Tag Archive for: United States

Cyber wrap

Chairman Jason Chaffetz

The gargantuan scale of the Office of Personnel Management (OPM) hack, initially thought to have affected 4 million current and former US government workers has now ballooned to over 9 million. The White House announced on Friday that the same group of hackers were responsible for a second infiltration on a different section of the agency’s network. These files are said to include a database filled with Standard Form 86s—a security clearance questionnaire given to prospective government employees. In addition to applicant details, these forms also include extensive information on non-government workers including close acquaintances, friends and family. This has drastically inflated the number of people affected by the breach and has helped fuel the mounting pressure from the media on the Obama administration to ‘retaliate’.

Congress began the cross-examination of senior OPM officials before the House Oversight Committee this morning. When Chairman Jason Chaffetz asked why the sensitive data on OPM’s networks wasn’t encrypted, Director Katherine Archuleta explained that ‘it is not feasible to implement on networks that are too old’. Apparently OPM is now working to rectify the encryption issue, but according to Dr Andy Ozment—Assistant Secretary for Cybersecurity at the Department of Homeland Security—even encryption wouldn’t have saved OPM. He explained to the committee that the intruders had stolen valid user credentials, probably via social engineering, and this, combined with the fact that OPM had failed to implement multifactor authentication, gave the attackers easy access.

Proving that no one is completely secure in cyberspace, computer security giant Kaspersky Labs last week disclosed that that it recently fell victim to an internal network compromise. The company believes the intruders were seeking commercial information, probably connected to the development of its new technologies, but are confident they caught the intrusion in its initial stages. The malware used in the attack was distributed via Microsoft Software Installer files and didn’t write any files to disk ‘but instead resided in affected computers’ memory, making it relatively hard to detect.’ The infiltration attempt also utilised three zero-day exploits—an impressive number considering the significant price a single exploit can garner on the black market.

Switching focus to cyber diplomacy, the Chinese government has been busy in Africa and Southeast Asia. China’s Industry and Information Technology Minister Miao Wei travelled to South Africa to meet with Telecommunications and Postal Services Minister Dr Siyabonga Cwele. The two signed a ‘Plan of Action’ designed to help expand the country’s connectivity via technology, skills and knowledge exchange. It was reported that the agreement also covered everything from cyber security to e-government and intriguingly, internet governance.

Back in Beijing, the Cyberspace Administration of China (CAC) met with Indonesia’s new National Desk for Information Resilience & Cyber Security (DK2ICN).. The meeting sought to explore ways the two countries could build bilateral cyber cooperation, and highlighted the newly-established China–Southeast Asia Data Centre as a potential space for bilateral cooperation.

The Office of General Counsel at the US Department of Defense has released its latest edition of the Law of War Manual. The manual acts as a guide for military and defence officials on customary and treaty law of war, with the last comprehensive manual published in 1956. This edition of the weighty publication (1,180 single spaced pages) includes a chapter on cyber operations. Helpful definitions as to what might constitute a cyber operation, when a cyber attack could constitute a use of force, and what a proportional response might look like in response to such an incident are included in the chapter.

Australian defence industry: where to next?

Recent discussions on naval shipbuilding have highlighted the importance of a vibrant and innovative defence industry for both strategic and economic security reasons. Prior experience with building the Anzac- frigates shows that Australia can build defence product to high quality and at globally competitive prices provided there’s a sufficient number of items, and a stable design, to develop efficiencies over the build program.

The government’s consideration of a continuous build of naval ships is positive. A much more concerning problem exists beyond the large, but narrow, confines of shipbuilding and as borne out in an analysis of contracts placed by the Defence Materiel Organisation (DMO). This problem centres on the trends within Australian defence industry and where it’s heading.

In the period from 1 July 2007 to 31 March 2015 the DMO has placed approximately 117,000 contracts worth a little over A$71 billion for acquisition, sustainment and sundry other items. In the financial year 2007–08 almost 80% of the DMO contracting was to companies operating within Australia, but this has steadily declined since that time to the current state where less than 60% are awarded locally. The movement of contracting activity is shown in the following graph. (All data from Austender.)

When only Australian-owned companies are considered the picture is far worse, and is significantly impacted by the amount contracted to ASC. When ASC is taken out of the equation less than 5% (by value) of all DMO acquisition and sustainment contracts are awarded directly to Australian-owned companies. This is less than half the amount awarded to Australian-owned companies in 2010 and earlier years.

With respect to DMO contract award, the overwhelming winner is the US Government. In the period 1 July 2007 to 31 March 2015 the amount of DMO contracts (by value) placed directly with the US Government has increased by over 250%. Whilst there are some items of military hardware that can only be acquired through Foreign Military Sales (FMS) there’s no clear reason why repeated FMS orders are needed for the sustainment of items that have been in the Australian inventory for many years.

The current trend with respect to FMS contracting is shown in the following graph, and one can’t escape the conclusion that FMS is becoming the ‘route of convenience’, or maybe the path of least resistance, for defence contracting. (All data from Austender.)

But why does this matter? Isn’t it better for the Australian Defence Force (ADF) to have the best capability irrespective of where it comes from? There’s a certain merit in this position, but it’s also a strategic imperative that Australia be in a position to repair, maintain and upgrade the systems it has. Analysis of the DMO contract data shows that acquisition of equipment via FMS typically comes with significant support attached. This initial support may appear to be an attractive short term solution but to the detriment of developing local support capabilities for the new systems; repeated contracts are therefore placed into the US.

Such contracting behaviour does nothing to build local capability to provide the support that might one day be required in extremis. Should that day come we’ll be beholden to an offshore entity to provide the support we require when we require it. The sovereign risk issues are obvious, yet currently seem to be swept under the carpet for expediency.

Unless we stop talking about industry as a fundamental input to capability and do something about its trajectory, the future of the Australian defence industry doesn’t look good. We need to determine those parts of industry that are associated with high strategic risk and then unashamedly support and develop them. We also need to determine how the defence industry sector plays into the wider industrial and economic base, and to make a policy decision that we’ll support defence industry activities that contribute to the national economic well-being. Those aren’t offsets in disguise. It’s not protectionism. It’s Australia as a sovereign nation taking actions that are associated with our national security.

There’s no doubt that Defence needs high quality capabilities. There’s also no doubt that the level of understanding within Defence of how a vibrant defence industry forms part of that capability is woefully lacking. It’s time that we faced the reality and did something about fixing the local defence industry problem while we can. The upcoming Defence White Paper provides an early opportunity to do this. Hopefully it will.

Reflections on the nuclear deal with Iran

Lausanne, Switzerland

Since the early April release of the Parameters for a Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran’s Nuclear Program, commentators have been vocal and divided about its merits and demerits. I’m reluctant to rush to judgment about the deal. The negotiations remain a work in progress, and clarification of the key parameters before final signature at the end of June will have an important role in any assessment of its final value. Moreover, both the US and Iran have presented their own versions of the current level of agreement, which suggests the existing contest in public diplomacy is merely one more round where each is trying to cement the other’s feet in place on contentious points.

But I’d like to offer a few comments about the framework of the framework, as it were. First of all, it’s important to see the deal as an arms control measure, not as a disarmament measure. That’s an important distinction, since half the criticism levelled at the agreement is that it doesn’t lock Iran away from nuclear weapons forever. Arms control agreements codify and stabilise. They create durable expectations. They’re meant to manage a problem, rather than to solve it. That’s what we have here—which also explains why the agreement’s attracted its fair share of critics. Those deeply opposed to the possibility that Iran might ever have nuclear weapons don’t want the problem managed for a decade or so; they want it solved, even if they don’t have a perfect picture of how a solution might be achieved.

Second, if this is an arms control agreement, then the final agreement itself will bear a close reading. In arms control accords, every word matters. In the New START agreement, for example, one of the principal constraints falls on nuclear warheads deployed on strategic nuclear delivery vehicles. The agreement says nothing about non-deployed strategic nuclear warheads, nothing about non-strategic warheads—whether deployed or not. The same rule about close reading applies to the Iranian agreement. The interim agreement shows an attempt to constrain Iran’s pathways to the development of fissile materials—whether by uranium enrichment or by plutonium production. So far, the broad parameters are promising, but the devil will be in the details still to be agreed. As the interim agreement itself notes, nothing is agreed until all is agreed.

Third, the agreement enshrines a new metric for arms control: a proliferation breakout timeline. That timeline—the time it would take Iran to acquire the fissile material for one nuclear weapon—is meant to be kept at one year for the next ten years. The metric’s essentially a by-product of the other technical constraints, but it does set a precedent that other future proliferators might be content to see applied to their own cases. The one-year timeline suggests that any breakout can be addressed by the international community, or at least its principal players, over that timeframe. The ten-year timeframe is not an exemption from Iran’s obligations under the NPT, but some worry that it implies an absorptive capacity within the international community in relation to a future nuclear-armed Iran.

Fourth, if this is an arms control measure and not a disarmament one, we should expect a degree of controversy about the agreement and its contents. One rule of arms control is that it’s most available when least needed. Since some constraints on the Iranian nuclear program are sorely needed, that in itself suggests concluding a final agreement won’t be simple. Arms control makes a virtue of half a loaf when the full loaf isn’t available. In the context of negotiations between two heavily nuclear-armed superpowers, half a loaf’s a good outcome. The virtue of half a loaf is going to be harder to sell in the context of proliferating powers. Treating nuclear proliferation as a management issue is more contentious.

Finally, US policy has long tended to treat each specific proliferation problem as unique. After all, nuclear proliferation comes along infrequently enough that there’s good reason to shape a response that addresses individual motivations. But that approach turns upon a broad acceptance across the US mainstream about the nature of the potential proliferator. I think we’re about to see, over coming months, whether such a level of agreement exists in relation to Iran.

It’s not too late for a safer nuclear deal with Iran

It's not too late

If the recent Iranian nuclear framework deal progresses into an actual signed agreement, it would legitimise Iran as a nuclear weapons threshold state by allowing it to maintain a vast nuclear infrastructure.

The finer points of the deal that remain to be finalised by 30 June are more or less the mechanisms upon which the world would rely to try prevent Iran from weaponising their nuclear material if they so choose—try being the operative word.

Like the ill-fated case of North Korea, this plan depends heavily on inspections. There is little reason to believe it would be more effective this time around.

This was not the kind of deal that US President Barack Obama said would be safe and acceptable in the past. Why is it somehow safe and acceptable now?

The inescapable fact is that President Obama has repeatedly rolled back his requirements for nuclear safeguards on Iran. He has done so for no apparent reason other than that Iran objected to them, and he was determined to get a deal.

In the 2012 Presidential Debate, President Obama was unequivocal. ‘Our goal is to get Iran to recognize it needs to give up its nuclear program and abide by the UN resolutions [against Iran’s illegal nuclear program] that have been in place,’ he said, adding that ‘we hope that their leadership takes the right decision, but the deal we’ll accept is they end their nuclear program.’

However, in an interim agreement with Iran, signed in Geneva in November 2013, the US conceded a nuclear program to Iran—provided it only retained the elements required for civilian and peaceful applications.

At the Saban Forum in Washington the following month, Obama volunteered three unacceptable aspects of Iran’s nuclear program that he would target in a final agreement:

‘In terms of specifics, we know that they don’t need to have an underground, fortified facility like Fordow in order to have a peaceful nuclear program. They certainly don’t need a heavy-water reactor at Arak in order to have a peaceful nuclear program. They don’t need some of the advanced centrifuges that they currently possess in order to have a limited, peaceful nuclear program.’

Now, with the Lausanne agreement, keeping Iran’s enrichment consistent with a civilian nuclear program is passé. The stated goal has now become keeping Iran a year away from building a bomb, for a period of 10 years (according to Iran) or 15 years (according to the US).

The only real benchmark that appears to have been used for estimating Iran’s breakout time to a bomb would be the time it would take for Iran’s centrifuges to enrich uranium to weapons-grade levels—a formula based on the idea that Iran will keep a set number of known centrifuges running and thousands of others under a temporary seal, though it would not be required to dismantling any of them. Moreover, it assumed Iran will not utilise its newly developed IR-8 centrifuges, which are up to 20 times more efficient than the IR-1 models it primarily uses for enrichment today.

According to all versions of the framework agreement, Iran would not have to close any nuclear facility, including Fordo and Arak, and Iranian Foreign Minister Zarif insists the framework would permit Iran to operate its high-speed centrifuges from the first day the signed deal becomes effective.

This is the deal Iran wanted.

Iran was never willing to discuss its development of intercontinental ballistic missiles, whose sole effective purpose is to deliver nuclear warheads. Nor was Iran willing to negotiate its support for Hezbollah or Hamas, or willing to consider recognising Israel or even to simply stop threatening its annihilation.

Iran’s leaders weren’t willing to negotiate over these issues, and the US didn’t press them to.

Iran has failed to fully comply with every nuclear deal it has agreed to in the past—including the interim deal currently in place. But even if Iran was to adhere to the kind of deal suggested by the Lausanne framework, what would happen after the agreement ends?

What happens if they don’t keep to the deal? President Obama speaks of sanctions that ‘snap back’ into place. This is fanciful—given the complex nature of global economics—and misunderstands the nature of sanctions, which require a long time to have any effect.

As for verification and inspections, there’s no indication that Iran will be willing to give inspectors unfettered ‘anytime, anywhere’ access, nor would any deal be capable of regulating secret nuclear facilities that Iran might choose to construct, as it has in the past.

Moreover, the Lausanne framework ignores the disastrous effect that having Iran legitimised as a nuclear weapon threshold state will have on a Middle East already in turmoil.

Ending Iran’s nuclear program—Obama’s original goal—however challenging, would unquestionably have solved the Iranian nuclear problem. Restricting Iran’s nuclear program to civilian capabilities would have been risky, but arguably manageable.

With the adaptation of the dangerous Lausanne parameters, however, the Obama administration has gambled global security on the mere hope that Iran can be prevented from weaponising in the future, even against its best efforts.

With a signed deal months away at best, and Tehran still very vulnerable to sanctions, it’s not too late to re-open the debate and find a less dangerous alternative that we all can live with.

Iran: cutting a deal with the Great Satan

In 2003, a ‘perfect storm’ of intersecting developments saw Tehran caught with one hand in the nuclear weapon cookie jar (secretly enriching uranium), despite having joined the Nuclear Non-Proliferation Treaty and given assurances that it would do no such thing. The Iranian regime was humiliated.

India and Pakistan had endured sustained condemnation when they declared their nuclear-armed status via a blizzard of tests in 1998, but they were known proliferation risks and had declined to join the NPT. Even the DPRK—not a state that anyone wants to be compared to—had gone through the formality of withdrawing from the NPT in April 2003, to (redundantly) signal its intent to pursue a nuclear weapon capability.

Iran opted to bluff its way through. Tehran steadfastly denied that it had an obligation to restore confidence in its compliance with the NPT. It insisted that everything the IAEA could discover was consistent with its intention to build a substantial network of nuclear power stations. It maintained that it was also exercising its rights under the NPT to acquire its own capacities to fuel its future reactors with enriched uranium and (potentially) plutonium. For its part, the US insisted that Iran had to get out of the enrichment business.

Twelve years later, on 2 April 2015, negotiators from China, France, Germany, Russian, America and Iran announced agreement on a Joint Comprehensive Plan of Action (JCPOA) concerning special arrangements to bolster confidence that Iran’s nuclear program is exclusively peaceful in intent and that it has no aspirations to acquire nuclear weapons. The JCPOA—details of which can be found here—is commendably comprehensive, addressing both the enriched uranium and plutonium paths to the fissile core of a nuclear weapon.

Enrichment capacity will be cut by two-thirds and technological development precluded for 10 years; stocks of low-enriched uranium are set to be reduced to token levels for 15 years; the IAEA will have enhanced visibility of and access to Iranian nuclear facilities to verify compliance with the new agreement.

The central bargain may well have been Iran’s acceptance of the need for ‘special arrangements’ with the US conceding retention of an enrichment capacity, albeit on that’s circumscribed. If one looks at the key players, the regional context over recent decades and the broader global developments on the nuclear weapon front, easily the most surprising thing about this agreement is that it happened at all.

Support for the agreement, generally on arms control grounds, has been qualified while opposition to it has been markedly more absolute and trenchant. The Australian’s Greg Sheridan  called the deal ‘a dismal outcome for the world’ as the restraints on Iran’s nuclear activities are either reversible or expire after 10–15 years while economic sanctions, once lifted, are unlikely to be re-imposed if Iran misbehaves.

Henry Kissinger and George Shultz share Sheridan’s disappointment, contending that the deal won’t stop Iran’s nuclear potential from stoking anxieties in the Arab world that, in the final analysis, Washington will have to deal with. They stress that Iranian–Arab rivalries have been shaped over millennia, making a decade of restraint of little consequence to Arab states.

Coming to a comfortable judgement on the utility of this deal is not easy. But most criticisms fail to consider what alternative courses of action were both feasible and likely to deliver better outcomes. If abandoning enrichment had been made non-negotiable, the options might have been continual intensification of economic sanctions,- with the mounting risk that Russia and China would trigger either a break in the ranks,- or the use of force.

America still has unique capacities to attract support and make things happen, but it’s relative power and room for manoeuvre, including on the home front, isn’t what it used to be. Even the use of force could only delay an Iran determined to acquire nuclear weapons. The fact is that the character of the non-proliferation challenge has been transformed.

Acquiring nuclear weapons is not a trivial undertaking but neither is it any longer a massive, complex challenge fraught with uncertainty and the risk of failure. The decision of whether Iran becomes a nuclear-armed state rests entirely in their hands, just as it does for a significant number of other countries around the world, including Australia.

If Iran remains a non-nuclear weapons state indefinitely, it’ll be because that’s its preference. Many factors (and states) will shape the outcome on this question, not just Washington and not just this agreement.

The JCPOA is an interim agreement. Many crucial details—not least concerning the verification arrangements and the lifting of sanctions—still have to be thought through, agreed, and expressed in clear language before 30 June 2015.

Iran’s supreme leader has already tried to pre-empt the process, signalling that he’s prepared to walk away from the deal if any agreement on 30 June doesn’t provide for the immediate and complete lifting of sanctions. But if a deal can be finalised without distorting the integrity of the package, it should make a positive difference. Certainly, it is hard to see how it would make things worse.

What might America’s new long range strike–bomber cost? (part 2)

In my previous post on the US Long Range Strike–Bomber (LRS-B), I promised to return to the likely cost-effectiveness of the future system. But first I’m going to back-track to examine the possible costs in a bit more detail. We’ll get around to cost-effectiveness in part three.

I noted that the USAF was estimating that it can build 100 LRS-Bs for the same cost as the 21 B-2s it acquired in the 1980s and 1990s. The finance industry is required to say that ‘past performance is not a reliable indicator of future returns’. Sadly, that isn’t true of Pentagon weapon system programs. Back in the early days of The Strategist I showed how Augustine’s laws of defence acquisition could be used to accurately cost the new Ford-class aircraft carriers, despite previous optimistic projections.

Now I’m going to change my tune and state that Augustine’s laws won’t work for the LRS-B. But first let’s note that they’ve done pretty well so far on predicting US bomber costs and the long-term trend is a well-established one. The graph below shows the cost of American bombers from 1929 to 1985, plotted in then-year dollars. (If we adjust for inflation, the graph flattens a little, but the growth is always well above inflation, at times as much as 10% per year, equivalent to a doubling of unit cost every seven years.) And Augustine’s data set includes some medium bombers. If we include only ‘heavy’ bombers (another relative term), the trend is stronger still. Read more

What might America’s new long range strike-bomber cost? (part 1)

Arrival of the first B-36A at Carswell AFB, Ft. Worth, Texas, June 1948

From the time it came into being in 1947, the United States Air Force has had a state-of-the-art long-range bomber in its inventory. The first was the extraordinary B-36 Peacemaker (see photo)—the name intending to signify its deterrent value rather than (just) being ironic—and the latest is the B-2 Spirit ‘stealth’ bomber. There’ve been several notable aircraft, not least the B-52, which is now scheduled to have a service life in various versions of an astonishing 90 years. (For a review of the current USAF bomber fleet, see here.)

Bomber aircraft have been an important part of America’s superpowerdom, allowing it to project global air power and forming part of the nuclear deterrent. Some bombers over the years have never seen combat, but others have flown many ‘hot’ missions. So it’s no surprise that a new Long Range Strike–Bomber (LRS-B) system is in development. In fact, it’d be surprising if there wasn’t.

The value assigned to long-range bombers by the US is shown in how much it’s spent developing and building them. They’ve frequently been the centre of controversy about costs—not just the sometimes eye-watering direct costs but also the opportunity cost of other capabilities foregone. The B-36’s first battle was fought in Washington, with the newly-minted USAF and the Navy slugging it out over which Service would carry the strategic nuclear capability. In summary, the USN lost a planned ‘supercarrier’ to fund the bomber. The B-36 was called ‘the billion dollar blunder’ at the time (or $10 billion dollar blunder in today’s money), but at least that referred to the entire program of nearly 400 aircraft. The B-2, by contrast, cost almost a billion dollars each to build—and when the R&D is added in, the 21 aircraft fleet cost $55 billion. Read more

Iran and the future of the nuclear order

Ali KhameneiWe’re rapidly getting down to the endgame in the nuclear negotiations between Iran and the P5+1. The end of March looms as a real deadline—at least for a political agreement which would subsequently have to be turned into final text. In the US, President Obama has said that he sees no need for a further extension, and that if Iran wants a political solution to the issue, now’s the time to cut a deal. The US Congress has agreed to hold off on new sanctions until the end of March, but if that deadline passes, like previous ones, without an agreement, the administration will find it difficult to keep its domestic opponents of the negotiations in check. So, is an agreement likely? And, if so, what would it mean for other potential proliferators?

Let’s start with the first question: is there the will for an agreement? Frankly, it’s going to be touch and go. Obama himself recently put the likelihood of an agreement at only 50%. And the position of the Iranian Supreme Leader, Ayatollah Ali Khamenei, is ambiguous. Recent media reports say the Iranian leader’s in favour of a deal that’s ‘transparent, single-stage and good’, but that he would prefer no deal at all to a bad one. President Rouhani and Foreign Minister Zarif, the smiling, public faces of the negotiating team, don’t have carte blanche to give away the Iranian nuclear program. Read more

It’s not the size of the footprint that matters…

A U.S. Army Soldier assigned to 1st Armored Brigade Combat Team, 1st Infantry Division, adjusts an Iraqi trainee's weapon to ensure he's covering the correct sector of fire during infantry squad tactical training lanes, Jan. 7, 2015, at Camp Taji, Iraq. U.S. Army photo by Master Sgt. Mike LavigneHow times change. Yemen has fallen to the Iranian-backed Houthi rebels and the situation on the Arabian Peninsula’s more uncertain than ever. Just a few months ago, President Obama was touting the success of the US–Yemen partnership as a ‘model’ for fighting terrorism. This sudden reversal has caused some analysts—like Max Boot—to draw a set of premature and extreme conclusions about the efficacy of so-called ‘small-footprint’ interventions. But we should beware throwing the baby out with the bathwater. Better we understand first what’s involved in a small-footprint approach, the limitations of the model, and possible flaws in the Obama administration’s application of it.

In its most recent iteration, the small-footprint approach typically appears as part of the ‘lessons learned’ from Iraq and Afghanistan. But it’s not new though. Small-footprint approaches were far more the norm than the exception throughout the Cold War and even in the post-Cold War period. In such cases, the US and other allies—including Australia—provided assistance to countries fighting insurgencies. Yet the success of those approaches has been overshadowed by the mixed outcomes of large-scale counterinsurgency campaigns in Vietnam, Iraq and Afghanistan. Read more

The US and Australian strategy

TensionThe recent debate in these pages on how Australia should think and act as a power in the international system is important and timely. The thoughtful contributions of Peter Jennings, Andrew Carr, Rod Lyon, John Blaxland, Nic Stuart and Peter Dean argue well the emerging regionalist and globalist schools of strategic thought. A true historian, John rightly points out the wise regionalist continuities in our strategic policy, traceable through defence white papers and actual commitments since the 1970s. But another important continuity is the centrality of the US alliance to Australia’s defence policy. This is timely, because the US is struggling now to determine how it will play its accustomed global power role going forward. Whatever it decides, it’s clear that the hard power that has made the US an effective steward of that system since the Second World War is no longer guaranteed. To the extent that Australia’s strategy relies on US power, that should concern us.

Peter Jennings has earlier discussed the value of hard power in general and of US hard power, judiciously applied, in particular. Andrew Carr acknowledges the importance of that power to Australia. But a health check on American military power, including recent messages from the US national security community, renders a worrying prognosis. Read more