting that the U.S. might
include exemptions in the administration’s travel ban for Iraqis who have
provided help to American forces. He also confirmed that the U.S. is “not
in Iraq to seize anybody’s oil,” despite Trump’s insistence in a speech
at the CIA shortly after his inauguration that America “should have kept
the oil” after the 2003 invasion of Iraq.
The Cipher Take:
Mattis’ visit and comments
are a welcome show of support for the Iraqi government as the battle to
retake western Mosul from ISIS begins. The overall campaign in Mosul has
already proven bloodier and costlier than Iraqi and U.S. leaders had
predicted. Casualties have been severe and Iraqi forces were only able to
secure eastern Mosul after bringing up new reinforcements during a
tactical pause last December. Unfortunately, the battle for western
Mosul, which is densely populated and full of ISIS sympathizers, may be
more difficult. President Trump’s comments about seizing Iraqi oil, and
the executive order banning travel from seven Muslim-majority countries,
including Iraq, have helped neither U.S. officials in Iraq, nor the
politically fragile government of Iraqi Prime Minister Haider al
Abadi. Mattis may have offered some measure of reassurance.
Greece and Lenders Agree
to Revisit Reforms
Greece and its international creditors – primarily the EU and
International Monetary Fund (IMF) – agreed on Monday to allow a group of
experts to analyze the Greek economy and formulate a new set of reforms
to the pension system, labor market, and income tax regime. The team will
be made up of experts from the European Central Bank, European
Commission, euro zone bailout fund, and the International Monetary Fund,
and will travel to Athens soon, according to the head of the euro zone
finance ministers, Jeroen Dijsselbloem.
The Cipher Take:
Greece needs to
receive the next tranche of its 86 billion euro bailout fund by the third
quarter of this year in order to make its next debt repayments. However,
the last mission to Athens fell apart last year over key disagreements
between the IMF and major EU creditors. The dispute primarily centers
around a recent IMF report, which predicts that Greek debt will grow
unsustainably without either deeper reforms or significant debt relief
from its creditors. EU bodies have been more optimistic in their
forecasts and denied the need for further debt relief. Now, it seems that
there has been some compromise between the two sides, which, according to
Dijsselbloem, will translate into “a change in the policy mix, moving
away from austerity and putting more emphasis on deep reforms.” A
departure from austerity, which has crippled the Greek economy, would be
welcome news for Athens, but the ruling Syriza party will be loath to
extend deep and painful reforms to Greece’s entitlement system. The
result of this new expert team’s analysis will be nervously anticipated.
Hackers Attempt False
Flag to Divert Attribution to Russia
Researchers at BAE Systems have determined that the hackers behind a
cyber campaign targeting 104 organizations—many of them financial
institutions—across 31 different countries have intentionally inserted
poorly translated Russian words and commands into their malware in an
attempt to throw off investigators. The poor translations appear to be
based on translation software that at times completely change the meaning
by making the comments unintelligible to native Russian speakers.
The Cipher Take:
The campaign seemingly
began in October last year with hits at banks in Mexico and Uruguay.
Researchers connected breaches around the world to the same campaign,
most recently with multiple breaches at banks in Poland earlier this
month. The sloppy use of Russian comments within the malware seems to be
an attempt at diverting attention to Russian criminal groups known to
target banks. Instead, security researchers believe the culprit to be the
Lazarus group, which has been active since 2009 and responsible for
various attacks on organizations in South Korea and the United States –
most notably Sony Pictures in 2014. The Lazarus group has also been
linked to the theft of $81 million from the central bank of Bangladesh by
breaching the SWIFT network, a global monetary transfer system used by
banks. The group is thought to be the North Korean government hacking
unit, known as Bureau 121. The country is restricted by economic
sanctions, making cybercrime one of its few methods of collecting revenue
in support of its nuclear ambitions.
Israeli Military
Personnel Targeted with Android Trojan
Security researchers have determined that hackers have infiltrated the
Android phones of over 100 Israeli military personnel to monitor their
activities by exfilitrating data directly from the compromised devices.
Those targeted were compromised by social engineering techniques, such as
luring soldiers into conversation through communication platforms like
Facebook Messenger with the hackers who pose as attractive women from a
variety of countries, including Canada, Germany, and Switzerland. The
soldiers were then tricked into installing malicious, yet seemingly
legitimate Android chat apps, SR Chat and YeeCall Pro, for further
communication, whereby the hackers then remotely updated the apps with a
Trojan called ViperRAT capable of receiving commands from an external
server and exfiltrating call logs, geolocations, photos, audio, contacts,
messages, metadata, internet browsing, and emails. Notably, the photos
exfiltrated from the phone cameras were using highly sophisticated
cryptographic protocols.
The Cipher Take:
Using targeted
spear-phishing attacks to compromise the mobile devices of Israeli
soldiers suggests the perpetrators are engaging in cyber espionage on
behalf of a nation-state. While the Israeli military has insinuated Hamas
is behind the breaches, security researchers argue the sophistication of
the ViperRAT Trojan and the encryption used to exfiltrate images – likely
so that if discovered, the Israeli military would not know what the
hackers were interested in nor what assets had been compromised –
strongly indicates a more capable state. Mobile phones in the hands of
soldiers have long been an operational security hazard – at the least
because they maintain telling social media accounts, at worst because
they become unwitting insider threats to military operations. The easiest
way to avoid a breach by the ViperRAT is to never download applications
from an untrusted, third-party source.
Pakistan Air Strikes
Target Militants
Air strikes launched by the Pakistani government in the Federally
Administered Tribal Areas along the Pakistan-Afghan border on Monday
killed dozens of militants, including four wanted militants belonging to
a faction of the Pakistani Taliban known as Tehrik-e-Taliban (TTP).
Pakistani planes specifically targeted several insurgent hideouts in both
North and South Waziristan. Over the weekend, the Pakistani army also
conducted operations at suspected terrorist camps in Afghanistan, after providing
the Afghan government with the names of 76 alleged Pakistani terrorists
believed to be hiding in Afghanistan.
The Cipher Take:
Pakistan has ramped up
its counterterrorism efforts after numerous attacks carried out by
factions of TTP as well as ISIS last week killed more than 100 people,
including 88 people at a well known Sufi shrine. Pakistan’s operations in
Afghanistan may also signal a shift in the policies of the two countries
and indicate that they are working more closely to eliminate terrorist threats.
Not only did the Pakistanis hand over a list of suspected terrorists in
Afghanistan, the Afghan ambassador to Pakistan also provided Pakistan
with a list of 85 suspected terrorist leaders believed to be in Pakistan,
as well as the locations of 32 centers and camps it hopes Pakistan can
destroy.
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Upcoming Cipher Brief Events
National Interests vs.
International Provocations: China Pushes the Line in East Asia | Tuesday, February 28
Our February Georgetown Salon Series event will focus on the global
implications of China's island-building campaign in the South China Sea.
Leading the discussion with be Admiral Jon Greenert, former Chief of
Naval Operations for the U.S. Navy; Timothy Heath, Senior International
Defense Research Analyst at RAND Corporation; and Greg Poling,
Director of the Asia Maritime Transparency Initiative at CSIS. The
discussion will be moderated by The Cipher Brief's CEO & Publisher,
Suzanne Kelly.
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