Cold War files show CIA support for guerrilla warfare inside USSR (Part II)

Latvia Forest BrothersThe role of the CIA in funding and helping to organize anti-Soviet groups inside the USSR has been known for decades. But, as intelNews explained in part I of this article, a batch of recently released documents, unearthed by Russian-language service of Latvian state television, sheds light into the CIA’s early understanding of the identity, strength and operations of these groups. They also contain new information about the background and structure of underground anti-Soviet groups like the Forest Brothers in Latvia.

Judging that Latvia’s anti-Soviet underground movement could be “of considerable operational value”, the CIA initiated project ZRLYNCH in the summer of 1950. Operated out of the CIA’s Munich station in Germany, ZRLYNCH was intended as a long-term project supervised by the Office of Policy Coordination, an early Cold War covert operations outfit that in 1952 was absorbed into the CIA’s Directorate of Operations. The Latvia operation was part of a wider effort by the CIA, which was aimed at subverting Soviet power in Eastern Europe.

For the first year of ZRLYNCH, the CIA’s Office of Policy Coordination asked for —and received— a budget of $30,000. The top-secret document unearthed recently by Latvian state television states that the budget was to be used primarily for intelligence collection inside Soviet territory, as well as for covert operations by the Forest Brothers (for information about the group, see part I of this post). The latter were to conduct sabotage activities as part of organized guerrilla warfare. These activities are not specified in the CIA documents. By the end of the first year, it appears that the CIA had recruited three Latvian agents in Europe (one in Sweden and two in Germany), who were acting as mediators between the CIA and the Forest Brothers inside the USSR. Less than three years later, the ZRLYNCH budget had risen to $134,000, with $52,000 going toward covert —mostly psychological— operations and the rest being used to fund intelligence collection efforts. The CIA was also funding the travel expenses of leading Latvian émigré figures in the US, and was diverting tens of thousands of dollars toward Latvian émigré conferences in America, which aimed to unite the various political factions of the fragmented Latvian community in the States.

But the CIA officers behind ZRLYNCH were extremely concerned about operational security. They did not want the Kremlin finding out that the Agency was behind efforts to stir up armed resistance against Soviet power in the Baltic region. One CIA document states that there would be no tolerance for “any breaches of security” that compromised ZRLYNCH. Consequently, any action that uncovered the link between the US government and the Forest Bothers would lead “to an immediate cessation of financial support” for ZRLYNCH, states the memo.

Ultimately, ZRLYNCH failed to seriously challenge Soviet power in Latvia. Most of the members of the Forest Brothers were killed during Red Army counterinsurgency operations, and much of the organization’s structure was penetrated by agents of Soviet intelligence. Eventually, the Forest Brothers became extinct in 1957, when their last members emerged from the forest and surrendered to Latvian and Soviet authorities.

Author: Joseph Fitsanakis | Date: 11 August 2017 | Permalink

Cold War files show CIA support for guerrilla warfare inside USSR (Part I)

Latvian Forest BrothersRecently declassified documents from the archive of the Central Intelligence Agency detail financial and material support given by the United States to groups of armed guerrillas in Soviet Latvia in the 1950s. The documents, initially marked ‘Top Secret’ but now declassified, show that the CIA was aware and supported the activities of an anti-Soviet guerrilla army known as ‘the Forest Brothers’. Known also as ‘the Forest Brethren’, the group was formed in the Baltic States in 1944, as the Soviet Red Army established Soviet control over the previously German-occupied states of Estonia, Latvia and Lithuania. The Soviet Union had previously occupied and annexed the three Baltic countries, in a failed attempt to pre-empt Germany’s eastward military expansion. Groups like the Forest Brothers consisted of the most militant members of anti-Soviet groups in the Baltic States, many of whom were ideologically opposed to Soviet Communism.

The role of the CIA in funding and helping to organize anti-Soviet groups inside the USSR has been known for decades. But the recently released documents, unearthed by Russian-language service of Latvian state television, shed light into the CIA’s early understanding of the identity, strength and operations of these groups. They also contain new information about the background and structure of underground anti-Soviet groups like the Forest Brothers in Latvia.

The first declassified CIA document that contains information on anti-Soviet resistance in Latvia is dated November 29, 1949, and is titled “The Organization of the Underground Resistance Movement in Eastern Europe”. It was soon followed by two other documents, entitled “Latvian Resistance to Russian Occupation” and “Request for [Support] to the Latvian Resistance Movement”. The latter document was produced in mid-1950, after the CIA was able to establish contact with anti-Soviet Latvian expatriates living in Germany and Sweden. From these contacts, the CIA was able to determine that active (and possibly armed) resistance to the Soviet Red Army in Latvia was limited to approximately 5,000 individuals, many of whom conducted periodic guerrilla attacks against Soviet troops or installations. However, the CIA report said that, as of 1950, the majority of these armed guerrillas remained dormant, “waiting for a more opportune moment” to return to action. The CIA memorandum also stated that clandestine radio communication existed between the leadership of Latvia’s anti-Soviet underground in Riga and exile Latvian communities in Sweden.

Note: Part II of this report can be found here.

Author: Joseph Fitsanakis | Date: 10 August 2017 | Permalink

US reportedly considering airstrikes against pro-ISIS groups in the Philippines

The United States is reportedly weighing plans to launch airstrikes in the Philippines, against militant groups that are affiliated with the Islamic State of Iraq and Syria. However, some American officials are skeptical about reports of possible airstrikes, while Philippine government officials claim no such action is necessary. For more than 40 years, the Philippine army has been fighting a counterinsurgency campaign against secessionist Moros in the country’s southwest. The region is home to most of the Philippines’ Muslim population, which constitutes around 6 percent of the country’s overall population. In recent years, some Muslim secessionist groups, including the most formidable, Abu Sayyaf, have pledged allegiance to the Islamic State of Iraq and Syria, known as ISIS.

For about 15 years, a small contingent of US troops has assisted the Philippine military in its war against Muslim militants. Known as Joint Special Operations Task Force Trident, the small group of US soldiers performs a low-key advisory role in the Philippine military’s counterinsurgency campaign. The American military presence in the Philippines is not a ‘named operation’, which means that its funding from the Pentagon is relatively small and its range of activities remains limited. But this week’s visit to Manila by the US Secretary of State Rex Tillerson prompted rumors that Washington may be considering naming the Task Force Trident operation, and possibly increasing the scope of its activities to include airstrikes against Abu Sayyaf. The American news network NBC said on Tuesday that the US is considering launching an offensive air campaign against ISIS, “as part of [a new] collective self-defense” treaty with Manila. Citing two unnamed US defense officials, NBC said that the air campaign could be officially announced as early as this week.

But the network also said that another US official cautioned that a new collective self-defense agreement between the US the Philippines would not necessarily have to include provisions for an offensive air campaign. Typically, self-defense agreements between Washington and allied countries that are not members of the North Atlantic Treaty Organization are “more about intelligence sharing than offensive US strikes”, said the official. Meanwhile, Philippine government officials denied on Tuesday that Manila had requested air support from Washington in its war against Abu Sayyaf. The island country’s Secretary of Defense, Delfin Lorenzana, told reporters that “there was no need” for US airstrikes in the Philippines. The US Pentagon did not comment on the NBC report.

Author: Joseph Fitsanakis | Date: 09 August 2017 | Permalink

CIA’s withdrawal from Syria could cause pro-US rebels to join Islamists, experts warn

Free Syrian ArmyThe decision by the White House to terminate American support for rebels in war-torn Syria could backfire by causing the suddenly unemployed fighters to join jihadist organizations, according to experts. The United States’ support for the rebels began in secret in early 2013, after the then US President, Barack Obama, instructed the Central Intelligence Agency to provide covert support to fighters in Syria. The CIA then joined forces with spy agencies from Britain, France, Saudi Arabia and the United Arab Emirates, to assist fighters affiliated with the Free Syrian Army. At that time, Washington saw the Free Syrian Army and forces affiliated with it as ideologically moderate. It also agreed with the group’s main aim, which was to topple the regime of Syrian President Bashar al-Assad.

Codenamed TIMBER SYCAMORE, the CIA program was designed to mirror a similar project run by the US military in support of local troops fighting the Islamic State. On the one hand, the White House wanted to use the CIA’s support for the FSA to weaken militarily the regime in Damascus. On the other hand, Washington hoped that the CIA’s involvement in the region would be able to control the influx of weapons, money and fighters that were streaming in from neighboring countries. Under TIMBER SYCAMORE, for over three years, CIA personnel trained Free Syrian Army fighters in irregular warfare, while also providing them with light weaponry including machine guns, sniper rifles and off-road vehicles.

But on July 19 of this year, US President Donald Trump abruptly ended the CIA program, which he called “dangerous and wasteful”. Some observers argued that the termination of TIMBER SYCAMORE was an attempt by the Trump administration to come to an agreement with Russia on Syria. It is believed that America’s local allies, such as Saudi Arabia and the United Arab Emirates, are also terminating their clandestine support for the Free Syrian Army, not wishing to go against the White House. This development, therefore, may signal the effective termination of substantial foreign support for the most important anti-Assad rebel group in Syria.

What does that mean for the fate of the Free Syrian Army and its thousands of fighters? Some experts say that their fate is uncertain, and warn that some of them may turn against their former benefactors. Writing in The Christian Science Monitor, Taylor Luck, said earlier this week that the Free Syrian Army reported 50 defections of its fighters in July. Some of these fighters, says Luck, are joining the Pentagon’s program in support of forces fighting the Islamic State, and are currently heading to the eastern and northern battlefronts. But many others are being tempted to join al-Qaeda affiliated groups, who are still fighting President Assad’s forces. Many do so for financial reasons, after seeing their CIA income suddenly disappear. Others, says Luck, are feeling very emotional and bitter against what they see as a betrayal by Washington. “We lost our brothers, our sisters, our children”, says one of these fighters, before vowing to fight Assad until the end. According to Luck’s report, Saudi Arabia and the United Arab Emirates are trying to come up with ways to continue to pay the Free Syrian Army rebels, in an attempt to stop them from joining rival jihadist groups.

Author: Ian Allen | Date: 04 August 2017 | Permalink

US Pentagon wasted $450 million in Afghan spy training program, says watchdog

Afghan National ArmyNearly half a billion of American taxpayers’ funds were wasted by contractors hired by the United States government to train Afghan intelligence personnel, according to a scathing report by a Congressional body. The funds were spent between 2010 and 2013 by the US Department of Defense, in order to train several thousand members and a few dozen aspiring trainees of the Afghanistan National Defense and Security Forces (ANDSF). Two companies, Legacy Afghanistan R&D and Afghanistan Source Operations Management, oversaw the training program. It was primarily executed by a contractor, Imperatis Corporation, and a subcontractor, New Century Consulting, at a total cost of $457 million to the US taxpayer.

But according to a new report, the four-year program was a monumental, multimillion dollar waste. The report was written by the Special Inspector General for Afghanistan Reconstruction (SIGAR). The body was established by the US Congress in 2008 to supervise the effectiveness of US government-funded reconstruction programs in Afghanistan. Dated July 2017, the SIGAR report says it is “almost impossible” to evaluate the effectiveness of the ANDSF intelligence-training program, because none of the contractors and subcontractors involved in it kept adequate training records. Based on the available information, the SIGAR report concludes that there is virtually “no indication of improvement in intelligence operations” by ANDSF as a result of the four-year training program.

Part of the reason for the poor value of the program is that “a significant portion” of the intelligence trainees enrolled in it performed below the minimum standards required. Additionally, few trainees actually completed the courses that were required prior to graduation. Shockingly, the US Pentagon paid the contractors in full despite the fact that they had failed to keep adequate records of their performance, an omission which legally entitled the Pentagon to refuse to payment. Even more incredibly, the SIGAR report also found that Imperatis Corporation billed the US taxpayer nearly $4 million between March and December of 2011 for training courses that had been canceled and were not being offered.

The training program’s subcontractor, New Century Consulting (owned by retired US Special Forces Colonel Tim Collins), was criticized two years ago in another SIGAR report for spending $130 million of US taxpayers’ funds on “unsupported” and “questioned” purchases. The program’s main contractor, Imperatis Corporation, went out of business in May 2016.

Author: Ian Allen | Date: 03 August 2017 | Permalink

Dozens of Western ‘freelance fighters’ embedded with anti-ISIS forces in Syria

Kurdish YPG SyriaDozens of Western European and American citizens are participating in the ongoing takeover of Raqqa, the de facto capital of the Islamic State in Syria, despite being prohibited from doing so by their own governments, according to recent news reports. Much has been written about foreign fighters who enter Iraq and Syria in order to join the ranks of the Islamic State, the Sunni militant group that previously went by the name Islamic State of Iraq and Syria (ISIS). But relatively little attention has been paid to the thousands of foreign fighters who have traveled to the region to join the war against ISIS.

In late 2015, independent researcher Nathan Patin published “The Other Foreign Fighters”, a rare examination of Americans who had joined the various armed groups fighting ISIS in the region. Patin found that at least 200 Americans had attempted to travel to the region in order to join the fight against ISIS as ‘freelance fighters’. Roughly half of those had managed to embed themselves with armed —primarily Kurdish— groups, and saw action on the ground. In 2016, three British and Irish anti-ISIS volunteers were jailed by Iraqi authorities while attempting to return to Europe after having fought for the Kurdish People’s Protection Unit (YPG), a group that serves as the armed wing of the Kurdistan Workers’ Party (PKK) in northern Syria. The three were initially suspected of being foreign ISIS volunteers, but were released from prison in April of 2016, after the YPG verified their bona fides.

A recent report by The Los Angeles Times claims that there are still “several dozen” Western volunteers embedded with anti-ISIS militias in Syria. They are doing so in the face of warnings by European and American government agencies that freelance participation in the Syrian civil war is a potentially punishable offense. The Times cited “local estimates” and spoke to Daman Frat, a YPG commander stationed in the eastern outskirts of Raqqa, who said that “several foreign volunteers” were embedded in YPG units. Most, though certainly not all of them, said Frat, had prior military experience. According to the paper, at least three Western volunteers, one British and two American citizens, have died in recent days, as YPG forces are closing in on the de facto ISIS capital. The US Departments of State and Defense, which are tacitly in support of the YPG and other Kurdish groups operating in Syria, did not comment on The Los Angeles Times report.

Author: Joseph Fitsanakis | Date: 20 July 2017 | Permalink

US plans to beef up Cyber Command, separate cyberwar operations from NSA

PentagonThe White House will soon announce its decision to strengthen the United States Cyber Command and separate cyber war operations from intelligence functions, according to insider reports. For many decades, the National Security Agency has been in charge of protecting America’s cyber network and combating online threats. But in 2009, the Administration of US President Barack Obama established a brand new Cyber Command, proposing that the online environment represented a new theater of war. Since that time, the US Department of Defense has been campaigning in favor of strengthening the new Cyber Command and completely removing it from the patronage of the NSA –despite the fact that the latter is also a Pentagon agency.

According to media reports, US President Donald Trump has decided to follow the Pentagon’s suggestion. After several months of delay, his administration is now preparing to announce a major reinforcement of the US Cyber Command, and a formal separation between its functions and those of the NSA. According to the American news network PBS, which broke the news on Monday, the idea behind the move is to give the Cyber Command more operational autonomy and to allow it to establish its own mission statement, which will be distinct from that of the NSA. The latter is an intelligence organization, which means that it primarily seeks to exploit adversary networks for purposes of collecting information. Broadly speaking, therefore, the NSA finds operational adversary cyber networks far more useful than destroyed networks. That tends to clash with the goals of the US Cyber Command, whose tactical goals often center on launching destructive attacks on enemy networks. It is believed that the impending change will allow it to do so without the interference of the NSA.

According to PBS, which cited anonymous sources in its report, the details of the separation “are still being worked out”. Furthermore, some observers caution that the Cyber Command will continue to rely on NSA technology and expertise for years to come, until it is able to carry its own weight. There is even less discussion about the view of the NSA on the matter, which some claim is notably negative. However, the move appears to have been decided, and the Cyber Command’s budget will be increased by nearly 20% to $647 million in the coming year, reflecting its elevated role in US defense.

Author: Joseph Fitsanakis | Date: 19 July 2017 | Permalink

CIA whistleblower complains of seven-year inaction by Agency’s inspector general

CIAA contractor for the United States Central Intelligence Agency has complained in an interview that no action has been taken in the seven years since he revealed a “billion-dollar fraud” and “catastrophic intelligence failure” within the Agency’s ranks. John Reidy argues that his case illustrates the unreasonable delay that impedes investigations by whistleblowers like him inside the CIA. Individuals like him, he argues, are forced to seek justice through leaks to the media, something which could be avoided if the CIA’s Office of the Inspector General addressed concerns more promptly.

Reidy, 46, from Worcester in the US state of Massachusetts, joined the CIA in 2003, after graduating with a law degree from the University of San Francisco. But he left the agency soon after joining, initially to work for a security contractor before setting up his own company, Form III Defense Solutions. He continued to work with the CIA by subcontracting his services, focusing on Iran. Reidy’s company developed an intelligence study guide for Iran and advised the CIA on the use of human intelligence (known as HUMINT) in the Islamic Republic.

In 2010, Reidy submitted two complaints to the CIA’s Office of the Inspector General, the Agency’s internal watchdog that is tasked with investigating whistleblower allegations. The first issue related to what Reidy describes as large-scale “fraud between elements within the CIA and contractors”. The second issue involved a “massive [and] catastrophic” intelligence failure “due to a bungled foreign operation”. When he filed his concerns with the OIG, Reidy was hoping that attention would be given to his claims right away. However, seven years later, his case is still “gathering dust” at a CIA office, he says. When he realized that no progress had taken place in several years, a frustrated Reidy forwarded his case —which includes copies of 80 emails and nearly 60 other documents— to Senator Chuck Grassley, chairman of the US Senate Committee on the Judiciary. He also reached out to the McClatchy news service with his concerns.

The secrecy rules that apply to those who work for the US Intelligence Community prevent Reidy from disclosing details of the alleged fraud and intelligence failure, or from specifying the country in which these incidents took place —though it seems from his intelligence résumé  that they probably involve Iran. But in an interview with McClatchy news service, the intelligence contractor voiced grave concerns about the internal investigation process in the CIA. “I played by the rules [and] they are broken”, he said. “The public has to realize that whistleblowers [like me] can follow all the rules and nothing gets done”, added Reidy. He went on to warn that if the CIA does not improve its internal investigation system, leaks to the media “may grow worse”.

McClatchy contacted the CIA about Reidy’s concerns and was told by a spokesperson, Heather Fritz Horniak, that, “as a general matter, [the CIA does] not comment on ongoing litigation”.

Author: Joseph Fitsanakis | Date: 14 July 2017 | Permalink

Russian aid center in Serbia rejects claims that it is an intelligence base

Russian-Serbian Humanitarian CenterStaff at a Russian disaster relief center in southern Serbia have rejected claims by American officials that the facility operates as an espionage arm of Moscow’s foreign policy in the Balkans. The Russian-Serbian Humanitarian Center was built in 2012, at a cost of nearly $40 million, following an agreement between Belgrade and Moscow. Its stated mission is to “provide humanitarian emergency response in Serbia and other Balkan states” through the provision of humanitarian assistance to those in need and training local emergency response crews. The center is located in the outskirts of Serbia’s fourth largest city of Niš, not far from the country’s border with Kosovo, a former Serbian province that unilaterally declared independence in 2008. Serbia refuses to recognize Kosovo’s independence, a decision that is strongly backed by Russia. It is also close to the headquarters of the North Atlantic Treaty Organization’s peacekeeping force stationed in Kosovo, which houses 4,000 international troops, including 600 Americans.

Western officials have raised concerns that the disaster relief center is in reality an intelligence base, from which Russia conducts some of its espionage operations in the Western Balkans. It has also been suggested that the center could operate as a military base in a potential Russian military operation in the former communist state. In June, the United States Deputy Assistant Secretary of State for European and Eurasian Affairs, Hoyt Brian Yee, publicly described the compound as “the so-called humanitarian center” in Serbia. Speaking during a US Senate hearing on southeastern European politics, Yee said the Department of State was concerned about the center’s unofficial use. He also expressed reservations about Moscow’s request that the Serbian government grants the center diplomatic immunity, similar to that which covers the activities of the Russian embassy in Belgrade.

Moscow responded to American allegations of espionage by inviting local and international media representatives to the center on Wednesday. The center’s co-director, Viacheslav Vlasenko, told reporters that the center was “very open”, adding that its staff consisted of 15 Serbs and five Russians who were dispatched to Serbia from Russia’s Ministry of Emergency Situations, known as EMERCOM. Vlasenko said that Moscow’s request for diplomatic immunity for the center was solely aimed at reducing the annual taxes that the facility had to pay.

Regular readers of intelNews will recall allegations made last October by authorities in Serbia’s neighboring state of Montenegro —later repeated by Britain— that nationalists from Russia and Serbia were behind a failed plot to kill the country’s then-Prime Minister Milo Dukanović and spark a pro-Russian coup in the country. The allegations surfaced after 20 Serbians and Montenegrins were arrested by police in Montenegro on election day, October 16, as Montenegrins were voting across the Balkan country of 650,000 people. In response to allegations that the coup had been hatched in neighboring Serbia, Serbian Prime Minister Aleksandar Vučić said that he would not allow Serbia to “act as the puppet of world powers”, a comment that was clearly directed at Moscow. Russia has vehemently denied the allegations.

Author: Joseph Fitsanakis | Date: 13 July 2017 | Permalink

Russia allegedly planning to expel 30 American diplomats in a few weeks

US embassy in MoscowRussia is planning to expel approximately 30 American diplomats from its territory, and seize buildings and property belonging to the United States Department of State, according to Russian media reports. The expulsions will be in response to the expulsion last December of 35 Russian diplomats stationed in the US by the administration of President Barack Obama. In addition to expelling the diplomats, Washington also reclaimed two “recreational facilities” (in reality intelligence outposts) that were used by the Russians in New York and Maryland. The White House said that the expulsions were ordered in response to alleged efforts by Russia to interfere in the 2016 US presidential election.

Observers, including the present author, were confident at the time that the Kremlin would respond in kind. In a surprising move, however, the Russian President Vladimir Putin said he would not respond to Mr. Obama’s move, in the hope that US-Russian relations would improve with the arrival of the new president in the White House. He added that Russia reserved the right to retaliate at a later time. Moscow’s response was met with praise by the then-president-elect Donald Trump and his transition team.

But Russia’s hopes for warmer relations with the US under Mr. Trump’s leadership do not seem to be materializing. A recent article in the daily Russian newspaper Izvestia reported that the Kremlin thought it was “outrageous” that the Trump White House had not yet returned the two seized compounds to the Russian Ministry of Foreign Affairs and not rescinded the expulsions of the 35 diplomats and their families. It also claimed that President Putin raised the issue with his US counterpart during their July 7 meeting in the German city of Hamburg. The Moscow-based newspaper quoted unnamed senior Russian officials, who said that Russia was preparing to expel dozens of American diplomats and seize US diplomatic facilities soon.

It appears that Russia will wait until the upcoming meeting between the US Undersecretary of State Thomas Shannon and the Russian Deputy Foreign Minister Sergei Ryabkov, which has been scheduled for later this month in St. Petersburg. If no US assurances for the return of the compounds and diplomats are made at that time, Moscow will proceed with its tit-for-tat plan. When asked about Izvestia’s article, the Russian Minster of Foreign Affairs, Sergei Lavrov, replied that the Kremlin was “weighing specific measures” in response to last December’s expulsions of Russian diplomats from the US. However, Mr. Lavrov said he did not want to elaborate at the present time, while also refusing to deny the newspaper’s allegations.

Author: Joseph Fitsanakis | Date: 12 July 2017 | Permalink

Ex-CIA contractor says Pakistan’s leaders helped him escape murder charges

Raymond Allen DavisA former contractor for the United States Central Intelligence Agency, who was released from a Pakistani prison in 2011 despite being implicated in a double murder there, says he was freed with the help of senior Pakistani officials. Raymond Allen Davis was a CIA contractor posted in the US consulate in Pakistan’s Punjabi capital, Lahore, which is also the country’s second-largest city. It has been suggested that, for a while, Davis was the CIA’s acting station chief in Lahore, thus technically the most senior American intelligence officer in Punjab.

On January 27, 2011, while driving in downtown Lahore, Davis opened fire against two men riding on a motorcycle, killing them instantly. Soon after the incident, Davis appears to have contacted the US consulate in Lahore, which rapidly dispatched a consular vehicle to remove him from the scene of the shooting. However, the vehicle was unable to reach Davis, who was surrounded by an angry crowd. Unable to pick up Davis, the car then returned to the consulate after running down and killing a motorcyclist who was unconnected with the earlier incident. Eventually Davis was arrested and charged with double murder and illegal possession of a firearm. The Pakistani government dismissed Washington’s assertion that Davis was an accredited diplomat, and was thus not subject to Pakistan’s legal system because of his diplomatic immunity. With public opinion in Pakistan heavily against Davis, the case sparked a diplomatic crisis between Washington and Islamabad. Unexpectedly, however, Davis was released in March of the same year, after the families of the two men he killed appeared in court and said they forgave him and wanted him to be pardoned. It later emerged that the families of the murdered men had been given a total of $2.4 million as compensation for their deaths.

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American spies use US Federal Reserve to monitor foreign banks

Federal Reserve Bank of New YorkAmerican intelligence services have made use of a little-known confidentiality exception to spy on the financial activities of foreign banks who have accounts with the United States Federal Reserve, according to Reuters. Established in 1913, the Federal Reserve System is the central banking structure of the US. It oversees and regulates the nation’s financial institutions, and is tasked with —among other things— maintaining the stability of the American financial system. Additionally, however, the Federal Reserve offers a host of financial services to official (government-owned or sanctioned) foreign institutions. Thus, over 250 foreign banks (typically central banks) from dozens of countries have deposited nearly $3.3 trillion in assets at the Federal Reserve Bank of New York, one of 12 Federal Reserve Banks in the US. Depositing assets at a US Federal Reserve Bank, allows these foreign ‘depository institutions’ to use the US Federal Reserve as a ‘custodial institution’. Through it, they get direct and immediate access to American debt markets, where they can trade directly in dollars — the reserve currency of the global economy.

As one would expect, the ‘custodial services’ provided to foreign state banks by the US Federal Reserve are subject to strict confidentiality rules. However, according to a report published yesterday by Reuters, US intelligence agencies have found ways to circumvent these rules and monitor the activities of foreign banks who use the US Federal Reserve’s services. The news agency said it interviewed “more than a dozen current and former senior [Federal Reserve] and [US] Treasury [Department] officials”, including executives and division heads. It concludes that the US Intelligence Community has “leveraged the [US Federal Reserve’s] position at the center of global finance” to gain insights into the financial activities of foreign governments.

Specifically, the report alleges that American spies have made regular use of a little-known “need to know” exception clause to the US Federal Reserve’s confidentiality rules, and have been able to monitor the financial activities of selected foreign governments. These include Libya, Yemen, Iraq, China, Russia and Turkey, among others, says Reuters. In its report, the news agency says that the exception clause has been used at least seven times in the past 15 years. In some of these instances, the intelligence gathered led to “specific US responses” in relation to the financing of terrorism, or large-scale money-laundering. In other cases, the intelligence gathered helped Washington closely monitor market activity in areas of interest around the world, says Reuters.

The news agency contacted the New York Federal Reserve Bank, and was told by a spokesperson that the exception to the Federal Reserve’s confidentiality rules “has been used on rare occasions and on a limited basis”. These instances related to “issues as compliance with sanctions requirements and anti-money laundering principles”, said the spokesperson. The US government did not respond to calls for comments.

Author: Joseph Fitsanakis | Date: 27 June 2017 | Permalink

German intelligence agency spied on thousands of targets in the United States

BND GermanyThe foreign intelligence service of Germany spied on at least 4,000 targets in the United States from 1998 until 2006, according to a leaked document published yesterday by leading German newsmagazine Der Spiegel. The German investigative weekly said that the surveillance was carried out by the German Federal Intelligence Service, known as BND. The Hamburg-based magazine claimed to have in its possession a list of approximately 4,000 “selector keywords”, unique distinguishing terms, addresses or numbers that identify individual targets for surveillance. The list allegedly includes names, telephone or fax numbers, and email addresses of people that the BND had identified as worthy of individual attention between 1998 and 2006.

According to Der Spiegel, the list of targets in the United States includes officials in the White House, the Department of the Treasury and the Department of State. Their work and private phone numbers, and often emails, are listed in the BND document. The latter also focuses on the American military sector, paying particular attention to the US Air Force and the Marine Coprs. Other targets include the National Aeronautics and Space Administration and the Defense Intelligence Agency, the US Pentagon’s intelligence organization. In addition to US government targets, the BND exercised surveillance on American companies with ties to the state, such as Lockheed Martin, as well as state-owned universities. The leaked list also includes targets in international organizations that have an institutional presence in the US, such as the International Monetary Fund and the Arab League, which has an office in Washington. Hundreds of foreign embassies and consulates in the US were also targeted, said Der Spiegel.

German-American relations suffered a major setback in 2013, when it was revealed that Washington had spied on the personal cell phone of German Chancellor Angela Merkel. In response to the revelations, Germany expelled the Central Intelligence Agency’s station chief in Berlin —the most senior American intelligence officer in the country. It remains to be seen whether Thursday’s revelations will affect the current relations between the two transatlantic allies. Neither the BND nor the US embassy in Berlin responded to questions about Der Spiegel‘s report.

Author: Joseph Fitsanakis | Date: 23 June 2017 | Permalink

Islamic State’s cyber army still ‘largely intact’ despite America’s efforts

US Cyber CommandThe global reach of the Islamic State through the use of the internet remains “largely intact” despite relentless efforts by some of America’s most advanced cyber warfare experts to neutralize the group’s online presence. It is now over a year since the United States Department of Defense announced that it had launched a cyber war against the Islamic State —the militant Sunni Muslim group that today controls large parts of Syria and Iraq.

At that time, the Pentagon’s Cyber Command (USCYBERCOM), put in motion plans that included the deployment of computer viruses, denial-of-service attacks and other cyber weapons against computers, internet servers and cell phone networks belonging to the Islamic State. As intelNews wrote at the time, the idea behind the plan was that an all-out online war against the Sunni militant group would hurt its public image and prevent it from launching armed attacks against targets abroad. Additionally, the Pentagon aimed to disrupt the Islamic State’s ability to recruit new members online, to spread its propaganda and to coordinate operations through the use of encrypted communications.

However, according to The New York Times, American military commanders are disappointed with the Cyber Command’s efforts. The Pentagon is quickly discovering, says the paper, that its cyber warfare methods, which were designed for fixed targets in countries like North Korea and Iran, are ineffective against the mobile and polymorphic cyber army of the Islamic State. In many instances, US Pentagon hackers wipe out online information found on Islamic State servers, only to see it reappear elsewhere online within hours. In other cases, US Cyber Command experts uncover Islamic State information stored on the cloud, but are unable to access it because it is strongly encrypted.

According to The Times, the lack of progress in the cyber war against the Islamic State was one of the reasons why the administration of President Barack Obama sought to replace Admiral Mike Rogers, the head of the National Security Agency, who also led the US Cyber Command —and continues to do so under the Donald Trump administration.

Author: Ian Allen | Date: 20 June 2017 | Permalink

Miami police arrest Panama’s ex-president on charges of wiretapping

Ricardo MartinelliPolice in the United States have arrested Panama’s former president Ricardo Martinelli, who is wanted in the Central American country on charges of using state resources to spy on his political opponents and business rivals. The center-right US-educated businessman won the 2009 presidential election in the country with a landslide, receiving over 60 percent of the national vote. His election prompted positive comments from Washington, because it marked a rare ascent to power of a conservative Latin American leader in a sea of socialist heads of state. But the euphoria did not last long. In 2014, Martinelli was succeeded in the presidency by his Vice President, Juan Carlos Varela. Varela promptly launched nearly 200 criminal investigations against his former political partner on issues ranging from embezzlement of state funds to political espionage.

Martinelli is now accused of embezzling $45 million in funds that should have been allocated to a government-run school lunch program for children of disadvantaged families. According to Panamanian prosecutors, Martinelli diverted $13 million of these funds to launch a secret wiretapping program that targeted some of his main political opponents and business rivals. Some of the individuals allegedly targeted in the secret surveillance program were senior members of Martinelli’s own Party of Democratic Change, Supreme Court judges, lawyers, journalists and union activists. The government of Panama also claims that Martinelli wiretapped the telephones of his business rivals, as well as their family members and mistresses.

It appears that Martinelli’s allies within the Panamanian government notified him early on that corruption investigations would be launched against him. This would explain why the former political strongman was able to flee the country days before these investigations were officially launched. Since January 2015, Martinelli has lived in Florida. In 2016, the government of Panama issued an arrest warrant against Martinelli. It also notified the international police agency, Interpol. Last month, Interpol circulated a ‘red notice’, an official alert notifying its counterparts around the world of a wanted individual. On Tuesday, US Marshals arrested Martinelli at his home in the city of Coral Gables in Florida, in response to the red notice issued by Interpol.

Speaking to reporters in Miami on Tuesday, Martinelli’s legal team questioned the timing of the Panamanian government’s arrest warrant, claiming that it came soon after the former president announced he would be running again for office. But the office of Adam S. Fels, the assistant US attorney who ordered Martinelli’s arrest, said that the US intended to fulfill its treaty obligations with the government of Panama. Martinelli is currently in prison in Miami and is expected to remain there until his preliminary court date on June 20.

Author: Ian Allen | Date: 14 June 2017 | Permalink