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This program was recorded in one, 60-minute segment .
Introduction: Supplementing the many programs already recorded about Eddie the Friendly Spook [Snowden], this broadcast updates us on developments in the Snowden/WikiLeaks “op,” as well as presenting information which will enrich listeners’ understanding of the admittedly complex and complicated line of analysis presented on this topic.
(The Snowden gambit is a fairly obvious intelligence operation, aimed at, among other things: the destabilization of the Obama administration, the destabilization of the NSA and GCHQ, an attack on U.S. high-tech and internet business, an attempt by Germany to force inclusion in the “Five Eyes Club” and an interdiction of U.S. diplomatic policy. In the latter regard, we will further analyze the Snowden “op” in the context of the negation of Obama’s “reboot” with Russia in an upcoming broadcast.)
After all the international caterwauling about Angela Merkel’s mobile phone supposedly having been hacked by the NSA, the probe into the alleged hack has been dropped “for lack of evidence!” 
The Germans have been consummately hypocritical about the Snowden “op”–not only does German intelligence do exactly what it has berated the NSA for doing, it has partnered with the NSA in its surveillance activities.
Germany has allowed Blackberry to purchase a company that handles security technology for mobile phones, on the condition that it turns over its source-code to the German intelligence ! The suspicion in these quarters concerns Germany’s desire to use the technology to compromise the mobile phones of targeted individuals.
After reviewing the BND’s monitoring of cell phone calls  made by Hillary Clinton and John Kerry and expulsion of the CIA station chief from Berlin, the program undescores BND’s circumvention of rules designed to prevent illicit spying by the agency.
In addition to classifying targeted citizens as “office holders,”  in order to circument German regulations on espionage, BND rationalizes satellite communication intercepts by classifying those as outside of German territory–they technically come from space .
Germany is asking Google to disclose the algorithm  used in its search engine, which would enhance Germany’s ability to conduct electronic espionage.
Concluding with two stories that highlight the extent to which we are living in a “brave new world.”
A Turkish pipeline exploded in 2008 after a sophisticated attack  neutralized normal security devices and procedures that would have protected the pipeline. The “Wikification” of society has brought us into an entirely different technological and political era.
Two private citizens built a tiny, mobile drone that usurps cell-phone tower functions and can mimic a tower  in order to intercept calls. This, too, highlights the Brave New World in which we find ourselves.
This Brave New World is among the reasons we are supportive of NSA and GCHQ, warts and all. We exist in a new landscape of civilization and it is essential, in our view, that the government have a major agency involved with monitoring such technologies.
Sadly, we are not convinced that NSA is up to the task at hand–perhaps that is an unrealistic expectation.
Program Highlights Include: Review of specifics of BND’s spying  on calls made by Hillary Clinton and John Kerry; Angela Merkel’s opposition  to net neutrality; Google’s development of AI technology  to refine its search engine algorithm; review of the expulsion  of the CIA station chief from Berlin for receiving transcripts of BND spying on Clinton and Kerry.
1. After the international rhetorical storm over the hacking of Angela Merkel’s mobile phone by the NSA, the Germans have dropped the investigation due to a lack of evidence!
Germany is dropping a probe into the alleged tapping of Chancellor Angela Merkel’s mobile phone by US spies, due to a lack of evidence, magazine Focus said Saturday.
Six months after the investigation began, the experts have failed to find any solid proof to back the case, and have therefore recommended that it be dropped, the magazine reported, quoting sources close to the German justice ministry.
“The result (of the probe) is almost zilch. A lot of hot air, but nothing done,” one source was quoted as saying.
According to sources close to the judiciary, the federal prosecutor will heed the experts’ recommendation to drop the probe.
In June, German justice had announced that a case had been opened into the alleged spying by foreign intelligence services on German soil.
2a. In an attempt to stave off the ousting of CIA station chief in Berlin , Germany was offered inclusion in the Five Eyes Club and turned it down. One wonders what is going on behind the scenes and what they want in return?
U.S. Ambassador John Emerson made his way to the Foreign Ministry in Berlin armed with a plan to head off the worst diplomatic clash of Angela Merkel’s chancellorship.
Emerson came to the July 9 meeting with an offer authorized in Washington: provide Germany a U.S. intelligence-sharing agreement resembling one available only to four other nations. The goal was to assuage Merkel and prevent the expulsion of the Central Intelligence Agency’s chief of station in Berlin.
It wasn’t enough.
The same morning, across the boundary once marked by the Berlin Wall, Merkel convened her top ministers following the 9:30 a.m. Cabinet meeting on the sixth floor of the Chancellery and resolved to ask the U.S. intelligence chief to leave German soil.
Merkel, who ultimately determined the government’s course, had to act. Public and political pressure after more than a year of accusations of American espionage overreach, stoked by indignation at the lack of a sufficient response from Washington, had left the German government with no alternative.
“We don’t live in the Cold War anymore, where everybody probably mistrusted everybody else,” Merkel, who has previously reserved her Cold War-mentality accusations for Russian President Vladimir Putin, said in an interview with German broadcaster ZDF today.
The spying scandal has blown open a rift between the U.S. and Germany, a nation once under American tutelage in the decades after World War II. The latest allegations, involving U.S. double agents, rekindled anger over the disclosure last year that Merkel’s mobile phone had been hacked by the U.S.
“The notion that you always have to ask yourself in close cooperation whether the one sitting across from you could be working for the others -– that’s not a basis for trust,” Merkel told ZDF. “So we obviously have different perceptions and we have to discuss that intensively.”
Merkel also signaled displeasure with U.S. spying at a news conference in Berlin on July 10. Within an hour, her office issued a statement saying that the two new investigations into U.S. cloak-and-dagger methods, on top of “questions over the past months” following leaks on National Security Agency activity, forced the government to take action.
Invited to Leave
At that point, the U.S. intelligence officer was invited to leave the country rather than suffer the diplomatic ignominy of being declared “persona non grata” and expelled under the Vienna Convention. Merkel’s spokesman, Steffen Seibert, said yesterday that the government expected the unidentified official to leave the country “soon.”
The eviction was “a necessary step and a measured response to the breach of trust that took place,” German Foreign Minister Frank-Walter Steinmeier told reporters yesterday. He’ll meet U.S. Secretary of State John Kerry in Vienna tomorrow to discuss the matter on the sidelines of talks on Iran’s nuclear program.
The onus is on the U.S. to suggest solutions, and German officials are waiting to hear what Kerry will propose, according to a German diplomat who asked not to be identified discussing the conflict.
The revelations at once disrupt the U.S. security relationship with a core European ally and expose German anxiety over the balance to strike between privacy issues and combating terrorism. Hamburg was home to three of the Sept. 11, 2001, suicide pilots.
The arrangement, initiated in 1946 between the U.S. and U.K., calls for the U.S. and the other English-speaking countries to share most of the electronic intercepts and some of the other intelligence they collect, with the understanding that they will limit their spying on one another.
“We are not currently looking to alter the Five Eyes structure,” said Caitlin Hayden, a spokeswoman for the White House’s National Security Council, in an e‑mailed statement. “But we remain open to discussions with our close allies and partners, including Germany, about how we can better coordinate our intelligence efforts.”
Postwar Germany has had a more modest intelligence establishment than the U.S. or U.K., focused largely on the former East Germany and Soviet Union and on terrorist groups. German officials balked at expanding their collection and sharing under such an unwritten arrangement, according to the U.S. official.
The allegations of snooping have particular resonance for Merkel, who lived for 35 years in communist East Germany and who, as the daughter of a Protestant pastor, endured special scrutiny from the state-security service, the Stasi.
While German‑U.S. relations dipped during the 2003 Iraq war when Merkel’s predecessor, Gerhard Schroeder, refused to join President George W. Bush’s coalition against Saddam Hussein, ties improved under Merkel. She was awarded the Presidential Medal of Freedom by Obama in 2011.
White House spokesman Josh Earnest declined to comment on the details of the allegations, telling reporters at the beginning of the week that accusations over spying were subject to a “a big ‘if’.”
“We highly value the close working relationship we have with the Germans on a wide range of issues,” Earnest said, “but particularly on security and intelligence matters.”
U.S. lawmakers, including some frequently critical of Obama, have been similarly reticent.
“I don’t know how much the administration could have done to defuse this,” Representative Ed Royce, the California Republican who heads the House Foreign Affairs Committee, said yesterday at a breakfast with reporters hosted by the Christian Science Monitor. “Given the circumstances, the administration is attempting at this time to deal with the German government, and I’m hopeful that they’re successful.”
Senator Mark Udall, a Colorado Democrat and Intelligence Committee member, has told reporters that he was eager to learn more about the situation at a classified briefing for the panel members next week.
“I am concerned that we’re sending the wrong message to a key ally,” Udall said.
Before the current tensions, the U.S. and Germany had a history of extensive intelligence cooperation. For many years, much of U.S. electronic spying on Iran was conducted out of a CIA station in Frankfurt known as Tefran, according to a former U.S. intelligence official who described the cooperation on condition of anonymity.
A number of people in the U.S. government say that, more than two decades after the Cold War ended, it’s time to consider agreements with more countries to help track terrorists, weapons proliferation and espionage, according to U.S. officials who asked not to be identified.
They said the conflict with Germany also has underscored concern that intelligence agencies lack any good risk-assessment model to judge the benefits of operations against friendly powers against the potential risks.
“This is so stupid,” German Finance Minister Wolfgang Schaeuble, Germany’s longest-serving lawmaker, said July 9, reflecting frustration and amazement about the turn of events in U.S.-German relations.
Schaeuble, who helped negotiate German reunification 25 years ago this year, said, “It makes you want to cry.”
Germany’s foreign intelligence agency eavesdropped on calls made by U.S. Secretary of State John Kerry and his predecessor Hillary Clinton, German magazine Der Spiegel reported Saturday.
The respected news weekly reported that the agency, known by its German acronym BND, tapped a satellite phone conversation Kerry made in 2013 as part of its surveillance of telecommunications in the Middle East. The agency also recorded a conversation between Clinton and former U.N. Secretary-General Kofi Annan a year earlier, Der Spiegel claimed.
The magazine didn’t give a source for its information, but said the calls were collected accidentally, that the three officials weren’t directly targeted, and the recordings were ordered destroyed immediately. In Clinton’s case, the call reportedly took place on the same “frequency” as a terror suspect, according to Der Spiegel.
The tapping of Clinton’s call was reported Friday by German public broadcaster ARD and Munich daily Sueddeutsche Zeitung.
If true, the revelations would be embarrassing for the German government, which has spent months complaining to Washington about alleged American spy activity in Germany. Last year German media reports based on documents leaked by former NSA contractor Edward Snowden prompted a sharp rebuke from Chancellor Angela Merkel, who was allegedly among the U.S. intelligence agency’s targets.
A spokesman for the U.S. embassy in Berlin and the State Department in Washington declined to comment on the latest reports.
In its report Saturday, Der Spiegel also cited a confidential 2009 BND document listing fellow NATO member Turkey as a target for German intelligence gathering.
The Germany intelligence agency didn’t immediately respond to a request for comment Saturday.
2c. Here’s an interesting twist to the recent uproar over the BND spy that was caught selling secrets to the CIA (leading to the expulsion of the CIA chief in Germany): One of the documents the BND agent–Markus R–sold to the CIA was the transcript of the recorded phone calls that the BND picked up between Hillary Clinton and Kofi Annan when Annan was giving Hillary a briefing following negotiations with Syria .
After the chemical weapons attacks of August 2013, there was quite a bit of discussion of Syrian official conversations picked up by German intelligence, and both Kerry’s and Clinton’s phone calls were apparently getting picked up while they were flying over conflict areas. So the CIA knew these satellite phone calls were getting picked up by the BND. Note that 2012 phone call between Clinton and Kofi Annan reportedly involved a briefing of Annan’s negotiations with Syria . Also note that Annan announced his resignation as the envoy to Syria in early August, 2012  and that Markus R. approached the CIA via email with his offer to sell the documents in 2012 .
If true, that would suggest that the CIA knew these phone calls were getting picked up by 2012, and yet the “accidental” capture of Clinton’s and Kerry’s phone conversations kept taking place while they flying over conflict areas.
Those inercepted calls involved quite a bit of discussion over how to address the Syrian chemical weapons situation.
The German Foreign Intelligence Agency has admitted tapping “at least one” phone call each by current U.S. Secretary of State John Kerry and then-Secretary of State Hillary Clinton while they were aboard United States government jets, according to German media reports.
The reports claim Kerry’s intercepted communication was a satellite phone call from the Middle East in 2013. Clinton’s communication was also a satellite call, in 2012, and was reportedly to then-United Nations Secretary General Kofi Annan. Both calls were reported to have been intercepted accidentally while German intelligence was targeting terror suspects in the Middle East and northern Africa.
The intelligence agency (the Bundesnachrichtendienst or BND) told German media that terror groups often use the same frequencies that the secretaries’ phone calls were made over, so the calls were picked up. The calls were among what the German newspaper Suddeutsche Zeitung said intelligence sources described as several cases of U.S. official phone calls being picked up accidentally during anti-terror communications monitoring.
The BND is the German equivalent of the American Central Intelligence Agency. German-American relations have chilled in the past year — since former National Security Agency worker Edward Snowden began leaking documents detailing the extent of America’s global electronic spying and eavesdropping programs. Media reports about Snowden’s leaked documents led to the revelation that German Chancellor Angela Merkel’s private cellphone had been tapped since the years when she was a lower ranking German minister, and continuing at least until the summer of 2013.
The spy scandal includes the electronic spying on millions of private emails and electronic communications, the tapping of official phones and even the hiring of German officials to act as American agents  and pass on secret German government information.
The news reports outraged Germans, leading to favourable attitudes about the United States falling to their lowest levels in years and creating a public and private sense of mistrust. Merkel has repeatedly called the U.S. spy program a breach of trust and noted that “friends don’t spy on friends.”
In a twist that connects this tale to the broader spying scandal, the new reports note that after Clinton’s phone call was picked up, an order from the BND leadership was sent out to delete the communication. But the German charged with deleting the conversation was Markus R, who has been charged with selling 218 secret official documents to U.S. intelligence and, rather than deleting the conversation, sold the transcript to his American contacts. Markus R, who under German law cannot be fully identified unless he is convicted, allegedly made a total of €25,000, or about $32,500, by selling the documents to the CIA.
He has been charged with spying for a foreign intelligence agency.
The BND denied that there was any systematic phone tapping of U.S. officials while admitting other phone calls had been swept up. German intelligence officials have told German media that the frequencies the American officials use are also favourites of terror groups in northern Africa and the Middle East.
Both Kerry’s and Clinton’s phone calls were picked up while they were flying over conflict areas. The German phone-tapping program in the Middle East is well known to U.S. officials. During the Syrian conflict, and particularly after the chemical weapons attacks of August 2013, there was quite a bit of discussion of Syrian official conversations picked up by German intelligence.
Secusmart  is the company that develops software and hardware to protect government phones, including the “Merkel Phone” used by Chancellor Angela Merkel. She moved  to a more secure device after it came out that the National Security Agency had been [allegedly] monitoring her communications .
Back in July 2014, the Canadian handset maker announced  that it would acquire the Düsseldorf-based company.
In order to get Berlin’s approval, BlackBerry apparently had to agree to a number of government demands. It was required to give full access of its source code to the the German information security agency, known by its German acronym, BSI.
Further, Berlin stipulated that Secusmart’s development would continue to take place in Germany, and a “binding” agreement dictates that BlackBerry would not share private information with foreign governments or intelligence agencies.
Neither BlackBerry nor the German government gave any further comment to German press.
The Bundesnachrichtendienst (BND), Germany’s foreign intelligence service, spied on some citizens living abroad, a former lawyer for the spies told MPs on Thursday.
Dr Stefan Burbaum, who worked at the BND from 2000 to 2005, said that some Germans were targeted as “office holders”, a legal loophole the spies used to circumvent the law that protects Germans citizens from being spied on by its own intelligence agency.
Normally, the intelligence agencies must overcome high legal hurdles  laid out in the so-called “G10 law” to spy on German citizens, including when they live abroad.
Otherwise, information regarding German citizens has to be filtered out from any foreign communications intercepted by the BND.
But the German spies argue that a citizen working for a foreign company abroad is only protected in his private life, not in his professional communications, Burbaum told the Bundestag inquiry committee into National Security Agency (NSA) mass spying.
“The office holder is the legal person,” Burbaum said . “It’s a small exception. But a German citizen can function as an office holder in a foreign organization.
“The decisive thing is whether he’s communicating as a citizen or as an office holder.”
“This construct of an office holder is just as absurd in practice as it appears in the law,” Konstantin von Notz of the Green party said.
Further, foreigners’ communications conducted abroad are not protected, even if they are in contact with German people or work for a German company.
MPs from the Social Democratic (SPD), Green and Left (Linke) parties all criticized the BND’s ability to operate in a “lawless zone” when it came to spying on foreigners.
Under the “G10 Law” the BND is also allowed access to data from German telecoms firms to search for specifically identified suspicious traffic.
But Burbaum told the MPs that the BND regularly retains traffic which it had not received specific permission to investigate which it collects during such trawls.
In this way, access acquired under the “G10 law” becomes a “foot in the door” to otherwise closed-off sources of data, Burbaum said.
5. More about how BND and other German intelligence services skirt German law.
The Foreign Intelligence Service’s data protection officer told the Bundestag’s NSA Committee of Inquiry about an argument she had with her boss Gerhard Schindler. Her concerns fell on deaf ears.
For a fully-qualified lawyer, Dr. F. certainly has an unusual job. For the past nine years she has worked for the Bundesnachrichtendienst  [Federal Intelligence Service or BND] and for the past two-and-half-years as the BND’s data protection officer. She reports directly to BND President President Gerhard Schindler, and her duty station is Berlin.
As stipulated by her employer, committee members weren’t provided with more detailed personal information, such as Dr. F.‘s full name, for example. Nevertheless, the statement of the secret service employee before the Budestag’s NSA Committee of Inquiry  on Oct. 9 was quite interesting, as it revealed the seriousness, or rather lack thereof, with which the BND has for many years treated — and continues to treat — the issue of data protection. . . .
. . . . The dispute centered on Bad Aibling Station , where German intelligence officers capture and analyze satellite data from abroad — telephone calls in Afghanistan and Pakistan, for example. Members of American intelligence attached to the NSA are also stationed on the grounds.
According the testimony of Dr. F., BND President Schindler considers the satellite data as existing largely in a legal vacuum as it is gathered from space where German law does not apply. . . .
6. The EU’s net neutrality laws just got the kiss of death :
German Chancellor Angela Merkel has laid out her vision for the future of the internet, and net neutrality proponents won’t be pleased. In comments on Thursday in Berlin, Merkel argued for a two-lane internet. One lane for “special,” high priority service, and another that’s meant to resemble the internet as it exists today.
While supporters of net neutrality argue that it is key to the continued growth of the internet, Merkel believes just the opposite. She argues that fast lanes are necessary for the development of new, advanced uses of the internet, like telemedicine or driverless cars. According to Merkel, without guaranteed, fast-access internet connections, such innovations won’t come to market.
It’s not clear how such a two-lane system would be implemented or regulated. For instance, it’s unknown if there would be limits on what sort of companies could pay for access to fast-lane internet. A report from Frankfurter Allgemeine  cites sources inside the German government who say that on-demand internet video streaming services would be among the companies that would be able to pay for access for high-speed service.
The European Union currently mandates true net neutrality, though discussions have been underway for the future of internet regulation. Merkel believes that her position is a middle ground, but the idea that the general traffic lane will operate under net neutrality depends entirely on how much bandwidth it receives from internet providers.If the main traffic lane isn’t fast, and any company can opt for fast-lane access, companies will likely find it necessary to pay up for direct access just to compete — the exact opposite of net neutrality.
7. Next, we present an article that acts as a reminder that the new EU anti-monopoly regulatory paradigm of forcing Google to submit its search results algorithms to regulator review is going to get might messy in a singular way that could complicate patents and copyright laws in all sorts of strange ways. Keep in mind that Google’s search engine still forms the core its business, with Google search ads bringing in a majority of Google’s $60 billion revenues, making it unlikely that they will surrender the keys to the kingdom.
German justice minister Heiko Maas is calling on Google to become more transparent by disclosing exactly how it ranks search results.
This, of course, will simply never happen. The algorithm is the heart of Google, the source of all its wealth and power as the planet’s best index of knowledge. Google is just never going to give that up. CEO Larry Page will fight to the death.
Nonetheless, in an interview with the Financial Times , Maas explains that Germany is unhappy with the search giant’s actions in Europe and wants it to reveal the details of its search algorithm in the interests of consumer protection.
Google Search remains the most important part of Google’s business, with advertising on the platform forming the majority of its $60 billion in annual revenue. But now, Germany’s government has escalated its antitrust case against the company by requesting that Google publishes how websites are ranked on Google Search.
Google has apparently pushed back against the request, claiming that publishing the search engine algorithm would mean revealing its business secrets and opening up the service to exploitation by spammers.
8. Lets hope Google isn’t correct in predicting that revealing its secrets would result in spammers using Google’s search secrets because that would be scary.
But also keep in mind that even casual search algorithm disclosure regimes by the EU or anyone else might get really complicated in the future. So complicated that only a super AI will be able to keep up with the regulatory oversight workload. Why? Because one of the first project Google is assigning its “DeepMind” self-learning super AI project to is developing better and better search algorithms, and as DeepMind learns more about self-learning, it’s only going to get better at it.
In the future, humans may not be the only ones conducting lab experiments.
In late October, we wrote  about the Neural Turing Machine, a Google computer so smart it can program itself. In the time since, it’s become clear that this is only the beginning and we should expect a lot more from DeepMind Technologies , the little-known startup acquired by Google who developed the human-like computer and sports the mission “Solve intelligence.”
In discussing DeepMind Technologies’s delve into the future of computers with MIT, founder Demis Hassabis detailed the company’s research and mentioned that he wants to create “AI scientists.”
He explained that although they’re currently working on some smaller AI activities  like searching for ways to apply DeepMind techniques to existing Google products such as Search and YouTube recommendations, his plans for the future are bigger than a better search engine. He dreams of creating artificially intelligent “scientists” that could develop and test their own hypotheses in the lab. He mentioned that there’s also a future for DeepMind’s software in robotics.
“One reason we don’t have more robots doing more helpful things is that they’re usually preprogrammed,” he told MIT. “They’re very bad at dealing with the unexpected or learning new things.”
9. A pipeline explosion highlights the digital brave new world into which we have entered.
The pipeline was outfitted with sensors and cameras to monitor every step of its 1,099 miles from the Caspian Sea to the Mediterranean. The blast that blew it out of commission didn’t trigger a single distress signal.
That was bewildering, as was the cameras’ failure to capture the combustion in eastern Turkey. But investigators shared their findings within a tight circle. The Turkish government publicly blamed a malfunction, Kurdish separatists claimed credit and BP Plc (BP/) had the line running again in three weeks. The explosion that lit up the night sky over Refahiye, a town known for its honey farms, seemed to be forgotten.
It wasn’t. For western intelligence agencies, the blowout was a watershed event. Hackers had shut down alarms, cut off communica- tions and super-pressurized the crude oil in the line, according to four people familiar with the incident who asked not to be identified because details of the investigation are confidential. The main weapon at valve station 30 on Aug. 5, 2008, was a keyboard.
The revelation “rewrites the history of cyberwar,” said Derek Reveron, a professor of national security affairs at the U.S. Naval War College in Newport, Rhode Island.
Countries have been laying the groundwork for cyberwar operations for years, and companies have been hit recently with digital broadsides bearing hallmarks of government sponsorship. Sony Corp.’s network was raided by hackers believed to be aligned with North Korea, and sources have said JPMorgan Chase & Co. blamed an August assault on Russian cyberspies. Security researchers just uncovered what they said was a campaign by Iranian hackers that targeted commercial airlines, looking for vulnerabilities that could be used in physical attacks.
The Refahiye explosion occurred two years before Stuxnet, the computer worm that in 2010 crippled Iran’s nuclear-enrichment program, widely believed to have been deployed by Israel and the U.S. It turns out the Baku-Tbilisi-Ceyhan pipeline hackers were ahead of them. The chief suspect, according to U.S. intelligence officials, is Russia.
The sabotage of the BTC line — which follows a route through the former Soviet Union that the U.S. mapped out over Russian objections — marked another chapter in the belligerent energy politics of Eurasia. Days after the explosion, Russian fighter jets dropped bombs near the line in neighboring Georgia. Alexander Dugin, an influential advocate of Russian expansionism and at the time an adviser to the Russian parliament, was quoted in a Turkish newspaper declaring the BTC was “dead.”
The obituary was premature, but the attack proved to U.S. officials that they were right to be concerned about the vulnerability of pipelines that snake for hundreds of thousands of miles across Europe and North America. National Security Agency experts had been warning the lines could be blown up from a distance, without the bother of conventional weapons. The attack was evidence other nations had the technology to wage a new kind of war, three current and former U.S. officials said.
“The timing really is the significance,” said Chris Blask, chairman of the Industrial Control System Information Sharing and Analysis Center, which works with utilities and pipeline companies. “Stuxnet was discovered in 2010 and this was obviously deployed before that. This is another point on the timeline” in the young history of cyberwar.
U.S. intelligence agencies believe the Russian government was behind the Refahiye explosion, according to two of the people briefed on the investigation. The evidence is circumstantial, they said, based on the possible motive and the level of sophistication. The attackers also left behind a tantalizing clue.
Although as many as 60 hours of surveillance video were erased by the hackers, a single infrared camera not connected to the same network captured images of two men with laptop computers walking near the pipeline days before the explosion, according to one of the people, who has reviewed the video. The men wore black military-style uniforms without insignias, similar to the garb worn by special forces troops.
“Given Russia’s strategic interest, there will always be the question of whether the country had a hand in it,” said Emily Stromquist, an energy analyst for Eurasia Group, a political risk firm based in Washington.
Nikolay Lyaschenko, a spokesman for the Russian Embassy in Washington, didn’t respond to two e‑mails and a phone call.
Eleven companies — including majority-owner BP, a subsidiary of the State Oil Company of Azerbaijan, Chevron Corp. and Norway’s Statoil ASA (STL) — built the line, which has carried more than two billion barrels of crude since opening in 2006.
It starts in Azerbaijan, traverses Georgia and then enters Turkey, ending at the port city of Ceyhan. It was routed south to circumvent Russia, a blow to that country’s aims to reassert control over Central Asia, a major pipeline deliberately built outside Russian territory to carry crude from the Caspian.
Traversing strategic, politically unsettled terrain, the line was built to be one of the most secure in the world. The 3‑foot 6‑inch diameter pipe is buried underground and punctuated by fenced valve stations designed to isolate sections in case of emergency and to contain leaks.
According to investigators, every mile was monitored by sensors. Pressure, oil flow and other critical indicators were fed to a central control room via a wireless monitoring system. In an extra measure, they were also sent by satellite.
The explosion, at around 11 p.m. on a warm summer night, was spectacular. Residents described feeling the heat a half mile away, and patients at a nearby hospital reported hearing a thunderous boom.
Almost immediately, the Kurdistan Workers’ Party, or PKK, an armed separatist group in Turkey, claimed credit. It made sense because of the PKK’s history of bombing pipelines. The Turkish government’s claim of mechanical failure, on the other hand, was widely disputed in media reports. Hilmi Guler, then Turkey’s energy minister, said at the time there was no evidence of sabotage. Neither he nor officials at the Energy Ministry responded to requests for comment.
Huseyin Sagir, a spokesman for Botas International Ltd., the state-run company that operates the pipeline in Turkey, said the line’s computer systems hadn’t been tampered with. “We have never experienced any kind of signal jamming attack or tampering on the communication lines, or computer systems,” Sagir said in an e‑mail. He didn’t respond to questions about what caused the explosion. BP spokesman Toby Odone referred questions to Botas.
The BTC was shut down because of what BP referred to in its 2008 annual report simply as a fire.
The investigators — from Turkey, the U.K., Azerbaijan and other countries — went quietly about their business. The first mystery they set out to solve was why the elaborate system in place to detect leaks of oil or a fire didn’t work as planned.
Instead of receiving digital alerts from sensors placed along the line, the control room didn’t learn about the blast until 40 minutes after it happened, from a security worker who saw the flames, according to a person who worked on the probe.
As investigators followed the trail of the failed alarm system, they found the hackers’ point of entry was an unexpected one: the surveillance cameras themselves.
The cameras’ communication software had vulnerabilities the hackers used to gain entry and move deep into the internal network, according to the people briefed on the matter.
Once inside, the attackers found a computer running on a Windows operating system that was in charge of the alarm-management network, and placed a malicious program on it. That gave them the ability to sneak back in whenever they wanted.
The central element of the attack was gaining access to the operational controls to increase the pressure without setting off alarms. Because of the line’s design, the hackers could manipulate the pressure by cracking into small industrial computers at a few valve stations without having to hack the main control room.
The presence of the attackers at the site could mean the sabotage was a blended attack, using a combination of physical and digital techniques. The super-high pressure may have been enough on its own to create the explosion, according to two of the people familiar with the incident. No evidence of a physical bomb was found.
Having performed extensive reconnaissance on the computer network, the infiltrators tampered with the units used to send alerts about malfunctions and leaks back to the control room. The back-up satellite signals failed, which suggested to the investigators that the attackers used sophisticated jamming equipment, according to the people familiar with the probe.
Investigators compared the time-stamp on the infrared image of the two people with laptops to data logs that showed the computer system had been probed by an outsider. It was an exact match, according to the people familiar with the investigation.
Years later, BP claimed in documents filed in a legal dispute that it wasn’t able to meet shipping contracts after the blast due to “an act of terrorism.”
The explosion caused more than 30,000 barrels of oil to spill in an area above a water aquifer and cost BP and its partners $5 million a day in transit tariffs during the closure, according to communications between BP and its bankers cited in “The Oil Road,” a book about the pipeline.
Some of the worst damage was felt by the State Oil Fund of the Republic of Azerbaijan, which lost $1 billion in export revenue while the line was shut down, according to Jamala Aliyeva, a spokeswoman for the fund.
A pipeline bombing may fit the profile of the PKK, which specializes in extortion, drug smuggling and assaults on foreign companies, said Didem Akyel Collinsworth, an Istanbul-based analyst for the International Crisis Group. But she said the PKK doesn’t have advanced hacking capabilities. “That’s not their modus operandi,” she said. “It’s always been very physical, very basic insurgency stuff.”
U.S. spy agencies probed the BTC blast independently, gathering information from foreign communications intercepts and other sources, according to one of the people familiar with the inquiry. American intelligence officials believe the PKK — which according to leaked State Department cables has received arms and intelligence from Russia — may have arranged in advance with the attackers to take credit, the person said.
The U.S. was interested in more than just motive. The Pentagon at the time was assessing the cyber capabilities of potential rivals, as well as weaknesses in its own defenses. Since that attack, both Iran and China have hacked into U.S. pipeline companies and gas utilities, apparently to identify vulnerabilities that could be exploited later.
10. We conclude with discussion of a brand new spy drone that mimics cellphone towers. As something that could be built in a garage for less than $6,000, it, too, is indicative of the brave, new tech world in which we live. Note that it’s tiny, as well.
“Spy Drone Hacks WiFi Networks, Listens to Calls” by Erin Van der Bellen; WUSA; 12/12/2014. 
It’s small. It’s bright yellow, and it’s capable of cracking Wi-Fi passwords, eavesdropping on your cell phone calls and reading your text messages. It’s an unmanned spy drone and it just landed in Washington, D.C.
Long-time friends and former Air Force buddies, Mike Tassey and Rich Perkins, describe their state-of-the-art cyber drone as hard to take down, hard to see and virtually hard to detect.
They built it in a garage, using off the shelf electronics to prove a drone can be used to launch cyber-attacks.
It needs a human for take-off and landing but once airborne, it can fly any pre-programmed route posing as a cell phone tower and tricking wireless cell phones.
While it’s flying those points, the spy drone has a number of antennas for picking up your cell phone conversation, for picking up blue tooth, and for picking up and monitoring Wi Fi signals.
“We passed telephone calls, hacked into networks, cracked the encryption on Wi-Fi access points all of that sort of evilness is possible,” said Tassey.
And now their spy drone has landed in Washington so everyone can see it.
“I think it’s fantastic to have an artifact like this in the Spy Museum,” said Vincent Houghton, International Spy Museum Curator .
“It’s the first of its kind, it’s a piece of modern espionage equipment,” said Houghton. “This is something governments should be doing and perhaps only government should be doing.
“If two guys from the Midwest can build this for six-thousand dollars in a garage, what can Iran do? What can nation states do?” said Rich Perkins.
The drone has a 50 mile range and while its creators chose a cyber-attack test, they say this technology can be used things like anti-IED missions and search and rescue operations.