Overnight Cybersecurity: Obama hints at looming sanctions

Welcome to OVERNIGHT CYBERSECURITY, your daily rundown of the biggest news in the world of hacking and data privacy. We’re here to connect the dots as leaders in government, policy and industry try to counter the rise in cyber threats. What lies ahead for Congress, the administration and the latest company under siege? Whether you’re a consumer, a techie or a D.C. lifer, we’re here to give you …

THE BIG STORIES:

–HULK SMASH: President Obama on Wednesday strongly hinted his administration is prepared to retaliate against China for a string of recent cyberattacks against U.S. interests. “We are preparing a number of measures that will indicate to the Chinese that this is not just a matter of us being mildly upset,” he said during a speech to the Business Roundtable in Washington. “We are prepared to take some countervailing actions to get their attention.” Obama singled out “industrial espionage,” in which Chinese hackers are suspected to have stolen trade secrets from companies, as “an act of aggression that has to stop.” To read our full piece, click here.

{mosads}–CAN I HELP?: On Capitol Hill, Senate Homeland Security and Governmental Affairs Committee Chairman Ron Johnson said he isn’t too convinced Obama’s approach is having any effect on Chinese behavior. “I understand about quiet diplomacy, but this has been going on for far too long and I think the Chinese government has been far too complicit in this,” he told reporters. The Wisconsin lawmaker said he is pushing for a bill that “specifically details what type of sanctions, just so it’s out on the table, so the Chinese government realizes that we are serious about this.” Johnson believes such a measure would help strengthen Obama’s hand in negotiations. To read our full piece, click here.

–ABOUT LAST NIGHT…: The Obama administration is backing away from a call for Congress to pass a law that would require companies to decrypt data when compelled by a warrant. Officials are even considering whether to support widespread encryption that could lock out investigators, The Washington Post reported. The FBI and Justice Department have long been pressing Congress and the tech sector to solve what they call the “going dark” problem, in which encryption prevents companies from being able to access customers’ communications for law enforcement officials. The fear, as repeatedly outlined in speeches and congressional testimony over the last year, is that criminals and terrorists are increasingly able to operate in a zone of privacy without the worry of being discovered. But according to documents obtained by the Post, the tide is turning within the administration. Officials across multiple agencies are now pushing for President Obama to disavow a legislative solution and instead support universal strong encryption. To read our full piece, click here.

–QUIT CHANGING THE TOPIC!: Google and other tech advocates accused federal agencies Wednesday of creating “distractions” during the years-long debate on updating an email privacy law from the 1980s. There is widespread support in Congress to close a loophole in the Electronic Communications Privacy Act (ECPA) that lets the government use a subpoena, rather than a warrant, to force Google and other service providers to hand over customers’ electronic communications if they are more than 180 days old. During the Senate Judiciary Committee hearing Wednesday, the Justice Department, Securities and Exchange Commission (SEC) and Federal Trade Commission (FTC) expressed continued opposition to the bill. The agencies said they are not currently using the authority under the decades-old law to force companies to hand over customer emails without a warrant. They even testified that old emails should not be treated differently under the law than newly sent ones. To read our full piece, click here.

–NOTHING’S GONNA STOP US NOW: At Wednesday’s hearing, Google also vowed to charge ahead with more encryption of user data even as law enforcement officials warn the technology could hamper their investigations. To read our full piece, click here.

UPDATE ON CYBER POLICY:

–WITH GREAT POWER… A House Democrat has introduced another piece of legislation attempting to codify the Department of Homeland Security’s cybersecurity responsibilities, part of a broad push among lawmakers to clarify the agency’s role in that area. Rep. Cedric Richmond (D-La.) on Tuesday introduced the so-called Department of Homeland Security Cybersecurity Act of 2015, which would require the DHS to develop a formal strategy for managing cyber threats. The bill lays out mandated responsibilities for the agency, including acting as a cross-sector hub for federal and civilian cyber threat information sharing — a responsibility other legislation has tried to give it with varying degrees of authority. Richmond’s bill is scheduled for a subcommittee markup on Thursday. Read our full piece, here.

LIGHTER CLICK:

–KEEP UP. The Internet masses are flocking to the new Kardashian and Jenner mobile apps, which have already been breached by a developer — to the tune of 600,000 names and email addresses. Don’t freak out, payment data is safe. Read on, here.

WHO’S IN THE SPOTLIGHT:

–THE KID WITH THE CLOCK. Ahmed Mohamed, the 14-year-old student who was arrested earlier this week for bringing a homemade clock to school — sparking outrage over racial profiling — is already being courted by tech companies. Local Dallas hackers reached out with resources for the young inventor, only to be one-upped by Twitter, which offered Mohamed an internship via a tweet Wednesday afternoon. Facebook CEO Mark Zuckerberg also invited Mohamed to meet with him. To read about the Zuckerberg invite, click here.

A PRESIDENTIAL CANDIDATE IN FOCUS:

–JEB BUSH. The former Florida governor is wrapping cybersecurity into his economic pitch for the country as he seeks to revive his flagging poll numbers in the second Republican debate Wednesday night.

Bush this week introduced a five-point plan for improving the nation’s digital defenses that argues the economy cannot reach 4 percent growth without a “vibrant and secure Internet.”

The economic pitch for cybersecurity is unusual, as the issue is typically debated through the lens of national security.

But political strategists say Bush’s approach is deliberate.

Check out our full piece here.

A LOOK AHEAD:

THURSDAY

–The House Judiciary Committee will mark up the Judicial Redress Act at 10:30 a.m.

–The House Homeland Security Committee will mark up the Department of Homeland Security Cybersecurity Act of 2015 and several other cyber-related bills at 10:00 a.m.

IN CASE YOU MISSED IT:

Links from our blog, The Hill, and around the Web.

Two senators are pressing automakers for more answers on their plans to protect cars from the looming threat of hackers. (The Hill)

The Department of Justice plans to embed a prosecutor within the European Cybercrime Centre (EC3) to better combat hackers, who often strike the U.S. from across the Atlantic.  

A second Russian man pleaded guilty Wednesday in what authorities are calling the largest hacking scheme ever prosecuted in the United States. (The Hill)

Homeland Security Secretary Jeh Johnson repeated his call for the Senate to move on a stalled cybersecurity bill in October. (The Hill)

The Manhattan District Attorney’s Office is founding an international cybersecurity threat sharing organization. (The Hill)

Attacks on Cisco routers — which often go undetected — are more widespread than previously thought. (ArsTechnica)

The encryption keys of a WikiLeaks precursor have been stolen. (Motherboard)

Apple is delaying an update to its smartwatch software because of a bug. (The Wall Street Journal)

Hackers are going after hackers, trying to sell their data. (Motherboard)

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