Blogger: Randall Gamby

As briefly mentioned in a Burton Group IdPS blog and a ZDNet Australia published article on July 3, 2008, HR data from Google was stolen from one of their previous HR outsource partners.  It seems that the partner, Colt Express Outsource Partners, had equipment stolen that contained HR data from some of its clients, including Google.  The data was unencrypted and stored on systems that were apparently portable.

So what does this mean for all of us? 

First, it shows that even large SaaS companies like Google can be bitten by a lack of security at their partners, just like many of us can.  Burton Group has been warning clients for a long time about the dangers of sending confidential information to outsource partners without proper security and audit processes in place. Of course this should also be backed by strong contractual language. 

Second, be prepared to pay.  Even if Google had breach mitigation terms in their contract, Colt Express announced that it was in financial difficulty. So Google has had to pay for financial reporting and other compensation to its own employees, even though Google did nothing wrong. 

Third, a Google representative stated "We take the security of our employees very seriously and require outside vendors to meet appropriate security standards. We review and update these standards on an on-going basis.”  Does this mean that Google doesn’t require encryption of its confidential information since encryption of the data was not deployed at Colt Express?  When working with third parties, whether it’s financial data or confidential personal data, this information needs to be protected from unauthorized access. One of the simplest ways is encrypting the data while at rest, regardless of where it’s located. 

Final, the Colt Express breach brings to mind a question Burton Group is always asking: “What is your exit strategy if the contract is terminated with your outsourcing partner?”  A lot of effort is expended in creating an outsourcing agreement around use and protection of data, but what happens when the contract is ended?  Do you obtain and retain the information the outsource partner maintained?  Do you have the outsource partner destroy the information and any archives of it (and verify this was done)?  Do you create a custodial contract with the outsourcing partner for them to maintain the information and archives on your behalf (ensuring the data is properly protected)?  As was found in this incident, after their contract with Google was terminated the outsourcing partner apparently retained the employee data unencrypted on their servers. This was the fatal mistake that allowed the breach to occur.

So as you work with your outsourcing and SaaS vendors, you should not only consider how day-to-day operations should be secured to maintain the confidentiality of your data. You should also think about how that data is being maintained over time, and what are your procedures should the unthinkable happen if your partner allows your data to be compromised.

Weldon, who is currently being investigated by the FBI over alleged corruption during his time in office, visited Libya in March to discuss a possible military deal, according to a letter describing the trip from Weldon to Defense Solutions CEO Timothy Ringgold. In May, Weldon, together with Ringgold and another company representative, traveled to Moscow to discuss working with Russia's weapons-export agency on arms sales to the Middle East.

Both trips were part of the company's effort to tap into the growing -- and often legally murky -- market for selling weapons from former Eastern Bloc countries to the Middle East and Afghanistan.

Ex-Rep. Curt Weldon, R-Penn., is helping broker deals between Russian weapons suppliers and the Iraqi and Libyan governments through his company, Defense Solutions.
Photo: H. Rumph Jr/AP

The Russians want to sell weapons to Iraq directly, but "must go slow on Iraq because of political reasons" and want to work with an "intermediary" like Defense Solutions, CEO Ringgold subsequently wrote to colleagues. "They have not spoken with any American company that can offer the quid pro quo that we can or that has the connections in Russia that we have," he boasted.

A few years ago, an American company proposing to sell weapons to Libya might have triggered a congressional hearing. So, too, would have a proposal to conduct arms deals with Russia, which the United States has accused of selling high-tech weapons to Syria and Iran.

However, U.S. government efforts to rapidly equip countries like Afghanistan and Iraq -- which have largely Soviet-origin weapons -- have created legal ambiguities and loopholes in export controls that didn't exist in years past and given rise to a new class of arms trade middlemen. So, even though both Libya and the Russian arms export agency are on official U.S. blacklists, government officials and analysts involved in weapons sales say the rules have become unclear as the push to equip allies in the global war on terror has blazed new but uncertain legal ground.

Eagerly stepping into that virgin territory is Defense Solutions, a Pennsylvania-based company that is carving out a small but lucrative niche in a new international arms bazaar. The firm boasts as its advisors a number of influential Washington insiders, such as retired General Barry McCaffrey, the former White House drug czar.

Helping the firm make key connections is Curt Weldon, a former Republican congressman from Pennsylvania at the center of an FBI investigation into alleged conflicts of interest during his time in office. Weldon, now a key executive at Defense Solutions, is working with the company to set up these weapons deals.

Defense Solutions has also proposed refurbishing Libya's BTR-60 armored personnel carriers, according to a sales proposal seen by Wired.com. Defense Solutions denies drafting a sales proposal to Libya.

It's an unusual, if not an entirely unexpected chapter for Weldon, whose time in office included frequent trips to Russia. As an influential member of the House Armed Services Committee, Weldon pushed for multibillion-dollar defense programs, like ballistic missile defense, and earned a reputation as a foreign policy gadfly, boasting of his contacts with officials in nations labeled by the administration as "rogue states" such as Libya and North Korea. Weldon's wild claims about a 9/11 cover-up and his sensationalist book warning of an Iranian terror plot, sometimes earned him official scorn and public ridicule, but it was accusations that he steered contracts to Eastern European businesses linked to his daughter's lobbying firm that drew the government's attention.

Weldon was voted out of office in 2006 just weeks after the FBI raided his daughter's home, and that of one of her associates.

Weldon did not respond to e-mails and phone requests to be interviewed or comment for this article. But in a 2006 interview, before the FBI probe was public, Weldon spoke enthusiastically about setting up a "front company" to work with the Russian arms agency, Rosoboronexport. Weldon hoped this company could sell weapons to the Middle East, and other regions, particularly to countries where the U.S. has strained relations. He claimed the director of Rosoboronexport approached him to work with "an American company that would act as a front for weapons these nations want to buy."

Weldon called the proposal an "unbelievable offer."

The administration, he acknowledged at the time, did not welcome the idea of an American company selling Russian weapons to potentially unfriendly countries. But two years later, Weldon, now a private citizen and chief strategic officer for Defense Solutions, appears to be working on precisely that sort of deal. And whether illegal or not, Defense Solutions' business represents a new phenomenon in the international arms trade business.

In years past arms brokers -- firms or individuals who serve as middlemen to facilitate weapons sales between countries -- were largely the stuff of spy thrillers. Unlike traditional American defense companies, like Lockheed Martin or Boeing, which typically sell weapons directly to NATO countries or other governments regarded as friendly to the United States, brokers are often small outfits run by people with sometimes questionable experience and reputations they will sell to anyone. One of the most infamous arms brokers, a Russian named Viktor Bout, is charged by the United States, United Nations, Interpol and others of funneling arms to terrorists and rebels around the world. He was recently arrested in Thailand. The United States is requesting his extradition on charges of supplying arms to a terrorist organization.

Two Marines lower the trim vane on the front of an Iraqi BMP-1 mechanized infantry combat vehicle that was captured during Operation Desert Storm. The American defense consulting firm Defense Solutions has proposed refurbishing Libya's aging fleet of BMP-1s. Defense Solutions denies drafting a sales proposal to Libya.

But ironically, Iraq has fueled a new market for these professional middlemen; the United States is funneling billions of dollars into modernizing Iraq's army so that the country's government can fend for itself after coalition troops withdraw. And Iraq's largely Soviet-equipped military is a natural market for Eastern European countries brimming with old or out-of-date equipment they would like to unload. The middlemen, in these cases, serve a key role by allowing the U.S. government to do business with an American company, which in turn buys equipment from Eastern Bloc countries in deals worth hundreds of millions of dollars, much of it financed with U.S. taxpayer dollars.

One of Defense Solutions' sales -- a deal to sell Hungarian-owed T-72 tanks to Iraq in 2005 -- was typical of these new foreign military sales. But on the more questionable side is the company's plans to work with Rosoboronexport, which is barred from doing business with the U.S. government, and Libya, which is still on the State Department's arms embargo list.

The Eastern European-Middle East arms-brokering business, while in some cases sanctioned by the U.S. government, has run into problems, including outright corruption and quality. Defense contractor Dale Stoffel, the president of Wye Oak Technology, and another American were gunned down in Iraq in December 2004 after Stoffel alleged that the Iraqi Ministry of Defense was involved in a kickback scheme. Like Defense Solutions, the company Stoffel worked for was refurbishing the Iraq's army Eastern Bloc equipment.

Another problem is quality. Weapons from the former Soviet Bloc, which the U.S. military euphemistically calls "nonstandard equipment," have been flagged as substandard, acknowledges Brigadier General Charles Luckey, who is in charge of security assistance at Multi-National Security Transition Command-Iraq. In an interview from Iraq, Brigadier General Luckey said: "One of the frustrating things about buying nonstandard [weapons], is that I'm the guy who has to deal with the fact that some broker I've never heard of allowed weapons to get to Iraq before they were inspected."

Defense Solutions is carving a new niche in the arms trade, selling Soviet-made weapons to Middle Eastern countries like Afghanistan and Iraq. Defense Solutions sold Hungarian-owed T-72 tanks to Iraq in 2005.

In one high-profile case, Iraqi officials alleged that a corrupt firm sold them $400 million in shoddy helicopters from Poland. More recently, a company led by a 21-year-old and a former masseur was offered a U.S. government contract worth nearly $300 million to sell ammunition to Afghanistan. The ammunition turned out to be outdated and of dubious origin and several people connected with the company have been indicted. A congressional investigation concluded that the company, which was on a State Department watch list, was able to take advantage of regulatory loopholes by using middlemen.

For those concerned about illicit arms trade, this new wave of weapons deals is rife with the potential for corruption and abuse, but for companies eager to pursue markets once regarded as dubious, it represents a lucrative business opportunity. The problem in these cases, according to those familiar with arms sales, is that it's no longer clear what's legal and what's not.

Rachel Stohl, an expert on international arms trade and a senior analyst at Center for Defense Information, says that in many ways, the rush to equip Iraq has led the United States to throw caution to the wind. She points to a report by the Government Accountability Office last year that found that some 190,000 weapons sold to Iraq have gone missing. "I think the reality is we won't know, until way after the fact, about all of these irregularities with the Iraq weapons provision program," she said. "We were providing them all these assault rifles that have gone missing. Why? They were not following the standard procedures that were in place."

But Iraq and Afghanistan aren't the only markets available to arms brokers like Defense Solutions. The gradual normalization of relations with Libya opens another door into a quasi-legal area of sales.

Like Iraq, Libya has a substantial arsenal of Soviet-origin military weapons, offering a potential market for brokers working with Russia and other former Soviet states. But even when there's not an outright ban, sales to the Middle East are often fraught with controversy, particularly to countries like Libya, which was under international sanction for more than a decade. Even as sanctions against it have been lifted, European companies proposing to sell arms to Libya have faced steep criticism, particularly since the country is still ruled by dictator Muammar Gaddafi, who took power in a military coup in 1969.

While the United States lifted Libya's "state sponsor of terrorism" designation in 2006, other restrictions, such as on the sale of arms, remain in place. A State Department spokesperson confirmed that exports of "lethal munitions" to Libya, such as tanks or related equipment, are still banned, although sales of nonlethal equipment are now allowed on a case-by-case basis.

In late March, Weldon traveled to Libya for a weeklong trip at the invitation of the Gaddafi Foundation, a group run by the son of Libya's leader, and the chairman of Libya's foreign affairs committee, according to the report he sent to Defense Solutions (.pdf), a copy of which was obtained by Wired.com. The trip reports states: "Agreement reached for Weldon to quickly return to Libya for meetings with son [of Libyan leader Gaddafi] Morti regarding defense and security cooperation."

A document dated April 16, just two weeks after Weldon's trip, outlines Defense Solutions' proposal to Libya to refurbish the country's fleet of armored vehicles, including its T-72 tanks, BMP-1 infantry fighting vehicles, and BTR-60 armored personnel carriers. A copy of the sales proposal, also provided to Wired.com, is on Defense Solutions' letterhead, appears to bear the signature of company CEO Timothy Ringgold, and is addressed to Libya's defense procurement council. "Defense Solutions is committed to delivering a full end-to-end solution to its clients," the proposal states. "Besides refurbishing these vehicles, we are capable of providing a full logistics support package, including a two year supply of spare parts, maintenance and repair services, and operator, maintenance, and repair training."

In an interview with Wired.com, Ringgold admitted that he's interested in doing business in Libya and confirms receiving Weldon's trip report from Libya, but denies drafting or signing an arms-sale proposal. "I've never made such a document to Libya," Ringgold insisted, after being read the proposal, and told that his signature is on it.

In addition to the Libyan arms-deal document, Wired.com has also reviewed copies of e-mails from Ringgold discussing the Libyan deal.

While Ringgold denies proposing an arms sale to Libya, he is open about speaking with Rosoboronexport, which has been on a U.S. government sanctions list since 2006, after the Russian state agency allegedly violated the Iran and Syria Nonproliferation Act. An April e-mail provided to Wired.com describes Ringgold, Weldon and Stephan Minikes, a senior advisor to Defense Solutions and a former ambassador, meeting with Rosoboronexport. The conversations included a number of potential deals, including supplying Mi-17 helicopters to Afghanistan and spare parts for Iraq's infantry fighting vehicles. Ringgold wrote to colleagues following the visit, describing the meetings as a "spectacular success," saying the Russian agency "has the ability to undercut all cost proposals from brokers."

Ringgold confirmed those discussions and said that his company has sought to do business with Rosoboronexport. Asked whether Ringgold considers his dealings with Russia to be legal, he argued that U.S. companies could work with Rosoboronexport on a "case-by-case" basis. "The particular purpose of the meeting we had -- and I want to be crystal clear -- was in response to a U.S. government requirement," he said.

A number of officials at the State Department and in the Pentagon, when contacted for this article, could not say whether working with Rosoboronexport is legal or not. A Pentagon spokeswoman said she was familiar with the issue, but deferred the question to the State Department. When asked about Rosoboronexport's status on the blacklist, John Herzberg, a State Department spokesman replied: "What's on there is on there."

Asked whether, given the ban, there was any way a company could legally work with Rosoboronexport, as Ringgold suggested, Herzberg provided an equivocal answer. "At the stage of the process we're at, I'm unable to give you an answer," he said. "You can try elsewhere in government, and maybe they'll be braver than me."

In an interview from Iraq, General Luckey conceded it was a murky area, but said, "My understanding is they are currently on our no-go list."

The confusion over debarred parties has even led the U.S. government into its own legal tangles, according to Jim McAleese, a Washington attorney who specializes in government contracting and foreign military sales. Because the Russian government violated U.S. nonproliferation laws, even NASA had to go to Congress to ensure it could work with Russia on Soyuz flights to the international space station. "What I'm warning you about is, don't be surprised by the confusion," McAleese said. "There are a whole bunch of different statutes that were adopted piecemeal and were never intended to be reconciled."

But it's the very ambiguity of the law that troubles those who monitor export control. "It's highly unusual to do anything with the Russians, particularly Rosoboronexport," said Scott Jones, director of Export Control Programs at the Center for International Trade and Security at the University of Georgia.

Legal or not, reputable American companies simply don't want to work with banned entities, Jones said, for fear of risking their reputations and business. "Even if it's not an outright prohibition, most companies don't want to put themselves in a liability situation that has really bad PR … and they stay away from it," Jones said. "But if that's your business, pimping out arms from the U.S. or Russia, that's the way it works, and you push as much as possible."

Finding any U.S. defense company working with the Russian government at this point would be "remarkable," Jones added.

In the meantime, the future for Weldon is unclear. The FBI investigation continues and Weldon's former chief of staff recently pleaded guilty to a conspiracy charge and is cooperating with the government, notes Melanie Sloan, the executive director of Citizens for Responsibility and Ethics in Washington, which filed a complaint against Weldon in 2004. Sloan speculated that Weldon may be charged with "honest service fraud" for misusing his office for personal gain. "It's an easier standard than bribery," she said. "I wouldn't be surprised [if he's charged] with bribery, but I think it will be honest services fraud."

Ringgold insists that he and Weldon are on the right side of the law. "Everything we do is in strict compliance with international and U.S. law and we operate only in the best interests of the U.S. government," he said. "I didn't serve 30 years in the United States Army to throw that away on a whim."

Asked if Weldon is still working for the company, Ringgold replied: "Absolutely, proudly so."

Disappointingly, the author sprinkles the usual super-secret uber-hacker spin throughout the article to make the Red Team seem mysterious and exclusive, with untouchable talent. It’s a little misleading. For starters, there’s the predictable question about success rates:

I’d heard from one of the Department of Defense clients who had previously worked with the NSA red team that OWNSAVAOG and his team had a success rate of close to 100 percent. “We don’t keep statistics on that,” OWNSAVAOG insisted when I pressed him on an internal measuring stick.

This is one of those statements that is difficult for the average reader to interpret. It’s intended to make the team sound like a crack squad of hackers, but in reality it’s the same statistic that every security consultancy cites during sales calls. The truth is, there’s a lot of wiggle room on what is considered “getting in” to the target. For example, some would say that brute forcing an FTP server and downloading some FOUO (For Official Use Only) documents constitutes penetrating the target. Others would disagree.

How about personnel? I thought this was an englightening and accurate statement from the unnamed NSA source:

And like any good geek at a desk talking to a guy with a really cool job, I wondered just where the NSA finds the members of its superhacker squad. “The bulk is military personnel, civilian government employees and a small cadre of contractors,” OWNSAVAOG says. The military guys mainly conduct the ops (the actual breaking and entering stuff), while the civilians and contractors mainly write code to support their endeavors. For those of you looking for a gig in the ultrasecret world of red teaming, this top hacker says the ideal profile is someone with “technical skills, an adversarial mind-set, perseverance and imagination.”

He basically admits that the team consists mostly of people who “run the tools” and only a handful that actually write the tools or do anything cutting-edge. It shouldn’t be that surprising; just as in any large consulting organization, you have some people who run scanners/tools and aren’t expected to be terribly analytical. While the Red Team almost certainly has some superstars, on the whole it is similar in both skillset and composition to a typical consultancy or enterprise security team.

In terms of attracting and retaining top talent, the Red Team faces the same challenges as the rest of the information security industry, with the built-in disadvantage of the government pay scale. If that wasn’t bad enough, they also have to compete with themselves (i.e. the rest of the NSA) for already scarce resources. Given these challenges, how could one realistically expect the Red Team to be as advanced as the article portrays?

Finally, let’s dispel the “super-secret” notion — unless things have changed significantly, the majority of Red Team operations are unclassified. Granted, detailed information is guarded, but you can find reports summarizing past operations if you dig around a bit. One would expect that an operation intended to be truly secretive would never make its way into Google search results.

I want to conclude by saying that this post is not intended to cast the Red Team itself in a negative light. I enjoyed my time there and had the opportunity to work with some smart people. The Red Team’s goals are worthy and noble; clearly, state-sponsored cyberterrorism is a growing concern and as a country we should be as prepared as possible. But realize that we have a long way to go.

At TechEd this year, I gave a presentation called "21st century networking: time to throw away your medieval gateways." (Actually, I've given this same talk before, at events in Amsterdam, Brussels, Oslo, and numerous on-campus customer meetings. It's time to bring the knowledge to the masses.)

I described an idea of using IPv6, IPsec, NAP, and group policy to build a pretty slick replacement for clunky VPN gateways. Turns out we've been piloting this very idea on our internal corpnet. Like a good little bunny I got myself enrolled in the thing and -- pardon the unattractive gushing -- this thing rawks! Here's a brief rundown of the parts you'd configure on managed clients:

• Windows Vista Business (with Software Assurance), Enterprise, or Ultimate editions
• That are domain-joined
• Users run as non-admin
• Group policy applies numerous settings
• UAC is enabled
• BitLocker is configured to protect confidential information stored offline
• The Windows Firewall is enabled
• NAP is used for checking health
• Forefront Client Security for keeping malware off the box
• Smart cards for strong authentication of users
• IPsec is required for connection authentication and traffic encryption
• IPv6 is required for worldwide Internet connectivity
• A DNS suffix search list represents the data center name space
• Static IPv6 DNS servers provide name resolution for hosts in the data center

What does this give you? True anywhere access, anywhere in the world, directly to corpnet resources from managed and secure client PCs. The Internet has replaced private WAN links for good reason: enormous cost benefits. The only thing holding us back from fully utilizing this development has been a lack of way to enforce and monitor the security of clients not physically located within the corpnet. Well, those days are over. Now you can build PCs that are trusted just as if they were on the corpnet, without knowing or caring anything about the underlying network connections. And let me tell you, it's as addictive as a few other substances I could mention, but will refrain, since this is (I hope) a family blog :)

Maybe you've heard of the notion of "deperimeterization." Taken to its extreme, I think it's a bit silly. To put a SQL Server directly on the Internet is just plain stupid -- not because I don't think I could keep it protected, but simply because that's unnecessary risk. Only my web server -- and no one else -- should be talking to my SQL Server. But that web server will be in the same subnet as the SQL Server, and IPsec policies used also here will govern who can connect to the SQL Server. Warning to any and all network DMZs: your days are numbered!

Shrink your perimeter to that which really matters -- your data center. All your clients live (as we would say in the olden days) "on the outside of the firewall." Now then, there are two kinds of clients. Managed clients, as I described above, establish IPsec-authenticated/encrypted, group-policy-configured, NAP-enforced IPv6 connections directly to corpnet resources without going through any kind of access gateway. The router connecting you to your ISP is fully sufficient for blocking denial of service attempts. Be sure to follow my advice in "Configure your router to block DOS attempts," and then add two more rules to permit incoming port udp/500 and IP protocol 50 over IPv6. That's it. No NATing or other unnatural network acts are required (finally, you can stop lying to your significant other about why you squirrel yourself away in the computer room all those weekend nights).

Unmanaged clients will continue to use IPv4 to access published Web and Win32 applications through a gateway like IAG. Since you can't trust these clients nor can you trust the data they're throwing at you, you have to inspect and validate at the perimeter. You can take advantage of IAG's application-modifying capabilities to "wrap" security around poorly-written web apps; you can even download an ActiveX control to unmanaged clients to perform some basic health checking, policy enforcement, and cache clearing. None of these eliminates the final requirement to continue inspecting and removing malware from servers where users store data: Exchange, SharePoint, Office Communications Server, and file servers.

Machines are mobile, data is mobile. The mainframes and large desktop PCs of the past posses an effective security attribute: the heaviness of the machines. You couldn't easily saunter out the front door with a PC-AT in your pocket! These days, we all line our pockets with tiny little mobile phones stuffed with 16GB of storage. It's now a fact: data moves. And like water, data moves wherever it can, as rapidly as it can, often beyond your control if you don't prepare for that. With properly-configured and managed clients we can enjoy a single access and authentication experience no matter where the computer is physically located. For example: I can sit in my house and enter '"http://internal-web-site-name" in my browser. The DNS suffix search list adds the appropriate suffix, my browser's resolver performs an IPv6 name lookup, and my computer makes an authenticated and encrypted connection, after it meets the NAP policy, directly to that internal server. Very nice. As far as I'm concerned, there's no difference between the Internet and my corpnet. It's all just there.

For a while now many of you know I've been speaking and writing, mostly at the conceptual level, about the day when such a way of remote computing will arise. Well, my friends, that day is now. You can indeed build it now, with the products you have. I won't admit it's all peaches and cream: there's a fair number of moving parts here, it's true. But most of these moving parts are parts you're already familiar with: I'm simply encouraging you to move them in a specific way. You'll need to do some custom scripting for client-side connection diagnostics, but that's about it.

My next step is to create a more detailed guide, which I plan to publish through TechNet Magazine. I'm targeting (but not promising) the October issue. The article will include greater details about configuring your infrastructure to support the managed clients I describe.

I've lost track of the swelling number of individual conference attendees and the plethora of email writers who've expressed a desire to build this in their own environments. The one common thread from everyone is "I want to do it now!" Folks, it's really pretty exciting for me to see so many of you ready to cross the chasm from the perdition of paleo-networking (layer upon endless, complex layer of DMZs) into the paradise of flat, simple, cheap, and secure access to information. If you haven't yet, please take the time to read through some of our information (especially Scott Charney's paper) on end-to-end trust. Friends, the idea I describe above is the plumbing for realizing the end-to-end trust vision.