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Government Changes Its Tune about MalwareTech

Marcus Hutchins, AKA MalwareTech, just plead not guilty at his arraignment in Milwaukee, WI. After the hearing, his attorney, Marcia Hofmann, called him a “hero” and said he would be fully vindicated.

A dramatic change in the tone of the government suggested that might well be the case. Whereas at Hutchins’ Las Vegas hearing, the government used his appearance at a tourist-focused gun range in an attempt to deny him bail, here, the government was amenable to lifting many of the restrictions on his release conditions. Hutchins will be able to live in Los Angeles, where his other attorney, Brian Klein, is. He will be able to continue working. He can travel throughout the US, though he cannot leave the country (though his defense tried to get him released to the UK).

About the only major restriction — aside from GPS monitoring and monitoring by pretrial services — is that he can’t touch the WannaCry sinkhole.

The government’s attorney, Michael Chmelar, described Hutchins’ alleged crimes as “historic,” a seeming concession that he’s not currently a threat. That said, while the government had not deemed this a complex crime when they indicted Hutchins back on July 11, Chmelar said he expected they would do so in the coming weeks. The trial is currently scheduled for October, but with a complex designation, that will slide.

Chmelar said that they had or would turn over today both Hutchins’ FBI interview, as well as two other recorded phone calls. The rest of discovery will be delayed until the defense signs a protection order.

Perhaps the funniest part of the hearing came when the lawyers tried to help Magistrate William Duffin understand what a “sinkhole” is.

Update: Fixed spelling of Hofmann’s last name–sorry Marcia!

Update: Forgot to mention — the case was assigned to JP Stadtmueller, a 75-year old Reagan appointee, formerly the Chief Judge of EDWI.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

Marcus Hutchins, the Word of God

Motherboard obtained the hearing transcript from Marcus Hutchins (AKA MalwareTech) court hearing on August 4. It reveals precisely the oblique language Prosecutor Dan Cowhig actually used, which got reported very differently, to explain Hutchins’ alleged admission to have authored the Kronos malware.

In his interview following his arrest, Mr. Hutchins admitted that he was the author of the code that became the Kronos malware and admitted that he had sold that code to another.

Compare that to this allegation, in Hutchins’ indictment.

It’s a very different thing to create code that may make up part of a package that would be sold on AlphaBay as malware and to write code that makes up part of the code ultimately packaged and sold as malware. It seems likely the government overstated what they had evidence of in the indictment (and, one wonders, to the grand jury), which might, in turn, significantly alter questions of intent.

Even with the government’s claim that Hutchins discussed getting paid for his code in chat logs (we’ll see about their provenance and accuracy after Hutchins goes broke trying to pay the bills in WI without a job, I guess), it’s not entirely clear the government even claims to have evidence that Hutchins wanted to sell a tool to rip off banks.

Which means that any eventual trial (assuming Hutchins doesn’t plea out of desperation) may turn on textual analysis of what it was some agents in WI bought off the dark web and what Hutchins coded years ago.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

[Photo: National Security Agency, Ft. Meade, MD via Wikimedia]

Rick Ledgett’s Straw Malware

For some reason, over a month after NotPetya and almost two months after WannaCry, former Deputy DIRNSA Rick Ledgett has decided now’s the time to respond to them by inventing a straw man argument denying the need for vulnerabilities disclosure. In the same (opening) paragraph where he claims the malware attacks have revived calls for the government to release all vulnerabilities, he accuses his opponents of oversimplification.

The WannaCry and Petya malware, both of which are partially based on hacking tools allegedly developed by the National Security Agency, have revived calls for the U.S. government to release all vulnerabilities that it holds.  Proponents argue this will allow for the development of patches, which will in turn ensure networks are secure.  On the face of it, this argument might seem to make sense, but it is actually a gross oversimplification of the problem, would not have the desired effect, and would in fact be dangerous.

Yet it’s Ledgett who is oversimplifying. What most people engaging in the VEP debate — even before two worms based, in part, on tools stolen from NSA — have asked for is for some kind of sense and transparency on the process by which NSA reviews vulnerabilities for disclosure. Ledgett instead poses his opponents as absolutists, asking for everything to be disclosed.

Ledgett then spends part of his column claiming that WannaCry targeted XP.

Users agree to buy the software “as is” and most software companies will attempt to patch vulnerabilities as they are discovered, unless the software has been made obsolete by the company, as was the case with Windows XP that WannaCry exploited.

[snip]

Customers who buy software should expect to have to patch it and update it to new versions periodically.

Except multiple reports said that XP wasn’t the problem, Windows 7 was. Ledgett’s mistake is all the more curious given reports that EternalBlue was blue screening at NSA when — while he was still at the agency — it was primarily focused on XP. That is, Ledgett is one of the people who might have expected WannaCry to crash XP; that he doesn’t even when I do doesn’t say a lot for NSA’s oversight of its exploits.

Ledgett then goes on to claim that WannaCry was a failed ransomware attack, even though that’s not entirely clear.

At least he understands NotPetya better, noting that the NSA component of that worm was largely a shiny object.

In fact, the primary damage caused by Petya resulted from credential theft, not an exploit.

The most disturbing part of Ledgett’s column, however, is that it takes him a good eight (of nine total) paragraphs to get around to addressing what really has been the specific response to WannaCry and NotPetya, a response shared by people on both sides of the VEP debate: NSA needs to secure its shit.

Some have made the analogy that the alleged U.S. government loss of control of their software tools is tantamount to losing control of Tomahawk missile systems, with the systems in the hands of criminal groups threatening to use them.  While the analogy is vivid, it incorrectly places all the fault on the government.  A more accurate rendering would be a missile in which the software industry built the warhead (vulnerabilities in their products), their customers built the rocket motor (failing to upgrade and patch), and the ransomware is the guidance system.

We are almost a full year past the day ShadowBrokers first came on the scene, threatening to leak NSA’s tools. A recent CyberScoop article suggests that, while government investigators now have a profile they believe ShadowBrokers matches, they’re not even entirely sure whether they’re looking for a disgruntled former IC insider, a current employee, or a contractor.

The U.S. government’s counterintelligence investigation into the so-called Shadow Brokers group is currently focused on identifying a disgruntled, former U.S. intelligence community insider, multiple people familiar with the matter told CyberScoop.

[snip]

While investigators believe that a former insider is involved, the expansive probe also spans other possibilities, including the threat of a current intelligence community employee being connected to the mysterious group.

[snip]

It’s not clear if the former insider was once a contractor or in-house employee of the secretive agency. Two people familiar with the matter said the investigation “goes beyond” Harold Martin, the former Booz Allen Hamilton contractor who is currently facing charges for taking troves of classified material outside a secure environment.

At least some of Shadow Brokers’ tools were stolen after Edward Snowden walked out of NSA Hawaii with the crown jewels, at a time when Rick Ledgett, personally, was leading a leak investigation into NSA’s vulnerabilities. And yet, over three years after Snowden stole his documents, the Rick Ledgett-led NSA still had servers sitting unlocked in their racks, still hadn’t addressed its privileged user issues.

Rick Ledgett, the guy inventing straw man arguments about absolutist VEP demands is a guy who’d do the country far more good if he talked about what NSA can do to lock down its shit — and explained why that shit didn’t get locked down when Ledgett was working on those issues specifically.

But he barely mentions that part of the response to WannaCry and NotPetya.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

In Mistaking Surveillance for Sabotage, NYT Fearmongers Nukes Again

Last night, the NYT had an alarming story reporting that suspected Russian spies were compromising engineers that work at nuclear power plants across the United States. Amber! the story screamed.

Since May, hackers have been penetrating the computer networks of companies that operate nuclear power stations and other energy facilities, as well as manufacturing plants in the United States and other countries.

Among the companies targeted was the Wolf Creek Nuclear Operating Corporation, which runs a nuclear power plant near Burlington, Kan., according to security consultants and an urgent joint report issued by the Department of Homeland Security and the Federal Bureau of Investigation last week.

The joint report was released on June 28. It was obtained by The New York Times and confirmed by security specialists who have been responding to the attacks. It carried an urgent amber warning, the second-highest rating for the severity of the threat.

After screaming “Amber,” the story went on to scream “bears!”

The origins of the hackers are not known. But the report indicated that an “advanced persistent threat” actor was responsible, which is the language security specialists often use to describe hackers backed by governments.

The two people familiar with the investigation say that, while it is still in its early stages, the hackers’ techniques mimicked those of the organization known to cybersecurity specialists as “Energetic Bear,” the Russian hacking group that researchers have tied to attacks on the energy sector since at least 2012.

Ultimately, the story worked its way up to invoke StuxNet, an attack on the actual enrichment processes of a nuclear facility.

In 2008, an attack called Stuxnet that was designed by the United States and Israel to hit Iran’s main nuclear enrichment facility, demonstrated how computer attacks could disrupt and destroy physical infrastructure.

The government hackers infiltrated the systems that controlled Iran’s nuclear centrifuges and spun them wildly out of control, or stopped them from spinning entirely, destroying a fifth of Iran’s centrifuges.

In retrospect, [former chairman of the Federal Energy Regulatory Commission] Mr. Wellinghoff said that attack should have foreshadowed the threats the United States would face on its own infrastructure.

And yet, in the fourth paragraph of the story, NYT admitted it’s not really clear what the penetrations involved. With that admission, the story also revealed that the computer networks in question were not the control systems that manage the plants.

The report did not indicate whether the cyberattacks were an attempt at espionage — such as stealing industrial secrets — or part of a plan to cause destruction. There is no indication that hackers were able to jump from their victims’ computers into the control systems of the facilities, nor is it clear how many facilities were breached.

Still further down, the report admitted that this involved phishing and watering hole attacks on engineers, not attacks on control systems.

In most cases, the attacks targeted people — industrial control engineers who have direct access to systems that, if damaged, could lead to an explosion, fire or a spill of dangerous material, according to two people familiar with the attacks who could not be named because of confidentiality agreements.

[snip]

Hackers wrote highly targeted emails messages containing fake résumés for control engineering jobs and sent them to the senior industrial control engineers who maintain broad access to critical industrial control systems, the government report said.

[snip]

In some cases, the hackers also compromised legitimate websites that they knew their victims frequented — something security specialists call a watering hole attack.

That is, even while screaming “Amber Russian bear OMIGOSH StuxNet!!” the article admitted that this is not StuxNet. This amounts to spies, quite possibly Russian, “hunting SysAdmins,” just like the United States does (of course, the US and its buddy Israel also assassinate nuclear engineers, which for all its known assassinations, Russia is not known to have done).

That distinction is utterly critical to make, no matter how much you want to fearmonger with readers who don’t understand the distinction.

There is spying — the collection of information on accepted targets. And there is sabotage — the disruption of critical processes for malicious ends.

This is spying, what our own cyber doctrine calls “Cyber Collection.”

Cyber Collection: Operations and related programs or activities conducted by or on behalf of the United States Government, in or through cyberspace, for the primary purpose of collecting intelligence – including information that can be used for future operations – from computers, information or communications systems, or networks with the intent to remain undetected. Cyber collection entails accessing a computer, information system, or network without authorization from the owner or operator of that computer, information system, or network or from a party to a communication or by exceeding authorized access. Cyber collection includes those activities essential and inherent to enabling cyber collection, such as inhibiting detection or attribution, even if they create cyber effects. ( C/NF)

That doesn’t mean Russian spying on how our nuclear facilities work is not without risk. It does carry risks that they are collecting the information so they can one day sabotage our facilities.

But if we want to continue spying on North Korea’s or Iran’s nuclear program, we would do well to remember that we consider spying on nuclear facilities — even by targeting the engineers that run them — squarely within the bounds of acceptable international spying. By all means we should try to thwart this presumed Russian spying. But we should not suggest — as the NYT seems to be doing — that this amounts to sabotage, to the kinds of things we did with StuxNet, because doing so is likely to lead to very dangerous escalation.

And it’s not just me saying that. Robert M. Lee, who works on cyber defense for the energy industry and who recently authored a report on Crash Override, Russia’s grid-targeting sabotage tradecraft (and as such would have been an obvious person to cite in this article) had this to say:

So while the threat to nuclear from cyber is a real concern because of impact it’s very improbable and “what about Stuxnet” is a high bar

Or said more simply: phishing emails are lightyears removed from “what about Stuxnet” arguments. It’s simply otherworldly in comparison.

There’s one more, very real reason why the NYT should have been far more responsible in clarifying that this is collection, not sabotage. Among the things Shadow Brokers, with its presumed ties to Russia, has been threatening to expose is “compromised network data from Russian, Chinese, Iranian, or North Korean nukes and missile programs.” If the NYT starts inflating the threat from cyber collection on nuclear facilities, it could very easily lead to counter-inflation, with dangerous consequences for the US and its ability to monitor our adversaries.

There is very real reason to be concerned that Russia — or some other entity — is collecting information on how our nuclear and other power facilities work. But, as Lee notes, conflating that with StuxNet is “otherworldly.”

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

Revisiting Obama on the Weakness of American Democracy

It has become fashionable, of late, for pundits to say President Obama failed to respond accordingly to the Russian hack last year. As I showed in this analysis of WaPo’s 8300 word opus making that argument, such claims tend to give the views of the CIA and Democrats most emphasis, obscuring the degree to which even within the Intelligence Community there was less certainty than narrative reconstructions make out. They also tend to ignore some key events — like assassinations and indictments of Russian hackers — in claiming nothing has happened, effectively pretending that sanctions are the necessary and exclusive possible response. Significantly, they also tend to ignore ongoing developments, most notably the Shadow Brokers leaks and the global ransomware launched using it, that may constrain our possible responses for the moment.

In other words, the narrative condemning Obama inaction ignores a lot.

Such analyses also miss another important point, something Obama pointed out in his December speech on the Russian hack. It’s a point I’ve been thinking a lot about recently, especially today.

To the extent the Russian hack was effective, Obama argued, it’s because our own politics have made us vulnerable.

Our vulnerability to Russia or any other foreign power is directly related to how divided, partisan, dysfunctional our political process is. That’s the thing that makes us vulnerable.

If fake news that’s being released by some foreign government is almost identical to reports that are being issued through partisan news venues, then it’s not surprising that that foreign propaganda will have a greater effect, because it doesn’t seem that far-fetched compared to some of the other stuff that folks are hearing from domestic propagandists.

To the extent that our political dialogue is such where everything is under suspicion, everybody is corrupt and everybody is doing things for partisan reasons, and all of our institutions are full of malevolent actors — if that’s the storyline that’s being put out there by whatever party is out of power, then when a foreign government introduces that same argument with facts that are made up, voters who have been listening to that stuff for years, who have been getting that stuff every day from talk radio or other venues, they’re going to believe it.

So if we want to really reduce foreign influence on our elections, then we better think about how to make sure that our political process, our political dialogue is stronger than it’s been.

I’m unsympathetic to Obama’s complaints that people distrust our institutions. His DOJ, after all, failed to prosecute torturers, illegal wiretappers, and most of all, the banksters that crashed our economy. The distrust of our institutions, including the press that got us into the Iraq War, has been earned.

We need to start thinking about what they would need to do to earn trust anew.

But Obama is right about why the hack succeeded, to the extent it did. Almost everything Russia did — create fake scandals, try to tamper with the ability to vote — the Republicans (and occasionally, Democrats too) have been doing for decades. In fact, we now know that a long-time GOP ratfucker, Peter W Smith, was even trolling hacker forums looking for someone who might have hacked Hillary’s private server. So whatever the Russians did, they largely just joined the predictable and persistent GOP wave doing precisely the same.

And for decades, we have tolerated that — explicit voter suppression, fake scandals, cheating to win — from the GOP.

As I said last week, when Democrats were responding to Kris Kobach’s latest attempt to suppress the vote, it’s time for all patriotic Americans to establish and commit to a standard for our democracy, one that doesn’t tolerate the same tactics a foreign government would use to its advantage.

We’re stuck with the Republicans for at least two more years, and they’re determined to do as much damage to our democracy to prevent paying any price for the crap they’re currently pulling, so it may be longer than that. But we need to think of this about restoring our democracy, not just beating the other team.

Happy Fourth of July. May we find a way to keep the Republic.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

NotPetya: Why Would Russia Target Kaspersky AV?

With the backing of a bunch of security companies, both the US and Ukraine are getting closer to formally blaming Russia for the NotPetya attack last week on the same hackers that brought down the power grid in 2015.

But there are skeptics. Rob Graham suggests this analysis all suffers from survivorship bias. And Jonathan Nichols argues the attack was so easy pretty low level hackers could have pulled it off.

Nichols also raises a point that has been puzzling me. The attack does extra damage if it detects the Kaspersky Antivirus.

Much has been made about the fact that the NotPetya virus appears to have been designed as a wiper, and not as a genuine piece of ransomware. The virus also checks for avp.exe (Kaspersky Antivirus) and then wipes the bootsector of any device with the file present.

[snip]

Further, the specific targeting of Kaspersky Antivirus harkens back to the vindictive nature of low level cyber criminals, such as those which famously write hate messages to Kaspersky and Brian Krebs regularly.

There may be a good reason to do this (such as, if Kaspersky dominates the AV market in Ukraine, it would provide an additional way to target Ukraine specifically, though that would seem to also implicate Russian companies, like Rosneft, that were hit by NotPetya as well). But absent such a reason, why would Russia selectively do more damage to victims running Kaspersky, especially at a moment with the US is so aggressively trying to taint Kaspersky as a Russian front?

As a reminder, back in January when Shadow Brokers claimed to be disappearing forever, they called out Kaspersky specifically in a dump of dated Windows files (SB trolled Kaspersky even more on Twitter, though deleted all those old tweets last week).

Before go, TheShadowBrokers dropped Equation Group Windows Warez onto system with Kaspersky security product. 58 files popped Kaspersky alert for equationdrug.generic and equationdrug.k TheShadowBrokers is giving you popped files and including corresponding LP files.

So not just cybercriminals with a grudge against Kaspersky for cooperating with western law enforcement, but the source of some of the exploits used in this attack, has targeted Kaspersky in the past.

I don’t know the answer. But it’s one counterargument to the rush to blame Russia that, in my opinion, needs some answers.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

Minority Report: An Alternative Look at NotPetya

NB: Before reading:

1) Check the byline — this is NotMarcy;

2) Some of this content is speculative;

3) This is a minority report; I’m not on the same paragraph and perhaps not the same page with Marcy.

Tuesday’s ‘Petya/Petna/NotPetya’ malware attacks generated a lot of misleading information and rapid assumptions. Some of the fog can be rightfully blamed on the speed and breadth of infection. Some of it can also be blamed on the combined effect of information security professionals discussing in-flight attacks in full view of the public who make too many assumptions.

There’s also the possibility that some of the confusing information may have been deliberately generated to thwart too-early intervention. If this isn’t criminal hacking but cyber warfare, propaganda should be expected as in all other forms of warfare. Flawed assumptions, too, can be weaponized.

A key assumption worth re-examining is that Ukraine was NotPetya’s primary target rather than collateral damage.

After the malware completed its installation and rebooted an infected machine, a message indicated files had been encrypted and payment could be offered for decryption.

Thousands of dollars were paid $300 at a time in cryptocurrency but a decryption key wouldn’t be forthcoming. Users who tried to pay the ransom found the contact email address hosted by Posteo.net had been terminated. The email service company was unhelpful bordering on outright hostile in its refusal to assist users contacting the email account holder. It looked like a ransom scam gone very wrong.

As Marcy noted in her earlier post on NotPetyna, information security expert Matt Suiche posted that NotPetya was a wiper and not ransomware. The inability of affected users to obtain decryption code suddenly made perfect sense. ‘Encrypted’ files are never going to be opened again.

It’s important to think about the affected persons and organizations and how they likely responded to the infection. If they didn’t already have a policy in place for dealing with ransomware, they may have had impromptu meetings about their approach; they had to buy cryptocurrency, which may have required a crash DIY course in how to acquire it and how to make a payment — scrambling under the assumption they were dealing with ransomware.

It all began sometime after 10:30 UTC/GMT — 11:30 a.m. London (BDT), 1:30 p.m. Kyiv and Moscow local time, even later in points across Russia farther east.

(And 4:30 a.m. EDT — well ahead of the U.S. stock market, early enough for certain morning Twitter users to tweet about the attack before America’s work day began.)

The world’s largest shipping line, Maersk, and Russia’s largest taxpayer and oil producer Rosneft tweeted about the attack less than two hours after it began.

By the end of the normal work day in Ukraine time, staff would only have just begun to deal with the ugly truth that the ransom may have been handed off and no decryption key was coming.

As Marcy noted, June 28th is a public holiday in Ukraine — Constitution Day. I hope IT folks there didn’t have a full backup scheduled to run going into the holiday evening — one that might overwrite a previous full backup.

The infection’s spread rate suggested early on that email was not the only means of transmission, if it had been spread at all by spearfishing. But many information security folks advocated not opening any links in email. A false sense of security may have aided the malware’s dispersion; users may have thought, “I’m not clicking on anything, I can’t get it!” while their local area network was being compromised.

And then it hit them. While affected users sat at their machines reading fake messages displayed by the malware, scrambling to get cryptocurrency for the ransom, NotPetya continued to encrypt files under their noses and spread across business’s local area networks. Here’s where Microsoft’s postmortem is particularly interesting; it not only gives a tick-tock of the malware’s attack on a system, but it lists the file formats encrypted.

Virtually everything a business would use day to day was encrypted, from Office files to maps, website files to emails, zip archives and backups.

Oh, and Oracle files. Remember Oracle pushed a 299 vulnerability mega-patch on April 19, days after ShadowBrokers dumped some NSA tools? Convenient, that; these vulnerabilities were no longer a line of attack except through file encryption.

While information security experts have done a fine job tackling a many-headed hydra ravaging businesses, they made some rather broad assumptions about the reason for the attack. Kaspersky concluded the target was Ukraine since ~60% of infected devices were located there though 30% were located in Russia. But the malware’s aim may not have been the machines or even the businesses affected in Ukraine.

What did those businesses do? What they did required tax application software MEDoc. If the taxes to be calculated were based on business’s profits — (how much did they make) X (tax rate) — they hardly needed tax software. A simple spreadsheet would suffice, or the calculation would be built into accounting software.

No, the businesses affected by the malware pushed at 10:30 GMT via MEDoc update would be those which sold goods or services frequently, on which sales tax would have been required for each transaction.

What happens when a business’s sales can’t be documented? What happens when their purchases can’t be documented, either?

Which brings me to the affected Russian businesses, specifically Rosneft. There’s not much news published in English detailing the impact on Rosneft; we’ve only got Kaspersky’s word that 30% of infections affected Russian machines.

But if Rosneft is the largest public oil company in the world, Russia’s largest taxpayer as Rosneft says on their Twitter profile, it may not take very many infections to wreak considerable damage on the Russian economy. Consider the ratio of one machine invoicing the shipment of entire ocean tanker of oil versus many machines billing heating oil in household-sized quantities.

And if Rosneft oil was bought by Ukraine and resold to the EU, Ukraine’s infected machines would cause a delay of settlements to Russia especially when Rosneft must restore its own machines to make claims on Ukrainian customers.

The other interesting detail in this malware story is that the largest container line in the world, Maersk, was also affected. You may have seen shipping containers on trucks, trains, in shipyards and on ships marked in bold block letters, MAERSK. What you probably haven’t seen is Maersk’s energy transport business.

This includes shipping oil.

It’s not Ukraine’s oil Maersk ships; most of what Ukraine sells is through pipelines running from Russia in the east and mostly toward EU nations in the west.

It’s Russian oil, probably Rosneft’s, shipping overseas. If it’s not in Maersk container vessels, it may be moving through Maersk-run terminal facilities. And if Maersk has no idea what is shipping, where it’s located, when it will arrive, it will have a difficult time settling up with Rosneft.

Maersk also does oil drilling — it’s probably not Ukraine to whom Maersk may lease equipment or contract its services.

Give the potential damage to Russia’s financial interests, it seems odd that Ukraine is perceived as the primary target.

 

NotPetya’s attack didn’t happen in a vacuum, either.

A report in Germany’s Die Welt reported the assassination of Ukraine’s chief of intelligence by car bomb. The explosion happened about the same time that Ukraine’s central bank reported it had been affected by NotPetya — probably a couple hours after 10:30 a.m. GMT.

On Monday, privately-owned Russian conglomerate Sistema had a sizable chunk of assets “arrested” — not seized, but halted from sale or trading — due to a dispute with Rosneft over $2.8 billion dollars. Rosneft claims Sistema owes it money from the acquisition of oil producer Bashneft, owned by Sistema until 2014. Some of the assets seized included part of mobile communications company MTS. It’s likely this court case Rosneft referred to in its first tweet related to NotPetya.

The assassination’s timing makes the cyber attack look more like NotPetya was a Russian offensive, but why would Russia damage its largest sources of income and mess with its cash flow? The lawsuit against Sistema makes Rosneft appear itchy for income — Bashneft had been sold to the state in 2014, then Rosneft bought it from the state last year. Does Rosneft need this cash after the sale (or transfer) of a 19.5% stake worth $10.2 billion last year?

Worth noting here that Qatar’s sovereign wealth fund financed the bulk of the deal; commodities trader Glencore only financed 300 million euros of this transaction. How does the rift between other Middle Eastern oil states and Qatar affect the value of its sovereign wealth fund?

In her previous post, Marcy spitballed about digital sanctions — would they look like NotPetya? I think so. I can’t help recall this bit at the end of the Washington Post’s opus on Russian election interference published last week on June 23:

But Obama also signed the secret finding, officials said, authorizing a new covert program involving the NSA, CIA and U.S. Cyber Command.

[…]

The cyber operation is still in its early stages and involves deploying “implants” in Russian networks deemed “important to the adversary and that would cause them pain and discomfort if they were disrupted,” a former U.S. official said.

The implants were developed by the NSA and designed so that they could be triggered remotely as part of retaliatory cyber-strike in the face of Russian aggression, whether an attack on a power grid or interference in a future presidential race.

I’m sure it’s just a coincidence that NotPetya launched Tuesday this week. This bit reported in Fortune is surely a coincidence, too:

The timing and initial target of the attack, MeDoc, is sure to provoke speculation that an adversary of Ukraine might be to blame. The ransomware hid undetected for five days before being triggered a day before a public Ukrainian holiday that celebrates the nation’s ratification of a new constitution in 1996.

“Last night in Ukraine, the night before Constitution Day, someone pushed the detonate button,” said Craig Williams, head of Cisco’s (CSCO, +1.07%) Talos threat intelligence unit. “That makes this more of a political statement than just a piece of ransomware.” [boldface mine]

Indeed.

Two more things before this post wraps: did anybody notice there has been little discussion about attribution due to characters, keyboards, language construction in NotPetya’s code? Are hackers getting better at producing code without tell-tale hints?

Did the previous attacks based on tools released by the Shadow Brokers have secondary — possibly even primary — purposes apart from disruption and extortion? Were they intended to inoculate enterprise and individual users before a destructive weapon like NotPetya was released? Were there other purposes not obvious to information security professionals?

Blogger since 2002, political activist since 2003, geek since birth. Opinions informed by mixed-race, multi-ethnic, cis-female condition, further shaped by kind friends of all persuasions. Sci-tech frenemy, wannabe artist, decent cook, determined author, successful troublemaker. Mother of invention and two excessively smart-assed young adult kids. Attended School of Hard Knocks; Rather Unfortunate Smallish Private Business School in Midwest; Affordable Mid-State Community College w/evening classes. Self-employed at Tiny Consulting Business; previously at Large-ish Chemical Company with HQ in Midwest in multiple marginalizing corporate drone roles, and at Rather Big IT Service Provider as a project manager, preceded by a motley assortment of gigs before the gig economy was a thing. Blogging experience includes a personal blog at the original blogs.salon.com, managing editor for a state-based news site, and a stint at Firedoglake before landing here at emptywheel as technology’s less-virginal-but-still-accursed Cassandra.

What Would a Digital Sanctions Regime Relying on Malware Look Like?

A day ago, the second ransomware based on NSA tools leaked by Shadow Brokers hit. The attack was focused on Ukraine, in large part because “patient zero” appears to be a tax software update for a Ukrainian company M.E.Doc. But global giants include Maersk and Merck were also affected. Russian oil giant Rosneft was affected too, though there are conflicting claims about how badly it was disabled.

A day in, folks still can’t get a grasp on this attack, even down to the name (it started as Petya until security folks determined it’s not the ransomware of the same name, leading to the use of NotPetya).

While using far more attack vectors (and more toys from Shadow Brokers), this attack bears two similarities with last month’s WannaCry attack: the ransom requested $300 to decrypt locked data, and the ransom function was never really designed to work properly.

There is mounting evidence that the #GoldenEye / #Petya ransomware campaign might not have targeted financial gains but rather data destruction.

  • The choice of a regular, non-bulletproof e-mail service provider to act as a communication channel was obviously a wrong decision in terms of business.
  • The lack of automation in the payment & key retrieval process makes it really difficult for the attacking party to honor their end of the promise.
  • There is a total lack of usability in the payment confirmation: the user has to manually type an extremely long, mixed case “personal installation key” + “wallet” is prone to typos.

Update 6/28 06.00 GMT+3

The email address that was used by the threat actors to get payment confirmations has been suspended by Posteo. This means that all payments made overnight will be unable to get validated, and therefore will surely not receive the decryption key. Not that we have ever advised otherwise, but if you’re planning to pay the ransom, stop now. You’ll lose your data anyway, but you’ll contribute in funding the development of new malware. Even so, there have been 15 payments made after the suspension of the e-mail address. The wallet now totals 3.64053686 BTC out of 40 payments, with a net worth of $US 9,000.

Indeed, Matt Suiche argues the attack is better thought of as a wiper attack, designed to destroy rather than lock data, than a ransomware attack.

It will take some time to understand what the attack really is, particularly given the degree to which it appears to masquerade as things it’s not. But for the moment, I want to consider how a similar attack might be used as a counter to sanctions regimes. As far as we currently know, this attack made doing business with Ukraine a very expensive business proposition, as doing business with, say, some oligarchs in Russia is made costly for those subject to US sanctions because have to bank in the US. The attack served as a self-executing investigative method to identify just who had business tax dealing in Ukraine, and imposed an immediate cost. So whether or not that’s what this is, such an attack could be used to counteract sanctions imposed by the international banking community.

Again, I’m just spitballing.

But some dates are of interest.

On June 14, the Senate passed some harsh new sanctions on Russia, ostensibly just for Russia’s Ukrainian and Syrian related actions, not for its tampering in last year’s US election. The House mucked up that bill, but the Senate will continue to try to impose new sanctions. Trump might well veto the sanctions, but that will cause him a great deal of political trouble amid the Russian investigation.

The Petya/NotPetya malware was compiled on June 18.

Microsoft dates the attack to June 27 at 10:30 GMT.

We observed telemetry showing the MEDoc software updater process (EzVit.exe) executing a malicious command-line matching this exact attack pattern on Tuesday, June 27 around 10:30 a.m. GMT.

Today, June 28, is a public holiday in Ukraine, making it more difficult to deal with the attack.

Again, I’m not saying that’s what NotPetya is. I am saying that if you wanted to design a counter to financial sanctions using malware, NotPetya is close to what it’d look like.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

The Compartments in WaPo’s Russian Hack Magnum Opus

The WaPo has an 8300 word opus on the Obama Administration’s response to Russian tampering in the election. The article definitely covers new ground on the Obama effort to respond while avoiding making things worse, particularly with regards to imposing sanctions in December. It also largely lays out much of the coverage the three bylined journalists (Greg Miller, Ellen Nakashima, and Adam Entous) have broken before, with new details. The overall message of the article, which has a number of particular viewpoints and silences, is this: Moscow is getting away with their attack.

“[B]ecause of the divergent ways Obama and Trump have handled the matter, Moscow appears unlikely to face proportionate consequences.”

The Immaculate Interception: CIA’s scoop

WaPo starts its story about how Russia got away with its election op with an exchange designed to make the non-response to the attack seem all the more senseless. It provides a dramatic description of a detail these very same reporters broke on December 9: Putin, who was personally directing this effort, was trying to elect Trump.

Early last August, an envelope with extraordinary handling restrictions arrived at the White House. Sent by courier from the CIA, it carried “eyes only” instructions that its contents be shown to just four people: President Barack Obama and three senior aides.

Inside was an intelligence bombshell, a report drawn from sourcing deep inside the Russian government that detailed Russian President Vladi­mir Putin’s direct involvement in a cyber campaign to disrupt and discredit the U.S. presidential race.

[snip]

The material was so sensitive that CIA Director John Brennan kept it out of the President’s Daily Brief, concerned that even that restricted report’s distribution was too broad. The CIA package came with instructions that it be returned immediately after it was read.

[snip]

In early August, Brennan alerted senior White House officials to the Putin intelligence, making a call to deputy national security adviser Avril Haines and pulling national security adviser Susan Rice side after a meeting before briefing Obama along with Rice, Haines and McDonough in the Oval Office.

While the sharing of this information with just three aides adds to the drama, WaPo doesn’t consider something else about it. The inclusion of Rice and McDonough totally makes sense. But by including Avril Haines, Brennan was basically including his former Deputy Director who had moved onto the DNSA position, effectively putting two CIA people in a room with two White House people and the President. Significantly, Lisa Monaco — who had Brennan’s old job as White House Homeland Security Czar and who came from DOJ and FBI before that — was reportedly excluded from this initial briefing.

There are a number of other interesting details about all this. First, for thousands of wordspace, the WaPo presents this intelligence as irreproachable, even while providing this unconvincing explanation of why, if it is so secret and solid, the CIA was willing to let WaPo put it on its front page.

For spy agencies, gaining insights into the intentions of foreign leaders is among the highest priorities. But Putin is a remarkably elusive target. A former KGB officer, he takes extreme precautions to guard against surveillance, rarely communicating by phone or computer, always running sensitive state business from deep within the confines of the Kremlin.

The Washington Post is withholding some details of the intelligence at the request of the U.S. government.

If this intelligence is so sensitive, why is even the timing of its collection being revealed here, much less its access to Putin?

That seemingly contradictory action is all the more curious given that not all agencies were as impressed with this intelligence as CIA was. It’s not until much, much later in its report until WaPo explains what remains true as recently as Admiral Rogers’ latest Congressional testimony: the NSA wasn’t and isn’t as convinced by CIA’s super secret intelligence as CIA was.

Despite the intelligence the CIA had produced, other agencies were slower to endorse a conclusion that Putin was personally directing the operation and wanted to help Trump. “It was definitely compelling, but it was not definitive,” said one senior administration official. “We needed more.”

Some of the most critical technical intelligence on Russia came from another country, officials said. Because of the source of the material, the NSA was reluctant to view it with high confidence.

By the time this detail is presented, the narrative is in place: Obama failed to respond adequately to the attack that CIA warned about back in August.

The depiction of this top-level compartment of just Brennan, Rice, McDonough, and Haines is interesting background, as well, for the depiction of the way McDonough undermined a State Department plan to institute a Special Commission before Donald Trump got started.

Supporters’ confidence was buoyed when McDonough signaled that he planned to “tabledrop” the proposal at the next NSC meeting, one that would be chaired by Obama. Kerry was overseas and participated by videoconference.

To some, the “tabledrop” term has a tactical connotation beyond the obvious. It is sometimes used as a means of securing approval of an idea by introducing it before opponents have a chance to form counterarguments.

“We thought this was a good sign,” a former State Department official said.

But as soon as McDonough introduced the proposal for a commission, he began criticizing it, arguing that it would be perceived as partisan and almost certainly blocked by Congress.

Obama then echoed McDonough’s critique, effectively killing any chance that a Russia commission would be formed.

Effectively, McDonough upended the table on those (which presumably includes the CIA) who wanted to preempt regular process.

Finally, even after  these three WaPo journalists foreground their entire narrative with CIA’s super duper scoop (that NSA is still not 100% convinced is one), they don’t describe their own role in changing the tenor of the response on December 9 by reporting the first iteration of this story.

“By December, those of us working on this for a long time were demoralized,” said an administration official involved in the developing punitive options.

Then the tenor began to shift.

On Dec. 9, Obama ordered a comprehensive review by U.S. intelligence agencies of Russian interference in U.S. elections going back to 2008, with a plan to make some of the findings public.

The WaPo’s report of the CIA’s intelligence changed the tenor back in December, and this story about the absence of a response might change the tenor here.

Presenting the politics ahead of the intelligence

The WaPo’s foregrounding of Brennan’s August scoop is also important for the way they portray the parallel streams of the intelligence and political response. It portrays the Democrats’ political complaints about Republicans in this story, most notably the suggestion that Mitch McConnell refused to back a more public statement about the Russian operation when Democrats were pushing for one in September. That story, in part because of McConnell’s silence, has become accepted as true.

Except the WaPo’s own story provides ample evidence that the Democrats were trying to get ahead of the formal intelligence community with respect to attribution, both in the summer, when Clapper only alluded to Russian involvement.

Even after the late-July WikiLeaks dump, which came on the eve of the Democratic convention and led to the resignation of Rep. Debbie Wasserman Schultz (D-Fla.) as the DNC’s chairwoman, U.S. intelligence officials continued to express uncertainty about who was behind the hacks or why they were carried out.

At a public security conference in Aspen, Colo., in late July, Director of National Intelligence James R. Clapper Jr. noted that Russia had a long history of meddling in American elections but that U.S. spy agencies were not ready to “make the call on attribution” for what was happening in 2016.

And, more importantly, in the fall, when the public IC attribution came only after McConnell refused to join a more aggressive statement because the intelligence did not yet support it (WaPo makes no mention of it, but DHS’s public reporting from late September still attributed the the threat to election infrastructure to “cybercriminals and criminal hackers”).

Senate Majority Leader Mitch McConnell (R-Ky.) went further, officials said, voicing skepticism that the underlying intelligence truly supported the White House’s claims. Through a spokeswoman, McConnell declined to comment, citing the secrecy of that meeting.

Key Democrats were stunned by the GOP response and exasperated that the White House seemed willing to let Republican opposition block any pre-election move.

On Sept. 22, two California Democrats — Sen. Dianne Feinstein and Rep. Adam B. Schiff — did what they couldn’t get the White House to do. They issued a statement making clear that they had learned from intelligence briefings that Russia was directing a campaign to undermine the election, but they stopped short of saying to what end.

A week later, McConnell and other congressional leaders issued a cautious statement that encouraged state election officials to ensure their networks were “secure from attack.” The release made no mention of Russia and emphasized that the lawmakers “would oppose any effort by the federal government” to encroach on the states’ authorities.

When U.S. spy agencies reached unanimous agreement in late September that the interference was a Russian operation directed by Putin, Obama directed spy chiefs to prepare a public statement summarizing the intelligence in broad strokes.

I’m all in favor of beating up McConnell, but there is no reason to demand members of Congress precede the IC with formal attribution for something like this. So until October 7, McConnell had cover (if not justification) for refusing to back a stronger statement.

And while the report describes Brennan’s efforts to brief members of Congress (and the reported reluctance of Republicans to meet with him), it doesn’t answer what remains a critical and open question: whether Brennan’s briefing for Harry Reid was different — and more inflammatory — than his briefing for Republicans, and whether that was partly designed to get Reid to serve as a proxy attacker on Jim Comey and the FBI.

Brennan moved swiftly to schedule private briefings with congressional leaders. But getting appointments with certain Republicans proved difficult, officials said, and it was not until after Labor Day that Brennan had reached all members of the “Gang of Eight” — the majority and minority leaders of both houses and the chairmen and ranking Democrats on the Senate and House intelligence committees.

Nor does this account explain another thing: why Brennan serially briefed the Gang of Eight, when past experience is to brief them in groups, if not all together.

In short, while the WaPo provides new details on the parallel intelligence and political tracks, it reinforces its own narrative while remaining silent on some details that are critical to that narrative.

The compartments

The foregrounding of CIA in all this also raises questions about a new and important detail about (what I assume to be the subsequently publicly revealed, though this is not made clear) Task Force investigating this operation: it lives at CIA, not FBI.

Brennan convened a secret task force at CIA headquarters composed of several dozen analysts and officers from the CIA, the NSA and the FBI.

The unit functioned as a sealed compartment, its work hidden from the rest of the intelligence community. Those brought in signed new non-disclosure agreements to be granted access to intelligence from all three participating agencies.

They worked exclusively for two groups of “customers,” officials said. The first was Obama and fewer than 14 senior officials in government. The second was a team of operations specialists at the CIA, NSA and FBI who took direction from the task force on where to aim their subsequent efforts to collect more intelligence on Russia.

Much later in the story, WaPo reveals how, in the wake of Obama calling for a report, analysts started looking back at their collected intelligence and learning new details.

Obama’s decision to order a comprehensive report on Moscow’s interference from U.S. spy agencies had prompted analysts to go back through their agencies’ files, scouring for previously overlooked clues.

The effort led to a flurry of new, disturbing reports — many of them presented in the President’s Daily Brief — about Russia’s subversion of the 2016 race. The emerging picture enabled policymakers to begin seeing the Russian campaign in broader terms, as a comprehensive plot sweeping in its scope.

It’s worth asking: did the close hold of the original Task Force, a hold that appears to have been set by Brennan, contribute to the belated discovery of these details revealing a broader campaign?

The surveillance driven sanctions

I’m most interested in the description of how the Obama Admin chose whom to impose sanctions on, though it includes this bizarre claim.

But the package of measures approved by Obama, and the process by which they were selected and implemented, were more complex than initially understood.

The expulsions and compound seizures were originally devised as ways to retaliate against Moscow not for election interference but for an escalating campaign of harassment of American diplomats and intelligence operatives. U.S. officials often endured hostile treatment, but the episodes had become increasingly menacing and violent.

Several of the details WaPo presents as misunderstood (including that the sanctions were retaliation for treatment of diplomats) were either explicit in the sanction package or easily gleaned at the time.

One of those easily gleaned details is that the sanctions on GRU and FSB were mostly symbolic. WaPo uses the symbolic nature of the attack on those who perpetrated the attack as a way to air complaints that these sanctions were not as onerous as those in response to Ukraine.

“I don’t think any of us thought of sanctions as being a primary way of expressing our disapproval” for the election interference, said a senior administration official involved in the decision. “Going after their intelligence services was not about economic impact. It was symbolic.”

More than any other measure, that decision has become a source of regret to senior administration officials directly involved in the Russia debate. The outcome has left the impression that Obama saw Russia’s military meddling in Ukraine as more deserving of severe punishment than its subversion of a U.S. presidential race.

“What is the greater threat to our system of government?” said a former high-ranking administration official, noting that Obama and his advisers knew from projections formulated by the Treasury Department that the impact of the election-related economic sanctions would be “minimal.”

Three things that might play into the mostly symbolic targeting of FSB, especially, are not mentioned. First, WaPo makes no mention of the suspected intelligence sources who’ve been killed since the election, most credibly Oleg Erovinkin, as well as a slew of other suspect and less obviously connected deaths. It doesn’t mention the four men Russia charged with treason in early December. And it doesn’t mention DOJ’s indictment of the Yahoo hackers, including one of the FSB officers, Dmitry Dokuchaev, that Russia charged with treason (not to mention the inclusion within the indictment of intercepts between FSB officers). There’s a lot more spy vs. spy activity going on here that likely relates far more to retaliation or limits on US ability to retaliate, all of which may be more important in the medium term than financial sanctions.

Given the Yahoo and other indictments working through San Francisco (including that of Yevgeniey Nikulin, who claims FBI offered him a plea deal involving admitting he hacked the DNC), I’m particularly interested in the shift in sanctions from NY to San Francisco, where Nikulin and Dokuchaev’s victims are located.

The FBI was also responsible for generating the list of Russian operatives working under diplomatic cover to expel, drawn from a roster the bureau maintains of suspected Russian intelligence agents in the United States.

[snip]

The roster of expelled spies included several operatives who were suspected of playing a role in Russia’s election interference from within the United States, officials said. They declined to elaborate.

More broadly, the list of 35 names focused heavily on Russians known to have technical skills. Their names and bios were laid out on a dossier delivered to senior White House officials and Cabinet secretaries, although the list was modified at the last minute to reduce the number of expulsions from Russia’s U.N. mission in New York and add more names from its facilities in Washington and San Francisco.

And the WaPo’s reports confirm what was also obvious: the two compounds got shut down (and were a priority) because of all the spying they were doing.

The FBI had long lobbied to close two Russian compounds in the United States — one in Maryland and another in New York — on the grounds that both were used for espionage and placed an enormous surveillance burden on the bureau.

[snip]

Rice pointed to the FBI’s McCabe and said: “You guys have been begging to do this for years. Now is your chance.”

The administration gave Russia 24 hours to evacuate the sites, and FBI agents watched as fleets of trucks loaded with cargo passed through the compounds’ gates.

Finally, given Congress’ bipartisan fearmongering about Kaspersky Lab, I’m most interested that at one point Treasury wanted to include them in sanctions.

Treasury Department officials devised plans that would hit entire sectors of Russia’s economy. One preliminary suggestion called for targeting technology companies including Kaspersky Lab, the Moscow-based cybersecurity firm. But skeptics worried that the harm could spill into Europe and pointed out that U.S. companies used Kaspersky systems and software.

In spite of all the fearmongering, no one has presented proof that Kaspersky is working for Russia (there are even things, which I won’t go in to for the moment, that suggest the opposite). But we’re moving close to de facto sanctions against Kaspersky anyway, even in spite of the fact (or perhaps because) they’re providing better intelligence on WannaCry than half the witnesses called as witnesses to Congress. But discrediting Kaspersky undercuts one of the only security firms in the world who, in addition to commenting on Russian hacking, will unpack America’s own hacking. You sanction Kaspersky, and you expand the asymmetry with which security firms selectively scrutinize just Russian hacking, rather than all nation-state hacking.

The looming cyberattack and the silence about Shadow Brokers

Which brings me to the last section of the article, where, over 8000 words in, the WaPo issues a threat against Russia in the form of a looming cyberattack Obama approved before he left.

WaPo’s early description of this suggests the attack was and is still in planning stages and relies on Donald Trump to execute.

Obama also approved a previously undisclosed covert measure that authorized planting cyber weapons in Russia’s infrastructure, the digital equivalent of bombs that could be detonated if the United States found itself in an escalating exchange with Moscow. The project, which Obama approved in a covert-action finding, was still in its planning stages when Obama left office. It would be up to President Trump to decide whether to use the capability.

But if readers make it all the way through the very long article, they’ll learn that’s not the case. The finding has already been signed, the implants are already being placed (implants which would most likely be discovered by Kaspersky), and for Trump to stop it, he would have to countermand Obama’s finding.

The implants were developed by the NSA and designed so that they could be triggered remotely as part of retaliatory cyber-strike in the face of Russian aggression, whether an attack on a power grid or interference in a future presidential race.

Officials familiar with the measures said that there was concern among some in the administration that the damage caused by the implants could be difficult to contain.

As a result, the administration requested a legal review, which concluded that the devices could be controlled well enough that their deployment would be considered “proportional” in varying scenarios of Russian provocation, a requirement under international law.

The operation was described as long-term, taking months to position the implants and requiring maintenance thereafter. Under the rules of covert action, Obama’s signature was all that was necessary to set the operation in motion.

U.S. intelligence agencies do not need further approval from Trump, and officials said that he would have to issue a countermanding order to stop it. The officials said that they have seen no indication that Trump has done so.

Whatever else this article is designed to do, I think, it is designed to be a threat to Putin, from long gone Obama officials.

Given the discussion of a looming cyberattack on Russia, it’s all the more remarkable WaPo breathed not one word about Shadow Brokers, which is most likely to be a drawn out cyberattack by Russian affiliates on NSA. Even ignoring the Shadow Brokers’ derived global ransomware attack in WannaCry, Shadow Brokers has ratcheted up the severity of its releases, including doxing NSA’s spies and hacks of the global finance system, It has very explicitly fostered tensions between the NSA and private sector partners (as well as the reputational costs on those private sector partners). And it has threatened to leak still worse, including NSA exploits against current Microsoft products and details of NSA’s spying on hostile nuclear programs.

The WaPo is talking about a big cyberattack, but an entity that most likely has close ties to Russia has been conducting one, all in plain sight. I suggested back in December that Shadow Brokers was essentially holding NSA hostage in part as a way to constrain US intelligence retaliation against Russia. Given ensuing events, I’m more convinced that is, at least partly, true.

But in this grand narrative of CIA’s early warning and Obama’s inadequate response, details like that remain unsaid.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.

The Suspected Assasination of Gareth Williams and Shadow Brokers’ Focus on SWIFT

If you haven’t seen it, BuzzFeed has been doing a superb series on the UK deaths that US spooks included in a secret report on suspected Russian assassinations. Yesterday they published the story I knew had to be coming, confirming that GCHQ spy Gareth Williams is among those deaths suspected to be Russian assassinations.

Police declared the death of Gareth Williams “probably an accident” – but British intelligence agencies have been secretly communicating with their American counterparts about suspicions that the spy was executed by Russian assassins, four US intelligence officials told BuzzFeed News.

An ongoing BuzzFeed News investigation has revealed that British and American spy agencies have intelligence connecting a string of suspected assassinations in the UK to Russian state agents or organised criminals – who sometimes cooperate. One high-ranking US intelligence source said: “The Kremlin has aggressively stepped up its efforts to eliminate and silence its enemies abroad over the past couple of years – particularly in Britain.” A second serving official said the circumstances of Williams’ death and 13 others “suggest Russian involvement” and demand “more investigation from the UK”. In all 14 cases, police ruled out foul play while intelligence agencies secretly compiled information connecting the deaths to Russia.

Williams, a 31-year-old codebreaker for Britain’s Government Communication Headquarters (GCHQ), had been assigned to MI6, and in the months before his death, sources said, he was working with the US National Security Agency. Two senior British police sources with direct knowledge of the case said some of his work was focused on Russia – and one confirmed reports that he had been helping the NSA trace international money-laundering routes that are used by organised crime groups including Moscow-based mafia cells.

While the report revisits and expands on all the suspicious details of Williams death and the thwarted British investigation into it, that spooks suspected it had ties to Russian mobsters is not new (though that theory does solidly explain why Williams would be among those targeted in this apparent assassination wave). The Daily Mail reported that theory back in 2011.

At the time, I noted that Williams’ impact on the Russian mob was described as a knock-on effect of a generally improved ability to track money laundering, something I tied closely to NSA’s ability to track SWIFT messaging.

[M]oney laundering is money laundering. Terrorists do it. Organized crime does it. Spy services do it. Corporations do it (often legally). And banksters do it, among others.

And there doesn’t appear to be anything about this description to suggest the Russian mafia would be specifically targeted by the technology. Indeed, the description of their exposure as a “knock-on effect” suggests everything would be targeted (which sort of makes sense; you can’t track money laundering unless you track the “legitimate” part of finance that makes it clean).

Which is why I find this latest narrative–with its complete lack of attention on the technology, instead focusing exclusively on the Russian mob–so interesting. Because finding a way to track money laundering, of any sort, would just be a new way to do what US intelligence has already been doing with SWIFT.

The following year, I noted that Gauss, a variant of StuxNet, sounded like the kind of money laundering tracking that might piss off the Russian mob.

That feels so long ago now: before the time we learned, in 2013, that the NSA was double-dipping at SWIFT, accessing SWIFT data directly at targeted customers in addition to its legal access via Europol, and before the time in April when Shadow Brokers not only dumped details of how the NSA hacked SWIFT but also (particularly ominously given the reminder of Williams’ death) doxed the NSA hackers who had carried that out.

Remember: Shadow Brokers has promised more details on “compromised network data from more SWIFT providers and Central banks” as part of its monthly tools of the month club.

There’s a lot that’s going on here. But a big part of it appears to be striking at US asymmetric visibility into the world’s financial system (I don’t say transparency because the US is increasingly the haven of last resort).

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including Vice, Motherboard, the Nation, the Atlantic, Al Jazeera, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse in Grand Rapids, MI.