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  • Updated
    19
    Feb
    2013
    7:50pm, EST

    Successful hacker attack could cripple U.S. infrastructure, experts say

    Kevin Mandia, the founder and chief executive of Mandiant, discusses cyber-attacks on US companies and organizations.

    By Erin McClam, Staff Writer, NBC News

    A report tying the Chinese military to computer attacks against American interests has sent a chill through cyber-security experts, who worry that the very lifelines of the United States — its energy pipelines, its water supply, its banks — are increasingly at risk.


    Follow @NBCNewsUS

    The experts say that a successful hacker attack taking out just a part of the nation’s electrical grid, or crippling financial institutions for several days, could sow panic or even lead to loss of life.

    “I call it cyberterrorism that makes 9/11 pale in comparison,” Rep. Mike Rogers, a Michigan Republican and chair of the House Intelligence Committee, told NBC News on Tuesday.

    An American computer security company, Mandiant, reported with near certainty that members of a sophisticated Chinese hacking group work out of the headquarters of a unit of the Chinese army outside Shanghai.

    The report was first detailed in The New York Times, which said that the hacking group’s focus was increasingly on companies that work with American infrastructure, including the power grid, gas lines and waterworks.

    The Chinese embassy in Washington told The Times that its government does not engage in computer hacking.

    As reported, the Chinese attacks constitute a sort of asymmetrical cyberwarfare, analysts said, because they bring the force of the Chinese government and military against private companies.

    “To us that’s crossing a line into a class of victim that’s not prepared to withstand that type of attack,” Grady Summers, a Mandiant vice president, said on the MSNBC program “Andrea Mitchell Reports.”

    The report comes as government officials and outside security experts alike are sounding ever-louder alarms about the vulnerability of the systems that make everyday life in the United States possible.

    A new report confirmed by U.S. intelligence officials has pinpointed a building in Shanghai where those working for the Chinese military launched cyberattacks against 141 US companies spanning 20 industries. NBC's Andrea Mitchell reports.

    Outgoing Defense Secretary Leon Panetta warned in October that the United States was facing a threat that amounted to “cyber Pearl Harbor” and raised the specter of intentionally derailed trains, contaminated water and widespread blackouts.

    “This is a pre-9/11 moment,” Panetta told business executives in New York. “The attackers are plotting.”

    RELATED: Report: Chinese army tied to widespread U.S. hacking

    The Times report described an attack on Telvent, a company that keeps blueprints on more than half the oil and gas pipelines in North and South America and has access to their systems.

    A Canadian arm of the company told customers last fall that hackers had broken in, but it immediately cut off the access so that the hackers could not take control of the pipelines themselves, The Times reported.

    Dale Peterson, founder and CEO of Digital Bond, a security company that specializes in infrastructure, told NBC News that these attacks, known as vendor remote access, are particularly worrisome.

    “If you are a bad guy and you want to attack a lot of different control systems, you want to be able to take out a lot,” he said. “The dirty little secret in these control systems is once you get through the perimeter, they have no security at all. They don’t even have a four-digit pin like your ATM card.”

    Carlos Barria / Reuters

    Locals walks in front of 'Unit 61398', a secretive Chinese military unit, in the outskirts of Shanghai. The unit is believed to be behind a series of hacking attacks, a U.S. computer security company said.

    The 34-minute blackout at the Super Bowl earlier this month highlighted weak spots in the nation’s power system. A National Research Council report declassified by the government last fall warned that a coordinated strike on the grid could devastate the country.

    That report considered blackouts lasting weeks or even months across large parts of the country, and suggested they could lead to public fear, social turmoil and a body blow to the economy.

    Vital systems do not have to be taken down for very long or across a particularly widespread area, the experts noted, to cause social disorder and to spread fear and anxiety among the population.

    Last fall, after Hurricane Sandy battered the Northeast, it took barely two days for reports of gasoline shortages to cause hours-long lines at the pumps and violent fights among drivers.

    Peterson described being in Phoenix, Ariz., during a three-day gas pipeline disruption “when people were waiting in line six hours and not going to work. You can imagine someone does these things maliciously, with a little more smarts, something that takes three months to replace.”

    Similarly, hacking attacks last fall against major American banks — believed by some security experts and government officials to be the work of Iran — amounted to mostly limited frustration for customers, but foreshadowed much bigger trouble if future attacks are more sophisticated.

    What worries Dmitri Alperovitch, co-founder of the computer security company CrowdStrike, is a coordinated attack against banks that modifies, rather than destroys, financial data, making it impossible to reconcile transactions.

    “You could wreak absolute havoc on the world’s financial system for years,” he said. “It would be impossible to roll that back.”

    While the report Tuesday focused on China, the experts also highlighted Iran as a concern. That is because China, as a “rational actor” state, knows that a major cyberattack against the United States could be construed as an act of war and would damage critical economic cooperation between the U.S. and China.

    “With the Iranians in the game,” Rogers said, “what’s worrisome is they don’t care. They have no economic lost opportunity.”

    Security experts have for years expressed concern, if not outrage, that the nation’s critical infrastructure remains so vulnerable so long after Sept. 11, 2001.  

    But the escalating threats from hackers in China and Iran, in addition to Russia and North Korea, appear to be lending new urgency to efforts to make sure companies and government agencies are better prepared.

    President Barack Obama announced in his State of the Union message last week that he had signed an executive order directing federal agencies to share certain unclassified reports of cyber threats with American companies.

    The next day, Rogers and Rep. Dutch Ruppersberger, a Maryland Democrat, reintroduced legislation designed in part to help companies share information. The bill passed the House last year but stalled in the Senate.

    State Department spokeswoman Victoria Nuland said Tuesday that the United States has “substantial and growing” concerns about threats to the U.S. economy and national security posed by cyberattacks.

    “I think as recent public reports make clear, we’re obviously going to have to keep working on this,” she said. “It’s a serious concern.”

    Peterson said that oil, gas and electric companies had led the way in developing security perimeters, with water companies “kind of in the middle” and transportation and mining companies lagging.

    But even the protections enacted by companies so far leave too many holes, he said.

    “They’re all in the same situation,” Peterson said. “If you get through the perimeter, you can do whatever you want.”

    A U.S. security firm has exposed the role of the Chinese military in an overwhelming number of cyber-attacks on U.S. infrastructure, government agencies, and corporations, resulting in the theft of information from military contractors and energy companies. Mandiant Vice President Grady Summers and Chris Johnson of the Center for Strategic and International Studies discusses.

    This story was originally published on Tue Feb 19, 2013 2:47 PM EST

    674 comments

    File this article under the heading of: "Well no Sh!t Sherlock!"

    Show more
    Explore related topics: china, security, cyber, hacking, infrastructure, updated
  • 19
    Apr
    2012
    12:19pm, EDT

    Senate tries to put wrangling aside to rescue Postal Service from insolvency

    Sen. Jon Tester talks about the outrage over outrageous government spending and why the USPS is now under scrutiny.

    By Tom Curry, msnbc.com National Affairs Writer

    Updated at 3:05pm ET The Senate struggled Thursday to push forward a bill to restructure the U.S. Postal Service, but still lacked accord on which amendments the senators would be allowed to offer.

    “We’re really very, very close to getting something done,” said Majority Leader Harry Reid Thursday afternoon. “Our main issue now is whether there will be a 50-vote hurdle or a 60-vote hurdle,” he said.

    The Postal Service is headed for financial collapse and perhaps for a taxpayer bailout. Whether Congress can avert this outcome and save it is the question that the Senate has been debating this week as it considers a bipartisan agency restructuring bill.

    Reid warned on the Senate floor Thursday, “Those of you who are holding up the bill because you don’t like it, you may not like what the result of having no bill is.”

    He also said, “If there is no bill, the post office will be drastically hit.”

    Reid and his colleagues face a deadline: the Postal Service has agreed to a moratorium on closing any postal retail facilities until May 15, to allow Congress time to devise a way to resuscitate an enterprise that, if it were in the private sector, would be on the brink of bankruptcy or liquidation. 

    Win Mcnamee / Getty Images

    Sen. Joe Lieberman, I-Conn., seen in this February 2012 file photo, said it was "unthinkable" that the Postal Service could cease operation.

    If Congress does not act by that deadline, the postmaster general will close more than 200 mail processing plants and take other cost-cutting steps.

    But there’s discord among senators over what “saving” the Postal Service would really mean, whether it’s worth saving, and whether small towns from Maine to Montana will lose the post offices that serve as their community anchors.

    “Its failure would deliver a crushing blow to our economy at a time when the economy is already fragile and it would be particularly harmful to people living and working in rural America,” said Sen. Susan Collins, R-Maine, the chief Republican co-sponsor of the restructuring bill.

    The legislation’s other chief sponsor, Connecticut Sen. Joe Lieberman, an independent who caucuses with Democrats, said, “This bill will keep the Postal Service alive and I think it will keep it well and put it on the path to surviving forever – but in a different way …”

    Noting that the Postal Service still delivers 563 million pieces of mail each day, Lieberman said it was “unthinkable” that it could cease operation, calling it “not just a relic of the 18th century but a pivotal part of the 21st century.”

    Related: Save Postal Service! No, don’t! Readers weigh in

    The Lieberman-Collins bill would use an $11 billion refund from Federal Employee Retirement system to offer buyouts of up to $25,000 to postal workers. Half of the Postal Service workforce of 557,000 employees is eligible for full or early retirement, Lieberman said. If 100,000 were to retire, the Postal Service would save $8 billion a year.

    The bill also relaxes the tight schedule for Postal Service payments into a fund for retiree health care, easing its cash flow problem. And for at least two years, it would halt the end of Saturday mail delivery, as other cost-cutting measures were implemented.

    Action on the bill was temporarily derailed when Sen. Rand Paul, R-Ky., tried on Tuesday to get a vote on an amendment to the postal bill aimed at cutting off U.S. aid to Egypt unless Cairo ends prosecution of American citizens pursuing pro-democracy action in the African nation.

    Leaders of each party were working to reach a deal to allow votes on a limited number of amendments to the legislation. If there’s no deal on amendments, there will be a vote to move ahead on the bill Thursday morning and Republicans might block it if they can’t get the chance to vote on amendments they want.

    Although Cairo, Egypt is long way from Cairo, Kentucky, Paul defended his effort to get a floor vote on his amendment.

    Mark Wilson / Getty Images

    Sen. Rand Paul, R-Ky., speaks at a news conference on the 2013 budget March 8, 2012 in Washington, DC.

    “I was never preventing any action (on the postal bill). I just want a 15-minute vote,” he told reporters on Wednesday. The Postal Service, he said “is losing $4 billion a year and I think the American people would like to know why we’re sending money to Egypt when we can’t fund our own enterprises in this country.”

    According to a report issued Tuesday by the Government Accountability Office, Congress’s fiscal watchdog, transactions at postal retail facilities have decreased by 18 percent over the past five years, while mail volume has declined by more than 20 percent. In fiscal year 2011, the Postal Service had a $5.1 billion loss and did not make its $5.5 billion retiree health benefits payment to the federal government.

    “Approximately 80 percent of its retail facilities do not generate sufficient revenue to cover their costs,” the GAO reported, yet “the number of USPS-operated retail facilities, about 32,000, has remained largely unchanged” over the past five years.

    An opponent of the Lieberman-Collins bill, Sen. John McCain, R- Ariz., said, “It is very clear that Congress and the Postal Service cannot make decisions.” The only solution, he said, would be an independent commission (akin to the Base Realignment and Closure Commission which closed military bases) to shut down redundant or money-losing facilities.

    Mocking the Lieberman-Collins bill’s two-year study of cost control measures before eliminating Saturday mail delivery,  McCain said sarcastically during Tuesday’s floor debate, “Now isn’t that marvelous! Two years to study! It’s delaying what is absolutely necessary and that is to have five-day-a-week delivery.”

    Illustrating the home-state concerns felt by almost all senators on closing postal facilities, Collins passionately defended a mail processing center in Hampden, a town in northern Maine. Closing it would mean that a letter sent from one town in northern Maine to another town just ten miles away would take a 600-mile roundtrip, she said.

    “That (Hampden) plant could be downsized, but it should never be closed” she insisted.

    Karen Bleier / AFP - Getty Images

    Senator Susan Collins, R-Maine, is seen during the Senate Interior, Environment and Related Agencies Subcommittee hearing in this June 23, 2010 file photo on Capitol Hill.

    NBCPolitics.com asked Collins Wednesday whether her die-hard defense of Hampden didn’t precisely illustrate the problem – few senators or House members are willing to allow a facility in his or her state or district to be closed -- so few are ever shuttered.

    “The problem is there are (under current law) not (legal) standards when a center or a post office should be closed,” she explained. The Lieberman-Collins bill would set such standards. “Our bill does not say that not a single post office or processing plant can be closed. Nor do we dictate that certain numbers should be closed.” Instead the bill sets what Collins called “logical standards” to determine which ones should be shut.

    Under the 1970 Postal Reorganization Act, the Postal Service was supposed to be financially self-sufficient, covering its costs through postal rates and fees. But in its previous reform efforts, Congress has shown that it manages and sometimes micromanages the Postal Service, even as it advocates self-sustainability.

    This week’s GAO report blamed Congress itself for making it impossible for the Postal Service to operate as a profitable private-sector firm would.

    The GAO said, “On one hand, USPS is supposed to ‘act like a business’ and be self-financing, but on the other hand, it is restricted by law from making decisions that businesses would commonly make, such as closing unprofitable units.” For example, under federal law, no small post office can be closed solely for operating at a deficit.

    Paul seems to see the Postal Service as a lost cause, calling the Lieberman-Collins effort was “too little, too late. I always ask people would you like to buy the Postal Service? If we could just sell it to somebody,” he mused and then pondered another idea: “Declaring bankruptcy – I don’t know if you could do it technically – but there’s been some discussion of that.” Declaring bankruptcy would allow the Postal Service to abrogate contracts with its labor unions “and start all over” with new contracts, he said.

    But the Kentucky freshman senator acknowledged, “People are emotional” about closing post offices. “People come to me … Republicans who say, ‘I supported you (in the 2010 election), I’m part of the Tea Party, but don’t close my post office.’”

    961 comments

    The postal service NEEDS to be saved. what, do they want everything done electronically? Are they really dumb enough to believe that EVERYONE has internet when half this country makes less than 25 grand a year? If they sink the postal service, they are undoubtedly the most STUPID government official …

    Show more
    Explore related topics: senate, capitol-hill, infrastructure, appfeatured
  • 14
    Feb
    2012
    4:28pm, EST

    New defense cuts threaten bases, shipyards

    J. Scott Applewhite / AP

    Defense Secretary Leon Panetta, right, accompanied by Joint Chiefs Chairman Gen. Martin Dempsey, testifies on Tuesday before the Senate Armed Services Committee.

    By Tom Curry, msnbc.com National Affairs Writer

    At a time when President Barack Obama is proposing more than $120 billion in new and enhanced tax incentives for companies to manufacture in America, not overseas, one part of the nation’s industrial base -- a sector where foreigners aren't allowed to fully compete -- is under siege.

    Smaller defense budgets proposed by Obama and Defense Secretary Leon Panetta will cancel some made-in-America ships, airplanes and unmanned aerial vehicles and slow down the purchase of others.

    The Obama budget also threatens to shut manufacturing and repair facilities, such as the 212-year old Portsmouth Naval Shipyard, which sits on an island between Maine and New Hampshire.

    Obama’s budget blueprint calls for defense outlays to drop by 5 percent over the next two years, and fall from 19 percent of federal spending this year to 13 percent by 2022.

    In a four-hour hearing before the Senate Armed Services Committee Tuesday, Panetta defended his call for fewer ships, unmanned aerial vehicles, and other hardware.

    And he made the case for his proposal for two more rounds of the base realignment and closure (BRAC) process that would close bases and shipyards across America.

    But he faced concerns and criticism from both Republicans and Democrats on the committee -- about the threat to blue-collar manufacturing and repair jobs as well to national security.

    Sen. John McCain, R- Ariz., told Panetta that “perhaps most disturbing of all” was the fact that at a time when U.S. strategy is increasingly focusing on East Asia and the Pacific, “this budget would reduce shipbuilding by 28 percent.” 

    Sen. Roger Wicker, R- Miss., whose state is home to the Ingalls shipyard in Pascagoula, pointed to the 8.3 percent unemployment rate and noted that Obama’s budget proposal has various job creation ideas -- such as transportation infrastructure -- in it.

    The Grio's Perry Bacon, Former White House Communications Director Anita Dunn, and the Huffington Post's Jon Ward discuss the latest political news, including the GOP candidates' public comments about the President's budget.

    “It makes no sense to me -- at a time when there is an effort to create more jobs with other spending -- to cut defense spending, which gives us the ‘two-fer’ of protecting the country and protecting the industrial base, which is a whole lot of Americans working to provide us with the infrastructure we need,” Wicker said. “It is a fact, is it not, that this budget will have an adverse effect on our industrial base?”

    Panetta replied, “We’ve taken a lot of steps to try to protect against that happening, because we absolutely have to protect our industrial base and those industries that support the defense budget. We can’t afford to lose any more and, for that reason, we design an approach that will keep them in business …”

    But keep them in business with fewer manufacturing jobs, Wicker noted.

    “There will be, I understand that, and that does have some impact,” Panetta admitted.

    Later in the hearing, pressed by Sen. Susan Collins, R-Maine, Panetta said he would make sure that “we keep our industrial base busy, serving our needs.”

    “Once that industrial base is gone, you never get it back and once those trained workers go into other fields you’ve lost them forever,” Collins told Panetta. “And that would greatly weaken our capabilities.”

    Armed Services Committee members such as Sen. Joe Lieberman, I –Conn., are also opposing delays in building the Virginia-class submarine, which is built in Connecticut and repaired in New Hampshire.

    As for closing excess bases and shipyards, Panetta said, “I don’t know of any other way” to cut infrastructure and get the savings needed “without going through that kind of process.”

    When Panetta served as a House member from California in 1991, he saw BRAC first hand when the BRAC commission closed Ft. Ord near Monterey, costing more than 16,000 jobs.

    President Barack Obama's newly-proposed 2013 budget, has been criticized by Republicans as a political document in an election year – calling it "dead on arrival." Economist Greg Ip takes a closer look at Obama's plan

    “I’ve been through the process; frankly I don’t wish the process on anybody,” he told Sen. Jeanne Shaheen, D- N.H., who was defending the Portsmouth Naval Shipyard. 

    “Twenty five percent of my local economy was hit by virtue of a BRAC closure,” Panetta told her. But he said the community did use the closing as an opportunity to develop a college campus.

    “I see very little support for the president’s proposal on BRAC,” Collins said, in an interview during a break in the hearing.

    “If you look at the GAO reports on the last BRAC round, it has turned out to cost the government money, rather than saving money -- at least for the first five years. So I think there’s a great deal of skepticism both about the savings that would be produced and also whether there really is excess capacity.”

    She said she did not think Congress would vote to launch another BRAC round. Portsmouth was on the hit list in 2005, but the BRAC commission overrode the Pentagon recommendation that it be closed. “Tony Principi, the BRAC chairman at the time, described Portsmouth Naval Shipyard as ‘the gold standard in naval yards.’”

    The economic impact of closing the shipyard would huge in southern Maine, Collins said: “It’s a major employer in York County and beyond York County. Half the workers are from New Hampshire -- it affects both states”

    In bipartisan accord was her Democratic neighbor, Shaheen who said after hearing, “The number one priority is national security. The Portsmouth Naval shipyard was created … because of national security – but there are a lot of good jobs there. To look at the equation without factoring that in, along with costs, would be shortsighted.”

    One dissenter on the committee was Sen. Lindsey Graham, R- S.C., who said he did not consider defense manufacturing as “a job creator for America.” He also said he does think it’s necessary to consider another BRAC round -- “as hard as that is for my colleagues.”

     

    1010 comments

    Defense is over half of the discretionary spending in the budget. I understand big ships are pretty vulnerable to anyone with a motorboat and a missile, or an airplane etc.

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    Explore related topics: white-house, infrastructure, leon-panetta, appfeatured

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