Wednesday, December 24, 2014

Sony, North Korea and the Future of Cyberwarfare

By Jim McFarlin

The recent hack against Sony Pictures Entertainment (widely believed to have been perpetrated by North Korea), its threats of physical violence against Americans, and its successful attempt to restrict our right of free speech can only be termed an attack on America.

Tuesday, December 9, 2014

Increasing Cyber Threats Fuel Growing Global Disorder

By Jim McFarlin

The world as we once knew it, one of post-Cold War order with the U.S. as a primary world power, is disappearing before our eyes. In its place, we are left with a world now defined by mounting global disorder – and cyber threats only add to the chaos.

An expansionist Russia and increasingly aggressive China seek to establish new spheres of influence; meanwhile, the cauldron of war and unrest engulf the Middle East and North Africa. At the same time, the U.S. sits on the brink of a nuclear-armed Iran, which surely has its own ambitions for global power.

As Senator John McCain puts it, “We’re in the most dangerous position we’ve ever been in as a nation.”

Wednesday, November 12, 2014

Cyber Alert: The Russians Are Coming

By Jim McFarlin

When it comes to today’s digital world, it is the best of times – and it is the worst of times.

Although we enjoy an era of unparalleled worldwide commerce, sharing of cultures, and global communications thanks to the Internet, we also find the power of this marvelous creation turned on us in ways we would not have considered possible just a few years ago.

Goals such as improving quality of life, extending the benefits of health care for all and spreading economic benefits are still there but deemed perhaps unachievable, or at a minimum both diluted and distorted.

The good is here but the bad has come with it – and there is no going back. The genie is out of the bottle.

A rising torrent of cybercrime attacks on hundreds of millions of Americans has swept the nation. Roughly 280 million customers have been affected by cyberattacks on Home Depot, eBay, and JP Morgan.

The government has fallen victim, too. The Washington Post reported that hackers affiliated with the Russian government have breached computer networks at the White House; meanwhile, the Chinese government infiltrated the Department of Defense to steal plans for the F-35 advanced fighter jet.

There appears to be no end to such cyberattacks, nor means to stop them. Worse, there are ominous signs that these attacks are just the beginning.

A recently released study by the Pew Research Center study found that more than 60 percent of 1,642 computer and Internet experts polled believe a nationwide cyberattack against the United States is imminent.

The most vulnerable targets include essential critical infrastructures like power distribution. Many also expect attacks against the financial services sector at a larger scale than is now being experienced, possibly leading to economic disruptions worldwide.

Those surveyed did not have expectations of immediate attacks, but such views quickly became outdated in October, when the Wall Street Journal reported that Russian computer hackers have already begun laying the groundwork for such attacks against the U.S.

In researching recent cyberattacks, investigators for cybersecurity firm FireEye found “sophisticated cyber weapons able to evade detection and hop between computers.” The investigators also found code programmed on Russian-language machines that was sophisticated enough to indicate a government sponsor, specifically a government based in Moscow.

The cyber weapons discovered by FireEye, known as “trojan horses,” have been discovered in America’s critical infrastructures such as power and water facilities. Such weapons consist of malicious software that potentially threatens all aspects of our daily lives and is just waiting to be activated.

Such cyber weapons implanted in American industrial facilities can be located and disposed of, but the facts are there: more will come.

Cold War 2.0 has begun. And the Russians are not just coming with the genie in hand; they are already here.

("Grunge Flag Of Russia" by creativedoxfoto/

Tuesday, October 28, 2014

China’s Cyberespionage against the U.S. Is Just the Opening Gambit

By Jim McFarlin

The world is becoming increasingly hostile. The evidence is mounting: struggles with ISIS in the Middle East; Russia’s adventurism in Ukraine and the California coast; Iran’s nuclear bomb; and China’s aggression in the South China Sea, not to mention her new boomer subs.

Of these, China’s aggression is perhaps the most subtle -- and most concerning.

Thursday, October 2, 2014

Jihadists to America: Cyberattacks Are Coming

By James McFarlin

The 9/11 Commission’s authors placed primary blame for the success of the attacks on “a failure of imagination.” America’s intelligence agencies, with all of their resources, did not awaken to the gravity of such a threat to our nation until it was too late. The authors recently reprised this conclusion in an updated 9/11 Report assessment with a fresh warning:

“We must not repeat this mistake in the cyber realm.”

But if we do not wake up – and quickly – to the very real threat of 9/11-class cyberattacks against the United States, we may soon find ourselves reliving the nightmare of 9/11 all over again.

Tuesday, September 16, 2014

The Hidden Insurgency Imperiling America’s Cyber Security

By James McFarlin

As the world’s most advanced digital society, America possesses the world’s most vulnerable digital economy. Cyberattacks - many well known by now - keep invading our financial, retail and other sectors with no end in sight.

Trouble started to heat up when the credit card information of 40 million customers was lost during a cyberattack on retailer Target last December. Attacks quickly followed on Neiman Marcus and others, including the biggest data breach in Internet history against ecommerce giant eBay.

Most recently, retailer Home Depot reported a breach of its security systems in more than 2,200 U.S. and Canadian stores, as did banker JPMorgan Chase.

According to official data, the number of companies reporting cyber security breaches has more than doubled in the past two years to 1,174. No organization appears to be safe from cyberattack and theft.

America is in the midst of a digital crime wave that shows every indication of continuing at increased levels. That much is adequately reported by the news media – what’s not, though, are the harsh realities of these attacks:

  • Most organizations do not even realize they are being attacked, and many cyberattacks go undiscovered for months. The 2012 NASDAQ hack had been going on for two years. Reports indicate that more than 70 percent of companies being breached only become aware after being notified by an outside organization.
  • It is increasingly accepted that cyberattacks against corporate networks cannot be stopped, and the best that can be done is to limit the losses once the intrusion is identified.
  • Despite the fact that the information being stolen is theirs, customers are typically the last to know of a hack against a commercial organization. Crucial time is lost for those who might want to protect themselves by changing passwords, monitoring transactions or other means.

In a recent industry study of U.S. businesses, one-third of respondents indicated that they maintain no continuous monitoring of their networks against intrusions. What's more, 22 percent indicated they do no monitoring at all. The results? In the recent Home Depot customer credit card theft (estimated to be 60 million accounts), five months passed before the breach was noticed – and this is one of the five largest retailers in America.

No wonder class-action lawsuits are already being filed against Home Depot for negligence.

With the move to new payment systems such as Apple Pay and the Apple Watch, business opportunities are created but raise questions about data protections. Will security be there?

And who pays for the costs of these escalating attacks and the harsh realities they expose? Except for the occasional CEO departure (think Target) and revolving door losses of Chief Information Security Officers, it is the consumer who pays. To assume the costs for attack recovery, damages, lost information, legal expenses, new equipment and hosts of other costs comes out of the retailers’ or bankers’ hides is nothing but naive at its highest level.

The consistent theme in these attacks and trends? American industry has been quick to embrace the benefits of using the Internet as platform for running their businesses but have not deployed an appropriate sense of urgency in making its use secure. The forces of disbelief, denial and delayed action on cyber defenses pervade all too many organizations, and we are seeing the result.

We haven’t just met the insurgents. We are the insurgents.

("Firewall Antivirus Antispyware Post" by Stuart Miles/

Saturday, August 30, 2014

The Second Internet Era is Here and it's Not Pretty

By James McFarlin

The world has turned. Corporate boards everywhere are suddenly demanding top-priority attention be given to the now-soaring business risks from cyberattacks. Over the past few months – virtually overnight in today’s era of instant everything – the rules and risks of living in today’s digital-powered environment have changed forever.

I forewarned of this looming eventuality in my September 7th, 2013 post, “Will 2013 be the Year Cybersecurity Crashes the Party in the Boardroom?

Less than a year later, predictions have become reality.

Wednesday, August 6, 2014

When Will U.S. Cyber Alarms Match Its Cyber Threats?

by James McFarlin

Former Secretary of State Madeline Albright recently stated “the world is a mess.” And indeed it is. From Russia’s stoking of a war of insurrection in the Ukraine to the Israel-Hamas war to conflicts in Syria, Iraq and throughout much of the Middle East and North Africa, large swaths of the world are at war.

But it is instructive to place such events in perspective. In spite of the significant dangers they pose, these conflicts offer but a prelude to even the greater threat to America’s national security which emanate from the increasing worldwide proliferation of cyber weapons.

Why? Because these conflicts, no matter how loud, are still like distant thunder; in the world of cyberattacks ground zero is America’s critical infrastructures and ultimately, our way of life.

Wednesday, July 9, 2014

Why Cybersecurity Initiatives Fail

By James McFarlin

My July 1 post addressed the misdirection that ensues when an organization’s senior management awareness of cyber threats turns to anxiety, and that anxiety into fevered action.

Nothing will get a board of directors to the anxiety stage as quickly as seeing a high profile business face cyberattack-induced loss of competitive advantage, reputational damage, and financial consequences in the billions of dollars.

Therefore, preventing such anxiety-fed misdirection must take center stage as an organization forms its cybersecurity strategy.

What follows are three solid suggestions on how cybersecurity initiatives can be successfully formulated, as stated and practiced by the experts.

But I will warn you: There is a caveat, and it’s a big one, as you’ll see.

Wednesday, July 2, 2014

Are Corporate Boards Rushing into a Cybersecurity Void?

By James McFarlin

Don’t say they weren’t warned. The forecast in my September 7, 2013 article “Will 2013 Be the Year Cybersecurity Crashes the Party in the Boardroom?" predicted stormy cybersecurity seas ahead for corporate America.

A plague of inadequate cybersecurity strategies is now raining on board members across the land, thanks to the massive Target Stores 40-million credit card heist; the resulting blizzard of lawsuits and subsequent ousting of its CEO; and numerous similar cyber breaches on retailers. The circumstances are highlighted in the Wall Street Journal June 30th article, “Corporate Boards Race to Shore Up Cybersecurity.”

The forthcoming corporation reactions will inevitably risk plunging them into a vast cyberspace void, populated only by scarce technical resources, a mind-numbing array of software cyberattack “solutions,” and seemingly insurmountable executive vs. technical cultural and language barriers.

Here is what to watch for:

Friday, June 13, 2014

Cyberwarfare: A Predictable but Dangerous Future

By James D. McFarlin

Over the remainder of this decade, geopolitical and ideological forces will both govern the deployment of offensive cyber weapons and be shaped by the evolution and uses of such weapons.

There is no going back.

Wednesday, May 28, 2014

Why Isn’t Cyber Security Secure?

by James McFarlin

Target. Neiman Marcus. eBay. The New York Times. The U.S. Navy. The Federal Reserve. The list of organizations falling victim to cyber attacks recently continues to grow, with the number of reported security incidents rising from 2,989 in 2012 to 3,741 in 2013.

The severity is increasing, too, with the loss of customer information in some attacks reaching astronomical levels: 110 million accounts from Target, while eBay compromised up to 145 million customer records.

According to Forbes, the average losses per incident are also climbing at a rate of 23% year-over-year, with incident losses exceeding $10 million per occurrence. This is up 75% from just two years ago.

Due to a combination of factors, including timing, carefully selected targets, and increasing sophistication, attacks are becoming more successful, not less. These increases exist in spite of major increases in cyber security spending.

Wednesday, May 14, 2014

America on the Brink

By James McFarlin

America’s economic and national security in this digital age are centered much less around our ability to deploy advanced cyber weaponry - which it does well - than on how the United States positions itself and conducts its affairs geopolitically.

Why? Read on.

Wednesday, April 30, 2014

Giving Up the Beachhead: U.S. Cyber Defenses in Retreat

by Jim McFarlin

Data released from US-CERT shows that reported cyberattacks have increased tenfold since 2006. Combined with the rapid-fire advancements in attack methods, it’s clear that preventing breaches is becoming increasingly more difficult rather than easier.

Many organizations are thus shifting their attention and resources to mitigation - limiting and stopping attacks in progress - and to business continuity and recovery.

A recently released study by accounting firm EY entitled “Global Information Security Survey 2013” documented this change of cybersecurity focus. The report found that 51% of corporate executives surveyed had set their 2014 information security priorities in business continuity and disaster recovery, eclipsing their focus of 13% on information security risk management.

In other words, if the beach cannot be held, retreat to the next line of defense.

Monday, March 31, 2014

The Missing Element in U.S. Cyber Security

By Jim McFarlin

In the global picture, the recent Target cybertheft is but a reminder that America - all of America - is under attack.

Late last year, the U.S. Navy discovered that its computer systems had been breached and its communications compromised. Not only did the Navy not know for how long the breach had been occurring, but it took them four months to rid their networks of the spyware that had been imbedded.

Whether by cybertheft, cyberterrorism, or cyberwarfare, the critical systems that generate and distribute electricity, operate our financial markets, and command our nation’s military and defense forces, to mention a few, are all targets.

And, unfortunately, this is a battle we are losing.

Tuesday, March 11, 2014

Opposing Internal Forces Sabotage U.S. Cyber Defenses

By Jim McFarlin

Cyberspace isn’t just becoming the 21st century’s dominant platform for life, as noted by Wired editor Ben Hammersley: It’s also becoming this century’s dominant platform for warfare.

As political and military decisions are made to protect and preserve our 21st century way of life, one can’t help but wonder how well informed these decisions will be. Before America can possess national security in the cyberspace era, we must reconcile these three opposing forces:

Friday, February 28, 2014

Target Credit Card Breach Hits the Boardroom

By Jim McFarlin

Some predictions do come true.

The question raised in this September post, Will 2013 Be the Year Cybersecurity Crashes the Party in the Boardroom? was late happening. Then on December 17th, in the midst of retail’s most critical sales season, reality crashed through Target’s boardroom in the form of one of the largest credit card heists in history.

Following the loss of credit card information belonging to 40 million customers and personal data of another 70 million customers, Target now faces massive expenditures to remedy the breach and shore up its cyber defenses to prevent repeat thefts in the future.

Dealing with such remedial action is not coming cheaply. According to the February 27th issue of The Wall Street Journal, Target’s fourth quarter profit fell from nearly a billion dollars a year earlier to just over $500 million in 2013’s fourth quarter, knocking nearly two billion dollars from its market capitalization.

But such financial shortfalls are just the beginning of Target’s troubles. Here are three more dampers on the company’s financial picture:

Wednesday, February 19, 2014

White House Bunts on Critical Infrastructure Cyber Protection

By Jim McFarlin 

The United States is engaged in a non-stop global cyber conflict. Others across the globe have declared war on America – but we have not declared war on them. America is playing defense, and when it comes to cyber conflict, that’s a losing strategy.

It’s apparent that America is losing. Cyberattacks against the U.S. have risen tenfold since 2006, and China is conducting all-out cyber espionage on our military plans and weapons designs.

Meanwhile, Islamic extremists have vowed to destroy America by whatever means it takes. Extremist groups have lacked strong cyberattack capabilities but have been clear about their plans and intentions.

What does this mean for the country?

Tuesday, January 21, 2014

Sanctions for the NSA; A Free Pass for Iran

By Jim McFarlin

It was an amazing global sleight of hand that would make even David Copperfield proud.

On January 17, 2014, President Barack Obama levied sanctions in the name of reform on the very U.S. agency that seeks to preserve the freedoms Americans rightly expect. Meanwhile, the nation’s attention was diverted from the easing of sanctions on a nation that would just as soon see those freedoms destroyed.

In an ironic fate of timing, this parlor trick occurred just as the real significance of the criminal hacking of credit card information from Target stores and other U.S. retailers was seeping into our consciousness: in the battlefield of cyberspace, America’s critical infrastructures are not defended. Our financial information are not safe, and our way of life is not secure. The Target attack publicly demonstrated that attacks such as this can be accomplished quickly and quietly, typically with fake or misleading identities.

The heart of this presidential illusion was to make sanctions appear to be reforms. Here is the essence of what was proposed: