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Blackwater USA – Daily Brief


  • China warned that it could directly intervene in Hong Kong: “If the situation worsens further, and there is turmoil that the Hong Kong government is unable to control, the central government absolutely will not just watch without doing anything.” (A WSJ article pasted below has more).
  • The State Department raised its travel warning for Hong Kong to the second of four levels, in light of continued protests that have sometimes turned violent: “These demonstrations, which can take place with little or no notice, are likely to continue.”
  • Indeed, Hong Kong police are again being accused of lollygagging as white-shirted miscreants chased after protesters with wooden rods and knives on Monday. As in the train station attack last month, these armed instigators are thought to be connected with the triad (mafia), who wear white shirts.
  • They’re not just standing by while protesters are assaulted; CNBC says the police have arrested 589 protesters—including some as young as 13—since the protests began in June.


  • Feeling threatened by a new U.S. “embargo,” Venezuela’s government withdrew from Norway-mediated talks with the opposition in Barbados. Pres. Maduro got dramatic about it on TV: “I’ve decided we’re not going to continue [with talks]. This week, the North American imperialists went crazy. The Bolivarian fury is ready for battle.”
  • I put “embargo” in quotes above because the Washington Post says that’s an incorrect term for Pres. Trump’s new executive order against Venezuela. The reasoning is nuanced, but generally follows Pres. Guaido’s suggestion that the move was really about Citgo. Post article on that pasted below.


  • Pres. Trump ordered the State Department and USAID to freeze all remaining foreign aid funding for this year until three days after they deliver reports on how much is left in certain accounts (a process that will apparently only take a few days). Critics say it’s another example of Trump bullying; Trump supporters say he’s trying to make the two entities more accountable. Either way, a one-week freeze isn’t going to be a huge deal.
  • Federal immigration authorities raided some food processing plants across Mississippi, and arrested 680 apparently undocumented workers in the process.
  • Puerto Rico is now on its third Governor in a week, and it’s someone who had no interest in the job. Gov. Rossello resigned Friday after protests against him; the Supreme Court removed his successor on constitutional grounds; and now former Justice Secretary Wanda Vázquez has been sworn in. Despite having said she wasn’t interested in being Governor, Gov. Vázquez is now speaking and planning like she’s going to stay.


  • Pakistan condemned India’s revocation of Kashmir’s special status, and said it would “go to any extent” to fight it. As we saw in yesterday’s article, that could put the Afghan peace process at risk.


  • Yesterday’s Taliban car bomb apparently killed 14 people and injured 145. But don’t worry: as part of the developing U.S.-Taliban deal, the Taliban has reportedly pledged not to let Afghanistan be used for terrorist attacks on the U.S. or other countries (besides itself).


  • Reuters cited three oil tracking firms that estimate China imported 4.4 to 11 million barrels of Iranian crude in July—around half the level of a year earlier. Per Reuters: “Senior Trump administration officials estimate that 50-70% of Iran’s oil exports are flowing to China, while roughly 30% go to Syria.”


  • Niger redrew the borders of Termit and Tin-Toumma—one of Africa’s largest biodiversity reserves—to make way for a Chinese oil concession granted in 2008. The current change declassifies part of the park’s protected status, but the Niger government hopes to later extend the reserves boundaries in other directions so it stays the same size overall…we’ll see if that happens.


  • Three Congolese medics have been detained for allegedly murdering a WHO doctor during an attack in Butembo in April. However, the local doctors’ association stands behind the purported assailants, and has threatened to go on strike if their colleagues weren’t released within 48 hours.

China Warns Hong Kong It Will Intervene if Situation Deteriorates (WSJ)

A senior Chinese official in charge of Hong Kong affairs issued a dire assessment of the situation in the territory after more than two months of protests

A senior Chinese official in charge of Hong Kong affairs warned that Beijing would intervene if the local government proved unable to contain the violent protests, the most explicit threat of intervention to date from the central government.

At a meeting with Hong Kong representatives in the nearby city of Shenzhen on Wednesday, the official, Zhang Xiaoming, issued a dire assessment of the situation in the territory after more than two months of protests. He called the situation the most severe since China resumed sovereignty over Hong Kong in 1997.

“If the situation worsens further, and there is turmoil that the Hong Kong government is unable to control, the central government absolutely will not just watch without doing anything,” Mr. Zhang, director of the Hong Kong and Macau Affairs Office of China’s State Council, said in remarks carried by official state media.

Though Mr. Zhang didn’t lay out options for intervention, he said the central government had “enough methods and enough strength” to quickly quell the unrest.

Adam Ni, a China researcher at Macquarie University in Sydney, said the meeting was likely held to discuss methods for resolving the crisis with Hong Kong’s elite, and to show that Beijing will back up Hong Kong’s government.

“The one big thing that I think Beijing fears is if the pro-establishment camp breaks down and really loses the will to confront the protesters,” he said. “It’s really about reinforcing the notion that the Party center is behind them, with military force if necessary.”

Beijing has in recent days expressed its concern that the protests were spiraling out of control and challenging China’s sovereignty over the territory, a former British colony that has limited autonomy under Chinese rule. The demonstrations started as protests against an extradition bill proposed by the local government, but have turned increasingly violent and pointedly critical of Chinese rule, with protesters targeting the national flag and state seal.

Mr. Zhang’s warning of intervention was more direct than in recent days when officials signaled that Beijing’s patience was wearing thin. A day earlier in Shenzhen, where Wednesday’s meeting was held, more than 10,000 mainland police officers ran through anti-riot drills, a video of which was circulated widely online as a show of force.

Still Beijing faces invidious options if it moves to intervene. Use of troops in a military garrison in Hong Kong or of riot police brought in from other parts of China would likely bring international opprobrium, damage confidence in the territory’s role as an international finance center and be seen by many in Hong Kong as undermining its rule of law.

Wednesday’s gathering included more than 500 representatives, including Hong Kong delegates to China’s legislature and leaders of pro-Beijing groups in the city, and others in attendance. A similar meeting had been held in 2014 when a swath of Hong Kong’s central area was occupied by protesters demanding full democratic elections.

Most of the discussions took place behind closed doors, with selected remarks released by Chinese state media.

Wang Zhimin, Beijing’s top official in Hong Kong, called it a “life and death war,” and said the situation had already been pressed to the point where there was no room left to retreat.

Mr. Zhang said the protests had the markings of a “color revolution.” The term refers to democratic movements that have unseated authoritarian governments in countries such as Serbia, Georgia and Ukraine.

The meeting followed a barrage of state media commentaries in recent days that have warned Beijing won’t allow the Hong Kong unrest to continue. A spokesman for Mr. Zhang’s office said at a press conference on Tuesday that those behind the protests wouldn’t escape punishment.

It’s not a U.S. embargo: The new Venezuela sanctions are all about Citgo (Washington Post)

On Monday night, the United States announced sweeping measures to freeze the assets of the Venezuelan government and bar commercial transactions with it.

“The United States is acting assertively to cut off [Nicolás] Maduro financially, and accelerate a peaceful democratic transition,” said national security adviser John Bolton on Tuesday to a conference on the Venezuelan crisis held in Lima, Peru.

Much of the press has gone immediately to the “e-word”: Venezuela, the headlines breathlessly announced, had been placed under a U.S. embargo. The e-word is prominent in the Wall Street Journal headline announcing the new sanctions, and echoed in every media account thereafter.

There’s just one problem: The measure is by no imaginable interpretation an “embargo.”

An embargo is a ban on trade with a particular country. Under an embargo, it’s illegal to sell goods or services to the target country. There’s exactly nothing about trade with Venezuela in the new U.S. measure, whose entire focus is on freezing Venezuelan government assets in the United States.

And to Venezuela watchers, talk of Venezuelan state assets in the United States means just one thing: Citgo.

Unbeknown to many Americans, Venezuela bought the then-Tulsa, Oklahoma-based refiner back in 1986. Venezuela wanted a reliable channel to refine and distribute its extra-heavy crude in the U.S. market, and owning a big downstream company in the United States made good strategic sense.

It’s just that a little over a decade after they bought Citgo, Hugo Chávez came to power, and the country set on a tragic trajectory that’s turned it into a byword for dysfunction these last few years.

The chaotic administration under Chávez would end up putting Venezuela’s control of Citgo in peril. And it would do so through a series of blunders that had nothing to do with Citgo, nothing to do with Donald Trump — and relate instead to one of the world’s largest gold deposits: a place called Las Cristinas in Venezuela’s remote southeast.

In 2002, Chávez signed an agreement to develop the Las Cristinas mine alongside a small Canadian mining company called Crystallex. But, as Chávez was wont to do, he changed his mind and announced plans to nationalize the mine in 2008. Crystallex wasn’t compensated, and an epic, decade-long court battle followed.

To make an excruciatingly long story short, the Canadians took the case to international arbitration, won, and then showed up in U.S. court to collect their $1.4 billion award. But, of course, the only hope they had of collecting their award was to seize Venezuelan property in the United States — which is where Citgo comes in.

At the end of last month, a U.S. Circuit Court of Appeals in Philadelphia upheld a lower-court order giving Crystallex control of Citgo.

Only by that time, the Venezuelan crisis had proceeded so far that the U.S. government no longer even recognized the chavista regime, now led by Nicolás Maduro, as legitimate. Instead, the United States and some 50 other countries recognize the opposition leader, Juan Guaidó, as the rightful president, even though he doesn’t control the actual government in Caracas.

Because it is still a U.S.-based company, Citgo is perhaps the most prominent asset Guaidó has access to. That made prospects that Venezuela would lose it — as a result of a Chávez blunder, no less! — entirely unacceptable.

Which is what Monday night’s asset freeze is actually all about: a desperate, last-ditch effort by the Trump administration to keep Guaidó and the opposition from losing any hope of controlling Citgo.

Whether this measure will survive the inevitable court challenges it will face from a (rightly) aggrieved Crystallex is open to question. U.S. law gives the president wide leeway on matters such as this. What should be clear is that saving Citgo — and not some kind of Cuban-style embargo — is what the White House had in mind with this latest asset freeze.

Which is what makes the headlines about an “embargo” so confusing — and such a propaganda boon for the loathsome regime in Caracas. It’s ironic. As the United States makes a final push to try to save Venezuela’s most valuable remaining asset abroad, Maduro gets to play the victim, waving around a copy of the Wall Street Journal as proof.

It’s not a great look.