US sanctions Russians for cyber attacks

The US has announced sanctions on three Russian individuals and five companies, who have been cited as ‘malicious actors working at the behest of the Russian Federation and its military and intelligence units to increase Russia’s offensive cyber capabilities’ against the US ‘and it’s allies’ – which could include New Zealand.

Reuters: U.S. sanctions Russians over military, intelligence hacking

The U.S. Treasury imposed sanctions on three Russian individuals and five companies on Monday, saying they had worked with Moscow’s military and intelligence services on ways to conduct cyber attacks against the United States and its allies.

“The United States is engaged in an ongoing effort to counter malicious actors working at the behest of the Russian Federation and its military and intelligence units to increase Russia’s offensive cyber capabilities,” Treasury Secretary Steven Mnuchin said in a statement.

“The entities designated today have directly contributed to improving Russia’s cyber and underwater capabilities through their work with the FSB and therefore jeopardize the safety and security of the United States and our allies,” Mnuchin said, using an acronym for Russia’s Federal Security Service.

The Treasury said Russia’s “malign and destabilizing cyber activities” included the NotPetya attack last year, which spread across Europe, Asia and the Americas. The White House in February blamed Russia for the attack, saying it caused billions of dollars in damage and was part of the Kremlin’s effort to destabilize Ukraine.

The Obama administration sanctioned Russia’s FSB in December 2016, citing the Russian government’s aggressive harassment of U.S. officials and cyber operations aimed at the 2016 presidential election.

Washington imposed additional sanctions against the intelligence services in March, when President Donald Trump’s administration slapped sanctions on 19 individuals and five entities.

At the time, the administration publicly blamed Moscow for the first time for a campaign of cyberattacks that targeted the U.S. power grid, including nuclear facilities, and stretched back at least two years. Russia has denied trying to hack into other countries’ infrastructures.

There’s a good chance Russia will retaliate with sanctions of their own.

GCSB (February 2018): New Zealand joins international condemnation of NotPetya cyber-attack

The Director-General of the Government Communications Security Bureau (GCSB) Andrew Hampton has today added New Zealand’s voice to international condemnation of the NotPetya cyber-attack.

NotPetya caused wide spread damage and disruption to computer systems around the world in June 2017.

Mr Hampton says the GCSB’s international partners have today attributed the NotPetya cyber-attack to the Russian Government.

“While NotPetya masqueraded as a criminal ransomware campaign, its real purpose was to damage and disrupt systems,” Mr Hampton said.

“Its primary targets were Ukrainian financial, energy and government sectors. However, NotPetya’s indiscriminate design caused it to spread around the world affecting these sectors world-wide.

“While there were no reports of NotPetya having a direct impact in New Zealand, it caused disruption to some organisations while they updated systems to protect themselves from it.

“This reinforces that New Zealand is not immune from this type of threat. In a globally connected world our relative geographic isolation offers no protection from cyber threats.

“We support the actions of our cyber security partners in calling out this sort of reckless and malicious cyber activity.”

In the 12 months from June 2016 to June 2017 nearly a third (122) of the 396 serious incidents recorded by the GCSB’s National Cyber Security Centre involved indicators that have previously been linked to state-sponsored actors.

I think it’s unlikely New Zealand will join the US with sanctions.

China-US trade war on hold, deal pending

The risk of a trade war between the United States and China has diminished after a deal has been made, which means threatened US tariffs and counter tariffs from China may be scrapped.

Avoiding a trade war is better for both countries – and for world trade – than trying to win a war that would adversely affect both countries.

RNZ (BBC): Trade war on hold as US and China halt imposing tariffs

China and the US say they will halt imposing punitive import tariffs, putting a possible trade war “on hold”.

The deal came after talks in the US aimed at persuading China to buy $US200 billion of US goods and services and thereby reduce the trade imbalance.

The US has a $335b annual trade deficit with Beijing.

In March this year, Mr Trump announced plans to impose tariffs on Chinese imports – mainly steel and aluminium.

Beijing threatened equal retaliation, including tariffs on a number of US imports – among them aircraft, soybeans, cars, pork, wine, fruit and nuts.

Two days of talks ended in Washington DC on Friday with a framework agreement.

US Treasury Secretary Steven Mnuchin…

…told Fox News on Sunday that China would buy more US goods “to substantially reduce the trade deficit”.

Concrete numbers had been agreed, he said, although he refused to disclose if this meant China was buying $200bn in return for the US threat to be lifted. US Commerce Secretary Wilbur Ross would travel to China soon, he said, to work on details, which would involve industries – not just the two governments.

“We are putting the trade war on hold. Right now we have agreed to put the tariffs on hold while we try to execute the framework” of the agreement, Mr Mnuchin said.

But he warned that failure to implement it would result in the imposition of the threatened US tariffs.

Chinese vice-premier Liu He…

…said his visit to the US had been “positive, pragmatic, constructive and productive”.

He described a “healthy development of China-US economic and trade relations” which would result in enhanced co-operation in areas such as energy, agriculture products, healthcare, high-tech products and finance.

“Such co-operation is a win-win choice as it can promote the high-quality development of the Chinese economy, meet the people’s needs, and contribute to the US effort to reduce its trade deficit,” he added.

Mr Mnuchin said the new framework agreement included structural changes to Chinese economy to enable fair competition for US companies, but this would take time, China’s vice-premier said.

And, perhaps because of that, he said the two countries “should properly handle their differences through dialogue and treat them calmly in the future”.

That’s a much better threat than making public threats and launching a trade war. But as is normal with the trump administration, there is some uncertainty.

Reuters: U.S., China putting trade war on hold, Treasury’s Mnuchin says

Trump’s top economic adviser, Larry Kudlow…

…told CBS “Face the Nation” it was too soon to lock in the $200 billion figure. “The details will be down the road. These things are not so precise,” he said.

Trump was in a “very positive mood about this,” Kudlow said.

However, he said there was no trade deal reached.

“There’s no agreement for a deal,” Kudlow told ABC. “We never anticipated one. There’s a communique between the two great countries, that’s all. And in that communique, you can see where we’re going next.”

One next step will be dispatching Commerce Secretary Wilbur Ross to China to look at areas where there will be significant increases, including energy, liquefied natural gas, agriculture and manufacturing, Mnuchin and Kudlow said.

So there is a lot of work to do yet.

Trump transition troubles

It was always going to be a big challenge for Donald Trump and his transition team. It is a huge job setting up a presidency, with thousands of staff appointments required, over 700 of which have to go through a political hearing process.

I don’t know when they seriously thought they could win the presidency, but they were relatively very under-prepared.

On top of this even within the Republican Party there are a lot of people who were far from supportive of Trump and won’t want to be involved.

And there are others who are being cast aside by the Trump team. For example Chris Christie was a prominent Trump supporter and campaign and transition assistant until he was dumped. Trump’s son-in-law Jarod Kushner, who is thought to have a lot of influence, says that has nothing to do with this:

In 2005, Mr. Christie, then the United States attorney for New Jersey, sent Mr. Kushner’s father, Charles, to federal prison for tax evasion, witness tampering and illegal campaign donations.

Some of Trump’s appointments have been well received. General James Mattis had to be given an exemption to be able to become Secretary of Defence but this was supported from both sides of Congress.

The New Yorker: CAN MAD DOG MATTIS SAVE AMERICA FROM TRUMP?

Thursday saw another significant break with history when, for the first time in almost seventy years, the Senate voted to allow a recently retired military officer—James Mattis, a former four-star general—to serve in the civilian post of Secretary of Defense.

When Donald Trump picked Mattis, a sixty-six-year-old ex-Marine who goes by the nickname Mad Dog, to run the Pentagon, some observers predicted that his nomination could run into opposition from the Senate Armed Services Committee, which oversees the Pentagon and the rules governing it—including one that precludes ex-officers from serving as Secretary of Defense until they have been out of uniform for seven years.

But the Committee’s vote to grant a waiver to Mattis, who retired from the service in 2013, was bipartisan and overwhelming: 24–3.

The confirmation hearing that McCain held on Thursday demonstrated that many members of the committee, particularly the Democratic ones, are hoping that Mattis will act as a bulwark against Trump, the authoritarian tendencies he represents, and some of his scarier counsels, particularly Michael Flynn, a former three-star general slated to be Trump’s national-security adviser.

On Flynn – Politico: Is Trump ready for a national security crisis?

The NSC staffing process is being controlled closely by Trump’s national security adviser-designate, retired Lt. Gen. Michael Flynn, who, unlike his past several predecessors, has no NSC experience. Flynn’s deputy, K.T. McFarland, served as a typist and a research assistant at the NSC in the Nixon and Ford White Houses before working as a speechwriter and public affairs official in the Reagan Pentagon.

The abrupt withdrawal of a top Trump National Security Council appointee and the dozens of high-level personnel holes across key foreign policy and defense agencies have national security experts posing a dark question: Will Donald Trump be ready to manage a national security crisis from Day One?

There are concerns and problems with other nominees.

Betty DeVos is a very controversial nominee for Education. She is a strong supporter of charter schools, her family funds anti-LGBTQ organisations,  and like a number of nominees she has potential conflicts of interest.

What Betsy DeVos Did (and Didn’t) Reveal About Her Education Priorities

Throughout the three-hour-plus exchange between DeVos and members of the Senate’s Committee on Health, Education, Labor, and Pensions, DeVos—who has never taught public school, never attended public school, and never held elected office—sidestepped questions about everything from how she will ensure that groups she has backed financially in the past will not feel pressure to behave a certain way to whether guns belong in schools.

Washington Post: Trump Cabinet nominees meet growing ethical questions

Three of Donald Trump’s Cabinet picks came under growing fire Wednesday on ethical issues, potentially jeopardizing their nominations.

The most serious concerns surround personal investments by Trump’s health and human services nominee, Rep. Tom Price (R-Ga.), in health-care firms that benefited from legislation that he was pushing at the time.

Additionally, Rep. Mick Mulvaney (R-S.C.), Trump’s choice to head the Office of Management and Budget, has acknowledged during his confirmation process that he failed to pay more than $15,000 in state and federal employment taxes for a household employee.

And Commerce Department nominee Wilbur Ross revealed that one of the “dozen or so” housekeepers he has hired since 2009 was undocumented, which he said he discovered only recently. The employee was fired as a result, he added.

All of those are the kinds of problems that have torpedoed nominees in the past. But it is far from certain — or even likely — that any of Trump’s nominees will buckle under the political pressure.

And from The Hill: Mnuchin calls failure to disclose $100M in assets an ‘oversight’

President-elect Donald Trump’s pick to lead the Treasury Department says his initial failure to disclose $100 million in assets was an “unintentional” oversight.

Steven Mnuchin on Thursday told the Senate Finance Committee that revised documents he filed with the committee a day earlier showed the additional assets, and blamed the complexity of nominee paperwork for those assets missing initially.

Mnuchin also defended his position as a director of Dune Capital International, an entity based in the Cayman Islands, a notorious tax haven.

He argued that setting up an entity on the island, where there were no employees or clients, was done at the behest of clients seeking to minimize taxes and not to lower his own tax bill.

“I did not use a Cayman Island entity in any way to avoid taxes for myself. I paid U.S. taxes on all that income, so there was no benefit to me in the Cayman entity,” he said. “They were merely an accommodation to pension funds and nonprofit institutions.”

With the number of controversial nominees and questionable links it will be difficult to check them all out thoroughly.

Some of these issues are probably relatively minor, but the chances of there being a few majors amongst them is high.

There seems to be a high likelihood that some messes-in-waiting will slip through the vetting processes.

This one is a bit of a worry.

NY Times: ‘Learning Curve’ as Rick Perry Pursues a Job He Initially Misunderstood

When President-elect Donald J. Trump offered Rick Perry the job of energy secretary five weeks ago, Mr. Perry gladly accepted, believing he was taking on a role as a global ambassador for the American oil and gas industry that he had long championed in his home state.

In the days after, Mr. Perry, the former Texas governor, discovered that he would be no such thing — that in fact, if confirmed by the Senate, he would become the steward of a vast national security complex he knew almost nothing about, caring for the most fearsome weapons on the planet, the United States’ nuclear arsenal.

Two-thirds of the agency’s annual $30 billion budget is devoted to maintaining, refurbishing and keeping safe the nation’s nuclear stockpile; thwarting nuclear proliferation; cleaning up and rebuilding an aging constellation of nuclear production facilities; and overseeing national laboratories that are considered the crown jewels of government science.

As a casino owner Trump is very familiar with gambling.

It’s a bit different though when he is gambling with the well-being of the US and the world.