This week, the House of Representatives will consider the “Cyber Intelligence Sharing and Protection Act,” a piece of legislation that would allow America’s intelligence agencies to share and protect the voluminous data they collect about America’s citizens with the keepers of America’s financial infrastructure, among others. An identical bill passed the House last year but died in the Senate, despite a powerful push from a curious coalition of spies, lawyers, financiers and politicians.
As an American citizen about to be shared and protected, when you see that kind of lineup behind a power play, you may fear trouble. For many months now, the bill’s campaign has been building. It began last summer with a briefing for about 50 Washington think tankers convened by former Senator Jon Kyl (R-AZ).
That day, July 9, 2012, was a scorcher, with afternoon temperatures over 100 degrees when the audience convened in a third floor briefing room at the Senate’s Russell Office Building on Capitol Hill. Kyl had invited the American Center for Democracy (ACD) and the Economic Warfare Institute (EWI) to hold a “Super-Panel” and an open discussion on the topic of “Economic Warfare Subversions: Anticipating the Threat.”
The make up of the panel was a little peculiar; it featured a number of heavy hitters from the intelligence community, including General Michael Hayden (former director of both the CIA and the National Security Agency), James Woolsey (former CIA director), and Michael Mukasey (former Attorney General for George W. Bush). But there were others. First among them was the facilitator and director of the Economic Warfare Institute itself, Dr. Rachel Ehrenfeld, who aggressively used her academic title at every opportunity, an unusual practice in this company. Among the remaining panelists, one suggested that jihadists were setting wildfires in Colorado that summer. Another, a former Alternate Director for the U.S at the International Monetary Fund (IMF), also produced a memorable presentation by envisioning complex terror scenarios not even Hollywood could produce.
In total, the panel included Dr. Ehrenfeld and eight white men. To kick off the festivities, she approached the podium. Dr. Ehrenfeld opened her remarks with the announcement that the United States was target-rich for economic jihad, apparently a new concept for only a few of us in the audience. We the uninitiated exchanged nervous glances as Dr. Rachel went on to explain the “Cutting Edge Threats” that keep her up at night. She pointed out that both Sept. 11, 2001 and Sept. 15, 2008 were potentially devastating to the United States. One attack was the work of al-Qaeda, a foreign enemy, and the other was self-inflicted by the management of our own financial institutions. However, Dr. Ehrenfeld said, we could not rule out the possibility that economic terrorists were: a) responsible for, or b) learning from the economic collapse that precipitated the Great Recession. She also referenced the “flash crash” of May 6, 2010 when the Dow lost over 1000 points in a few minutes, only to regain 600 of them minutes later:
Still, two years later, the joint report by the SEC and the Commodity Futures Trading Committee (CFTC) did not rule out “terrorism” as a possible cause for the May 2010 “flash crash,” and the entire financial industry still has no uniform explanation of why or how this event occurred.
Quite simply, Dr. Ehrenfeld was terrifying.
EWI [Economic Warfare Institute] is of the strong opinion that threats to the U.S. economy are the next great field of battle. Indeed, we are already at economic war with such state actors as China and Iran and such non-state actors as al-Qaeda and its affiliates. The future battlefield is vast: it not only includes the realms of cyber and space but also of banking and finance, market and currency manipulation, energy, and drug trafficking. The list could go on and on.
So, EWI believes that the US faces mass terror-induced economic calamity. The fact that this has not yet occurred, she cautioned us, does not mean it isn’t going to.
Shortly thereafter, General Michael Hayden, now a principal at the Chertoff Group, a lucrative security consulting firm run by former Secretary of Homeland Security Michael Chertoff took the floor. General Hayden stood to speak about “The Most Dangerous Tools in the Most Dangerous Hands. How much should we fear hacktivists achieving state-like capabilities?” The answer to this rhetorical question was “a lot.” Speaking as the former director of the NSA, he told us, “You want us to go to the cyber domain to defend you. But in that domain, every advantage goes to the attacker because the environment is both insecure and indispensible.” In other words, we can’t defend you without the proper weapons.
But what would those be?
By this time, some of us were alarmed. Apparently, we are completely unprotected from flash crashing at the hands of terrorist hacktivists waging economic jihad. And the next speaker was no relief. Daniel Heath, the former US Alternate Director at the International Monetary Fund (IMF) and currently a Managing Director at Maxwell Stamp, broke the ice by suggesting that we imagine the following scenario:
A foreign country holding about a trillion dollars in US debt demands an arrangement to swap it for the agricultural production of California. Capital begins to flee the US. It’s Christmas, and a heavy snow storm hits the northeast, knocking out the power grid. An act of sabotage hits the Washington, D.C. metro, and a couple of assassinations occur, both high-value targets and random ones. Finally, a biochem incident or two occurs, like anthrax or something in the water supply.
Heath just kept on coming. Shadowy parties might manipulate the price of oil and a real economic crisis would occur – like the one of Sept. 15, 2008. He suggested that episode was actually a jihadist plot. Probably. Well, possibly.
What if terrorists aim to engineer a renewed financial meltdown? Is it possible? How would the financial system handle a massive attack on New York City? Is enough being done to buttress financial resilience—to limit the contagion of cascading failures throughout the economy? In what ways could different kinds of terrorist attacks succeed in destabilizing our financial sector and impair the real economy?
And just when we thought it couldn’t get worse, David Aufhauser, former General Counsel and Chief Legal Officer of the Department of the Treasury, took the floor. After his presentation – “Transnational Crime – Unholy Allies to Disorder, Terror and Proliferation” – there wasn’t a dry seat in the house (to quote Alfred Hitchcock). This guy speculated about an alliance between Iran, the Revolutionary Armed Forces of Colombia and Hugo Chavez. Among them, they’ll create nuclear weapons for Venezuela. Terror, psycho crime and jihad will come together for the politically purposeful annihilation of our banks. We must identify nodes in the corruption network and break the circuitry, Aufhauser claimed. If not, we’ll have WMD at our ATMs.
After a few more interventions, Mukasey wrapped it all up as the final speaker. He was talking about “legal perspectives” on economic terror. The Law needs to stay out of the way, he said. “The rules won’t work and the law is inadequate. Criminal law, he said, punishes after the act. We need to take action before the bad guys act. And the only way we can do that is to know what the bad guys are up to by “monitoring” them. Unfortunately, since we don’t know exactly who the bad guys are, we’re going to have to monitor everyone, it seems. And we’re going to ask our “Too Big to Fail” banks to help. So, the NSA, the CIA, Bank of America and Citigroup will work together to protect you and your data.
Why isn’t this a comforting prospect? Perhaps because we are still recovering from the loss of our homes, jobs and pensions that occurred as a consequence of the banks’ last exercise in risk management.
The bullet point from Mukasey was this:
In dealing with new economic threats and circumstances, the law has a strong tendency to get in the way. This is not to disparage the law but, rather, to recognize that new circumstances beg some jettisoning of old principles and the creation of new ones.
Yes, the law does have a tendency to get in the way. Which brings us back to the “Cyber Intelligence Sharing and Protection Act.” This smart new law will clear those cumbersome old ones out of the road. It will jettison old principles and create some new ones.
And this prospect is the truly terrifying one. At GAP, where we represent whistleblowers from the NSA,the CIA and the major US banks, we’ve learned that none of these institutions can be allowed to operate with the secrecy, privileged information and latitude they already have. Using their current powers, intelligence agencies are conducting wholesale, illegal surveillance of American citizens while wasting billions in taxpayers’ money on unconstitutional boondoggle projects. For their part, private banks have been leveraging loans to a point where they’re secretly insolvent.
Whistleblowers have shown us, with convincing clarity, that all of these institutions have abused the trust and authority they already have. They’re warning us that we may not want to jettison our constitutional rights in exchange for protection from economic jihad – whatever that is.
Bea Edwards is the Executive Director for the Government Accountability Project, the nation’s leading whistleblower protection and advocacy organization.