In Other News: Russian Hack on U.S. Government, Mexico and Brazil Congratulate Biden & More – December 18, 2020

December 18, 2020

Hackers believed to be from Russia’s foreign intelligence service, or SVR, penetrated a range of U.S. government agencies in what has been described as “a grave risk” to the federal, state, local, and tribal governments as well as critical infrastructure and other private sector entities. The hack was nothing short of stunning in its breadth and audacity. The State, Treasury, Commerce, Agriculture, and Homeland Security Departments, as well as the National Institutes of Health, were all successfully breached. As updates have continued to roll in, it has emerged that even the nuclear weapons agency was breached, though the Department of Energy and National Nuclear Security Administration have said that the malware used in the attack affected their business operations but remained outside of internal national security networks. Much remains unknown about the operation, including definitive identification of the perpetrators, how long ago it began, and the full extent of which entities were compromised. Also unknown is whether hackers were able to access classified information or just data stored on unclassified systems. However, it is a near-unanimous assessment that this was highly sophisticated, creative, and well-resourced, and that the potential fallout will be difficult to predict. This incident is also ratcheting up international calls for a multilateral agreement to establish rules of the road, similar to those that govern more traditional forms of warfare, to hold authoritarian regimes and other bad state actors to account.

Mexican President Andrés Manuel López Obrador and Brazilian President Jair Bolsonaro congratulated President-elect Biden this week. López Obrador and Bolsonaro, who were both seen as close to President Trump over the last four years, had withheld their congratulatory remarks for Biden until this week, presumably allowing for Trump’s legal challenges to make their way through the courts and for the Electoral College to meet on December 16. López Obrador said that he had intentionally waited until after the Electoral College met before sending a letter to Biden, while Bolsonaro sent his congratulations via Twitter. Both López Obrador and Bolsonaro emulated Trump in their own ways, most recently in their response to the Covid-19 pandemic, but it is likely that they will both want a working relationship with the incoming Biden administration too. In his letter to Biden, López Obrador noted that maintaining good relations with the United States is one of his top priorities given that the United States is Mexico’s top trading partner. This is pragmatic. With Latin America’s economy set to contract by approximately 8% this year, López Obrador and Bolsonaro know that the countries of the region will need U.S. support coming out of the pandemic. Also, Biden will need to work with Mexico and Brazil on several top issues of interest to the United States, including energy and climate issues; counternarcotics, migration, and border security; as well as the thorny issue of Venezuela. On all of these foreign policy fronts, Biden will need commitments and cooperation from Mexico and Brazil, the two largest economies in Latin America and leaders in the region in their own right.

An Indian call-center scam defrauded more than 4,500 Americans out of more than $14 million by telling victims that law enforcement authorities were freezing their assets because their bank account details had been found at crime scenes linked to Mexican and Colombian drug cartels. The victims would then transfer funds (in various forms, including bitcoins) to purported government accounts to avoid going to jail. Police in Delhi have arrested 50 people for their involvement in the scam. According to police, the scammers – who were trained to speak with American accents – were employed by an Indian man based in Dubai, UAE, who paid them $400-$500 a month with extra monetary rewards for those who showed particular skill in getting people to quickly accede to demands for funds. Call center and online fraud operations are so common in India that there are police units dedicated to them, and with India now officially in recession and facing a long road ahead to return to growth, these types of scams are likely to proliferate.

The U.S. Commerce Department is blacklisting more than 60 Chinese firms today for enabling human rights abuses, supporting the Chinese military in operations and island-building in what the international community considers illegitimate claims to the South China Sea, purchasing U.S. goods on behalf of the Chinese military, and theft of intellectual property and trade secrets. Blacklisted firms include Semiconductor Manufacturing International Corp, which is critical to Beijing’s ambition to reduce its reliance on U.S. semiconductor manufacturers, thereby being less vulnerable to punitive trade actions. This is only the latest salvo in an escalating series of actions by the U.S. that appear designed not only to punish China for a variety of infractions – state and corporate espionage, territorial adventurism, legitimate human rights abuses, particularly against its Muslim Uighur minority – but also to lock the incoming Biden administration into policies that take aggressive aim at limiting the influence of Chinese companies in the U.S. and globally. However, Beijing will likely continue to keep its responses targeted and restrained in hopes of finding a new equilibrium with the incoming Biden administration.