National Security

Ash to stay; Panetta’s perfect storm; The clock ticks for Allen; Did the Pentagon turn on the cyber-burglar alarm? Wheels up for Dempsey and a little more.

Ash to stay at the Pentagon. The Pentagon's No. 2, Ash Carter, will stay on at the Pentagon, Situation Report learns this morning. A senior defense official tells us that Carter, who had been on a short list to lead the Pentagon - or would go to lead Energy - was asked by President Barack Obama to stay on. "He's doing an outstanding job for Secretary Panetta and has been a friend of Senator Hagel for years," the senior defense official tells us. Naturally, Carter has been integral to the transition that has begun this week in the building as well as the confirmation hearing prep that is also taking place. Folks inside the building tell us that Carter and his chief of staff, Wendy Anderson, who has also known Hagel for some time, are both seen as critical elements in the handover from Panetta to Hagel. Hagel's pending confirmation is certainly controversial but likely.

The Pentagon faces rough fiscal sledding over the next few months. Defense Secretary Leon Panetta told reporters yesterday that he was prepared to take dire steps to stave off a "perfect storm of budgetary uncertainty," announcing that the Pentagon would have to curtail facility maintenance for "non-mission critical activities," freeze civilian hiring and delay contracts. Panetta said there are plans to implement unpaid furloughs for civilian personnel if sequestration occurs. His anxiousness stems from the combination of the threat from sequestration, that could still occur March 1, to the debt ceiling crisis to the possibility that the "continuing resolution" under which the Pentagon is currently funded might extend through the rest of the fiscal year. But the main issue is if there is no budget deal soon, the Pentagon could have to deal with a $52 billion budget shortfall, Panetta said.

"The fact is, looking at all three of those, we have no idea what the hell's going to happen.  All told, this uncertainty, if left unresolved by the Congress, will seriously harm our military readiness," he said yesterday.

The impact of the continuing resolution has been scaring defense officials for several weeks. Last year, Congress failed to pass an appropriations bill, instead implementing a "CR" that keeps funding at 2012 levels. But under the CR, Defense Department funding is essentially frozen, not only at past levels but also in the same accounts -- and that's where the rub is. As an example, funding for the Air Force's long-troubled KC-46 refueling tanker, which was finally put back on track, was to double in 2013. But since funding is frozen at 2012 levels, the program doesn't have the money to expand as the Pentagon had planned. "The problem is that under a CR, the money is in the wrong places, DOD has limited ability to reprogram the money around, and you can't have any new starts," CSBA's Todd Harrison told Situation Report. If Congress keeps funding the Pentagon under the CR, it will put such a program at risk; and even if Congress passes an appropriations bill in the coming months, it will force Pentagon budgeteers and programming personnel to change tracks in a limited amount of time.

The net effect of all this? "Schedule delays in programs. They've been trying to manage at one level, now at a higher level," said Harrison. "It just creates a lot of churn, a lot of delays in contracting actions." It also means regular maintenance scheduled during 2013 may not happen -- since that would be considered a new contract, defense officials explain.

One service official tells Situation Report, "This could have an incredibly big impact. It's largely going to involve operations and maintenance because we're going to try to protect personnel. So this is all about operations and maintenance. That's where this is going to be  felt."

Wethinks: The tanker issue will surely come up at today's Air Force presser with SecAf Donley and CoS Welsh at 11 a.m.

Welcome to Friday's edition of Situation Report, where we try to manage churn daily. Follow me @glubold. Or hit me anytime at And sign up for Situation Report here: or just send me an e-mail and I'll put you on the list. And if you have a report, piece of news, or tidbit you want teased, send it to us early for maximum tease.

Obama and Karzai meet at the White House at 10 a.m. today, lunch at noon with Biden, and speak at a joint presser in the East Room at 1:15.

The clock is ticking for John Allen. The DOD inspector general will have 60 days to close its case on ISAF Commander Gen. John Allen after the Feb. 10 change of command ceremony, or Allen's rank will revert automatically to that of a two-star. According to federal code, general and flag officers can't maintain a third or fourth star unless they are assigned to a specific command -- three and four stars are jobs. It's been 8½ weeks since Secretary Panetta opened the investigation after the FBI stumbled on e-mail exchanges between Allen and Jill Kelley that were deemed inappropriate.

Optimists believe Allen will not only be exonerated but also be re-nominated for the job in Europe; but many pessimists think that, even if Allen is cleared, the White House won't re-nominate him, thereby ending his career. Although, if re-nominated, he's not expected to face Senate opposition. Either way, the IG would have to conclude its investigation very soon if Allen were to be re-nominated and then confirmed -- and the average investigation takes six or seven months.

U.S. code citation:

Did the Pentagon remember to turn on the cyber burglar alarm? Killer Apps' John Reed wondered that aloud, when he heard Mark Orndorff, the program XO for mission assurance at the Defense Information Systems Agency, say during an otherwise dry panel discussion: "We have so much capability that is positioning us to stay in front of the threat, but have we thought through and applied ourselves in a way that we should to leverage that in a way to make sure we're getting the most out of it?" Orndorff: "If somebody is just flat smarter than us and they come up with [a threat] that we can't deal with, that's not what keeps me up at night."

Starting tomorrow, the new ODRP in Pakistan is Greg Biscone. The Air Force's Biscone, now a major general, will be given another star tomorrow and assume duties as the Office of Defense Representative, Pakistan. He replaces Lt. Gen. P.K. "Ken" Keen. Also... the Navy announced that Rear Adm. (lower half) Philip Howe will be assigned as commander of Special Operations Command at PACOM (he is now serving as assistant commander of operations at JSOC, SOCOM at Fort Bragg). Rear Adm. (lower) Matthew Kohler will be assigned as director of intel at AFRICOM in Stuttgart. He's now the director for intel operations at the office of the CNO.

Dempsey's wheels are up tomorrow for Brussels. Dempsey will leave tomorrow for Brussels, where he'll attend the meeting of more than 60 NATO chiefs of defense in Brussels. Spokesman Col. Dave Lapan tells the E-Ring's Kevin Baron that the one-stop trip will focus on issues within the alliance, from Kosovo to counter-piracy to NATO-Russia military cooperation and "emerging security challenges facing the alliance." But they'll also talk Afghanistan in the wake of President Hamid Karzai's visit to Washington and his appearance with President Barack Obama today. We're guessing the "Zero Option" will be discussed, as NATO allies are keen on what the U.S. will do in Afghanistan post-2014 and in recent days the notion the U.S. could pull out altogether is one of the offerings on the table. Neither Panetta nor Dempsey would discuss it at yesterday's Pentagon briefing.

Dempsey: "You know, we've said, I think, from the start that no option is entirely off the table. It'll depend on the conditions. ... What's the mission? What's the requirement to protect the force while it's accomplishing that mission?  Over what period of time? And as the secretary said, we have provided options, not to the president yet, but to the national security staff.  And I -- as you know, I would -- I don't speak about options until I've had a chance to speak to the president himself, so I'm not prepared to say any more than that."

Reporter: "But have you considered that one particular option, either of you? Dempsey (testily): "I'm not prepared to say any more than that."

Internal reporters on a plane on Dempsey's trip: Jim Garamone. External reporters on a plane: N/A.

The Visit

WSJ: Zero Dark Afghanistan: Karzai's dysfunction meets Obama's detachment.
Time: Who's the decider on the future of Afghanistan?
National Journal: Obama and Karzai's rocky history.


FP (Kane): An Army of None (why the Pentagon is failing to keep its best and brightest).
Small Wars: The benefits of a paramilitary force in Mexico.
Duffel Blog: Chief to airmen: just say no to autoerotic asphyxiation.
Defense News (Intercepts blog): Sequestration almost happened when the stakes were lower.


Eliot Cohen: Hagel's war service isn't the point.
WSJ: Obama and Hagel bonded over Iraq.
Columbus Dispatch (Thomas): Senators right to ask Hagel tough questions.
NPR: Two political cartoonists' take on Hagel.


National Security

Panetta reassures Israel; Karzai to the Pentagon this morning; Hagel talks talking points on Iran; What Obama should ask him tomorrow; Scowcroft is who he is; Is Brennan good for the anti-drone crowd? And more.

The Pentagon sees it as a good time to re-emphasize the commitment to Israel. Again. Defense Secretary Leon Panetta met Israeli Minister of Defense Ehud Barak yesterday for the 11th time since he took office and "reiterated the strong U.S. commitment to Israel's security and the strong U.S.-Israel defense relationship," according to Pentagon press secretary George Little. The two discussed regional cooperation when it comes to Syria, Iran and Gaza. What Little did not say: whether they addressed the political firestorm that Chuck Hagel's nomination to Defense has created. (Safe money is on "yes.")

Hagel has been countering his critics, saying he strongly supports multilateral sanctions against Iran. Hagel's transition and prep has begun, and he is in the Pentagon preparing for his Senate testimony and for the strong pushback from some quarters. He has told defense officials that Tehran must be prevented from acquiring nuclear weapons, according to the AP's Lita Baldor. Echoing the administration's long-standing talking point on Iran, Hagel told Pentagon folks this week that all options are on the table, including military action.

The U.S. Institute of Peace's Iran Primer project compiled a set of Hagel statements on Iran. They include an interview with al-Monitor on March 9, 2012: "You cannot push the Iranians into a corner where they can't get out.... You've got to find some quiet ways -- and you don't do this in the press or by giving speeches -- to give them a couple of face saving ways out of this thing so they get something out of this, too." Also: "I don't think that we are necessarily locked into one of two options. And that's the way it's presented. We are great in this country and in our politics of responding to false choices; we love false choices."

Chuck Hagel wasn't nom'ed to head Obama's policy on Israel, writes Gordon Adams on FP. The drawdown of the military budget and the contracting of the Defense Department is what Hagel will confront -- not major policy decisions on Israel or Iran. "For me, the questions for Hagel don't have to do with his policy views on Israel, Iran, or, for that matter, gays. They have to do with the things he would really be responsible for: the management of a defense drawdown in a way that keeps the U.S. military sharp, strengthens the point of the spear for what it should be doing, and constrains the overuse of the military for missions that are not their core competence." Hagel will not only have to oversee the shrinking of the military but will have the opportunity to reshape it, constrain the runaway "back office" at DOD, hold contractors to "realistic pricing" on hardware programs, and make "the tough decisions" about compensation and benefits that Adams says "need to happen."

Adams: "So it is time to cut the irrelevant chatter and ask the nominee the really tough questions. How will he manage the real challenges at DOD?"

Welcome to Thursday's edition of Situation Report. Follow me @glubold. Or hit me anytime at And sign up for Situation Report here: or just send me an e-mail and I'll put you on the list. And if you have a report, piece of news, or tidbit you want teased, send it to us early for maximum tease.

Eek: local news sites are a danger to your cyber health. So reports Killer Apps' John Reed, who tells us that thieves are "injecting" local news websites with malware that infects visitor's machines. "Once on the infected computer, the malware transmits the users' online banking information to a server owned by the criminals. You can guess what happens next." Why local news sites? "The attackers find which banks have weak online banking security by scanning a range of IP addresses to see which ones use a specific type of Website login that is known to be vulnerable," Reed hears from Jason Rebholz, a consultant working for cyber security firm Mandiant. "Then they target the local media in the area that the bank is in so they can collect information from its likely customers.

Brent Scowcroft on Hagel: I am who I am. The former national security adviser spoke with The Cable's Josh Rogin about the Hagel brouhaha: "We haven't moved; the Republican party has moved," he told Rogin. "I have been a lifelong Republican and I hold to what are my own beliefs, which happen to be core Republican beliefs, but many in the party have taken a different course." If the party wants to desert him, Scowcroft said, "that's their privilege."

Karzai and Panetta meet at the Pentagon this morning. They'll discuss a host of issues relating to the U.S.-Afghan security relationship before Panetta and Chairman of the Joint Chiefs of Staff Gen. Marty Dempsey meet reporters in the briefing room at 3 p.m.

An announcement on post-2014 troop levels -- and the "slope" of withdrawal -- is expected very soon. Some experts believe the White House will make the dual announcements in the coming days -- possibly during Karzai's visit, or maybe not until the State of the Union address. But soon. The two issues had been seen as separate, but now the White House has linked them and may make an announcement on both simultaneously. Most Afghanistan watchers believe that by the time Gen. Joe Dunford arrives in Kabul to assume command on Feb. 10, there will be much more clarity on the way ahead.

It's not all about the numbers: McChrystal reiterated the need for a "strategic partnership" between the U.S. and Afghanistan. Stan McChrystal told CNN's Anderson Cooper last night that it's not all about numbers when it comes to what the military force might look like after 2014, but the depth of the commitment from the U.S. "Instead of just troop numbers, I really think, what the Afghan people want from America and the West is a strategic partnership that isn't numbers of people but is a relationship that gives them the confidence that we are enough of a partner that if they need our help, not thousands of troops, maybe not even billions of dollars," he said, "but some sort of presence and some sort of a relationship."

Here are the five things Obama should grill Karzai on during their visit this week, according to Michael Kugelman: Why are green-on-blue attacks still happening? Are the ANSF's biggest needs being neglected? What can be done about conflicting Indian and Pakistani policies in Afghanistan? How can Afghanistan and the international community better harness the vast potential of the country's natural resources? And how can the international community ensure the longevity of development projects in Afghanistan?

Why Brennan might not be the worst thing for the anti-drone crowd. The popular thinking is that John Brennan, nominated this week to head the CIA, is too focused on killing and, as FP columnist Micah Zenko has pointed out, "No politically appointed official in U.S. history has played such a prominent role in killing so many people outside of a war zone as John Brennan." But Michael Cohen says on FP that Brennan is also one of the most prominent critics of the drone program. At CIA, Brennan may even argue to put the bulk of drone operations back within the military, where they would be subject to more outside oversight. Brennan said last fall: "I think the rule should be that if we're going to take actions overseas that result in the deaths of people, the United States should take responsibility for that." Cohen: "Putting the program in the military's hands would go a long way toward achieving that goal."

As a customer and a CIA careerist, Brennan could help the agency get back to basics. The call from both inside and outside CIA headquarters is for a move back to basics -- intelligence collection and analysis -- and away from the paramilitary operations the agency has become known for in recent years. Although Brennan is seen as a chief architect of those operations, he has also more quietly challenged the notion of what operations are appropriate and what ones aren't. "Brennan's an insider, he's going to understand the strengths and weaknesses of the building," Nada Bakos, a former CIA analyst told Situation Report. His background at CIA and as a "customer" at the White House gives him a well-rounded view of "both ends of the pointy end of the spear," Bakos said. "I think that will bode well for some in the building."

Zenko memo to Obama: reform the drone program. Micah Zenko spent the last six months researching a report on armed drones in non-battlefield settings for CFR based on more than five dozen interviews with current and former U.S. officials. Zenko: "The Obama administration should bring its drone strike practices in line with its stated policies by: exclusively limiting its targeted killings to the leadership of al Qaeda or those with a direct operational role in past or ongoing terrorist plots; immediately ending the practice of signature strikes, or publically explaining how they plausibly meet the principles of distinction and proportionality; and reviewing the current policy whereby the executive authority for drone strikes is split between the CIA and Joint Special Operations Command, which have different legal authorities, degrees of permissible transparency, and oversight."