The Cable

SitRep: Trump and Putin Call for More Nukes; Russia Hacks Ukrainian Artillery; PEOTUS Disrupts Defense Industry

Mike Flynn’s Business Ties; Snowden Report; Bombs Over Yemen; And Lots More

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Nukes! Thursday was a big day in Trump Tweets, and we’re all just going to have to get used to it.

First was his 140 character suggestion that he may scrap decades of bipartisan agreement over nuclear disarmament, and the U.S. “must greatly strengthen and expand its nuclear capability.” The tweet didn’t come from nowhere. Hours earlier during a speech in Moscow, Russian President Vladimir Putin called for upgrading and expanding his own nuclear portfolio — something he has done repeatedly over the years — and Trump was fresh from a meeting with several U.S. generals who run U.S. strategic and nuclear forces.

No one knows quite what to make of Trump’s response: is it policy? Are they simply musings? But FP’s Paul McLeary writes, “the comments from two men  — who have expressed a willingness to work together to reduce tensions — show how tough it may be to overcome great-power rivalries, driven both by Moscow’s desire to reclaim its place and a nervous NATO bulking up against a perceived threat.”

Troll-in-Chief. During his annual year-end press conference on Friday, Putin repeated his assertion that the Russian armed forces could take on all comers, but denied he wanted a nuclear arms race with the United States. “Of course the U.S. has more missiles, submarines and aircraft carriers, but what we say is that we are stronger than any aggressor, and this is the case,” he said. When it comes to Trump’s nuke tweet, Putin, seemingly content he had gotten a rise out of the President-elect, added, “as for Donald Trump, there is nothing new about it, during his elections campaign he said the U.S. needs to bolster its nuclear capabilities and its armed forces in general.”

The business of defense. And in another example of how Trump may use his Twitter account to react quickly to events and summarize meetings he holds with officials, he also lit into the world’s biggest defense contractor, Lockheed Martin, for its unsteady performance on the $400 billion F-35 program. “Based on the tremendous cost and cost overruns of the Lockheed Martin F-35, I have asked Boeing to price-out a comparable F-18 Super Hornet!” he exclaimed.

Lockheed’s stock immediately plummeted, while Boeing’s rose — just as we saw Boeing’s stock fall recently after Trump attacked its Air Force One contract. The tweet caused Cowen and Company’s defense analyst Roman Schweizer to coin a new term for the Trump Era: “we have no idea how this plays out but believe ‘Twitter risk’ for defense companies could be a significant issue over the next four years,” he wrote to investors.

Any changes in the F-35 program, of course, would have a huge impact not only on the U.S. Air Force, Navy and Marines, who are all customers, but also U.S. allies. The program has eight international partners for developing the plane: Australia, Canada, Denmark, Italy, the Netherlands, Norway, Turkey and the U.K. And another three countries are customers: Israel, Japan and South Korea.

Not so easy. As Defense News’ Valerie Insinna points out, “what this means for Lockheed Martin and its top competitor Boeing in the long term is not exactly clear. Although the F-35 has been plagued with its share of cost overruns and technical issues…Redesigning a Super Hornet that meets the same requirements as the F-35 would require years of development and engineering time and probably billions of dollars.”

Flynn watch. Incoming national security advisor Michael Flynn’s Russian-related business practices are again under scrutiny. Earlier this year, Flynn partnered “with a controversial technology company co-run by a man once convicted of trying to sell stolen biotech material to the Russian KGB espionage agency,” according to Bloomberg news.

“Subu Kota, who pleaded guilty in 1996 to selling the material to an FBI agent posing as a Russian spy, is one of two board directors at the company, Boston-based Brainwave Science. During years of federal court proceedings, prosecutors presented evidence they said showed that between 1985 and 1990 Kota met repeatedly with a KGB agent and was part of a spy ring that made hundreds of thousands of dollars selling U.S. missile defense technology to Russian spies. Kota denied being part of a spy ring, reached a plea agreement in the biotech case and admitted to selling a sketch of a military helicopter to his co-defendant, who was later convicted of being a KGB operative.”

War ready. Ukrainian artillery forces and the Democratic National Committee have something surprising in common, FP’s Elias Groll reports. They were both targeted by the same Russian code and spied upon by the same military intelligence unit. The finding, contained in a report released Thursday by security firm Crowdstrike, provides additional evidence linking hackers working on behalf of the Russian state — in this case, Russian military intelligence, or GRU

“According to Crowdstrike, a hacking group known Fancy Bear attempted to spy on Ukrainian artillery units by distributing a bogus Android application used for weapons targeting. It is unclear how successful the effort was, but according to the firm, the app had ‘the potential ability to map out a unit’s composition and hierarchy, determine their plans, and even triangulate their approximate location.’”

SitRep is taking Monday, Dec 26 off but will be back at it Tuesday to close out the year that was. Hope everyone enjoys the long weekend!

Good morning and as always, if you have any thoughts, announcements, tips, or national  security-related events to share, please pass them along to SitRep HQ. Best way is to send them to: paul.mcleary@foreignpolicy.com or on Twitter: @paulmcleary or @arawnsley

Libya

The international community has spent time and effort trying to piece together an inclusive, representative government of national accord in Libya, but Russian President Vladimir Putin is looking to undo all that by pumping up authoritarian strongman Khalifa Haftar as a leader for the country. Bloomberg reports that Russia has been flattering Haftar with visits to Moscow and facetime with Foreign Minister Sergei Lavrov. Haftar may also be receiving weapons from Egypt, which has grown increasingly close to Moscow in the past few years. Haftar’s control of territory in Libya’s oil crescent gives him powerful cards to play within the country’s political landscape.

Snowden

The Intelligence Committee in the House released a new report on former National Security Agency contractor Edward Snowden. The report accuses Snowden of continuing to have “contact with Russian intelligence services” while in self-imposed exile in Russia. The assertion, however, is backed up with what the report says is classified material, leaving no evidence available for discussion in the open. Snowden has denied previous versions of the allegation, saying that Russia briefly tried to get him to share secrets but that he rebuffed the attempt.

The report also looks at the alleged damage done by Snowden’s leak of a massive archive of classified National Security Agency documents. It says the Pentagon pointed out at least 13 areas where leaks based on the documents created “high risk” issue for U.S. national security, saying that major adversaries like Russia and China could put American troops at risk in the event of a military confrontation in the event they received further information on eight of those 13 areas.  The committee says it still doesn’t think the Agency has gotten a handle on security after the Snowden leaks and it remains concerned that it hasn’t done enough to prevent a repeat leak.

Bombs away

The U.S. military announced on Thursday that airstrikes in Yemen had killed 28 al Qaeda members since September. The statement from U.S. Central Command didn’t specify how the strikes were carried out, but most U.S. airstrikes in Yemen have been conducted by drones.

 

Photo Credit: U.S. Air Force

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