Huawei insanity

The Huawei Affair just keeps escalating. I hope this doesn’t lead to a Sino-American war. It’s really not worth it.

A second Canadian has just disappeared into detention in China – by sheer coincidence, of course.

Meantime, the permanent bureaucracy shows the president who’s boss:

Despite President Trump’s statement that he might intervene in a criminal case against the chief financial officer of Huawei Technologies Co., such a move would break from longstanding tradition and advisers have warned him that his options are limited, according to people familiar with the matter.

When news broke last week of the arrest of Meng Wanzhou, threatening the president’s trade talks with China, he asked for options, according to one person, and advisers told him the arrest and potential prosecution of Ms. Meng was essentially out of his hands.

The arrest was a Justice Department matter, they said, and the White House should stay out of it for now, this person said. There are no immediate plans to intervene in the matter, officials added.

Trump can and absolutely should make the DoJ drop this case:

Former Justice Department officials said that while Mr. Trump’s intervention in the Meng case would be a departure from the norms against White House involvement in criminal cases, there is nothing in the Constitution that bars it. Such actions are more common – though still unusual – if the action is framed as a national-security matter.

While the circumstances were different, President Obama pushed the Justice Department to drop cases against several alleged Iran-sanctions violators while negotiating a plan for that country to curb its nuclear program.

David Goldman is probably right that certain elements of the national security state are trying to sandbag Trump.

Here’s an explainer on the legal niceties of the case. All well and good, but it blithely ignores the insanely provocative nature of this move, how it is *perceived* outside the US (backlash is bad), as well as the selective way in which the law is being applied:

The arrest of Huawei chief financial officer Meng Wanzhou is a dangerous move by US President Donald Trump’s administration in its intensifying conflict with China. If, as Mark Twain reputedly said, history often rhymes, our era increasingly recalls the period preceding 1914. As with Europe’s great powers back then, the United States, led by an administration intent on asserting America’s dominance over China, is pushing the world toward disaster.

The context of the arrest matters enormously. The US requested that Canada arrest Meng in the Vancouver airport en route to Mexico from Hong Kong, and then extradite her to the US. Such a move is almost a US declaration of war on China’s business community. Nearly unprecedented, it puts American businesspeople traveling abroad at much greater risk of such actions by other countries.

It may not be kidnapping but it certainly looks like kidnapping. From FT:

To put the incident’s shock value in an American context, it was as if a daughter of Steve Jobs, who was following him up the corporate ladder at Apple, had been detained in Moscow pending her possible extradition to Beijing.

The hypocrisy of this move against an extremely high-profile Chinese businesswoman is a little hard to take:

Meng is charged with violating US sanctions on Iran. [Ed: Not quite.] Yet consider her arrest in the context of the large number of companies, US and non-US, that have violated US sanctions against Iran and other countries. In 2011, for example, JPMorgan Chase paid US$88.3 million in fines for violating US sanctions against Cuba, Iran and Sudan. Yet chief executive officer Jamie Dimon wasn’t grabbed off a plane and whisked into custody.

And JPMorgan Chase was hardly alone in violating US sanctions. Since 2010, the following major financial institutions paid fines for violating US sanctions: Banco do Brasil, Bank of America, Bank of Guam, Bank of Moscow, Bank of Tokyo-Mitsubishi, Barclays, BNP Paribas, Clearstream Banking, Commerzbank, Compass, Crédit Agricole, Deutsche Bank, HSBC, ING, Intesa Sanpaolo, JP Morgan Chase, National Bank of Abu Dhabi, National Bank of Pakistan, PayPal, RBS (ABN Amro), Société Générale, Toronto-Dominion Bank, Trans-Pacific National Bank (now known as Beacon Business Bank), Standard Chartered, and Wells Fargo.

None of the CEOs or CFOs of these sanction-busting banks was arrested and taken into custody for these violations. In all of these cases, the corporation – rather than an individual manager – was held accountable. Nor were they held accountable for the pervasive lawbreaking in the lead-up to or aftermath of the 2008 financial crisis, for which the banks paid a staggering $243 billion in fines, according to a recent tally.

The plot thickens!

Huawei CEO Meng Wanzhou

The internet is abuzz with more news and speculation related to the stunning arrest of Huawei CFO Wanzhou Meng:

• I previously noted that “This is about as dumb as the US trying to arrest Julian Assange, but with far nastier geopolitical implications.” For what it’s worth, here’s Wikileaks weighing in:

@wikileaks

Editorial comment: The U.S. extradition of Huawei CFO Meng Wanzhou from Canada, for actions performed in China, is the same extra-territorial invasion through lawfare, that the U.S. government is applying to the UK, by extraditing Assange from the UK, for publishing in the UK.

4:26 PM – 6 Dec 2018

• Comrade Balding, an academic formerly based in Shenzhen, has some very interesting thoughts, among them:

@BaldingsWorld

There’s more coming on Huawei. I just don’t know when it’s going public

8:58 AM – 6 Dec 2018

===

Fact: timing of Huawei arrest is a great big political F+*#?!U

Fact: everyone in China knew she broke the US laws. Obama admin knew Huawei broke the law. Trump admin knew Huawei broke the law.

It’s only political if you think she should get away with it

8:48 AM – 6 Dec 2018

===

FWIW, I’ve know for a few months that there is more coming down the road with Huawei. Have confirmation from multiple unrelated people

2:08 AM – 6 Dec 2018

• The Alibaba-owned South China Morning Post ran this piece Thursday on how Meng told Huawei employees “in an internal talk on compliance that there are scenarios where the company can weigh the costs and accept the risks of not adhering to the rules.” Is China planning to throw Meng under the bus?

• Reuters correspondent “SJ” writes:

@SijiaJ

What happened on December 1? Xi & Trump met, Huawei founders’ daughter got arrested, Danhua Capital founder committed suicide

10:11 PM – 5 Dec 2018

• Wait, who committed suicide? From SCMP reporter Zheping Huang:

@pingroma

Prominent Stanford physics professor and blockchain venture capitalist Zhang Shoucheng died at age 55 on Dec 1 in the US after fighting depression, according to a family statement. Story TK

“Danhua lists 113 U.S. companies in its portfolio, and most of those companies fall within emerging sectors and technologies (such as biotechnology and AI) that the Chinese government has identified as strategic priorities,” the USTR name-checked Zhang’s VC in its Nov. 20 report

10:48 PM – 5 Dec 2018

Odd timing on that. “The family of Stanford professor Zhang Shoucheng, a world-renowned physicist and venture capitalist, denied speculation on Chinese social media that his death was connected to tensions in US-China relations or the arrest of Huawei’s CFO in Canada on Saturday.” (SCMP)

• An intriguing piece of gossip:

@maggiexiao

Replying to @BaldingsWorld

Rumor says Meng entered Canada with a Canadian passport. China recently strengthened its no-dual citizenships policy . So that means she voluntarily gave up her Chinese citizenship. If true, does China still have the rights to claim her back?

6:24 PM – 5 Dec 2018

• David Goldman comments:

First, never before has the United States attempted the extraterritorial rendition of a foreign citizen – Meng is a Chinese national – in connection with sanctions violations. It has imposed travel and banking restrictions, but seeking an arrest warrant for this is entirely without precedent. […]

The question is: Who ordered the arrest, and why?

It is possible that President Trump knew about it and sanctioned the arrest, to be sure. But it is unlikely that the president would escalate the conflict with China with the arrest of a senior executive of China’s flagship high-tech manufacturer on the same day that he sought to de-escalate the trade war.

If Trump did not initiate the arrest, who did? There are two alternative possibilities.

The first is that the order came from administration officials who believe that the United States must provoke a confrontation with Beijing now, before China becomes too powerful to intimidate. Some parts of the permanent bureaucracy and the intelligence community believe that China’s economy is fragile and that an economic war would produce an economic crisis and political instability, perhaps even toppling Xi Jinping.

That view may seem fanciful, but it is argued seriously, for example by some former senior officials of the Trump administration.

The second possibility is that Trump’s enemies in the permanent bureaucracy simply want to prevent the president from negotiating a deal with China that would enhance his image and remove risks to economic growth.

Goldman notes that the only American politician to comment publicly on the matter has been Senator Marco Rubio, who earlier this year tried to torpedo Trump’s agreement with Xi regarding ZTE. He “celebrated the arrest” in an email to Axios. Hmm.

• Huawei is in deep trouble and not only in the US. From Reuters: “Japan plans to ban government purchases of equipment from China’s Huawei Technologies Co Ltd and ZTE Corp to beef up its defenses against intelligence leaks and cyber attacks, sources told Reuters.”

• …And: “Australia and New Zealand have already blocked Huawei from building 5G networks.”

• …And: “Britain’s BT Group said on Wednesday it was removing Huawei’s equipment from the core of its existing 3G and 4G mobile operations and would not use the company in central parts of the next network.”

• I’ll close with Professor Balding again – somewhat off-topic, but it caught my eye:

I think what most people who haven’t spent a lot of time in China don’t get is how abnormal the business, economic, financial, and negotiation climate is. People see the shiny tall glass office buildings and the Ritz and they make the assumption they get it. That’s wrong 1/n

The stories that get out in public are wild. The stories that never make it into the public are at least 10x crazier. The IP theft and theft stories you hear about in public are low hanging fruit where someone falls out of favor in Beijing. I know first hand accounts of 2/n

Flat out 10 ten digit USD thefts. Companies who have valid contracts telling a foreign partner they’re ignoring a contract and they will have them abducted or jailed if they even think about trying to enforce a contract with again 10 digit USD values. You DC/NYC debutantes 3/n

simply do not understand what you are dealing with.The rules are different. You think fentanyl doesn’t get various levels of state protection? Get real. You think this IP theft and gangsterism isn’t quasi official policy? Get real. You need to be realistic about your counterparty

6:14 AM – 6 Dec 2018

Russia to verify moon landings

Buzz Aldrin moon July 1969

I always thought this looked fake

It’s time someone cleared this up once and for all:

The head of Russia’s Roscosmos space agency has said that a proposed Russian mission to the moon will be tasked with verifying that the American moon landings were real, though he appeared to be making a joke.

“We have set this objective to fly and verify whether they’ve been there or not,” said Dmitry Rogozin in a video posted Saturday on Twitter.

Rogozin was responding to a question about whether or not NASA actually landed on the moon nearly 50 years ago. He appeared to be joking, as he smirked and shrugged while answering. But conspiracies surrounding NASA’s moon missions are common in Russia.

“Novichok spymaster” dies

GRU director Igor Korobov

GRU director Igor Korobov

The twisty Skripal affair takes another turn as the head of Russia’s GRU, who is viewed as the mastermind of the poisoning, is reported dead:

One of Russia’s highest ranking spies and the powerful head of military intelligence has died “after a long and serious illness,” a Defense Ministry spokesperson told the news agency RIA Novosti. Gen. Col. Igor Korobov, the 63-year old head of Russia’s Military Intelligence Directorate (GRU), was reported dead early Thursday morning; currently there’s no reports of foul play though officials did not reveal specific details or the circumstances of his death.

Crucially Korobov had been dubbed by the West the “Novichok spymaster” — as the Russian GRU chief ultimately blamed for the Salisbury attack as well as the downing of MH17 over Ukraine in 2014, which the Kremlin in turn had blamed on pro-Kiev national forces.

Korobov had for two years been under US sanctions, added by US Treasury in December 2016 related to allegations of Russian hacking and “efforts to undermine democracy”. Ironically, however, he was seen at times as a cooperative ally in Washington’s “war on terror” efforts since 9/11. […]

What’s the real story here? As usual… who knows? But here’s a possible clue:

Korobov had been ill since early October, when reports revealed he was severely reprimanded by President Putin himself over mishandling accusations surrounding the alleged Salisbury poison attack the West pinned on Russian intelligence.

The Daily Mail reports:

President Vladimir Putin personally gave a dressing down to the head of Russian spy agency GRU over ‘deep incompetence’ shown in the Salisbury poisonings and other international operations.

GRU chief Col-Gen Igor Korobov, 62, reportedly emerged shaken and in sudden ‘ill health’ after his confrontation with the furious Russian president.

As for the “deep incompetence”: the once-fearsome GRU is apparently not sending its best.

Hope he has a good security detail

Steve Bannon Guo Wengui

Idea for a buddy cop film (Bannon and Guo)

Steve Bannon teams up with Guo Wengui to throw down the gauntlet… against the Chinese government:

Former chief strategist for US President Donald Trump, Steve Bannon, has lent his support to exiled Chinese billionaire Guo Wengui in a campaign to investigate China’s ruling elite, the two announced at a press conference in New York on Tuesday.

Bannon introduced the “Rule of Law Fund” which aims to investigate wrongdoing, including the alleged involvement of Chinese officials in the death and disappearance of Chinese individuals. Bannon said he would chair and oversee operations of the initiative. […]

Guo gave a presentation alongside Bannon, and has pledged to back the fund with US$100 million and formally request that the FBI and relevant law enforcement authorities review “voluminous investigative material.”

I can only assume that Bannon understands what he is up against here. Guo, the fugitive real estate tycoon who was visited in his Manhattan penthouse by Chinese security agents last year, has a bit more experience facing off against Beijing.

Among the cases that Guo/Bannon plan to investigate is the death of HNA Group co-founder Wang Jian in France after apparently falling from a wall.

Bannon Guo Wengui fund

IHOP Knows About Bigfoot

A prime example of the lunacy of Twitter is the account “IHOP Knows About Bigfoot” (@IHOPKnows), which I have just had the misfortune of stumbling upon. The account has published only 10 tweets but already has over 1,800 followers. How many of the followers are fake? Is this a weird marketing ploy by the pancake chain?

The account’s inaugural tweet juxtaposes a map of Bigfoot report locations against a map of IHOP’s restaurant empire, hinting at a vast conspiracy:

Make the madness stop!

Google fails to not be evil

Google devil

“Google” by William Blake

Now we know why Google has scrubbed almost all mention of “Don’t be evil” from its code of conduct:

Google bosses have forced employees to delete a confidential memo circulating inside the company that revealed explosive details about a plan to launch a censored search engine in China, The Intercept has learned.

The memo, authored by a Google engineer who was asked to work on the project, disclosed that the search system, codenamed Dragonfly, would require users to log in to perform searches, track their location — and share the resulting history with a Chinese partner who would have “unilateral access” to the data. […]

The memo identifies at least 215 employees who appear to have been tasked with working full-time on Dragonfly, a number it says is “larger than many Google projects.” It says that source code associated with the project dates back to May 2017, and “many infrastructure parts predate” that. Moreover, screenshots of the app “show a project in a pretty advanced state,” the memo declares.

Most of the details about the project “have been secret from the start,” the memo says, adding that “after the existence of Dragonfly leaked, engineers working on the project were also quick to hide all of their code.”

It’s pretty simple, if you want to operate in China you have to play by the CPC’s rules. There is no way for Google to do that while successfully upholding the values it pretends to care about. Hence the secrecy.

Observatory reopens, but I still believe in aliens

Mulder aliens

An update on that mysterious observatory closure last week is aptly summarized by the Buzzfeed headline, “New Mexico’s Solar Observatory Is Finally Reopening But The Whole Thing Is Still Pretty Weird”:

A solar observatory in the mountains of New Mexico has reopened 10 days after it was suddenly closed and its employees evacuated for a mysterious security threat, baffling locals, the internet, and whipping conspiracy theorists into a frenzy.

On Sunday, the Association of Universities for Research in Astronomy (AURA), announced that it is reopening the Sunspot Observatory, which it manages, and that employees and the residents who had been forced to leave their homes on the site are now allowed to return.

“AURA has been cooperating with an on-going law enforcement investigation of criminal activity that occurred at Sacramento Peak. During this time, we became concerned that a suspect in the investigation potentially posed a threat to the safety of local staff and residents,” Shari Lifson, an AURA spokesperson, said in a statement Sunday. “For this reason, AURA temporarily vacated the facility and ceased science activities at this location.”

The statement provided no further details on the nature of the presumed threat, or on the status of the investigation. […]

Of course, that’s just what the authorities would say if the telescope had detected aliens or an apocalyptic solar storm, isn’t it? 🤔

But even some former NSO employees and other scientists have raised questions about the mysterious shutdown, calling it “fishy” and “pretty weird.”

“Nothing like this has ever happened before at an observatory,” John Varsik, a data scientist and telescope operator at Big Bear Solar Observatory who worked at Sunspot about two decades ago, said Friday.

“It’s all very fishy,” he said.

Here’s a nice rundown of the top theories on the closure.

Perhaps we’ll learn more when the new presidential alert system is rolled out this week:

The Trump administration will send a message to all US mobile phones on Thursday, as it tests an unused alert system that warns the public about national emergencies.

Phones will make a loud tone and have a special vibration according to the Federal Emergency Management Agency (FEMA), which will send the alert.

The test message will be headlined “Presidential Alert” and will go on to read “THIS IS A TEST of the National Wireless Emergency Alert System. No action is needed.”

US mobile phone users will not be able to opt out of the test.

Are we quite sure that’s what the message will say? Because I’m predicting a very special message of a different sort… and the famous five-tone sequence from Close Encounters of the Third Kind would make for a perfect alert sound.

Mysterious observatory closure

Deep Impact observatory

A terrible discovery?

If you were to write a movie screenplay in which some cosmic disaster befalls mankind, you could do worse than lifting the opening scene from news reports of what happened at a New Mexico observatory last week:

A space observatory at the centre of swirling alien conspiracy theories has asked for “patience” as it continues to be locked down.

The Sunspot Solar Observatory in Sunspot, New Mexico caught the attention of the world when it was shut down by FBI agents who reportedly swooped on the facility after arriving in elite Blackhawk helicopters.

It led immediately to suggestions the advanced technology inside of the facility spotted something it shouldn’t – such as proof of extraterrestrials, UFOs or even some baseless speculation that the observatory had spotted that the sun has started dying. The fact the observatory is only about 120 miles from the site of the Roswell UFO incident has only fuelled speculation.

The FBI and the administrators of the facility have said only that the shutdown happened because of a “security issue”.

In the days since, the sheriff’s department has said it has no idea what is going on. And the lockdown continues with no new information.

Could the observatory have detected something that has the authorities spooked? Like a catastrophic solar storm? (The director denies this.)

Another theory:

The Sunspot observatory on Sacramento Peak overlooks Holloman Air Force Base and an observer could potentially see out to the U.S. Army’s White Sands Missile Test range. That has raised questions about possible espionage. “New Mexico is a center of national-security-related science, and for that reason it has also been a prominent venue for foreign espionage,” says Steven Aftergood, director of the Federation of American Scientists’ Project on Government Secrecy. “Spies go where the secrets are, and there are plenty of secrets in New Mexico.”

But, Aftergood says, a solar observatory might not be the best place to conduct such activity. “I imagine most or all of its sensors are directed up.” He wonders if someone at the Sunspot observatory somehow inadvertently spotted a classified satellite or transmission, triggering the shutdown.

It wasn’t aliens, I tell ya:

A spokeswoman for the nonprofit group that runs the facility said the organization was addressing a “security issue,” but would offer no additional information, other than, “I can tell you it definitely wasn’t aliens.”