Situation Report: Another day, another Iran deadline; State drops Clinton emails; defense CEOs unhappy with Pentagon; drones spot Russian base in Ukraine; and much more

By Paul McLeary with Adam Rawnsley

RED SIREN. Just coming in Wednesday morning: An Islamic State-linked group in Egypt has claimed responsibility for a series of coordinated attacks against as many as 15  Egyptian Army checkpoints the troublesome Sinai Peninsula, killing at least 38 soldiers. It’s the latest assault in what has become an increasingly bloody fight in the Sinai, pitting jihadist groups against Cairo. The group claims to have captured several Egyptian armored vehicles and other weapons, with Egyptian Apache attack helicopters reportedly in pursuit of some of the militants who escaped.

More nuke talks. President Barack Obama on Tuesday said he’s prepared to walk away from any potential nuclear deal with Iran that waters down demands for a thorough monitoring regime and doesn’t give inspectors access to Iranian nuclear research sites. It’s something that has been one of the sticking points in the negotiations in Vienna, and critics of the talks have accused the P5+1 of already giving away too much in terms of which Iranian sites inspectors can enter, and how.

In the continuing saga, negotiations are now slated to continue until July 7, if need be, with American diplomats keeping their weary eyes on the calendar. A deal reached by that date would give the Congress 30 days to look over the agreement. But a delay past July 9 would give skeptical U.S. lawmakers up to 60 days to review a final accord — more time to muster a concerted opposition.

One notable side effect of the talks is how well the U.S. and Russian diplomats have played together. Moscow is just as wary as Washington over a nuclear Iran, since it would lead to regional instability, but there is some serious political and economic value for Russia to reap by unshackling Tehran from crippling economic sanctions. Iranian officials have estimated that with sanctions lifted, Iranian/Russian trade could quickly jump from the present $5 billion a year to $70 billion, including big deals for Russian military equipment, along with mining and oil exploration gear to rebuild Tehran’s battered industrial sector.

Data dump. At the stroke of 9 p.m. Tuesday, the State Department dropped an estimated 3,000 pages of former Secretary of State Hillary Clinton’s emails, giving Foggy Bottom reporters and others looking for nuggets to mine a long night of reading hundreds of anodyne notes, including from her former chief of staff, Cheryl Mills.

But there’s more! FP’s Dan De Luce, David Francis and Elias Groll, who pored through the trove, write that the emails, “make clear she was intimately engaged in a broad spectrum of world events while in office. They also show how acutely aware the now-Democratic presidential frontrunner was to the minutia of insider politics and media in Washington.”

In one awkward example, the Council on Foreign Relations’ Les Gelb ran into Clinton pal and investment holdings firm owner Lynn Forester de Rothschild and proposed writing a flattering Parade magazine piece on the SecState. Rothchild immediately emailed Clinton to relay that Gelb “said that he would give you a veto over content,” and told her that “she will like it.” Things must have moved quickly, since the flattering profile ran in October 2009.

Opening up for business. Looking south, President Obama is is expected to announce on Wednesday that the U.S. Embassy in Havana is about to open for business, writes FP’s Lara Jakes, Ben Pauker, and David Francis. The move will create buzz over what is likely to be the next hot job in Washington: the first American ambassador to Cuba since Philip Bonsal vacated the post in October 1960. The short list includes diplomat Jeffrey DeLaurentis, the chief of mission at the U.S. Interests Section in Havana, and former Sen. Chris Dodd (D-Conn.) who was an early proponent of relaxing sanctions on Cuba.

Good morning from the Situation Report, and welcome to July!  The flip of the calendar doesn’t change much in our morning routine over here, so keep on sending tips, thoughts, events, and the like over to paul.mcleary@foreignpolicy.com, or on Twitter: @paulmcleary.

Yemen

An astounding 1,200 prisoners, some linked to al-Qaeda, have escaped from a prison in Yemen after days of heavy fighting around the complex. The breakout reportedly comes courtesy of forces loyal to former Yemeni president Ali Abdullah Saleh, who is allied with the Houthi forces that have seized control of the country.

The business of defense

Some of the bosses running the United States’ largest defense firms are bristling under a Defense Department proposal to control how and where they can spend their own internal research and development (IRAD) money. During a discussion late last week, Ellen Lord, president and chief executive officer of Textron Systems, and Bill Lynn of Finmeccanica North America and DRS Technologies, made clear they’re not fans of the plans by the Frank Kendall, Pentagon’s chief weapons buyer.

“That seems a little invasive to me, and I’m not sure that’s letting free markets play out,” Lord said. Earlier this year, Kendall promised that the proposed rules for Pentagon approval would be “minimalist,” and that industry could “just find anybody, anywhere in the Defense Department who will [sign off on spending] for you, essentially.” But it looks like industry officials aren’t buying it, and are not about to sit back and let the Pentagon direct how to spend their own cash on their own projects.

Ukraine

A drone operated by Ukraine’s Dnipro-1 volunteer battalion has spotted a Russian base just north of the Ukrainian port city of Mariupol, according to footage obtained by the Daily Beast. The footage reveals a forward operating base with nine T-72 tanks, a few dozen troops and support infrastructure — all built in the span of just a couple weeks, according to the battalion. The base is pretty well positioned to support a rebel push against the northern supply route for Mariupol, a strategic city coveted by Donetsk rebels. U.S. Ambassador to Ukraine Geoffrey Pyatt also noted on Twitter that Dnipro-1 battalion briefed Senator John McCain on the intelligence collected by their “home made drone fleet” during his visit to the region two weeks ago.

Cyber Command

U.S. Cyber Command is scaling up to keep pace with the demands for cyber operations by building a new $1.8 billion headquarters at Fort Meade, Md. The command’s budget has more than quadrupled, from $120 million to $509 million, since it was first established in 2010. In the next five years, the command is expected to double its personnel at Fort Meade and go from a current 1,100 personnel to around 2,000.

Iraq

Prime Minister Haider al-Abadi sacked his Army chief of staff, Gen. Babaker Zebari, the most senior office removed by the Shiite premier to date. Word is that Zebari, a Kurd, will likely be replaced by another Kurd, Gen. Anwar Hamad Amin. During the regime of former Prime Minister Nouri al-Maliki, Iraq’s military suffered from poor and often corrupt leadership as political allegiances and ethnic ties — Sunnis out, Shiites in — guided promotions. But Zebari had repeatedly threatened to retire during Maliki’s reign, and his removal now looks to have more to do with the Army’s poor performance against the Islamic State than any kind of ethnic vendetta.

The tab for the fight against Islamic State now tops $3 billion, according to the Pentagon. The figure breaks down to about $9.2 million a day since August of last year. Airstrikes have taken up about half the bill, with one quarter spent on weapons and another quarter spent on other operations.

Hamas

Jihadists inspired by the Islamic State are establishing a presence in Gaza and taking aim at Hamas, another sign that the extremist group’s brand is gaining influence among the ranks of militants around the world. So far, fighters loyal to the Islamic State have carried out a handful of bombings in Gaza targeting Hamas officials. Hamas has dealt with al Qaeda-inspired jihadi groups before, but the resourceful leadership of the Palestinian militants has managed to retain a tight grip on its control over Gaza.

On the move

The U.S. Naval Academy said goodbye to Rear Adm. Bill Byrne this week, who left his post as the Commandant of Midshipmen in order to relieve Rear Adm. Lisa Franchetti as commander of U.S. Naval Forces Korea. Byrne handed off duties in Annapolis to Marine Corps Col. Stephen Liszewski, who becomes just the second Marine to hold the title after some guy named Col. John Allen held it in 2002-2003. Allen, of course, went on to command NATO forces in Afghanistan and now runs around the world for the State Department as the point man for marshalling allies in the fight against the Islamic State.

Another Marine heading for a new post is Brig. Gen. Eric Smith, who is taking over as commander of Marine Corps Forces South in Miami. Smith leaves from the Pentagon, where he served as senior military assistant to Deputy Defense Secretary Bob Work. He’s been replaced there by Rear Adm. Stuart Munsch.

On Tuesday, Secretary of State John Kerry also announced that Lee Wolosky will take over one of the tougher jobs out there: the State Department’s special envoy for closing the detention center at Guantanamo Bay. Wolosky previously served as the National Security Council’s director for transnational threats under former Presidents Bill Clinton and George W. Bush, and now will take responsibility for arranging for the transfer of Guantanamo detainees to countries willing to take them and otherwise overseeing State’s casework for remaining detainees.

Think tanked

“Procedures for Congressional Action in Relation to a Nuclear Agreement with Iran,” from the Congressional Research Service