Saturday, January 16, 2021

The Unbelievable Failure Of The CIA And The Intelligence Community Regarding China

This is part II of a three part essay from Foreign Policy. We linked to part I in January 2's: Data and Money and Death: "China Used Stolen Data to Expose CIA Operatives in Africa and Europe".

From Foreign Policy, December 22:

Pt. II: "Beijing Ransacked Data as U.S. Sources Went Dark in China"

As Xi consolidated power, U.S. officials struggled to read China’s new ruler.

In early 2013, as Communist Party General Secretary Xi Jinping prepared to assume the Chinese presidency, very few people in the West had any idea what kind of leader he was. In January of that year, the New York Times’ Nick Kristof, an experienced China correspondent, wrote that Xi “will spearhead a resurgence of economic reform, and probably some political easing as well.”

It was a radically mistaken assessment. But even inside the U.S. government, knowledge of China—and its intensions—was at a low point. During the 2000s, U.S. intelligence had operated with relative confidence against Beijing. But during China’s biggest political transition in decades, American officials were looking through an increasingly opaque glass.

The twin disasters of the Office of Personnel Management (OPM) hack, which had helped the Chinese to identify undercover U.S. intelligence officials, and the obliteration of the CIA’s network of Chinese assets significantly “affected the quality of insight” into what the United States understood about events in that country, according to a former U.S. national security official. There was a noticeable decrease in high-quality intelligence reporting percolating up to senior policymakers, this source recalled. “Things weren’t the same.”

And as U.S. officials struggled to try and grasp what was happening on the other side of the Pacific, China was doubling down on a hacking spree that would see unprecedented amounts of data stolen and fed into an increasingly sophisticated intelligence apparatus.

At the time, White House officials trying to craft new China policies debated Xi’s character and intentions, a senior Obama-era official said. Administration officials were split in their views on Xi. There was a “set of analysis” that led some to argue that Xi was a possible reformer: a product of the Chinese Communist Party (CCP), yes, but a leader capable of ameliorating some of the excesses of the Chinese system, this former official recalled. Others, however, argued that Xi was a “neo-Maoist”: that is, a dangerous hard-liner. The difference in views was “very stark,” this person recalled.

Other officials who served under U.S. President Barack Obama recall more consensus regarding the new Chinese president. “There was never any romanticism about Xi,” said the former national security official. But ultimately, this source said, “no one was able to foresee the kind of leader he was to become.” And, as the Xi-led purges soon revealed, “the Communist Party leadership didn’t see it either,” this official recalled.

Inside the CIA, senior officials were also divided about Xi’s rise, if perhaps more skeptical than at the White House, a former senior CIA official recalled. “There was some wishful thinking that Xi would come in and promote some kind of continued reform,” this source said. “But the vast majority [within the agency] thought the party was moving toward the strongman model, [the idea] that China should stand up and become more aggressive in its viewpoint. Within elite party corners that was a big debate at the time.” But “what CIA was hearing from sources pointed to a re-centralization for the party to maintain power,” this person recalled.

“There was concern in Washington about what Xi was going to pursue, both in terms of domestic liberties, but also his approach to America,” said Gail Helt, a former CIA China analyst. “The Chinese Communist Party is corrupt, to put it mildly, but there were initial indicators that he was going to clean up that corruption, there was a little glimmer of hope. Then it was clear that he was going to purge and create a personality cult.”

Some of the gaps in intelligence were because U.S. officials had grown more cautious. There was “reluctance or concern or anxiety about putting our officers in the field given that our protective shield had been punctured [by the OPM breach],” recalled the former national security official. “We didn’t fully know what they knew about us.” Subsequently, “dozens of postings” for CIA officers scheduled for assignments in China were canceled, according to The Perfect Weapon, a 2018 book by David Sanger. “CIA, for many years, was not willing to do forward facing ops in China,” because its confidence was so shaken by the asset roll-up and other breaches, said a former senior intelligence analyst.

China was also hardening its digital defenses against U.S. spying during 2012-2014, the former analyst said. It was “a gradual change over a year or two, as Chinese leaders started incorporating insights into increasing their control over their own internet space.” Intelligence collection by U.S. cyberspies suffered as a result. China’s tightening domestic-focused digital surveillance dragnet—like its increasing use of biometrics and closed-circuit TV—also made U.S. intelligence gathering there more difficult, former officials say.

Prior leaks had accentuated the difficulty of even routine communications by U.S. officials with their Chinese counterparts. The release of a massive tranche of U.S. diplomatic cables by WikiLeaks in 2010 and 2011 left some Chinese officials, whose relatively frank discussions with their American counterparts were documented in the cables, dangerously exposed at home. (Two Chinese government or state media sources named in the cables, for instance, had their careers stymied after the leak.) In the past, this type of relatively open diplomatic intercourse had played an important role in helping U.S. officials form a picture of China. “Chinese officials became much more reluctant to talk after [the WikiLeaks cables], because they didn’t believe we could keep it a secret,” recalled a current State Department official with extensive experience in China.

And while the United States maintained significant eavesdropping and cyberspying capabilities against China, Chinese officials were becoming much more reluctant to talk on many channels. This wasn’t just out of the knowledge, revealed by the Edward Snowden leaks and other disclosures, that the United States might be intercepting communications; it was also out of fears that they were under surveillance by China’s own security services, according to a former Defense Intelligence Agency official. In the aftermath of the Bo Xilai affair in 2012—the first of Xi’s purges of the party, which felled both top-level government officials and army officers—Chinese officials became even more devoted to face-to-face meetings for any sensitive matter. “Disclosure of state secrets,” intentional or otherwise, was one of the most common charges brought against Xi’s targets.

As Xi began a comprehensive purge of the party and restructuring of the state, the answers about his character and intentions became clearer—at least to some members of the Obama administration. “The debates over what kind of leader Xi was going to be, that got settled pretty early for some of us,” the Obama-era official recalled. “Some did not see that as quickly.”

For this official, the meeting between Xi and Obama in 2013 in Southern California was an immediate revelation. It “wasn’t even an open question anymore” that Xi would rule with increasing authoritarianism, this person said. Over the next few years, Xi’s hard-line policies would extend into almost every area of Chinese life, from the estimated 1 million Uighurs subjected to detention, surveillance, and torture in Xinjiang; to a mass clampdown on freedom of speech; to supposed anti-corruption purges that swept up hundreds of thousands of Chinese officials. But the U.S. administration often remained reluctant to act, said the Obama-era official.

Meanwhile, the hacks continued. Beijing’s spies were ransacking Americans’ data at an almost Olympian scale. In addition to masterminding the OPM breach, hackers linked to Chinese intelligence would filch private information from over 383 million individuals, including passport and credit card data, in a massive 2014 compromise of the hotel giant Marriott; pilfer personal information from over 78 million Americans in a 2014 breach of Anthem, the major health insurance provider; breach the networks of American Airlines, United Airlines, and Sabre, a top travel reservation provider (and key target for China’s travel intelligence program); and burrow into computer systems belonging to the U.S. Department of the Navy, stealing sensitive data linked to over 100,000 naval personnel, among other penetrations of the U.S. private and public sectors. The Chinese “were always a Hoover, sucking up mountains of data beyond anything else in the world,” recalled a former senior National Security Agency official.

U.S. intelligence and national security officials, in particular, were becoming increasingly incensed by China’s actions. The Obama administration began to take more aggressive steps against Chinese cyberspying, indicting five Chinese military hackers in 2014 for a massive espionage campaign targeting U.S. companies—the first-ever public U.S. indictment of nation-state hackers—and threatening Beijing with sanctions. But senior U.S. officials under Obama still believed there were key, if narrowing, areas to carve out mutual cooperation with their Chinese counterparts.....


As mentioned in the introduction to 2018's "The CIA's communications suffered a catastrophic compromise. It started in Iran.":

Sometimes I think the U.S. intelligence community isn't as good as they say they are.

I have this picture in my head of that Peter Strozk fellow in the Home for Retired Spooks with spy guys and gals from all around the world, Russians and Chinese and the Iranians and North Koreans and the British and the Germans and the Israelis and the Macedonians, all of 'em.

Now Strozk was a pretty big deal,  He was Chief of the Counterespionage Section of the FBI.
He was also the #2 of the entire FBI Counterintelligence Division.

And he left 50,000 text messages with his paramour, DOJ and FBI attorney Lisa Page, laying around.
50,000 mash notes to sweetie-pie.
Right there, in the phone, on a server, where any junior-grade investigator could find them.

And in my vision all the old spies spies and counter-spies are waiting for dinner and laughing at Strozk and reverting to childhood as the elderly are sometimes wont to do and chanting, almost in unision:

"Peter and Lisa sitting in a tree, T-E-X-T-I-N-G..."
So, although the story below is about the CIA, it was 'ol FBI Pete who I thought of when I saw the article....