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May 30, 2019
Notes from the Pentagon

President slaps DNI
President Trump's recent order conferring new intelligence power on Attorney General William Barr was a slap at Director of National Intelligence Dan Coats — viewed within the White House as too accommodating of the intelligence bureaucracy.

According to people close to the White House, Mr. Trump and top aides were angered by congressional testimony by Mr. Coats in February when the former Indiana Republican senator testified that U.S. intelligence agencies assessed North Korea will seek to keep its nuclear arsenal and is unlikely to give up either nuclear weapons or production capabilities in a deal.

Members of the president’s team felt that even if the judgment was accurate, Mr. Coats undermined Mr. Trump’s efforts to negotiate a denuclearization deal with North Korean leader Kim Jong-un by not holding back the assessment while negotiations were underway.

Two months after the damaging testimony, Mr. Trump met with Mr. Kim in Hanoi for what would quickly become a failed summit. Mr. Kim rejected an offer to give up all nuclear arms and facilities in exchange for the lifting of U.S. and international economic sanctions.

Since then, the North Korean leader has dialed back past accommodating positions and begun testing short-range missiles in what is viewed as a sign the nuclear negotiations are not going well.

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On May 23, Mr. Trump signed a memorandum directing the intelligence community to “quickly and fully cooperate” with Mr. Barr’s investigation into intelligence surveillance related to the 2016 counterintelligence investigation of the Trump campaign.

The president also gave Mr. Barr “full and complete authority” to declassify information according to security standards.

The memorandum set off a flurry of opposition from former intelligence officials, joined by their allies in liberal newspapers and cable new outlets, who decried the move as a politicization of intelligence. No similar cries of outrage, however, were heard when the president and his advisers were the target of a string of damaging intelligence leaks beginning in early 2017.

Kenneth deGraffenreid, former White House National Security Council intelligence director, said Mr. Trump’s action was completely in line with his authority.

“It’s very simple: With the exception of statutorily classified information, such as atomic energy and communications intelligence, the classification system is created by presidential executive order and the president designates officials who can classify and declassify information. End of story,” Mr. deGraffenreid said.

The memorandum was an emphatic signal from the president that he does not trust Mr. Coats, his senior U.S. intelligence adviser, to make sure that the intelligence bureaucracy, considered along with the State Department’s Foreign Service as among the most aggressive at undermining Republican presidents, will cooperate and provide documents and information for the Barr inquiry.

Sources tell Inside the Ring the president is unlikely to fire Mr. Coats, but that the Barr memorandum sent an unmistakable signal of displeasure.

Mr. Coats made clear last summer that his loyalty is to the intelligence community and not the president during remarks at the Aspen Security Conference in July. In addition to rejecting several qualified Trump appointees for intelligence positions, Mr. Coats also sided with spy agencies in challenging pro-Russia comments by the president on Moscow’s election meddling.

“As I expressed to the president on my third visit to the Oval Office, as his new principal adviser, I said, ‘Mr. President, there will be times when I will have to bring news to you that you don’t want to hear. I just want you to know that the news I bring to you, the information I bring to you, will be to the best extent that we can be unvarnished, nonpoliticized.’”

“I just felt at this point in time that what we had assessed and reassessed and reassessed and carefully gone over still stands, and that it was important to take that stand on behalf of the intelligence community and on behalf of the American people,” he added.

The Justice Department is looking into improprieties related to the FBI counterintelligence probe of the Trump campaign launched in July 2016 and code-named Crossfire Hurricane.

Information made public so far reveals FBI counterintelligence agents used improper information — specifically the Democratic-funded dossier by former British spy Christopher Steele — to obtain court approval for surveillance on the president and campaign.

Defense bill focus on China
The Senate Armed Services Committee’s 2020 defense authorization bill contains several elements designed to build up forces and provide new focus on the growing threat from China.

The $750 billion bill calls for creating an Army multidomain task force for the Indo-Pacific to restore the U.S. military advantage in the region. It also requires a new basing assessment designed for what the committee said in a statement will produce “smaller, dispersed, resilient and dynamic basing” for military forces in Asia.

The bill, if passed in its current form, also would require the Pentagon to report to Congress on defense needs for the Indo-Pacific region, including a plan to build up forces between 2022 and 2026. The annual Pentagon report on China’s military power also would be required to add an assessment of Chinese overseas investment related to military and security objectives.

To hedge against a Chinese embargo on rare earth elements, used in military electronics and other systems, the Pentagon is being directed to develop the ability to produce rare earth elements from coal ash, a market China currently dominates.

“The world is more unstable and dangerous than it has been in recent memory,” the committee said in its statement. “Our margin of military supremacy has eroded and is undermined by new threats from strategic competitors like China and Russia.”

Big loss for Chinese search engine
China’s premier search engine company Baidu reported a massive loss in revenue in a first quarter financial report, the Chinese news site Sina reported May 19.

Baidu, a censored search engine used by hundreds of millions of Chinese for internet searches, experienced a loss of around $49 million during the first quarter of 2019. By contrast, during the same period last period, Baidu reported a profit of around $967 million. It was the first time since Baidu went public in 2005 that the company reported a loss.

The report sent the company’s stock price in a downward spiral, losing 16% and causing the company to suffer a market value crash of $8.7 billion. Xian Hailong, Baidu senior vice president and chief of the search engine group, resigned shortly after the earnings report was released.

Victor Mair, professor of Chinese language and literature at University of Pennsylvania, noted that with Google banned in China and the withering of Baidu through censorship controls, there is really no efficient way to search the Chinese web that already had been gutted by government censorship.

China’s censors have taken restrictive practices to extremes, banning, for example, images of Winnie the Pooh after online users used pictures of the fictional bear in postings designed as indirect criticism of Chinese leader Xi Jinping, who critics say bears a resemblance to the A.A. Milne character.

“The free, ready availability of knowledge, information and data to which we are accustomed in the USA, and which we consider a right, simply does not exist in China,” Mr. Mair told Inside the Ring.

“This is the stupidification of China, the ‘dumbing of the people’ that is useful for totalitarian tyrants, disastrous for the nation,” he added. “You simply cannot have a strong, vigorous, healthy, powerful nation with such obscurantist policies having an iron grip on the minds of the people.”

Mr. Mair said this is the reason students and scholars are desperate to escape from the Chinese information desert in order to “taste the fresh air of unfettered access to information.”

  • Contact Bill Gertz on Twitter via @BillGertz.

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