US agencies, companies secure networks after huge hack

By BEN FOX and FRANK BAJAK
7-9 minutes

https://apnews.com/article/us-agencies-hacked-global-cyberspying-328b4936f2535418b27cb90afa858489

WASHINGTON (AP) — U.S. government agencies and private companies rushed Monday 
to secure their computer networks following the disclosure of a sophisticated 
and long-running cyber-espionage intrusion that experts said almost certainly 
was carried out by a foreign state.

It was not yet clear who was responsible for the intrusion, though it was 
reportedly conducted by Russia, and the extent of the damage is not yet known. 
The potential threat was significant enough that the Department of Homeland 
Security’s cybersecurity unit directed all federal agencies to remove 
compromised network management software and thousands of companies were 
expected to do the same.

What was striking about the operation was its potential scope as well as the 
manner in which the perpetrators managed to pierce cyber defenses and gain 
access to email and internal files at the Treasury and Commerce departments and 
potentially elsewhere. It was stark evidence of the vulnerability of even 
supposedly secure government networks, even after well-known previous attacks.

“It’s a reminder that offense is easier than defense and we still have a lot of 
work to do,” said Suzanne Spaulding, a former U.S. cybersecurity official who 
is now a senior adviser to the Center for Strategic and International Studies.

The campaign came to light when a prominent cybersecurity firm, FireEye, 
learned it had been breached. FireEye would not say who it suspected, though 
many experts quickly suspected Russia given the level of skill involved, and 
alerted that foreign governments and major corporations were also compromised.

U.S. authorities acknowledged that federal agencies were part of the breach on 
Sunday, providing few details. The Cybersecurity and Infrastructure Security 
Agency, known as CISA, said in an unusual directive that the widely used 
network software SolarWinds had been compromised and should be removed from any 
system using it.

The national cybersecurity agencies of Britain and Ireland issued similar 
alerts.

SolarWinds is used by hundreds of thousands of organizations around the world, 
including most Fortune 500 companies and multiple U.S. federal agencies. The 
perpetrators were able to embed malware in a security update issued by the 
company, based in Austin, Texas. Once inside, they could impersonate system 
administrators and have total access to the infected networks, experts said.

“Quite honestly, my heart sank when I saw some of the details, just the amount 
of information they could potentially have if they are reading everyone’s 
emails and they are accessing sensitive files within places like Treasury or 
Commerce,” said Ben Johnson, a former National Security Agency cyber-engineer 
who is now chief technology officer of software security firm Obsidian.

The Washington Post, citing unnamed sources, said the attack was carried out by 
Russian government hackers who go by the nicknames APT29 or Cozy Bear and are 
part of that nation’s foreign intelligence service.

U.S. officials have declined to say who they believe is responsible. National 
Security Council spokesman John Ullyot said Monday only that the Trump 
administration was working with the CISA, U.S. intelligence agencies, the FBI 
and government departments that were affected to coordinate a response to 
whoever was behind it.

Microsoft cybersecurity researchers on Monday tied the hacks to “nation-state 
activity at significant scale,” aimed at both government and the private sector.

“It’s obviously incredibly significant and widespread,” said Chris Painter, who 
coordinated cyber-policy at the State Department during the Obama 
administration. “How much was compromised? How much was exfiltrated? There are 
lots of open questions now.”

Kremlin spokesman Dmitry Peskov said Monday that Russia had “nothing to do 
with” the hack.

“Once again, I can reject these accusations,” Peskov told reporters. “If for 
many months the Americans couldn’t do anything about it, then, probably, one 
shouldn’t unfoundedly blame the Russians for everything.”

Federal agencies have long been attractive targets for foreign hackers looking 
to gain insight into American government personnel and policymaking.

Hackers linked to Russia, for instance, were able to break into the State 
Department’s email system in 2014, infecting it so thoroughly that it had to be 
cut off from the internet while experts worked to eliminate the infestation. A 
year later, a hack at the U.S. government’s personnel office blamed on China 
compromised the personal information of some 22 million current, former and 
prospective federal employees, including highly sensitive data such as 
background investigations.

Cybersecurity experts said the nature and level of tradecraft involved in this 
latest effort suggest a foreign nation. Many have pointed out that the goal of 
the months-long effort appeared to be espionage and not information that could 
be quickly used for profit or to simply inflict damage. Russia was the most 
likely culprit, though China and perhaps others are potential candidates.

In terms of scale alone, the the operation seems similar to the Office of 
Personnel Management that authorities suspect was carried out by the Chinese 
government, said Ben Buchanan, a Georgetown University cyber-espionage expert.

“The operational tradecraft — how the hack was carried out — seems to have been 
extremely good. These operators are experienced and capable, adept at finding a 
systemic weakness and then exploiting it quietly for months,” said Buchanan, 
author of “The Hacker and The State.”

If it was carried out by a foreign government, and the U.S. has the proof, then 
it becomes a question of what to do about it.

Some obvious options would include expelling diplomats of the offending 
country, imposing sanctions or filing criminal charges for cyber-espionage, 
steps that Washington and the European Union have taken against Russia in the 
past.

“I’m sure that the departments like NSA and Cyber Command are coming up with 
options, that the Treasury Department is looking at sanction options , that the 
State Department is looking for how they will send a strong signal,” Spaulding 
said. Whether they will get approval for all these things from the White House 
remains to be seen.”

In the meantime, SolarWinds and its many private-sector clients were working to 
close any breaches and repair the damage. 

The company said in a financial filing that it believed that an unknown number 
of customers, though fewer than 18,000, had installed the compromised product 
update earlier this year. SolarWinds has said its customers include all five 
branches of the U.S. military, the Pentagon, the State Department, NASA, the 
National Security Agency, the Department of Justice and the White House, along 
with the top U.S. telecommunications and accounting firms, though it hasn’t 
identified which of its customers were using the compromised product.

“We anticipate this will be a very large event when all the information comes 
to light,” said John Hultquist, director of threat analysis at FireEye.

___

Bajak reported from Boston.
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