Situation Report

A weekly digest of national security, defense, and cybersecurity news from Foreign Policy reporters Jack Detsch and Robbie Gramer, formerly Security Brief. Delivered Thursday.

FP’s Situation Report: Hackers may have snagged credit card #s from Pentagon employees

Budget day at the Pentagon; What is a "toggle?"; U.S. working to aid Ukraine; How fake poker chips could fell a naval officer; and a bit more.



It’s a big budget day at the Pentagon. Today Defense Secretary Chuck Hagel unveils a $496 billion budget almost exactly a year after he arrived at the Pentagon, a budget that reflects the true post-war thinking of the Defense Department after more than 12 years of war. Hagel’s budget includes dozens of decisions, including changes that "slow the growth" to military compensation in the future, but really can’t be described as cuts, a senior defense official told Situation Report today.

A year ago, the Pentagon was criticized because the administration told it not to plan for sequestration since no one thought it would really happen. The budget deal in December prevented sequestration this year. However, if sequestration returns, the budget Hagel is proposing today will have a built-in feature essentially to allow Pentagon bean counters to reduce funding for the budget overall and for individual programs. "We’ve done the work that will show exactly what we’re prepared to do should sequestration come back," a senior defense official told Situation Report.

What’s a "toggle?" It’s the internal word Pentagon folks are using to describe a program that may have to "toggle" from the proposed funding figure to a sequestration-level spending amount.

Will there be a separate part of the budget for overseas operations – a war budget? Nope. Still waiting on resolution to the security agreement issue with Afghanistan.

Pentagon budget marks historic shift in US priorities abroad. The NYT’s Thom Shanker and Helene Cooper: "Defense Secretary Chuck Hagel plans to shrink the United States Army to its smallest force since before the World War II buildup and eliminate an entire class of Air Force attack jets in a new spending proposal that officials describe as the first Pentagon budget to aggressively push the military off the war footing adopted after the terror attacks of 2001… The new American way of war will be underscored in Mr. Hagel’s budget, which protects money for Special Operations forces and cyberwarfare. And in an indication of the priority given to overseas military presence that does not require a land force, the proposal will – at least for one year – maintain the current number of aircraft carriers at 11." Read more here.

For military compensation growth, it’s the end of an era: The budget Hagel reveals today will reflect limits on military pay raises, higher fees for health-care benefits and less generous housing allowances, per the WSJ’s Don Nissenbaum and Julian E. Barnes: "…Faced with steadily increasing military personnel costs that threaten to overwhelm an ever-tighter budget, Mr. Hagel is also expected to include a one-year freeze on raises for top military brass-a gesture meant to show that the best-compensated leaders also will make sacrifices.
"…Pentagon officials say that they recognize the political realities, but emphasize that declining military spending makes trimming costs even more important this year." Personnel costs reflect some 50% of the Pentagon budget and cannot be exempted in the context of the significant cuts the department is facing," said Adm. John Kirby, the Defense Department’s top spokesman. "Secretary Hagel has been clear that, while we do not want to, we ultimately must slow the growth of military pay and compensation.
"Veterans organizations are expected to oppose many of the proposals. Joe Davis, a spokesman for the Veterans of Foreign Wars, said veterans groups understand there is a "finite amount of money," but would like to see the Pentagon focus more on other cost cuts it is seeking, such as closing unnecessary bases and scaling back weapons programs, rather than targeting personnel costs." More here.

FYI, Big meeting: Hagel is meeting with veterans service organizations today to discuss the budget and military compensation issues and essentially ask veterans groups to help him socialize a budget that does reduce compensation for the military over time to help make it more sustainable, Situation Report is told.

"The very key thing, from the start, the promise that Secretary Hagel made to the chiefs – as we make changes to military compensation, we will reinvest them back into the force – we’re not going to take cuts and send them over to something completely different in the government," a senior defense official told Situation Report.

New subject: On the Pentagon’s big budget day, something quick you didn’t know that has nothing to do with the budget: Situation Report has learned that Pentagon police are investigating possible credit card fraud inside the Building that could affect anyone who has used a credit card at any of the Pentagon’s shops or restaurants within the last three months. From a message sent out to Pentagon employees Friday from the Pentagon Force Protection Agency Corporate Communications Office: "ALL [Caps theirs] Pentagon Government and Contractor Employees: The Pentagon Force Protection Agency (PFPA) is currently investigating a case of fraudulent use of credit cards belonging to Pentagon personnel. These individuals had fraudulent charges to their account soon after they had legitimate transactions at the Pentagon.  PFPA is working with partner federal and local law enforcement agencies to determine where the credit card numbers have been compromised, as it may ultimately have no connection to the Pentagon.  If you received a fraudulent charge on your credit card bill within the last 120 days that occurred within 48 hours of a purchase at the Pentagon, please report this to us at 571-256-0000."

But PFPA didn’t want to comment on the matter, citing it as an "active investigation" and thusly couldn’t apparently describe for Situation Report the scope of the investigation, or how many people the agency thinks might be affected, to provide any context for an issue that, potentially, affects thousands of people who use credit cards in the Pentagon every day.

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The Obama administration is now weighing 3k troops for Afghanistan. The WaPo’s Karen DeYoung: ne of the four options President Obama is considering for a U.S. military presence in Afghanistan beyond this year would leave behind 3,000 troops, based in Kabul and at the American installation at Bagram, U.S. officials said. Military commanders have recommended 10,000 troops, with more installations across the country. But the military has spent the past several months studying what kind of reduced counterterrorism and training operations it could conduct under the smaller option, which some in the White House favor. Defense Secretary Chuck Hagel plans to brief his NATO counterparts in Brussels this week on the status of U.S. decision making. A senior administration official said that no announcement of specific troop numbers was planned but added that ‘we’ll have to tell people where we stand in our thinking and planning.’" Read the rest here.

21 Afghan solders were killed by the Taliban. The WSJ’s Nathan Hodge and Habib Khan Totakhil: " A Taliban attack on an army outpost killed at least 21 Afghan soldiers, a military setback that prompted President Hamid Karzai to put an overseas trip on hold. The attack Sunday morning in eastern Kunar province followed a weekend of backroom political intrigue in the capital. Two leading presidential candidates held talks about uniting their campaigns, which would give them a significant edge in the contest to succeed Mr. Karzai. The president must step down this year. The Taliban claimed responsibility for the attack on an outpost near the village of Shirghaz in the Ghaziabad district of Kunar." Read the rest here.

This morning, a new report provides some understanding about the Afghan population’s thinking as 2014 unfolds. The "Perception Survey of the Afghan People Towards the Taliban and their Future Role in Afghanistan" goes online today at the Center for National Policy. Surveyors interviewed 4,219 men and women in 11 provinces. Key findings: 80 percent of the Afghan population perceives the Afghan government to be in control of their area, and 72 percent of Afghans trust the Afghan National Army – and, surprisingly, 64 percent of the Afghan National Police. And – 80 percent of Afghans think there should be a role for the international community within the country. There will be a discussion today at noon at the Center for National Policy. Deets here.

A suicide bombing yesterday takes war among jihadi factions in Syria to a new levelReuters’ Mariam Karouny: "A Syrian rebel commander who fought alongside al Qaeda founder Osama bin Laden and was close to its current chief, Ayman al-Zawahiri, was killed by a suicide attack on Sunday, intensifying infighting between rival Islamist fighters. The Observatory for Human Rights in Syria said Abu Khaled al-Soury, also known as Abu Omair al-Shamy, a commander of the Salafi group Ahrar al-Sham was killed along with six comrades by al Qaeda splinter group the Islamic State of Iraq and the Levant (ISIL). It said al-Soury had fought in Iraq and Afghanistan. Al-Soury’s death will fuel the infighting among jihadis fighting President Bashar al-Assad, a violent rivalry that has killed hundreds of fighters in recent months, rebels said." Read more here.

Page One: United States, Europe and Russia continue to jockey for influence in Ukraine. The WSJ’s Jay Solomon, Vanessa Mock and Stephen Fidler: "The Obama administration worked Sunday with the European Union to forge a much-needed financial bailout of Ukraine, but also extended an olive branch to Russia by inviting it to join the effort. The U.S. response to the removal of Ukrainian President Viktor Yanukovych drove home the delicate balance the White House is seeking to strike as it tries to cement Ukraine’s future with the West without provoking a Russian intervention in a country it has long considered a strategic ally.
"Although the Ukrainian opposition’s success in ousting Mr. Yanukovych suggests the West has gained the upper hand for now, the West has studiously avoided a declaration of victory out of recognition that doing so could fuel Russian President Vladimir Putin‘s determination to bring about a reversal.
"…Ukraine’s parliament, after it took steps to weaken Mr. Yanukovych’s powers, released on Saturday his staunchest political foe, former Prime Minister Yulia Tymoshenko, who was jailed on corruption charges in 2011. The 53-year-old became a darling of the West following the "Orange" revolutions that gripped Ukraine and other former Soviet republics in the mid-2000s. Officials say Washington had grown wary of Ms. Tymoshenko due to widespread allegations of corruption surrounding her government.
"…An EU official said a summit with Ukraine could be convened as early as next month, during which the stalled trade deal with the country could be signed. That pact could come with a large aid package that could exceed the almost €20 billion ($27.5 billion) over seven years that EU officials had previously considered tying to the EU political-and-trade agreement." Read more here.

Yanukovych left without packing his bags. FP’s own Shane Harris: "It appears that in his rush to get out of Kiev, embattled Ukrainian president Viktor Yanukovych left behind quite a paper trail. Protesters arriving at his opulent estate, the Mezhyhirya, a kind of Swiss chalet-meets-Neverland Ranch about 12 miles from Kiev, found hundreds pages of accounting files, receipts, and dossiers on Yanukovych’s political opponents floating in a river. The incriminating records were apparently dumped there by whomever was last at the palace before Yanukovych fled for parts unknown, according to multiple reports on social media Saturday and in the Ukrainian press…. The most intriguing piece of paper may be a receipt for a cash transfer of $12 million dated September 2010, about seven months after Yanukovych took office. It’s not clear who gave the money, or whether Yanukovych was the recipient." Read the full story here.

The former auto mechanic who steered Ukraine away from civil war. Our story from Saturday: "The man who may be responsible for helping to keep the violence in Ukraine from escalating has reportedly left Kiev and gone to Crimea. But Ukrainian Defense Minister Pavlo Lebedyev’s work may essentially be done: by helping to keep the Ukrainian military on the sidelines during the massive protests that have rocked the country in recent weeks, he set the stage for a what could be a relatively peaceful transition to a new government.
"…But despite the battles between security forces and protesters in recent weeks — fighting that left at least 100 people dead — the Ukrainian military never got involved. That may be largely due to the efforts of Lebedyev, a thick-necked former auto mechanic and businessman whose complete lack of defense-related experience sparked intense public criticism when his appointment was announced in December 2012. Lebedyev was derided as a Yanukovych crony, which makes his refusal to use military force of behalf of his former benefactor all the more striking."  Read the rest of our story here.

How a naval officer’s story about fake poker chips could ruin his career. From the Omaha World-Herald’s Steve Liewer: "Playing three phony poker chips last summer at a Council Bluffs casino started Rear Adm. Tim Giardina’s troubles. But when Giardina told conflicting stories about how he wound up with the counterfeit $500 chips, things got worse. ‘I was not forthright in my response about how I came into possession of the chips in question,’ Giardina acknowledged in a signed statement to prosecutors last August. Now Giardina’s distinguished Navy career is in limbo. He has lost his job as deputy commander for the U.S. Strategic Command. His retirement and possibly even his freedom are in jeopardy. Until now, authorities had released few specific details of what happened at the Horseshoe Casino in Council Bluffs last June 15. In an interview Wednesday, Giardina, too, declined to answer questions about those events, but he did talk about the tension and uncertainty in his life ever since." Read the rest here.

Listen and read NPR’s Tom Bowman’s piece on how the new ethics officer at the Pentagon – yet to be named – will have a full plate, here.

Randy Forbes takes issue with the QDR in the National Interest. Virginia Republican Rep. Randy Forbes’ BLUF: …The challenges here today and just over the horizon are real, but I am afraid our government’s intent to plan and resource for them is far from serious. If this coming QDR again fails to meet expectations, it may be time to seriously consider alternative approaches to requiring the Pentagon to conduct long-term planning. Whatever the future of the QDR, I remain a strong supporter of the 2010 Independent Panel that successfully forged a bipartisan consensus on this nation’s strategic outlook and the resources required to achieve objectives consistent with the demands of the coming decade. I look forward to reviewing both the coming QDR and QDR Independent Panel, and I will continue to look for new ways for the Congress to work with the Department to successfully construct a long-term national defense strategy consensus." Read the rest here.

The QDR focuses on the Middle East, by Defense News’ John Bennett, here.

Can you hear me now? The high failure rate of the Air Force’s $1,800 sat phone. Time’s Mark Thompson on Swampland: "…Take the Air Force’s new URT-44 personnel locator beacon (PLB), designed to help pinpoint aviators who eject or otherwise leave their plane under emergency conditions so they can be rescued. The Air Force has spent $30 million buying 17,000 of the devices since 2009 and deployed them in ejection-seat survival kits and parachute pockets. They’re about the size of a fat iPhone (2.6 inches wide, 4.9 inches high, 1.28 inches thick), and weigh a little more than a pound. Mind you, this isn’t intended to locate downed pilots behind enemy lines, because it transmits signals to search-and-rescue units via satellite that the bad guys could intercept. The URT-44 is basically an $1,800 satellite phone that automatically rings for aid once a pilot or crew member goes down, and needs help getting home.

That’s what made its failure rate during testing last year-100%-so disconcerting." Read the rest of Thompson’s bit here.

Marine Corps Times just got some e-mails that show exchanges between Marine officials about what to do with the newspaper amid its coverage of Commandant Gen. Jim Amos. Military Times’ Lance Bacon: "The initiative to ban or bury the independent newspaper Marine Corps Times originated in May "on a rather tight timeline" at the behest of Gen. Jim Amos, the service’s commandant, newly obtained emails show. The exchange occurred just days before Marine Corps Times published an investigative report spotlighting allegations Amos abused his authority. Marine Corps Times authenticated the internal discussion from May 15, 2013, that contradicts official statements offered recently in response to the service’s abrupt and questionable decision in December to relocate the newspaper away from checkout lines at Marine Corps Exchange stores worldwide. Officials have described the move as an effort to ‘professionalize’ checkout counters, refuting the suggestion it was retaliation for the newspaper’s ongoing coverage of allegations surrounding Amos." Read the rest, including exchanges between Marine officials, here.

Hagel’s E-Ring is filling up, with more nominees en route. Defense News’ Marcus Weisgerber: "The team of US Defense Secretary Chuck Hagel – who’s entering his second year in office – is finally taking shape. Hagel has surrounded himself with a team of experienced managers tasked with reshaping the Pentagon as defense spending declines following more than a decade of war, experts say. One senior defense official said Hagel has been pumped and energized in recent staff meetings about the prospect of having a full-up staff as he begins chapter two of his tenure at the Defense Department. Some of these undersecretaries and assistant secretaries will begin the confirmation process Feb. 25 when they appear before the Senate Armed Services Committee. The list of nominees includes: Robert Work, nominated for deputy defense secretary; Michael McCord, for comptroller; and Christine Wormuth, for undersecretary for policy. Also scheduled to testify are Brian McKeon, nominated to be principal deputy undersecretary for policy; David Shear, to be assistant secretary for Asian and Pacific Security Affairs; and Eric Rosenbach, to be assistant secretary for homeland defense. Other nominations pending in the Senate include Jessica Wright, to be the undersecretary for personnel and readiness, and Jamie Morin, to be the director of the Cost Assessment and Program Evaluation Office (CAPE)." More here.

No Medal of Honor for Peralta, the Pentagon announced late Friday. The Union Tribune’s Gretel Kovach: "A years-long battle to upgrade the posthumous combat award for Sgt. Rafael Peralta to the Medal of Honor appeared to end in defeat Friday, when the Pentagon announced it will not reopen the nomination for the fallen Marine. The 25-year-old San Diegan was awarded a Navy Cross, the nation’s second highest medal for valor in combat, after he smothered a grenade blast during house-to-house fighting in Fallujah, Iraq in November 2004.

"Supporters in Peralta’s hometown, on Capitol Hill and in the Navy have persistently campaigned for the top award, including Rep. Duncan Hunter, R-Alpine, a Marine combat veteran who submitted additional evidence in support of a Medal of Honor. The entire California congressional delegation pushed to reopen the nomination, which seems unlikely now that a third defense secretary has declined to upgrade Peralta’s medal.

"’Secretary (Chuck) Hagel and the department remain forever grateful to Sgt. Peralta for his selfless service to our nation,’ the Pentagon said in a news release. But an ‘exhaustive’ review of the evidence by Hagel – as well as the armed forces medical examiner, the Defense Department general counsel, the acting undersecretary for personnel and readiness, and several high-ranking military officers – concluded that the totality of evidence in Peralta’s case did not meet the "proof beyond a reasonable doubt" standard for the Medal of Honor, defense officials said." Read the rest here.



Gordon Lubold is a national security reporter for Foreign Policy. He is also the author of FP's Situation Report, an e-mailed newsletter that is blasted out to more than 70,000 national security and foreign affairs subscribers each morning that includes the top nat-sec news, breaking news, tidbits, nuggets and what he likes to call "candy." Before arriving at FP, he was a senior advisor at the United States Institute of Peace in Washington, where he wrote on national security and foreign policy. Prior to his arrival at USIP, he was a defense reporter for Politico, where he launched the popular Morning Defense early morning blog and tip-sheet. Prior to that, he was the Pentagon and national security correspondent for the Christian Science Monitor, and before that he was the Pentagon correspondent for the Army Times chain of newspapers. He has covered conflict in Iraq, Afghanistan, Pakistan and other countries in South Asia, and has reported on military matters in sub-Saharan Africa, East Asia and Latin America as well as at American military bases across the country. He has spoken frequently on the sometimes-contentious relationship between the military and the media as a guest on numerous panels. He also appears on radio and television, including on CNN, public radio's Diane Rehm and To the Point, and C-SPAN's Washington Journal. He lives in Alexandria with his wife and two children. Twitter: @glubold

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