Return to Winter: Russia, China, and the New Cold War Against America (32 page)

Neighbors near and far also worry that Venezuela could provide high technology and weapons to sophisticated drug runners, such as the Colombian narco-terrorist group FARC. According to Stephen Blank of the U.S. Army War College, “Venezuela’s arms purchases make no sense unless they are intended for purposes of helping the
FARC and other similar groups, fighting Colombia, projecting power throughout Latin America drug running with subs that are protected against air attacks, or providing a temporary base for Russian naval and air forces where they can be sheltered from attacks but threaten North or South America.”
¹⁰³
Chávez, for his part, simply asserted his right to do as he pleased as a sovereign leader. Speaking of the arms purchases, he said: “We can do it today because we are free. We could not have done this before, because we were dominated by Yankees, the World Bank, and the entire imperial economy and financial structure.”
¹⁰⁴

The Axis’s involvement in Latin America represents an encroachment on a territory the U.S. has considered its backyard ever since the Monroe Doctrine, a policy originally created to prevent former colonial powers from attempting to regain their holdings in Latin America. The U.S. maintained the policy successfully for almost a century and a half. In recent decades, however, foreign powers have greatly expanded their military and economic ties to Latin America.

To be sure, the United States remains by far the predominant military power in the region, a position it has recently bolstered by reestablishing the Fourth Naval Fleet in Latin American waters and by conducting extensive joint activities with several Latin American countries.
¹⁰⁵
Latin America’s links with the United States are longstanding and fundamental to the economies of North, Central, and South America; the United States remains the preferred business partner of most Latin American companies because of its deep understanding of the market and culture.
¹⁰⁶
Yet the Chinese and Russian infiltration presents a serious challenge.

At the very least, China’s presence in Latin America will mean a loss for American businesses, as cheap Chinese products edge out American exports. It’s also possible that future engagement between Russia or China and such anti-American powers as Venezuela could form an anti-American axis in our own backyard, limiting access to
resources or even destabilizing friendlier regimes.
¹⁰⁷
American estimations of Chinese and Russian arms influence in the region might not even be fully reliable, because figures of arms sales do not provide a comprehensive picture. While China sells few weapons, it has made large donations of military equipment to Bolivia, for instance, since the election of Evo Morales—including missiles, logistical equipment, and non-weapons support gear. Military aid to Latin America achieves certain soft-power goals for Beijing; thus the precise depth and scope of China’s involvement may not be apparent.
¹⁰⁸

The Chinese are also making major inroads into another traditional American enclave: the Caribbean. In June 2013, Beijing lavished $3 billion in development loans on a region whose economy is equivalent to that of the state of Kansas; the Chinese have doled out $6 billion over the last decade. Beijing now has “a major project in nearly every Caribbean country,” Rush Doshi and David Walter wrote in a
Wall Street Journal
report, including the construction of a huge commercial port in Jamaica by the state-owned Chinese Communications Construction Company. Doshi and Walter see the Chinese posture in the Caribbean as less about traditional Chinese economic expansion—though the getting is good, to be sure—and more about mimicking the Soviet Union’s Cold War strategy of using the region to contain the United States. They envision China eventually signing naval-access agreements with Caribbean countries and establishing surveillance posts. “In times of crisis,” they write, “China could use the Caribbean to draw U.S. attention away from Asia and Beijing’s own maritime backyard, the South China Sea.”
¹⁰⁹

UNDERSTANDING THE AXIS’S ECONOMIC CHALLENGE

As President Xi has made clear, China and Russia support each other politically, militarily, and, as we have seen, also economically. To this
end, regional trade agreements, investment, and development projects in nations across the globe have aided China and Russia in extending their global economic influence. Both countries are moving ahead with plans to expand their economies, investing at home and abroad, and working (sometimes together) on enormous infrastructure projects to transport natural resources. But their economic cooperation extends further than energy deals and trade agreements. It is also rooted in a mutual vision to counter the influence of the united States, in part by creating and formalizing alternative alliances and institutions that work independently of—and often directly against—American and Western interests.

Yet for all of their considerable success, both countries face serious economic challenges. China’s meteoric economic growth is slowing; its banks are stagnant under heavy government involvement, and corruption throughout its quasi-private economy is endemic. Its lack of environmental standards causes pollution and health problems. Cronyism within the Communist elite has denied opportunity to millions. Russia, meanwhile, faces even more serious problems—none more so than its economic overreliance on energy. With the American shale-gas revolution, Russia’s ability to call the tune in Europe and elsewhere may about to be drastically curtailed.

Here is an example, again, of the tragic absence of American leadership. As in the other areas we have covered in previous chapters, the Axis nations pose serious challenges, but they also exhibit clear weaknesses and limitations. The absence of an effective American policy response in the economic realm, as elsewhere, is as damaging as it is bewildering.

Without question, any effective American response must address, comprehensively, the area where China hits us the hardest: jobs. “China continues to acquire more and more of our industrial capacity,” Greg Autry and Peter Navarro write. “We have less and less of an ability to
produce the jobs we need for our economy and the weapons systems we need for national defense.”
¹¹⁰
Elsewhere, Navarro argues that the United States must address its trade deficit with China and pursue a policy of balanced trade with Beijing by, say, 2020; crack down on China’s many unfair trade practices; and re-link human rights with Chinese trade. He also urges American consumers to stop buying Chinese products or at least “think about their purchases.”
¹¹¹

The United States has stood up to China occasionally; the Obama administration has made repeated complaints against Beijing’s trade practices, and the president did raise the issue of cyber security (if none too successfully) with Xi at their summit in 2013. Yet, like our European neighbors, we in the United States must often feel as if we have only carrots, not sticks: It’s difficult for hard-pressed American consumers to stop buying Chinese, or even to “think about their purchases,” as Navarro urges, when incomes are stagnating and millions remain jobless. The blizzard of Chinese cash—as investment for U.S. businesses and as cheap products for U.S. consumers—is very difficult to resist in a troubled economy.

What is lacking here, as in other areas, is a comprehensive vision of how to proceed. How should the United States understand its economic policy in the face of the Chinese challenge? What policies do we need to pursue to regain our economic self-sufficiency and protect our own people against the exploitation that other nations have alleged against China and its ruthless fiscal and trade policies?

Given how successful the Chinese have been in using cheap labor to destroy jobs in the developed world, reviving the once-proud American manufacturing sector would certainly be a step in the right direction. Reforming and streamlining the tax code, providing stronger incentives for businesses to invest, and ensuring the stability and vitality of key American entitlement programs such as Social Security would also be crucial components of a comprehensive policy. As in other
areas, there is no shortage of good ideas. What is lacking is a leader to adopt them with conviction and purpose, one who will articulate and sell them to the people, and pursue them with the kind of single-minded determination that we see on display daily from leaders in Moscow and Beijing.

In economics as in national security, it is not too late for the United States to retake the initiative, defend its interests, and slow the momentum of its adversaries. The United States does not lack the economic know-how; it possesses many built-in advantages, including rich natural resources, a creative and industrious people, and a heritage of free enterprise. What the United States lacks is leadership, and it’s an absence all the more glaring when contrasted with the leadership of our Axis adversaries. They have it, we don’t—at least for now.

CHAPTER 7

Intelligence Wars: Stealing America’s Secrets

“The public needs to decide whether these programs and policies are right or wrong. . . . This is the truth. This is what’s happening. You should decide whether we need to be doing this.”

—
EDWARD SNOWDEN
¹

“Such a present for us for Christmas.”

—
VLADIMIR PUTIN, TALKING ABOUT EDWARD SNOWDEN
²

“Stealing American secrets is not a crime in Russia.”

—
DIMITRI SIMES, HEAD OF THE CENTER FOR THE NATIONAL INTEREST
³

“Don’t ask me why there’s a director of national intelligence and a director of central intelligence. Something to do with 9/11, after which the government decided it could use more intelligence. Instead it wound up with more directors of intelligence, which is the way it usually goes in Washington.”

—
MARK STEYN
⁴

“Washington should come clean about its record first. It owes, too, an explanation to China and other countries it has allegedly spied on. It has to share with the world the range, extent, and intent of its clandestine hacking programs.”

—
XINHUA, STATE NEWS AGENCY OF CHINA
⁵

H
e was the most famous international traveler ever to take up temporary residence in Moscow’s Sheremetyevo Airport—a fugitive wanted by the most powerful country in the world for leaking national-security secrets. And not just any national-security secrets: “basically the instruction manual” for how America’s National Security Agency operated. As Edward Snowden, formerly a technical contractor for the NSA and employee of the CIA, sat under the protective watch of the Russian government and Vladimir Putin, he had information that could cause more damage to the U.S. government than “anyone else has ever had in the history” of the country.
⁶

What Snowden leaked, via left-wing
Guardian
journalist Glenn Greenwald, was huge volumes of information about top-secret United States and British mass-surveillance programs. The programs, called PRISM in the U.S. and Tempora in Britain, involved massive data collection of telephone and Internet metadata on hundreds of millions of people, via cooperative arrangements with telephone and Internet-service companies. Snowden’s leaks also disclosed that the United States was spying aggressively and comprehensively on its allies in Europe. All told, what Snowden made public added up to one of the worst intelligence breaches in American history. (The heads of the House and Senate Intelligence Committees, a Republican and Democrat, would later charge that Snowden may have had earlier ties with Russian intelligence.
⁷
)

And the Russians had no intention of turning him over to the United States, despite earnest American pleas. “We have returned seven prisoners to them in the last two years that they requested,” Secretary of State John Kerry said of the Russians. “I think it’s very important for them to adhere to the rule of law and respect the relationship.”
⁸
But Kerry made no mention of consequences should the Russians refuse to cooperate, and his defeatist wording suggested there would be none.

Putin played the affair with the consummate skill of an old spy, making Kerry and President Obama seem like novices. His confidence showed when, giving a speech in Finland, he claimed—to much audience laughter—that Russia did not want Snowden to damage the United States. Amusing his listeners, Putin described how he had told Snowden that Russia would consider his application for asylum on the condition that he stop damaging “our American partners” by leaking documents.

“You are laughing, but I am serious,” said Putin. “[Snowden] said, ‘I want to continue my activities, I want to struggle for human rights, that the U.S. violated some international law, interference with privacy, and my goal is to struggle against this.’ We said: ‘Only, not with us. We have other things to struggle against.’”

Putin even insisted that the U.S. had forced his hand, trapping Snowden in Russia by persuading other countries not to accept him for asylum: “They themselves scared all other countries; no one wants to take him, and in this way they themselves in fact blocked him on our territory.” It sounded plausible, but then Putin couldn’t resist a gloat.
⁹
“Such a present for us for Christmas,” he said. The audience laughed again.

(Putin has been more nuanced in other contexts. At a December 2013 news conference, he conceded that surveillance was “necessary to fight terrorism,” though he also argued that it was “necessary to limit the appetite of special services with certain rules.”
¹⁰
And in fact the Kremlin has beefed up its own efforts against cyber crime and hackers.)

Of course, what Putin didn’t say was that he could have turned Snowden over to Obama himself, but this Putin was never going to do. Nor were the Chinese; before landing in Moscow, Snowden had taken refuge in Hong Kong. The White House’s insistence that he be returned fell on deaf ears there, too, as Hong Kong government
officials made a host of bureaucratic excuses for why they couldn’t respond to the American request.

Meanwhile, Snowden had become a global cause célèbre. He met with human-rights organizations at the Russian airport, including Amnesty International, Human Rights Watch, and Transparency International. A Swedish sociology professor nominated him for a Nobel Prize, saying that honoring Snowden would make up for the Nobel Committee’s error in giving the award to President Obama in 2009.

“Edward Snowden has—in a heroic effort at great personal cost—revealed the existence and extent of the surveillance the U.S. government devotes [to] electronic communications worldwide,” wrote Stefan Svallfors. “By putting light on this monitoring program—conducted in contravention of national laws and international agreements—Edward Snowden has helped to make the world a little bit better and safer.”
¹¹

U.S. adversaries enjoyed the spectacle from the sidelines. America did not have “the moral right to request the extradition of a young man who is only warning of the illegalities committed by the Pentagon and the CIA and the United States,” said Venezuelan president Nicolás Maduro. “As head of state, I reject any request for extradition. They are simply disregarding bilateral agreements.”
¹²

Beijing, for its part, celebrated Snowden and damned the U.S. for its blatant hypocrisy: “These, along with previous allegations, are clearly troubling signs. They demonstrate that the United States, which has long been trying to play innocent as a victim of cyber attacks, has turned out to be the biggest villain in our age.”
¹³

The Edward Snowden affair was a devastating event for the United States national-security and intelligence communities, and it became even more so when Putin accepted Snowden’s request for asylum in Russia, at least for a year, allowing the American to leave his airport sanctuary. Eventually, he took up residence in Russia and reentered
the spotlight by asking Putin on a television program in 2014 whether Russia spied on its citizens the way America does. Certainly not, Putin assured him.
¹⁴

Although it was a self-inflicted wound (Snowden decided to become a leaker on his own, without foreign assistance), it was difficult to miss the symbolism of Snowdon’s choices for shelter—first China, then Russia—to say nothing of his requests for asylum from other nations with which America has poor relations—Venezuela, Ecuador, and Bolivia. Both Axis countries steadfastly refused to cooperate with Washington and used the event to their advantage, serene in their confidence that the Americans would do little to make them pay. A disgusted President Obama canceled a scheduled meeting in Moscow with Putin, but his gesture seemed more an admission of defeat than anything else. And as the debate continues to rage over whether Snowden deserves amnesty—a request National Security Adviser Susan Rice summarily shot down in a
60 Minutes
interview—the Obama administration continues to look outsmarted and outmaneuvered at every turn.
¹⁵

Snowden’s deeds were as much of a surprise to the Chinese and Russians as they were to us, but the Axis response to them, as in so many other areas we have chronicled, outlined a familiar picture: China and Russia playing the game for keeps, relentless in the pursuit of their interests; America confused, passive, and ineffective. It’s a picture that unfortunately holds as true in the area of intelligence warfare as in the others we have discussed. China and Russia are far more aggressive and effective here than is commonly understood, while the U.S. does not counter their efforts. In part, this comes from a failure of vision and nerve. In part, it is due to post–Cold War transformations in how the intelligence game is played internationally. Our adversaries have adapted much more readily to these changes
than we have, and, to some degree, the changing landscape has given them a built-in advantage.

THE OLD GAME IS OVER

On June 28, 2010, the FBI accused 11 people of acting as Russian spies. The accused spies’ neighbors in New York, Boston, and Virginia were shocked by the news. As one neighbor put it: “They couldn’t have been spies. Look what she did with the hydrangeas.” Another neighbor referred to one of the couples as “suburbia personified.”
¹⁶

Suburbanites or no, according to the FBI, the accused were involved in the “Illegals Project,” a spy ring dedicated to obtaining secrets about American nuclear weapons, CIA leadership, and Congressional politics, among other subjects. They used fake civilian identities, and their tactics included both old-fashioned espionage and high-tech devices: forged passports, stolen identities, invisible ink, and special computer software.
¹⁷
In a coded message, one couple disclosed the purpose of their trip: “You were sent to USA for long-term service trip . . . Your education, bank accounts, car, house, etc.—all these serve one goal: fulfill your main mission, i.e., to search and develop ties in policymaking circles and send intels [intelligence reports] to C[enter].”
¹⁸

The FBI gathered information on the spies for more than seven years, with the help of Colonel Alexander Poteyev, a high-ranking Russian official who had penetrated the spy ring by appearing to administrate it—all the while feeding information back to the FBI.
¹⁹
The FBI’s long investigation resulted in what seemed an intelligence coup: a broken-up spy ring that reminded some of the old Cold War days. Operation Ghost Stories, as the bureau called its investigation, played into a broader story about espionage and counter-espionage between the United States and Russia.

And yet, the spy ring itself was almost entirely ineffectual.

To be sure, the spies were good at fooling their suburban neighbors. But while they apparently cultivated relationships with certain academics, nuclear-weapons experts, and U.S. officials, no evidence indicated that they had actually retrieved anything beyond, as
The Economist
put it, what “could have been gleaned from reading the better papers.” Indeed, the spies often had to justify their expenses and behavior to their superiors, who wondered what was taking them so long. None of the spies were charged with espionage—not because of a lack of intent, but because there was not enough evidence to warrant the charge.
²⁰
They were exchanged for four Russians who’d been imprisoned in Russia for spying for the United States.

What the broken-up spy ring really showed was how outdated the Cold War model of human moles has become in 21st-century intelligence wars. The entire episode had the somewhat comical quality of a bad Cold War spy film. The last time anyone had a clear snapshot of the human face of espionage—that is, the struggle to gather information and deploy influence by hidden means—was during the Soviet era, a time of master spies, John Le Carré characters, and
The Manchurian Candidate
.

Human intelligence, boots on the ground, moles, and operatives played a crucial role during the Cold War. The game has changed. Deployed from afar, spying need not depend on undercover spooks. Agents of influence need not function in the shadows. They ply their trade in the open in the PR industry, in the media, working as Washington lobbyists or as top business executives who depend on profits from commerce with Russia and China.

The new playing field might be characterized as one of decentralized intelligence, with heightened surveillance. Eavesdropping, for instance—a staple of Cold War practice, not to mention a thousand spy novels—has changed radically since the days of bugged hotel rooms and men in raincoats watching from doorways. The human element is
not nearly so necessary in an era when modern-day communications, from cellphones to emails, are so porous. As we discussed in our “Cyber Wars” chapter, the U.S. government fights a daily war to keep hackers from disrupting it websites and penetrating passwords and IDs. We don’t worry about individual spies such as Robert Hansen; we worry about an entire technological spying apparatus, like the unit China runs in Shanghai, built and sustained and operated by countless hands.

The surveillance culture, then, has only intensified since the days of the Cold War, but with this difference: We take it for granted that we’re on our own and that our government cannot protect us. During the Beijing Olympics, for instance, every taxi in Beijing carried an audio bug, and most carried video monitors.
²¹
The technology of spying has proliferated in quantum leaps, and both Russia and China can now monitor not only large swaths of their own population, but also ours—indeed, the world’s.

So, while the Cold War spy model is obsolete, the intelligence wars themselves are very much alive, both around the world and in the U.S. Unfortunately, while our adversaries have adapted to the new terrain and seized the advantage, the U.S. has been slow to respond to the serious losses it is already suffering—first and foremost, in the area of national security.