A pain in the assets for Russia

From the SitRoom to the E-Ring, the inside scoop on defense, national security and foreign policy.
May 08, 2024 View in browser
 
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By Paul McLeary and Matt Berg

Polish Foreign Minister Radoslaw Sikorski is pictured speaking.

“Russia knows that it’s not seeing that money, ever,” Poland’s Foreign Minister Radoslaw Sikorski said. “The real issue is whether we release the money to Ukraine now or after the war … Why wait for the Russians to destroy Ukraine when we can help to protect it?” | Jacquelyn Martin/AP

With help from Erin Banco, Lara Seligman, Joe Gould and Daniel Lippman

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The European Union today approved using the interest from seized Russian assets to help arm Ukraine and fund the country’s reconstruction, at least one NATO member state is all in.

“I think we have a firm, legal basis for using those assets,” Poland’s Foreign Minister RADOSŁAW SIKORSKI told NatSec Daily during his recent visit to Washington.

Using that money — about $3 billion per year in interest that’s part of about $300 billion in assets overall — would not only punish Russia but also relieve some of the burden on the international community in helping areas of Ukraine shattered by more than two years of Russian bombardment.

“Russia knows that it’s not seeing that money, ever,” Sikorski said. “The real issue is whether we release the money to Ukraine now or after the war … Why wait for the Russians to destroy Ukraine when we can help to protect it?”

Poland has been outspoken about punishing Russia for its full-scale invasion of Ukraine since the start. But with tens of billions in new weapons purchases and a defense budget that has shot to one of the largest in Europe over the past several years, Warsaw is increasingly taking a leadership role in the NATO alliance.

While he didn’t take a victory lap, Sikorski explained Warsaw’s long-held position on Russian President VLADIMIR PUTIN’s ultimate aims in Europe, and the trouble he has caused for years.

“We were right when some were mocking us — and we do feel vindicated,” the foreign minister said. “We don't expect apologies but … You were wrong. We were right. Listen to us now,” he added, referring to Western countries.

When it comes to the seized Russian assets, Sikorski said he’s heartened by the major change in how the U.S. views using the seized assets. In 2022, during his last visit to Washington while a member of the European Parliament, American officials told him, “‘No way, we never do this unless there is a state of war.’ And now the U.S. is in the lead on the issue.”

Overall, Sikorski willingly laid into Putin, who is increasingly isolated on the world stage aside from partnerships with China, North Korea and Iran.

“What a strategic fool Putin is, with the current attacks of the Houthis in the Red Sea…Russia could be making good income — and with the world's approval — developing the northern route” in the Arctic, which is turning into an attractive commercial shipping route as the sea ice melts.

Instead, Sweden and Finland joined NATO, he said: “I wouldn't call that a success of the great strategist.”

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The Inbox

BOTHERED BY BOMB DELAY: Senior Israeli officials warned the Biden administration that its pause on sending bombs to Israel could derail cease-fire talks and hostage negotiations, Axios’ BARAK RAVID reports.

“The Israelis told the U.S. they are extremely concerned that — with negotiations ongoing in Cairo — the timing of the move will jeopardize efforts to secure a deal for the release of hostages and a temporary ceasefire,” Axios writes, adding that Israel is worried Hamas won’t negotiate as it sees the U.S. put pressure on Israel.

The Biden administration has paused a shipment of bombs over concerns that Israel is poised to invade the southern Gaza city, where more than 1.4 million Palestinians are sheltering. Defense Secretary LLOYD AUSTIN told lawmakers today that the pause is due to concerns over Rafah operations, but stressed that no final decision has been made, our own CONNOR O’BRIEN reports.

“We’re going to continue to do what’s necessary to ensure that Israel has the means to defend itself,” the Pentagon chief said. “But that said, we are currently reviewing some near-term security assistance shipments in the context of unfolding events in Rafah.”

Israel has yet to see a breakthrough in its negotiations with Hamas to broker a hostage deal that would lead to a cease-fire, an Israeli official told Reuters’ DAN WILLIAMS. That assessment came as CIA Director BILL BURNS met with Israeli Prime Minister BENJAMIN NETANYAHU about possibly suspending Israel’s operation into Rafah.

Scroll down to On The Hill for more on the bomb delays.

GAZA CROSSING MAY NOT HAVE FULLY OPENED: A main aid crossing into Gaza hasn’t fully reopened following the Rafah attacks, despite Israel saying it has, aid groups told our own ERIN BANCO.

Israel’s military said it had reopened its Kerem Shalom crossing into Gaza after days of being closed, but the United Nations said no aid has gotten through, The Associated Press’ JOSEPH KRAUSS, SAMY MAGDY and MELANIE LIDMAN report. Even if it did, there is no one in Rafah to receive it — because workers fled as Rafah was attacked, the U.N. said.

Aid groups told Erin that Israel has opened its side but humanitarian workers are unable to get aid through because there is still active fighting in the area, adding that several staffers have been injured nearby over the last two days.

As the Israeli military undertakes what it says is a targeted operation to root out militants in the city, it told civilians to go to an “expanded humanitarian zone” about 12 miles away, Reuters’ MICHAEL GEORGY reports.

VICTORY DAY BARRAGE: Russia launched more than 50 cruise missiles and explosive drones at Ukraine’s power grid overnight, The Associated Press’ ILLIA NOVIKOV reports.

Seven regions of the country were hit, damaging homes and the country’s rail network. The “massive attack,” as Ukrainian President VOLODYMYR ZELENSKYY characterized it, came on the day Ukraine observed the end of European fighting in World War II.

“The entire world must understand who is who. The world must not give a chance to new Nazism,” Zelenskyy wrote on X today. “Today, everyone who remembers World War II and has survived to this day feels a sense of déjà vu,” he said i n a subsequent post.

Read: Ukraine moves to send convicts to the front line — minus the rapists and killers by our own VERONIKA MELKOZEROVA

HAITI MISSION: U.S. military has begun flying in private security personnel and equipment to build a base for the Kenya-led multinational security force that’s preparing to deploy to try to calm the situation in Haiti, a DOD official told our own LARA SELIGMAN.

The flights began on Friday and the project is on track to be completed May 23, said the official granted anonymity to discuss internal matters. Biden has vowed not to put US military boots in the ground in Haiti, necessitating the use of contracted security, the official added.

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ELECTION 2024

IS TRUMP ‘MISUNDERSTOOD’? You shouldn’t assume DONALD TRUMP would leave Europe to fend for itself, said DAVID LAMMY, who’s vying to be Britain's next top diplomat if his Labour Party wins a general election.

During a Hudson Institute event, Lammy said the former president’s stance on Europe's security is “often misunderstood,” our own MATT HONEYCOMBE-FOSTER and NOAH KEATE report. Lammy has sharply criticized Trump in the past, but said he does “not believe that [Trump] is arguing that the U.S. should abandon Europe.”

Instead, the shadow foreign secretary said Trump “wants Europeans to do more to ensure a better defended Europe … U.S. spending on European defense actually grew under President Trump, as did the defense spending of the wider alliance during his tenure.”

Lammy argued that Trump helped to push the issue of European defense spending up the global agenda during his time in the White House.

Keystrokes

GET OUT OF THE HUAWEI: The U.S. revoked licenses that allowed companies, including Intel and Qualcomm, to ship some semiconductors to Chinese telecoms giant Huawei Technologies, Reuters’ ALEXANDRA ALPER, FANNY POTKIN and DAVID SHEPARDSON report.

The companies were notified of the move, which applies to chips used for laptops and handsets, on Tuesday. Last month, the sanctioned telecoms company released its first AI-enabled laptop powered by Intel's new Core Ultra 9 processor.

The Commerce Department’s crackdown follows Republican lawmakers’ backlash in Congress over Huawei’s rollout of the new laptop. The lawmakers urged the U.S. to make sure Intel can’t send chips to the company — a move that could hurt both Huawei and American suppliers who do business with it.

"China resolutely opposes the United States overstretching the concept of national security and abusing export controls to suppress Chinese companies without justification," the Chinese foreign ministry said in a statement to Reuters.

THAT GUY TALKING AI: Vox put out a helpful explainer last night on how Israel uses artificial intelligence for its military operations in Gaza. We recommend you give it a watch (and not just because our sharp cyber colleague JOSEPH GEDEON is featured in it. Room rater: 10/10.)

 

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The Complex

ALL HANDS ON DECK: A bipartisan group of lawmakers is raising alarms about what they see as America’s failure to compete with China in shipbuilding, calling for more government investment to reverse the downward trend, our friends at Morning Defense (for Pros!) scoop.

House Armed Services Committee members Reps. MICHAEL WALTZ (R-Fla.) and JOHN GARAMENDI (D-Calif.), as well as Senate Armed Services member MARK KELLY (D-Ariz.) and Senate Intel ranking member MARCO RUBIO authored a report that lays out dozens of recommendations for a fix.

The report’s to-do list includes Washington making a “once-in-a-generation” investment in U.S. shipbuilding, America’s maritime workforce, and U.S.-flag shipping capabilities and capacity, all to advance the power and influence of America's maritime industry.

 

JOIN 5/22 FOR A TALK ON THE FUTURE OF TAXATION: With Trump-era tax breaks set to expire in 2025, whoever wins control of Congress, and the White House will have the ability to revamp the tax code and with it reshape the landscape for business and social policy. Join POLITICO on May 22 for an exploration of what is at stake in the November elections with our panel dissecting the ways presidential candidates and congressional leaders are proposing to reshape our tax rates and incentives. REGISTER HERE.

 
 
On the Hill

BLASTING THE BOMB DELAYS: Top Republican lawmakers accused the White House today of intentionally keeping Congress in the dark to pause bomb shipments to Israel.

“This disastrous policy decision was undertaken in secret and deliberately hidden from Congress and the American people,” Reps. MIKE ROGERS (R-Ala.) and MICHAEL McCAUL (R-Texas), chairs of the House Armed Services and Foreign Affairs Committee respectively, said in a statement.

Progressives, meanwhile, hailed the administration’s pause, with some crediting the pressure Democrats placed on Biden to get Israel to change the way it is waging war in Gaza, Jour own JOE GOULD, NICHOLAS WU and Connor report.

IRAN ENVOY DRAMA: Top Republicans on the Senate Foreign Relations and House Foreign Affairs Committees, Sen. JIM RISCH of Idaho and McCaul, asked the State Department to confirm that Iran envoy ROBERT MALLEY’s security clearance was suspended last year because he “allegedly transferred classified documents to his personal email account and downloaded these documents to his personal cell phone,” The Washington Post’s JOSH ROGIN scooped Tuesday.

Broadsides

BAD LOOK FOR WASHINGTON: Biden’s America is becoming less popular worldwide, a poll published today found.

As our own LUCIA MACKENZIE and GIOVANNA COI report, the U.S. international reputation has taken a hit since early 2023, particularly in Muslim countries where Washington’s unwavering support of Israel in its war in Gaza has proven intensely divisive, according to the 2024 Democracy Perception Index, which canvassed some 63,000 respondents across 53 countries.

Now, Europe is joining the trend: “For the first time since the start of the Biden administration, many Western European countries have returned to net negative perceptions of the U.S,” FREDERICK DEVEAUX, senior researcher for the company that compiled the index.

That attitude is most evident in Germany, Austria, Ireland, Belgium and Switzerland, he added.

THAT’S NOT AN ATTACHÉ! The British government will expel Russia's London defense attaché after accusing him of spying for the Kremlin, our own ANDREW McDONALD reports.

In a statement in the House of Commons today, Home Secretary JAMES CLEVERLY branded the diplomat an "undeclared military intelligence officer" — and said he is being expelled as part of a wider clampdown on "malign activity."

It's the latest move in a tit-for-tat diplomatic row that saw Russia impose its own restrictions on the U.K. embassy in Moscow.

A message from Lockheed Martin:

F-35: The World's Most Advanced Fighter

The F-35 is the most advanced, connected fighter aircraft in the world – unmatched 5th Generation capabilities for the U.S. and allies around the globe. Learn more.

 
Transitions

FIRST IN NATSEC DAILY — REBECCA CHALIF is now chief of staff at USAID, after serving as the agency's head of public affairs for the last three years. She has also previously worked for KAMALA HARRIS and HILLARY CLINTON, our DANIEL LIPPMAN writes in. JESSICA JENNINGS takes over for her as USAID's chief communications officer. She's currently the agency's spokesperson and is a Democratic National Convention and British Embassy alum.

Texas A&M University’s Bush School DC added three national security and intelligence experts to its Intelligence Studies graduate degree program: LINDA WEISSGOLD, former CIA Director for analysis, will be teaching an advanced analytics course. ANDREW MAKRIDIS, former CIA chief operating officer, began teaching a course on strategic intelligence. MARK ZAID, a prominent national security lawyer, began teaching a national security law course.

What to Read

MICHAEL LIEBREICH, LAURI MYLLYVIRTA, and SAM WINTER-LEVY, Foreign Affairs: Why Ukraine should keep striking Russian Oil refineries

BRITTNEY GRINER, The Washington Post: The day I landed in Russia and wound up in prison

TODD HARRISON, American Enterprise Institute: Building an enduring advantage in the third space age

Tomorrow Today

The Carnegie Endowment for International Peace, 8 a.m.: Artificial intelligence for the global majority: understanding opportunities and challenges

The Center for Global Development, 9 a.m.: How will AI transform work and jobs in developing countries?

The Hudson Institute, 9:30 a.m.: Reflections and lessons from 20 years of Estonian NATO membership

The Armed Forces Communications and Electronics Association, 10 a.m.: The Army's current strategies for improving software development and acquisition processes, and the anticipated impact on enhancing operational effectiveness and agility

The Council on Foreign Relations, 10:30 a.m.: U.S.-India relations

The Middle East Institute, 12 p.m.: The Biden administration's national cybersecurity strategy: opportunities and challenges

The Carnegie Endowment for International Peace, 2 p.m.: The Israel-Hamas war with Israeli Ambassador MICHAEL HERZOG

Thanks to our editor, Rosie Perper, who is the biggest pain in our assets.

We also thank our producer, Gregory Svirnovskiy, who makes us happy to be alive.

 

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Eric Bazail-Eimil @ebazaileimil

 

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