Jan 20, 2021

Axios Codebook

Hello, and welcome to this week’s Codebook — the first from the Biden era, where cybersecurity issues will continue to be a key challenge for the new administration.

Today's newsletter is 1,368 words, a 5-minute read.

1 big thing: How the far right made itself a Russian intel target

Illustration: Aïda Amer/Axios

The bizarre story of Capitol rioter Riley June Williams is a full-circle moment for Russia as it looks for new ways to shore up its own influence by fueling the democracy-destabilizing ascendancy of a globally networked radical right.

The big picture: Five years ago, Russia used a network of bots and strategic hack-and-leak operations to embolden an unwitting U.S. far right. Now, at least one American extremist stands accused of willingly offering would-be material support to Moscow.

What's happening: Williams, according to court documents, helped lead the rioters’ charge upstairs toward House Speaker Nancy Pelosi’s office, where Williams herself stole a laptop.

  • While a Pelosi aide said the computer was “only used for presentations,” any electronic device belonging to one of the most powerful people in the U.S. government is inherently sensitive, even if there is no classified information contained on it.

The intrigue: At least at a superficial level, Williams understood this too. According to a former romantic partner of Williams’ cited in court documents, the 22-year-old “intended to send the computer device to a friend in Russia, who then planned to sell the device to SVR, Russia’s foreign intelligence service.”

Reality check: This was a cartoonish plot with a very low chance of success, even assuming the SVR would be interested in the laptop — or would consider Williams’ offer credible.

  • But what’s interesting in the coverage of Williams’ alleged toying with profit-driven spying is what went unsaid: that someone on America’s extreme right would even consider betraying her country for Moscow.

Background: Under Vladimir Putin, Russia has turned toward a brittle ultranationalism that often frames Moscow as the last defender of “traditional” values against an effete and divided Europe.

  • Russia has built connections with far-right political movements across Europe, including in Italy and Austria; a Russian bank even lent the pro-Kremlin French extremist Marine Le Pen over $12 million dollars to shore up the finances of her political party.

Far predating the Trump era, American white nationalists began to view Russia as a natural ally, with prominent extremist Richard Spencer even calling Russia “the sole white power in the world.”

  • Far-right American activists have traveled to Russia to meet with radical politicians. And Rinaldo Nazzaro, a former Pentagon contractor who was the head of a violent neo-Nazi organization called “The Base,” now lives in Russia. He's now calling for “re-establishing secretive paramilitary training across the U.S,” in an effort to cultivate potential terror cells.
  • Even Nazzaro’s own allies in the U.S. were suspicious about who was supporting him and “joked he was part of the FSB ... suspecting he had orders to meddle with the American political landscape through the terror group,” writes Vice.

Russian propagandists including those from Moscow’s intelligence services — have long understood the country’s appeal to European and American right-wing radicals and how to target these communities in its online disinformation campaigns, including, recently, on Gab and Parler.

  • Russian government-linked actors like the Internet Research Agency have also invested in online disinformation targeting left-wing news consumers.

The catch: It’s important not to overstate the degree to which malign foreign interests may be influencing American domestic politics.

  • The overwhelming majority of American right-wing radicals are entirely homegrown, and there is a long and shameful history of domestically generated white-supremacist violence that has stalked this country from its founding.

Yes, but: U.S. adversaries would be foolish not to try to take advantage of these domestic fractures. Russia has already internalized this lesson.

  • In Europe, current and former Russian military intelligence officials have been involved in training extremist groups in Hungary and Slovakia.

The bottom line: U.S. law enforcement officials mapping the networks of violent radicals that helped storm the Capitol — and the infrastructure supporting these individuals — may soon be faced with the prospect that what begins as a criminal probe may nevertheless leak into the hazier world of counterintelligence.

2. Feds investigating bitcoin transfers to extreme right groups

U.S. law enforcement officials are investigating $500,000 in bitcoin transfers from what appears to be a mysterious French donor to major figures and organizations in the U.S. extreme right, including “VDARE, the Daily Stormer and Nick Fuentes,” according to Yahoo News.

Between the lines: The timing of the transfers has raised suspicions that they may somehow be related to funding for groups participating in the Jan. 6 Capitol riot.

What they’re saying: "The suspicious Dec. 8 transaction, along with a number of other pieces of intelligence, has prompted law enforcement and intelligence agencies in recent days to actively investigate the sources of funding for the individuals who participated in the Capitol insurrection, as well as their networks," writes Yahoo.

  • "I’d be stunned if both nation-state adversaries and terrorist organizations weren’t figuring out how to funnel money" to far-right U.S. extremists, a former FBI official told Yahoo.
  • "Many of them use fundraising sites (often in Bitcoin) that are virtually unmonitored and unmonitorable. If they weren’t doing it, they’d be incompetent."

Context: Many extremist groups started using cryptocurrency after the 2017 "Unite the Right" rally in Charlottesville, Virginia, that brought together far-right activists from across the country, writes Yahoo.

  • The event led to violent clashes and the murder of one counterprotester by a neo-Nazi.
3. Biden's national security picks talk cyber on the Hill

Avril Haines, President Biden's pick for director of national intelligence. Photo: Melina Mara/Pool via Getty Images

President Joe Biden’s picks for key national security positions expressed alarm about the SolarWinds attack and committed to a firm cyber posture in a series of confirmation hearings Tuesday.

Why it matters: Cybersecurity is an ever-larger component of national security. Biden officials will have their hands full running a SolarWinds post-mortem, preventing other major cyber intrusions and weighing whether to continue the aggressive offensive operations the U.S. mounted in cyberspace in the Trump era.

Alejandro Mayorkas, Biden’s nominee for DHS secretary, underlined his commitment to strengthening CISA, particularly in light of SolarWinds. Mayorkas pledged to focus on whether CISA’s detection programs were sufficient to prevent another SolarWinds-type compromise.

  • Mayorkas, however, noted that he had not yet received a classified briefing on SolarWinds, and that his understanding of the Russian cyber operation was therefore incomplete.

Avril Haines, Biden’s nominee for director of national intelligence, also spoke about SolarWinds at her confirmation hearing, noting that it was “pretty alarming” that the government was first informed of the breach by FireEye, a private cybersecurity vendor instead of detecting it itself.

Lloyd Austin, Biden’s nominee for defense secretary, also broached both offensive and defensive operations at his hearing and of the need to ”elevate cybersecurity as an imperative across the government in order to defend the American people and U.S. critical infrastructure.”

  • Austin also stated his support for the Pentagon’s more aggressive cyber posture of “defending forward” under NSA and Cyber Command chief Paul Nakasone.
4. Rob Joyce named NSA cybersecurity head

Rob Joyce, a respected senior NSA official, has been named the new director of the NSA’s Cybersecurity Directorate, according to CyberScoop News, taking over for Anne Neuberger, who is ascending to become President Biden’s deputy national security adviser on cyber issues.

Why it matters: Biden is signaling interest in focusing on cybersecurity policy, placing into key roles seasoned cyber veterans who are widely held in high esteem irrespective of political persuasion.

Catch up quick: Joyce has spent the last few years abroad as NSA’s liaison to GCHQ, the U.K.’s signals intelligence service. The NSA-GCHQ liaison job is among the most prestigious at NSA, as it helps coordinate what many U.S. intelligence officials consider the world’s most important service-to-service relationship.

  • Joyce previously held other positions at the NSA, including heading up the Tailored Access Operations unit — the agency’s elite offensive hacking wing. He was detailed out to the Trump White House’s National Security Council for a brief stint in 2018.

Yes, but: There’s still one big hole in the new administration’s cyber personnel: Biden has yet to announce who will fill the inaugural National Cyber Director (NCD) position.

  • As mandated by Congress in the last National Defense Authorization Act, the Senate-confirmed position is supposed to be “the principal advisor to the President on cybersecurity strategy and policy.”
  • The new NCD may be supported by an office of up to 75, according to the legislation — making it a potentially important power center of its own.

What’s next: Joyce and other top cyber officials will have to work out how to work with the new NCD.

5. Odds and ends
  • Russian opposition leader Alexei Navalny has encouraged supporters to “take to the streets” following his arrest. (NPR)
  • Michael Sulmeyer, an adviser to NSA director Paul Nakasone, has been named to a key NSC cyber post in the Biden administration. (CyberScoop News)
  • Over the objections of NSA Director Nakasone, acting Defense Secretary Chris Miller ordered the last-minute appointment of Trump ally Michael Ellis to a senior position at the agency. (Washington Post)
  • Joe Biden has nominated David Cohen to be CIA’s new deputy director. Cohen previously served in that position during the Obama administration. (CNN)
  • A look back at President Trump’s more bizarre cyber-related statements. (Wired)
  • Sidney Powell and Michael Flynn, Trump confidants who advanced baseless election conspiracy theories, were considered for top-secret clearances before presidential advisers squashed the prospect. (Axios)