By Juliet Eilperin and Adam Entous
December 31, 2016
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Editor’s Note: An earlier version of this story incorrectly said that Russian hackers had penetrated the U.S. electric grid. Authorities say there is no indication of that so far. The computer at Burlington Electric that was hacked was not attached to the grid.
A code associated with the Russian hacking operation dubbed Grizzly Steppe by the Obama administration has been detected within the system of a Vermont utility, according to U.S. officials.
While the Russians did not actively use the code to disrupt operations, according to officials who spoke on the condition of anonymity to discuss a security matter, the discovery underscores the vulnerabilities of the nation’s electrical grid. And it raises fears in the U.S. government that Russian government hackers are actively trying to penetrate the grid to carry out potential attacks.
Officials in government and the utility industry regularly monitor the grid because it is highly computerized and any disruptions can have disastrous implications for the country’s medical and emergency services.
Burlington Electric said in a statement that the company detected a malware code used in the Grizzly Steppe operation in a laptop that was not connected to the organization’s grid systems. The firm said it took immediate action to isolate the laptop and alert federal authorities.
Friday night, Vermont Gov. Peter Shumlin (D) called on federal officials “to conduct a full and complete investigation of this incident and undertake remedies to ensure that this never happens again.”
“Vermonters and all Americans should be both alarmed and outraged that one of the world’s leading thugs, Vladimir Putin, has been attempting to hack our electric grid, which we rely upon to support our quality-of-life, economy, health, and safety,” Shumlin said in a statement. “This episode should highlight the urgent need for our federal government to vigorously pursue and put an end to this sort of Russian meddling.”
Sen. Patrick J. Leahy (D-Vt.) said he was briefed on the attempts to penetrate the electric grid by Vermont State Police on Friday evening. “This is beyond hackers having electronic joy rides — this is now about trying to access utilities to potentially manipulate the grid and shut it down in the middle of winter,” Leahy said in a statement. “That is a direct threat to Vermont and we do not take it lightly.”
Rep. Peter Welch (D-Vt.) said the attack shows how rampant Russian hacking is. “It’s systemic, relentless, predatory,” Welch said . “They will hack everywhere, even Vermont, in pursuit of opportunities to disrupt our country. We must remain vigilant, which is why I support President Obama’s sanctions against Russia and its attacks on our country and what it stands for.”
American officials, including one senior administration official, said they are not yet sure what the intentions of the Russians might have been. The incursion may have been designed to disrupt the utility’s operations or as a test to see whether they could penetrate a portion of the grid.
Officials said that it is unclear when the code entered the Vermont utility’s computer, and that an investigation will attempt to determine the timing and nature of the intrusion, as well as whether other utilities were similarly targeted.
“The question remains: Are they in other systems and what was the intent?” a U.S. official said.
This week, officials from the Department of Homeland Security, FBI and the Office of the Director of National Intelligence shared the Grizzly Steppe malware code with executives from 16 sectors nationwide, including the financial, utility and transportation industries, a senior administration official said. Vermont utility officials identified the code within their operations and reported it to federal officials Friday, the official said.
The DHS and FBI also publicly posted information about the malware Thursday as part of a joint analysis report, saying that the Russian military and civilian services’ activity “is part of an ongoing campaign of cyber-enabled operations directed at the U.S. government and its citizens.”
Another senior administration official, who also spoke on the condition of anonymity to discuss security matters, said in an email that “by exposing Russian malware” in the joint analysis report, “the administration sought to alert all network defenders in the United States and abroad to this malicious activity to better secure their networks and defend against Russian malicious cyber activity.”
According to the report by the FBI and DHS, the hackers involved in the Russian operation used fraudulent emails that tricked their recipients into revealing passwords.
Russian hackers, U.S. intelligence agencies say, earlier obtained a raft of internal emails from the Democratic National Committee, which were later released by WikiLeaks during this year’s presidential campaign.
President-elect Donald Trump has repeatedly questioned the veracity of U.S. intelligence pointing to Russia’s responsibility for hacks in the run-up to the Nov. 8 election. He also has spoken highly of Russian President Vladimir Putin, despite President Obama’s suggestion that the approval for hacking came from the highest levels of the Kremlin.
Trump spokesman Sean Spicer said it would be “highly inappropriate to comment” on the incident given the fact that Spicer has not been briefed by federal authorities at this point.
Obama has been criticized by lawmakers from both parties for not retaliating against Russia before the election. But officials said the president was concerned that U.S. countermeasures could prompt a wider effort by Moscow to disrupt the counting of votes on Election Day, potentially leading to a wider conflict.
Officials said Obama also was concerned that taking retaliatory action before the election would be perceived as an effort to help the campaign of Democratic presidential nominee Hillary Clinton.
On Thursday, when Obama announced new economic measures against Russia and the expulsion of 35 Russian officials from the United States in retaliation for what he said was a deliberate attempt to interfere with the election, Trump told reporters, “It’s time for our country to move on to bigger and better things.”
Trump has agreed to meet with U.S. intelligence officials next week to discuss allegations surrounding Russia’s online activity.
Russia has been accused in the past of launching a cyberattack on Ukraine’s electrical grid, something it has denied. Cybersecurity experts say a hack in December 2015 destabilized Kiev’s power grid, causing a blackout in part of the Ukrainian capital. On Thursday, Ukrainian President Petro Poroshenko accused Russia of waging a hacking war on his country that has entailed 6,500 attacks against Ukrainian state institutions over the past two months.
Since at least 2009, U.S. authorities have tracked efforts by China, Russia and other countries to implant malicious software inside computers used by U.S. utilities. It is unclear if the code used in those earlier attacks was similar to what was found in the Vermont case. In November 2014, for example, federal authorities reported that a Russian malware known as BlackEnergy had been detected in the software controlling electric turbines in the United States.
The Russian Embassy did not immediately respond to a request for comment. Representatives for the Energy Department and DHS declined to comment Friday.
Alice Crites, Carol Morello and Ellen Nakashima contributed to this report.
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Russian government hackers do not appear to have targeted Vermont utility, say people close to investigation
By Ellen Nakashima and Juliet Eilperin
January 2, 2017
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The investigation by officials began Friday, when the Vermont utility reported its alert to federal authorities, some of whom told The Washington Post that code associated with the Russian hackers had been discovered within the system of an unnamed Vermont utility. (Kirill Kudryavtsev/AFP/Getty Images)
As federal officials investigate suspicious Internet activity found last week on a Vermont utility computer, they are finding evidence that the incident is not linked to any Russian government effort to target or hack the utility, according to experts and officials close to the investigation.
An employee at Burlington Electric Department was checking his Yahoo email account Friday and triggered an alert indicating that his computer had connected to a suspicious IP address associated by authorities with the Russian hacking operation that infiltrated the Democratic Party. Officials told the company that traffic with this particular address is found elsewhere in the country and is not unique to Burlington Electric, suggesting the company wasn’t being targeted by the Russians. Indeed, officials say it is possible that the traffic is benign, since this particular IP address is not always connected to malicious activity.
Yahoo says one billion accounts exposed in newly discovered security breach
By Jim Finkle and Anya George Tharakan
Dec 15, 2016
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Yahoo Inc warned on Wednesday that it had uncovered yet another massive cyber attack, saying data from more than 1 billion user accounts was compromised in August 2013, making it the largest breach in history.
The number of affected accounts was double the number implicated in a 2014 breach that the internet company disclosed in September and blamed on hackers working on behalf of a government. News of that attack, which affected at least 500 million accounts, prompted Verizon Communication Inc to say in October that it might withdraw from an agreement to buy Yahoo's core internet business for $4.83 billion.
Following the latest disclosure, Verizon said, "we will review the impact of this new development before reaching any final conclusions."
A Yahoo spokesman told Reuters that the company has been in communication with Verizon during its investigation into the breach and that it is confident the incident will not affect the pending acquisition.
Yahoo required all of its customers to reset their passwords - a stronger measure than it took after the previous breach was discovered, when it only recommended a password reset.
Yahoo also said Wednesday that it believes hackers responsible for the previous breach had also accessed the company’s proprietary code to learn how to forge "cookies" that would allow hackers to access an account without a password.
"Yahoo badly screwed up," said Bruce Schneier, a cryptologist and one of the world's most respected security experts. "They weren't taking security seriously and that's now very clear. I would have trouble trusting Yahoo going forward."
Yahoo was tentative in its description of new problems, saying the incident was "likely" distinct from the one it reported in September and that stolen information "may have included" names, e-mail addresses, telephone numbers, dates of birth, hashed passwords and, in some cases, encrypted or unencrypted security questions and answers.
It said it had not yet identified the intrusion that led to the massive data theft and noted that payment-card data and bank account information were not stored in the system the company believes was affected.
Yahoo said it discovered the breach while reviewing data provided to the company by law enforcement. FireEye Inc’s Mandiant unit and Aon Plc's Stroz Friedberg are assisting in the investigation, the Yahoo spokesman told Reuters.
The breach is the latest setback for Yahoo, an internet pioneer that has fallen on hard times in recent years after being eclipsed by younger, fast-growing rivals including Alphabet Inc's Google and Facebook Inc.
Hours before it announced the breach on Wednesday, executives with Google, Facebook and other large U.S. technology companies met with President-elect Donald Trump in New York. Reflecting its diminished stature, Yahoo was not invited to the summit, according to people familiar with the meeting.
The Yahoo spokesman said Chief Executive Marissa Mayer was at the company's Sunnyvale, California headquarters to assist in addressing the new breach.
Yahoo shares were down 2.4 percent to $39.91 in extended trading. Verizon shares were little changed from their close at $51.63.
(Reporting by Jim Finkle in Boston and Anya George Tharakan in Bengaluru; Additional reporting by Dustin Volz in Washington and Jessica Toonkel in New York; Editing by Savio D'Souza, Bernard Orr)
The investigation by officials began Friday, when the Vermont utility reported its alert to federal authorities, some of whom told The Washington Post that code associated with the Russian hackers had been discovered within the system of an unnamed Vermont utility. On Friday evening, The Post published its report, and Burlington Electric released a statement identifying itself as the utility in question and saying the firm had “detected the malware” in a single laptop. The company said in its statement that the laptop was not connected to its grid systems.
The Post initially reported incorrectly that the country’s electric grid had been penetrated through a Vermont utility. After Burlington Electric released its statement saying that the potentially compromised laptop had not been connected to the grid, The Post immediately corrected its article and later added an editor’s note explaining the change.
Officials say Russian government hackers do not appear to have targeted Burlington Electric, a Vermont utility. Editor’s Note: An earlier version of this video incorrectly said that Russian hackers had penetrated the U.S. electric grid. Authorities say there is no indication of that so far. The computer at Burlington Electric that was hacked was not attached to the grid. (Victoria Walker/The Washington Post)
U.S. officials are continuing to investigate the laptop. In the course of their investigation, though, they have found on the device a package of software tools commonly used by online criminals to deliver malware. The package, known as Neutrino, does not appear to be connected with Grizzly Steppe, which U.S. officials have identified as the Russian hacking operation. The FBI, which declined to comment, is continuing to investigate how the malware got onto the laptop.
Initially, company officials publicly said they had detected code that had been linked by the Department of Homeland Security to Grizzly Steppe.
Over the weekend, the company issued a statement, saying only that it had “detected suspicious Internet traffic” on the computer in question.
The murkiness of the information underlines the difficulties faced by officials as they try to root out Grizzly Steppe and share with the public their findings on how the operation works. Experts say the situation was made worse by a recent government report, which they described as a genuine effort to share information with the industry but criticized as rushed and prone to causing confusion. Authorities also were leaking information about the utility without having all the facts and before law enforcement officials were able to investigate further.
The incident comes as President-elect Donald Trump has cast doubt on the findings of intelligence officials that the Russians conducted a hacking operation designed to help him win the White House.
Experts also said that because Yahoo’s mail servers are visited by millions of people each day, the fact that a Burlington Electric employee checking email touched off an alert is not an indication that the Russian government was targeting the utility.
“It’s not descriptive of anything in particular,” said Robert M. Lee, chief executive of Dragos, a cybersecurity firm.
The company said it was told much the same thing by authorities. “Federal officials have indicated that the specific type of Internet traffic, related to recent malicious cyber activity that was reported by us [on Friday], also has been observed elsewhere in the country and is not unique to Burlington Electric,” company spokesman Mike Kanarick said in a statement.
The FBI and DHS released a report last week intended to prompt companies to search their systems for any evidence of a Russian hacking operation that they concluded had infiltrated Democratic Party servers. The document was intended to help companies mitigate Russian hacking and report any suspicious activity to the government. That report itself contained a caution regarding the suspicious IP addresses it listed: “Upon reviewing the traffic from these IPs, some traffic may correspond to malicious activity, and some may correspond to legitimate activity.”
The discovery of the laptop issue has prompted criticism that the government provided overly broad information to companies that was not effective in isolating Russian government hacking.
“That report offered no technical value for defenders,” Lee said. “It was very much high level and nothing in there was specifically descriptive of Russian activity.”
Some in the administration are concerned that this episode with the Vermont utility will cause industry officials to avoid sharing information with the government, for fear that it will be leaked. The company in this case, the U.S. official said, “did what it was supposed to do.”
Experts also expressed concerns regarding the report released by DHS and the FBI on the Russian hacking operation. The report said it was providing “technical details regarding the tools and infrastructure used by the Russian civilian and military intelligence services” to “compromise and exploit” political, government and private computer networks. The government released the document on the same day it announced a series of measures taken to punish the Russian government for its interference in the 2016 presidential election, including the DNC hacks.
But a range of cybersecurity experts say that although the intention of the report was good, it lacked specific details that would enable firms to detect Russian government hackers.
At least 30 percent of the IP addresses listed were commonly used sites such as public proxy servers used to mask a user’s location, and servers run by Amazon.com and Yahoo. (Amazon’s founder and chief executive, Jeffrey P. Bezos, owns The Washington Post.) The IP address information alone is not useful, experts noted. Moreover, a server that is used by Russian spies one year might be used by “granny’s bake shop” the next, Lee said.
“No one should be making any attribution conclusions purely from the indicators in the [government] report,” tweeted Dmitri Alperovitch, chief technology officer of CrowdStrike, which investigated the DNC hack and attributed it to the Russian government. “It was all a jumbled mess.’’
A senior DHS official, speaking on the condition of anonymity to discuss a sensitive security matter, defended the report.
“We know the Russians are a highly capable adversary who conduct technical operations in a manner intended to blend into legitimate traffic,” the official said. The indicators of compromise contained in the report, he said, “are indicative of that. That’s why it’s so important for net defenders to leverage the recommended mitigations contained in the [report], implement best practices, and analyze their logs for traffic emanating from those IPs, because the Russians are going to try and hide evidence of their intrusion and presence in the network.”
The official said the information shared was “precisely the type of information DHS should be sharing, particularly since we know that cybersecurity capabilities differ among companies and organizations.”
The nation’s electrical grid is not a physical entity, but rather a series of networks that generate, transmit and distribute electricity. There are three primary networks--the Eastern Interconnect, Western Interconnect and the Electric Reliability Council of Texas--and smaller grids within those three groups. Each amounts to an industrial control system that dispatches electricity from where it is generated to the consumers who use it.
While these systems include redundancies to prevent any disruptions in service, and human operators oversee them, the functioning of the country’s grid is also highly automated. Experts say that this results in the system being more vulnerable to hacking attacks.
Utilities connected to the grid are routinely subjected to penetration efforts, but the U.S. electrical grid has never lost its transmission capacity because of such attempts.
“This is an example of the system working, and us getting bad things off our system as soon as they’re known,” said Nathan Mitchell Sr., who directs electric reliability standards and security at the American Public Power Association.
Shumlin: Vermont Better Off Without Nuclear Plant
by Mike Faher
December 26, 2016
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VERNON – At a recent economic development announcement in Brattleboro, Gov. Peter Shumlin confidently declared that Windham County has an advantage because “we can do cash.”
He was referring to a multimillion-dollar pot of money – the Windham County Economic Development Program – that was created via a shutdown settlement agreement with Vermont Yankee owner Entergy.
As he prepares to leave office two years after the Vernon nuclear plant stopped producing power, Shumlin says he is confident that the regional and state economy is headed in the right direction even without Yankee’s 600-plus jobs in the mix.
And from an energy standpoint, Shumlin contends the state is better off without Vermont Yankee’s 605 megawatts of power production due to a new emphasis on renewables and efficiency.
“There’s no question that running an aging, leaking nuclear power plant beyond its design life was not in Vermont’s best interest,” Shumlin said.
Shumlin never made any secret of his opposition to the nuclear plant that operated for 42 years in his home county.
As a state senator, he led a 2010 vote to block Vermont Yankee’s requested 20-year relicensing. Against a backdrop of tritium leaks at the plant, Yankee shutdown was a key issue in Shumlin’s Democratic gubernatorial campaign that same year.
Shumlin carried that advocacy into the governor’s office, contending Vermonters had lost faith in the plant’s corporate owners – whom he referred to as “Entergy Louisiana.”
During a recent interview with VTDigger.org, Shumlin said his opposition to Vermont Yankee was based partly on tritium leak scandal. But he also believed that the plant should not operate beyond its initial, 40-year licensure period.
“I felt strongly like, in a state where your word is your bond, the deal had been changed after it had been agreed to,” Shumlin said. “It should be retired on time as promised to Vermonters.”
Ultimately, the state didn’t close the plant. The federal Nuclear Regulatory Commission granted a renewed license for Vermont Yankee in 2011, and a federal judge subsequently ruled that the facility could continue to operate beyond a March 21, 2012 shutdown date that had been set by the state.
When Entergy in 2013 announced Vermont Yankee’s planned closure, the company cited financial reasons including the price of natural gas and the costs of operating the plant. There was no mention of the state’s long-standing opposition.
Shumlin, however, still believes that the state played a role. He says it’s no coincidence that Vermont Yankee’s closure came first in a series of nuclear shutdown announcements for Entergy.
“It was a very unhappy relationship” between the state and Entergy, Shumlin said. “And I’m sure that when they made the decision based on economics … to shut a plant down, we had a shiny gold star on our heads.”
Whatever the reason for Entergy’s decision, Shumlin believes it was for the best.
As he exits the governor’s office after three terms, Shumlin often touts his track record in boosting renewable energy sources such as wind and solar. Though the state still buys nuclear power from a plant in New Hampshire, Shumlin says emphasizing renewables and energy efficiency is the right thing to do environmentally and economically.
“We are an example of how to reduce your carbon footprint and do electric generation right,” he said.
The governor said the loss of Vermont Yankee employees has been “a heartbreaking and tragic thing for all of us to go through,” and he said he is not denying the economic impact of the plant’s closure.
At the same time, though, he sees renewable energy as an economic engine for the future. “Now, in Vermont, if you have 17 people in a room, one of them is working in the renewable energy sector,” Shumlin said. “And they tend to be young, vigorous, excited about living in Vermont.”
Shumlin says he’s also proud of a 2013 shutdown agreement the state struck with Entergy. The deal allocated at least $2.6 million in Entergy money for clean energy development activities “in or for the benefit of Windham County.”
Some of that cash has gone toward a wood-heat initiative, and another $400,000 recently was awarded to start a renewable energy grant program in the county.
The state settlement deal also committed Entergy to paying $2 million a year for five years to boost economic development in Windham County. The resulting Windham County Economic Development Program has funded a variety of projects including major expansions at Chroma Technologies in Bellows Falls and G.S. Precision and Commonwealth Dairy in Brattleboro.
“This is the kind of economic incentive that Windham County needs to continue to be economically prosperous,” the governor said.
For the most part, the Shumlin administration has been unsuccessful when attempting to intervene in the federally regulated Vermont Yankee decommissioning process. But officials can still point to the 2013 settlement deal with Entergy as an important victory with long-lasting impacts.
Chris Recchia, whom Shumlin appointed in 2012 to lead the Vermont Public Service Department, echoed the governor in praising Entergy’s recent willingness to negotiate with the state.
“I’ve been very pleased with the discussions we had with Entergy in recent years. I think the (2013) settlement was a good outcome for Vermont,” Recchia said.
Like Shumlin, Recchia also believes the state is “better off without relying on (nuclear) power.”
VERNON RESIDENTS PUSH BACK
Not everyone shares those sentiments. In Vernon, there remains resentment about the state’s fight against Vermont Yankee and doubt about Shumlin’s economic development efforts.
A few months after Entergy announced Vermont Yankee’s pending closure, Vernon resident Josh Unruh titled his first batch of home brew “Shumlin’s Shutdown.” The bottle’s label proclaimed that the beer had been “brewed in Montpelier by politics and ignorance.”
Now a member of Vernon Selectboard, Unruh’s ire hasn’t abated. He says the Shumlin administration’s focus on closing Vermont Yankee “was a short-sighted view.”
As for the impact on Vernon, “my personal view is, I don’t think they care a whole lot,” Unruh said of state officials.
State Rep. Mike Hebert, R-Vernon, says that impact has been “devastating to Vernon and to Windham County in general.”
In addition to employment and tax revenue losses, Hebert said, “people have lost a lot of friends. And we’ve lost a lot of brainpower and a lot of volunteers for organizations in Windham County.”
Hebert isn’t sure the state played much role in Vermont Yankee’s shutdown. But he believes state officials could have done much more to prevent it.
“Had (Shumlin) made efforts as he did with other businesses to keep them in the state, something could have been done to make it easier to have stayed here,” Hebert said.
Hebert and Unruh also question the effectiveness and intent of the Windham County Economic Development Program. That money, they argue, should be doing more to boost entrepreneurs and small businesses – especially in Vernon.
Shumlin doesn’t shy away from criticism, acknowledging that he has denied grants and loans to many applicants because he didn’t feel they had enough economic impact.
“I didn’t want it frittered away on projects that all had good intentions but wouldn’t have resulted necessarily in real jobs for hard-working people,” Shumlin said.
SHUMLIN TOUTS DECOMMISSIONING PLAN
Economics aren’t the only beef some have with Shumlin’s Vermont Yankee policies.
The Brattleboro-based anti-nuclear group New England Coalition won’t give the governor a ringing endorsement as he departs. Coalition trustee and staff member Clay Turnbull argues that Shumlin and his staff should have worked to set site restoration standards and to ensure spent nuclear fuel was stored in a different location than the one Entergy chose.
“It would have been so much better if his legacy was that the waste was much farther from the Connecticut River,” Turnbull said.
While Turnbull said the state deserves some credit for opposing Vermont Yankee’s continued operation, he doesn’t think that was a deciding factor in Entergy’s shutdown decision.
“Every bit of resistance made it easier for them to throw in the towel,” Turnbull said. “But ultimately, if there was money to be made, they would still be operating. That’s the bottom line.”
State Rep. Mike Mrowicki, D-Putney, is more complimentary of Shumlin’s Vermont Yankee work. While there were “a lot of factors” contributing to shutdown, Mrowicki said, “I don’t think Peter’s contribution can be ignored.”
Asked whether he agreed with Shumlin’s declaration that the state is better off without Vermont Yankee, Mrowicki responded that he would “have to say yes, in the long term.”
“The big question mark is, will it get cleaned up … on time and on budget,” Mrowicki said.
The answer to that question may lie with New York-based NorthStar Group Services, which has promised to have most of the Vermont Yankee site cleared by 2030 if state and federal regulators approve its purchase of the property.
Shumlin won’t have a direct role in vetting that sale. But he said the NorthStar deal has the potential to ensure that the plant won’t “sit there rotting” for decades before cleanup work begins.
“If they can really get …. that plant decommissioned as quickly as possible so that we can (develop) that site for another use, that’s a huge help to Windham County,” Shumlin said.
He added that while federal authorities inform utilities on a daily basis about potential threats to the grid, when it came to Thursday’s joint report, “A presidential directive and a high-profile release on this brought it to the forefront.”
Adam Entous contributed to this report.