FP’s Situation Report: Rexon Ryu is Hagel’s new chief of staff; AQAP endorses IS in Yemen; How the IS governs like a state; a Saudi is robbed of his suitcase with $355,000 in it; @oopsy at CSIS; and a bit more.

By Gordon Lubold with Nathaniel Sobel

Exclusive in SitRep: Chuck Hagel has selected Rexon Ryu to be his new Chief of Staff. Ryu, who up until now has served as the deputy to the U.S. Permanent Representative to the U.N. Samantha Power, was a Hagel aide from Hagel’s days in the Senate. He will begin working in Hagel’s front office at the Pentagon later this week, Situation Report has learned, and take over for real by Labor Day.

"The Bash Model." In picking Ryu, Hagel is selecting someone with whom he has a close bond, even if Ryu, who doesn’t have Pentagon experience, will take some time to figure out where the coffee pot is. Ryu was one of three known candidates to replace Mark Lippert, Hagel’s current chief of staff, who has been nominated to serve as the U.S. ambassador in South Korea. When Leon Panetta was Defense Secretary, he brought Jeremy Bash with him from the CIA to be his chief of staff. Bash didn’t necessarily know the Pentagon well but knew his boss and his boss knew him. Bob Gates, on the other hand, chose Robert Rangel, someone he didn’t necessarily know well but who knew the building. Hagel, who is on his third chief of staff in 18 months if you count Marcel Lettre, who served in an acting capacity early on, is clearly settling on someone he knows and trusts.

Who is Ryu? He’s little known in Pentagon circles because he doesn’t have any specific experience in the building even if he’s considered to be very familiar with a lot of the abiding issues. Between 2009 and 2001, he served as director for Nonproliferation on the NSC at the White House, where he covered U.S. nonproliferation policy in Asia and the Middle East, with a particular focus on North Korea and Iran, according to his bio. He led the confirmation team for Susan Rice to be the U.S. ambassador to the U.N. during the 2008-2009 transition for Obama; and between 2005 and 2009, Ryu served as the deputy chief of staff and senior foreign policy advisor for Hagel.  Before that, he held various positions at State, including overseas experience in Cairo and Jerusalem, and also worked for then Deputy Secretary of State Richard Armitage.

Hagel, in an emailed statement to SitRep: "I am greatly looking forward to having Rexon Ryu back on my senior leadership team.  He is a proven talent when it comes to working with the interagency, Congress, and outside groups and he will be a tremendous asset to the Defense Department… [I] have long relied on his counsel and wise perspective on national security matters… Rexon is someone I’ve been interested in recruiting to the Pentagon and I am delighted to welcome him as my new Chief of Staff."

State Department’s Deputy Secretary Bill Burns, to SitRep in an email: "Rexon is one of the smartest and most promising public servants of his generation. Rexon is remarkably versatile – with experience on the Hill, and at State, on the NSC staff and at USUN.  He has excellent policy judgment, and is universally respected for both his professional skill and personal decency."

The other candidates under consideration included Wendy Anderson and Elissa Slotkin. Anderson has become the chief of staff to Penny Pritzker at Commerce, as SitRep reported exclusively a couple weeks ago. And we’re told that Slotkin is a leading candidate to replace Derek Chollet, the Assistant Secretary of Defense for International Affairs, a key policy job in the building. SitRep reported July 31 that Chollet will be leaving the Pentagon in January.

Right seat, left seat – Lippert and Ryu will begin to transition as early as this week, with Lippert, who is expected to be moving to Habib House in Seoul to serve as the U.S. ambassador to South Korea. He has yet to be confirmed, but that confirmation is expected sometime this fall. Ryu has a previous set of relationships with a number of people in the building, however, including people like CAPE’s Jamie Morin, Policy’s Brian McKeon and the Pentagon Comptroller, Mike McCord.

What’s going to be in Ryu’s inbox? A senior defense official tells Situation Report that he’ll be focused on a lot of the obvious "buckets" of issues – operational issues like the Islamic State, Ukraine, Syria and the South China Sea – as well as the budget and issues pertaining to the Department of Veterans Affairs and the electronic health records issue on which the Defense Department has been focused. But at the Pentagon and for Hagel, the Asia pivot is still key. "He wants to continue to play a leadership role in the pivot," a senior defense official told SitRep.

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AQAP just announced its support for ISIL. Al-Qaida of the Arabian Peninsula, or AQAP, based heavily in Yemen, issued a statement yesterday indicating its support for ISIL, now known as the Islamic State, or IS. The statement, in part: "We announce solidarity with our Muslim brothers in Iraq against the crusade. Their blood and injuries are ours and we will surely support them," the statement read, according to a post in the Yemen Times. "We assert to the Islamic Nation [all Muslims worldwide] that we stand by the side of our Muslim brothers in Iraq against the American and Iranian conspiracy and their agents of the apostate Gulf rulers.

"…Based on our experience with drones, we advise our brothers in Iraq to be cautious about spies among them because they are a key factor in setting goals; be cautious about dealing with cell phones and internet networks; do not gather in large numbers or move in large convoys; spread in farms or hide under trees in the case of loud humming of warplanes; and dig sophisticated trenches because they reduce the impact of shelling." The Yemen Times’ Ali Ibrahim Al-Moshki: "Many observers note that AQAP and ISIL are using similar tactics and are exchanging strategy and advice. More here.

From taxes to electricity to post offices, the Islamic State is quickly learning how to govern like a state. FP’s Yochi Dreazen: "The Obama administration’s escalating air war against the Islamic State is running up against a dispiriting new reality: The militants are becoming as good at governing territory as they are at conquering it, making it considerably harder to dislodge them from the broad swaths of Syria and Iraq that they now control.

"U.S. intelligence officials say the leaders of the Islamic State are adopting methods first pioneered by Hezbollah, the Lebanon-based Shiite militia, and are devoting considerable human and financial resources toward keeping essential services like electricity, water, and sewage functioning in their territory. In some areas, they even operate post offices.

David Kilcullen, a counterinsurgency expert who spent several years working as a top aide to Gen. David Petraeus: "ISIS is the most dangerous terrorist group in the world because they combine the fighting capabilities of al Qaeda with the administrative capabilities of Hezbollah… It’s clear that they have a state-building agenda and an understanding of the importance of effective governance." More here.

A 24-hour Gaza ceasefire is extended as talks continue in Cairo. The WSJ’s Joshua Mitnick in Tel Aviv, Asa Fitch in Gaza City and Mohammed Najib in Ramallah: "Israel and the Palestinian factions, including the Gaza Strip’s ruling Hamas movement, agreed Monday to prolong their crease-fire an extra 24 hours to pursue talks on a long-term truce and a broader deal for the conflict-ridden territory.

"…In announcing the extension, there were no indications from the negotiators whether the wide gaps between the two sides in the talks had narrowed and what, if anything, an additional 24 hours would accomplish. During the indirect negotiations, Israel and the Palestinians have sought publicly to portray the other as intransigent, and Mr. Risheq expressed pessimism that more talk would produce a durable accord." More here.

As Israel and the Palestinians struggle to reach yet another cease-fire, the mediators in Cairo are making the conflict worse — and empowering radicals in the process.  Carnegie’s Michele Dunne and Nathan Brown, here.

Iraq forces do battle to keep jihadists out of Saddam Hussein’s hometown of Tikrit. Reuters’ Ahmed Rasheed and Michael Georgy: "…Buoyed by an operation to recapture a strategic dam from the jihadists after two months of setbacks, Iraqi army units backed by Shi’ite militias fought their way towards the center of Tikrit, a city 130 km (80 miles) north of Baghdad which is a stronghold of the Sunni Muslim minority. ‘Our forces are advancing from two directions with cover from army helicopters, mortar and artillery shelling the positions of the Islamic State fighters in and around the city,’ an army major in the operations room told Reuters." More here.

Troops in Iraq rout Sunni militants from a key dam. The NYT’s Helene Cooper, Mark Lander and Azam Ahmed: "Iraqi and Kurdish ground troops overran Sunni militants and reclaimed Iraq’s largest dam on Monday, President Obama said, as American warplanes unleashed a barrage of bombs in an expansion of the limited goals laid out by the president in authorizing the military campaign in Iraq.

"Mr. Obama, who interrupted a family vacation on Martha’s Vineyard to meet Monday with his national security team in Washington, maintained that the airstrikes around the Mosul Dam were within the constraints of what he initially characterized as a limited campaign meant to break the siege of stranded Yazidis on Mount Sinjar and protect American personnel, citizens and facilities in Iraq." More here.

A billionaire has been named in a suit against an anti-Iran group. The NYT’s Matt Apuzzo: "A billionaire Wall Street commodities investor has been drawn into a court fight against one of the nation’s most influential anti-Iran advocacy groups, a case in which the Obama administration has introduced a sense of intrigue by its recent claim that, somehow, the group possesses important government secrets." More here.

AP this morning: A new report warns of anti-aircraft weapons in Syria. AP’s Stephen Braun: " Armed groups in Syria have an estimated several hundred portable anti-aircraft missiles that could easily be diverted to extremists and used to destroy low-flying commercial planes, according to a new report by a respected international research group. It cites the risk that the missiles could be smuggled out of Syria by terrorists. The report was released just hours after the Federal Aviation Administration issued a notice Monday to U.S. airlines banning all flights in Syrian airspace." More here.

Syria’s most lethal chemical weapons are destroyed with little fanfare. FP’s Kate Brannen: "Almost a year after a sarin gas attack killed more than 1,400 people outside Damascus, the U.S. Defense Department quietly announced Monday that Syria’s most dangerous chemicals have been neutralized.

Pentagon spokesman Rear Adm. John Kirby said in a statement: "While the international community’s work to completely eliminate Syria’s chemical weapons program is not yet finished, the secretary believes this is a clear demonstration of what can be achieved when diplomacy is backed by a willingness to use military force." More here.

And the WH’s statement, here.

And believe it or not, Germany spies on its allies, too. David Francis for FP: "The revelation that Germany spies on Turkey, a NATO member, should dispel any notion that spying on allies violates the unwritten rules of international espionage, despite Berlin’s numerous suggestions otherwise." More here.

How Germany spies on its friends. SPIEGEL’s story: "…On Friday, the daily Süddeutsche Zeitung reported that the BND — even if apparently unintentionally — had eavesdropped on a telephone conversation by then-US Secretary of State Hillary Clinton. The revelation made Merkel’s dictum, ‘Spying among friends? That’s unacceptable,’ ring a bit hollow. Information obtained by SPIEGEL indicates that the affair goes beyond Clinton. Last year, it also drew in Clinton’s successor, John Kerry, when he was mediating in the Middle East between the Israelis, the Palestinians and the Arab states. At the time, the recording of at least one Kerry conversation was apparently immediately deleted by the BND under orders." More here.

Julian Assange said yesterday that he’s leaving the Ecuadorian embassy in London "soon," raising suspicious that he might roll the dice in Sweden.  But it’s highly doubtful that Sweden would extradite him.  FP’s Elias Groll: "…Sweden’s extradition agreement with the United States, signed in 1961 and updated in 1983, prohibits extradition on the basis of ‘a political offense’ or ‘an offense connected with a political offense.’ The agreement does not specify what constitutes a ‘political offense.’ Whether the Swedish supreme court would rule to extradite Assange largely depends on what charges the secret U.S. grand jury brings against him." More here.

Who’s Where When today – Deputy Secretary of Defense Bob Work is in Guam.  His schedule includes "windshield tours" of the flightline and Northramp Project there; THAAD tour; meetings with Gov. Calvo and Congresswoman Bordallo; Windshield tours of Port Authority of Guam; Apra Harbor Tour; a Troop Event; and a media engagement with local press… Sgt. Maj. Bryan Battaglia, the senior enlisted adviser to the chairman of the Joint Chiefs of Staff, Gen. Marty Dempsey, will serve as the guest of honor today at an event recognizing 40 expectant military mothers with none other than Buddy the Cake Boss, at the Ridgewood Country Club in Paramus, N.J… Denny Blair, the retired admiral and now the chairman of the Sasakawa Peace Foundation/US gives a speech today at Heritage on Asia at 2pm, event deets here.

@Ooopsy. Somebody in the tweet department at the Center for Strategic and International Studies in Washington tweeted their mind yesterday in response to an Amnesty International tweet earlier yesterday but is now in the doghouse.

@AI: "US can’t tell other countries to improve their records on policing and peaceful assembly if it won’t clean up its own human rights record."

@CSIS: @AI your work has saved far fewer lives than American intervention. So suck it."

The inevitable apology came just a bit later: "@CSIS Our sincerest apologies to @amnesty & our followers. Our last tweet was sent in error. We’re reviewing internal policies for social media." See it here (on abumuquama/Andrew Exum’s feed).

Rep. Duncan Hunter, in Defense News on sequester and the budget and the Army’s need for Black Hawk and Apache engine upgrades. The California Republican’s BLUF: "Even if sequestration is alleviated over the long term – and let’s hope it is – the sound judgments on display within the Army and the other services must continue. Whether the budget is considered too large or too small, that should not take away from the military’s duty to be smart as it prepares for the future." More here.

There’s still a political impasse in Afghanistan. The NYT’s Matthew Rosenberg: " A coterie of powerful Afghan government ministers and officials with strong ties to the security forces are threatening to seize power if an election impasse that has paralyzed the country is not resolved soon. Though it is unusual to telegraph plans for what could amount to a coup – though no one is calling it that – the officials all stressed that they hoped the mere threat of forming an interim government would persuade the country’s rival presidential candidates, Abdullah Abdullah and Ashraf Ghani, to make the compromises needed to end the crisis." Read the rest here.

Next door, in Pakistan, the military says it carried out fresh airstrikes near the Afghan border, killing 18 suspected terrorists. VOA: "…Tuesday’s action focused on Khyber and North Waziristan tribal agencies where Pakistani Taliban and fugitive Afghan insurgents are entrenched." More here.

On the fifth day of protests, the Pakistan Army is putting troops in Islamabad on high alert. Reuters, in Dawn, here.

India cancels talks with Pakistan over tea invitation to Kashmiri separatists, in the WaPo’s World View blog, here. 

The Economic Times in India: "Pakistan has made little genuine effort to improve relations with India," an analysis, here.

Despite being indicted last week, Rick Perry will headline an event titled "The Border Crisis and the New Politics of Immigration" at the Heritage Foundation on Thursday morning. Deets here.

Is Rick Perry’s Bad Judgment Really a Crime? On the NYTs editorial page today, here.

It would appear that Vietnam clearly has a superior claim to the South China Sea islands, finds a new CNA Corporation report authored by Captain Raul "Pete" Pedrozo, USN, Judge Advocate Corps (ret.). The report is one of three released yesterday on U.S. policy options in the South China Sea. But the report concludes "The reality on the ground is that China has occupied the entire Paracel group for 40 years, and short of military action by Vietnam to recapture the archipelago, will never leave… Resolution of the dispute is likely in only four ways: judicial arbitration that all parties agree to undertake; all parties agree to freeze in place while tabling the issue of ultimate sovereignty in favor of a cooperative regime for resource exploitation and management; individual claimants reach an understanding with China ceding sovereignty claims in return for economic preference; or the use of force by the most powerful to expel rival claimants." More here.  Find CNA Corporation’s analysis on Malaysia and Brunei here and Philippine claims in the South China Sea here.

Next time, leave home without it. NBC: "Armed robbers attacked a Saudi Arabian prince’s convoy in Paris on Sunday night, allegedly seizing around 250,000 euros ($335,000) in cash and sensitive documents." More here.