Hello, and welcome to Codebook. This week, we’re thinking about digital authoritarianism and how its China-led rise may help define the next century.
Today's newsletter is 1,498 words, a 5½-minute read.
Hello, and welcome to Codebook. This week, we’re thinking about digital authoritarianism and how its China-led rise may help define the next century.
Today's newsletter is 1,498 words, a 5½-minute read.
Illustration: Aïda Amer/Axios
The blockbuster New York Times report on President Trump’s taxes reveals that the president is $421 million in debt, with more than $300 million coming due during Trump’s potential second term — and the identities of the president’s creditors remain unknown.
Why it matters: If some, or all, of this debt is held by foreign actors, it raises serious national security implications.
The big picture: Standard counterintelligence practices counsel against granting access to sensitive information to individuals with a history of financial instability, because these can provide acute leverage to predatory foreign governments. Senior intelligence officials are even required to disclose all stock transactions in a monthly report.
Between the lines: An average American with Trump's financial profile — massive debts and a history of bankruptcies — would likely not get a security clearance, say former intelligence officials.
One key risk in President Trump's case is that "hostile intelligence services can quite easily penetrate foreign banks," says Polymeropoulos.
Some former U.S. intelligence officials worry about these vulnerabilities even after Trump leaves office. Ex-presidents can traditionally continue to receive intelligence briefings, including bespoke classified briefings before traveling to specific countries.
Flashback: The question of whether Trump's businesses have relied on foreign financing — and particularly Russian money — has simmered for years.
The Mueller probe declined to look deeply into the international money trail, according to senior investigator Andrew Weissmann — a key oversight, he believes.
Be smart: For Christopher Burgess, a 30-year CIA veteran who writes often on counterintelligence issues, the revelations about Trump’s indebtedness raise more questions than they answer.
The bottom line: If any portion of the vast sum Trump reportedly owes is derived from overseas financing, the issue of his debt becomes a matter of national security — and unprecedented in the history of the presidency.
Even before the recent Times report, President Trump’s financial entanglements raised the specter of foreign influence.
The big picture: Although Trump has said he turned over day-to-day management of the Trump Organization to his two sons, he hasn't divested from any of his businesses. Revelations from the Times report add to concerns that this state of affairs is shaping elements of Trump's foreign policy.
Catch up quick: National security questions have been raised about:
What's new: The Times report deepens and substantiates this picture, showing that in the president’s first two years in office, "his revenue from abroad totaled $73 million," including "$3 million from the Philippines, $2.3 million from India and $1 million from Turkey" in revenue from licensing deals.
Trump's business interests in the Philippines, Turkey and India also cloud the relationship between the U.S. and these countries, says Polymeropoulos.
What's next: The post-presidency briefings that will be available to Trump will, among other types of key data, contain highly sensitive economic intelligence, says Wise. "It will give him extraordinary advantages over other competitors."
Director of National Intelligence John Ratcliffe. Photo: Tom Williams/CQ-Roll Call via Getty Images
In a highly unusual disclosure Tuesday, Director of National Intelligence John Ratcliffe declassified unverified potential Russian disinformation relating to the 2016 Russian election interference campaign.
Why it matters: The disclosure lends an air of legitimacy to Russia’s campaign to smear Hillary Clinton in 2016 and comes as the Trump administration and campaign seek to downplay ongoing Russian efforts to aid in the president’s re-election.
Driving the news: The letter, addressed to Senate Judiciary Chairman Lindsey Graham and purportedly a response to Graham’s request for information relating to the FBI’s “Crossfire Hurricane” investigation, detailed previously unreleased — and entirely unverified — Russian intelligence obtained by U.S. spy agencies.
Yes, but: Per Politico, this Russian intelligence report was deemed "as having no factual basis" by bipartisan Senate investigators during their long-running probe into Russian interference into the 2016 election.
Our thought bubble: It’s hard to overstate how bizarre Ratcliffe’s letter is. What is the public value of releasing unverified Russian intelligence that the intelligence community believes "may reflect exaggeration or fabrication"?
Some 70% of cyberattacks by cyber criminals are now phishing-related, according to a new report from Microsoft, which also found that attacks on critical infrastructure represent just a small slice of state-backed hacking efforts.
Why it matters: In the past, the report notes, "cybercriminals focused on malware attacks" to compromise their targets. The shift reflects cyber criminals’ skill at quickly adapting, in this case by pivoting to tried-and-true human engineering to trick people into handing over credentials.
Of note: In the last year, Microsoft analysts observed hackers affiliated with "16 different nation-state actors either targeting customers involved in the global COVID-19 response efforts or using the crisis in themed lures to expand their credential theft and malware delivery tactics," says the report.
Meanwhile: Though much attention has focused on breaches in critical infrastructure, the vast majority of cyber espionage observed by Microsoft is unrelated to it, says the report.