Latvia warns of ‘hybrid war’ as central bank corruption probe widens

Ilmars RimsevicsLatvian defense officials have hinted that Russia is trying to destabilize Latvia’s economy, as a Western-backed anti-corruption probe at the highest levels of the Baltic country’s banking sector deepens. Developments have progressed at a high speed since Monday of last week, when Latvia’s Corruption Prevention and Combating Bureau arrested Ilmars Rimsevics, the longtime Governor of the Bank of Latvia —the country’s central bank. Bureau investigators said Rimsevics’ arrest related to charges that he received bribes in order to facilitate money laundering from Russia.

Rimsevics became deputy governor of the Bank of Latvia in 1992, just months after the country seceded from the Soviet Union. In 2001 he was promoted to governor, a post that he has held onto ever since. When the small Baltic country joined the European Union, in January 2014, Rimsevics automatically became a member of the Governing Council of the European Central Bank (ECB), which directs the Eurozone’s monetary policy and monitors the performance of the euro. But last week the Latvian government rescinded Rimsevics’ security clearance and a scheduled meeting of the ECB in Frankfurt took place without him.

This dramatic development underscores the troubled state of Latvia’s banking sector, which is a notorious reputation as one of Europe’s most lucrative money-laundering hubs. Soon after it gained its independence, the small country of 2 million became an attractive conduit for Russia’s nouveau riche seeking to funnel their money westward. The country’s sizeable Russian-speaking minority allowed the local banking sector to offer highly sought-after services in the Russian language, which further-facilitated its contacts with wealthy Russian clients. This was further-enhanced by Latvia’s integration into the economic structure of the European Union in 2014. But Western countries began voicing concerns about close links between Latvia’s banking sector and Russian oligarchs in 1996. By 2011, the United States Department of the Treasury had identified numerous Latvian banks as serious violators of laws designed to prevent money laundering. In 2014, and again in 2017, the Organized Crime and Corruption Reporting Project identified Latvia as part of an extensive international money-laundering scheme dubbed “the Russian Laundromat”.

Notably, Rimsevics was arrested less than a week after Washington vowed to impose penalties on ABLV, Latvia’s third largest bank, for “institutionalizing money laundering” and violating a host of financial sanctions imposed by the United Nations, including sanctions against North Korea’s nuclear program. There is no question, therefore, that Rimsevics’ dramatic arrest was designed to combat what The Financial Times recently called “a banking scandal on the Baltic”. In the past few hours, reports from Riga indicate that ABLV may be on the brink of collapse, being unable to withstand the financial effects of the public scandal that emerged in recent days.

But things are never simple in the Baltic region. Soon after Rimsevics’ release on bail, reports in the Latvian media pointed to alleged efforts by Russia to defame him, in an effort to further-tarnish the already damaged reputation of Latvia’s banking sector. On Tuesday of last week, the Latvian Ministry of Defense said it had evidence that Rimsevics was targeted in a “disinformation operation” directed from abroad. It added that there was a “high probability that [a] massive information operation” had been launched for “foreign centers” aimed at destabilizing Latvia’s banks. No evidence or further information about the allegation was revealed. But the Defense Ministry’s allegations seemed to be supported by an analysis of the relevant news reporting by the Atlantic Council’s Digital Forensics Research Lab in Washington.

On February 23, Latvia’s Prime Minister, Maris Kucinskis, and President, Raimonds Vejonis, seemed to endorse the Defense Ministry’s allegations. Despite the fact that both politicians have urged Rimsevics to resign “for the sake of the financial system”, they also warned that Latvia was under attack in an information war. The two men did not make specific allegations, but said that the information attacks experienced by Latvia were “identical” to those seen in recent years in France, Germany, and the United States. Meanwhile, shortly after his release, Rimsevics held a press conference in Riga, where he denied all charges against him. He accused Latvia’s private banks of conspiring against him and said he was the victim of “death threats” to destabilize the country. On the same day Moscow, Kremlin spokesman Dmitry Peskov said that Russia had no comment on the situation in Latvia. “This is an internal political matter for our Latvian comrades [and] we wouldn’t want to get involved”, he said.

Author: Joseph Fitsanakis | Date: 26 February 2018 | Permalink

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Britain to set up intelligence unit to combat ‘fake news’ by foreign states

Theresa MayThe British government has announced that it will form a new intelligence unit tasked with preventing the spread of so-called “fake news” by foreign states, including Russia. The decision was revealed earlier this week in London by a government spokesman, who said that the new unit will be named “National Security Communications Unit”. The spokesman added that the unit will be responsible for “combating disinformation by state actors and others”. When asked by reporters whether the effort was meant as a response to the phenomenon often described as “fake news”, the spokesman said that it was.

According to The Times newspaper, the proposal for a National Security Communications Unit was presented during a scheduled meeting of the country’s National Security Council earlier this week. It was put forward by its strongest proponent, Sir Mark Sedwill, Britain’s former ambassador to Afghanistan and current national security adviser to the government. The unit will be directly accountable to the Cabinet Office, the government department that is responsible for providing support to the Prime Minister and her Cabinet. It will be staffed with professionals from Britain’s intelligence and security agencies, but will also rely on contributions from external experts in cybersecurity, communications and public relations. The unit will also include a “rapid response unit” that will be tasked with countering “fake news” in real time, according to The Times.

The move follows a similar development in the United States. In December of 2016, the then President Barack Obama signed a new law that designated $160 million to set up a government center for “countering foreign propaganda and disinformation”. The law, entitled “Countering Foreign Propaganda and Disinformation Act”, authorized the departments of State and Defense to work with other federal agencies in establishing the new body. According to a statement by the White House, the goal of the Center would be to collect and analyze “foreign government information warfare efforts” and to “expose and counter foreign information operations” directed against “US national security interests”.

On Wednesday it was announced in London that the British Secretary of Defense, Gavin Williamson, will be providing further details about the National Security Communications Unit in a speech to the House of Commons “within the next few days”.

Author: Joseph Fitsanakis | Date: 25 January 2018 | Permalink

Intelligence chief warns of foreign interference in German coalition talks

A senior German intelligence official has warned that foreign powers, including Russia, could try to shape the outcome of talks by German parties to form a governing coalition, following last week’s national elections. The elections resulted in a major shakeup of Germany’s political landscape, as Chancellor Angela Merkel’s Christian Democratic Union lost nearly 10 percentage points compared to its 2013 election result. It is now forced to seek the participation of other conservative or centrist political parties in a broad governing alliance. Meanwhile, the far-right Alternative for Germany (AfD) won 12.6 percent, propelling it to third place and giving it 91 seats in the Bundestag. The AfD result marks the first time since 1945 that a German far-right party has managed to secure parliamentary representation.

On Thursday, senior intelligence official Burkhard Even said that, unlike France and the United States, Germany was spared major foreign interference during its recent election period. Speaking at a security conference in Berlin, Even, who is director of counterintelligence at the Federal Office for the Protection of the Constitution, said interference attempts were limited in both volume and impact. He described them as “low-level propaganda” operations conducted mainly by Russian media, which “did not have a significant impact on voters” and did not affect “the election outcome as a whole”. However, the official added that such attempts were possible in the post-election period. For instance, there could be efforts by foreign intelligence agencies to discredit certain government officials or political figures, said Even. Alternatively, methods of propaganda could be employed by a foreign power “to affect the forging of a new government”, he added, referring to the ongoing talks between German political parties to enter into a governing coalition. “The risks are enormous”, said Even, and “they are not diminishing”.

The far-right AfD campaigned in favor of ending Muslim immigration to Germany and expelling most non-Western immigrants from the country. The party has also called for a tighter relationship between Berlin and Moscow and opposes Germany’s decision to impose economic sanctions on Russia in response to its alleged intervention in Crimea. Some have suggested that the Russian intelligence services launched a secret campaign to gather voter support for the AfD in the run-up to last week’s elections.

 

Author: Joseph Fitsanakis | Date: 29 September 2017 | Permalink

South Korean former spy chief sent to prison for meddling in elections

Won Sei-hoonThe former director of South Korea’s main intelligence agency has been sent to prison for organizing a large-scale illegal campaign to influence the result of the country’s 2012 presidential election. Won Sei-hoon headed the NIS from 2008 to 2013, during the administration of conservative President Lee Myung-bak. During the 2012 presidential election, Won ordered a group of NIS officers to “flood the Internet” with messages accusing liberal political candidates of being “North Korean sympathizers”. One of those candidates, Moon Jae-in, of the left-of-center Democratic Party of Korea, is now the country’s president. Mr. Moon succeeded his main right-wing rival, Park Geun-hye, who resigned in March of this year following a series of financial scandals. She is now facing charges of bribery, abuse of power, leaking government secrets, and corruption.

In February 2015, the Seoul High Court upheld an earlier sentence of 2.5 years in prison, which had been imposed on Won by a lower court. But his conviction was overturned on appeal. Earlier this August, an internal inquiry conducted by the NIS found that many its officers were tasked by Won to manipulate the outcome of the 2012 presidential election with 30 dedicated teams of officers —some of whom were hired specifically for that purpose. A number of teams were in charge of creating fake social media accounts and using them to post negative views of Mr. Moon and positive views of his conservative rival, Mrs. Park. Other teams were tasked with creating the false impression that South Korea’s rival, North Korea, was supportive of Mr. Moon’s candidacy. The probe also found that the NIS launched similar —though on smaller scale— efforts to influence the outcome of parliamentary elections in 2011 and 2012.

On Wednesday, based on new evidence provided by the government, including the results of the NIS’ internal investigation, the Seoul High Court sentenced Won to four years in prison for political meddling. Two other former senior officials in the NIS were sentenced to 30 months in prison each. In delivering his sentence, the judge said Won assembled a team of NIS operatives “with the specific intention to sway public opinion”. Throughout the operation, said the judge, Won was “regularly briefed” and exercised precise control over it. Won was transferred directly from the court to prison, where he will serve his sentence.

Author: Ian Allen | Date: 30 August 2017 | Permalink

Mismanagement plagues US online program against ISIS, say sources

CENTCOM military computersWhistleblowers say mismanagement, amateurism and cronyism are plaguing a multimillion-dollar American psychological operation aimed at countering online propaganda by the Islamic State. The program, known as WebOps, was established by the United States Department of Defense during the administration of US President Barack Obama. Its stated goal is to counter efforts by the Islamic State (also known as the Islamic State of Iraq and Syria —ISIS) to spread propaganda and recruit followers using online social media. Since its creation, it has been administered by the US Central Command’s Information Operations Division. But its implementation has been contracted to Colsa Corporation, a private company based in the US state of Alabama. The company specializes in providing services for US government agencies, some of which include the use of specialized software that utilizes information found on social media.

According to the Associated Press news agency, WebOps staff consists of civilian analysts who speak Arabic. Every day, using fabricated online profiles, they browse social media platforms like Facebook and Twitter looking for pro-ISIS activity to counter. But the news agency said on Tuesday that it spoke to several people with knowledge of the program, who claim that it is plagued by incompetence, mismanagement and cronyism. They allege that analysts involved in WebOps have limited experience in counter-propaganda, incomplete understanding of Islam, and little more than a basic command of Arabic. Consequently, they have been known to make crucial errors when posting messages online. The latter end up amusing their readers instead of countering ISIS propaganda. In one case, a WebOps analyst confused the Arabic word for “authority” (as in Palestinian Authority) with the similarly sounding word “salad”, thus ending up with “Palestinian salad” instead of “Palestinian Authority”. Rather than managing to counter ISIS propaganda, the message was ridiculed on social media.

The report also cited “four current or former workers” who claimed that they personally witnessed “data being manipulated” to make the WebOps program seem more successful than it has been. They also claim that the program’s administrators have purposely resisted efforts by the Department of Defense to exercise independent oversight of the program’s performance. The Associated Press said it contacted US Central Command, the Pentagon outfit that is responsible for WebOps, on January 10. But it said that no response has been received from anyone there.

Author: Joseph Fitsanakis | Date: 01 February 2017 | Permalink

US government to set up ‘anti-propaganda center’ after Obama signs new law

Barack ObamaUnited States President Barack Obama has signed a new law that designates $160 million to set up a government center for “countering foreign propaganda and disinformation”. The law authorizes the US departments of State and Defense to work with other federal agencies in establishing the new body. Its precise tasks are not yet known, nor is the role in it —if any— of intelligence agencies, though the Director of National Intelligence is mentioned in the body of the legislation.

The legislation is entitled “Countering Foreign Propaganda and Disinformation Act”, and it was introduced in both chambers of the US Congress last spring by Republican and Democrat legislators. It was initially entitled “Countering Information Warfare Act”, but was subsequently revised and included in the National Defense Authorization Act for fiscal year 2017. It was approved by the House of Representatives on December 2, and by the Senate on December 8. President Obama signed it into law on December 23. Under the new law, the Department of Justice has to take initiative within 180 days, and collaborate with the Department of Defense, before reaching out to “other relevant departments and agencies”. Resulting from this process will be the establishment of a “Center for Information Analysis and Response”. The goal of the Center will be to collect and analyze “foreign government information warfare efforts”, and to “expose and counter foreign information operations” directed against “US national security interests”. The plan will be funded in the amount of $160 million over two years.

Rob Portman, a Republican US Senator from Ohio, who co-sponsored the bill, hailed it as “a critical step towards confronting the extensive, and destabilizing, foreign propaganda and disinformation operations being waged against us by our enemies overseas”. But the Russian government-owned broadcaster RT called the new law “ominous” and “controversial”, and said the US government was “itself pushing propaganda on its own domestic population”. In an article published on Tuesday, the Hong Kong-based newspaper South China Morning Post said the new legislation was aimed at China, as well as at Russia. The newspaper cited Chinese experts who warned that Washington and Beijing “could head down the slippery slope toward ideological confrontation” as a result of the new law.

Author: Joseph Fitsanakis | Date: 28 December 2016 | Permalink

FBI warns against alleged Russian campaign to destabilize US elections

Putin and ObamaThe Federal Bureau of Investigation is among several intelligence agencies in the United States that have expressed concerns about an alleged Russian campaign to destabilize November’s presidential elections. The Washington Post, which revealed the FBI’s concerns on Monday, claimed that Moscow recently launched an “active measures” operation aimed at covertly sabotaging the integrity of the US election process. Russia’s goal, said the paper, was to “counter US leadership and influence in international affairs”, thus subverting America’s image, especially in countries of the former Eastern Bloc or former Soviet republics.

According to The Post, the FBI and other US intelligence agencies have “no definitive proof” that Moscow is attempting to promote public distrust in American political institutions. But there are strong indications that have made this topic “a priority” for intelligence officials from the FBI, the Department of Homeland Security, the National Security Agency and the Central Intelligence Agency, said the paper. These indications include the hack of the computer systems at the Democratic National Committee, the official governing body of the US Democratic Party, which was revealed in June. The hack resulted in the disclosure of over 20,000 internal emails and led to the resignation of Debbie Wasserman-Schultz, the DNC’s Chairwoman. According to The Post, the hack is “not yet officially ascribed by the US government to Russia”, but US intelligence officials are convinced that Moscow was behind it.

The DNC hack prompted the FBI to send a so-called “flash alert” to US election officials in July, urging them to remain vigilant against “attempts to penetrate election systems”, which have been detected in several states, according to the report. The unprecedented FBI alert did not expressly name Russia as a national-security threat, nor did it give details of electoral sabotage. But it urged state election officials to “be on the lookout for intrusions into their election systems”. Citing unnamed intelligence officials, The Post said that the investigation into alleged Russian operations against the US Presidential election is being coordinated by James Clapper, the US Director of National Intelligence.

Author: Joseph Fitsanakis | Date: 07 August 2016 | Permalink