The President's Daily Brief - July 8th, 2022; Special Brief: FBI Director Warns of Chinese Cyber Attacks.

Episode Date: July 8, 2022

It’s July 8th. You’re listening to the President’s Daily Brief. Your morning intel starts now. ------ The FBI Director stepped up his assault on China this week, with special anger directed at Beijing’s cyber attacks. He said that those cyber crimes are a bigger threat than every other major country — combined.  But as righteous as those words are, they’re not the first time that we’ve heard them. During this morning’s special PDB, we’re going to quickly cover decades worth Washington DC’s attempts to deal with China — either by negotiations or strongly worded speeches.  I’m going to make the case to you for why that approach has failed. And, if I were advising the president this morning, what we really need to do to stop them. All up next on the President's Daily Brief. ------ Please remember to subscribe if you enjoyed this episode of the President's Daily Brief. Learn more about your ad choices. Visit megaphone.fm/adchoices

It's July 8th. You're listening to the President's Daily Brief. I'm your host and former CIA Officer Brian Dean Wright. Your morning intel starts now. The brief you're about to hear is in the same spirit of the actual President's Daily Brief, which is a top secret summary of the most critical events in the past 24 hours, all delivered to the president each day by the nation's spymasters. And so, ladies and gentlemen, I am your spy, and this is your special brief. Here's what we're going to be talking about this morning. The FBI director stepped up his assault. on China this week with special anger directed at Beijing's cyber attacks. He said that those cyber crimes are a bigger threat than every other major country combined.

But as righteous as those words are, they're not the first time that we've heard them. So during this morning's special PDB, we're going to quickly cover decades' worth of Washington, D.C.'s attempts to deal with China, either by negotiations or strongly worded speeches. And I'm going to make the case for you that that approach has failed. And if I were advising the president this morning, what we really need to do to stop them. All up next on this special edition of the president's daily brief. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th,

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On Wednesday, the FBI's director said that China poses the biggest long-term threat to the world's economic and national security. The director went on to say that the Chinese government is an even more serious concern to Western businesses than even many sophisticated business people realize and that Beijing is set on stealing their technology. So the FBI's leadership said all of this while standing next to officials with the British law enforcement agency MI5. Now, all of this tracks with what PDB listeners already know from previous briefs.

As you'll recall, China steals technology and other intellectual property each year that costs American businesses at least $200 billion. And that's just the market value of what's stolen. When you add in all the lost sales, that number grows to at least $600 billion a year. And those losses mean fewer American factories and fewer jobs and fewer vibrant American communities. And that is really why you should care. Now, adding to this grim assessment by the FBI is another one out Wednesday from the National Counterintelligence and Security Center. Now, these folks help coordinate and de-conflict all of the counterintelligence activities

against foreign governments and groups. These are the folks that are trying to do harm to America. Well, on Wednesday, that National Counterintelligence and Security Center issued a warning to state and local officials that China has launched a new covert influence operation aimed at manipulating these local politicians to embrace more Beijing-friendly policies. To explain, China knows that the U.S. Constitution allows for far greater control at the state and local level than in many other countries. So they're targeting mayors and state legislatures and governors so that those politicians will either create pressure on the federal government to be more pro-China or that a state will adopt more pro-China policies regardless of what a president might do or say. Now, that's not to suggest that China won't try to affect politicians on the national level too because they will, case in point. In March of this year, the Chinese government tried to take down the candidacy of a Chinese immigrant. who's running for Congress in New York.

And China doesn't like him because he protested at the Tiananmen Square massacre back in 1989. And the man remains very critical of Beijing to this day. So listen to this. The communist hired a private investigator to dig up dirt on this candidate. And when they found none, they tried to come up with an operation involving a sex worker and staging a car accident. All of that, according to the FBI. Now, one final note to these two warnings from our,

government, the one from the FBI and the other that national counterintelligence center. There was a British official standing next to the FBI director and said to the audience, this might feel abstract, this threat from China, but it's real and it's pressing. We need to talk about it. We need to act. And the FBI director nodded in agreement. So that's great. But the question is, what are these governments doing on both sides of the Atlantic about this

existential threat. Well, in the UK, they're running seven times as many counterintelligence investigations as they did in 2018. Now, the FBI, for its part, said that they're opening up a new counterintelligence case against China every 12 hours. But there's something else here, because we've heard these kinds of warnings and news about investigations before, from the FBI, certainly, but also from the White House. Back in 1986, President Reagan tried to get China to stop the theft of patents and copyrights. They were doing it back then, too. And he realized, obviously, that these inventions and business secrets were absolutely critical to America's economic vibrancy. So he got Beijing to agree to something called the

trading-related aspects of international property rights agreement or trips, mouthful. But regardless, there was no action. Beijing did not stop stealing. So Bill Clinton tried a new track. He wanted to admit China into the World Trade Organization or WTO in order to use that structure to force China to follow WTO rules. Well, that didn't work either. As an example, by 2006, the then-Bush administration was being inundated by American companies saying that China had stolen their designs and ideas or had pressured them into partnerships and then taken their technology. And that's all according to Michael Wessel, who was a commissioner on the U.S.-China Economic economic and security review commission. Now I mentioned him in particular because he pointed out

something disturbing when all of that was going down. He said that American companies, as upset as they were, actually wanted to handle things quietly. American businesses in China wanted the administration to come in hard on the Chinese, but without business fingerprints on the reasoning behind it. Because while they wanted the profits, they didn't want the possible retribution. And so few American companies pressed any charges. But still, President Bush tried something with then Chinese president Hu Jintao. The two agreed on an initiative called a strategic economic dialogue, and the idea here was that regular contact between Bush and Jintou would put an end to the hacking and the theft once and for all. But it didn't. Case in point. Two years after Bush left the

White House, Google announced that it had been long hacked, along with 34 other major years. U.S. companies. The Chinese in this case were focused on stealing intellectual property plus emails of Chinese dissidents. And so Barack Obama tried something kind of sort of new with President Xi, the man who's actually still in charge of China today. They signed an agreement, here we go, called the U.S. China Strategic and Economic Dialogue. Well, surprise, surprise, once again, nothing changed. In fact, things got worse. In November of 2013, China began hacking the Office of Personnel Management in what was and remains the worst hack of U.S. government data in history. Over 22 million records were stolen, including background checks

and personal information of very sensitive government officials. And then, of course, we get to President Trump, who tried something far more aggressive. He invoked a trade war back in 2019, all to penalize the Chinese for their hacking. In response, Beijing made lots of promises, namely that they'd buy more American goods and they'd stop stealing our stuff. And in exchange, we would eventually lower our tariffs. But that didn't work either. China bought about half of what they promised. Plus, the cyber attacks only continued against both the government and American businesses.

And that, of course, takes us to Joe Biden. But first, let's take a quick break. And when we come back, I'll tell you my advice to the president on what we should do next. Hey, honey, it's mom. Did you know if we switched to Verizon we can get four phones for $0, plus four lines for $25 a line? Call me back. Me again. That's just $100 a month for four lines on unlimited welcome, plus four phones, no trade in needed. Call me. It's mom. America's Best Network, Verizon, that's the one we're talking about. I'll send you text. America's Best Network based on Root Metrics, Best Overall Mobile Network Performance,

U.S. second half, 2025. Four new lines on a limited welcome and auto pay. See Verizon. com for details. How many discounts does USAA auto insurance offer? Too many to say here. Multi-vehicle discount. Safe driver discount. New vehicle discount. Storage discount. How many discounts will you stack up? Tap the banner or visit usa.com slash auto discounts. Restrictions apply. On this Friday morning, ladies and gentlemen, we have a lot of news to think about. One piece of news is what Joe Biden will do now that his FBI director and others within the U.S. government had made it very clear, publicly clear, that China is an existential threat to America. Well, as of this morning, Joe Biden is actually thinking about rolling back Trump's tariffs,

the ones that we just talked about, all to help address inflation, or at least that's his logic. But most economists have said that it'll do no such thing. So what will he do? What should he do next to China if not roll back the tariffs? Well, if I were briefing the president this morning, I'd frankly excuse everyone else in the room and deliver a very blunt message. First on the problem, yes, but mostly on the solutions. But before I do a fair warning, this is coming from Brian Dean Wright, the former CIA officer who personally saw this country being abused by the Chinese when I was of service. And that abuse has shaped every word that I'm about to say. For 40 years, presidents and FBI directors and corporations of all stripes have acknowledged Chinese hacking and theft. But for over 40 years,

nothing has changed. In fact, by every reasonable measure, it's gotten worse. From China stealing $600 billion a year now to the FBI opening up a counterintelligence case every 12 hours. Most alarmingly, though, Beijing has gone from the hacking and the stealing to actually killing Americans. And I'm not even talking about COVID. There are at least 100,000 Americans dead this morning because Chinese chemical companies are working with Mexican cartels to pump our streets full of fentanyl. You may remember the brief that I gave you on that, explaining how Chinese companies used to send fentanyl directly to American people in the mail, but have since switched to sending the precursor chemicals or the ingredients to make fentanyl all to Mexican cartels. And then those thugs cook it up south of the

border and ship it into communities like yours. So let's be very clear. The time for talking to China is over. The time for diplomacy has passed. And that's because diplomacy only works when your adversaries think that you are serious about your demands. And we're not, obviously. We never have been. And the Chinese have played us for the suckers that we have sadly become. But actually, who's the we in this case? Who are the suckers? Well, I think it's clear that every president and national security team over the past 40 years is, to a degree, a sucker. And Congress who's thumped their chest about this issue but done nothing, well, they're also kind of suckers. But the we here is also corporate America.

And I want to prove the point. There's a man named James McGregor. He's a former chairman of the American Chamber of Commerce in China. Here's what he said about corporate America in China around the time of the Google hack in 2000. 2010. Quote, what the hacked companies should have done was held a press conference and say, we 35 businesses have been hacked, and that would have put it right back on China. And instead, they just all hit under a rock and pretended that it didn't happen.

All because they were afraid of offending China and might be kicked out of the country. So they wanted to protect their short-term profit at the expense of their long-term viability. So ladies and gentlemen, if there's any talking left to do, it's to them, to corporate America. Though I defer to the president on the wording, the message I think should be clear. Get out of China. Move your supply chains back home. Because we are about to enter a very nasty era with Beijing, and we're not going to protect you. We won't. And that gets me to the solutions.

So the president has what are called covert action authorities that use the, the CIA and NSA in particular, he can wage covert war against China. There are different degrees to that war, some more painful and obvious than others. So without getting into the classified particulars here, one way to do this is to attack them as they have attacked us. I'm talking about cyber attacks. We can use our creative tools at the NSA and CIA to hack as many Chinese companies as possible, inside China and beyond. And then, fry their networks, erase the data, bring it all down. And then you pick up the phone and you tell President Xi that you understand that he's having some computer problems and that you'd love to

discuss the solutions. And you know, maybe there's an accident where a Chinese ship full of fentanyl chemicals sinks to the bottom of the Pacific. And then you call up President Xi again and you offer him some new boats made in America naturally. The point is that the Chinese government will not respond to diplomatic overtures unless they believe America is angry and won't take it anymore. That is true for China and every other adversary in the world. Let me give you a recent example of that. When President Trump ordered a drone strike on Iran's top general, Soleimani was his name, the Iranians were shocked. You see, Soleimani had run around for decades in the Middle East killing Americans and our allies. He and Iran's leadership believed that no one would ever touch

him. And then Trump decided to put him six feet under. Well, guess what? Iran had a fearful respect of Trump and America. Now, whether or not you like Trump, that's how international affairs works best when it comes to tyrants and bullies. When people like that hurt you, you make them hurt twice as hard. And then we can talk diplomacy. The bottom line of this special brief, friends, is that while reasonable people can disagree with how hard we need to. hit China, and I celebrate that disagreement if you do. What should be obvious, nevertheless, is that after 40 years of diplomatic failure, we need to do something different. We need to hit China square in the jaw. The time for talk is over. On a final note, maybe you're wondering

what you can do about all of this. And actually, there is something, two things. First, next November, you can make your voice heard when you vote. If you want to send a signal of disapproval, about how the country is being run, particularly on the China issue, well, that's your chance. Second, the Biden administration is, as of this very moment, considering an end to all the tariffs against Beijing. Now, remember, those tariffs were designed to teach Beijing a lesson for their cyber attacks, for all the stealing. Now, reasonable people can again disagree here, too, but if you think that rolling back those tariffs is a bad idea, let your senators and representatives know. Go to Senate.gov and house.gov. Find those phone numbers, write down those email addresses, and to make

your voice heard. Your politicians, they will listen, believe it or not, but only if enough of you make some noise. And that, ladies and gentlemen, concludes your special morning brief. As always, we close out the show reminding each other of why we are here, talking about our country and our world. It's the creed of every good spy and every smart American. It's from John chapter 8, verse 32. And you shall know the truth. And the truth shall make you free. Good day. Some follow the noise. Bloomberg follows the money. Because behind every headline is a bottom line. Whether it's the funds fueling AI or crypto's trillion dollar swings, there's a money side to every story and when you see the money side you understand what others miss get the money side of the story

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