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June 25, 2015
Notes from the Pentagon

OPM director faces senators as hack damage worsens
Investigators conducting the probe into the Chinese cyberattack against Office of Personnel Management computer networks say the damage is far worse than Obama administration political appointees have let on.

Officially, OPM has said the number of compromised records in at least two agency databases includes the loss of personal information on 4.2 million current and former federal workers.

However, an internal OPM assessment disclosed to Congress by the FBI puts the figure at as many as 18 million federal workers whose sensitive information was lost as part of what investigators say was a Chinese intelligence-gathering operation to build a database on millions of Americans.

Congressional aides said a dispute over the numbers surfaced Tuesday during a closed-door, senators-only briefing after an open hearing of the Senate Appropriations subcommittee on financial services and general government.

During the briefing, OPM Director Katherine Archuleta, a political appointee who is under fire for not taking steps to close vulnerabilities in OPM networks, was asked by senators about a CNN report quoting the compromise of personal records on 18 million federal employees. Ms. Archuleta asserted that the CNN story and the 18 million figure were inaccurate.

That prompted an unusual intervention by acting FBI Assistant Director James Trainor, who is charge of the cybercrime division. He spoke up during the briefing to defend the 18 million figure provided in earlier testimony from FBI Director James B. Comey, based on an internal OPM estimate of the damage.

Mr. Trainor held up a copy of the OPM report during the session for the senators.

On Wednesday, Ms. Archuleta backtracked. She disclosed during a House Oversight and Government Reform Committee hearing that in fact 18 million Social Security numbers are said to have been compromised in the breach of the background investigations database. She called the number “preliminary, unverified and approximate,” and said she was “not comfortable” with the estimate.

The OPM-FBI dispute was first reported by CNN.

China has been linked to the OPM attack, which was discovered in April but traced back to at least the beginning of December.

At first, investigators believed that only OPM’s central personnel data system was breached. But within days of announcing the breach, a further compromise was discovered related to a database used for some of the 700,000 federal officials who hold security clearances.

The cyberattack has been linked to Chinese intelligence agencies, either the civilian Ministry of State Security or the military spy service called the Second Department of the PLA General Staff, or 2PLA. A U.S. intelligence official told Inside the Ring that initial evidence indicated Chinese military intelligence is linked to the cyberstrike.

Cybersecurity analysts close to the investigation say a key signature linking the cyberattack to China was the hackers’ use of software called Sakula. The software is a remote access tool that provides wide access inside accessed networks.

Senior Obama administration officials would not say on Tuesday whether the OPM hacking was mentioned during the previously scheduled Strategic and Economic Dialogue held with senior Chinese leaders in Washington this week.

Instead, a U.S. spokesman told reporters that the general topic of cybersecurity was discussed during meetings that focused on climate change and other less-controversial subjects.

“I mean, certainly, the issue of cyber came up in discussions with the Chinese,” a senior State Department official told reporters. “We’re not going to have a lot to say about the content of those discussions, and I think I’ll just leave it at that for today.”

Lisa Monaco, the White House’s homeland security director, said last week that among the options being considered in response to the OPM cyberattack were unspecified sanctions, and legal, diplomatic and intelligence actions.

Pentagon girds for space warfare
Deputy Defense Secretary Robert Work said this week that Russia and China pose threats to vital U.S. space capabilities and other U.S. technological weapons superiority.

U.S. space systems built up over decades include imaging and other spy satellites, navigation and targeting sensors and communications networks that give the United States unequaled power-projection capabilities, Mr. Work said during a speech Tuesday to a symposium called GEOINT 2015.

“These capabilities that were built up and refined over the Cold War allowed us to project more power, more precisely, more swiftly, at less cost and with less force structure and with far fewer casualties than would otherwise be possible,” he said.

But U.S. military superiority is being steadily eroded in significant ways, as states such as Russia and China field advanced weapons, he said.

Russia and China have studied U.S. war fighting and are preparing to attack space systems as a “vulnerable center of gravity for U.S. military power,” Mr. Work said.

To deal with the threat, the Pentagon is working to make space systems better able to withstand attacks ranging from ground-fired missiles and lasers to small robot satellites.

Failing to secure these systems would have a “profound” impact, as command-and-control systems would be disrupted, the ability to detect missile launches weakened, and the accuracy of precision-guided weapons reduced. Links used for unmanned aircraft and much of the data from intelligence gathering also would be lost, Mr. Work said.

A new command center to deal with space attacks, increasing space intelligence, and a new space architecture are needed, he said.

To fund the better space defenses, the Pentagon will be spending around $5 billion on space security. Mr. Work called added funding “a big, big muscle move” in the current fiscally constrained environment.

Mr. Work described Russia as a “clear and present danger” after its aggression against Ukraine and threatening nuclear activities. China, he said, also poses military challenges but is not destined to be an enemy.

“Under any circumstances, both of these countries present us with unique and stressing military challenges,” Mr. Work said.

Strategy on Islamic State failing
Sunday will mark the first anniversary of Islamic State leader Abu Bakr al-Baghdadi’s declaration of the establishment of an Islamic caliphate in occupied areas of Syria and Iraq.

To date, President Obama’s strategy to “degrade and defeat” the al Qaeda offshoot and now rival appears to be foundering. An intelligence official said the strategy is limited and projects out to 2017 — when the Obama administration ends. The limitations are a sign of the administration’s lack of seriousness in dealing with the threat, the official said.

A heavy U.S. reliance on bolstering the Iraqi army is not producing results, and U.S. and allied airstrikes have had a limited impact on Islamic State forces that currently occupy key cities such as Mosul and Ramadi. A sign the strategy is failing was evident in the president’s recent decision to send an additional 450 U.S. military trainers and support troops to Anbar province. Some 3,100 U.S. troops currently are in Iraq trying to train the Iraqi army, which, despite billions of dollars in training and equipment, remains a weak fighting force.

Iraqi military forces refused to fight during last year’s Islamic State incursion and abandoned large numbers of military vehicles and equipment to the Islamic terrorists. Additionally, the lack of U.S. military backing for Iraqi forces on the ground is leading to increased Iranian political and military backing for Baghdad.

A detailed military situation report on Iraq by the security contractor Falcon Group warns that Iranian influence in Iraq is growing and could affect the U.S. train-and-equip effort.

“The influence of Iranian-backed Iraqi Shia militias is extending beyond Iraq’s security sector and creating political friction,” says the report, dated June 24.

Leaders in Anbar province recently traveled to Iran to request Iranian military backing, an indication that Iranian influence is extending beyond traditional support bases for pro-Iran militias.

“Meanwhile, the expansion of the militias’ presence into western Iraq is bringing them closer to U.S. personnel,” the Falcon report said. “U.S. officials today confirmed that Shia militias are present in varying numbers at Taqaddum base, to which the U.S. plans to deploy the additional U.S. personnel that President Obama recently authorized.”

A Falcon report from June 23 stated that Iraqi and allied forces are preparing to carry out Operation Mosul Liberation after a base of operations is set up near Shiqat and once Beiji, where a major oil facility is located, is secured.

  • Contact Bill Gertz on Twitter via @BillGertz.

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