Marking the 100th anniversary of the 1917 Russian revolution, Cliff Kincaid of America’s Survival, Inc. introduces the November 10, 2017, ASI “Russia-gate” conference. Cliff examines America’s communist revolution – the eight years of the Obama presidency. “What you are going to see and hear today is an outline of the forces here and abroad who want to see President Donald J. Trump not only impeached but dead,” Kincaid says. He adds, “Our books, Comrade Obama Unmasked and Red Star Rising, are absolutely essential to understanding what’s really happening behind the scenes.”
It is being reported that Kevin Janson Neal, the suspect in the case of the horrific Rancho Tehama School shooting is the same man who was arrested earlier this year for an assault against an elderly person that resulted in likely “great bodily injury.”
Kevin Janson Neal: 43, of Corning was arrested Tuesday in the 6900 block of Bobcat Lane in Rancho Tehama. He was booked into Tehama County Jail on the charges of assault with deadly weapon not firearm or force, great bodily injury likely, battery on person, crime against elder or dependent adult, discharge firearm with gross negligence and false imprisonment with violence. Bail was $160,000.
His bail was set at $160,000. Yet he was free and armed less than a year after his vile crime to terrorize his neighbors and to allegedly murder yet-unnamed innocent people – selected randomly – at an elementary school.
“At least five people, including the alleged gunman, have been killed following a shooting spree in Northern California that ended near an elementary school. Two children were wounded and have been transported to local area hospitals.”
Watch a local report about how neighbors have been terrorized by Kevin Janson Neal:
Here is part of an interview with the man who says his truck was stolen and his roommate was shot and killed by the alleged shooter who is described as a known felon in his 50’s named Kevin. #RanchoTehamashootingpic.twitter.com/ZNdwmdOwU7
Introduction: History informs us that scoundrels abound. Current events inform us that scoundrels currently control the GOP. What follows is the second installment of an abridged version of a “communiqué” from the book Communiqués From the Vast Right-Wing Conspiracy. This particular communiqué was first written circa 2012, and then updated in 2015. Thus, it predates – and so is a precursor to – the current endeavor of Breitbart’s Steven K. Bannon to effect what would amount to “regime change” within the GOP – the goal of which is to electorally expel “Establishment ‘Republicans'” and elect genuinely Conservative ones. This is stated not to gloat, but to highlight that this is not a problem of recent origin, nor one that is diminishing. Quite the opposite. Mitch McConnell’s and Paul Ryan’s sabotage by inaction of the Trump agenda; and recent revelations that one former President Bush voted for Hillary Clinton, and the other withheld his vote from Donald Trump, should dispel any lingering doubts concerning “Establishment ‘Republicans'” being in-bed and under the covers with the Progressive Democrats – and so Establishment Republicans – SWAMP REPUBLICANS – are actual enemies, not weak allies. Those who knowingly and willingly collaborate with evil are …
Down with Vichy Republican Collaborators!
Vive la Republican Résistance!
Our American flag being stomped-on by Bill Ayers: professional revolutionary; domestic terrorist; Professor of Education and political mentor to one Barack Hussein Obama.
It didn’t start with Obama – the Democrat Party of today has metastasized into a political party that would be repellant to a Truman or JFK-era Democrat. The radicals of the 1960’s have succeeded in taking over the party from the inside and, greased with the money of radical labor unions like SEIU, and “philanthropists” like George Soros, have funded and spawned radical groups such as ACORN and MoveOn and Midwest Academy and innumerable others (Yes Virginia, there is indeed a “vast, Left-wing conspiracy”). Aided and abetted by the mislabeled “mainstream media,” this Axis of Collectivism is now rather openly completing the march that it surreptitiously began in the 1960’s – one commenced by working to erode the foundational principles and culture of the United States, invoking the tactics of Marxist theoreticians such as Antonio Gramsci and Andre Gorz and, lest we forget …
Saul Alinsky – Prophet of Progressivism – author of Rules for Radicals: A Practical Primer for Realistic Radicals and its dedication to Lucifer at its beginning, the subject of Hillary Rodham Clinton’s college thesis, and creator of the “occupation” of “community organizer” (which, tellingly, was the chosen profession of one Barack Hussein Obama). This Progressive prophet taught his disciples to burrow into the American political system, to appear to be legitimate players and never disclose true intentions, all while working diligently to undermine it from within – and in so doing to pave the way for revolution.
Hillary Rodham (Clinton’s) college thesis on Saul Alinsky, who later wrote “Rules for Radicals” – which included a compliment to Lucifer in its introduction. She picked sides at an early age. In the 2016 elections, the Bushes supported her over Donald J. Trump.
Would even the most Liberal Democrat of the JFK era (much less the Truman or Roosevelt era) – when told that within their lifetime their party’s position would be to condone widespread illegitimate birth, and an unwritten edict that one cannot question or criticize the mother for her irresponsibility (now considered acceptable) – have agreed, or would they have laughed and said such a thing is unthinkable?
Would even the most Liberal Democrat of the JFK era (much less the Truman or Roosevelt era) – when told within their lifetime their party’s position would be to condone homosexual marriage and champion transsexualism – have agreed, or would they have laughed and said such a thing is unthinkable?
Would even the most Liberal Democrat of the JFK era (much less the Truman or Roosevelt era) – when told that within their lifetime their party’s position would be to condone a refusal to secure our borders from an influx of millions of illegal migrants from Central America – coming here for the express purpose of birthing anchor babies and thereby anchoring themselves onto the American welfare system – have agreed, or would they have laughed and said such a thing is unthinkable?
Would even the most Liberal Democrat of the JFK era (much less the Truman or Roosevelt era) – when told that within their lifetime their party’s position would be to condone granting those illegal aliens amnesty and inviting them to legally bring their family members to America to latch onto our welfare system – have agreed, or would they have laughed and said such a thing is unthinkable?
Would even the most Liberal Democrat of the JFK era (much less the Truman or Roosevelt era) –when told that within their lifetime their party’s position would be to condone not just abortion, but partial birth abortion – have agreed, or would they have laughed and said such a thing is unthinkable?
You know the answer(s).
Regarding social issues, Democrat Senator Daniel Patrick Moynihan spoke disapprovingly of “defining deviancy down.” His Democrat successors not only approve of this redefining, they actively embrace it as a weapon to be deployed socially, politically and economically – invoking the Antonio Gramsci tactic of a “long march through the institutions.” That is, eroding the social and cultural pillars of our society, and thus rendering our culturally weakened country susceptible to Collectivism.
Republican “moderates” – puppeting modern Democrat talking points intended to frame the debate – assert that the GOP has shifted to the right, and too far. Not at all! The positions that we Constitutional Conservatives support trace their genealogy from 1776, and the family resemblance is unmistakable. Rather, as the foregoing examples illustrate, it is the Democrat Party that has shifted radically Left – and exerts a leftward gravitational pull on a GOP that currently is reduced to being a small moon orbiting Planet Progressivism.
General Essam Al-Badawi was installed as Al Minya’s governor (in Upper Egypt) in September 2016 when President Al-Sisi was replacing local officials. He graduated from the police academy in the mid-eighties last century after a long career with the National Security Service. Statements made recently by the governor in response to antagonism and threats towards Christians and the forced closing of Saint George Church (on Oct 27) have aroused widespread suspicion of him among Copts inside and outside Egypt.
His denial of “sectarian” strife as the cause of the recent closures of three churches and an assault on a fourth issued on the heels of Bishop Makarious’ pointed objections displays his interest in gaining control over this narrative with a pro-Islamic stance. Sectarianism is rife with Muslim civil servants and becomes an obstacle to any attempts at equality under the law.
How could Governor Al-Badawi not see that the mosque inflated its numbers with jihadists in order to pose a threat and strike the church across the road? And now, after the fact, what do Copts risk by speaking up? In an attempt to silence Copts, the governor schooled them: “It is not permissible to raise internal problems in international and local media.” But Copts need to be heard outside of Al Minya and seek only justice.
In countering a public statement made by the bishop, the governor patronized, flattered, and feigned ignorance regarding the detrimental “peace reconciliations” for Copts who are corralled into rigged tribal agreements and kept from the courts. In other words, it is evident to Copts directly involved or following it closely that the governor has no interest in truth or justice.
Governor Al-Badawi cautioned Bishop Makarious to regard his sources more carefully for the sake of accuracy as if the bishop had the basic facts wrong. “With great confidence in the wisdom and rationality of the bishop” the governor began and proceeded to say that “through sincere cooperation between the bishop and the organs of the province” there would be “agreed implementation of the solutions.” In other words, this Islamic bureaucrat instructs to toe the line and the solutions will come from ignoring the facts and excusing the culprits.
Exasperated by the governor’s request for cooperation with a system that’s well-known for incriminating Christian victims, Monsignor Athanasius George replied, “Where were you when the attacks, insults, vandalism and injuries took place? Where were you when barbarians and bandits became self-appointed rulers?” Sarcastically he added, “It is better that you remove the ISIS flag from your provincial building.”
Governor Al-Badawi warned Copts against pursuing justice, cautioning that irritating “religious citizens who love their religion,” i.e. jihadists, might incite them to strike again if Copts persist. Coptic MP, Marian Azer, seems to agree with the governor. With the expectations of her to represent her own people and at least take a role to insure that evidence is factual, she remains silent. Azer instead reassures the American delegation days after the incident of non-discriminatory treatment of Copts: “…all Muslims and Christians are living under the umbrella of the homeland as equal citizens in rights and freedoms without distinction in any field.” Sadly, misinformation is their take-away.
Muslim and Christian support for Al Minya Copts
The largely Muslim and Muslim-led political party, the Egyptian Secular Party, put MP Azer to shame. It issued a statement strongly condemning “the wave of church closures in Al Minya” stressing its absolute belief in the right of every citizen to practice the rites of religion and beliefs whatever they are without restrictions or conditions – further emphasizing the repeal of the unfair church construction law and proclaiming a unified law on places of worship, a meaningful reform for Copts.
Likeminded Kamal Suleiman Bishara, former MP and member of the Christian community, urged a fact-finding commission: “The president must immediately send a committee to Al Minya to investigate the truth about what is happening on the ground against Christians and their churches and not rely on misleading reports from the security and executive services.”
Coptic Bishop Agathon of Magagha and Al Adwa (Upper Egypt) issued a statement of support for Bishop Makarius and the Coptic community of Al Minya and Abukarqas in their legitimate demand for the right to pray and practice religious rites, pointing out the repeated attacks by outlaws against the Copts and stressing their rights as guaranteed under the law and current constitution.
Bishop Agathon’s signature was notably absent from an earlier dhimmi-style (appeasing and assuming inferiority) press release issued from the Coptic Orthodox Diocese of Mallawi Ashmonin gushing thanks to the governor of Al Minya, as well as President Al Sisi, the prime minister, the interior minister, the security director of Al Minya, the director of national security of Al Minya, officers and police staff for their hard work to resolve the variety of problems concerning Coptic issues as well as serving the Coptic Church.
So far, their hard work has led them to unsatisfactory and unacceptable solutions: The church closure issue is ignored and Saint George remains closed indefinitely, other churches have been shut down since the crisis, perpetrators are not arrested for their encroachments and threats which led to police closing the victimized church, and finally, a “conciliation” meeting has been thrust upon Copts for the purpose of submission and further threats.
Governor Al-Badawi is Al-Sisi’s man. He awaits direct orders from the top. If he does not receive a clear dictate to treat Copts equality and fairly he will adhere to Islamic doctrine and teachings. As it stands, the governor appears to take his lead from the Grand Imam who just a few weeks ago emphasized Islamic Sharia as Egypt’s rule of law.
Navigator Holdings Ltd., the shipping firm part-owned by U.S. Commerce Secretary Wilbur Ross, doubled the number of contracts it had with Sibur Holding PJSC just months after the U.S. imposed sanctions on a major shareholder of the Russian petrochemical company in 2014.
Sibur itself wasn’t subject to the restrictions, which the U.S. imposed over the Ukraine crisis, but they led to a broad chill in business ties between the two countries. Sibur’s shareholders have particularly close ties to the Kremlin. Gennady Timchenko, a billionaire energy trader, was cited as a member of the “inner circle” by the U.S. Treasury when it imposed a visa ban and asset freeze on him in March 2014, held a stake of as much as 32 percent by September of that year. Kirill Shamalov, who is married to Russian President Vladimir Putin’s younger daughter isn’t subject to U.S. restrictions, raised his Sibur stake to 21 percent in late 2014. He later sold all but 3.9 percent. More here.
Mikhelson is the founder and chairman of natural gas producer Novatek. He is also chairman of gas processing and petrochemical company Sibur; Billionaire Gennady Timchenko is his partner in both; Putin’s reported son-in-law, Kirill Shamalov, is a partner in Sibur. Over 2015 and 2016, Mikhelson sold a 16% stake in Sibur to China’s state-owned Sinopec and China’s Silk Road Fund for $2.1 billion. An avid art collector, he has sponsored museum exhibits in Russia and the U.S. His father headed the largest pipeline construction trust in the Soviet Union, and Mikhelson began his career as foreman for a construction company building a gas pipeline in Russia’s Tyumen region.
China and Syria have already begun discussing post-war infrastructure investment with a ‘Matchmaking Fair for Syria Reconstruction’ held in Beijing
From Utah, Secretive Help for a Russian Oligarch and His Jet
Records leaked from an offshore law firm show how the wealthy elite sidestep prohibitions on foreigners registering private planes in the United States.
SALT LAKE CITY — Bank of Utah has that all-American feel. Founded in the 1950s by a veteran of both world wars, it offers affordable mortgages and savings accounts, sponsors children’s festivals and collects coats for the poor.
But in addition to its mom-and-pop customers, the bank has a lesser-known clientele that includes Russia’s richest oligarch, Leonid Mikhelson, an ally of the country’s president, Vladimir V. Putin. The bank served as a stand-in so Mr. Mikhelson could secretly register a private jet in the United States, which requires American citizenship or residency.
The work on behalf of Mr. Mikhelson, whose gas company is under United States sanctions, is part of a discreet niche business for Bank of Utah that allows wealthy foreigners to legally obtain American registrations for their aircraft while shielding their identities from public view. The bank does this through trust accounts, in its own name, that take the place of owners on plane registration records.
Bank of Utah manages more than 1,390 aircraft trust accounts, most of them for foreigners, generating millions of dollars in fees and making it the second-largest holder of such accounts in the country. A trove of records leaked from an offshore law firm, Appleby, shows that the services offered by Bank of Utah, Wells Fargo and other American companies were sought after by rich jet owners in Russia, Africa and the Middle East.
The files were obtained by a German newspaper, Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists and other news organizations, including The New York Times. Among other things, the records reveal how Appleby often packaged trust arrangements with a tax avoidance scheme on the Isle of Man, a British crown dependency that serves as a haven for aircraft owners to sidestep taxes in the European Union. Together, businesses like Bank of Utah and Appleby provide a suite of money-saving tricks for the wealthy elite around the world.
Members of Congress and federal auditors have grown increasingly concerned that the opaque aircraft trust arrangements, which are not closely tracked by the Federal Aviation Administration, could allow terrorists and criminals a back door for evading sanctions, intelligence officials or law enforcement. Some 10,000 private planes are registered in the United States to noncitizen trusts.
“There are serious national security risks when the F.A.A. approves an aircraft registration but does not have all the information, particularly if an aircraft is owned by a shell corporation or a foreign entity,” Representative Stephen F. Lynch, a Massachusetts Democrat, said when he introduced legislation in July that would require the F.A.A. to obtain and regularly update records on the ultimate owners behind aircraft trusts.
An inspector general report in 2013 found that more than half of noncitizen trusts registered with the F.A.A. “lacked important information such as the identity of the trusts’ owners and aircraft operators.” As a result, the report said, the agency “has been unable to provide information on these aircraft to foreign authorities upon request when U.S. registered aircraft are involved in accidents or incidents.”
Another inspector general report, in 2014, cited specific cases that it said demonstrated the potential for national-security or legal problems. Among them was an episode in which an unnamed American bank had to cancel an aircraft trust after learning that its beneficiary, a Lebanese politician, had ties to a terrorist group. Another involved a jet registered to Wells Fargo that made an unscheduled landing in Libya in 2011 just as a no-fly zone was imposed by the United Nations.
In 2014, a plane registered to Bank of Utah was spotted at an airport in Iran, raising questions about whether its presence violated American sanctions.
And three years ago, a plane registered to Bank of Utah was spotted at an airport in Iran, raising questions about whether its presence violated American sanctions at the time. The bank told reporters it had “no idea” why the plane was there, and would not reveal who owned it; the Bombardier jet turned out to be owned by a Ghanaian company and had no Americans aboard.
That episode led to some soul-searching for Bank of Utah officials. In a recent interview at the bank’s corporate trust offices in Salt Lake City, Branden Hansen, the chief financial officer, said that the reputational risk of the trusts prompted the bank to consider whether “to shut this whole thing down.”
Ultimately the bank decided to continue the service, but with stronger due diligence and new staff to oversee it. Jon Croasmun, a trust officer who joined the bank last year, said that “knowing who the owners are is important,” adding that the bank searches public records, seeks passports and takes other steps to ensure it knows the background of aircraft owners.
Still, the Bank of Utah executives were surprised to learn that they had aided Mr. Mikhelson, the Russian oligarch. When told the name of the offshore shell company that Mr. Mikhelson used to manage his Gulfstream jet, Mr. Croasmun interrupted the interview to check the bank’s files. He confirmed that the shell company had been a client since 2013 — but information identifying Mr. Mikhelson as the man behind it “was nowhere that I saw in the files.”
“His name is not in there,” Mr. Croasmun said.
A Request From Moscow
Appleby, based in Bermuda, is one of the world’s largest offshore law firms. Its files offer a rare inside look at more than a dozen aircraft trusts structured by American financial institutions for privacy-seeking plane owners, primarily foreigners who otherwise would not be allowed to register with the F.A.A. There is a premium on American registration because it increases a plane’s resale value, the bureaucratic requirements are less costly and complex, and it is believed to draw less scrutiny as the aircraft moves around the world.
Among the plane owners seeking Appleby’s services were Shaher Abdulhak, a Yemeni businessman worth an estimated $9 billion whose investments included a Coca-Cola distributor in the Middle East; UPL, an Indian producer of industrial chemicals and pesticides; and Rashid Sardarov, a Russian oil billionaire and longtime client of Mossack Fonseca, the law firm whose leaked records in 2015 became known as the Panama Papers.
In serving these clients, files show, Appleby dealt with the two banks that are the most prolific creators of American aircraft trusts: Wells Fargo and Bank of Utah. It is easy to see how Wells Fargo, the third-largest bank in the United States, with nearly $2 trillion in assets and offices in 42 countries, might find a lucrative niche catering to the wealthy elite. Less obvious is how Bank of Utah, with 18 branches confined to one state, took the same path.
As it happens, a group of former Wells Fargo trust officers joined Bank of Utah about 10 years ago and created what would become a profitable part of the bank’s business. The bank collected $8.8 million in trust fees in 2016 — an increase of $1.1 million from the previous year, according to its most recent annual report.
Mr. Croasmun and Mr. Hansen took issue with the suggestion that they were exploiting a loophole to bypass restrictions on foreigners registering aircraft in the United States. By filling the role of “U.S. citizen” for registration purposes, the bank provided a valuable service for, say, multinational companies whose top executives might not be American, they said. The bank is clearly sensitive to concerns raised about the trusts. Its website carries a statement distancing itself from the planes it registers in its name, noting its only role is that of trustee.
In the case of Mr. Mikhelson, the trail leading from Russia to Utah began in September 2012, with an email to Appleby from the Moscow office of the accounting firm Ernst & Young. The firm wanted Appleby to set up a complex corporate structure for an unnamed client to purchase a Gulfstream jet, valued at roughly $65 million, and retain possession of it through a chain of companies in six countries.
From the outset, the goal was clear: “This structure,” wrote Svetlana Yakushina of Ernst & Young, “should allow registering the aircraft with the aviation authorities of the United States.”
The arrangement would also permit the owner to avoid certain taxes, most notably a value-added tax of 20 percent if the jet were registered and used in the European Union. A six-page memo prepared by Ernst & Young laid out a plan to exploit a tax loophole offered by the Isle of Man, where about 1,000 privately owned aircraft are recorded on a government registry for tax purposes. Appleby and other similar firms maintain offices there.
The Isle of Man allows owners to escape the value-added tax, or VAT, through a paper-shuffling scheme, wherein the jet is held by a company based there but leased to another company elsewhere, both controlled by the same owner. The tax is technically deferred into the future, through use of a special account managed by Ernst & Young, and then canceled out by the corporate structure. Research by the investigative journalists consortium suggests that Isle of Man-registered aircraft have escaped more than $1 billion in taxes.
According to a flow chart created by Appleby’s Isle of Man office for the Mikhelson account, the ownership chain for his jet began in Panama, with a company called Golden Star Aviation, which registered on the Isle of Man and then leased the aircraft to a Cayman Islands company called SWGI Growth Fund. Both companies were controlled by Mr. Mikhelson.
Mr. Mikhelson declined to answer questions about his plane. His representative released a statement saying, “Mr. Mikhelson acts strictly within the boundaries of the law and in compliance with applicable legislation at all times.”
By June 2013, lawyers at Appleby still had not learned of Mr. Mikhelson’s role, other than being told that the Gulfstream’s owner was Russian. Once the lawyers were informed of his identity by a Swiss firm that manages Mr. Mikhelson’s finances, they conducted a background check and concluded that, as with other clients from Russia, where the political and legal environment can be unstable, working for him would be “high risk.” But they decided to proceed.
Sanctions and ‘Citizenship’
A due-diligence report by Appleby noted Mr. Mikhelson’s source of wealth — valued currently at about $18 billion — from oil and gas investments, notably through Novatek, Russia’s largest nongovernment-owned gas company. Mr. Mikhelson’s main business partner is Gennady Timchenko, a close friend of Mr. Putin’s. The two businessmen are the primary investors in Sibur, a Russian gas-processing company.
Included in the report was a list of questions to determine if Mr. Mikhelson had any connections to the United States, including whether he had assets or maintained an address there. The answer to all of them was “no.” Flight records show that the plane has rarely, if ever, flown to the United States and instead makes trips within Russia or occasionally to cities in Europe and China.
Despite its lack of a connection to the United States, Mr. Mikhelson’s private jet was soon on its way to securing a registration with the F.A.A., thanks to Bank of Utah.
It is not clear if the bank was ever told, or inquired, about the identity of the owner of the aircraft. Mr. Croasmun said that files indicated the owner “was Russian” but that identifying details were missing.
Whatever the case, the trust agreement for Mr. Mikhelson’s Gulfstream, filed with the F.A.A., does not name him anywhere in the document. Instead, the owner is listed as Golden Star Aviation, the Panamanian company he used to buy the plane. Attached to it is an “affidavit of citizenship” signed by a bank officer, Brett King, attesting that the trustee — Bank of Utah — is a “citizen of the United States.”
Appleby’s conclusion that doing business with Mr. Mikhelson would be “high risk” began to look prescient by July 2014. That is when Washington hit a number of Russian individuals and companies with economic sanctions in response to Russian intervention in Ukraine.
Among those named by the Treasury Department’s Office of Foreign Assets Contro were Novatek, Mr. Mikhelson’s gas company, and Mr. Timchenko, his partner in other ventures. Mr. Mikhelson himself was not included in the sanctions, which tightly restricted Novatek’s access to American capital markets.
Almost immediately, lawyers at Appleby flagged the Novatek sanctions and began emailing one another, one of them seeking advice on “how this affects the structures that we manage.” Within a week, Appleby had sent a message to Mr. Mikhelson’s aide Igor Ryaskov explaining that the law firm was concerned about Mr. Mikhelson’s connections to a company subject to sanctions.
“Due to the ongoing issues and increased risk, it is with regret that I must advise that we will be looking to cease services in respect of these structures,” the note said.
Mr. Ryaskov protested, saying that Mr. Mikhelson was not on the sanctions list. Still, Appleby held fast, and referred Mr. Ryaskov to other firms; by 2015, Mikhelson’s aircraft account had been transferred to Fedelta Trust Limited, a financial services firm on the Isle of Man. Mr. Ryaskov did not respond to a request for comment.
As for Bank of Utah, it filed a registration renewal application with the F.A.A. in July last year, indicating that its trusteeship for the aircraft remained unchanged. During the recent interview, the bank executives suggested that Mr. Mikhelson’s case escaped scrutiny during an earlier period when their internal review process was less rigorous, and they vowed to review it.
“Russian involvement would score as a high risk by itself,” Mr. Hansen said. “It’s highly unlikely that something like this would have been approved in today’s climate.”
The world’s hottest shale basin, the Permian, is leading the second U.S. wave of tight oil production growth and will continue to do so for years to come, all analysts say.
However, signs have started to emerge that the relentless intensification of drilling leads to diminishing returns, Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie, said in an article this week. Pumping twice as much sand as usual into Permian wells and drilling longer laterals doesn’t deliver commensurate volumes of oil, Flowers notes.
“Drilling costs rise exponentially with depth, and there’s a suspicion that longer wells are hitting a cost efficiency ceiling,” WoodMac’s chief analyst writes.
Moreover, after the early production-exuberance stage, drillers are now much more focused on delivering profits and higher profit margins. They now favor quality over quantity, and value over volumes.
“Might the Permian be reaching the limits of well size and design? Maybe—as Star Trek’s Scotty might observe of an underwhelming high intensity completion ‘you cannae change the laws of physics, Jim’,” Flowers says. But WoodMac suggests that drillers could ‘change the laws of physics’ and that these signs of setbacks may actually be growing pains.
The energy consultancy’s Director of L48 Research, Rob Clarke, argues that there are two basic and very sound reasons that the fading lateral drilling and proppant metrics might be just growing pains. One is much more advanced proppant placement, and the other is the oil majors’ move into the Permian, set to change things.
“Now, pinpoint frac technology can place the proppant exactly where it’s wanted. Science is also being applied to identify the most effective proppant grain size and shape as well as drill bit design and fluid chemistry, all with the aim of boosting EUR,” according to WoodMac.
In addition, ExxonMobil significantly boosted its Permian position earlier this year, and Exxon has “global expertise in extra-long laterals—including a 39,000 footer in Russia,” WoodMac says.
ExxonMobil has already drilled a 12,500-foot well in the Permian and “will no doubt ramp up longer still to test the diminishing returns theory,” Clarke noted.
Now the next challenge will be to deliver an effective completion of such a long well.
“The application of the Majors’ capital and industrial approach will test whether the thousands of wells to be drilled in the future enable the Permian to deliver on the bold growth targets,” WoodMac said.
Two months ago, Wood Mackenzie warned that as drillers are set to continuously develop the hottest U.S. shale play, they may soon start to test the region’s geological limits. And if E&P companies can’t overcome the geological constraints with tech breakthroughs, Permian production could peak in 2021, putting more than 1.5 million bpd of future production in question, and potentially significantly influencing oil prices.
Apart from geological constraints, other factors that could affect Permian growth are increasing service costs and potentially persistently low oil prices.
While oil service margins have increased for oil field service providers such Schlumberger and Halliburton, oil producers, on the other hand, face cost pressure, and “higher well costs may force additional discussion on capital discipline going into 2018, which could be a good thing for the overall supply and demand balance,” BTU Analytics said earlier this month.
At the end of September, Moody’s warned that even if average drilling and completion costs have declined significantly in the past two years, “drillers will be hard pressed to further reduce drill-bit finding and development costs, since drilling efficiencies may be offset by higher service costs.” North American oil producers will need WTI at over $50 a barrel in order to achieve “meaningful capital efficiency”, Moody’s said.
Pioneer Natural Resources, for example, continues to believe in the Permian, but it thinks that the U.S. shale patch is heading toward hitting the ceiling of efficiency gains from larger frackings.
“In the U.S., we are essentially using a sledgehammer approach. We are using larger volumes or sand and fluids and pumping at higher rates,” Pioneer’s CEO Tim Dove said at the Oil & Money conference in London, as quoted by Platts.
“At some point you reach a peak on logistics, limits on sand, water volumes… that’s where we are getting to, [although] we’re not quite there as an industry,” Dove noted.
Still, the expertise of the majors, as well as science and tech breakthroughs in proppant use, may help the Permian outgrow its growing pains faster than expected.
Either we fight to survive or surrender to the forces of anarchy and despotism. In collusion with Islamic supremacists, the Left has gone to the mats to bring down our nation in an unholy alliance we call the Red-Green Axis. If they win, it spells the end for our republic. And while we have gotten something of a break from their destructive designs with the election of Donald Trump as president, they are doing everything possible to keep America in the dark and intimidate us into silence.
I have seen this up close and personal over the past few days. Last week I traveled to locations in the Midwest to speak on that issue. I was accompanied by Phil Haney, a Department of Homeland Security founding employee who was investigated by the Obama administration because he identified a large number of Islamic terrorists hiding in plain sight inside the U.S. Yes, he was investigated by the very agency that tasked him to do this job. That is the level of insanity we confront today.
On Tuesday we got the news that a booking at a venue we were scheduled to speak at in Sioux Falls, South Dakota, next week was cancelled when an organization named South Dakota Voices for Peace called and threatened the venue. They bragged about this in a press release:
The History Club of Sioux Falls has cancelled two events scheduled to take place at the historic venue: “Sioux Falls Immigration Question: Follow the $$$ with featured speaker Ron Branstner” scheduled for 10/26 and “Philip Haney and James Simpson 11/4.” All speakers have been identified as spreading misinformation about Islam, Muslims, refugees, immigrants and the refugee resettlement process.
We spoke Saturday at another venue in Illinois. Our hosts were threatened but did not back down. The restaurant where the event was to be held was contacted and told to cancel the event. Restaurant management responded that they do not take sides and would not cancel. The organizer of the event said she was also personally threatened and calls were made to her employer as well.
If this is not a demonstration of the Islamists’ Nazi mindset I don’t know what is. A few of them appeared at the venue, but had to sign an agreement before entering that they would not attempt to disrupt the meeting. Instead they attempted to commandeer the meeting by droning on with long statements of opinion, asking repeated questions, and objecting to our answers.
I tried to find the South Dakota Voices for Peace press release online, but the website, www.southdakotavoicesforpeace.org, is listed as “for sale” on the GoDaddy web hosting site. A Google search found a Facebook site, but when accessed it returns an error message: “The link you followed may be broken, or the page may have been removed.”
The organization seems to have disappeared. This is typical of these shady groups. The day the event was cancelled, the release was available and someone sent me a screen shot, shown below.
The South Dakota lawyer who threatened the History Club is Taneeka Islam, formerly Civil Rights Director for CAIR-Minnesota. She does have a website for her law practice.
CAIR posted its own announcement about the cancellation of Branstner’s presentation on its Facebook page. It was silent, however on the cancellation of our presentation, probably because CAIR does not want people discovering what we have to say.
CAIR is an unindicted co-conspirator in the Holy Land Foundation terrorism financing case, which led to the largest successful terrorism financing trial in U.S. history. CAIR only remains unindicted today because Obama was elected and shut down the investigation. CAIR is also a front group for the Islamic terrorist organization HAMAS, and is a member organization of the Muslim Brotherhood – another Islamic terrorist organization from which almost all others have sprung.
CAIR and its proponents are engaging in their own form of terrorism here in the U.S. But there are dozens of other Muslim Brotherhood front groups in America. CAIR is only the most visible. All of these organizations aggressively attack anyone who criticizes or questions any aspect of what they do. Meanwhile, university campuses across the country have become a virulent hotbed of overt anti-Semitism as the direct result of actions by the Muslim Students’ Association, another MB front.
Ironically, the same day as the South Dakota event, U.S. Attorney General Jeff Sessions gave a speech at the Heritage Foundation, decrying efforts to suppress free speech and our need to defend it. He said, in part:
We must above all vigorously defend the inalienable rights that are part of our heritage and especially religious liberty and freedom of speech. These are the very first freedoms the Founders put in the Bill of Rights—and not by accident. They are first because our freedom to worship and to speak our minds are at the core of what it means to be free.
Our Founders believed that reason is the best means to truth and justice. Reason requires discourse and, frequently, argument. The Father of our Constitution, James Madison, said, in protest of the Alien and Sedition Acts—the speech codes of his day—that freedom of speech is “the only effectual guardian of every other right.
Certainly not all Muslims are violent or even agree with what these groups do, but primed with oceans of money from Saudi Arabia and domestic left-wing funders like George Soros, the groups have become agents-provocateur in a ceaseless battle to dominate the narrative and shut down free speech when it exposes them for what they are. Let’s hope Attorney General Sessions puts his words into action.
What CAIR and others are doing is called “tortious interference.” It can be viewed as a form of economic warfare. A problem we face is that too many public officials let them get away with it or even side with them. Those people need to be removed from office and the Muslim Brotherhood’s aggressive efforts must be met with determined opposition.
The so-called Trump Dossier, financed by the Hillary campaign and provided by the KGB through a former British intelligence agent, has fizzled out. It has been supplanted by the Moore Dossier, concocted by Washington Post reporters working for their billionaire owner, P.T Barnum-like Jeff Bezos. This variation of the ploy, with a new target, seems to have legs. Many Republicans and conservatives are falling for it.
But is there really any reason to believe the Moore Dossier has any more validity than the Trump Dossier?
A big red flag appeared when feminist attorney Gloria Allred raised her head in the Roy Moore case. Suddenly another accuser surfaces, under suspicious circumstances, and even “conservative” Republicans are running for the hills. It stinks.
Why do the liberals need the Southern Poverty Law Center when Republicans will pin “guilty as charged” labels on conservatives?
Look at Colorado Republican Senator Cory Gardner and the rest. Senate Republicans are so scared of being charged with a “war on women” that they have decided to wage war, with no moral or legal basis, on the GOP Senate candidate in Alabama. They deny him due process and have accepted unverified claims of sexual harassment against him. Some are threatening to expel him from the Senate if he wins.
No wonder these Senators can’t get anything done. They are too busy posing for the cameras and looking politically correct. Why don’t they just put on dresses and pretend to be feminists? Perhaps this will win them the transgender vote.
The Washington Post, the source of the charges, is a partisan Democratic paper which thinks billionaire hedge fund operator and Democratic Party money bags George Soros is a blessing for America. It said so in an editorial. Yet this paper is dictating what Republicans should be saying and doing in the Moore case.
The Post hates morality and traditional values. Its religion columnist, Washington insider and party giver Sally Quinn, believed in the occult and admits casting hexes on her enemies.
The Washington Post once published a Pulitzer Prize-winning story about a child heroin addict that turned out to be a total lie. Google the name “Janet Cooke.” Her editor was Watergate reporter Bob Woodward. Perhaps she used a Ouija board to write her stories.
Referring to the Post’s initial story, legal expert and commentator Gualberto Garcia Jones says, “The obvious question is who informed The Washington Post of the allegations? And who located the women and put them in touch with Washington Post reporters?” He adds, “It is simply impossible to believe that their simultaneous allegations happened organically after nearly 40 years of silence.”
The follow-up accusations, fed to the media by Gloria Allred, make the whole thing even more questionable.
Garcia Jones writes, “The Washington Post’s political motivations to destroy the reputation of Judge Roy Moore are evident and the tactics used against him uncannily resemble those used against President Donald Trump. A month before the presidential election of 2016, The Washington Post published accusations of sexual misconduct against candidate Donald Trump while endorsing his Democratic opponent, Hillary Clinton.”
Yes, indeed, why not probe the motives of the paper that helped usher Barack Hussein Obama into the presidency and has been working to destroy the Trump presidency? The Post had endorsed Moore’s opponent while working on the hit piece against Moore. The same modus operandi was evident in the Trump case.
It didn’t work with Trump but it looks like it could work with Moore. Which means that if they destroy Moore, they will return to undermining Trump, probably with new sex charges. Or perhaps they will try something else. The new Janet Cookes at the paper are probably working on that right now.
We’re heard the mantra about frightened women scared to take on a powerful man with sex charges. But Moore has been powerful for decades in Alabama. Only now they decide to come forward, when Moore is leading in the polls and about to become a Senator on the national stage?
What’s surprising is the reaction of Texas Republican Senator Ted Cruz, whose father was charged with being involved in the assassination of President Kennedy. Cruz says, in the case of Roy Moore, that “as long as these allegations remain unrefuted,” Cruz is “not able to urge the people of Alabama to support his candidacy.” How does one refute charges from decades ago, for which there is no evidence in the first place? You would think Cruz would have more sympathy for Moore, considering that Cruz’s father was unfairly targeted with the JFK allegations. How is Moore supposed to “refute” the charges against him? Go back in time in a time machine to take pictures?
Cruz, a lawyer, says Moore “needs to come forward with strong, persuasive rebuttal demonstrating” that the charges are untrue. I am not a lawyer, but since when does the accused have to prove his innocence about charges from decades ago concerning his dating habits? I thought the burden of proof was on the accusers.
Do Moore’s accusers have anything other than a signature on a high school yearbook? So far, they rely on claims, accusations, and charges. These are easy to make. Tears can be faked. All of this is supposed to carry more weight than his decades of service to the cause of traditional values and God-given rights?
Garcia Jones says, “It should come as no surprise that people like the editors of National Review and Senate Majority Leader Mitch McConnell would publicly convict Judge Roy Moore in less than 12 hours solely on one article published by a politically partisan publication.”
True. It’s no surprise. These are cowardly “conservatives” and Republicans. In McConnell’s case, he’s actually an enemy of Moore, having supported one of his Republican opponents in the primary race.
Why does McConnell fear Moore? As Garcia Jones told me in a phone interview, Moore is a doer, not just a talker. Moore actually gets things done. Because of that, he has made real enemies, such as those in the Southern Poverty Law Center. Moore can be expected to actually force conservatives in the Senate to do something about the issues we face as a nation. He will embarrass McConnell & Company.
Moore would be more than justified, if he wins the Senate seat in the face of this bipartisan assault, to go to Washington and fight to get his reputation back. Let Moore challenge his accusers, in and out of the liberal media and the Republican Party, to produce the evidence against him. Let’s get to the bottom of this.
Those releases were part of a series of leaks WikiLeaks called Vault 7. Now, WikiLeaks says Hive is just the first of a long string of similar releases, a series WikiLeaks calls Vault 8, which will consist of source code for tools previously released in the Vault 7 series.
Some of the tools included in that release have been incorporated in many malware families and have been at the center of all three major ransomware outbreaks that have taken place n 2017 — WannaCry, NotPetya, and Bad Rabbit. More here.
Security Breach and Spilled Secrets Have Shaken the N.S.A. to Its Core
A serial leak of the agency’s cyberweapons has damaged morale, slowed intelligence operations and resulted in hacking attacks on businesses and civilians worldwide
WASHINGTON — Jake Williams awoke last April in an Orlando, Fla., hotel where he was leading a training session. Checking Twitter, the cybersecurity expert was dismayed to discover that he had been thrust into the middle of one of the worst security debacles ever to befall American intelligence.
Mr. Williams had written on his company blog about the Shadow Brokers, a mysterious group that had somehow obtained many of the hacking tools the United States used to spy on other countries. Now the group had replied in an angry screed on Twitter. It identified him — correctly — as a former member of the National Security Agency’s hacking group, Tailored Access Operations, or T.A.O., a job he had not publicly disclosed. Then the Shadow Brokers astonished him by dropping technical details that made clear they knew about highly classified hacking operations that he had conducted.
America’s largest and most secretive intelligence agency had been deeply infiltrated.
“They had operational insight that even most of my fellow operators at T.A.O. did not have,” said Mr. Williams, now with Rendition Infosec, a cybersecurity firm he founded. “I felt like I’d been kicked in the gut. Whoever wrote this either was a well-placed insider or had stolen a lot of operational data.”
The jolt to Mr. Williams from the Shadow Brokers’ riposte was part of a much broader earthquake that has shaken the N.S.A. to its core. Current and former agency officials say the Shadow Brokers disclosures, which began in August 2016, have been catastrophic for the N.S.A., calling into question its ability to protect potent cyberweapons and its very value to national security. The agency regarded as the world’s leader in breaking into adversaries’ computer networks failed to protect its own.
“These leaks have been incredibly damaging to our intelligence and cyber capabilities,” said Leon E. Panetta, the former defense secretary and director of the Central Intelligence Agency. “The fundamental purpose of intelligence is to be able to effectively penetrate our adversaries in order to gather vital intelligence. By its very nature, that only works if secrecy is maintained and our codes are protected.”
With a leak of intelligence methods like the N.S.A. tools, Mr. Panetta said, “Every time it happens, you essentially have to start over.”
Fifteen months into a wide-ranging investigation by the agency’s counterintelligence arm, known as Q Group, and the F.B.I., officials still do not know whether the N.S.A. is the victim of a brilliantly executed hack, with Russia as the most likely perpetrator, an insider’s leak, or both. Three employees have been arrested since 2015 for taking classified files, but there is fear that one or more leakers may still be in place. And there is broad agreement that the damage from the Shadow Brokers already far exceeds the harm to American intelligence done by Edward J. Snowden, the former N.S.A. contractor who fled with four laptops of classified material in 2013.
Mr. Snowden’s cascade of disclosures to journalists and his defiant public stance drew far more media coverage than this new breach. But Mr. Snowden released code words, while the Shadow Brokers have released the actual code; if he shared what might be described as battle plans, they have loosed the weapons themselves. Created at huge expense to American taxpayers, those cyberweapons have now been picked up by hackers from North Korea to Russia and shot back at the United States and its allies.
A screenshot taken as ransomware affected systems worldwide last summer. The Ukrainian government posted the picture to its official Facebook page.
Millions of people saw their computers shut down by ransomware, with demands for payments in digital currency to have their access restored. Tens of thousands of employees at Mondelez International, the Oreo cookie maker, had their data completely wiped. FedEx reported that an attack on a European subsidiary had halted deliveries and cost $300 million. Hospitals in Pennsylvania, Britain and Indonesia had to turn away patients. The attacks disrupted production at a car plant in France, an oil company in Brazil and a chocolate factory in Tasmania, among thousands of enterprises affected worldwide.
American officials had to explain to close allies — and to business leaders in the United States — how cyberweapons developed at Fort Meade in Maryland, came to be used against them. Experts believe more attacks using the stolen N.S.A. tools are all but certain.
Inside the agency’s Maryland headquarters and its campuses around the country, N.S.A. employees have been subjected to polygraphs and suspended from their jobs in a hunt for turncoats allied with the Shadow Brokers. Much of the agency’s cyberarsenal is still being replaced, curtailing operations. Morale has plunged, and experienced cyberspecialists are leaving the agency for better-paying jobs — including with firms defending computer networks from intrusions that use the N.S.A.’s leaked tools.
“It’s a disaster on multiple levels,” Mr. Williams said. “It’s embarrassing that the people responsible for this have not been brought to justice.”
In response to detailed questions, an N.S.A. spokesman, Michael T. Halbig, said the agency “cannot comment on Shadow Brokers.” He denied that the episode had hurt morale. “N.S.A. continues to be viewed as a great place to work; we receive more than 140,000 applications each year for our hiring program,” he said.
Compounding the pain for the N.S.A. is the attackers’ regular online public taunts, written in ersatz broken English. Their posts are a peculiar mash-up of immaturity and sophistication, laced with profane jokes but also savvy cultural and political references. They suggest that their author — if not an American — knows the United States well.
“Is NSA chasing shadowses?” the Shadow Brokers asked in a post on Oct. 16, mocking the agency’s inability to understand the leaks and announcing a price cut for subscriptions to its “monthly dump service” of stolen N.S.A. tools. It was a typically wide-ranging screed, touching on George Orwell’s “1984”; the end of the federal government’s fiscal year on Sept. 30; Russia’s creation of bogus accounts on Facebook and Twitter; and the phenomenon of American intelligence officers going to work for contractors who pay higher salaries.
The Shadow Brokers have mocked the N.S.A. in regular online posts and released its stolen hacking tools in a “monthly dump service.”
One passage, possibly hinting at the Shadow Brokers’ identity, underscored the close relationship of Russian intelligence to criminal hackers. “Russian security peoples,” it said, “is becoming Russian hackeres at nights, but only full moons.”
Russia is the prime suspect in a parallel hemorrhage of hacking tools and secret documents from the C.I.A.’s Center for Cyber Intelligence, posted week after week since March to the WikiLeaks website under the names Vault7 and Vault8. That breach, too, is unsolved. Together, the flood of digital secrets from agencies that invest huge resources in preventing such breaches is raising profound questions.
Have hackers and leakers made secrecy obsolete? Has Russian intelligence simply outplayed the United States, penetrating the most closely guarded corners of its government? Can a work force of thousands of young, tech-savvy spies ever be immune to leaks?
Some veteran intelligence officials believe a lopsided focus on offensive cyberweapons and hacking tools has, for years, left American cyberdefense dangerously porous.
“We have had a train wreck coming,” said Mike McConnell, the former N.S.A. director and national intelligence director. “We should have ratcheted up the defense parts significantly.”
America’s Cyber Special Forces
At the heart of the N.S.A. crisis is Tailored Access Operations, the group where Mr. Williams worked, which was absorbed last year into the agency’s new Directorate of Operations.
The N.S.A.’s headquarters at Fort Meade in Maryland. Cybertools the agency developed have been picked up by hackers from North Korea to Russia and shot back at the United States and its allies. Jim Lo Scalzo/European Pressphoto Agency
T.A.O. — the outdated name is still used informally — began years ago as a side project at the agency’s research and engineering building at Fort Meade. It was a cyber Skunk Works, akin to the special units that once built stealth aircraft and drones. As Washington’s need for hacking capabilities grew, T.A.O. expanded into a separate office park in Laurel, Md., with additional teams at facilities in Colorado, Georgia, Hawaii and Texas.
The hacking unit attracts many of the agency’s young stars, who like the thrill of internet break-ins in the name of national security, according to a dozen former government officials who agreed to describe its work on the condition of anonymity. T.A.O. analysts start with a shopping list of desired information and likely sources — say, a Chinese official’s home computer or a Russian oil company’s network. Much of T.A.O.’s work is labeled E.C.I., for “exceptionally controlled information,” material so sensitive it was initially stored only in safes. When the cumulative weight of the safes threatened the integrity of N.S.A.’s engineering building a few years ago, one agency veteran said, the rules were changed to allow locked file cabinets.
The more experienced T.A.O. operators devise ways to break into foreign networks; junior operators take over to extract information. Mr. Williams, 40, a former paramedic who served in military intelligence in the Army before joining the N.S.A., worked in T.A.O. from 2008 to 2013, which he described as an especially long tenure. He called the work “challenging and sometimes exciting.”
T.A.O. operators must constantly renew their arsenal to stay abreast of changing software and hardware, examining every Windows update and new iPhone for vulnerabilities. “The nature of the business is to move with the technology,” a former T.A.O. hacker said.
Long known mainly as an eavesdropping agency, the N.S.A. has embraced hacking as an especially productive way to spy on foreign targets. The intelligence collection is often automated, with malware implants — computer code designed to find material of interest — left sitting on the targeted system for months or even years, sending files back to the N.S.A.
The same implant can be used for many purposes: to steal documents, tap into email, subtly change data or become the launching pad for an attack. T.A.O.’s most public success was an operation against Iran called Olympic Games, in which implants in the network of the Natanz nuclear plant caused centrifuges enriching uranium to self-destruct. The T.A.O. was also critical to attacks on the Islamic State and North Korea.
It was this cyberarsenal that the Shadow Brokers got hold of, and then began to release.
Like cops studying a burglar’s operating style and stash of stolen goods, N.S.A. analysts have tried to figure out what the Shadow Brokers took. None of the leaked files date from later than 2013 — a relief to agency officials assessing the damage. But they include a large share of T.A.O.’s collection, including three so-called “ops disks — T.A.O.’s term for tool kits — containing the software to bypass computer firewalls, penetrate Windows and break into the Linux systems most commonly used on Android phones.
Evidence shows that the Shadow Brokers obtained the entire tool kits intact, suggesting that an insider might have simply pocketed a thumb drive and walked out.
But other files obtained by the Shadow Brokers bore no relation to the ops disks and seem to have been grabbed at different times. Some were designed for a compromise by the N.S.A. of Swift, a global financial messaging system, allowing the agency to track bank transfers. There was a manual for an old system code-named UNITEDRAKE, used to attack Windows. There were PowerPoint presentations and other files not used in hacking, making it unlikely that the Shadow Brokers had simply grabbed tools left on the internet by sloppy N.S.A. hackers.
After 15 months of investigation, officials still do not know what was behind the Shadow Brokers disclosures — a hack, with Russia as the most likely perpetrator, an insider’s leak, or both.
Some officials doubt that the Shadow Brokers got it all by hacking the most secure of American government agencies — hence the search for insiders. But some T.A.O. hackers think that skilled, persistent attackers might have been able to get through the N.S.A.’s defenses — because, as one put it, “I know we’ve done it to other countries.”
The Shadow Brokers have verbally attacked certain cyberexperts, including Mr. Williams. When he concluded from their Twitter hints that they knew about some of his hacks while at the N.S.A., he canceled a business trip to Singapore. The United States had named and criminally charged hackers from the intelligence agencies of China, Iran and Russia. He feared he could be similarly charged by a country he had targeted and arrested on an international warrant.
He has since resumed traveling abroad. But he says no one from the N.S.A. has contacted him about being singled out publicly by the Shadow Brokers.
“That feels like a betrayal,” he said. “I was targeted by the Shadow Brokers because of that work. I do not feel the government has my back.”
The Hunt for an Insider
For decades after its creation in 1952, the N.S.A. — No Such Agency, in the old joke — was seen as all but leakproof. But since Mr. Snowden flew away with hundreds of thousands of documents in 2013, that notion has been shattered.
The Snowden trauma led to the investment of millions of dollars in new technology and tougher rules to counter what the government calls the insider threat. But N.S.A. employees say that with thousands of employees pouring in and out of the gates, and the ability to store a library’s worth of data in a device that can fit on a key ring, it is impossible to prevent people from walking out with secrets.
Mr. Martin’s gargantuan collection of stolen files included much of what the Shadow Brokers have, and he has been scrutinized by investigators as a possible source for them. Officials say they do not believe he deliberately supplied the material, though they have examined whether he might have been targeted by thieves or hackers.
But according to former N.S.A. employees who are still in touch with active workers, investigators of the Shadow Brokers thefts are clearly worried that one or more leakers may still be inside the agency. Some T.A.O. employees have been asked to turn over their passports, take time off their jobs and submit to questioning. The small number of cyberspecialists who have worked both at T.A.O. and at the C.I.A. have come in for particular attention, out of concern that a single leaker might be responsible for both the Shadow Brokers and the C.I.A.’s Vault7 breaches.
Then there are the Shadow Brokers’ writings, which betray a seeming immersion in American culture. Last April, about the time Mr. Williams was discovering their inside knowledge of T.A.O. operations, the Shadow Brokers posted an appeal to President Trump: “Don’t Forget Your Base.” With the ease of a seasoned pundit, they tossed around details about Stephen K. Bannon, the president’s now departed adviser; the Freedom Caucus in Congress; the “deep state”; the Alien and Sedition Acts; and white privilege.
“TheShadowBrokers is wanting to see you succeed,” the post said, addressing Mr. Trump. “TheShadowBrokers is wanting America to be great again.”
The mole hunt is inevitably creating an atmosphere of suspicion and anxiety, former employees say. While the attraction of the N.S.A. for skilled cyberoperators is unique — nowhere else can they hack without getting into legal trouble — the boom in cybersecurity hiring by private companies gives T.A.O. veterans lucrative exit options.
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Young T.A.O. hackers are lucky to make $80,000 a year, while those who leave routinely find jobs paying well over $100,000, cybersecurity specialists say. For many workers, the appeal of the N.S.A’s mission has been more than enough to make up the difference. But over the past year, former T.A.O. employees say an increasing number of former colleagues have called them looking for private-sector work, including “graybeards” they thought would be N.S.A. lifers.
“Snowden killed morale,” another T.A.O. analyst said. “But at least we knew who he was. Now you have a situation where the agency is questioning people who have been 100 percent mission-oriented, telling them they’re liars.”
Because the N.S.A. hacking unit has grown so rapidly over the past decade, the pool of potential leakers has expanded into the hundreds. Trust has eroded as anyone who had access to the leaked code is regarded as the potential culprit.
Some agency veterans have seen projects they worked on for a decade shut down because implants they relied on were dumped online by the Shadow Brokers. The number of new operations has declined because the malware tools must be rebuilt. And no end is in sight.
“How much longer are the releases going to come?” a former T.A.O. employee asked. “The agency doesn’t know how to stop it — or even what ‘it’ is.”
One N.S.A. official who almost saw his career ended by the Shadow Brokers is at the very top of the organization: Adm. Michael S. Rogers, director of the N.S.A. and commander of its sister military organization, United States Cyber Command. President Barack Obama’s director of national intelligence, James R. Clapper Jr., and defense secretary, Ashton B. Carter, recommended removing Admiral Rogers from his post to create accountability for the breaches.
But Mr. Obama did not act on the advice, in part because Admiral Rogers’ agency was at the center of the investigation into Russia’s interference in the 2016 election. Mr. Trump, who again on Saturday disputed his intelligence agencies’ findings on Russia and the election, extended the admiral’s time in office. Some former intelligence officials say they are flabbergasted that he has been able to hold on to his job.
A Shadow War With Russia?
Lurking in the background of the Shadow Brokers investigation is American officials’ strong belief that it is a Russian operation. The pattern of dribbling out stolen documents over many months, they say, echoes the slow release of Democratic emails purloined by Russian hackers last year.
But there is a more specific back story to the United States-Russia cyber rivalry.
Starting in 2014, American cybersecurity researchers who had been tracking Russia’s state-sponsored hacking groups for years began to expose them in a series of research reports. American firms, including Symantec, CrowdStrike and FireEye, reported that Moscow was behind certain cyberattacks and identified government-sponsored Russian hacking groups.
In the meantime, Russia’s most prominent cybersecurity firm, Kaspersky Lab, had started work on a report that would turn the tables on the United States. Kaspersky hunted for the spying malware planted by N.S.A. hackers, guided in part by the keywords and code names in the files taken by Mr. Snowden and published by journalists, officials said.
Kaspersky was, in a sense, simply doing to the N.S.A. what the American companies had just done to Russian intelligence: Expose their operations. And American officials believe Russian intelligence was piggybacking on Kaspersky’s efforts to find and retrieve the N.S.A.’s secrets wherever they could be found. The T.A.O. hackers knew that when Kaspersky updated its popular antivirus software to find and block the N.S.A. malware, it could thwart spying operations around the world.
So T.A.O. personnel rushed to replace implants in many countries with new malware they did not believe the Russian company could detect.
In February 2015, Kaspersky published its report on the Equation Group — the company’s name for T.A.O. hackers — and updated its antivirus software to uproot the N.S.A. malware wherever it had not been replaced. The agency temporarily lost access to a considerable flow of intelligence. By some accounts, however, N.S.A. officials were relieved that the Kaspersky report did not include certain tools they feared the Russian company had found.
As it would turn out, any celebration was premature.
On Aug. 13 last year, a new Twitter account using the Shadow Brokers’ name announced with fanfare an online auction of stolen N.S.A. hacking tools.
“We hack Equation Group,” the Shadow Brokers wrote. “We find many many Equation Group cyber weapons.”
Inside the N.S.A., the declaration was like a bomb exploding. A zip file posted online contained the first free sample of the agency’s hacking tools. It was immediately evident that the Shadow Brokers were not hoaxsters, and that the agency was in trouble.
The leaks have renewed a debate over whether the N.S.A. should be permitted to stockpile vulnerabilities it discovers in commercial software to use for spying — rather than immediately alert software makers so the holes can be plugged. The agency claims it has shared with the industry more than 90 percent of flaws it has found, reserving only the most valuable for its own hackers. But if it can’t keep those from leaking, as the last year has demonstrated, the resulting damage to businesses and ordinary computer users around the world can be colossal. The Trump administration says it will soon announce revisions to the system, making it more transparent.
Mr. Williams said it may be years before the “full fallout” of the Shadow Brokers breach is understood. Even the arrest of whoever is responsible for the leaks may not end them, he said — because the sophisticated perpetrators may have built a “dead man’s switch” to release all remaining files automatically upon their arrest.
“We’re obviously dealing with people who have operational security knowledge,” he said. “They have the whole law enforcement system and intelligence system after them. And they haven’t been caught.”
Friday stocks limped to a close and Treasuries fell for the third consecutive day. The reason for the weakness… potential tax reform delay.
As noted a gazillion times, this is the first time in 30 years I have observed near universal bearishness as the majority of bulge bracket firms are forecasting a significant decline. The reasons are varied, but the consistency is the change in monetary policy. Some are pontificating that last week was the beginning of a declining trend.
My only comment is rarely does an event occur when everyone is suggesting that it will occur.
To date, there has been little written about the Middle East and its potential impact upon the markets. In years past, any Middle Eastern volatility was met with considerable selling.
Will the purge in Saudi Arabia be of significance, the greatest purge in at least a generation? What about the abdication of the Lebanese President and the subsequent coup in Lebanon leaving the Iranian supported Hezbollah in power? Saudi Arabia has all but declared war on Lebanon. And then there is the Iranian based Yemini Houthi missile fired at the Saudi Arabian capital, an act of war. How will the Kurdistan referendum in Iraq unfold?
The hatred between Saudi Sunni and Iranian Sunni is at least 1200 years old. The potential flash points are at historical proportions. All must remember Iran, Iraq and Saudi Arabia provide approximately 25% of the world’s daily oil needs.
There is little geopolitical premium in either the equity or oil markets. Is this about to change?
Historically it is the unwritten event that becomes a major market catalyst.
This week there are several inflationary indices released as are retail sales. Also posted is industrial production/capacity utilization as well as housing statistics. How will all be interpreted?
Last night the foreign markets were down. London was down 0.09%, Paris was down 0.68% and Frankfurt was down 0.75%. China was up 0.44% and Japan was down 1.32%.
The Dow should open quietly lower. Is the benign inflationary narrative about to change? According to the NY Fed’s underlying inflation gauge, inflation is now at the highest level in more than 10 years, partially the result of a 35% climb in oil from its June lows. The 10-year is up 8/32 to yield 2.38%.
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