Posts Tagged: New York Times

Nov 15

Paris Terror Attacks Stoke Encryption Debate

U.S. state and federal law enforcement officials appear poised to tap into public concern over the terror attacks in France last week to garner support for proposals that would fundamentally weaken the security of encryption technology used by U.S. corporations and citizens. Here’s a closer look at what’s going on, and why readers should be tuned in and asking questions.

encryptedeyeDespite early and widely repeated media reports that the terrorists who killed at least 128 people in Paris used strong encryption to disguise their communications, the evidence of this has failed to materialize. An initial report on Nov. 14 from Forbes titled “Why the Paris ISIS Terrorists Used PlayStation4 to Plan Attacks” was later backpedalled to “How Paris ISIS Terrorists May Have Used PlayStation 4 to Discuss and Plan.” Turns out there was actually nothing to indicate the attackers used gaming consoles to hide their communications; only that they could do that if they wanted to.

Politico ran a piece on Sunday that quoted a Belgian government official saying French authorities had confiscated at least one PlayStation 4 gaming console from one of the attacker’s belongings (hat tip to

“It’s unclear if the suspects in the attacks used PlayStation as a means of communication,” the Politico story explained. “But the sophistication of the attacks raises questions about the ability of law enforcement to detect plots as extremists use new and different forms of technology to elude investigators.”

Also on Sunday, The New York Times published a story that included this bit:

“The attackers are believed to have communicated using encryption technology, according to European officials who had been briefed on the investigation but were not authorized to speak publicly. It was not clear whether the encryption was part of widely used communications tools, like WhatsApp, which the authorities have a hard time monitoring, or something more elaborate. Intelligence officials have been pressing for more leeway to counter the growing use of encryption.”

After heavy criticism of the story on Twitter, The Times later removed the story from the site (it is archived here). That paragraph was softened into the following text, which was included in a different Times story later in the day: “European officials said they believed the Paris attackers had used some kind of encrypted communication, but offered no evidence.” To its credit, the Times today published a more detailed look at the encryption debate.

The media may be unwittingly playing into the hands of folks that former NBC reporter Bob Sullivan lovingly calls the “anti-encryption opportunists,” i.e., those who support weakening data encryption standards to make it easier for law enforcement officials to lawfully monitor people suspected of terrorist activity.

The directors of the FBI , Central Intelligence Agency and National Security Agency have repeated warned Congress and the technology community that they’re facing a yawning intelligence gap from smart phone and internet communication technologies that use encryption which investigators cannot crack — even after being granted the authority to do so by the U.S. courts.

For its part, the Obama administration has reportedly backed down in its bitter dispute with Silicon Valley over the encryption of data on iPhones and other digital devices.

“While the administration said it would continue to try to persuade companies like Apple and Google to assist in criminal and national security investigations, it determined that the government should not force them to breach the security of their products,” wrote Nicole Perlroth and David Sanger for The New York Times in October. “In essence, investigators will have to hope they find other ways to get what they need, from data stored in the cloud in unencrypted form or transmitted over phone lines, which are covered by a law that affects telecommunications providers but not the technology giants.”

But this hasn’t stopped proponents of weakening encryption from identifying opportunities to advance their cause. In a memo obtained in August by The Washington PostRobert Litt, a lawyer in the Office of the Director of National Intelligence, wrote that the public support for weakening encryption “could turn in the event of a terrorist attack or criminal event where strong encryption can be shown to have hindered law enforcement.”

To that apparent end, law enforcement officials from Manhattan and the City of London are expected on Wednesday to release a “white paper on smartphone encryption,” during an annual financial crimes and cybersecurity symposium at The Federal Reserve Bank of New York. A media notice (PDF) about the event was sent out by Manhattan District Attorney Cyrus R. Vance Jr., one of the speakers at the event and a vocal proponent of building special access for law enforcement into encrypted communications. Here’s Vance in a recent New York Times op-ed on the need for the expanded surveillance powers.

Continue reading →

Jun 15

Catching Up on the OPM Breach

I heard from many readers last week who were curious why I had not weighed in on the massive (and apparently still unfolding) data breach at the U.S. Office of Personnel Management (OPM). Turns out, the easiest way for a reporter to make sure everything hits the fan from a cybersecurity perspective is to take a two week vacation to the other end of the world. What follows is a timeline that helped me get my head on straight about the events that preceded this breach, followed by some analysis and links to other perspectives on the matter.

OPM offices in Washington, DC. Image: Flickr.

OPM offices in Washington, DC. Image: Flickr.

July 2014: OPM investigates a breach of its computer networks dating back to March 2014. Authorities trace the intrusion to China. OPM offers employees free credit monitoring and assures employees that no personal data appears to have been stolen.

Aug. 2014: It emerges that USIS, a background check provider for the U.S. Department of Homeland Security, was hacked. USIS offers 27,000 DHS employees credit monitoring through AllClearID (full disclosure: AllClear is an advertiser on this blog). Investigators say Chinese are hackers responsible, and that the attackers broke in by exploiting a vulnerability in an enterprise management software product from SAP. OPM soon suspends work with USIS.

November 2014: A report (PDF) by OPM’s Office of the Inspector General on the agency’s compliance with Federal Information Security Management Act finds “significant” deficiencies in the department’s IT security. The report found OPM did not maintain a comprehensive inventory of servers, databases and network devices, nor were auditors able to tell if OPM even had a vulnerability scanning program. The audit also found that multi-factor authentication (the use of a token such as a smart card, along with an access code) was not required to access OPM systems. “We believe that the volume and sensitivity of OPM systems that are operating without an active Authorization represents a material weakness in the internal control structure of the agency’s IT security program,” the report concluded.

Dec. 2014: KeyPoint, a company that took over background checks for USIS, suffers breach. OPM states that there is “no conclusive evidence to confirm sensitive information was removed from the system.” OPM vows to notify 48,439 federal workers that their information may have been exposed in the attack.

Feb. 2015: Health insurance giant Anthem discloses breach impacting nearly 80 million customers. Experts later trace domains, IP addresses implicated in attack to Chinese hackers. Anthem offers two years of free credit monitoring services through AllClearID.

May 2015: Premera Blue Cross, one of the insurance carriers that participates in the Federal Employees Health Benefits Program, discloses a breach affecting 11 million customers. Federal auditors at OPM warned Premera three weeks prior to the breach that its network security procedures were inadequate. Unlike the Anthem breach, the incident at Premera exposes clinical medical information in addition to personally identifiable information. Premera offers two years of free credit monitoring through Experian.

May 2015: Carefirst Blue Cross discloses breach impacting 1.1 million customers. Clues unearthed by researchers point to the same attack infrastructure and methods used in the Anthem and Premera breach. Carefirst offers two years free credit monitoring through Experian.

June 2015: OPM discloses breach affecting up to 4 million federal employees, offers 18 months of free credit monitoring through CSID. Follow-up reports indicate that the breach may extend well beyond federal employees to individuals who applied for security clearances with the federal government.


As the OPM’s Inspector General report put it, “attacks like the ones on Anthem and Premera [and OPM] are likely to increase. In these cases, the risk to Federal employees and their families will probably linger long after the free credit monitoring offered by these companies expires.”

That would appear to be the understatement of the year. The OPM runs a little program called e-QIP, which processes applications for security clearances for federal agencies, including top secret and above. This bit, from a July 10, 2014 story in The Washington Post, puts the depth and breadth of this breach in better perspective:

“In those files are huge treasure troves of personal data, including “applicants’ financial histories and investment records, children’s and relatives’ names, foreign trips taken and contacts with foreign nationals, past residences, and names of neighbors and close friends such as college roommates and co-workers. Employees log in using their Social Security numbers.”

That quote aptly explains why a nation like China might wish to hoover up data from the OPM and a network of healthcare providers that serve federal employees: If you were a state and wished to recruit foreign spies or uncover traitors within your own ranks, what sort of goldmine might this data be? Imagine having access to files that include interviews with a target’s friends and acquaintances over the years, some of whom could well have shared useful information about that person’s character flaws, weaknesses and proclivities.

For its part, China has steadfastly denied involvement. Politico cites a news story from the Chinese news service Xinhua which dismissed the U.S. allegations as “obviously another case of Washington’s habitual slander against Beijing on cybersecurity.” Continue reading →

Feb 15

The Great Bank Heist, or Death by 1,000 Cuts?

I received a number of media requests and emails from readers over the weekend to comment on a front-page New York Times story about an organized gang of cybercriminals pulling off “one of the largest bank heists ever.” Turns out, I reported on this gang’s activities in December 2014, although my story ran minus many of the superlatives in the Times piece.

The Times’ story, “Bank Hackers Steal Millions Via Malware,” looks at the activities of an Eastern European cybercrime group that Russian security firm Kaspersky Lab calls the “Carbanak” gang. According to Kaspersky, this group deployed malware via phishing scams to get inside of computers at more than 100 banks and steal upwards of USD $300 million — possibly as high as USD $1 billion.

Image: Kaspersky

Image: Kaspersky

Such jaw-dropping numbers were missing from a story I wrote in December 2014 about this same outfit, Gang Hacked ATMs From Inside Banks. That piece was based on similar research published (PDF) jointly by Dutch security firm Fox-IT and by Group-IB, a Russian computer forensics company. Fox-IT and Group-IB called the crime group “Anunak,” and described how the crooks sent malware laced Microsoft Office attachments in spear phishing attacks to compromise specific users inside targeted banks.

“Most cybercrime targets consumers and businesses, stealing account information such as passwords and other data that lets thieves cash out hijacked bank accounts, as well as credit and debit cards,” my December 2014 story observed. “But this gang specializes in hacking into banks directly, and then working out ingenious ways to funnel cash directly from the financial institution itself.”

I also noted that a source told me this group of hackers is thought to be the same criminal gang responsible for several credit and debit card breaches at major retailers across the United States, including women’s clothier Bebe Stores Inc., western wear store Sheplers, and office supply store Staples Inc.

Andy Chandler, Fox-IT’s general manager and senior vice president, said the group profiled in its December report and in the Kaspersky study are the same.

“Anunak or Carbanak are the same,” Chandler said. “We continue to track this organization but there are no major revelations since December. So far in 2015, the financial industry have been kept busy by other more creative criminal groups,” such as those responsible for spreading the Dyre and Dridex banking malware, he said. Continue reading →

Jan 15

Toward Better Privacy, Data Breach Laws

President Obama on Monday outlined a proposal that would require companies to inform their customers of a data breach within 30 days of discovering their information has been hacked. But depending on what is put in and left out of any implementing legislation, the effort could well lead to more voluminous but less useful disclosure. Here are a few thoughts about how a federal breach law could produce fewer yet more meaningful notice that may actually help prevent future breaches.

dataleakThe plan is intended to unify nearly four dozen disparate state data breach disclosure laws into a single, federal standard. But as experts quoted in this story from The New York Times rightly note, much rides on whether or not any federal breach disclosure law is a baseline law that allows states to pass stronger standards.

For example, right now seven states already have so-called “shot-clock” disclosure laws, some more stringent; Connecticut requires insurance firms to notify no more than five days after discovering a breach; California has similar requirements for health providers. Also, at least 14 states and the District of Columbia have laws that permit affected consumers to sue a company for damages in the wake of a breach. What’s more, many states define “personal information” differently and hence have different triggers for what requires a company to disclose. For an excellent breakdown on the various data breach disclosure laws, see this analysis by BakerHostetler (PDF).

Leaving aside the weighty question of federal preemption, I’d like to see a discussion here and elsewhere about a requirement which mandates that companies disclose how they got breached. Naturally, we wouldn’t expect companies to disclose the specific technologies they’re using in a public breach document. Additionally, forensics firms called in to investigate aren’t always able to precisely pinpoint the cause or source of the breach.

But this information could be publicly shared in a timely way when it’s available, and appropriately anonymized. It’s unfortunate that while we’ve heard time and again about credit card breaches at retail establishments, we know very little about how those organizations were breached in the first place. A requirement to share the “how” of the hack when it’s known and anonymized by industry would be helpful. Continue reading →

Apr 14

Heartbleed Bug: What Can You Do?

In the wake of widespread media coverage of the Internet security debacle known as the Heartbleed bug, many readers are understandably anxious to know what they can do to protect themselves. Here’s a short primer.

The Heartbleed bug concerns a security vulnerability in a component of recent versions of OpenSSL, a technology that a huge chunk of the Internet’s Web sites rely upon to secure the traffic, passwords and other sensitive information transmitted to and from users and visitors.

Around the same time that this severe flaw became public knowledge, a tool was released online that allowed anyone on the Internet to force Web site servers that were running vulnerable versions of OpenSSL to dump the most recent chunk of data processed by those servers.

That chunk of data might include usernames and passwords, re-usable browser cookies, or even the site administrator’s credentials. While the exploit only allows for small chunks of data to be dumped each time it is run, there is nothing to prevent attackers from replaying the attack over and over, all the while recording fresh data flowing through vulnerable servers. Indeed, I have seen firsthand data showing that some attackers have done just that; for example, compiling huge lists of credentials stolen from users logging in at various sites that remained vulnerable to this bug.

For this reason, I believe it is a good idea for Internet users to consider changing passwords at least at sites that they visited since this bug became public (Monday morning). But it’s important that readers first make an effort to determine that the site in question is not vulnerable to this bug before changing their passwords. Here are some resources that can tell you if a site is vulnerable: Continue reading →

Apr 12

Global Payments: Rumor and Innuendo

Global Payments Inc., the Atlanta-based credit and debit card processor that recently announced a breach that exposed fewer than 1.5 million card accounts, held a conference call this morning to discuss the incident. Unfortunately, that call created more questions than it did answers, at least for me. The purpose of this post is to provide some information that I have gathered, and a few observations about the reporting on this breach so far.

In a conference call this morning, Paul Garcia, Chairman and CEO of Global Payments (NYSE: GPN), declined to offer few new details about how the breach happened, beyond the details the company released in its press release last night. He also declined to comment on reports that the breach may have dated back to at least January 2012. Garcia emphasized that the company self-reported and discovered the intrusion in early March, and proactively notified law enforcement officials and hired independent forensics investigators.

When asked about the timeline first reported by last Friday — that Visa and MasterCard were warning of a payment processor that had an exposure between Jan 21, 2012 and Feb. 25, 2012 — Garcia said, without elaborating:

“There’s a lot of rumor and innuendo out there which is not helpful to anyone, and most of it incredibly inaccurate. In terms of other timelines, I just cannot be specific further about that.”

He went on to state that, “This does not involve our merchants, our sales partners, or their relationships with their customers. Neither merchant systems, or point of sale devices, were involved in any way. This was self-discovered and self-reported.” has a decent round-up of the call details, as well as other reporting on this breach. A recording of the conference call is available here.

I’d like to share a few thoughts on my own reporting as it relates to this breach. First, when I published the story early last Friday morning that is widely credited as the first to break the news of a large processor breach, at that time I did not know for sure that Global Payments had been compromised. I’d heard it from one source, but could not get it from a second source. The old-school reporter in me held back those details from my story.

Several readers have called me irresponsible for quoting anonymous sources stating that the Global Payments breach may have affected more than 10 million cards. This is simply not true. I didn’t even mention Global Payments in my original piece. That information was dug up by reporters at The Wall Street Journal. Indeed, given GPN’s statements thus far, I continue to be nagged by the possibility that my initial reporting may have been related to a separate, as-yet undisclosed breach at another processor. I mentioned this to a reporter at ABC News today, who included my perspective in a story here.


GPN said it would allow an hour for the call and for questions, but it told callers at the beginning of the conference that it would be using a portion of the call time to talk about its 4th quarter earnings. Although I sat in on the GPN call this morning for the entire hour and waited in the queue to ask questions, I was not afforded the opportunity. Nor did I hear questions allowed from reporters at mainstream news media outlets cited in this story. The company has not yet responded to my questions, which I submitted in a phone call after the news conference.

What follows is a partial brain dump on some of the information and interesting tidbits I’ve been able to uncover in my reporting today, in no particular order. Some or all of them may turn out to be relevant to the Global Payments breach, to a separate incident, or not at all. Continue reading →

Jun 11

$72M Scareware Ring Used Conficker Worm

Authorities seized computers and servers in the United States and seven other countries this week as part of an ongoing investigation of a hacking gang that stole $72 million by tricking people into buying fake anti-virus products. Police in Ukraine said the thieves fleeced unsuspecting consumers with the help of the infamous Conficker worm, although it remains unclear how big a role the fast-spreading worm played in this crime.

Image courtesy

The Security Service of Ukraine (SBU) said today that it had seized at least 74 pieces of computer equipment and cash from a criminal group suspected of running a massive operation to steal banking information from consumers with the help of Conficker and scareware, a scam that uses misleading security alerts to frighten people into paying for worthless security software. A Google-translated version of an SBU press release suggests that the crime gang used Conficker to deploy the scareware, and then used the scareware to launch a virus that stole victims’ financial information.

The Ukrainian action appears to be related to an ongoing international law enforcement effort dubbed Operation Trident Tribunal by the FBI. In a statement released Wednesday, the U.S. Justice Department said it had seized 22 computers and servers in the United States that were involved in the scareware scheme. The Justice Department said 25 additional computers and servers located abroad were taken down as part of the operation, in cooperation with authorities in the Netherlands, Latvia, Germany, France, Lithuania, Sweden and the United Kingdom.

On Tuesday, The New York Times reported that dozens of Web sites were knocked offline when FBI officials raided a data center in Reston, Va. and seized Web servers. Officials from an affected hosting company told the Times that they didn’t know the reason for the raid, but the story suggested it may have been related to an ongoing investigation into a string of brazen intrusions by the hacktivist group “Lulzsec.” Sources close to the investigation told KrebsOnSecurity that the raid was instead related to the scareware investigation.

The FBI’s statement confirms the SBU’s estimate of $72 million losses, estimating that the scam claimed at least 960,000 victims. Although the FBI made no mention of Conficker in any of its press materials, the Ukrainian SBU’s press release names and quotes Special Agent Norman Sanders from the FBI’s Seattle field office, broadly known in the security industry as the agency’s lead in the Conficker investigation. Conficker first surfaced in November 2008. The SBU said the FBI has been investigating the case for three years. [Update, June 24, 9:37 a.m.: Not sure whether this was an oversight or a deliberate attempt to deceive, but the picture showing the stack of PCs confiscated in this raid is identical to the one shown in an SBU press release last fall, when the Ukrainian police detained five individuals connected to high-profile ZeuS Trojan attacks.]

Continue reading →