Last month’s Open Group Conference in San Francisco focused on how IT and enterprise architecture support enterprise transformation. Speakers in conference events also explored the latest in service oriented architecture (SOA), cloud computing and security.
One of the main speakers, Joseph Menn, cybersecurity correspondent for The Financial Times and author of Fatal System Error: The Hunt for the New Crime Lords Who Are Bringing Down the Internet, has covered security since 1999 for both the Financial Times and then before that for The Los Angeles Times. Fatal System Error is his third book, he also wrote All the Rave: The Rise and Fall of Shawn Fanning’s Napster.
As a lead-in to his Open Group presentation, entitled “What You’re Up Against: Mobsters, Nation-States, and Blurry Lines,” Joe explored the current cybercrime landscape, the underground cybergang movement, and the motive behind governments collaborating with organized crime in cyberspace. The interview is moderated by Dana Gardner, principal analyst at Interarbor Solutions.
Listen to the podcast (32:13 minutes).
Here are some excerpts:
Dana Gardner: Have we entered a new period where just balancing risks and costs isn’t a sufficient bulwark against burgeoning cyber crime?
Joseph Menn: Maybe you can make your enterprise a little trickier to get into than the other guy’s enterprise, but crime pays very, very well, and in the big picture, their ecosystem is better than ours. They do capitalism better than we do. They specialize to a great extent. They reinvest in R&D.
On our end, on the good guys’ side, it’s hard if you’re a chief information security officer (CISO) or a chief security officer (CSO) to convince the top brass to pay more. You don’t really know what’s working and what isn’t. You don’t know if you’ve really been had by something that we call “advanced persistent threat” (APT). Even the top security minds in the country can’t be sure whether they’ve been had or not. So it’s hard to know what to spend on.
The other side doesn’t have that problem. They’re getting more efficient in the same way that they used to lead technical innovation. They’re leading economic innovation. The freemium model is best evidenced by crimeware kits like ZeuS, where you can get versions that are pretty effective and will help you steal a bunch of money for free. Then if you like that, you have the add-on to pay extra for — the latest and greatest that are sure to get through the antivirus systems.
Gardner: When you say “they,” who you are really talking about?
Menn: They, the bad guys? It’s largely Eastern European organized crime. In some countries, they can be caught. In other countries they can’t be caught, and there really isn’t any point in trying.
It’s a geopolitical issue, which is something that is not widely understood, because in general, officials don’t talk about it. Working on my book, and in reporting for the newspapers, I’ve met really good cyber investigators for the Secret Service and the FBI, but I’ve yet to meet one that thinks he’s going to get promoted for calling a press conference and announcing that they can’t catch anyone.
So the State Department, meanwhile, keeps hoping that the other side is going to turn a new leaf, but they’ve been hoping that for 10 or more years, and it hasn’t happened. So it’s incumbent upon the rest of us to call a spade a spade here.
What’s really going on is that Russian intelligence and, depending on who is in office at a given time, Ukrainian authorities, are knowingly protecting some of the worst and most effective cybercriminals on the planet.
Gardner: And what would be their motivation?
Menn: As a starting point, the level of garden-variety corruption over there is absolutely mind-blowing. More than 50 percent of Russian citizens responding to the survey say that they had paid a bribe to somebody in the past 12 months. But it’s gone well beyond that.
The same resources, human and technical, that are used to rob us blind are also being used in what is fairly called “cyberwar.” The same criminal networks that are after our bank accounts were, for example, used in denial-of-service (DOS) attacks on Georgia and Estonian websites belonging to government, major media and Estonia banks.
It’s the same guy, and it’s a “look-the-other-way” thing. You can do whatever crime you want, and when we call upon you to serve Mother Russia, you will do so. And that has accelerated. Just in the past couple of weeks, with the disputed elections in Russia, you’ve seen mass DOS attacks against opposition websites, mainstream media websites, and live journals. It’s a pretty handy tool to have at your disposal. I provide all the evidence that would be needed to convince the reasonable people in my book.
Gardner: In your book you use the terms “bringing down the Internet.” Is this all really a threat to the integrity of the Internet?
Menn: Well integrity is the key word there. No, I don’t think anybody is about to stop us all from the privilege of watching skateboarding dogs on YouTube. What I mean by that is the higher trust in the Internet in the way it’s come to be used, not the way it was designed, but the way it is used now for online banking, e-commerce, and for increasingly storing corporate — and heaven help us, government — secrets in the cloud. That is in very, very great trouble.
I don’t think that now you can even trust transactions not to be monitored and pilfered. The latest, greatest versions of ZeuS gets past multi-factor authentication and are not detected by any antivirus that’s out there. So consumers don’t have a prayer, in the words of Art Coviello, CEO of RSA, and corporations aren’t doing much better.
So the way the Internet is being used now is in very, very grave trouble and not reliable. That’s what I mean by it. If they turned all the botnets in the world on a given target, that target is gone. For multiple root servers and DNS, they could do some serious damage. I don’t know if they could stop the whole thing, but you’re right, they don’t want to kill the golden goose. I don’t see a motivation for that.
Gardner: If we look at organized crime in historical context, we found that there is a lot of innovation over the decades. Is that playing out on the Internet as well?
Menn: Sure. The mob does well in any place where there is a market for something, and there isn’t an effective regulatory framework that sustains it — prohibition back in the day, prostitution, gambling, and that sort of thing. ..
The Russian and Ukrainian gangs went to extortion as an early model, and ironically some of the first websites that they extorted with the threat were the offshore gambling firms. They were cash rich, they had pretty weak infrastructure, and they were wary about going to the FBI. They started by attacking those sites in 2003-’04, and then they moved on to more garden-variety companies. Some of them paid off and some said, “This is going to look little awkward in our SEC filings” and they didn’t pay off.
Once the cybergang got big enough, sooner or later, they also wanted the protection of traditional organized crime, because those people had better connections inside the intelligence agencies and the police force and could get them protection. That’s the way it worked. It was sort of an organic alliance, rather than “Let’s develop this promising area.” …
That is what happens. Initially it was garden-variety payoffs and protection. Then, around 2007, with the attack on Estonia, these guys started proving their worth to the Kremlin, and others saw that with the attacks that ran through their system.
This has continued to evolve very rapidly. Now the DOS attacks are routinely used as the tool for political repression all around the world — Vietnam, Iran and everywhere you’ll see critics that are silenced from DOS attacks. In most cases, it’s not the spy agencies or whoever themselves, but it’s their contract agents. They just go to their friends in the similar gangs and say, “Hey do this.” What’s interesting is that they are both in this gray area now, both Russia and China, which we haven’t talked about as much.
In China, hacking really started out as an expression of patriotism. Some of the biggest attacks, Code Red being one of them, were against targets in countries that were perceived to have slighted China or had run into some sort of territorial flap with China, and lo and behold, they got hacked.
In the past several years, with this sort of patriotic hacking, the anti-defense establishment hacking in the West that we are reading a lot about finally, those same guys have gone off and decided to enrich themselves as well. There were actually disputes in some of the major Chinese hacking groups. Some people said it was unethical to just go after money, and some of these early groups split over that.
In Russia, it went the other way. It started out with just a bunch of greedy criminals, and then they said, “Hey — we can do even better and be protected. You have better protection if you do some hacking for the motherland.” In China, it’s the other way. They started out hacking for the motherland, and then added, “Hey — we can get rich while serving our country.”
So they’re both sort of in the same place, and unfortunately it makes it pretty close to impossible for law enforcement in [the U.S.] to do anything about it, because it gets into political protection. What you really need is White House-level dealing with this stuff. If President Obama is going to talk to his opposite numbers about Chinese currency, Russian support of something we don’t like, or oil policy, this has got to be right up there too — or nothing is going to happen at all.