National Security

FP's Situation Report: Bob Work, on deck

Vaughn to McCaskill: catch the peckerwoods!; Move over Air Force, the Navy has a new cheating scandal; Why there are more Kalashnikovs moving in Afg; Clapper on Assad; and a bit more.

By Gordon Lubold

Bob Work, on deck. At long last, it looks to be true - Bob Work, the retired Marine colonel who done good, is poised to be nominated to be the next Deputy Secretary of Defense in the next day or so. Work, chief executive officer at the Center for a New American Security, appears to be in pre-nom mode, turning down invitations for speaking engagements and other events, Situation Report is told. Work, who last served as the Navy's No. 2, has long been thought to be the nominee. But his actual nomination seemed to be delayed for any a number of reasons. Some believed it was to give Acting Deputy Secretary of Defense Christine Fox a little space to do some heavy lifting on the budget. Although the defense budget probably won't be released until March now, much of that work may be done and maybe now is the right time for a Work nom. So, it's on. Check back here later today for our bit on Work. 

Sharing the hot seat: Move over Air Force, the Navy has a cheating scandal, too. It turns out the Air Force isn't the only service with a cheating scandal in the ranks of its nuclear force. With the Air Force grappling with growing evidence of systemic wrongdoing among its nuclear personnel, the Navy announced Tuesday that, it, too has uncovered a similar problem at a nuclear propulsion base in Charleston, S.C. Senior Navy officials said they'd already fingered 30 sailors but acknowledged that the total numbers could grow. And if the Air Force scandal is any indication, they will: Air Force commanders first said 34 officers were implicated, only to later raise that estimate to 92. They now say the true figure is likely to be even higher.

Tuesday's announcement means the hot seat the Air Force has been occupying for the last several weeks must now be shared with the Navy, the only other service that operates nuclear systems. Navy officials said that that a sailor-instructor from the nuclear power training unit in Charleston had come forward after colleagues asked if he or she wanted to participate in a cheating ring. The alleged ring includes senior enlisted personnel who allegedly shared information about how to pass proficiency tests designed to measure their knowledge of naval nuclear reactors.

As Navy officials put it, their system worked: the senior sailor rebuffed the personnel running the cheating ring and immediately alerted the program's chain of command. Navy officials, who had already begun a review of their own nuclear force after the Air Force scandal came to light, said they were conducting a formal investigation into the alleged incident.

"To say that I'm disappointed would be an understatement whenever I hear about integrity issues," said Chief of Naval Operations Adm. Jonathan Greenert, who was accompanied at a last-minute press briefing at the Pentagon by the head of the Navy's Nuclear Propulsion Program, Adm. John Richardson.

Added Richardson to reporters: "I take full responsibility for this incident - it is mine to investigate and to correct."

Noting: we think Richardson's look-alike is RFK but no one agrees with us. Whatevs! Read the rest of our story here.

Welcome to Wednesday's edition of Situation Report, where we'll never sell cigarettes. If you'd like to sign up to receive Situation Report, send us a note at and we'll just stick you on. And if you like what you see, tell a friend.  And if you have a report you want teased, a piece of news, or a good tidbit, send it to us early for maximum tease, because if you see something, we hope you'll say something -- to Situation Report. And one more thing: please follow us @glubold.

The Army recruiting scandal just got bigger.  FP's own Dan Lamothe: "One of the largest fraud investigations in the Army's history has grown grew even larger, with lawmakers releasing new evidence that a troubled Army National Guard recruiting program allowed hundreds of troops, including a two-star general and at least 18 colonels, to effectively steal as much as $66 million.

Senator Claire McCaskill (D-Mo.), who has been leading the Congressional investigation into the National Guard program, repeatedly asked senior officials who had overseen the Army's now-defunct Recruiting Assistance Program why the initiative hadn't been designed with better anti-fraud measures. The program offered cash incentives to all troops who helped nudge other would-be soldiers to join the military. The Army's actual recruiters weren't eligible for the money, but an Army audit completed in 2012 concluded that disgruntled recruiters and other troops may have unlawfully cooked the books to collect tens, and in some cases, hundreds of thousands of dollars that they didn't deserve.

McCaskill, clearly exasperated, during yesterday's hearing: "This is what kills me about this, you guys: This is, like, basic... You just assumed whoever was typing [recruits' information] in was telling the truth! And then nobody checked to see if they're lying! You're giving out millions of dollars, no questions asked!"

Lamothe: "Retired Lt. Gen. Clyde Vaughn, who commanded the Army National Guard from June 2005 to June 2009, was among the officials who defended the incentive program on Tuesday, saying its success in finding those additional recruits should not be overlooked. He pushed back against McCaskill's allegation that he and his staff didn't do enough to oversee the money, saying he regularly urged the general officers in charge of the National Guard in each state and territory to watch out for fraud. Those other officers were potentially at fault, he implied, for failing to keep a closer eye on the soldiers under their individual commands.

Vaughn, using a surprisingly colorful military epithet: "I told them, ‘We have to catch the first peckerwoods who get out here and mess this thing up. And, we have to prosecute them quickly... and I did that 18 months in a row." Read the rest of Lamothe's bit here.

Pakistan is a no-show at Taliban peace talks. The NYT's Salman Masood reporting from Islamabad: "Pakistani government representatives failed to appear on Tuesday for the scheduled start of peace talks with the Taliban, forcing the postponement of the talks and drawing a sharp rebuke from the militants' representatives. The episode added to the swirl of contradictory statements, confusion and delays that have surrounded the peace initiative since last week, when Prime Minister Nawaz Sharif made the surprise announcement that a four-member delegation would hold talks with the Pakistani Taliban. In turn, the Taliban named five public figures, including the opposition politician Imran Khan, to represent them in the talks. But Mr. Khan and another of the five refused to do so. The three remaining designees, led by Maulana Sami ul-Haq, a prominent religious scholar with close ties to Taliban leaders, said on Monday that they would meet the next day with the government representatives in Islamabad, the capital. But on Tuesday the government side balked." More here.

Page One: U.S. to curb drone strikes in Pakistan. The WaPo's Karen DeYoung and Greg Miller: "The Obama administration has sharply curtailed drone strikes in Pakistan after a request from the government there for restraint as it pursues peace talks with the Pakistani Taliban, according to U.S. officials. 'That's what they asked for, and we didn't tell them no,' one U.S. official said. The administration indicated that it will still carry out strikes against senior al-Qaeda targets, if they become available, and move to thwart any direct, imminent threat to U.S. persons... The administration is 'continuing to aggressively identify and disrupt terrorist threats in the Afghan war theater and outside areas of active hostilities in line with our established CT [counterterrorism] objectives and legal and policy standards. .?.?. Reports that we have agreed to a different approach in support of Pakistani peace talks are wrong,' said the senior official, one of several interviewed for this article who spoke on the condition of anonymity about the sensitive matter." Read the rest here.

Tora Bora isn't the one one: Read the top 10 mistakes the U.S. made in Afghanistan, by  FP's Stephen Walt here.

New today: Were you curious if the delay in signing the bilateral security agreement with Afghanistan was having any other effects? Right. So was the team of experts at the U.S. Institute of Peace, which conducted research on the economic impacts of the delay based on interviews with 29 people around the country. The research shows that the delay is causing increased hedging behavior, including increasing corruption and also causing Afghans to hoard their savings; it's also contributing to increased opium production, increased demand for small arms and the USIP team also found that real estate prices are falling and long-term investments are dropping, too. From one of those interviewed for the study, explaining the second-order effects of the delay: "Families in the east always used to make sure at least one of their boys went into the national army, if for no other reason than to draw a steady paycheck. Right now they are rethinking this livelihood strategy, and fewer families are sending their sons to the government."

At the same time, USIP found that some families are choosing to arm themselves, in part due to the failure of the government to pay police in some provinces and also, likely, due to the uncertainty of having no security agreement in place that would ensure the U.S. and coalition forces stay in some form. USIP found that a small arms dealer in Jalalabad said he is moving more Kalashnikovs and handguns than, according to the dealer, "at any time since the fall of the Taliban." You can read USIP's new report today by clicking here.

Afghanistan is likely one of Obama's most important decisions this year. The NYT's Peter Baker and Matthew Rosenberg: "President Obama brought his top Afghanistan commanders to the Oval Office on Tuesday to discuss the way forward in a war he is determined to end by the end of the year, even as he finds himself stymied by an unreliable partner and an uncertain future. Increasingly vexed by Hamid Karzai, Afghanistan's president, Mr. Obama is trying to figure out what form a residual force might take after the bulk of American troops leave by December and what would happen if no Americans stayed behind at all. The debate has rekindled some of the tensions within the administration that divided it in its early days.

"With Mr. Karzai reinforcing Washington's view of him as an erratic ally, skeptics of the administration's Afghan strategy are increasingly open to withdrawing entirely at the end of 2014. Some in Mr. Obama's civilian circle suspect that his generals may be trying to manipulate him with an all-or-nothing approach to a residual force. Military officials say they are trying to leave options open and are themselves more ambivalent than ever about staying.

"The internal dynamics involved in the review, described by a variety of current and former White House, administration and military officials, are complicating what could be one of the most important decisions Mr. Obama makes this year. The president wants to avoid a repeat of what has happened in Iraq, which is again under siege, and yet he considers extricating the United States from Afghanistan a signature achievement for his legacy.

"...While Washington has long been frustrated by Mr. Karzai, what little patience remains has ebbed in recent weeks as he blamed American forces for terrorist attacks on civilians, threatened to release prisoners deemed dangerous by the international coalition and likened the United States to a 'colonial power.'"

Who came to Obama's meeting yesterday? "...As part of his review, Mr. Obama met Tuesday with Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, and the general's vice chairman, Adm. James A. Winnefeld Jr.; Gen. Joseph F. Dunford Jr., commander of American and allied forces in Afghanistan; Gen. Lloyd J. Austin III, the head of the United States Central Command; and Adm. William H. McRaven, head of the United States Special Operations Command." Read the rest here.

Channeling Jim Lehrer: Afghanistan has its first televised debate. The WSJ's Nathan Hodge: "...The debate was aired as Afghan newsrooms prepare for blanket coverage of the campaign. Local media outlets are launching dedicated campaign websites, editors are dispatching reporters to the provinces, and candidates are prepping for a series of unprecedented debates."

Presidential candidate and leading contender Abdullah Abdullah to Hodge: "I think it went very well. It was a civilized debate...We reached millions through television and radio channels. The people of Afghanistan can make a conscious decision." More here.

Intel chief Jim Clapper: This is why Assad is stronger. Reuters' Warren Strobel: "Last year's agreement to eliminate Syria's chemical weapons left President Bashar al-Assad in a strengthened position, and there appears little chance rebels will soon force him from power, the U.S. intelligence chief told Congress on Tuesday. 'The prospects are right now that (Assad) is actually in a strengthened position than when we discussed this last year, by virtue of his agreement to remove the chemical weapons, as slow as that process has been,' said James Clapper, director of national intelligence.

"Clapper... did not specify why the September agreement on chemical arms had boosted Assad's position... Clapper said Assad's government is likely to remain in power, absent a diplomatic agreement for a new transitional government, which most analysts consider a long shot... 'I foresee kind of more of the same, sort of a perpetual state of a stalemate where ... neither the regime nor the opposition can prevail,'" Clapper told the House Intelligence Committee." More here.

The budget deal means the Pentagon needs real budget reforms: Vets Duncan Hunter and Pete Hegseth writing an op-ed in USA Today today: "Imagine a combat infantryman with 25 years of military service, through times of war and peace. Now retired, this veteran struggles with back pain and arthritis, warranting a disability rating and modest compensation for decades of grueling service. Despite the pain, he is deeply proud of his service to this country. "Now imagine a military compensation system that, because of growing budget pressures, is incapable of providing him with the full benefits he earned through decades of service. No different than federal entitlement programs, the military compensation system is facing challenges and constraints of its own. The Ryan-Murray budget deal, whether intentional or not, thrust military compensation into the spotlight and called attention to disconcerting projections of a system that, unless reformed, will be unable to meet its future obligations and crowd out other defense priorities." Their suggestions for an alternative to reform spending that could potentially save $600 million per year includes "audit the Pentagon" and "reform retirement benefits for future DOD employees" and "reform the acquisition process." Read the rest here.

An official says the threats at Sochi are real. AP's Kim Dozier: "A top U.S. counterterrorist official says there are "a number of specific threats" aimed at the Winter Olympics that start this week in Sochi, Russia - with the greatest danger coming from the Caucasus Emirate, which has threatened to attack the games. Matthew Olsen, director of the National Counterterrorism Center, told Congress on Tuesday that the U.S. and Russia are tracking threats of 'varying degrees' of credibility. He said potential attacks seem more likely outside the venues for the games, and instead in the area or region around Sochi. He described intelligence sharing with Russia as 'good.'" More here.

U.S. Ambassador to Moscow McFaul, out soon. Reuters' Steve Gutterman: "U.S. Ambassador Michael McFaul, who engineered Washington's "reset" of relations with Moscow but riled Russia during his tenure as envoy, said on Tuesday he would soon leave his posting and the administration of President Barack Obama. McFaul helped Obama improve ties with Russia during his first term but was clouded by controversy from the start of his stint as envoy after Vladimir Putin, campaigning to regain the presidency in 2012, accused Washington of stirring up protests." More here.


National Security

FP's Situation Report: A major fraud scandal rocks the Army's ranks

CSBA puts the band back together; Karzai back-channels peace; What's Senate Intel talking about today?; The military and beer in the Super Bowl: Bad Buds? and a bit more.

By Gordon Lubold

A massive kickback scandal rocks the Army's ranks. When a retired Army colonel and an enlisted soldier from Albuquerque, N.M., were charged last year with defrauding the National Guard Bureau out of about $12,000, the case drew little public attention. But it's now become clear that the two men are among the roughly 800 soldiers accused of bilking American taxpayers out of tens of millions of dollars in what a U.S. senator is calling "one of the biggest fraud investigations in Army history."

The wide-ranging criminal probe centers around an Army recruiting program that had been designed to help the Pentagon find new soldiers during some of the bloodiest days of the Iraq and Afghanistan wars. The program went off the rails, investigators believe, after hundreds of soldiers engaged in a kickback scheme that allowed them to potentially embezzle huge quantities of money without anyone in the government noticing. In one case, a single soldier may have collected as much as $275,000 for making "referrals" to help the Army meet its recruiting goals, according to USA Today's Tom Vanden Brook, who first reported the story Monday. 

The military's failure to spot, or stop, the wrongdoing will be the focus of what is expected to be a highly contentious hearing Tuesday before the Senate's Subcommittee on Financial and Contracting Oversight. The committee's chairwoman, Sen. Claire McCaskill, D-Mo., has summoned several of the National Guard officials who were in power at the time the alleged wrongdoing was taking place.

The numbers of soldiers and money involved are staggering. An Army internal audit has discovered that 1,200 recruiters had received payments that were potentially fraudulent. Another 2,000 recruiting assistants had received payments that were suspicious. More than 200 officers remain under investigation, according to McCaskill's office. There are currently 555 active investigations involving 840 people. 

A Defense Department official to Situation Report: "I think it was human greed, and I think it's the cascading effects of contractors' lack of supervision, as well as the Defense Department's lack of supervision." Read the rest of our story, with FP's own Dan Lamothe, here.

From the WaPo's Ernesto Londono: "... Army criminal investigators are probing the actions of more than 1,200 individuals who collected suspect payouts totaling more than $29 million, according to officials who were briefed on the preliminary findings of the investigation and would discuss them only on the condition of anonymity. More than 200 officers are suspected of involvement, including two generals and dozens of colonels." More here.

Welcome to Tuesday's edition of Situation Report, where we'll never be driverless. If you'd like to sign up to receive Situation Report, send us a note at and we'll just stick you on. And if you like what you see, tell a friend.  And if you have a report you want teased, a piece of news, or a good tidbit, send it to us early for maximum tease, because if you see something, we hope you'll say something -- to Situation Report. And one more thing: please follow us @glubold.

Closed doors: The Senate Select Committee on Intelligence meets today and Topic A is... Edward Snowden, Situation Report has learned.

The hunted becomes the hunter: Merkel accused of spying says a hacker group. The NYT's Melissa Eddy: "The Chaos Computer Club, a leading hacker organization based in Germany, filed a criminal complaint against Chancellor Angela Merkel and members of her government on Monday, accusing them of violating the law by helping intelligence agencies in the United States and Britain to spy on German citizens. The move comes days after Secretary of State John Kerry visited Berlin to try to smooth over relations that have been strained by revelations of the extent of the National Security Agency's surveillance activities in Germany. While filing the complaint with the Federal Prosecutor General is only a first step in the cumbersome German legal process and does not guarantee that an investigation will be opened, it demonstrates unwillingness by some here to drop the issue. Along with the International League for Human Rights, based in New York, the 32-year-old hacker group said in the complaint that Ms. Merkel's government and German intelligence agencies violated the personal privacy of German citizens through 'illegal and prohibited covert intelligence activities, along with aiding and abetting such activities' by tolerating and cooperating with the N.S.A. and the British eavesdropping agency, known as GCHQ."  More here.

CSBA is putting the band back together for another big joint think tank event called "Alternatives to the QDR and the FY15 Defense Budget." The Center for Strategic and Budgetary Assessments is holding an event tomorrow morning with the American Enterprise Institute, the Center for New American Security and the Center for Strategic and International Studies to offer alternatives to the QDR and budget that the Pentagon will soon - in March - be submitting to Congress. The event follows a similar one CSBA did last year.

Here's how it works: Each think tank team was asked to develop its own strategy to rebalance the DoD's major capabilities in the context of shrinking budgets. Then, using CSBA's "strategic choices tool and methodology," the teams are able to choose from more than 700 "pre-costed options" to add or cut the defense program over the next two years. The first option will follow the guidelines from the Budget Control Act, or BCA, while the second option offers a more pie-in-the-sky option with more resources. Then tomorrow, CSBA will host a public event on Capitol Hill where all four teams present their alternative strategies, capability priorities and budget decisions, according to CSBA's invite. There will, of course, be extensive Q&A after.

CSBA's Todd Harrison, to Situation Report: "I think what you'll find from the think tanks are ... some dramatic departures from the directions in which DOD is going." Harrison of course hopes it's not too late to influence DOD policymaking when it comes to the budget. "We're always hopeful that folks from OSD policy will come to the event and that it will inform or shape their thinking."  

Where? The Senate's Dirksen SD-G50. What's the agenda? Introduction at 10 a.m., followed by an "exercise overview," and then at 10:20, each team will begin each of their presentations; at 11, there will be a discussion of comparisons of each team and then at 11:15, the Q&A.

Regs watch: Did the partnership between the soldier returning home and the beer commercial during the Super Bowl make "Bad Buds?" FP's Phillip Carter: "I like beer, and would wager that most veterans like beer too. Budweiser placed a similar bet last night during the Super Bowl with its ad "A Hero's Welcome," which showed a Norman Rockwell-esque homecoming for Army 1st Lt. Chuck Nadd in his hometown of Winter Park, Fla. -- courtesy of Budweiser. The ad tugs my heartstrings in the same complex way that standing ovations at Washington Nationals games for veterans do. The applause feels good, and is certainly better than what Vietnam-era veterans faced too frequently at home. Nonetheless, the Budweiser ad should have never been aired. The ad ignores the complicated relationship that veterans have with alcohol, obscuring how much harm booze does to veterans when they come home. And the one-minute spot arguably breaks a handful of government regulations meant to prevent public endorsement of private brands, especially where alcohol and drugs are concerned.

"Two main sets of military regulations exist to prevent the Army from getting, well, too buddy-buddy with companies like Budweiser. The first are the military's ethics regulations... Under this regulation, the Army cannot legally endorse Budweiser, nor allow its active-duty personnel to participate in their ads (let alone wear their uniforms), any more than the Army can endorse Gatorade or Nike." More on that here.

Page One: On peace talks, Karzai back-channels the Taliban. The NYT's Azam Admed and Matthew Rosenberg: "President Hamid Karzai of Afghanistan has been engaged in secret contacts with the Taliban about reaching a peace agreement without the involvement of his American and Western allies, further corroding already strained relations with the United States. The secret contacts appear to help explain a string of actions by Mr. Karzai that seem intended to antagonize his American backers, Western and Afghan officials said. In recent weeks, Mr. Karzai has continued to refuse to sign a long-term security agreement with Washington that he negotiated, insisted on releasing hardened Taliban militants from prison and distributed distorted evidence of what he called American war crimes."  More here.

An upsurge in terrorism in the Sinai raises concerns in the Suez. FP's own Keith Johnson: "The growing and sophisticated insurgency in the Sinai Peninsula, along with its declared emphasis on attacking the Egyptian regime's economic lifeblood, has raised fears over the security of the Suez Canal, one of the world's principal arteries for trade, and especially for moving oil and gas between Asia and Europe. Late last summer, after militants filmed themselves launching a rocket attack on a cargo ship that was making its way through the canal, worries over the channel's vulnerability to a terrorist attack began to proliferate. In January, West Point's Combating Terrorism Center published an article on the Sinai insurgency and possible threats to the canal. The Suez Canal serves as the main transit point for the U.S. Navy to move ships between the Eastern Mediterranean and the Red Sea.

"... While many of Ansar Bait al-Maqdis's attacks have focused on parts of the Egyptian security apparatus -- the Army and the police -- the group has made clear in its statements that it seeks to impose the greatest possible economic pain on a regime it sees as apostate. The group justified a January attack on a pipeline that exported gas to Jordan as part of a campaign to "target the regime's economic interests." Another attack on a pipeline, one that fueled a cement factory owned by the Egyptian military, was justified in similar terms." More here.

Good news/man-bites-dog story: U.S. troop morale in Afghanistan actually increased in 2013. AP's Pauline Jelinek: "U.S. soldiers had higher morale and suffered fewer mental health problems in Afghanistan last year as they handed off more duties to Afghans and saw less combat themselves, according to a report released Monday. The Army report was drawn from a battlefield survey and interviews in June and July. It was the ninth time since the practice started in 2003 in Iraq that the service had sent a team of mental health experts to the field of war to measure soldier mental health and assess available care. The report says rates of soldiers with depression, anxiety and acute stress - as well as tendencies toward suicide - were lower than in the most recent previous surveys.

"In a survey of nearly 900 soldiers, 20.2 percent said last year that their morale was high or very high, compared with 14.7 percent and 16.3 percent in 2012 and 2010, respectively. During those earlier survey years, there were more U.S. troops in Afghanistan - 100,000 at the height of the surge that started in 2010. Now, there are about 34,000 U.S. troops." More of that bit here.

China's getting a little spendy when it comes to its military. The NYT's Michael Forsythe: "China already spends more on its military than any country in the world except the United States. Now, as defense budgets at the Pentagon and in many NATO countries shrink, China's People's Liberation Army is gearing up for a surge in new funding, according to a new report. China will spend $148 billion on its military this year, up from $139.2 billion in 2013, according to IHS Jane's, a defense industry consulting and analysis company. The United States spends far more - a forecast $574.9 billion this year - but that is down from $664.3 billion in 2012 after budget cuts slashed spending. By next year China will spend more on defense than Britain, Germany and France combined, according to IHS. By 2024, it will spend more than all of Western Europe, it estimates."

How capable IS China's mil? "One military analyst, Ian Easton of the Project 2049 Institute in Arlington, Virginia, believes that China's military is far less capable than its large military budget would suggest. Last month he wrote that the P.L.A. probably wouldn't be able to effectively attack Taiwan - the prosperous, self-ruled island claimed by the mainland. In addition, Chinese troops lack real combat experience and some of the P.L.A.'s marquee projects, including the aircraft carrier, are plagued by technical problems."  More here.

And speaking of Asia: Japan should lift the ban on its collective defense, a panel says. AP: "A government panel will urge Japan to allow its military to help allies that come under attack, in a major reversal of the country's ban on collective defense under its pacifist constitution. The panel is expected to present its near-final draft recommendation later Tuesday. Prime Minister Shinzo Abe wants Japan to play a greater role in international peacekeeping and step up its defense posture, citing potential military threats from China and North Korea." Read the rest here.

The role of American contractors grows in Iraq. The WSJ's Dion Nissenbaum: "Hundreds of contractors working for America's biggest defense companies are taking on a broader role in helping Iraq's military learn to use new weapons in a growing battle against Islamist insurgents.  Over the next few months, the U.S. government is expected to begin sending more than $6 billion in military equipment to Iraq. The latest deal includes 24 Apache attack helicopters made by Boeing Co. and nearly 500 Hellfire missiles produced by Lockheed Martin Corp. While the helicopters may not arrive in time to help with the current fighting, the missiles are expected to be used by the Iraqi military in the battle to uproot Islamic fighters from Ramadi and Fallujah, cities that were the focus of major U.S. military operations during the height of the war in Iraq." Read the rest here.