On North Korean hackers and Israeli elections

A big-picture look at Israel’s fourth election in two years, and why it might not be the last of this cycle; What's the deal with these North Korean indictments?

Arieh Kovler

Feb 18, 2021

Welcome back!

This week in the Hat Tip:

Big News: North Korean hackers indicted
Considering: Israel’s fourth election
Worth Reading: The Clubhouse App and the Rise of Oral Psychodynamics
Curious: Byelection fun

Big News: North Korean hackers indicted

The US Justice Department today indicted three hackers who work for the military of the Democratic People’s Republic of Korea (DPRK). The North Korean hackers are a part of Lazarus Group, also known as APT38. The indictment says that the hackers “attempted to steal or extort more than $1.3 billion” and this has been reported by many news organisations as if they actually did steal that amount. But it’s clear from that they did succeed in stealing or extorting hundreds of millions in any case.

Lazarus Group has been blamed for a number of high-profile hacks in the last 7 years or so, beginning with their attack on Sony and Hollywood in general because of Seth Rogen’s film “The Interview”. The DoJ release lists a variety of different criminal enterprises, each one a massive story in its own right:

Cyberattacks on the Entertainment Industry that followed North Korea’s reaction to the movie “The Interview” in 2014-15
Cyber-Heists from Banks, including sending fraudulent orders through the SWIFT network
ATM Thefts from ATMs connected to the Internet
Ransomware, especially by creating WannaCry 2.0 and using it to extort companies. Wannacry significantly damaged the UK’s National Health Service in 2017.
Creating a bunch of Malicious Cryptocurrency Applications, that stole Bitcoins and other cryptocurrencies
Hacking Cryptocurrency Companies which resulted in millions of dollars in thefts from some companies
Targeted hacking attempts against individual staff and contractors in sensitive defence positions
Setting up their own ICO, the “Marine Chain Token”, to try and both scam investors and evade shipping sanctions

Many of these schemes were linked with the DPRK already, whether due to existing attributions or speculation. But seeing it all pulled together like this shows the enormous scale of what the hackers were doing. For a country like North Korea, hundreds of millions of dollars is real money, especially when it’s in cryptocurrency that they can use to evade sanctions.

Oddly enough, I found one lone Internet user, Arsenalfan5000, who posted on BitcoinTalk and Reddit to in April 2018 to warn people that Marine Chain Tokens seemed to be a DPRK scam, and that Tony Walker, the purported founder, was actually a North Korean with a fake identity. Arsenalfan5000 created these accounts, made these posts, and was never heard from again. I wonder if this was an friendly intelligence agency trying to scupper the scam?

And, indeed, Arsenalfan5000 was right. One of the three men indicted is Kim Il, aka Julien Kim, aka Tony Walker.

Thanks, ArsenalFan 5000, whoever you were!

Considering: Israel’s fourth election

Israel is having another General Election on 23 March. I say ‘another’ because it will be the fourth General Election in two years; there were elections in April 2019, September 2019 and March 2020. For much of that period, the country was led by an “Outgoing Government” operating under continuity-of-government powers rather than with the confidence of Israel’s parliament, the Knesset. A government was eventually formed in May 2020, but it ended up lasting less than a year.

Background

A bit of background here on Israel’s system of government:

Israel has very weak local government, centralising political power at the national level.
Israel has a very small, unicameral legislature: The Knesset has just 120 members for romantic-historical reasons (there were 120 members in the Great Knesset, a somewhat mysterious body that was involved in the governance of a Jewish commonwealth at the end of the Babylonian exile 2,500 years ago).
Alongside just a couple of other democracies like the UK, Israel has no codified constitution: There are Basic Laws that the courts treat as constitutional, but most of them can be modified by a simple majority of the Knesset.
The Knesset is elected nationally via a single closed-list Proportional Representation system, which results in lots of small political parties. The electoral threshold for a party to enter the Knesset was raised to 3.25% (four seats), but this has resulted in short-lived electoral coalitions between smaller parties who then separate again after the vote.
Israel’s system of government is broadly modelled on the Westminster System: the Prime Minister must have the confidence of the Knesset, and ministers are normally drawn from the pool of Knesset members. This tends to result in individual coalition Knesset members (MKs) having disproportionate power.

For Americans, imagine your whole Government was just the Senate, but without any filibusters or comity rules, and if they ever failed to pass a budget then there’d be a new election. It’s like that in Israel all the time.

Until 2019, there had always been a government formed after a General Election. Sure, the country had its share of dirty tricks and double-dealing, but a Knesset member always managed to get a coalition together, win a vote of confidence and start governing.

April 2019 was the first time that this failed, and it failed for a simple reason: until there’s a new government, the incumbent government gets to hang around in a caretaker role.

Because this caretaker government is assumed to be ruling without a Knesset, it has certain limits on its power. But because it’s also assumed to be a very short-lived creature, it also has some extra powers, essentially allowing the Prime Minister to hire and fire ministers with no oversight and rule, to an extent, by decree.

The Bibi Question

And, of course, the incumbent Prime Minister is Benjamin ‘Bibi’ Netanyahu, who’s been in the role since early 2009. Netanyahu has faced five elections as Prime Minister and has led narrow right-religious coalitions, broad coalitions that encompass the Labor Party and centre-left, and coalitions of anyone who’d support him.

Under Netanyahu, the Likud party has stopped publishing party manifestoes or election platforms; their sole policy is “Netanyahu”, and most other policy areas can be set by coalition partners. In common with many political parties around the world, traditional ideological politics has mostly been set aside in favour of supporting the Leader whatever he might decide.

So when Netanyahu decided that Israel should annex the West Bank any day now, that policy was enthusiastically backed by his supporters. Then, when he decided annexation was a bad idea and normalisation with Arab states was more important, that policy was… also enthusiastically backed by his supporters.

When a figure like this emerges, all of politics reshapes around them, as we’ve just seen in the United States. Netanyahu is not Trump; he’s not an idiot, and he’s paranoid only on the normal level of political leaders. Unlike Trump, Netanyahu actually is a great deal-maker, and it’s this skill that’s kept him in power more than any other.

But things are different now. Netanyahu has had corruption charges hanging over him for a few years, and in the previous elections there were questions about if he’d actually be charged (he was), if the case would be delayed due to the election campaigns (it was), if he’d seek immunity from the Knesset (he did, they said no), if he’d leave office once the trial started (he didn’t)… and now, once again, if the trial will be further delayed because of this new election (it will be).

Politically, this election will be a referendum on Netanyahu. But literally, it won’t be, because it’s a parliamentary election. In the March 2020 election, a majority of Knesset members were elected on a platform of ousting Netanyahu. Nevertheless, Bibi was able to use the threat of the coronavirus pandemic and the offer of Cabinet jobs to stay in power, as well as rewriting the political system overnight to create an “Alternative Prime Minister” job for his rival-turned-partner Benny Gantz, who has since turned rival again.

The polls and the problem

Polling averages of parties in Israel’s March 2021 election, 17 February 2021

There have been all sorts of shenanigans to get to this point— splits and mergers, defections from within Netanyahu’s Likud party, Netanyahu helping encourage opposition parties like the Joint List to fracture, while pushing potential allies to merge. But without going into all the dirty dealings, here’s the bottom line:

The parties that are essentially guaranteed to back Netanyahu are currently polling at a combined total of 48 seats, well short of the bare minimum 61 needed for a majority. Even if they’re backed by Yemina, a potential swing party, they’d still only reach 59.

On the other side, the anti-Netanyahu bloc consists of 51 seats, plus 9 seats for the Joint List, a coalition of Arab parties that won’t join a governing coalition. Add Yemina to that and you get a just-about-workable 62 seat coalition.

However, this bloc contains a right-wing breakaway party from Likud (Gidon Saar’s New Hope), the centrist Yesh Atid led by Yair Lapid, the left-wing Labor and lefter-wing Meretz. It has two candidates for Prime Minister in Lapid and Saar, with a possible third if Naftali Bennett’s Yemina seeks to join it and topple Netanyahu. It is challenging to imagine this bloc coalescing into a coalition around a single Prime Ministerial candidate.

And so the most likely outcome of this upcoming election is… more gridlock, and another possible election in September or October.

Of course, this could shift. A few of the parties above are hovering around the electoral threshold. If they fall below the bar, that could move the balance towards one bloc or the other. That said, a government of 61 MKs is unlikely to last very long. And if a new government does succeed in ousting Netanyahu, it could be hard for it to stay together; it will have achieved its aim with its existence.

The simplest path to political stability for Israel would run through the Likud party under alternative leadership. With a different Likud leader, any number of viable coalitions would be possible. But as long as Likud is Netanyahu, and as long as more than half of the Knesset won’t sit under Netanyahu, gridlock remains.

Israeli polls are also notoriously bad, choosing to remove the don’t knows from the bottom line of the survey, effectively dividing them among existing parties. In reality, these hidden voters often break disproportionately for one or two parties giving them a big boost on election day.

So the polls could be wrong, or they could be hiding what’s going on, and of course there’s still time for things to shift. But my expectation right now is that Israel’s fourth election won’t be its last of this slow-burning crisis of governance.

Worth Reading: The Clubhouse App and the Rise of Oral Psychodynamics

A fascinating article by Zeynep Tufeki about the difference between oral and written culture, and how some social media is restoring oral forms to places that think in writing.

oral culture is not suited to certain kinds of knowledge accumulation and legibility of the world, some of which is necessary to hold our institutions together. And this underappreciated transition is certainly one big reason for the current tension in this historic transition: because of technology, oral psychodynamics have broken through at scale, and we are trying to manage them with institutions that operate solely through an within print/written culture. And that cannot, will not, hold without adjustment.