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We’re Back in the Iraq Business, Part IV

Thursday, September 18th, 2014

Too many variables and topics to take them all on in this note. But I do want to address several, and introduce a couple of ideas I gleaned from others.


  • We, the US or any sort of “global coalition”, are not going to solve the problems…the sources of instability and threats…. in the Middle East and South Asia.
  • We’re not going to eliminate ISIS, any more than we will ever eliminate al Qaeda or any of the other terrorist organizations. Their basis is unhappiness expressed as religious extremism, and the world will never be an entirely happy place. ISIS, Al Qaeda and the others are complex adaptive systems.
  • ISIS certainly seems to display most of the attributes of complex adaptive system. It does not have unifying central control and is a mix of small groups and sub-groups of actors unified by a common purpose. These groups act independently, and in a highly unpredictable, self-organizing way.  Its lack of formal organization has not hampered its effectiveness and ability to defeat better-organized forces with superior equipment and training.  Even though they come from all over the globe to fight, the strength of their common will creates a bond that holds them together against a common enemy (even though they fight each other at times).

Aaron Bazin, “Defeating ISIS and Their Complex Way of War”, Small Wars Journal, September 15, 2014.

  • Better to engage them there than here.
  • The bad guys turn their anger toward the US and others who interfere and/or are of different beliefs because we are in their countries and because we are trying to impose our will and idea of how things should be. That’s a large part of the reason other countries we want in the fight with us are hesitant to get more involved…….they don’t want the escalations towards them that come with escalations by them (see Turkey), and they know the US will act.
  • I believe there will be at best tiny ground force provided from other countries.
  • There will not be an Iraqi military or security force. There will be a Sunni military and security forces for the Sunni regions of the country, and a Shiite military and security forces for the Shiite portions of the country. And then there is the Kurdish region.

Here’s a different view that may be helpful to the US’s thinking about what we really ought to want to accomplish and how we want to get to that outcome.

    • The conflicts are primarily Sunnis vs. Shia, populations against government, regions of an artificially-composed country against one another, etc., not population against government.
    • If I told you that the Middle East and South Asia will remain unstable and dangerous places where there always has been and likely always will be unrest and unpredictability, but there are potentially ways to use that instability to have the fighting and threats more focused on “between them” and thereby reduce the danger of attacks here in the US, would you be OK with that?
    • Additionally, the determination will have to be made early on if an ISIS first strategy means the primary objective is the actual elimination of that terrorist and insurgent organization or if it means that the severe degradation (attrition of personnel and materiel) of that organization is the primary objective. The reason for a potential second strategy variant is that a severely weakened ISIS: (a) might have some benefit as a counter-balance to other influences and forces in Syria and Iraq and (b) might have some benefit in order to continue to create a Sunni Islamist schism as an Al Qaeda competitor.”
    • Robert Bunker, “An Islamic State of Iraq and Syria (ISIS) First Strategy”, Small Wars Journal, August 30, 2014
    • “Complex adaptive systems are self-organizing. As the system organizes, a hierarchy is established and leaders come to the forefront.  It seems counter-intuitive, but letting this happen helps stabilize the system. Much like in criminal organizations, overtime, three tiers of ISIS will eventually emerge: leaders, connectors, and workers. Capturing or killing the leadership throws the system back into disorganization, which actually causes the system to emerge stronger.  Eliminating all of the workers is also difficult as it takes a largest amount of resources and time.
    • The key here is to allow the system to stabilize and then eliminate the mid-tier connectors in a near simultaneous fashion.  Law enforcement commonly does this in racketeering and drug cases with a near simultaneous ‘round-up’ of all members of a criminal organization.  This weakens the system, and prevents it from operating effectively. Leaders find themselves unable to lead anything and workers find themselves without resources or guidance.  Unable to find a position of power, the international community would find ISIS leadership more amenable to accept their will and comply with international norms.  Once weakened, the international community must help provide a viable governance alternative and help build its legitimacy. The international community must have the follow-through to address the critical question of what’s next.”

            Aaron Bazin, “Defeating ISIS and Their Complex Way of War”, Small Wars Journal, September 15, 2014.

  • Get arms and ammunition out of the region. Do not send more in. There is a lifetime supply of both already there.
  • Covertly confuse, confound, disrupt and degrade those entities that appear to represent a threat to do harm here to the US.
  • If ISIS fights as a complex adaptive system, then the international community could apply knowledge of complex adaptive systems theory to defeat them.   Twice in its history, the United States has employed an “Anaconda” Strategy.  General Winfield Scott developed an “Anaconda” strategy to isolate and strangle the Confederate States (photo above).  More recently, General David Petraeus employed an “Anaconda Strategy versus Al-Qaeda Iraq” to isolate the adversary both physically and conceptually.  The international community should consider application of the “anaconda” metaphor to this new context.  One such approach could approach on three fronts: (1) establish boundaries to isolate and contain; (2) intervene on multiple fronts early and often; and, (3) conduct near simultaneous elimination of the connectors.

Aaron Bazin, “Defeating ISIS and Their Complex Way of War”, Small Wars Journal, September 15, 2014.

  • Look for ways to “level the playing field” between factions if we cannot effectively eliminate those we oppose and should not set our sights on solving the problems.
  • There’s a very important law enforcement and community services center aspect to the formula. Maybe the fact that we are sending active military into the Ebola region to help with containment will only draw bad guys….I would prefer to see this be a medical corps and civil services combination. But I do believe there is a peacekeeping role played by plopping down these operations and services centers in the midst of the poorest and most unstable areas
  • We’ve got to get much better at information operations. The bad guys are winning the messaging war, and that is helping with their recruitment. You don’t win the war with I/O, but you do confuse, confound, peel off the weak followers, turn some key sources of insight and intelligence, divide them, pit them against one another, etc.

Smart power, soft power…they have important roles in increasing the stability in and reducing the threats from these areas and regions.

Three other data points to keep in the back of your mind:

  • The first time a US or ally’s fighter jet gets shot down, or a special forced adviser wounded or killed, or a group of Syrian freedom fighters takes on the Syrian military, or those Turkish hostages start getting executed, all of the calculus goes out the window.
  • Al Qaeda is jealous. See their effort to hijack Pakistani naval ship.
  • Karzai is still in office in Afghanistan.

I may be wrong about some or all of this, and many of you have different and more informed views. Share them, and I’ll share them with our readers.  Send me a note at



We’re Back In The Iraq Business, Part III

Wednesday, September 10th, 2014

Most of your questions, perspectives and push-backs on last week’s note were concentrated around three of my assertions:

  • Do not send more arms to our allies in the region.
  • We will not eradicate ISIS.
  • We will not be able to build an alliance of any consequence.

Let me add some more context to my case for each assertion.

  • Send more arms into the region. No. They end up in the wrong hands. Anyway, there are already plenty of arms and ammunition already in the region. All of the parties to the conflicts have done just fine in the arms and ammunition department, haven’t they. I would pay huge bounties for arms and ammunition turned into appropriate honest brokers and destroyed.
  • We must eradicate ISIS. That’s never going to happen. We can confound, confuse, degrade, peel off weaklings…..but we will have no more luck ridding the world of ISIS than we have or will with Al Qaeda. We can covertly make them wonder where the next attack will come from. We can use information operations to hamper recruiting. Remember the smart power theory, which has a soft power element…..permanent, large-scale community services operations designed to be one element of removing some of the causes of unrest and conflict….and a law enforcement, gang conflict component in our strategy, both over there and here in the US. These types of threats are generational problems that will be with us for decades.
  • The US will form a global alliance to combat these threats. No, we won’t be able to form a truly effective alliance with proportional involvement from a critical mass of nations. They know the US will go ahead, regardless, and take action that will escalate the threat. So, why should they get “personally involved” in the unpopular and expensive escalations that only serve to put their countries at greater risk of reprisals.

Let’s see what we learn at 9PM tonight.

I am eager to hear from all of you with your views and cases. Send me a note at, and I’ll share your perspectives with our readers.



We’re Back In The Iraq Business, Part II

Wednesday, September 3rd, 2014

Syria-Iraq, Ukraine, Afghanistan, Libya, Central Africa…..on and on goes the list of turmoils.  Global whack-a-mole for the US, the way we are playing it now.

Here’s the facts as I see them, and then a recipe:

  • All of these turmoils are interconnected in various ways.
  • Confront them in one place and they pop up someplace else.
  • Any US, in fact any outsider, involvement in any single turmoil, on their turf, gets at least one of the parties mad at us.
  • The totality of all of this global turmoil involvement is draining our country’s money, warfighters, and overwhelming our country’s ability to inform, analyze, organize and prioritize our thinking about what to do and what not to do. If I am a bad guy, I am thrilled to see the US expending so much in so many places, and getting so frustrated and outwitted….and going broke in the process.
  • Our allies will not join the US in confronting or escalating most any of these situations. The UN and NATO will not act against the Russians in Ukraine. We are not going to get a meaningful coalition….by that I mean a minimum critical mass of the world’s most powerful economies acting as a team or in unison……… built for North Africa, the Middle East or South Asia. Our allies do not want the confrontations, escalations or the costs, and most still have bad dreams about their experiences in Iraq, Afghanistan, etc. They may have societal, trade and other economic concerns that would be threatened if they confront Russia, Iran, Iraq, Syria, etc.. Escalations breed…..well, more escalations.
  • Regional initiatives by those interested in stability have gone the other way…they have only expanded the sectarian conflicts over greater geographies, more countries, more parties, and more factors.
  • We will never stabilize these countries as they are delineated now. These nations are the artificial creations of uninformed foreigners, and if we were defining these nations today, I think we would all agree they would be configured very differently.
  • “Today about 10 to 15 percent of Muslims worldwide are Shia – they are the majority group in Iran and Iraq only-while most Muslims are Sunni…..Today, that religious division is again a political one as well: it’s a struggle for regional influence between Shia political powers, led by Iran, versus Sunni political powers, led by Saudi Arabia.”

Max Fisher, “40 Maps That Explain The World”, Vox, May 15, 2014.


    • “Such tensions between social classes, far more than those between sects, have sparked many recent Arab revolts; but sectarianism is then used to fan the flames. Islamists exploit class resentment to expand their base; governments stoke sectarian strife to justify their security apparatus.”


“Thethered By History”, The Economist, July 15, 2014, pp.20-22.

  • We will never eradicate these threats. Wiping out ISIL or al Qaeda is a pipedream. We can, however, reduce the number, size, severity of these threats. Several ideas are included below.

What’s to be done?  I think the answer has several parts, including but not limited to:

  • There is a new world reality that the US government and population is not dealing with. The new reality is a more dangerous world, where the US is not disproportionately powerful, a world filled with threats that our military might is ill-equipped to deal with, and a world that in many cases does not care for what they see as our interference and our desire to put our way of life on their way of life.
  • “Today, Americans are struggling to understand their role in the world. After seven decades as a superpower, there is still broad acceptance of the idea that the United States ought to be a world leader or even the “indispensable nation” that protects the prevailing liberal order. At the same time, there is growing fear of the costs of leadership, especially the possibility of war with dangerous adversaries such as Russia, China, or Iran…….The choice confronting Americans is whether to remain the kind of country that will act before its back is against the wall, or whether it will accept whatever kind of security environment emerges in the absence of American leadership. The advantage of being proactive is that the United States can respond to threats before they achieve maximum lethality. The disadvantage is that Americans will never know, even in hindsight, whether a war was truly necessary.”
  • “Americans want the benefits of order while remaining uneasy about the costs. This does not mean that the United States must respond with force every time that order is threatened. It may reconcile itself to Russia’s flagrant violation of Ukrainian sovereignty. It may reconcile itself to Beijing’s intimidation in the South China Sea, Iran’s pursuit of nuclear weapons, and the rise of a terrorist protostate within Syria and Iraq. What cannot be known is whether and when a crumbling order will bring the threat of violence directly to American shores.

David Adesnik, “Why America Fought”, The Weekly Standard, August 11,2014.

  • We are not able, even today, to think like “they” do. The religions, cultures, tribal ways, etc. are so different.
  • I believe we are well-advised to “engage” the problems and threats there, not here.
  • There will be terrorist attacks here, regardless of what we do.
  • We ought to do some security, policing, intelligence things here in the US to beef up our ability to discover potential terrorist activities earlier rather than later. Don’t know about you, but for me the loss of some privacy and freedom of movement is preferable to the loss of my life from a terrorist attack.
    • This is a law enforcement issue. The old saw that “if it doesn’t look right to the cop on the beat” was never more true and on point.
    • There is a certain percentage of the bad guys who were criminals before they joined the bad guys, are criminals now, and will be criminals forever. Find them, and put them in jail…..permenantly.
  • You do not send more US money, arms, ammunition, or military, into areas of turmoil and conflict. Bad things happen…..we get sucked into the conflict, and the arms, money and ammunition always ends up in the wrong hands.
  • What do you do when you have massive regional humanitarian disasters, including hunger, disease and lack of healthcare services, drought, displaced populations?
  • What do you do when you have family, tribal, religious, cultural, gang conflicts that are never going to be settled?
    • You plop a regional/city/refugee camp services facility right in the middle of it. This may include an international policing/peacekeeping force only, but not military. The mere presence of out-of-region military forces can have an effect on the level of conflict.
      • Some percentage of bad guys are doing that because it’s the only paying job available to them. Pay them to work in the services facility.
      • Paying people to turn in guns and ammo programs can work. I would pay for every tank, anti-aircraft missile, rifle, bomb, bullet and other item turned in and destroyed. I don’t care where you got it, I want it out of commission.
    • You put the UN, the Red Cross, the WHO, all of them in combinations, or someone of their ilk in that location for the long term, in a big way. They provide shelter, food, healthcare, education, jobs, etc. for all.  All the UN members are assessed fees and have professionals conscripted for this effort. It’s much cheaper than the alternatives.
    • The US and other countries like the UK, France, Germany, etc. covertly and clandestinely do the things that you do to keep the bad guys over there, off balance, focused on their own welfare vs. planning to get over here, disrupt their leadership and operations, peel off the weak believers, etc..
    • We’ve got to do a much better job with information operations…….the bad guys do so much better than we do them. There is a percentage of the bad guys, as well as a percentage of their recruits, that can be dissuaded if we are smart, thoughtful and timely with our messaging.

This is my view, and I share it in hopes that it will draw out your views and criticisms.  Please send me a note at, and I’ll share your perspectives with our readers.




VA, IRS, ACA, Insider Threat: Defining the Problem, and Some Ideas

Wednesday, June 4th, 2014

I’ve been taking some time the past 5-6 weeks to think about some of the big issues that are dominating the national news and to try to come up with some ideas that address these challenges.

Veterans Administration healthcare delivery

IRS tax audits

The Affordable Care Act’s implementation

Insider threats like Ft. Hood, the Washington Navy Yard and law enforcement tragedies like Newtown and Santa Barbara

Like you I have read the articles listing possible new leaders for each of these initiatives, and most recently Peggy Noonan’s Opinion piece in Saturday’s Wall Street Journal.  I think she was on to something at the end of her comments:

“The current lack of serious and effective management damages the progressive project because it presents that project as utterly cynical.  It presents progressives as people who really care.  If the cared, they’d oversee.  They’d make sure it works when the rubber hits the road.  They’d make sure the thing they supposedly want to happen (first-rate treatment for vets, for instance) happens.”

My idea has four parts.

1. Leadership and Expertise: Leaders do three things, to my mind:

  1. Define the objectives for an enterprise and how to get there, informed by the experts in their market and their business;
  2. Understand what resources and enablers are required to accomplish the objectives;
  3. Get the resources.

Many wonderful people can serve that role at the VA or the IRA or ACA. What I am most interested in seeing is who is put into the number 2 or 3 role…..the Chief Operating Officer role that converts the vision, strategy, plans, objectives and resources into progress and accomplishments. I want to see people like Steve Rohleder, Mike Salvino, Mike Burwell and Sam Hazen in the number 2 or 3 jobs. I bet you don’t know any of them. These are industry experts who should be running the operations and service delivery aspects of the VA, IRS, ACA, etc..

The VA is not about honoring our military.  It IS the largest healthcare delivery system in the world.  The IRS is not about tax policy.  It is the largest accounting and audit operation in the world. Let’s match the necessary expertise with the objective of each of these situations.

Sam Hazen is President-Operations for Hospital Corporation of America.  Mike Burwell is Transformation Leader at PwC,the largest tax accounting and audit firm, and previously was the firm’s US Chief Operations Officer.  Mike Salvino is Accenture’s Group Chief Executive-Operations, and was previously the head of the firm’s Business Process Outsourcing practice.  Steve Rohleder is Accenture’s Group Chief Executive-Health and Public Service.  His previous job was as Accenture’s Chief Operations Officer.  These guys have expertise in making sure operations deliver services, efficiently and effectively.  Give them the funds and authority, and they are the kinds of executives who can make things get better in huge, complex, partnered situations.

2. Scale, Complexity and Elasticity: I hear lots of folks talking about how the new insider threat/continuous monitoring requirements are so complex and the numbers of people to be monitored so huge that the required new requirements cannot be implemented. I agree. Scale alone……….. in the VA, the IRS, the ACA, counter-terrorism/counter-intelligence/threat monitoring………makes taking on these initiatives in one big bite likely doomed to failure for an extended period of time, even with expert industry and operational leadership.What to do? Break the huge problem down into “doable” pieces. Make sure those pieces are representative of the larger initiative, and that the operational and service delivery processes and capabilities developed for a piece are replicable to other pieces of the problem and scalable to handle the entire load at the appropriate time.Prioritize the components of the problem, and focus on them. Use surges, as we do in the military. I am a big fan of taking the problem out of its context and to the experts, versus bringing the experts to the problem in the context in which it resides. A couple of examples. Go fix the Phoenix VA with people, skills, processes, operations that get that one operation properly providing services to veterans. Do it in a way that can be laid onto other VA operations, as well as scaled to the larger challenge over time. I bet there are too few doctors, specialists and patient assistants to meet the demand in the short term. So let the vets with the most serious healthcare issues go to private practitioners, or to large healthcare systems, that may well be a piece of the puzzle for at least the medium term. That’s the elasticity we see in many industries when there is a surge in demand. Outsource the processing of tax returns for all individual and join returns with incomes over a certain amount, or all global corporations, to a tax accounting and audit expert firm. With the concentration of wealth in our country, this would be a very small number of returns…..that would represent the large majority (80%+) of tax revenues. For the intelligence community, there are too many people and too many potential threats to our security to adequately cover them all. And if we try, we spread our resources so thinly that we don’t do an adequate job of predicting any threats. I bet there are ten or twelve countries or organizations that are the most likely source of 80%+ of the threats to the US. Prioritize and focus our best resources….all of them if we have to….on those, so we minimize the probability of strategic surprise. And then be honest with the American people, and make sure we understand that in today’s world there WILL be terrorist attacks, regardless of what we do.

3. Give them the necessary tools, and hold people responsible and accountable: For outcomes, and for their actions. If the Phoenix VA fudged the wait times to get their bonuses, fire them all. Now. If the Santa Barbara cops did not look at the YouTube videos or check firearms records before they dismissed Elliot Rogers as a threat, that is just not acceptable. Fire them all. Now. In just about every mass murder and terrorism case in the past few years……the Times Square bomber, Ft Hood, Newtown, the Washington Navy Yard…..a failure to do basic police investigative work preceded the disaster. There is plenty of technology and data available for every one of these situations…..mental health records, healthcare services delivery, accounting and audit, background checks/security clearances/insider threats/continuous monitoring, etc. Most of the time, when we dig down into why we didn’t know what we could have known, it turns out that the people who have the job, responsibility and authority did not have the required skills or training and/or did not do the basic processes that would have informed them of the potential threat so that they could have investigated further and mitigated the threat before it because one more disaster.

4. Provide the Resources: That’s what our government is responsible to do.

Tell us what you think needs to be done.  Send me a note with your thoughts, and I’ll share your ideas and recommendations with our readers.  You can reach me at




More Thoughts: Magicians, Pay Attention: Can You Make a 777 and 239 People Disappear?

Monday, March 31st, 2014

Three-plus weeks into the hunt for the Malaysian airliner, and not a sign.

So, suppose we never find the plane, or we are never able to determine with any assurance what caused it’s demise. No one ever claims credit.

It seems to me that we are quickly getting to the point where the mystery has generated more global awareness and concern about the mystery itself than would have been the case is someone or some group had claimed responsibility for the plane’s demise.

Is “demise” even the right word to described what happened?

Most of us would get on a 777 tomorrow, under the assumption that whatever happened was an anomaly.

Within the next year, suppose another 777 disappears in a similar manner. We never find it, or we never determine what happened, and no one ever claims credit.

Making a mystery….can it be more powerful than being able to bring down a plane?

For many of you who are in the business of thinking these incidents and threats through to logical conclusions, not being able to figure out this one out must be frustrating. I have seen less commentary from inside the intelligence community about this incident than I have on any other that I can remember.

Not knowing cause and affect has a powerful influence on our psyche, confidence, trust in the future.

Is there a magician at work here?

Let me know what you think. Send me a note at, and I’ll share your thoughts with our readers.


Remember This: “Mystery Assault on Power Grid” Note From February 5th?

Wednesday, March 19th, 2014

Wall Street Journal, February 5, 2014

“SAN JOSE, Calif.—The attack began just before 1 a.m. on April 16 last year, when someone slipped into an underground vault not far from a busy freeway and cut telephone cables.

Within half an hour, snipers opened fire on a nearby electrical substation. Shooting for 19 minutes, they surgically knocked out 17 giant transformers that funnel power to Silicon Valley. A minute before a police car arrived, the shooters disappeared into the night.

Nobody has been arrested or charged in the attack at PG&E Corp’s Metcalf transmission substation. It is an incident of which few Americans are aware. But one former federal regulator is calling it a terrorist act that, if it were widely replicated across the country, could take down the U.S. electric grid and black out much of the country.”

Well, look at what we have now.

U.S. Risks National Blackout From Small-Scale Attack

Federal Analysis Says Sabotage of Nine Key Substations Is Sufficient for Broad Outage

Wall Street Journal, March 13, 2014

“The US could suffer a coast-to-coast blackout if saboteurs knocked out just nine of the country’s 55,000 electric-transmission substations on a scorching summer day.

The study by the Federal Energy Regulatory Commission concluded that coordinated attacks in each of the nation’s three separate electric systems could cause the entire power network to collapse.

A small number of the country’s substations play an outsize role in keeping power flowing across large regions.  The FERC analysis indicates that knocking out nine of those key substations could plunge the country into darkness for weeks, if not months.

The [Metcalf] California attack ‘demonstrates that it does not require sophistication to do significant damage to the US grid’ FERC said.”

The entire article can be found on page A1 of the March 13th Wall Street Journal.

Let us know what you think. Send me a note at, and I’ll share your views with our readers.



Magicians, Pay Attention: Can You Make a 777 and 239 People Disappear?

Thursday, March 13th, 2014

Suppose we can construct a zany scenario that fits all the known facts at this point in time.  Would you even entertain it?

Let’s look into a different-thinking scenario in an effort to add to the possible explanations for the disappearance of that Malaysian Airlines flight.

So, we now know that there are radar “blind spots” around the globe, where planes and other forms of transportation cannot today be tracked every step of the way.  Radar coverage is only operational over land and can only effectively cover about 200 miles offshore.  Most of these blind spots are over large bodies of water, where very large planes fly.

We believe we know that the 777 involved in this situation is one of the safest planes ever, that a complete electrical shutdown is very unlikely, and that the 777 has a smallish bit of battery life (generally about 30 minutes of effective battery power if the plane were to experience complete electric failure) that could power emergency capabilities…..some communications?….for a short period of time.  But that power was not used to make any emergency or distress calls.

We also know that an airliner’s transponders can very easily be turned off.

We know that there is typically a satellite phone on flights over large bodies of water, so that the pilots can communicate in emergencies.  That never happened.

No terrorist organization has claimed responsibility for downing the plane, so we are more comfortable that this was not a terrorism incident.

There has been no signaling that has been found from the plane’s black boxes.

Cell phones on the plane would probably have been useless over water and at altitudes where they could not access terrestrial communications networks.

But, it’s also hard to hide a 777 and 230+ people….but not impossible.  If you had to pick a place to hide the plane and people, would Southeast Asia be rich with options?

And what about those 230+ people?  The two Iranians on stolen passports appear not to be terrorism suspects, but what about the others?  We believe we know identity and passport checking processes in some parts of the world are less than they could be, and that’s what enabled the two Iranians to board the plane.  Who else might have been on that plane? 

It has been reported that at least one of the pilots was less than careful about keeping the cockpit secure.  Do you wonder who may have noticed that on a previous, scouting flight, or talked to others who did take note?

But, suppose you could put the plane and the people someplace where they are unlikely to be discovered for at least some period of time.

While there is some benefit terrorists believe they derive from bringing down a plane like this, and there is lots of terrorist capability in Southeast Asia, maybe there is as much or more perceived value from just making the plane and 230+ people just disappear.

What do you think will be the outcome?  Send me a note, to, with your thoughts and views, and I’ll share them with our readers.



In An Unpredictable World, How Do You Anticipate the Threats and the Consequences?

Tuesday, March 4th, 2014


“Al Qaeda Envoy Killed By Rival Syrian Rebels”

Wall Street Journal, February 24, 2014

“Al Qaeda’s top emissary in Syria was killed by rival Islamist rebels in a suicide bombing, deepening the violent struggle between extremist groups that has undermined the battle to unseat President Bashir al-Assad……..The attack on Sunday in the northern city of Aleppo killed Abu Khalid al Suri, one of the founders of the Islamist rebel group Ahrar al Sham.  His group said he had been asked by al Qaeda leader Ayman al Zawahiri to help settle differences between the two main al Qaeda offshoots in Syria.”


Usually, a common enemy or common opportunity binds these groups together until AFTER they achieve their goal, but not in this case.  With so many factions so active in Syria, how do you possibly calculate who to help in what way and whether it will get you the results you hope for?


“U.S. Moves To Protect Electric Grid”
Wall Street Journal, February 7, 2014

“Defending the grid from physical sabotage has gained urgency in light of the armed attack last April on the Metcalf substation near San Jose, Calif., …The incident began in the middle of the night when intruders cut telecommunication cables near the transmission hub, crossed a horse pasture, and opened fire on the substation, which funnels electricity to Silicon Valley……Improving security wouldn’t necessarily require big investments, power industry experts say.  For example, many big substations are already equipped with infrared cameras that look for equipment that is overheating…..The same cameras could be used for intrusion detection’.”


I guess I would have hoped, after all of the terrorist threats we’ve seen, that the electrical grid….especially in key spots like Silicon Valley….might be better protected than what is indicated in this story.


“Russian Markets Shudder Under Threat of Sanctions”

Wall Street Journal, March 4,2014

“As Russia’s military secured the Crimean peninsula, its currency hit a record low and its stock market plunged in the face of U.S. and European warnings of sanctions over the incursion into Ukraine……The Kremlin has dismissed any sanctions as inappropriate and showed no sign of backing down under the pressure, which so far has been in the form of tough talk.”


If you are Vladimir Putin, you probably calculated that no one, including the U.S., would take any military action to stop you.  But did you expect this kind of reaction in the stock and currency markets even before sanctions have taken form or effect?


Let us know what you think.  Send me a note at, and I’ll share your views with our readers.




Remember This: “Big Producer to Retrofit Rail Tank Cars for Safety”

Saturday, February 15th, 2014

“A series of recent derailments involving tank cars, punctuated by a catastrophic accident in Quebec last July that killed 47 people, have put the industry on edge at a time when rail shipments of crude oil are surging because of a North American energy-production boom. Railroads hauled about 400,000 carloads of crude oil last year, compared with just 4,700 in 2006.”

Wall Street Journal, February 7, 2014

Greenbrier Cos., the nation’s second-largest maker of railcars, said the industry needs to move faster to make tank cars more crash-resistant, and will begin offering to retrofit older tanker cars that carry potentially explosive crude oil.

The move, which comes in advance of expected new federal standards for such cars, makes Greenbrier the first U.S. manufacturer to embrace upgrades proposed by a rail-industry panel for the tens of thousands of older tank cars now in service in the U.S. The cost of the proposed modifications has been estimated at $15,000 to $80,000 a car.

In an interview Thursday, Greenbrier Chairman and Chief Executive William Furman criticized the 10-year timetable for modifying older tank cars that haul crude oil and ethanol suggested by a rail-industry trade group in December. He said safety improvements could be made in half the time, and at less cost, with a slimmed-down list of retrofits.

A series of recent derailments involving tank cars, punctuated by a catastrophic accident in Quebec last July that killed 47 people, have put the industry on edge at a time when rail shipments of crude oil are surging because of a North American energy-production boom. Railroads hauled about 400,000 carloads of crude oil last year, compared with just 4,700 in 2006.

These rising volumes of crude oil have exposed U.S. railroads to more potential liability from accidents involving tank cars. But railroads own almost none of the tank cars they transport. Many of them are owned instead by oil producers, chemical makers or leasing companies.

Tougher regulations on the cars could cause these customers to bypass railroads in favor of pipelines or ships for transporting crude oil, chemicals and other bulk liquids.

The proposed safety modifications to the cars were developed last year by the Association of American Railroads, which represents freight railroads, and forwarded to the U.S. Transportation Department for regulatory approval.

Greenbrier, which stands to benefit from a faster phase-in of the modifications, estimates about 68,200 older, general-purpose tank cars, known as DOT-111s, that are used to haul crude oil and ethanol would need significant modifications to comply with the proposed standards. Another 12,000 or so cars built after 2011 would require less work.

“Let’s do something immediately to improve safety,” Mr. Furman said in the interview. “That’s a sensible way of addressing this problem.”

Accidents? Intentional? Training for bigger events?

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Remember This: “Mystery Assault On Power Grid”

Friday, February 7th, 2014

Wall Street Journal, February 5, 2013

SAN JOSE, Calif.—The attack began just before 1 a.m. on April 16 last year, when someone slipped into an underground vault not far from a busy freeway and cut telephone cables.

Within half an hour, snipers opened fire on a nearby electrical substation. Shooting for 19 minutes, they surgically knocked out 17 giant transformers that funnel power to Silicon Valley. A minute before a police car arrived, the shooters disappeared into the night.
A sniper attack in April that knocked out an electrical substation near San Jose, Calif., has raised fears that the country’s power grid is vulnerable to terrorism. WSJ’s Rebecca Smith has the details. Photo: Talia Herman for The Wall Street Journal

With over 160,000 miles of transmission lines, the U.S. power grid is designed to handle natural and man-made disasters, as well as fluctuations in demand. How does the system work? WSJ’s Jason Bellini has #TheShortAnswer.

To avoid a blackout, electric-grid officials rerouted power around the site and asked power plants in Silicon Valley to produce more electricity. But it took utility workers 27 days to make repairs and bring the substation back to life.

Nobody has been arrested or charged in the attack at PG&E Corp’s Metcalf transmission substation. It is an incident of which few Americans are aware. But one former federal regulator is calling it a terrorist act that, if it were widely replicated across the country, could take down the U.S. electric grid and black out much of the country.

The attack was “the most significant incident of domestic terrorism involving the grid that has ever occurred” in the U.S., said Jon Wellinghoff, who was chairman of the Federal Energy Regulatory Commission at the time.

The Wall Street Journal assembled a chronology of the Metcalf attack from filings PG&E made to state and federal regulators; from other documents including a video released by the Santa Clara County Sheriff’s Department; and from interviews, including with Mr. Wellinghoff.

The 64-year-old Nevadan, who was appointed to FERC in 2006 by President George W. Bush and stepped down in November, said he gave closed-door, high-level briefings to federal agencies, Congress and the White House last year. As months have passed without arrests, he said, he has grown increasingly concerned that an even larger attack could be in the works. He said he was going public about the incident out of concern that national security is at risk and critical electric-grid sites aren’t adequately protected.

The Federal Bureau of Investigation doesn’t think a terrorist organization caused the Metcalf attack, said a spokesman for the FBI in San Francisco. Investigators are “continuing to sift through the evidence,” he said.

Some people in the utility industry share Mr. Wellinghoff’s concerns, including a former official at PG&E, Metcalf’s owner, who told an industry gathering in November he feared the incident could have been a dress rehearsal for a larger event.

“This wasn’t an incident where Billy-Bob and Joe decided, after a few brewskis, to come in and shoot up a substation,” Mark Johnson, retired vice president of transmission for PG&E, told the utility security conference, according to a video of his presentation. “This was an event that was well thought out, well planned and they targeted certain components.” When reached, Mr. Johnson declined to comment further.

A spokesman for PG&E said the company takes all incidents seriously but declined to discuss the Metcalf event in detail for fear of giving information to potential copycats. “We won’t speculate about the motives” of the attackers, added the spokesman, Brian Swanson. He said PG&E has increased security measures.

Utility executives and federal energy officials have long worried that the electric grid is vulnerable to sabotage. That is in part because the grid, which is really three systems serving different areas of the U.S., has failed when small problems such as trees hitting transmission lines created cascading blackouts. One in 2003 knocked out power to 50 million people in the Eastern U.S. and Canada for days.

Many of the system’s most important components sit out in the open, often in remote locations, protected by little more than cameras and chain-link fences.

Transmission substations are critical links in the grid. They make it possible for electricity to move long distances, and serve as hubs for intersecting power lines.

Within a substation, transformers raise the voltage of electricity so it can travel hundreds of miles on high-voltage lines, or reduce voltages when electricity approaches its destination. The Metcalf substation functions as an off-ramp from power lines for electricity heading to homes and businesses in Silicon Valley.

The country’s roughly 2,000 very large transformers are expensive to build, often costing millions of dollars each, and hard to replace. Each is custom made and weighs up to 500,000 pounds, and “I can only build 10 units a month,” said Dennis Blake, general manager of Pennsylvania Transformer in Pittsburgh, one of seven U.S. manufacturers. The utility industry keeps some spares on hand.
A 2009 Energy Department report said that “physical damage of certain system components (e.g. extra-high-voltage transformers) on a large scale…could result in prolonged outages, as procurement cycles for these components range from months to years.”

Mr. Wellinghoff said a FERC analysis found that if a surprisingly small number of U.S. substations were knocked out at once, that could destabilize the system enough to cause a blackout that could encompass most of the U.S.

Not everyone is so pessimistic. Gerry Cauley, chief executive of the North America Electric Reliability Corp., a standards-setting group that reports to FERC, said he thinks the grid is more resilient than Mr. Wellinghoff fears.

“I don’t want to downplay the scenario he describes,” Mr. Cauley said. “I’ll agree it’s possible from a technical assessment.” But he said that even if several substations went down, the vast majority of people would have their power back in a few hours.
The utility industry has been focused on Internet attacks, worrying that hackers could take down the grid by disabling communications and important pieces of equipment. Companies have reported 13 cyber incidents in the past three years, according to a Wall Street Journal analysis of emergency reports utilities file with the federal government. There have been no reports of major outages linked to these events, although companies have generally declined to provide details.

“A lot of people in the electric industry have been distracted by cybersecurity threats,” said Stephen Berberich, chief executive of the California Independent System Operator, which runs much of the high-voltage transmission system for the utilities. He said that physical attacks pose a “big, if not bigger” menace.

There were 274 significant instances of vandalism or deliberate damage in the three years, and more than 700 weather-related problems, according to the Journal’s analysis.

Until the Metcalf incident, attacks on U.S. utility equipment were mostly linked to metal thieves, disgruntled employees or bored hunters, who sometimes took potshots at small transformers on utility poles to see what happens. (Answer: a small explosion followed by an outage.)

Last year, an Arkansas man was charged with multiple attacks on the power grid, including setting fire to a switching station. He has pleaded not guilty and is undergoing a psychiatric evaluation, according to federal court records.

Overseas, terrorist organizations were linked to 2,500 attacks on transmission lines or towers and at least 500 on substations from 1996 to 2006, according to a January report from the Electric Power Research Institute, an industry-funded research group, which cited State Department reports.

To some, the Metcalf incident has lifted the discussion of serious U.S. grid attacks beyond the theoretical. “The breadth and depth of the attack was unprecedented” in the U.S., said Rich Lordan, senior technical executive for the Electric Power Research Institute. The motivation, he said, “appears to be preparation for an act of war.”

The attack lasted slightly less than an hour, according to the chronology assembled by the Journal.

At 12:58 a.m., AT&T fiber-optic telecommunications cables were cut—in a way that made them hard to repair—in an underground vault near the substation, not far from U.S. Highway 101 just outside south San Jose. It would have taken more than one person to lift the metal vault cover, said people who visited the site.

Nine minutes later, some customers of Level 3 Communications, an Internet service provider, lost service. Cables in its vault near the Metcalf substation were also cut.

At 1:31 a.m., a surveillance camera pointed along a chain-link fence around the substation recorded a streak of light that investigators from the Santa Clara County Sheriff’s office think was a signal from a waved flashlight. It was followed by the muzzle flash of rifles and sparks from bullets hitting the fence.

The substation’s cameras weren’t aimed outside its perimeter, where the attackers were. They shooters appear to have aimed at the transformers’ oil-filled cooling systems. These began to bleed oil, but didn’t explode, as the transformers probably would have done if hit in other areas.

About six minutes after the shooting started, PG&E confirms, it got an alarm from motion sensors at the substation, possibly from bullets grazing the fence, which is shown on video.

Four minutes later, at 1:41 a.m., the sheriff’s department received a 911 call about gunfire, sent by an engineer at a nearby power plant that still had phone service.

Riddled with bullet holes, the transformers leaked 52,000 gallons of oil, then overheated. The first bank of them crashed at 1:45 a.m., at which time PG&E’s control center about 90 miles north received an equipment-failure alarm.

Five minutes later, another apparent flashlight signal, caught on film, marked the end of the attack. More than 100 shell casings of the sort ejected by AK-47s were later found at the site.

At 1:51 a.m., law-enforcement officers arrived, but found everything quiet. Unable to get past the locked fence and seeing nothing suspicious, they left.

A PG&E worker, awakened by the utility’s control center at 2:03 a.m., arrived at 3:15 a.m. to survey the damage.

Grid officials routed some power around the substation to keep the system stable and asked customers in Silicon Valley to conserve electricity.

In a news release, PG&E said the substation had been hit by vandals. It has since confirmed 17 transformers were knocked out.

Mr. Wellinghoff, then chairman of FERC, said that after he heard about the scope of the attack, he flew to California, bringing with him experts from the U.S. Navy’s Dahlgren Surface Warfare Center in Virginia, which trains Navy SEALs. After walking the site with PG&E officials and FBI agents, Mr. Wellinghoff said, the military experts told him it looked like a professional job.

In addition to fingerprint-free shell casings, they pointed out small piles of rocks, which they said could have been left by an advance scout to tell the attackers where to get the best shots.

“They said it was a targeting package just like they would put together for an attack,” Mr. Wellinghoff said.

Mr. Wellinghoff, now a law partner at Stoel Rives LLP in San Francisco, said he arranged a series of meetings in the following weeks to let other federal agencies, including the Department of Homeland Security, know what happened and to enlist their help. He held a closed-door meeting with utility executives in San Francisco in June and has distributed lists of things utilities should do to strengthen their defenses.

A spokesman for Homeland Security said it is up to utilities to protect the grid. The department’s role in an emergency is to connect federal agencies and local police and facilitate information sharing, the spokesman said.

As word of the attack spread through the utility industry, some companies moved swiftly to review their security efforts. “We’re looking at things differently now,” said Michelle Campanella, an FBI veteran who is director of security for Consolidated Edison Inc. in New York. For example, she said, Con Ed changed the angles of some of its 1,200 security cameras “so we don’t have any blind spots.”

Some of the legislators Mr. Wellinghoff briefed are calling for action. Rep. Henry Waxman (D., Calif.) mentioned the incident at a FERC oversight hearing in December, saying he was concerned that no one in government can order utilities to improve grid protections or to take charge in an emergency.

As for Mr. Wellinghoff, he said he has made something of a hobby of visiting big substations to look over defenses and see whether he is questioned by security details or local police. He said he typically finds easy access to fence lines that are often close to important equipment.

“What keeps me awake at night is a physical attack that could take down the grid,” he said. “This is a huge problem.”
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