May 19, 2020—Counter China’s Threat to the Grid!

“Government and public utility procurement rules often push organizations into buying equipment due to price and without regard to origin or risk. In this case, it resulted in a utility having to procure a very large bulk transmission transformer from China. When the Chinese transformer was delivered to a U.S. utility, the site acceptance testing identified electronics that should NOT have been part of the transformer – hardware backdoors.” ~ Joe Weiss

Click here for the source of this quote, and I urge you to read Joe Weiss’ entire May 11, 2020 article, “Emergency Executive Order 13920 – Response to a real nation-state cyberattack against the US grid.” (Click here for this important Executive Order.) I strongly encourage you regularly to consider Weiss’ Control Global Blog, https://www.controlglobal.com/ for his expert reports on cyber threats to our critical infrastructure.

Joe reported that China’s first cyber-attack on the U.S. was in 2001, by trying to hack into the California Independent System Operator (CA ISO), and that China joined Russia in hacking control system vendor supply chains in 2010-2012. While noting that Russia has been in our grid since 2014, he wrote that China was producing counterfeit transmitters in around 2014 and they made their way into North America in 2018-19.

I was particularly concerned with his report that because U.S. Government and public utility procurement rules had encouraged organizations to purchase cheaper important electronic equipment without regard to origin or risk, and that condition had led to a utility procuring a very large bulk transmission transformer from China.

Most important in my opinion, he reported that the U.S. site acceptance testing identified electronics included hardware backdoors — obviously enabling damaging, even devastating cyber-attacks. As noted in last week’s message, I was astonished to learn we were purchasing these critically important large power transformers from China.

As I have reported often, we do not build them in the United States, but I never imagined that we would be so stupid as to buy them from China — which is well known for its cyber threats. I still haven’t learned when this practice began; some have suggested that such openness may have begun as early as 1992 when the North American Free Trade Agreement (NAFTA) was signed. In any case, it fits with general foreign policy assumptions that gave priority to the U.S. fostering trade with essentially all others to achieve desirable and stable international conditions — then called a “new world order.” That did not happen — and has not happened.

Francis Fukuyama wrote a notable book, “The End of History” that was taken to support this point of view. Many consider that subsequent events have gone against Fukuyama’s premise. Click here for a reference to that book, and here for Martin Continetti’s August 7, 2019 National Review article noting that Fukuyama’s views have been misunderstood. Whatever, Russia remains a peer competitor when it comes to military power, and China is rapidly joining — if it has not already surpassed — Russia as a peer competitor.

I am of the view that China is in fact a greater concern than Russia because of its substantially greater economic power. And we obviously cannot continue to “lead from behind” as the President Obama notably once claimed was the underlying strategy during his administration.

As previously discussed and elaborated below, President Trump’s May 1, 2020 Executive Order 13920 reflects his much more correct view of the threat from China, and should enable U.S. companies to produce such critically important electronics here in the USA — and not just because of China’s threat to our electric grid. But we should understand that assuring the viability of the grid under all potential threats is absolutely vital to our survival — especially under any other hostile initiatives that China may take. So that should be a top priority!

Indeed, threatening the grid is only one of the means China is pursuing to replace America as the world’s dominant superpower, as discussed by Michael Pillsbury in his Hundred-Year Marathon — China’s Secret Strategy to Replace America as the Global Superpower. Click here for a brief summary of his views and several press reviews of that important book by one who began studying China before I first met him when we both served in the Reagan administration. And click here if you want to order a copy from Amazon.

A fluent Mandarin speaker who served in several administrations of both parties, Michael’s views are based on numerous visits to China, interviews with Chinese defectors and disclosed national security documents. They reveal, among other things, that China seeks to supplant the United States as the world’s dominant power by 2049, the one-hundredth anniversary of the founding of the People’s Republic.

He discusses in considerable detail how their leaders are using traditional Chinese statecraft to underpin their approach to meet this objective — and how Chinese leaders view American leaders as barbarians who will be the architects of their own demise. Most troublesome — and pertinent — is Michael’s description of how our leaders have reinforced perceptions of China’s leaders since World War II, at least up until now.

President Trump is now seeking to counter this strategy that has succeeded under previous administrations of both political parties. The question is, “Will we wake-up in time to face and meet our greatest national security challenge?”

After all, we must counter China’s predatory economic policies that we have previously aided and abetted — like sending our technical expertise, capital and marketing expertise to Huawei, a wholly owned subsidiary of the Chinese Communist Party (CCP) and a major player in the advancing 5G technologies that will dominate the future electronic world. And incredibly, we have even invested the 401k retirement funds of our federal and state employees in Chinese companies a reality that President Trump on May 11, 2020 ordered be reversed.

I like to think that we members of the Committee on the Present Danger China played a significant role in urging him to take that important step. Click here for our April 27, 2020 press release and associated letter to President Trump, which identified some of most problematic CCP’s companies that would receive a sizeable portion of the $50 billion Thrift Savings Plan (TSP) International Fund (IFund) if a decision, originally taken by the Federal Retirement Thrift Investment Board in 2017 and reaffirmed last November, were to be implemented.

We noted that, by “mirroring” the MSCI All-Country World ex-U.S. Investment Index, the TSP’s IFund would hold in portfolio the stocks of the following corporations:

AviChina Industry & Technology Ltd.: AVIC and its subsidiaries develop and produce a range of aircraft, unmanned aircraft systems and airborne weapons for the People’s Liberation Army. AVIC and its subsidiaries have been repeatedly sanctioned by the U.S. for missile proliferation activities in Iran.
China Shipbuilding Industry Corporation: Naval equipment produced by CSIC includes: guided missile destroyers, frigates, conventional submarines, nuclear-powered ballistic missile submarines, unmanned aerial vehicle (UAV) systems, and, most notably, aircraft carriers.
Hikvision Digital Technology: Hikvision manufactures video cameras and other security technology integral to the CCP’s surveillance state apparatus, its “social credit” system and the network of large-scale concentration camps used to incarcerate certain religious minorities. Hikvision has been sanctioned by the U.S. government for human rights and other activities “contrary to the national security or foreign policy interests of the United States.”
Zhongxing Telecommunications Equipment Corporation (ZTE): ZTE is a telecommunications company that has engaged in economic and trade activities in sanctioned states in violation of U.S. laws and regulations.
China Communications Construction Company: As of 2015, CCCC owned over half of China’s dredging industry capacity. Several CCCC subsidiaries have been observed conducting dredging (and other) activity in support of Beijing’s illegal island-building activity in the South China Sea.
China Unicom: China Unicom is providing telecommunications systems to the contested Paracel Islands and Spratly Islands in the South China Sea to service China’s civilian and military personnel and also reportedly to support signals intelligence activities.
China Mobile Ltd.: China Mobile provides telecommunications services to illegal fortified Chinese-constructed islands in the Paracel and Spratly Island chains. In May 2019, the U.S. FCC denied China Mobile’s application to provide international telecommunications services between the U.S. and foreign destinations, saying it “raises substantial national security and law enforcement risks.”
China Telecom Corporation: In April 2020, the U.S. government pulled a license from this Chinese telecommunications company’s American subsidiary on the grounds that it entailed unacceptable risks of Chinese espionage and disruption of U.S. networks.

Our open letter urged President Trump “to act before any Thrift Savings Plan funds begin enriching the Chinese Communist Party, and enabling its further malevolence directed at the United States.”

Thankfully, on May 11^th the President explicitly overruled advocates for, in effect, rewarding China in the context of its undeniable role in perpetrating on the worldwide lethal COVID-10 pandemic.

His specific order prevented the federal Thrift Savings Plan from investing about $4.5 billion in Chinese Communist Party companies. Thus, his order stopped this previously approved plan, and was dispatched in letters from three of the President’s top subordinates.

Click here for further discussion of this important decision, including on those important letters from National Security Advisor Robert O’Brien, Economic Advisor Larry Kudlow, and Labor Secretary Eugene Scalia — and links to a number of earlier important briefings by the Committee on the Present Danger China, including one in the Columbia, SC State Capitol in which I participated.

It is long past time to stop such economic realities that have enabled China to become the world’s fastest growing military power — e.g., with hypersonic missiles, and other important technological areas where we are now playing “catch up.”

For example, those capabilities threaten to kill our aircraft carriers and put our military operations in harm’s way — not only in the South China Sea but increasingly around the world. And I fear we are even playing catch-up in our military space systems, e.g., to counter hypersonic missile threats (still without developing any apparent system to defend against them in and from space, though we knew how three decades ago) — and we now hope to return to the Moon before China gets there for the first time.

As the COVID-19 pandemic has unfolded, revelations have fully justified concerns about China’s role in at least exploiting that global threat, which without question originated in China. Along the way, China has blocked visits by U.S. scientists to Wuhan laboratories where many think it originated, while restricting access to 90-percent of the world’s antibody pharmaceuticals produced by China. Think we made a mistake in allowing that situation to develop in spite of our experience with coronaviruses in the 1990s? Follow the money!

Senator Tom Cotton (R-Ark) was among the first to observe that Wuhan laboratories by mid-January were fully aware of the threat and that China originated false propaganda that the U.S. Army was the source. Senator Ted Cruz (R-TX) has observed that Wuhan was at least researching coronaviruses — the only question is whether COVID-19 originated there. Some have claimed it originated as early as last Fall and got away from the Wuhan scientists. Dr. Li Wenliang, a senior Wuhan scientist, tried to warn about the COVID-19 threat in December 2019, was reprimanded by CCP authorities for doing so and died from its effects in early February 2020.

Meanwhile, China went on “a lockdown status” but placed no limit on traffic out to China. When President Trump banned travel to the U.S. from China on January 31, 2020, he was broadly criticized by individuals who now criticize him for not acting early enough. They also have faulted his criticism (valid criticism in my opinion) of the World Health Organization (WHO), which was complicit with China in allowing the spread of COVID-19 around the world while apologizing for China’s clear role in originating the pandemic and hiding that fact.

No one doubts that dealing effectively with the festering COVID-19 threat is vitally important to all Americans. That concern had led to unprecedented Congressional appropriations, of $5 trillion by some accounts, to deal with the consequences of this threat, including our unprecedented unemployment levels.

And now, the House over the weekend proposed spending another $3 trillion, including for a number of efforts that I believe have no chance of becoming law. But I do believe that additional appropriations will be passed, and that a substantial portion can support modernizing and improving our critical infrastructure — which should lead to additional jobs and economic benefits.

From my perspective, I believe a substantial investment should be on assuring the viability of our electric power grid — especially as it might be threatened by China, but also by other global powers — and even terrorists.

To help justify my concern that we need — actually have long needed — such investments, I want to return to Joe Weiss’ May 11 article, and his reference to the 2007 Aroura test at Idaho National Laboratories in which he was an active participant.

Click here for a Wikipedia article describing this important test and what has been called the “Aurora vulnerability,” caused by the out-of-sync closing of the protective relays. This cyber-attack strategy opens a circuit breaker, waits for the system or generator to slip out of synchronism, and recloses the breaker, all before the protection system recognizes and responds to the attack. Click here for a video of that test, which caused quite observable and impressive severe permanent damage to the below large alternating current (AC) generator, typical for many substations.

The failure of even a single generator could cause widespread outages, possibly via cascading failures of a major portion of the power grid, as occurred in the 2003 Northeast blackout. Click here for a discussion of that failure of much of the Midwestern and Northeastern grid, including the Canadian province of Ontario, all of which was actually triggered by a single event: A power line drooping over foliage in Ohio.

Evidence of the continuing lethargy in federal efforts to actually protect the grid is that fact that it took the Federal Energy Regulatory Commission (FERC) and its analysis arm, the North American Energy Regulatory Corporation (NERC), about a decade to issue appropriate regulatory measures to counter a repeat triggering event, e.g., on transmission lines that traverse the nation’s forests.

Draw your own conclusions re. the FERC/NERC ability to deal with more consequential threats — like the existential threat from natural or manmade electromagnetic pulse (EMP) events.

And even if there are not multiple outages from the removal of a single component, Weiss noted that there is a large window for multiple attacks because many generators and transformers are custom-built. (Note, it could take a year to replace such a destroyed generator or transformer.) Imagine how numerous such cyber-attacks might be deliberately aggregated to take down a much larger portion of the grid.

By successfully installing such hardware backdoors, the Chinese know they can cause such an Aurora type event at a time of their choosing. This is an important reason for supporting President Trump’s May 11, 2020 Executive Order that exhaustively seeks to counter cyber-attacks on the grid and its supporting critical infrastructure — especially those with embedded hardware vulnerabilities that can be exploited by cyber-attacks.

It is absurd that our policies have allowed us to buy critical equipment from China. What will it take to start making such essential components domestically again? Addressing the supply chain is not intractable, but it takes work — and funding. That fact should be an opening for including related manufacturing jobs in the response to the current unemployment crisis, as we seek to reopen following our immediate response to COVID-19.

And there are additional and related things that can and should be done with limited funding as part of such an initiative to enable much better protection for the electric power grid. We have long understood what should be done, but Washington has not acted to exploit that knowledge.

With that thought in mind, I also was quite interested in Joe Weiss’ reference to the 2007 Aurora test at Idaho National Laboratories, because I previously wrote about it and had to search my files to find my June 7, 2016 Message. Click here for that nearly four-year old message, entitled “Home Folks, Fix it Right, Fix It Now!” which with few modifications is still current, as you can confirm for yourself by rereading it and my past messages, particularly my most recent three messages.

My 2016 message was stimulated by Ted Koppel’s then recent excellent Book, Lights Out, that emphasized the consequences of losing the electric power grid, particularly by cyber-attack threats — and the fact that we had to get prepared to address this existential threat, beginning locally, or as I call it “from the bottom-up.” I began that message as follows:

“In anticipating the event of a power grid going down . . . the process will have to be streamlined and rehearsed. During the time that it takes to alert and dispatch military personnel and to mobilize the National Guard, local and state police will need to immediately secure the stores and warehouses containing essential supplies that will otherwise be stripped bare in a matter of hours. The authority exists, but without the regular conduct of combined exercises specifically designed to respond to the aftermath of a grid going down, critical supplies will be gone before law enforcement even arrives on the scene . . .” ~ Ted Koppel, emphasis added.

I believe it is worth your time to reread that four-year-old message and compare it to our most recent discussions that have emphasized lessons from our Lake Wylie Pilot Study (then just beginning) and our recommended role for the National Guard in addressing the existential EMP threat, which is actually included among “cyber-attack” strategies in the Military Doctrine of Russia, China, North Korea and Iran.

Essentially, the only thing new is that because of our efforts (without Washington’s help) in the past four years, we now know — actually have known for months — that it would cost only $100 per York County citizen to protect that SC county’s Distribution Grid to the same standards that we employ to protect our most important military systems.

That one-time cost would have to be supplemented by relatively inexpensive but regular survivability assurance activities — that I recommend become a mission of the National Guard, as a logical extension of its existing Civil Support Team (CST) mission, executed in every state under the Nation’s Adjutants General.

What is regrettably consistent over the past four years is the lethargy of the federal government in dealing with this existential threat, in spite of President Trump’s 2017 National Security Policy, his March 26, 2019 Executive Order intended to protect the Grid and his December 20, 2019 signature on the National Defense Authorization Act — the NDAA (2020) that made a strengthened version of his earlier Executive Order the “law of the land.”

Now, as we consider what to do next in dealing with COVID-19 — and what to invest money in to refurbish and modernize needed infrastructure, dealing with this existential threat should become a centerpiece.

Bottom Lines.

We know we have an existential threat from various attacks — and even a natural event that is certain to occur one day. And yet we dither and delay in addressing it.

Given the existential EMP threat, President Trump should assure that his May 1, 2020 Executive Order does not just lead to one more year-long study — and that the next major appropriation in response to COVID-19 deal with creating jobs to upgrade and modernize the electric power grid.

Hopefully, the powers that be will find a way for such an appropriation to support our Lake Wylie Pilot Study to provide the “concrete” plan that Senator Ron Johnson (R-WI), Chairman of the Homeland Security and Governmental Affairs Committee, has repeatedly urged be pursued.

There are possibilities for the House and Senate to join forces with the President to make it possible to “Fix China’s Threat to The Grid!” Help!!! And stay tuned!

What can you do?

Join us in praying for our nation, and for a rebirth of the freedom sought, achieved and passed to us by those who came before us.

Help us to spread our message to the grass roots and to encourage all “powers that be” to provide for the common defense as they are sworn to do.

Begin by passing this message to your friends and suggest they visit our webpage www.highfrontier.org, for more information. Also, please encourage your sphere of influence to sign up for our weekly e-newsletter.

Encourage them to review our past email messages, posted on www.highfrontier.org, to learn about many details related to the existential man-made and natural EMP threats and how we can protect America against them. I hope you will help us with our urgently needed efforts, which I will be discussing in future messages.

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