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October 14, 2010
Notes from the Pentagon

China's rare-earth controls
The diplomatic dispute between China and Japan over the Senkaku Islands has died down, but the incident involving a detained fishing boat captain has raised new fears within the U.S. government over China's use of economic warfare, namely, its control over exports of rare-earth minerals needed for high-technology manufacturing.

"It isn't about scarcity but rather China's virtual lock on production capacity," said a U.S. official who monitors the issue. "Other countries have rare-earth mineral deposits but aren't exploiting them to the same degree."

Japanese diplomatic sources confirmed contrary to denials from Beijing that China shut off or slowed exports of rare earths last month after Tokyo detained a Chinese boat captain who rammed his vessel into two Japanese coast guard ships near the Senkakus, which are Japanese territory but claimed by China and Taiwan.

Japan's Ministry for Economy, Industry and Trade conducted a survey recently of 31 Japanese companies dealing with China on rare earths and found that all were facing official and unofficial problems in getting shipments out of China since early September. The slowdown hit some companies that already had obtained Chinese licenses to export rare earths.

Rare earths include 17 elements that contain unique properties that are essential for high-technology goods. They are used in batteries, lasers, computer hard drives, magnets and other electronics.

Experts say China since the 1990s has taken steps to try to lock up the market for these difficult-to-extract metals. Starting in 2006, China began cutting exports by 5 percent to 10 percent annually, driving up prices amid growing demand.

Estimates are that China holds 35 percent of the world's reserves of rare earths and it supplies between 93 percent and 95 percent of demand.

Gareth P. Hatch, a specialist on rare earths with Technology Metals Research, said the Chinese tightening of rare- earth exports should be a wake-up call.

"I'm not sure I believe that there is a high probability of the U.S. losing access to the raw materials, semifinished and finished rare-earth products that its defense contractors need, for the devices and weapons systems that are used by the Department of Defense," he said. "On the other hand, should such a scenario occur, the effects would very likely be devastating, and I would argue that this is an unacceptable risk."

Non-Chinese production reportedly will begin in the next several years in California, which produced some rare earths until 2002, and in Australia, India and Vietnam. According to the Economist magazine, the only rare-earth producer outside Asia that is not dependent on Chinese ore is the Estonian company Silmet, which is being sought by customers worried about Chinese controls.

Did he or didn't he?
The Army is looking to the Pentagon's top investigator to settle a lingering question: Did Army Lt. Gen. Thomas Bostick, deputy chief of staff for personnel, equate those who oppose open gays in the ranks with those who opposed racial integration?

At least three people who attended the general's talk in Europe last summer say he did. But Gen. Bostick and an Army spokesman who checked notes of the unrecorded sessions in Stuttgart, Germany, say he did not, reports special correspondent Rowan Scarborough.

A probe by the Pentagon's inspector general was requested by Army Secretary John McHugh, and Army Chief of Staff Gen. George Casey after inquiries from Congress. Politico disclosed the probe this week. An Army spokesman referred questions to the IG's office, which declined comment. But a Pentagon official confirmed that an IG review is under way.

Two service members who attended separate sessions that day both told The Washington Times that Gen. Bostick likened opponents of openly gay personnel with those who opposed integration after World War II. A third attendee, a civilian employee, went on the record to make the same charge in a letter to The Times.

Said Army spokesman Lt. Col. Christopher Garver: "We have found no evidence that Lt. Gen. Bostick even remotely made a reference like that."

Whether IG investigators can settle the issue is unclear. There are no known recordings of his remarks as part of a Pentagon team assessing how to lift the ban on open gays, a priority of President Obama.

One of the two unnamed sources told The Times he took mental notes of Gen. Bostick's remarks and wrote them down 10 minutes later. This source said Gen. Bostick used the word "racist" in making a comparison between the 1940s and the gay debate of today.

North Korean missiles
North Korea's military displayed new missiles during the major parade Sunday marking the promotion of Kim Jong-il's son, Kim Jong-un, as the next "Dear Leader."

According to U.S. officials and private military analysts, the parade provided the first photos of two new systems: a medium-range missile called the Musudan and an advanced surface-to-air missile (SAM) that appears based on Russian and Chinese anti-aircraft missiles.

Richard Fisher, a military analyst with the International Assessment and Strategy Center, said the parade was the first time the North Koreans showed off the Musudan, which has an estimated range of up to 2,500 miles.

Mr. Fisher said the missile was developed with technology obtained from a Russian submarine-launched missile (SLBM) and uses special tubes to store its liquid fuel, increasing the missile's survivability from attack in the hours before it is set up for firing.

"It appears to have a single warhead," Mr. Fisher said, noting that the systems on display in Pyongyang may have been mockups, rather than actual missiles.

Mr. Fisher said the Musudan "is larger than the Russian Makayev R-27 SLBM on which it is based."

The second system is a surface-to-air missile so new there does not appear to be a name for it outside North Korea. The mobile missile was shown with what appears to be two long containers on a Russian-design Kamaz launcher-chasis, along with a separate mobile radar.

The new SAM uses advanced "cold-launch" technology that allows the missile to be popped out its launch tube using air pressure, then fire its engine. The technique permits using lighter metals than those required for missiles that ignite in their tubes.

Politically, Mr. Fisher said the military parade was significant for the high profile role of Zhou Yongkang, a senior Chinese leader who sits on the nine-member Standing Committee of the Communist Party Politburo, headed by President Hu Jintao, that ultimately rules China.

"By sending a member of the standing committee of Politburo, it is the communist equivalent of being blessed by the pope," Mr. Fisher said. "This signals communist China's blessing for the continuation of the Kim regime dictatorship."

CIA covert action
A new book by journalist Bob Woodward reveals some of the CIA's holy-of-holies secrets: Details of covert action programs that must be approved personally by the president.

Mr. Woodward, in "Obama's Wars," describes a Dec. 9, 2008, meeting between President-elect Obama and then-CIA Director Michael V. Hayden and then-Director of National Intelligence Mike McConnell. The briefing was on a detailed listing of some of the "14 highly classified covert actions," Mr. Woodward wrote.

At the top of the list was the Bush administration's program to "conduct clandestine, lethal counterterrorism operations and other programs to stop terrorists worldwide" in more than 60 nations. One program goal was to stop al Qaeda from using a nuclear weapon or spreading a biological warfare agent.

Other covert actions were directed at stopping Iran from developing nuclear weapons; deterring North Korea from building more; conducting anti-arms proliferation activities around the world; and launching lethal CIA operations in Afghanistan, like deadly drone attacks and the 3,000-person CIA unit called Counterterrorism Pursuit Teams.

In Iraq, CIA covert action involves both lethal and political operations, such as payoffs to Iraqi government officials and organizations.

Also, CIA was paying "tens of millions" to several foreign intelligence services, including Jordan's General Intelligence Department.

Covert actions mentioned in the briefing included a program to stop genocide in the Darfur region of Sudan and a CIA program to provide the Turkish government with intelligence and other support to prevent the northern Iraq-based Kurdish Workers' Party (PKK) from setting up an enclave in Turkey. Disclosure of the programs raised eyebrows among several high-ranking national security officials because covert action -- political, military and intelligence operations that are designed to hide the U.S. role in carrying them out -- are among the most closely guarded secrets.

According to Mr. Woodward, several covert programs, including counternarcotics and propaganda activities, were not disclosed to avoid endangering the lives of operatives and to avoid hampering U.S. foreign relations.

The book quotes the president, when asked about the covert action briefing, as saying: "I'm not going to comment on my reaction to our deep secrets."

Asked about the disclosure, a CIA spokesman said, without elaborating: "Separate and apart from any specific instance, when the agency has reason to believe there has been a possible violation of the law, such as the unauthorized disclosure of classified information, it has an obligation to refer the matter to the Department of Justice."

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