The Score: Hackers =1 Canada's Ministery of Public Safety = 0 ..... "Offence always beats defence!

U. S. Outgunned in Hacker War

Wednesday, March 28, 2012

By DEVLIN BARRETT 

WASHINGTON—The Federal Bureau of Investigation's top cyber cop offered a grim appraisal of the nation's efforts to keep computer hackers from plundering corporate data networks: "We're not winning," he said.

WJS's Devlin Barrett reports the FBI is struggling to combat cyberattacks by hackers." We're not winning," FBI Executive Assistant Director Shawn Henry said. (AP Photo/Haraz N. Ghanbari)

Shawn Henry, who is preparing to leave the FBI after more than two decades with the bureau, said in an interview that the current public and private approach to fending off hackers is "unsustainable.'' Computer criminals are simply too talented and defensive measures too weak to stop them, he said.

His comments weren't directed at specific legislation but came as Congress considers two competing measures designed to buttress the networks for critical U.S. infrastructure, such as electrical-power plants and nuclear reactors. Though few cybersecurity experts disagree on the need for security improvements, business advocates have argued that the new regulations called for in one of the bills aren't likely to better protect computer networks.

Mr. Henry, who is leaving government to take a cybersecurity job with an undisclosed firm in Washington, said companies need to make major changes in the way they use computer networks to avoid further damage to national security and the economy. Too many companies, from major multinationals to small start-ups, fail to recognize the financial and legal risks they are taking—or the costs they may have already suffered unknowingly—by operating vulnerable networks, he said.

"You never get ahead, never become secure, never have a reasonable expectation of privacy or security," says Shawn Henry, Executive Associate Director of the FBI. (Associated Press)

"I don't see how we ever come out of this without changes in technology or changes in behavior, because with the status quo, it's an unsustainable model. Unsustainable in that you never get ahead, never become secure, never have a reasonable expectation of privacy or security,'' Mr. Henry said.

James A. Lewis, a senior fellow on cybersecurity at the Center for Strategic and International Studies, said that as gloomy as Mr. Henry's assessment may sound, "I am actually a little bit gloomier. I think we've lost the opening battle [with hackers].'' Mr. Lewis said he didn't believe there was a single secure, unclassified computer network in the U.S.

"There's a kind of willful desire not to admit how bad things are, both in government and certainly in the private sector, so I could see how [Mr. Henry] would be frustrated,'' he added.

High-profile hacking victims have included Sony Corp., SNE -0.95% which said last year that hackers had accessed personal information on 24.6 million customers on one of its online game services as part of a broader attack on the company that compromised data on more than 100 million accounts. Nasdaq OMX Group Inc., NDAQ +0.50% which operates the Nasdaq Stock Market, also acknowledged last year that hackers had breached a part of its network called Directors Desk, a service for company boards to communicate and share documents. HBGary Federal, a cybersecurity firm, was infiltrated by the hacking collective called Anonymous, which stole tens of thousands of internal emails from the company.

Mr. Henry has played a key role in expanding the FBI's cybersecurity capabilities. In 2002, when the FBI reorganized to put more of its resources toward protecting computer networks, it handled nearly 1,500 hacking cases. Eight years later, that caseload had grown to more than 2,500.

Mr. Henry said FBI agents are increasingly coming across data stolen from companies whose executives had no idea their systems had been accessed.

"We have found their data in the middle of other investigations,'' he said. "They are shocked and, in many cases, they've been breached for many months, in some cases years, which means that an adversary had full visibility into everything occurring on that network, potentially.''

Mr. Henry said that while many company executives recognize the severity of the problem, many others do not, and that has frustrated him. But even when companies build up their defenses, their systems are still penetrated, he said. "We've been playing defense for a long time. ...You can only build a fence so high, and what we've found is that the offense outpaces the defense, and the offense is better than the defense,'' he said.

Testimony Monday before a government commission assessing Chinese computer capabilities underscored the dangers. Richard Bejtlich, chief security officer at Mandiant, a computer-security company, said that in cases handled by his firm where intrusions were traced back to Chinese hackers, 94% of the targeted companies didn't realize they had been breached until someone else told them. The median number of days between the start of an intrusion and its detection was 416, or more than a year, he added.

In one such incident in 2010, a group of Chinese hackers breached the computer defenses of the U.S. Chamber of Commerce, a major business lobbying group, and gained access to everything stored on its systems, including information about its three million members, according to several people familiar with the matter.

In the congressional debate over cybersecurity legislation, the Chamber of Commerce has argued for a voluntary, non-regulatory approach to cybersecurity that would encourage more cooperation and information-sharing between government and business.

Matthew Eggers, a senior director at the Chamber, said the group "is urging policy makers to change the 'status quo' by rallying our efforts around a targeted and effective information-sharing bill that would get the support of multiple stakeholders and come equipped with ample protections for the business community."

The FBI's Mr. Henry said there are some things companies need to change to create more secure computer networks. He said their most valuable data should be kept off the network altogether. He cited the recent case of a hack on an unidentified company in which he said 10 years worth of research and development, valued at more than $1 billion, was stolen by hackers.

He added that companies need to do more than just react to intrusions. "In many cases, the skills of the adversaries are so substantial that they just leap right over the fence, and you don't ever hear an alarm go off,'' he said. Companies "need to be hunting inside the perimeter of their network," he added.

Companies also need to get their entire leadership, from the chief executive to the general counsel to the chief financial officer, involved in developing a cybersecurity strategy, Mr. Henry said. "If leadership doesn't say, 'This is important, let's sit down and come up with a plan right now in our organization; let's have a strategy,' then it's never going to happen, and that is a frustrating thing for me,'' he said.

Write to Devlin Barrett at devlin.barrett@wsj.com

A version of this article appeared Mar. 28, 2012, on page B1 in some U.S. editions of The Wall Street Journal, with the headline: U.S. Outgunned in Hacker War.