14 May 2018

The Looming Halkbank Fine

If you are like most people, the name of the state-owned Turkish bank will not mean anything to you. However, in a few days time, it might become the most important news item about Turkey's economic future and political stability.

I mentioned Halkbank, or Halk Bankasi AS (its full Turkish name) about two years ago as a major threat to Erdogan's political survival. It played a key role in the biggest sanctions-evasion scheme in recent memory.

Reza Zarrab, a dual Iranian-Turkish citizen helped Iran sell its oil and gas and buy goods by creating an alternative to the SWIFT network through Halk Bankasi.

It was a complicated setup.
Tehran then decided to use a bypass system based on Turkey’s Halkbank. SWIFT was sidelined first by setting up front companies in China. Money was sent to the Chinese bank accounts of these companies from Iran as if they were reimbursements for exports. That money was instantly transferred to front or real companies in Turkey, also as export reimbursements. Gold bought with that money was moved to Iran via Dubai.
According to the Foundation for Defense of Democracies (FDD), this "massive "gas-for-gold" sanctions-busting scheme yielded neighboring Iran some $13 billion in Turkish gold between 2012 and 2013."

In fact, this was just the tip of the iceberg as the FDD estimates that the actual sums were much higher.
The more we investigated, the more we realized that Zarrab’s schemes, which could have helped Iran pocket more than $100 billion, rank among the largest sanctions evasion episode in modern history.
Since the sanctions were designed to hamper Iran's nuclear program, you can imagine where at least some of that money went.

Zarrab took his family to Disneyland in March 2016 and was promptly arrested by the American authorities and indicted by Preet Bharara, the then US Attorney for the Southern District of New York.

After a long trial with many ups and downs, former Halkbank deputy general manager Hakan Atilla was found guilty on 3 January 2018 (along with two Turkish ministers who were charged in absentia) and he is awaiting sentencing. While the prosecution is asking 20 years, the judge postponed sentencing twice so far. It has just been reported that the sentence will be announced on Wednesday 16 May.

What is more interesting for our purposes is the fine that the Treasury Department's Office of Foreign Assets Control (OFAC) is likely to impose to Halkbank and perhaps six other Turkish banks.

Turkish analysts and markets initially appeared optimistic about the size of the fine. But people who are familiar with the BNP Paribas (BNP) believe that Turkey is in for a big surprise.
In a decision made in May 2015, a U.S. court imposed a penalty of $8.9 billion against BNP, including $8.8 billion that it said was equal to the amount of transactions identified as criminal. The agreement with BNP was conditional on it accepting full responsibility for the crime and convincing U.S. authorities that it would set mechanisms in place to ensure full compliance with the sanctions regime in the future.
Remember that the amount BNP was accused of laundering was $10.3 billion.
The fact remains that Halkbank has laundered at least four (4) times more money than BNPP. In addition, a former top level U.S. Treasury official testified at Mr. Atilla’s trial that U.S. officials had warned Mr. Atilla and other Halkbank executives not to violate U.S. sanctions on a few occasions. Moreover, Halkbank has had the benefit of BNPP’s example as a test case for what happens when banks violate sanctions regimes. As a result, any fine imposed upon Halkbank will likely exceed that of BNPP’s and any settlement will likely contain stricter and more rigid measures.
I got curious and called a friend of mine who is in senior management at BNP and put the question to him. He said that the BNP analysts believe that the fine will be between $30 billion and $100 billion.

I asked if their people could be mistaken as these are huge sums and they would certainly bring Turkey to its knees. His response was that, is OFAC followed the same guidelines, there is no way they can impose a fine less than $30 billion.

He also added that they might postpone the decision until after the upcoming Turkish elections on 24 June. He was implying that the results might determine the size of the fine.

What should be worrisome for Turkish companies is the fact that such fines are always accompanied with an admission of wrongdoing and we know that Turkey's bombastic president will never agree to issuing such statement.

And without one, Washington could designate Halkbank on OFAC's sanction list.
This designation would effectively cut off the bank’s access to the U.S. market. Since Halkbank is the largest listed bank in Turkey, such a designation could have serious repercussions not just for the bank, but for Turkey at large.
That would remove Halkbank's ability to do business in dollars. And that is a kiss of death for any bank.

Moreover, if the fine was very high and targeted the other six banks named, the economic repercussions would be very serious.
The evaporation of credit would bring household consumption and fixed capital formation growth downward significantly, subsequently bringing headline GDP growth down by about 1 percentage point compared with current projections. Depreciation of the lira would be more prolonged, the stabilization of which would deplete foreign currency reserves to dangerously low levels. The sharp weakening of the lira and concurrent drop in reserves would severely undermine the country's ability to meet external debt obligations. Net portfolio capital flows could be outward for several months, raising the likelihood of a current-account crisis. With markets unstable, inflation would spike.
Originally, the OFAC decision was scheduled for 17 May (I can't find the link but I know I read it somewhere). If my friend at BNP is correct, we will see it postponed until after 24 June.

But if it is announced before the elections and it is substantial then we can assume that Turkey is no longer useful for the longer term American regional plans.

21 March 2018

Shooting White People While Being Mohamed Noor

Last July, a nice Australian woman called 9-11 to report a rape incident.

When the police car arrived at the scene, she was shot by one of the officers.

Now, as I noted at the time, this is something of a routine in the USA. You look directly into a police officer's eye you are shot. You look unhappy about being Tasered you are shot. You have the wrong skin color, you are definitely shot.

But in this instance, this is what I wrote:
Last year, 968 people were killed by police. This year, so far, 554
There were several issues with this one though. 
Otherwise it would not have made the headlines. 
First, she was a white woman. 
Second she was from Australia, an English speaking and relatively powerful country where the media can ask questions
Finally, the officer who shot her was called Mohamed Noor. 
Remember Philando Castile? Also in Minnesota. 
And countless others
But I predict that this time they will indict the officer. 
And throw the book at him. 
Because he shot a white woman from Australia while being Mohamed Noor.
Well, they just did. He is charged with third-degree and second-degree murder.

Don't get me wrong, I am not suggesting that this is an injustice for the officer.

Far from it. He should get punished for what he did and if you ask me, what they are proposing is rather lenient.

What I am suggesting that, under the same circumstances, Jeronimo Yanez who shot Philando Castile was charged with lesser crimes and, well, he was acquitted.

What I am also suggesting is that this case shows very clearly the racial bias in the US. When white police officers kill black people, it's all good. In fact, this is the majority of the shooting incidents I linked above.

And this what "All lives matter" idiots are trying to hide.

But when a Muslim officer kills a white woman, we know that "White Lives Matter."

Which was my point.

Nevertheless, I wish Justine Damond was alive and I didn't have to make this point.

But I also wish that Philando Castile was with us.

You know, all lives matter.


18 March 2018

Will Trump Fire Mueller? A Second Take

I pondered this question last December and my answer was that it was rather likely.

A month later, we found out that Trump had indeed tried to fire Mueller six months earlier but the White House Counsel Donald McGahn blocked his directive.

Now, I am more convinced that he will fire Mueller in the next few weeks.

How do you know that, you may ask.

First, Trump knows that Mueller has turned several witnesses and they are all going to implicate him, his family members and his inner circle.

He also knows that his dealings with Russian oligarchs and criminal groups were, well, charitably put, not above board. Refusing to release your tax returns might cheer up your base as sticking it to the Man, to use the 60s lingo, but it would not deter someone like Mueller.

But Trump would be worried mostly about his kids getting in the crosshairs of Robert Mueller.

And this is happening right now.

Mueller Investigation and Ivanka and Don Jr.

Robert Mueller has just subpoenaed Trump Organization's documents in their dealings with Russian business interests.

This week, congressional investigators claimed that the Trump Organization was negotiating a deal with a Russian bank during the 2016 election campaign.
Democratic congressional investigators this week claimed in a memo that they had learned that the Trump Organization was “actively negotiating” a deal in Moscow during the election campaign that involved a Russian bank that was under US sanctions. The deal never went through and it is not clear which bank the congressional investigators were referring to. 
When you say Trump Organization, you mean Ivanka, Don Jr and Eric. So the kids are being targeted now.

And this is not the first time.

There is also the Trump SoHo deal, which involved Tevfik Arif and Felix Sater and their real estate group Bayrock.

These two were born in the Soviet Union and have extensive commercial and shady connections in Russia including various criminal enterprises.

I mentioned them many times and you can read more about them and their involvement with the Trump Organization here and here.

Basically, as it was subsequently alleged, the Trump SoHo project was a Russian money laundering scheme whereby they sold overpriced real estate to unsuspecting investors who eventually lost their shirt.

That deal was investigated in 2012 by the Manhattan District Attorney's office and according to ProPublica and the New York Times, having found a smoking gun in Ivanka and Donald Jr's emails about their intent to defraud investors, the prosecutors were ready to indict the siblings.
In one email, according to four people who have seen it, the Trumps discussed how to coordinate false information they had given to prospective buyers. In another, according to a person who read the emails, they worried that a reporter might be onto them. In yet another, Donald Jr. spoke reassuringly to a broker who was concerned about the false statements, saying that nobody would ever find out, because only people on the email chain or in the Trump Organization knew about the deception, according to a person who saw the email.
Then, Trump lawyer Marc Kasowitz made a surprise visit to Manhattan DA Cyrus Vance Jr after which he instructed his prosecutors to shut down the investigation.

In case you are wondering, Kasowitz donated $25,000 to Vance's re-election campaign becoming one of his biggest donors. Vance returned the money when this strange coincidence was revealed. Undeterred, Kasowitz subsequently organized a fundraiser that netted Vance $50,000.

But, of course, there was no quid pro quo, as we all know that happens only in sub-Saharan Africa and some other, hmmm, what is the term, oh yes, shithole countries.

But not in the good old USA.

Where lawyers pay $130,000 to porn stars from their own pocket, just because...

Where prosecutors always go after the rich and powerful people like Cy Vance going after Harvey Weinstein.

In any event, not only is Mueller looking into this again but he is doing it in collaboration with New York's Attorney General Eric Schneiderman who hates Trump with a passion.

This is relevant since it puts Ivanka and Don Jr beyond their father's ability to pardon, which is limited to federal cases and Schneiderman's involvement makes it state level.

So stopping Mueller is now very important for Trump.

He thinks, firing Mueller might just stop the whole thing.

Does he have cover to do it?

Wel, the GOP has just arranged for it.

The End of House Probe on Russia Collusion

The House Intelligence Committee just ended its investigation on whether or not Trump Campaign colluded with Russia to influence electoral results.

Their report said there was nothing serious there. Nothing at all. A few mistakes here and there, but no Benghazi.
The House Republicans also said that a 150-page report they prepared — without consulting their Democratic colleagues — contradicts the U.S. intelligence community's firm conclusion that the goal of the Russian government effort was to boost Trump's campaign. 
See, it was all a witch hunt and Trump has always maintained that.

True, there is also an ongoing Senate probe but since that chamber is also controlled by the GOP don't expect a much different result. The GOP has a tight control over all their congresspeople. The carrot is money and stick is a Tea Party primary challenger.

If John McCain didn't have a brain tumor and sudden concerns about his legacy, he might have voted for Trump despite the Orange Man's previous comments about him not being a hero.

Why is that relevant?

When Trump fires Mueller, his GOP defenders will go on Sunday talk shows and say that the Mueller investigation was a waste of taxpayers' money since Congress already exonerated the President.

Those will be the same people who provided tens of millions dollars to Kenneth Starr's Whitewater inquiry and investigated Benghazi countless times.

But no corporate media personality will ever point that out.

So what is next for Trump?

Getting Ready to Fire Sessions

There are several reports that Trump is getting ready to fire his Attorney General, Jeff Sessions.
[S]ources said Trump has discussed a plan to fire Attorney General Jeff Sessions. According to two Republicans in regular contact with the White House, there have been talks that Trump could replace Sessions with E.P.A. Administrator Scott Pruitt, who would not be recused from overseeing the Russia probe. Also, as an agency head and former state attorney general, Pruitt would presumably have a good shot at passing a Senate confirmation hearing.
Now, I have to admit that this one would be a clever move because Pruitt might limit the Mueller investigation so much that there might not be any need to fire him.

Under that scenario, Trump gets exonerated without firing Mueller because Mueller couldn't talk about stuff he uncovered.

Not bad at all.

Hence, I believe firing the garden gnome might be the most likely next move.

Trump has been testing the waters with the firing of Rex Tillerson and Andrew McCabe (two days before his full pension retirement) to see what kind of push back he would get.

We now know the answer is, not much. And this, despite trolling him for moths about preventing him from getting his full pension.

Reportedly, the next person he is planning to fire is his National Security Advisor H.R. McMaster.

That should provide the litmus test.

It will be interesting to see how getting rid of his Secretary of State and National Security Advisor weeks before his planned meeting with Kim Jong-un would be handled by the Washington Establishment, the corporate media and the GOP.

If nothing happens, as I expect, Trump might decided to fire Mueller too.

What About Intelligence Agencies?

Previously, I suggested that even if Trump fires Mueller, he alienated intelligence agencies so much that they will continue to leak damaging information collected by his probe and more.

They have done that in previous months as every scoop by the Washington Post or the New York Times could be traced back to one of those alphabet agencies.

But Trump made another clever move. He nominated the torturer's torturer "Bloody" Gina Haspel to the head of the CIA.

That pleased everyone because she is one of them and they know her and are confident that she will not damage their interests or betray their secrets.

Would that be enough?

This is what the former CIA Chief John Brennan said today:
Brennan addressed the president earlier on Saturday, writing: “When the full extent of your venality, moral turpitude, and political corruption becomes known, you will take your rightful place as a disgraced demagogue in the dustbin of history.

“You may scapegoat Andy McCabe, but you will not destroy America … America will triumph over you.”
So what do you predict, you ask.

My guess is that being impulsive (plus his kids being in the crosshairs) Trump will fire Mueller.

This will cause a constitutional crisis and put  GOP in a bind. But they will stand by him and defend him until the 2018 elections.

If they lose badly, the Orange Man is toast.

And, despite Gina Haspel nomination, the intelligence community will leak damaging stuff like never before.

2018 will be a fun year.


It turns out that the garden gnome Beauregard lied under oath and Mueller knows it.

I am wondering why this is coming to the surface right now.
U.S. Attorney General Jeff Sessions’ testimony that he opposed a proposal for President Donald Trump’s 2016 campaign team to meet with Russians has been contradicted by three people who told Reuters they have spoken about the matter to investigators with Special Counsel Robert Mueller or congressional committees.
Someone should congratulate Scott Pruitt right now as he is preparing his presidential bid. I am not kidding.

15 March 2018

Tillerson Firing and the Irrelevance of the State Department Under Trump

Most pundits believe that it was Rex Tillerson calling the Orange Man "a fucking moron" that did him in.

Credit Reuters
Trump hold grudges for a long time, they say and his revenge was to fire him via Twitter when he was out of the country.

Others point to a fundamental incompatibility between the two men and Trump himself alluded to that as a chemistry issue or lack thereof.

I am sure these and other problems played a part in the latest The Apprentice moment.

But to my contrarian eyes, there is a more fundamental reason why Tillerson had to go.

Most people assume that the main job of of the State Department (or any diplomatic service for that matter) is to represent the US abroad, negotiate with partners and adversaries and propagate and emphasize the messages of its government.

In fact, this last function makes the previous two possible and it is what should properly called foreign policy.

In clearer terms, it consists of vigorously pushing meticulously crafted narratives around America's imperial, or to put it more bluntly, imperialist actions.

These narratives are designed to obfuscate the real motives of such acts and offer more palatable justifications. And they are based on soothing and innocuous notions like democracy, freedom, free market economy, America's national security and, of course, its benevolent approach to being a superpower.

In short, the mission is to convincingly defend the indefensible.

Defending The Indefensible

This is how it works:

Say the president decides to invade a country, overthrow a government, implement new tariffs, meddle in elections, engineer a coup against elected officials, commit war crimes and torture suspected terrorists.


Now, no Administration has ever acknowledged its actions in these terms. They have always been explained or presented in euphemisms referring to American ideals like freedom and democracy.

Funding fascist squads in Nicaragua was supporting freedom fighters. Engineering a coup against the duly elected Salvador Allende in Chile and cheering the murder and incarceration of thousands of people was called restoring democracy and preventing communist authoritarianism. Waging war against Ho Chi Minh, originally a nationalist who admired the US, was to stop the domino theory of communism.

Torturing is using Enhanced Interrogation Techniques to protect Americans, overthrowing a government is liberating its people and invading a country is bringing democracy to it.

It is the State Department's job to push these justificatory narratives and to have its diplomats  around the world to charm, cajole, pressure and bribe local politicians, media personalities and any other relevant figure to ensure that the real motives behind the actions are substituted with a new and nicer narrative.

Concrete example. Remember the Iraq War?

The real motive was to use the Saudi funded 9/11 as a pretext to implant the US into the Middle East in order to control the flow of oil and gas as a way to keep in check the energy needs of emerging powers like China and India.

At the time, 72 and 73 percent of oil and gas flows, respectively, were going through the region. Iraq was, in the immortal words of a Wall Street oil analysts “a military base with a very large oil reserve underneath."

The initial justification, the presence of WMDs, came from the Pentagon and the State Department forcefully pushed it everywhere, including Secretary of State Colin Powell going to the UN with a bogus Powerpoint presentation.

When it became obvious that there were no WMDs in Iraq and that the US invaded a sovereign country for no good reason and without a UN Security Council authorization, the new narrative focused on the evil dictatorship of Saddam Hussein and how the US acted selflessly to liberate the Iraqi people.

I could give you hundreds of other examples from the Middle East, Southeast Asia, Latin America and of course the "Banana Republics" in Central America and the accompanying idealistic justifications but you get the idea.

Not to give you the wrong impression let me add that the State Department's narratives are not limited to these acts of belligerence. It also covers other indefensible positions like supporting Saudi Arabia.

We know that the title of the world's most oppressive regime should go to either North Korea or Saudi Arabia.

It's probably a tie, unless you are a feminist like me, in that case, Saudi Arabia wins the trophy.

Yet the US has always been ready to nuke the former to smithereens but have always sided with the latter. And no matter what.

These are the folks who behead as many people as ISIS on any given year, who keep half of their population under house arrest, who surveil everyone and who incarcerate, torture and lately extort money from their subject with absolutely no due process.

They raised over $200 billion (by 2008, it is probably $300 billion by now) for Jihad, for radicalizing young Muslims and for funding Wahhabi institutions around the world.

Yet, the State Department has always defended America's fondness for this pernicious regime. The narratives, depending of the decade, were (a) oil dependency, it is our fault, (b) stability of the region and security of Israel, (c) a bulwark against Iranian ascendency.

Anyone who knows a little bit about foreign policy can tell you that this is all rubbish.

Oil dependency was never an issue, as, at the time, between Canada and Venezuela and its own reserve, the US had all the oil it needed. As for the second claim, if the security of Israel depended on the House of Saud, the biggest raiser of terrorist funds of all time, I would pity the Jewish State. And Saudi Arabia couldn't last two days against Iran, let alone being a bulwark.

The real reason has always been the protection money they pay to America's military industrial complex, as Saudis are by far the best clients of the US defense industry. I guarantee you that the day they stop buying those shiny deadly toys is the day the House of Saud and the House of Wahhab will collapse.

In fact, this is why Mohammed Bin Salman was desperate to find the funds to pay for the protection racket after he promised to buy $110 billion worth of arms during Trump's visit.

And this is why the Saudis remained an important US ally after the rise of fracking industry and American oil independence.

But we cannot say any of that, can we? The only narrative in mainstream media will be the one pushed by the State Department.

However, all of this changed with the Orange Man.

America First: the President as the "Ugly American"

As I outlines, through this duality between deeds and discourse, the US has always been able to present itself as a beacon of freedom, a tireless supporter of democracy and the defender of the underdog, while doing the opposite.

With Donald Trump this duality is no longer necessary. Because, just like he made openly racist statements to his domestic audience instead of relying on GOP dog whistles, he now tells the world exactly what his goals are and what he thinks of them.

In one of his first speeches (to the CIA) he argued that after liberating Iraq, the US should have kept the oil for itself. International law? What international law? We have the military might and next time we'll take it.

His approach was the same for Article 5 of Nato. He openly said that no Nato country who didn't use 2 percent of its GNP for defense expenditures should expect America's help when they trigger Article 5. Since most Nato defense procurement goes to American military industrial complex, it was his way of asking for protection money.

And who cares about treaty obligations.

When he launched his trade war, his goal was to have a trade surplus with every country. And for no other reason than the US is more powerful than other countries. And he clearly stated it.

Same with Iran, he is itching to abandon the nuclear deal so that he can bomb the country. And it looks like he is about to hire John Bolton, the perfect guy to do this as his National Security Advisor:
In 2015, he wrote a New York Times op-ed headlined, “To Stop Iran’s Bomb, Bomb Iran,” and last month, he wrote a Wall Street Journal op-ed outlining the legal case for a pre-emptive strike against North Korea.
Trump does not call torture Enhanced Interrogation Techniques. He calls it torture and states that "torture absolutely works" and he might just use it. In fact, his new pick for CIA Chief, Gina Haspel ran the first CIA black site in Thailand in 2002 and implemented waterboarding and other "enhanced techniques."

African nations and Haiti are shithole countries.

With Trump, there is no need to defend the indefensible. He says it in so many words and he doesn't want it defended. In fact, if you try to soften his remarks he will attack you on Twitter and double down on his rhetoric, as Tillerson discovered many times.

He does not care about soft power. He only cares about military power.

Tellingly, he increased the Pentagon's budget by the same percentage he decreased Foggy Bottom's.

And let's not forget the fact that the reason Tillerson called Trump a "fucking moron" was because the Orange Man was asking a ten-fold increase in America's nuclear arsenal.

In short, by removing its main function, Donald J. Trump made the State Department irrelevant.

He thinks he will just tell Kim Jong-un and Hassan Rouhani to disarm and it they don't, he will nuke them. That's as simple as that.

Tillerson might have objected, his replacement Mike Pompeo will ask to be in the room when Trump pushes the button.

As one recent op-ed noted, Trump is the Ugly American as the President.



From the desk of Nikki Haley, the next Secretary of State after Mike Pompeo:
U.S. Ambassador to the United Nations Nikki Haley is proposing a sweeping reassessment of U.S. foreign assistance with a view to punishing dozens of poor countries that vote against U.S. policies at the U.N., according to a confidential internal memo drafted by her staff. 
The move to make foreign aid conditional on political support follows a U.S. decision to cut tens of millions of dollars in assistance to Palestinian refugees, a cut made in retaliation for Palestine’s sponsorship of U.N. resolutions denouncing U.S. President Donald Trump’s controversial recognition of Jerusalem as Israel’s capital. Haley now wants to apply a similar principle to decisions about aid to other needy countries.
That's America First with a chin flick.

Who needs a State Department when this is your attitude.

10 March 2018

Why The Rocket Man Offered to Meet The Orange Man

Even to a cynical observer like the resident contrarian of this humble soapbox, the breathless coverage of Kim Jong-un's reported offer to talk to Trump was astonishing.

Pundits stepped over each other to declare it a historic moment similar to Nixon going to China.
"The [significance of this] could almost be compared to President Nixon meeting China's Chairman Mao, to a lesser degree," analyst Michael Madden of the US-Korea Institute at Johns Hopkins SAIS told the BBC.
The White House seized upon this unexpected development as proof that Trump's unhinged madman approach brought Kim Jong-un to the table.
[Trump] believes his "maximum pressure" strategy and his work to get China on side and help squeeze Pyongyang economically is working. Reporters say he casually mentioned in the White House briefing room that he hoped they would give him credit for Kim Jong-un's offer. His voters certainly will.
What is puzzling to me is the bogus premise of this hullabaloo: I cannot envisage a scenario under which Kim Jong-un would agree to a denuclearization. Something most pundits seem to take at face value.

Think about it, without those nukes North Korea is a joke of a country. It cannot even feed its own people.
Only about 20% of North Korea's mountainous terrain is arable land. Much of the land is only frost-free for six months, allowing only one crop per year. The country has never been self-sufficient in food, and many experts considered it unrealistic to try to be.
It has nothing of value beyond coal and its economy would be unable to compete even with the poorest of nations if it wasn't cut off from the world.

The Rocket Man knows that people take him seriously and are willing to talk to him only because of his nukes. And he knows what happens when autocratic rulers give up their weapons of mass destruction.

Bashar Al-Assad gave up his chemical and biological weapons and next thing you know, he is the president of a failed state held together by Russian intervention. We all know how it ended for Saddam Hussein and Colonel Gaddafi.

The minute Kim Jong-un agrees to a comprehensive demilitarization, his fate will be sealed and he knows it.

Some observers believe that his primary goal is the loosening of sanctions.
"By dangling before the US once again 'denuclearization of the Korean peninsula' and 'moratorium on nuclear and missile tests', Kim seeks to weaken sanctions, pre-empt US military pre-emption, and condition the world into accepting North Korea as a legitimate nuclear state," says Prof Lee Sung-yoon from the Fletcher School of Law and Diplomacy, Tufts University.
I don't see it.

Unless he capitulates, which he cannot do, there is no clear path to the loosening of sanctions. Dangling promises will not do it. Especially not when the White House claimed he came to the table because of their tough stance. If anything they will tighten the screws.

So why did he do it?

I think it was an unintended consequence of something Trump did for completely unrelated reasons.

In the last couple of months, Trump has been feeling the Mueller noose tightening around his neck and everytime a new revelation hit the Post of the Times or the Wall Street Journal, he announced something outrageous. Predictable the media focused on the outrage du jour and Russia inquiry was pushed to the back burner.

The latest was the tariffs to be imposed on steel and aluminum, followed by a general threat of a global trade war. One that led to the resignation of Gary Cohn.

My guess is that Kim Jong-un grew very concerned that, in a looming trade war, China might throw him under the bus and use him as a bargaining chip to get some concessions from the US.

Without China buying his coal and selling him the basic necessities to keep his impoverished population alive Kim Jong-un would not last long. Or, to put it more morbidly, he might not have enough people to rule upon.

Remember the Great Famine where up to 3,500,000 people died of starvation and famine related illnesses?

So he now hopes to appear reasonable to China. He desperately wants Xi Jinping to think that he is doing all he can to work out a deal. And he counts on Trump to screw the process up.

Trump is not just a "dotard" he is a spoiled idiot with the attention span of a Golden Retriever puppy. He is not a great deal maker as he went bankrupt six times. Which, as you know, is very hard to do in casino business where people come literally to hand over their money to you.

The spoiled obese youngun who live in seclusion is not alone in assuming that Trump would fail badly trying to outmaneuver him.
Prof Robert E Kelly at Busan University in South Korea tweeted: "Trump doesn't study or even read. He tends to fly wildly off script. And May means there's almost no time for all the staff prep necessary."
To me, the likely next step is Trump (or people around him) finding an excuse to cancel the meeting. But in the unlikely event that they meet, The Rocket Man expects The Orange Man to say and do something so blatantly stupid that even people who hate Kim Jong-un will be unable to fault him.

But you would not know any of this from the glowing media coverage. Once again the corporate media acts as Trump's enabler.

In a post entitled "Everything Trump Does Is A Victory", Atrios (Duncan Black) makes this point.
If Obummer had walked into the press room one day and said a big announcement was coming and then the big announcement was that he was going to meet with the North Korean leader with no "preconditions" or no pre-negotiated concessions, NK nukes would have been unnecessary because DC's "foreign policy community" would have imploded the city themselves in a black hole of rage and the Washington Post would not have had this headline ['Trump secures a diplomatic coup with Korea"].
It would have been more like, "Experts say naive Obama is Rocket Man's little bitch."
Indeed, this is how it would have been covered. 

There are different rules for Republicans in our liberal media.

25 February 2018

Why Fleeing ISIS Fighters Are A Huge Problem for Europe and Turkey

In November 2017, the BBC ran a piece about how coalition commanders facilitated the escape of ISIS fighters with their families from Raqqa.

This was not a furtive move, the coalition rented 50 trucks, 13 busses and added to the 7 km long convoy more than a 100 of personal vehicles of ISIS militants.

More ominously, they allowed them to keep their weapons and personal belonging and let their families accompany them. It was a coalition sponsored orderly evacuation.

And most importantly, it was a secret operation.
Great pains were taken to hide it from the world. But the BBC has spoken to dozens of people who were either on the convoy, or observed it, and to the men who negotiated the deal. (...)
The Kurdish-led SDF cleared Raqqa of media. Islamic State’s escape from its base would not be televised.
British and American commanders of the coalition forces and their Kurdish allies in SDF were all in on it. Here is a clip made by SDF troops showing the escape.

When confronted by the BBC with evidence of orderly evacuation, the coalition folks claimed that they had no choice. It was all done by the locals.
“We didn’t want anyone to leave,” says Col Ryan Dillon, spokesman for Operation Inherent Resolve, the Western coalition against IS. 
“But this goes to the heart of our strategy, ‘by, with and through’ local leaders on the ground. It comes down to Syrians – they are the ones fighting and dying, they get to make the decisions regarding operations,” he says. 
While a Western officer was present for the negotiations, they didn’t take an “active part” in the discussions.
Moreover, Col. Dillon claimed that only 4 fighters left and they were now in SDF custody.

And SDF maintained that "only a few dozen fighters had been able to leave, all of them locals."

But the actual number is 4,000 people, including families.

BBC could substantiate 250 fighters leaving in the convoy. But in February, the New York Times reported that over 1,000 ISIS militants left Raqqa.

Curiously, the same Col. Dillon who reluctantly acknowledged the operation but downplayed its scope in November 2017, denied in December that any evacuation took place and claimed that some might have slipped through Syrian defenses.
In December, Col. Ryan Dillon, the chief spokesman for the American-led military campaign in Iraq and Syria, said in a briefing with Pentagon reporters: “Syrian regime commanders in eastern Syria suggest that ISIS fighters” from the Middle Euphrates River Valley “may have slipped through porous Syrian and Russian defenses to arrive in areas near Damascus.”
 And when asked about the much higher number of militants escaping, he conveniently blamed Syrian forces.
Asked late last month by The New York Times about indications that as many as 1,000 fighters and family members had fled the Euphrates River area just in recent days, Colonel Dillon’s command replied in a statement: “We know that the Syrian regime has given ISIS the leeway to travel through their area of operations, but we cannot confirm any alleged incidents or operations that are taking place outside our area of operations.”
What am I repeating these allegations? For two reasons.

The first one, as the New York Times underlined, these battle-hardened fighters are not running away defeated and spent. They are regrouping in various pockets to get ready for a true insurgency fight.
As many of the fighters flee unfettered to the south and west through Syrian Army lines, some have gone into hiding near Damascus, the Syrian capital, and in the country’s northwest, awaiting orders sent by insurgent leaders on encrypted communications channels.
That means ISIS is far from dead. In fact, their big problem was defending a territory and it never made much sense for a terrorist group to build a country other than my Pipelineistan theory.

Now, they will move around and strike soft targets to terrorize the civilian population.
“The group is transitioning into an underground organization that places more weight on asymmetric tactics, like suicide bombings against soft targets in government-secured areas like Baghdad,” said Otso Iho, a senior analyst at Jane’s Terrorism and Insurgency Center at IHS Markit in London. 
Mr. Iho cited an attack by two suicide bombers in Baghdad last month that killed three dozen people and injured 90 more. The attack took place in a busy Baghdad square where day laborers gather to look for work.
The second reason for concern is the fact that a lot of these coldblooded killers are returning to their home countries.

To understand what that implies let me remind the story of a returning Jihadist. Three and a half years ago, a Turkish man who gave his middle name as Can told the New York Times the process through which one becomes an ISIS fighter.
After 15 days at a training camp in the Syrian city of Raqqa, the de facto headquarters of the group, the Islamic State in Iraq and Syria, the 27-year-old Can was assigned to a fighting unit. He said he shot two men and participated in a public execution. It was only after he buried a man alive that he was told he had become a full ISIS fighter.
So, in the span of two weeks, he shot two men, killed someone with his hand (possibly a beheading) and buried another one alive.

Think about that for a minute. This is the official regiment to become an ISIS fighter. It is not just him.

We don't even know what he did beyond those two weeks. Or what an ISIS soldier does regularly.

And now he is back in Turkey. Even if you assume that he is a repentant Jihadist (instead of a sleeper cell member) can you imagine him reintegrating into normal life without any issues?

Multiply this case by several thousand and you can see the enormity of the problem.
Of more than 5,000 Europeans who joined those ranks, as many as 1,500 have returned home, including many women and children, and most of the rest are dead or still fighting, according to Gilles de Kerchove, the European Union’s top counterterrorism official.
So far, Turkey leads the list of countries hosting former Jihadists with 900 returnees. And there are hundreds more from Western Europe hiding in the country.

I will make an easy prediction for Turkey. Some of these people will become suicide bombers at critical turns negatively affecting tourism and also the electoral process that is widely expected to take place in the next few months.

Yet, as far as I know no returning militant was placed in custody or checked for criminal activities.

As for Western Europe, I also predict that there will be more "lone wolf" attacks.

Now, some people claimed that all Western European countries need to do is to arrest and prosecute them upon their return. That's easier said than done.
The UK Home Office, for example, disclosed last year that of the 400 British foreign fighters who had returned from Syria and Iraq, only 54 were convicted.
Australia only prosecuted 2 returning fighters.

That's the same numbers for Canada, i.e. 2 fighters.

The Netherlands convicted one woman. "It then set her free."

Belgium also convicted 1 fighter. [Link in Dutch]

What about deradicalization centers you might ask?

Well, there aren't any.

The only one that is still working is the Aarhus institute in Denmark which I praised almost three years ago.

In 2016, France announced the opening of 12 deradicalization centers. The sole institution they opened closed in less than a year and there are no further plans.

Apparently, they thought daily lectures about philosophy and religion might be enough to change these people's mind.

It is as if no one wants to change the inevitable outcome.

20 February 2018

Will Trump Use Nuclear Weapons in Non-Nuclear Conflicts: New NPR

Nuclear Posture Review (NPR) is a document that outlines America's policies and positions regarding the size and nature of its nuclear arsenal and conditions under which it could be used.

As you will remember from Cold War days, the overarching nuclear doctrine was Mutually Assured Destruction or MAD for short. The idea was to let both side know that a nuclear war was not winnable: it was just a suicide.

Consequently, both the US and Russian nuclear stockpiles largely consist of multiple hundreds of kiloton warheads (Little boy that was dropped on Hiroshima was a 15 kiloton). Every one of them would cause massive destruction and kill a huge number of people.

The MAD doctrine and the consequent NPR was in line with Bernard Brodie's famous dictum after Hiroshima and Nagasaki.
“Thus far the chief purpose of our military establishment has been to win wars. From now on its chief purpose must be to avert them.”
The new NPR prepared by the Trump administration is going back to winning wars purpose by introducing three changes.

Low Yield Warheads with Low Collateral Damage

The Trump NPR calls for the development of low yield nuclear weapons which are defined as 20 kiloton or less.

The underlying argument is that America's enemies might think that the US would not use its nuclear weapons in lower level conflicts because of their large scale destructive capacity.
This is intended to address the argument that adversaries might think the United States, out of concern for collateral damage, would hesitate to employ a high-yield nuclear weapon in response to a “lower level” conflict, in which an adversary used a low-yield nuclear device.
In other words, instead of MAD doctrine where the goal is to make sure no nuclear power under any conditions could rationally use nuclear weapons, the new NPR is aiming to facilitate their use in certain conflict situation.

And to do so to win non-nuclear conflicts.

Lower Threshold for Nuclear Weapon Use

Previous NPR are did not specifically address the use of nuclear weapons in a conventional war. Sure, the US never gave up its right to use nuclear weapons in a massive conventional attack but the scenarios previous NPRs envisaged were rather extreme like "Warsaw Pact blitzkrieg through the Fulda Gap during the Cold War or a biological or chemical weapons attack in more recent years."

But, given the military superiority of the US, employing nuclear weapons in a low level non-nuclear conflict would have been both unnecessary and indefensible.

That is no longer the case and the threshold for their use has been lowered and the scope expanded.
While the document strives to maintain “some ambiguity regarding the precise circumstances that might lead to a U.S. nuclear response,” it explicitly states that the United States could employ nuclear weapons in response to “significant non-nuclear strategic attacks.” This includes but is not limited to “attacks on U.S., allied, or partner civilian population or infrastructure.”
In fact, New York Times reported in January that the NPR allows the deployment of nuclear weapons in the case of a massive cyber attack.
But three current and former senior government officials said large cyberattacks against the United States and its interests would be included in the kinds of foreign aggression that could justify a nuclear response — though they stressed there would be other, more conventional options for retaliation.
To say that this is a very dangerous path would be a yuge understatement.

Imagine a scenario where intelligence agencies blame Iran for a large scale blackout. What might the Orange Man do?

There are already talks of a pre-emptive nuclear attack on North Korea, the so called "bloody nose" option.

Nuclear Sea-based Cruise Missiles

The Trump NPR calls for the development of modern sea-launched nuclear cruise missiles.
This marks a departure from the Obama administration’s 2010 Nuclear Posture Review, which announced the retirement of the previous nuclear-armed sea-launched cruise missile.
By itself, this might appear innocuous but when you view with with the other two changes, you realize that this is a belligerent and aggressive NPR.

Understandably, Russia is worried.
 Moscow is showing understandable concern over the lowering of the threshold for employing nuclear weapons to include retaliation for cyber-attacks, a change announced on Feb. 2 in the U.S. Nuclear Posture Review (NPR).
Explaining the shift in U.S. doctrine on first-use, the NPR cites the efforts of potential adversaries “to design and use cyber weapons” and explains the change as a “hedge” against non-nuclear threats. In response, Russia described the move as an “attempt to shift onto others one’s own responsibility” for the deteriorating security situation.
What is worrisome is the difficulty to trace cyber attacks to its origins. It is laughably easy for a state to launch a cyber attack while leaving the footprints of another state.

Netanyahu's bete noire is Iran. Can you not envisage a situation where Israeli hackers attack the US infrastructure and leave clues to implicate Iran?

Under the new doctrine Trump could simply nuke Iran to Stone Age.

Or an independent group of hackers could implicate Russia. Some people believe that the DNC hack was done by third parties who left clues to incriminate Russian hackers.

In any case we have an extremely dangerous combination here: a lower nuclear attack threshold and a volatile, irrational and perhaps senile president.

Yet, no one seems concerned about this major change.