Some of the largest and medium-sized U.S. airports report close to 637,000 laptops lost each year, according to the Ponemon Institute survey released Monday. Laptops are most commonly lost at security checkpoints, according to the survey. Close to 10,278 laptops are reported lost every week at 36 of the largest U.S. airports, and 65 percent of those laptops are not reclaimed, the survey said. Around 2,000 laptops are recorded lost at the medium-sized airports, and 69 percent are not reclaimed. Travelers seem to lack confidence that they will recover lost laptops. About 77 percent of people surveyed said they had no hope of recovering a lost laptop at the airport, with 16 percent saying they wouldn't do anything if they lost their laptop during business travel. About 53 percent said that laptops contain confidential company information, with 65 percent taking no steps to protect the information.

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."

It's a cracking read and one I'd recommend to all insomniacs with an penchant for such topics, but I have to say, I'm actually pretty encouraged by what I read... ]]> Thu, 03 Jul 2008 14:00:00 +0000 hannigan report information security world government departments steps notably recommend insomniacs pan-emea special Why I welcome the Hannigan Report http://securityratty.com/article/1c291acddf9bcf88c7738b092ad66b32 http://securityratty.com/article/1c291acddf9bcf88c7738b092ad66b32 All sort of fun stuff was unearthed, discussed and - sometimes -  made-up upon reading the Verizon Security Breach Investigations report. Here are some things from the pile which I found fun:

• Report itself [PDF] and brief on it from Verizon (and two fun follow-ups, this and this here)
• "90% of all statistics can be made to say anything… 50% of the time, aka my thoughts on the Verizon report"
• "Data Breach Post Mortem Offers Surprises" (well, to some people, they are surprises ...)
• "Insider Threat Exaggerated, Study Says" (not, it doesn't, BTW)
• "Verizon Business Report Speaks Volumes" (from Richard, thus a MUST read)

And of course, here is my favorite part: "In 82 percent of cases, our investigators noted that the victim possessed the ability to discover the breach had they had they been more diligent in monitoring and analyzing event-related information [AC - i.e. logs] available to them at the time of the incident." and this  "Furthermore, a crime scene devoid of any network and system logs, a key resource for computer forensics, is a disturbingly common occurrence."

What can I say? Back to battle stations for me - to fight the war of making logs more popular! :-)

In this interview, cloudsecurity.org talks to Guido van Rossum about Python, Google App Engine and security.

Guido is the creator of the Python programming language and more recently, Google App Engine team member.  His involvement with the App Engine project was pretty late - the code “was almost ready for release” when he get involved.  The security architect of App Engine was primarily project lead, Kevin Gibbs, supported by the rest of the App Engine crew and the Google Security Team.

The Interview

cloudsecurity.org: What security principles did you follow for App Engine?

GvR: While I can’t share any specifics on what we’re doing to secure App Engine, I can say that the main principle we’ve followed could be called “defense in depth”. We’re not relying exclusively on a secure interpreter, or any other single security layer, to protect our users.

cloudsecurity.org: Please provide some examples of how those principles played out in terms of the current implementation?

GvR: Sorry, we don’t divulge such information.

cloudsecurity.org: What criteria did you apply to Python module selection?

GvR: We first looked for modules that were useful and straightforward to audit. If a module was large or complex, we’d only audit it (fixing things we found) if it was deemed essential or at least useful for a large number of users; otherwise we’d exclude it.

cloudsecurity.org: What do you see as the security risks inherent in exposing an interpreter runtime in a shared environment?

GvR: I presume you’re asking about risks to users, like providing accidental access to data belonging to another app. We’ve taken extensive measures to isolate different apps from each other. For example, each app runs in a separate process, and the datastore prevents an app from accessing data belonging to other apps.

cloudsecurity.org: I recently attended a fascinating talk by Justin Ferguson (a Seattle based security consultant) at eusecwest in London.  He gave a great talk exploring security vulnerabilities in language interpreters and specifically highlighted some security weaknesses in Python App Engine.  What are your thoughts on his research and specifically the Python issues he highlighted?  When do you anticipate they will get fixed?

GvR: We’ve anticipated all of the possibilities raised in Justin’s talk, and took measures to protect our users. Justin highlighted weaknesses in Python, but not in App Engine. Furthermore, our security model does not rely solely upon protections within the Python interpreter; there are additional protections that these external analyses have missed.

cloudsecurity.org: How do you contain an attacker that exploits bugs in App Engine from exploiting the underlying OS and potentially interfering with other users processes or attacking backend systems?

GvR: You are correct that there are strong measures in place, but I’m not at liberty to discuss details.

cloudsecurity.org: Python was the first language to get the App Engine treatment, what language is next and what are some of the language specific security challenges the team has had to deal with?

GvR: Although I can’t comment on what language is next, we are working on this, and have gotten a lot of great feedback from our developers. As far as language-specific security challenges, they stemmed mostly from the complexity of the Python interpreter. We spent a lot of time auditing this, and did a great deal more than just identifying buffer overflows.  I can also add that Google is actively researching the security of interpreted languages.  Google engineers routinely contribute security fixes to open source projects, including but not limited to Python.

cloudsecurity.org: How does the team decide when ‘enough is enough’ in terms of hardening the interpreter?

GvR: That’s not really how we approach it. We realize that security is an ongoing effort, and try to stay ahead of threats through continuous monitoring and testing.

cloudsecurity.org: Some commentators have suggested that perhaps the difficulty of auditing the implementation led to some modules being more heavily restricted than perhaps necessary.  What are your thoughts on that and what plans, if any, are there to bring back code objects/functions that were eliminated in the initial release?  (with the benefit of hindsight).

GvR: The only thing we are likely to put back is the _ast module, which was not audited based upon an underestimation of its usefulness (see my answer to question #3 above).  We will also put back some dummy functions and other objects whose absence currently prevents some popular frameworks from being loaded without modifications. For example, some harmless functionality in the imp module will come back. We’re also looking into making urllib2 work (to some extent), though that’s not really a security issue but merely a matter of API adjustment.

cloudsecurity.org: It is reported that Google encourages small groups to go off and create.  How involved were the Google security team with App Engine in terms of design and implementation review/testing?  Given the dynamics, is it possible to have a meaningful security process that shadows the development process?

GvR: The Google Security team is involved in everything we do. They have been extremely helpful.

cloudsecurity.org: How can people report security weaknesses they discover in App Engine?  What commitment does Google give in terms of dealing vulnerability reports?

GvR: There is a standard process for submitting security issues. See http://www.google.com/corporate/security.html. Google moves very fast to protect its users when a verifiable security vulnerability is reported.

cloudsecurity.org: One concern is the potential misuse of App Engine to exploit security vulnerabilities in visitors browsers.  This is not a new problem per se, shared hosting providers know all about this.  But with Google and other Cloud providers, the scalability potential is much higher.  What are your thoughts on this and what pro-active steps is Google taking to detect and terminate evil apps?

GvR: This is high on our list of concerns. We deal with this through a combination of restrictions on what you can do (e.g. certain HTTP headers and ports are off-limits) and, again, monitoring.

cloudsecurity.org: Beyond App Engine, what role do you think Python will play in the Cloud both now and in the future?

GvR: Sorry, I’m not prone to philosophizing about the future.

cloudsecurity.org: Trust is often cited as a barrier to enterprise adoption of Cloud Computing.  What role do you personally think Google can play in building that trust?

GvR: I think trust is built up over a long period of experience. Our actions in terms of being open to our users will be the most important factor in establishing trust. Of course, Google’s reputation also helps: everybody understands that Google doesn’t want its name associated with a bad product.

cloudsecurity.org: Looking at the Cloud Computing landscape beyond Google, what are your thoughts on the current state of Cloud Computing and Security?

GvR: It’s obvious that Cloud Computing is only just taking off. The next few years will be very exciting.

cloudsecurity.org: Lastly, what are some of your favourite App Engine apps?

GvR: There are too many to enumerate. If you insist on a highlight, well, I like Rietveld (http://codereview.appspot.com), a tool for collaborative code review which I (largely) wrote myself. It is open source and includes some essential components from Mondrian, a similar internal tool which I created before I joined the App Engine team.

Thanks

My thanks to Guido for his time and sharing his views.