In an exclusive interview for Brasidas Group, James “Jim” Lawler reflects on the U.S. invasion of Iraq, ongoing protests in Iran, the war in Ukraine, and other global events and issues shaping the debate around intelligence and security.
James “Jim” Lawler served 25 years as a Central Intelligence Agency (CIA) operations officer in several international posts and as Chief of the Counterproliferation Division’s Special Activities Unit. He was a member of the CIA’s distinguished Senior Intelligence Service from 1998-2005. He was a specialist in recruiting foreign spies and spent over half of his career battling the proliferation of weapons of mass destruction, including the A.Q. Khan Nuclear Takedown Team, which resulted in the disruption of the most dangerous nuclear weapons network in history. He is the recipient of some of the intelligence community’s most distinguished awards, including the Director’s Award, which he received from DCI George Tenet, the US Intelligence Community’s HUMINT Collector of the Year Award, and one of the CIA’s Trailblazer Awards in 2007, which marked the 60th anniversary of the CIA.
An accomplished author, Mr. Lawler published his first novel, Living Lies, about a covert Iranian nuclear weapons program. His second novel, In the Twinkling of an Eye, tells the story of a joint Russian-North Korean biological weapons program. He is working on his third novel, The Traitor’s Tale, a story about treachery and treason from within the CIA.
Brasidas Group (Brasidas) spoke with Mr. Lawler in early Spring 2023 to discuss several key global events and issues. Mr. Lawler is a Senior Advisor at Brasidas. The viewpoints and opinions expressed in this interview do not necessarily represent Brasidas and are solely those of the author and Mr. Lawler.
Brasidas: Both of your novels cover weapons development programs eerily similar to real-world developments and events. “Living Lies” focuses on a covert Iranian nuclear development program. In contrast, “In the Twinkling of an Eye” focuses on a joint Russian-North Korean biological weapons program deployed for targeted assassinations (spoiler alert). In both cases, private sector entities knowingly or unwittingly became involved in these programs. What can private sector entities do from a CI perspective to ensure they are not victims of foreign intelligence operations? Given your experience, what would be your overarching message to the private sector?
JL: From my vast experience in this area, if a company wants to ensure that the folks they are dealing with are on the up and up and not acting on behalf of a hostile power, they have a couple of choices. They can either go to the FBI or their local security service and ask to run the name of a company through their database to make sure these people are who they say they are. It is true that numerous governments use front companies, especially those with benign-sounding names, and operate through them to procure things that should probably be, or already are, on a trade sanctions list.
The clients of Brasidas also have the luxury of checking with it and its extensive databases whether this company is where they say they are, does what they say they do or acts on behalf of a hostile foreign power that could cause trouble. I think it’s wonderful that Brasidas has that type of verification and due diligence that it does on companies to make sure these people are who they say they are. Just because a company is in a benign location does not mean the actual end users or the company’s beneficial owners are not working undercover. I know the Chinese, the Iranians, the Russians, and others will sometimes create shell companies in benign locations. For example, it could be in Singapore, Hong Kong, or Dubai. Now Dubai and the United Arab Emirates sound very benign. They are in the business of doing business. However, there are a lot of [front companies] that operate out of jurisdictions like that. Frequently, these countries are more interested in the amount of commerce than what the commerce is.
I advise any company doing business with a company they do not know to check with a business like Brasidas to run these names through their extensive databases or to go to their local security service if they are based in the States. It could be the FBI or, if they are in Europe, their local security services. The reason is that you do not want to unknowingly supply the enemy with the means they could use to harm us.
In my books Living Lies and In the Twinkling of an Eye, some companies were dealing unwittingly with these hostile powers. Still, unfortunately, they absolutely do not want to know who they are dealing with, or they do know but do not care. Otherwise, they are owned and operated by some deep-cover enemy forces. So, to be truly diligent, you need to check these companies out, especially if it is any dual-use good. But even if it is something innocent like, say, high-precision equipment, you can use it in many things; that also means in things that can harm us. Right now, the best chips are made in the United States, and our allies and the Russians or Chinese would dearly love to get those things. There was an article in the Washington Post about some of the Iranian companies supplying the Russians fighting the Ukrainians. They are using certain Chinese and Russian technologies, and we need to stop that.
Brasidas: Recently was the 20th anniversary of the invasion of Iraq. You have spoken about how the story in Living Lies is underpinned by a willingness in Washington to believe or highlight only the intelligence they want to hear or which assists a political aim. You have previously mentioned that you drew parallels from the run-up to the invasion of Iraq. In your opinion, in the two decades since, what are the key lessons the Intelligence Community learned? Or do you see these issues remaining a significant challenge for your former colleagues?
JL: I would like to think we learned some lessons, but I know human nature is human nature. I fear any administration, whether Republican or Democratic, might only hear what they want to hear sometimes. In fact, intelligence collectors and the intelligence community can collect some of the best intelligence in the world, but if leadership does not believe it or disregards it, then it is useless. Or worse yet, if an intelligence organization or certain people in it pander to a political administration for whatever reason, that is shameful. We in the intelligence community need to tell the truth to power, and they may not like it, but our job is to provide the truth. The inscription in our entry hall at the Central Intelligence Agency is “ye shall know the truth and the truth shall set you free,” a Bible quotation from the Book of John. Sometimes those truths are ugly, even though they are the truth. We need intelligence officers and senior analysts to tell leaders, “This is what we see. We do not see the other.”
I witnessed this firsthand in the run-up to the Iraq War. I was in the counterproliferation division of the CIA, running an operation that later turned out to be the penetration and destruction of the A.Q. Khan nuclear weapons network. We were working against a real weapons of mass destruction (WMD) program, and we brought it down. But at the same time, significant people claimed that Iraq had a WMD program. Now it’s true that Saddam Hussein once had vigorous nuclear and chemical weapons programs, which he used against the Iranians and his own people, the Kurds. That was a proven fact. But in the run-up to the second Iraq war, he had either gotten rid of these programs, or they had been shut down.
I would like to think we learned some lessons, but I know human nature is human nature.
There were war drums back here in Washington, and some analysts got the clue that the White House wanted to hear certain things. And shamefully, they would only supply info slanted in that area. I was in the counterproliferation division at that time in 2002-2003 and was read into every sensitive intelligence compartment dealing with anything concerning weapons of mass destruction. A few months before we went to war, I was at a Group Chiefs’ meeting and asked if there was some highly secret compartment I had not seen that had the casus belli; the clarion calls to go to war, the justification for war. Because the United States typically, at least in the last 100 years or so, has not just indiscriminately gone to war with someone without being attacked or provoked. So, I was looking for this smoking gun. Where is this WMD that people are beating the war drums about? Is there a secret intelligence source I do not know about that is saying this? And I remember the people at the Group Chiefs’ meeting looked at me and said, “Jim, the train has left the station,” meaning we do not care, and I thought that was horrible. So, we would go to war without the casus belli, and later it became very personal.
My son was a Marine Corps infantryman in Iraq in Ramadi from 2006-2007 in combat three to four days a week, running interdiction operations along the Euphrates River. He was handling a 50-caliber machine gun, with people shooting at him constantly. Thankfully, he came back physically intact, but I thought this would be ironic if I knew going into this that there was no WMD and my son was injured or killed in that war. It was horrible, and I know a lot of young men and women that were killed. We lost a lot of blood and treasure over this. I am not going to pin all the blame on the White House. There is a tendency in human nature sometimes to tell people what you think they want to hear. That is more than unfortunate in this case. It was tragic. Think of the lost lives, the money lost, and the Iraqi lives lost. I am not an apologist for Saddam Hussein by any means, but it was simply a national tragedy. I hope some reforms might catch that, but I do not know. I am not sure if it would or not.
In fact, we may swing the other way, which is what my novel Living Lies posits, that we may have a situation where a country has a WMD program, maybe Iran, and we tend to ignore it because we want to believe it cannot be. Even though we have sources, as we did in my novel, screaming, we know they have them. Again, it would be human nature for an administration to take the temperature and conclude this would be an inconvenient truth if suddenly we have the smoking gun on an Iranian nuclear program while saying an administration was trying to make peace with Iran. We should not color the truth.
Brasidas: With the International Atomic Energy Agency (IAEA)’s new detection of 84% highly enriched uranium (HEU) and some estimates placing the timeline to a viable bomb in a matter of days, is it time the international community view Iran as a nuclear power? If not, why? What might that mean for how the international community interacts with it?
JL: There are some major weaknesses of the IAEA. In this case, they came up with 84% enriched uranium traces. Sometimes people think that weapons-grade means only 90% or above, but that is not true. You can have lower than 90%. You just need more of it. The bomb that destroyed Hiroshima, Little Boy, was primarily about 87-88% HEU. They just had more of it. You compensate by making the mass larger, but that is a technical issue.
I am not sure how alarmed I would get. It depends on how much of that 84% enriched uranium they found and the provenance and where it came from. It could be that Iran was using former Pakistani centrifuges, and the Pakistanis did improve theirs to weapons grade. So, there could be microscopic traces of HEU that the IAEA detected, thinking it was of Iranian origin when it could be from equipment Iran obtained from elsewhere.
Nevertheless, 84% is an alarm bell that goes off because you certainly are in the range of weapons grade. I doubt that a few-day timeline is accurate, even if you had enough weapons-grade uranium. The Iranians have a design they acquired from AQ Khan but will also be doing cold testing. They would be doing many additional things to get to that stage. It would take much longer than a matter of days. Nevertheless, that is alarming. If I were Israel right now, I would be very nervous. So, it is not a good sign. It is like flares are going off, but I am unsure how excited I will get until I figure out more. If the IAEA is doing its job, it should ask the Iranians, “How do you explain this?” and hold their feet to the fire. Again, I do not believe in trusting the IAEA, they serve a function, but they are only allowed to inspect the areas where Iran allows them to.
Brasidas: This was a major criticism of the Joint Comprehensive Plan of Action (JCPOA).
JL: Absolutely, that was what one of my books said: what if they take and hide it and take the IAEA to some other places? They open up something, take them in, and lead them around by the nose. Again they [the IAEA] are trying to do their job, but they are only allowed to do what they are allowed to do. If you recall, a few years ago, an Iranian spy in the IAEA would tip off the Iranians as to what they were going to inspect and what the inspection standards would be because, as you know, the IAEA is an international organization. So, they [Iran] had a source in the IAEA that told them, “OK guys, here is how to hide this.” It is like that with a lot of these international organizations. They are well-intentioned, but we know the road to hell is paved with good intentions. That is where you need intelligence sources. It would be best to rely on something other than the IAEA to deliver it. I am not saying they are just a feckless tool. No, not quite that bad. They serve a purpose, but I would not trust their pronouncements at any time. I just would not trust it.
Living Lies is available for purchase here.
To begin with, I am conflicted about the JCPOA, which is a real mouthful. But I was slightly in favor of the deal in 2015, thinking [at the time] it was better to talk to the Iranians and not push them into pursuing a nuclear weapons program. So, I would consider myself lukewarm in endorsing it, thinking it was better to have something than say “no, to hell with you,” and they [Iran] feel they do not have a choice and might as well have a nuclear weapons program.
After that, we did have much intelligence that the Israelis had uncovered about how extensive and ambitious their program was. At the same time, they were talking to us with supposedly honorable intentions. Yet, they had a very aggressive program of developing a nuclear weapon and how to fit it into a missile and other such projects. So now I would say that I probably oppose it, but hopefully, the Iranian regime will change at some point.
You probably know or recall that South Africa had an actual nuclear weapons program with six weapons. In the late 80s, they went from being an apartheid regime to handing over power to the African National Congress (ANC). Before they did that, they declared their six nuclear weapons to the IAEA and had them dismantled. So, that was a peaceful end to a nuclear program. Other countries have also done that, including Argentina and Sweden, which also had the program, amazingly. They have the technology for a program.
My long-term hope is that we can stall the Iranian program until more rational minds take power in Tehran and kick the mullahs out.
Many Iranians in America have positions in Sciences, Medicine, and Academia; these are very bright, hardworking people who are not inherently anti-American. So, if we could work out a rapprochement with Iran, it would be in our collective interest, and they would not feel like they need to be pushed to a nuclear weapon.
At the same time, I sometimes have to think about what I would do if I were Iranian and surrounded by Arab states that are hostile to me, or Sunni states when my predominant religion is Shi’a. It could be that if I were Iranian, I might think I do not have a choice. I am in a tough neighborhood. I need to have a nuclear weapons program. I believe the real fear I have of Iran developing a nuclear weapon is that it is far greater than just Iran having a nuclear weapon because of the government in Tehran. I may detest it, but it is not completely irrational. They realize that Israel does have a nuclear program. Against Israel, Iran would be wiped off the face of the earth. My concern is that if the Iranians demonstrate a nuclear weapon, there will be another number of countries in the region, such as the United Arab Emirates, Turkey, the Saudis, and others, who will feel like they must also have nuclear weapons. In fact, Mohammed bin Salman and Saudi Arabia even said as much. He said if the Iranians get weapons, we will have to have one. Everybody in the region suddenly is going to want to have a nuclear weapon. My honest conviction is that the more countries with nuclear weapons, the chances of intentional or accidental use almost logarithmically increase. So, my real fear is that this will be a contagion in the Middle East and be very destabilizing. If we ever have a single nuclear weapon go off in-anger again, and we have not had one since the two we [the United States] used in 1945, I think it would be catastrophic for the world economy and for the people that die as a result, and future generations of people.
Brasidas: Critics of the JCPOA voiced concerns about it not going far enough to address many aspects of Iranian behavior in the region, such as Iranian missile systems, funding of Hezbollah, Syria, Houthis in Yemen, groups in Iraq, etc. Given that the JCPOA has failed to prevent Iranian nuclear development, what is the concern with Iran’s nuclear program so far along that it may export nuclear or WMD technologies to its proxies, allies, or other nuclear aspirant states? In other words, what is the risk of an Iranian AQ Khan-type network developing?
JL: Let’s look at this from two perspectives. Do I think the Iranian government would knowingly trade nuclear or send nuclear technology to another hostile one of their allies of a hostile power? I doubt that. At the same time, it was not Pakistan’s government trying to market nuclear weapons technology but Dr. Khan himself. He took nuclear proliferation, private, and was a powerful individual with unique control and access to nuclear weapons. But it was he alone with some well-placed allies of his who did that. Neither the President of Pakistan, President Musharraf, nor the official government knew anything about it. There may have been some Pakistani generals who turned a blind eye, but it was not a Pakistan official state policy. The Iranians make much money dealing in conventional arms, drones, etc. I think they would have to think long and hard about trading or selling nuclear technology to an ally. I am thinking of which ally that might be. It could be Syria, but that might be a bridge too far for the Iranians. They have enough other mischiefs to get up to without dealing with nuclear weapons.
By the same token, people asked me when I was running the operation against AQ Khan if it was conceivable that he might sell it to Al-Qaeda. Well, no, actually. As much as I detest AQ Khan, I thought no, that was highly unlikely. Nevertheless, we were still looking for any indication that he or his network might possibly deal with a terrorist group, but he did not. He dealt only with the Libyans. And we are highly suspicious that he was probably dealing with Iran and some other state governments but not terrorist groups.
Brasidas: So AQ Khan had principles?
Yes, you could say that such as they were was too risky. He was not a fan of Al Qaeda. So, that was the enormous pressure on me and my team when we discovered that Libya was receiving nuclear weapons technology, recalling that Libya at that time was a state sponsor of terrorism. We were thinking, would this bleed over into Gaddafi supplying a terrorist group with weapons? Fortunately, we stopped Libya and disarmed them before they came to that, but I do not know. I mean, he [Gaddafi] was certainly less rational than many world leaders, but maybe even for him, that might have been too far.
My honest conviction is that the more countries with nuclear weapons, the chances of intentional or accidental use almost logarithmically increase.
Brasidas: No shortage of critics would say Iran is a state sponsor of terrorism, and it is not short of narcissistic and power-hungry individuals either.
JL: Suppose you asked me if an Iranian AQ Khan could exist. You might have a well-placed official somewhere, somebody probably senior in the Islamic Revolutionary Guard Corps (IRGC). Somebody like the figure in my book, General Alborzi. Somebody like that who is a master manipulator and has his fingers in a lot. It was like AQ Khan. The guy was not a brilliant nuclear scientist. He was a good scientist but not a nuclear weapons genius. Instead, he was an organizational genius who recruited Western business people and Westerners who were doing his dirty work when he was in the Netherlands. But if you find somebody like that and maybe my General Alborzi, who in Living Lies was loosely based on an AQ Khan-type figure, very narcissistic, manipulative. A character like that would have been the late General Soleimani, assassinated at the Baghdad airport. I based my character a bit on him as well. He was a charismatic, good-looking guy, far more significant than just his position as head of the Quds force and IRGC. So, somebody like him.
Brasidas: Speaking of Iran, we see continuing protests related to the death of Mahsa Amini and the government’s response to those protests. Our 2022 publications discussed current population trends, indicating that many Iranians have little to no personal memory of the Islamic Revolution. We see these demographics also reflected in the makeup of the protestors. How optimistic are you that these younger generations are becoming dissatisfied with the regime and that actual change can occur?
JL: It gives me hope that Iran cannot totally shut out Western influence. Virtually every Iranian middle-class and up probably has a cousin, brother, or relative in the West. And they have people coming and going back and forth. I know they try and control the Internet, but they cannot totally shut it out. I am sure that there are videos traded. It’s almost like back in the days of the Soviet Union when you had samizdat. You had the forbidden writings of Solzhenitsyn or others, and people would trade these things [on the black market]. It is the forbidden fruit. I would imagine that the younger generation in Iran is much more culturally tolerant and cosmopolitan, like younger generations anywhere. I hope this will eventually result in the Islamic regime moderating its stances or falling from power, much as the Shah did in 1979.
I do not know how long that is going to take. Everybody probably expected it would be much sooner than now, but it has been 44 years since the Islamic regime was in power. Many of the young people in Iran, the middle class, and young adults are tired of this. It is ridiculous. And I think the more that they can listen to Western media and be exposed to that the better. So, I am hopeful and cautiously optimistic. If you were to ask me to put a timeline on it, I have no idea. It could be sudden, like the Arab Spring, or gradual, and ten years from now, they might be slightly better off. But with the economic sanctions, the Iranian currency’s rial is virtually worthless, and inflation is horrible. The protests due to the death of Masha Amini were horrible. A lot of women are tired of this, and I think it is a tinderbox that they are sitting on. But I would have to be a cultural anthropologist or bright political scientist to predict [the outcome or fall of the regime]. Nobody has a timeline on it predicting the future like that.
Brasidas: One of the things that I think is characteristic of these protests is that it is the women leading the movements in the streets, which may be something we have not seen up to this point. Is that a shift that could be the game changer?
JL: Women can have a powerful influence on a country. That is not to say that 100% of all the women in Iran are for this. Many devout Muslim women, especially older ones, are probably shocked and more fundamentalist. Probably also, and I hate to be class conscious, but probably also in the lower ranks of people that are not as educated, that may be less tolerant of women without the hijab on. I do not know, I am not an expert on Iran, but I think it is encouraging that there are many women out there. I guess these protests are ongoing, and I do not know how vigorous they are now. Of course, the government has overreacted. It is like the Chinese bringing up the Tiananmen Square anniversary.
In the Twinkling of an Eye is available for purchase here.
Brasidas: Speaking of China, regionally, Iran and Saudi Arabia have agreed to reestablish diplomatic ties seven years after relations were severed. This agreement came after Beijing hosted talks between the two. Is China increasingly filling the void left by the United States’ withdrawal and a reduced focus on the Middle East?
JL: It is a genuine concern. I think Xi Jinping and the Chinese Communist Party are working on a brilliant campaign to replace American influence, not only in the Middle East. Look at Xi Jinping’s visit to Russia, where he acts as a peacemaker. It would not surprise me if he thought he would get the Nobel Peace Prize out of this.
He has basically brokered a peaceful rapprochement between Iran and Saudi Arabia, although I sincerely wouldn’t trust either country to really go into this. But with that, and if he can do something in Ukraine with the Russians, this is only to China’s credit, and it’s a win-win. It’s a brilliant campaign. Somebody in China deserves some prize for suggesting this. It shows that here you are, a so-called peacemaker and doing this, and you know the Chinese are very nervous about this whole thing anyways. They may do lip service about their alliance or friendship. No, actually, they don’t say alliance that much. Still, friendship with Russia makes them very nervous to see how the Russians have fallen apart in Ukraine, and even though they love Russian oil and gas, you don’t see them yet delivering arms to Russia. But this is China’s brilliant foreign policy campaign, and you have to watch them. As you said, they may be replacing us in certain areas, extending their influence, which is very troubling. He actually cannot lose this way, you know. He can say he tried even if the Russians and Ukrainians don’t make peace. I don’t know. I just thought that son of a gun; he’s going to; he’s holding himself up for a Peace Prize.
Brasidas: With the war in Ukraine heating up and escalations like the downing of a US drone, the parties are increasingly getting closer to a miscalculation or mistake that draws NATO into a confrontation with Russia. Is there a line to the support Ukraine should expect from the West? How can NATO ensure it does not become entangled in a confrontation with the Kremlin?
JL: That’s a very tricky and delicate question. Clearly, we do not want the Russians to escalate this to a nuclear conflict. But virtually anything short of supplying Ukrainians with nuclear weapons should be considered. I am glad that they are accelerating the delivery of the Abrams tanks. They [the United States] have pulled some old ones out of stock which are not the latest model, but still very good. Of course, that gave the Germans political coverage to supply the Leopard tank, which may not be as good as the Abrams, but it is a pretty darn good tank. The Leopard is more versatile in many respects because it does not use the special fuel that the Abrams does, and it does not require as much training. Of course, there are many of them in Europe, and many NATO countries have the Leopard tank. So, President Biden agreeing to supply the Abrams tanks, gave Chancellor [Scholz] in Berlin the go-ahead and the room to supply the Leopard and tell the other countries, such as Poland and others who use the tank that they could also supply them to the Ukrainians.
Regarding the deliveries of fighter jets, I am not an expert on air tactics. I am glad that the Poles are sending the fighters to Ukraine. I know that the Ukrainians would like F-16s. I have been told that it takes more training to train Ukrainian pilots on F-16s. So how practical that is, I am still determining. But I am firmly convinced that whatever we can do to help the Ukrainians, we need to be doing it. I know we are doing a lot. I am not going to criticize the administration. I saw a long list of all the things we have supplied or are in the process of providing, which is substantial. I am disturbed by some elements in the Republican Party that are starting to get weak knees and thinking, well, there is called to be a limit to this. I do not think there has to be a limit to this. If people had stood firm in 1938 when Hitler annexed the Sudetenland and then the rest of Czechoslovakia and Austria, we might have prevented World War II. So we need to do whatever we can to help the Ukrainians out. I know we’re doing a lot. I know we’re supplying them with intelligence, many weapons, and things like that.
I am firmly convinced that whatever we can do to help the Ukrainians, we need to be doing it.
We have seen [during the conflict] how rotten the Russian army is. It is amazing the losses that they have taken and everything. I am a staunch supporter of the Ukrainians. I think we should do whatever, and I don’t care how much it costs because it will be cheap compared to what it will cost if Russia takes over Ukraine and then threatens Eastern Europe. Short of a nuclear weapon, virtually, that would be my only red line. No, they’re not getting nuclear weapons or chemical weapons or anything like that, but short of that, I think as much high technology as we can supply them, the better.
Brasidas: The concern then becomes, at what point is, does the Kremlin say this is going so poorly for us that we do not have a choice but to use the tactical strike?
JL: I know there is a fear of that, and it is not a 0% [chance]. It is probably less than 5% that will happen, but you have to think about it. If you push them into a corner and they did use a tactical nuclear weapon, then I do not know what happens after that. I mean, that would be catastrophic for everybody, including the Russians.
Brasidas: The International Criminal Court (ICC) recently issued an arrest warrant for Vladimir Putin. With these developments, are we entering a stage of conflict that makes peace harder to achieve? With Russian leaders isolated economically and politically, how can the parties come to the negotiating table?
JL: Well, I’m not a trained diplomat. I do not know. I know you do need to offer some face-saving. If not, the only thing you can hope for is a coup d’état in Moscow, and the Russian people start suffering, especially the oligarchs. I am sure that Putin is concerned about some of his so-called allies that may not be at all. They are opportunists, and if they see that the opportunity is on the other side of grabbing power and making peace with the West, they may do it. That is a tricky question. You do not want to push them into a corner, but we have got to be firm in our support, and by the way, I would not cede Crimea to them at all. If he [Putin] still comes back and says, OK, we go back to the pre-invasion lines, I would be cautious about that. I know the Ukrainians do not want that, and I do not think we should make a deal that excludes their concurrence. That would be disgraceful. That would be spineless.
Brasidas: We are getting a lot of inquiries from our Clients about their supply chains. As someone quite familiar with dark supply chains, what do you think companies need to understand about their own supply chains, and how can they take proactive steps to manage their exposure to dark networks?
JL: Again, they need to have a healthy relationship with companies such as Brasidas to find out who is the trustworthy supplier, the actual manufacturer of specific essential components in their supplies. They must diversify their reserves, putting only some of their eggs in one basket. Anybody that depends upon Chinese manufactured anything should be weary of that, that this could stop at any time. Or that it could be sabotaged. There could be backdoors built into these things. I speak this from experience because my line of work ran sabotage operations through supply lines, so you must verify where these things are coming from. Who makes them? And can we rely on something manufactured in a hostile country? Or even if it is abroad, you must be very careful using a front company and certainly in any high-tech industry. Take it [the product] down to its essentials and what could be modified and sabotaged, what could suddenly be a choked-off.
A friend of mine used to be the Deputy Chief of Station in Beijing in, China, and he was talking about the high percentage of rare earths that China controls. Rare earth is used in cell phones, are used in computers; they are used in all kinds of high-tech applications. It turns out that China, through its reasonable fortune control, has something like 90 to 95% of the deposits of rare earths. As an investor, I thought it would behoove me to invest in a Western source of rare earths.
So, about 10 or 15 years ago, I found two companies, one in Canada and one in the United States, with healthy deposits of rare earths. They were starting to mine to produce these, and I thought this was a surefire investment. What I had just remembered, though, was that any country with an almost virtual monopoly on supply can not only choke the market but also flood the market. So, the Chinese flooded the market with cheap rare earth, consequently driving those two companies bankrupt and out of business. So, I had my failure of a supply chain and lost much money in these two investments because the Chinese ran them out of business by flooding the market, and the Canadian and American companies could not compete.
Brasidas: We see that across multiple industries, not just rare earth minerals. We see that in solar panel manufacturing, battery manufacturing, and, speaking of computers, just think of how much of the global economy is underpinned by batteries made in China.
JL: That is right. To get one further comment, any company in that industry with much manufacturing, or something like that, should be weary of offshoring to a location like China. If you have to go to a cheaper labor location, they should look more at Latin America, maybe the Philippines. India would be a great choice, you know, but not China.
Brasidas: Brasidas Group thanks Mr. Lawler for his time and insight on these issues.