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​The Colonial Pipeline

How A Private Security Outfit Helped Cyber-Criminals

Reprinted with permission from ProPublica

This story was co-published with MIT Technology Review.

On Jan. 11, antivirus company Bitdefender said it was "happy to announce" a startling breakthrough. It had found a flaw in the ransomware that a gang known as DarkSide was using to freeze computer networks of dozens of businesses in the U.S. and Europe. Companies facing demands from DarkSide could download a free tool from Bitdefender and avoid paying millions of dollars in ransom to the hackers.

But Bitdefender wasn't the first to identify this flaw. Two other researchers, Fabian Wosar and Michael Gillespie, had noticed it the month before and had begun discreetly looking for victims to help. By publicizing its tool, Bitdefender alerted DarkSide to the lapse, which involved reusing the same digital keys to lock and unlock multiple victims. The next day, DarkSide declared that it had repaired the problem, and that "new companies have nothing to hope for."

"Special thanks to BitDefender for helping fix our issues," DarkSide said. "This will make us even better."

DarkSide soon proved it wasn't bluffing, unleashing a string of attacks. This month, it paralyzed the Colonial Pipeline Co., prompting a shutdown of the 5,500 mile pipeline that carries 45 percent of the fuel used on the East Coast, quickly followed by a rise in gasoline prices, panic buying of gas across the Southeast and closures of thousands of gas stations. Absent Bitdefender's announcement, it's possible that the crisis might have been contained, and that Colonial might have quietly restored its system with Wosar and Gillespie's decryption tool.

Instead, Colonial paid DarkSide $4.4 million in Bitcoin for a key to unlock its files. "I will admit that I wasn't comfortable seeing money go out the door to people like this," CEO Joseph Blount told The Wall Street Journal.

The missed opportunity was part of a broader pattern of botched or half-hearted responses to the growing menace of ransomware, which during the pandemic has disabled businesses, schools, hospitals and government agencies across the country. The incident also shows how antivirus companies eager to make a name for themselves sometimes violate one of the cardinal rules of the cat-and-mouse game of cyber-warfare: Don't let your opponents know what you've figured out.

During World War II, when the British secret service learned from decrypted communications that the Gestapo was planning to abduct and murder a valuable double agent, Johnny Jebsen, his handler wasn't allowed to warn him for fear of cluing in the enemy that its cipher had been cracked. Today, ransomware hunters like Wosar and Gillespie try to prolong the attackers' ignorance, even at the cost of contacting fewer victims. Sooner or later, as payments drop off, the cybercriminals realize that something has gone wrong.

Whether to tout a decryption tool is a "calculated decision," said Rob McLeod, senior director of the threat response unit for cybersecurity firm eSentire. From the marketing perspective, "You are singing that song from the rooftops about how you have come up with a security solution that will decrypt a victim's data. And then the security researcher angle says, 'Don't disclose any information here. Keep the ransomware bugs that we've found that allow us to decode the data secret, so as not to notify the threat actors.'"

In a post on the dark web, DarkSide thanked Bitdefender for identifying a flaw in the gang's ransomware. (Highlight added by ProPublica.)

Wosar said that publicly releasing tools, as Bitdefender did, has become riskier as ransoms have soared and the gangs have grown wealthier and more technically adept. In the early days of ransomware, when hackers froze home computers for a few hundred dollars, they often couldn't determine how their code was broken unless the flaw was specifically pointed out to them.

Today, the creators of ransomware "have access to reverse engineers and penetration testers who are very very capable," he said. "That's how they gain entrance to these oftentimes highly secured networks in the first place. They download the decryptor, they disassemble it, they reverse engineer it and they figure out exactly why we were able to decrypt their files. And 24 hours later, the whole thing is fixed. Bitdefender should have known better."

It wasn't the first time that Bitdefender trumpeted a solution that Wosar or Gillespie had beaten it to. Gillespie had broken the code of a ransomware strain called GoGoogle and was helping victims without any fanfare, when Bitdefender released a decryption toolin May 2020. Other companies have also announced breakthroughs publicly, Wosar and Gillespie said.

"People are desperate for a news mention, and big security companies don't care about victims," Wosar said.

Bogdan Botezatu, director of threat research at Bucharest, Romania-based Bitdefender, said the company wasn't aware of the earlier success in unlocking files infected by DarkSide. Regardless, he said, Bitdefender decided to publish its tool "because most victims who fall for ransomware do not have the right connection with ransomware support groups and won't know where to ask for help unless they can learn about the existence of tools from media reports or with a simple search."

Bitdefender has provided free technical support to more than a dozen DarkSide victims, and "we believe many others have successfully used the tool without our intervention," Botezatu said. Over the years, Bitdefender has helped individuals and businesses avoid paying more than $100 million in ransom, he said.

Bitdefender recognized that DarkSide might correct the flaw, Botezatu said. "We are well aware that attackers are agile and adapt to our decryptors." But DarkSide might have "spotted the issue" anyway. "We don't believe in ransomware decryptors made silently available. Attackers will learn about their existence by impersonating home users or companies in need, while the vast majority of victims will have no idea that they can get their data back for free."

The attack on Colonial Pipeline, and the ensuing chaos at the gas pumps throughout the Southeast, appears to have spurred the federal government to be more vigilant. President Joe Biden issued an executive order to improve cybersecurity and create a blueprint for a federal response to cyberattacks. DarkSide said it was shutting down under U.S. pressure, although ransomware crews have often disbanded to avoid scrutiny and then re-formed under new names, or their members have launched or joined other groups.

"As sophisticated as they are, these guys will pop up again, and they'll be that much smarter," said Aaron Tantleff, a Chicago cybersecurity attorney who has consulted with 10 companies attacked by DarkSide. "They'll come back with a vengeance."

At least until now, private researchers and companies have often been more effective than the government in fighting ransomware. Last October, Microsoft disrupted the infrastructure of Trickbot, a network of more than 1 million infected computers that disseminated the notorious Ryuk strain of ransomware, by disabling its servers and communications. That month, ProtonMail, the Swiss-based email service, shut down 20,000 Ryuk-related accounts.

Wosar and Gillespie, who belong to a worldwide volunteer group called the Ransomware Hunting Team, have cracked more than 300 major ransomware strains and variants, saving an estimated 4 million victims from paying billions of dollars.

By contrast, the FBI rarely decrypts ransomware or arrests the attackers, who are typically based in countries like Russia or Iran that lack extradition agreements with the U.S. DarkSide, for instance, is believed to operate out of Russia. Far more victims seek help from the Hunting Team, through websites maintained by its members, than from the FBI.

The U.S. Secret Service also investigates ransomware, which falls under its purview of combating financial crimes. But, especially in election years, it sometimes rotates agents off cyber assignments to carry out its better-known mission of protecting presidents, vice presidents, major party candidates and their families. European law enforcement, especially the Dutch National Police, has been more successful than the U.S. in arresting attackers and seizing servers.

Similarly, the U.S. government has made only modest headway in pushing private industry, including pipeline companies, to strengthen cybersecurity defenses. Cybersecurity oversight is divided among an alphabet soup of agencies, hampering coordination. The Department of Homeland Security conducts "vulnerability assessments" for critical infrastructure, which includes pipelines.

It reviewed Colonial Pipeline in around 2013 as part of a study of places where a cyberattack might cause a catastrophe. The pipeline was deemed resilient, meaning that it could recover quickly, according to a former DHS official. The department did not respond to questions about any subsequent reviews.

Five years later, DHS created a pipeline cybersecurity initiative to identify weaknesses in pipeline computer systems and recommend strategies to address them. Participation is voluntary, and a person familiar with the initiative said that it is more useful for smaller companies with limited in-house IT expertise than for big ones like Colonial. The National Risk Management Center, which oversees the initiative, also grapples with other thorny issues such as election security.

Ransomware has skyrocketed since 2012, when the advent of Bitcoin made it hard to track or block payments. The criminals' tactics have evolved from indiscriminate "spray and pray" campaigns seeking a few hundred dollars apiece to targeting specific businesses, government agencies and nonprofit groups with multimillion-dollar demands.

Attacks on energy businesses in particular have increased during the pandemic — not just in the U.S. but in Canada, Latin America and Europe. As the companies allowed employees to work from home, they relaxed some security controls, McLeod said.

Since 2019, numerous gangs have ratcheted up pressure with a technique known as "double extortion." Upon entering a system, they steal sensitive data before launching ransomware that encodes the files and makes it impossible for hospitals, universities and cities to do their daily work. If the loss of computer access is not sufficiently intimidating, they threaten to reveal confidential information, often posting samples as leverage. For instance, when the Washington, D.C., police department didn't pay the $4 million ransom demanded by a gang called Babuk last month, Babuk published intelligence briefings, names of criminal suspects and witnesses, and personnel files, from medical information to polygraph test results, of officers and job candidates.

DarkSide, which emerged last August, epitomized this new breed. It chose targets based on a careful financial analysis or information gleaned from corporate emails. For instance, it attacked one of Tantleff's clients during a week when the hackers knew the company would be vulnerable because it was transitioning its files to the cloud and didn't have clean backups.

To infiltrate target networks, the gang used advanced methods such as "zero-day exploits" that immediately take advantage of software vulnerabilities before they can be patched. Once inside, it moved swiftly, looking not only for sensitive data but also for the victim's cyber insurance policy, so it could peg its demands to the amount of coverage. After two to three days of poking around, DarkSide encrypted the files.

"They have a faster attack window," said Christopher Ballod, associate managing director for cyber risk at Kroll, the business investigations firm, who has advised half a dozen DarkSide victims. "The longer you dwell in the system, the more likely you are to be caught."

Typically, DarkSide's demands were "on the high end of the scale," $5 million and up, Ballod said. One scary tactic: If publicly traded companies didn't pay the ransom, DarkSide threatened to share information stolen from them with short-sellers who would profit if the share price dropped upon publication.

DarkSide's site on the dark web identified dozens of victims and described the confidential data it claimed to have filched from them. One was New Orleans law firm Stone Pigman Walther Wittmann. "A big annoyance is what it was," attorney Phil Wittmann said, referring to the DarkSide attack in February. "We paid them nothing," said Michael Walshe Jr., chair of the firm's management committee, declining to comment further.

Last November, DarkSide adopted what is known as a "ransomware-as-a-service" model. Under this model, it partnered with affiliates who launched the attacks. The affiliates received 75 to 90 percent of the ransom, with DarkSide keeping the remainder. As this partnership suggests, the ransomware ecosystem is a distorted mirror of corporate culture, with everything from job interviews to procedures for handling disputes. After DarkSide shut down, several people who identified themselves as its affiliates complained on a dispute resolution forum that it had stiffed them. "The target paid, but I did not receive my share," one wrote.

Together, DarkSide and its affiliates reportedly grossed at least $90 million. Seven of Tantleff's clients, including two companies in the energy industry, paid ransoms ranging from $1.25 million to $6 million, reflecting negotiated discounts from initial demands of $7.5 million to $30 million. His other three clients hit by DarkSide did not pay. In one of those cases, the hackers demanded $50 million. Negotiations grew acrimonious, and the two sides couldn't agree on a price.

DarkSide's representatives were shrewd bargainers, Tantleff said. If a victim said it couldn't afford the ransom because of the pandemic, DarkSide was ready with data showing that the company's revenue was up, or that COVID-19's impact was factored into the price.

DarkSide's grasp of geopolitics was less advanced than its approach to ransomware. Around the same time that it adopted the affiliate model, it posted that it was planning to safeguard information stolen from victims by storing it in servers in Iran. DarkSide apparently didn't realize that an Iranian connection would complicate its collection of ransoms from victims in the U.S., which has economic sanctions restricting financial transactions with Iran. Although DarkSide later walked back this statement, saying that it had only considered Iran as a possible location, numerous cyber insurers had concerns about covering payments to the group. Coveware, a Connecticut firm that negotiates with attackers on behalf of victims, stopped dealing with DarkSide.

Ballod said that, with their insurers unwilling to reimburse the ransom, none of his clients paid DarkSide, despite concerns about exposure of their data. Even if they had caved in to DarkSide, and received assurances from the hackers in return that the data would be shredded, the information might still leak, he said.

During DarkSide's changeover to the affiliate model, a flaw was introduced into its ransomware. The vulnerability caught the attention of members of the Ransomware Hunting Team. Established in 2016, the invitation-only team consists of about a dozen volunteers in the U.S., Spain, Italy, Germany, Hungary and the U.K. They work in cybersecurity or related fields. In their spare time, they collaborate in finding and decrypting new ransomware strains.

Several members, including Wosar, have little formal education but an aptitude for coding. A high school dropout, Wosar grew up in a working-class family near the German port city of Rostock. In 1992, at the age of 8, he saw a computer for the first time and was entranced. By 16, he was developing his own antivirus software and making money from it. Now 37, he has worked for antivirus firm Emsisoft since its inception almost two decades ago and is its chief technology officer. He moved to the U.K. from Germany in 2018 and lives near London.

He has been battling ransomware hackers since 2012, when he cracked a strain called ACCDFISA, which stood for "Anti Cyber Crime Department of Federal Internet Security Agency." This fictional agency was notifying people that child pornography had infected their computers, and so it was blocking access to their files unless they paid $100 to remove the virus.

The ACCDFISA hacker eventually noticed that the strain had been decrypted and released a revised version. Many of Wosar's subsequent triumphs were also fleeting. He and his teammates tried to keep criminals blissfully unaware for as long as possible that their strain was vulnerable. They left cryptic messages on forums inviting victims to contact them for assistance or sent direct messages to people who posted that they had been attacked.

In the course of protecting against computer intrusions, analysts at antivirus firms sometimes detected ransomware flaws and built decryption tools, though it wasn't their main focus. Sometimes they collided with Wosar.

In 2014, Wosar discovered that a ransomware strain called CryptoDefense copied and pasted from Microsoft Windows some of the code it used to lock and unlock files, not realizing that the same code was preserved in a folder on the victim's own computer. It was missing the signal, or "flag," in their program, usually included by ransomware creators to instruct Windows not to save a copy of the key.

Wosar quickly developed a decryption tool to retrieve the key. "We faced an interesting conundrum," Sarah White, another Hunting Team member, wrote on Emsisoft's blog. "How to get our tool out to the most victims possible without alerting the malware developer of his mistake?"

Wosar discreetly sought out CryptoDefense victims through support forums, volunteer networks and announcements of where to contact for help. He avoided describing how the tool worked or the blunder it exploited. When victims came forward, he supplied the fix, scrubbing the ransomware from at least 350 computers. CryptoDefense eventually "caught on to us ... but he still did not have access to the decrypter we used and had no idea how we were unlocking his victims' files," White wrote.

But then an antivirus company, Symantec, uncovered the same problem and bragged about the discovery on a blog post that "contained enough information to help the CryptoDefense developer find and correct the flaw," White wrote. Within 24 hours the attackers began spreading a revised version. They changed its name to CryptoWall and made $325 million.

Symantec "chose quick publicity over helping CryptoDefense victims recover their files," White wrote. "Sometimes there are things that are better left unsaid."

A spokeswoman for Broadcom, which acquired Symantec's enterprise security business in 2019, declined to comment, saying that "the team members who worked on the tool are no longer with the company."

Like Wosar, the 29-year-old Gillespie comes from poverty and never went to college. When he was growing up in central Illinois, his family struggled so much financially that they sometimes had to move in with friends or relatives. After high school, he worked full time for 10 years at a computer repair chain called Nerds on Call. Last year, he became a malware and cybersecurity researcher at Coveware.

Last December, he messaged Wosar for help. Gillespie had been working with a DarkSide victim who had paid a ransom and received a tool to recover the data. But DarkSide's decryptor had a reputation for being slow, and the victim hoped that Gillespie could speed up the process.

Gillespie analyzed the software, which contained a key to release the files. He wanted to extract the key, but because it was stored in an unusually complex way, he couldn't. He turned to Wosar, who was able to isolate it.

The teammates then began testing the key on other files infected by DarkSide. Gillespie checked files uploaded by victims to the website he operates, ID Ransomware, while Wosar used VirusTotal, an online database of suspected malware.

That night, they shared a discovery.

"I have confirmation DarkSide is re-using their RSA keys," Gillespie wrote to the Hunting Team on its Slack channel. A type of cryptography, RSA generates two keys: a public key to encode data and a private key to decipher it. RSA is used legitimately to safeguard many aspects of e-commerce, such as protecting credit numbers. But it's also been co-opted by ransomware hackers.

"I noticed the same as I was able to decrypt newly encrypted files using their decrypter," Wosar replied less than an hour later, at 2:45 a.m. London time.

Their analysis showed that, before adopting the affiliate model, DarkSide had used a different public and private key for each victim. Wosar suspected that, during this transition, DarkSide introduced a mistake into its affiliate portal used to generate the ransomware for each target. Wosar and Gillespie could now use the key that Wosar had extracted to retrieve files from Windows machines seized by DarkSide. The cryptographic blunder didn't affect Linux operating systems.

"We were scratching our heads," Wosar said. "Could they really have fucked up this badly? DarkSide was one of the more professional ransomware-as-a-service schemes out there. For them to make such a huge mistake is very, very rare."

The Hunting Team celebrated quietly, without seeking publicity. White, who is a computer science student at Royal Holloway, part of the University of London, began looking for DarkSide victims. She contacted firms that handle digital forensics and incident response.

"We told them, 'Hey listen, if you have any DarkSide victims, tell them to reach out to us, we can help them. We can recover their files and they don't have to pay a huge ransom,'" Wosar said.

The DarkSide hackers mostly took the Christmas season off. Gillespie and Wosar expected that, when the attacks resumed in the new year, their discovery would help dozens of victims. But then Bitdefender published its post, under the headline "Darkside Ransomware Decryption Tool."

In a messaging channel with the ransomware response community, someone asked why Bitdefender would tip off the hackers. "Publicity," White responded. "Looks good. I can guarantee they'll fix it much faster now though."

She was right. The next day, DarkSide acknowledged the error that Wosar and Gillespie had found before Bitdefender. "Due to the problem with key generation, some companies have the same keys," the hackers wrote, adding that up to 40% of keys were affected.

DarkSide mocked Bitdefender for releasing the decryptor at "the wrong time…., as the activity of us and our partners during the New Year holidays is the lowest."

Adding to the team's frustrations, Wosar discovered that the Bitdefender tool had its own drawbacks. Using the company's decryptor, he tried to unlock samples infected by DarkSide and found that they were damaged in the process. "They actually implemented the decryption wrong," Wosar said. "That means if victims did use the Bitdefender tool, there's a good chance that they damaged the data."

Asked about Wosar's criticism, Botezatu said that data recovery is difficult, and that Bitdefender has "taken all precautions to make sure that we're not compromising user data" including exhaustive testing and "code that evaluates whether the resulting decrypted file is valid."

Even without Bitdefender, DarkSide might have soon realized its mistake anyway, Wosar and Gillespie said. For example, as they sifted through compromised networks, the hackers might have come across emails in which victims helped by the Hunting Team discussed the flaw.

"They might figure it out that way — that is always a possibility," Wosar said. "But it's especially painful if a vulnerability is being burned through something stupid like this."

The incident led the Hunting Team to coin a term for the premature exposure of a weakness in a ransomware strain. "Internally, we often joke, 'Yeah, they are probably going to pull a Bitdefender,'" Wosar said.

Renee Dudley and Daniel Golden have focused on ransomware for ProPublica and are working on a book about the Ransomware Hunting Team, to be published next year by Farrar, Straus and Giroux.

How College Admissions Are Tilted To Favor The Rich

How College Admissions Are Tilted To Favor The Rich

My 2006 book, The Price of Admission: How America’s Ruling Class Buys Its Way into Elite Colleges — and Who Gets Left Outside the Gates, was intended as a work of investigative journalism.

But many of its more affluent readers embraced it as a “how to” guide. For years afterward, they inundated me with questions like, “How much do I have to donate to get my son (or daughter) into Harvard (or Yale, or Stanford)?” Some even offered me significant sums, which I declined, to serve as an admissions consultant.

They may have been motivated by a tale I told in the book about a youth whose admission to Harvard appears to have been cemented by a $2.5 million pledge from his wealthy developer father. The then-obscure Harvardian would later vault to prominence in public life; his name was Jared Kushner.

Those requests from people who misunderstood my aim in writing the book came back to mind on Tuesday when I heard about the latest and most brazen scandal involving upper-crust parents — including chief executives, real estate investors, a fashion designer and two prominent actresses — manipulating college admissions.

One would think that the rich and famous would care less than the rest of us about foisting their children on elite colleges. After all, their kids are likely to be financially secure no matter where, or if, they go to college. Yet they seem even more desperate — to the extent, according to a complaint, that dozens of well-heeled parents ponied up six or seven figures for bogus SAT scores and athletic profiles for their children to increase their chances at Yale, Stanford and other brand-name universities.

The parents allegedly paid anywhere between $200,000 and $6.5 million to William Rick Singer, who ran a college counseling business in Newport Beach, California. Singer in turn bribed standardized test administrators and college coaches in upper-class sports like crew, sailing and water polo, even staging photos of the applicants playing various sports, prosecutors said.

The parents “chose to corrupt and illegally manipulate the system,” Andrew Lelling, U.S. attorney for Massachusetts, said at a press conference Tuesday. “There can be no separate college admissions system for the wealthy.”

Perhaps these parents were pining to boast at Hollywood cocktail parties about their Ivy League imprimatur. Possibly their offspring, like those of many successful families, lacked the motivation to strive and excel academically, and without a substantial boost would have been consigned to colleges of lesser repute.

In any event, such allegedly criminal tactics represent the logical, if extreme, outgrowth of practices that have long been prevalent under the surface of college admissions, and that undermine the American credos of upward mobility and equal opportunity. Although top college administrators and admissions officials were apparently unaware of the deception, their institutions do bear some responsibility for developing and perpetuating the system that made it possible.

I began looking into this issue in 2003, at a time when the U.S. Supreme Court was considering the fairness of affirmative action for minorities. I documented another form of affirmative action — for the white and privileged.

According to one poll after another, most Americans believe that college admissions should be based on merit, rather than wealth or lineage. Through their own intelligence and hard work, students with the best grades, the highest test scores, the most compelling recommendations and other hard-earned credentials achieve a coveted ticket to higher education — and with it, enhanced prospects for career success and social status. So goes the legend perpetuated by elite colleges, anyway.

But decades of investigating college admissions have led me to conclude that, for rich and famous families, it’s more like a television game show, “Who Wants to Be an Ivy Leaguer?” complete with lifelines for those who might otherwise be rejected. Instead of phoning a friend or asking the audience, the wealthy benefit from advantages largely unavailable to middle-class and poor Americans — what I described in my book as “the preferences of privilege.”

The best-known and most widespread of those preferences is conferred on alumni children, known as “legacies,” who tend as a group to be disproportionately white and well-off. But rich applicants whose parents didn’t attend the target university, like Kushner, still have a leg up.

Rich candidates can enhance their standardized test scores with test-prep and tutoring. They don’t have to rely for college recommendations and advice on an overburdened public high school guidance counselor with a caseload of hundreds of students. Instead, their parents can afford a private counselor who discreetly advises the desired university that the family has a history of philanthropy and, in case of acceptance, would be inclined to be especially generous.

Similarly, inner-city schools often don’t field teams in patrician sports like crew, squash, fencing and the like. But prep and suburban schools do, giving their affluent students an opportunity for the significant edge given to recruited athletes, even in upper-class sports limited to a relative few. Colleges favor recruits in these sports at least partly for fundraising reasons; they’re important to wealthy alumni and donors who played them in college or enjoy them as leisure activities.

So the parents charged in the current case followed customary practices of the entitled: hiring a private counselor, getting test help and participating in a patrician sport. The difference is that they allegedly took blatant short cuts: The counselor was unscrupulous, a stand-in secretly took the tests and the applicants didn’t actually play those sports. But, without the tilted system of preferences already in place, the parents would have had to choose a different route — or actually let merit determine their children’s college destiny.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Why Russian Spies Really Like American Universities

Why Russian Spies Really Like American Universities

Reprinted with permission from ProPublica.

 

Why Russian Spies Really Like American Universities

Under the alias Cynthia Murphy, Russian spy Lydia Guryeva attended Columbia Business School, and ingratiated herself with a key fundraiser for Hillary Clinton’s 2008 presidential campaign. Guryeva’s instructions from Moscow, according to a 2010 FBI complaint, were to “strengthen…ties w. classmates on daily basis incl. professors who can help in job search and who will have (or already have) access to secret info” and to report “on their detailed personal data and character traits w. preliminary conclusions about their potential (vulnerability) to be recruited by Service.”

Now another graduate student at an urban East Coast university, who similarly cultivated powerbrokers and political operatives, is accused of being a Russian spy and taking orders from high-ranking officials in her homeland. Maria Butina, who received a master’s degree in international relations this past spring from American University in Washington, D.C., courted the National Rifle Association’s top guns and sought access to Republican presidential candidates Scott Walker and Donald Trump. She pleaded innocent last week to charges of conspiring to act as a foreign agent.

If the charges against Butina are accurate, she’s only the latest in a long line of Russian agents to infiltrate U.S. universities. Dating back to the Soviet era, Russian spies have sought to take advantage of academia’s lax security, collaborative, global culture, and revolving door with government. Russian intelligence understands that today’s professor of international relations may be tomorrow’s assistant secretary of state, and vice versa. Although cyber-spying and hacking offer opportunities to glean secrets at less personal risk, the traditional strategies of human espionage persist, and sending a spy to school is prominent among them.

In that respect, little has changed since 1938, when Semyon Markovich Semyonov became the first Soviet agent to enroll at Massachusetts Institute of Technology, and made contacts vital to stealing scientific secrets. Or since 1958, when KGB officer Oleg Kalugin entered Columbia’s journalism school. After graduation, posing as a Radio Moscow correspondent at the United Nations, Kalugin attended events at Columbia and reported back on them to Moscow. His report on a speech about U.S.-Soviet relations by Zbigniew Brzezinski, then a Columbia professor and later national security adviser to President Jimmy Carter, earned kudos from the Communist Party’s Central Committee.

After that, “I went all across the country, from Harvard to Columbia and the West Coast, listening to what people said and reporting it if I thought it was interesting,” Kalugin told me. He rose to head the KGB’s foreign counterintelligence branch before falling out of favor in Russia, moving to Washington, D.C., and becoming an American citizen.

Sometimes, Russian agents join the academic community as students or instructors. Of Guryeva and the other nine “illegals” — sleeper agents without diplomatic cover — who pleaded guilty in 2010 to conspiring to act as foreign agents and were swapped back to Russia, seven went to U.S. universities, including Harvard, The New School, and the University of Washington. One taught politics for a semester at Baruch College, lambasting American foreign policy.

In other cases, agents hold diplomatic posts at an embassy or consulate and forage in nearby campuses for recruits and information. It’s easier, cheaper and less conspicuous for Russian intelligence to enlist a student or professor who can be steered to a federal agency than to lure someone already in a sensitive government position. Exploiting open campuses, spies slip unnoticed into lectures, seminars and cafeterias, where they befriend the computer scientist or Pentagon adviser sitting beside them.

Butina enrolled in American University’s School of International Service in the summer of 2016, university spokesman Mark Story said. She concentrated in cyber policy and became a research assistant at the university’s Kogod School of Business. With research funding from the Kogod Cybersecurity Governance Center, she and two professors, Mark A. Clark and J. Alberto Espinosa, co-authored a March 2018 paper on “Cybersecurity Knowledge Networks.” (The paper is still on the center’s website.) Clark and Espinosa declined comment.

The cybersecurity center was founded in 2015 to provide “guidance specifically to boards of directors, senior executives, and other leaders so that they can make informed decisions about cybersecurity.” It has a partnership with defense contractor Raytheon Co., and was headed from June 2017 to March 2018 by a former lawyer for the National Security Agency.

University spokesman Story declined to say whether Butina’s involvement with the center raises any concerns, or if the university plans to review her activities. He added that the center doesn’t do classified work and has no contracts with intelligence agencies.

Raytheon spokesman Michael Doble said, “There is no connection between our support of this respected school and what one of its students may or may not have done.”

Butina participated in February 2017 in a “weekend of seminars and cultural immersion” in Gettysburg, Pennsylvania, which brought together 10 American University students from Russia, Ukraine, Belarus and Azerbaijan with a dozen students from Gettysburg College to discuss U.S.-Russian relations in the post-Soviet era. Susan Eisenhower — a frequent adviser to businesses and the U.S. Department of Energy, and an expert on foreign policy and national security issues —led the seminars as well as a tour of the Gettysburg home of her grandfather, President Dwight Eisenhower.

Eisenhower said she wasn’t involved in selecting the American University students. She told me that when the delegation arrived, “I thought it was odd because she [Butina] was a graduate student and the other students were undergraduates. She played a prominent role in the discussions.”

Eisenhower added, “Any group of foreign students could possibly include students who have been called upon by their intelligence service. But we can’t isolate ourselves in a globalized world, and these exchanges play a role in enhancing mutual understanding.”

After the sessions, Butina wrote to Eisenhower, mentioning people they knew in common. Eisenhower answered politely, but was determined to avoid a continuing relationship, she said.

Prosecutors contend that a 56-year-old American — unidentified in court documents, but reportedly a South Dakota businessman and political fundraiser — edited Butina’s papers and answered exam questions for her. “Although she attended classes and completed coursework with outside help, attending American University was Butina’s cover,” the U.S. attorney’s office in Washington, D.C., said in a legal filing. Story declined comment on the cheating allegations, but noted that, under university policy, it reserves the right to revoke academic credentials acquired through “deceit, fraud, or misrepresentation.”

Beyond the university, Butina wooed gun-rights activists and influential conservatives. Shortly after Clinton called Trump to concede defeat on the morning of Nov. 9, 2016, Butina sent a direct Twitter message to a Russian official: “I am ready for further orders.”

As the use of Twitter suggests, one of the puzzling aspects of this case is the seemingly slapdash tradecraft compared to Russian intelligence’s usual standards. By contrast, Guryeva funneled names of potential Columbia recruits to Moscow Center via radiograms or electronic messages concealed by special software. Butina’s lawyer has said she simply takes an interest in American politics and is not a Russian agent.

In an interview for my 2017 book, “Spy Schools,” a professor at one top-tier East Coast university described how Russian intelligence tried to recruit him. After he moderated a campus discussion on arms control, a Russian diplomat approached him and invited him to lunch. Suspicious, the professor checked with the FBI, which confirmed that the diplomat was a Russian agent and advised playing along. The bureau wanted to use the professor as a double agent to learn about “Russian collection priorities, tradecraft, and things like that,” he told me. “Just knowing what the other side is really interested in is very valuable.”

Over the next two years, the Russian and the FBI each treated the professor to 10 lunches. He would dine with the Russian spy at Mexican restaurants, French bistros and steakhouses — never the same place twice, because his host was worried about counter-surveillance. The Russian always paid cash: $100 bills. Afterward, the professor would call the FBI agents, who would take him to lunch a few days later and debrief him.

The spy plied the professor with gifts of increasing value: first a fine bottle of Posolskaya vodka, then an $800 Victorinox Swiss Army watch, and finally, in return for an essay about the Afghanistan war, $2,000 in $100 bills.
The authoritative-sounding essay didn’t enthrall Russian intelligence. “We appreciate it, but we didn’t think it was that sensitive,” the spy told the professor, who had followed the FBI’s instructions not to divulge any secrets. “We can pay you more if you give us more.”

The agent also encouraged the professor to seek a job in the State Department or Pentagon—where, both men understood without saying, Russia would pay dearly for an inside source. After the spy rotated back to Moscow, the relationship — and the professor’s moonlighting in espionage — ended.

In 2013, the FBI recorded two Russian spies under diplomatic cover, Igor Sporyshev and Victor Pobodnyy, discussing efforts to recruit several young women with ties to New York University. Both men specialized in economic espionage and were supposed to gather information on U.S. alternative energy initiatives, as well as on sanctions against Russia. That same year, in a classic example of how spies mine conferences for prospects, Pobodnyy—using his cover as a diplomatic attache—met Carter Page at an energy symposium in New York. Pobodnyy then received documents about the energy business from Page, later a Trump campaign foreign policy adviser whose communications were monitored by the FBI as part of an investigation into links between the campaign and Russia. In July 2016, Page gave a speech at the New Economic School, a Moscow university, exchanging “nice pleasantries” afterwards with Russia’s deputy prime minister.

Page has denied any wrongdoing, saying, “I had a very brief hello to a couple of people. That was it.”
The nexus between espionage and academia has surfaced elsewhere in the Trump-Russia imbroglio. One incident involved a professor in the United Kingdom — hardly a surprise, since Russian intelligence has long been notorious for recruiting communist sympathizers from British universities, including Kim Philby and the other “Cambridge Five.”

Joseph Mifsud has been a professor at the University of East Anglia and the University of Stirling in Scotland (which touted his meeting with Russian president and ex-intelligence officer Vladimir Putin), as well as honorary director of the London Academy of Diplomacy. In 2016, he told George Papadopoulos, a foreign policy adviser to the Trump campaign, that the Russians had “dirt” on then-candidate Hillary Clinton in the form of “thousands of emails,” according to court documents and media reports. Papadopoulos, who pleaded guilty in October 2017 to lying to federal agents, understood that Mifsud had “substantial connections to Russian government officials,” and had met with them immediately before telling him about the Clinton emails, legal filings show.

Mifsud has denied being a Russian agent. “I am an academic, I do not even speak Russian,” he told The Washington Post.

U.S. universities, ever-sensitive to their finances and global relationships, have largely ignored the threat of foreign espionage: They’re ramping up enrollment of full-paying international students as well as opening campuses abroad, which are often subsidized by the host countries. Columbia didn’t revoke Murphy’s diploma after she turned out to be a spy named Guryeva — though Harvard’s John F. Kennedy School of Government did rescind the degree of another “illegal,” Andrey Bezrukov, who had posed as a Canadian named Donald Heathfield. Story declined to say whether, if Butina is convicted, the university will take away her degree.

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How The CIA Staged Sham Academic Conferences To Thwart Iran’s Nuclear Program

How The CIA Staged Sham Academic Conferences To Thwart Iran’s Nuclear Program

Reprinted with permission from ProPublica.

 

This is an edited excerpt from “Spy Schools: How the CIA, FBI, and Foreign Intelligence Secretly Exploit America’s Universities,” by senior editor Daniel Golden. The excerpt was co-published with The Guardian.

The CIA agent tapped softly on the hotel room door. After the keynote speeches, panel discussions and dinner, the conference attendees had retired for the night. Audio and visual surveillance of the room showed that the nuclear scientist’s minders from the Islamic Revolutionary Guard Corps were sleeping but he was still awake. Sure enough, he opened the door, alone.

According to a person familiar with this encounter, which took place about a decade ago, the agency had been preparing it for months. Through a business front, it had funded and staged the conference at an unsuspecting foreign institution of scientific research, invited speakers and guests, and planted operatives among the kitchen workers and other staff, just so it could entice the nuclear expert out of Iran, separate him for a few minutes from his guards, and pitch him one-on-one. A last-minute snag had almost derailed the plans: The target switched hotels because the conference’s preferred hotel cost $75 more than his superiors in Iran were willing to spend.

To show his sincerity and goodwill, the agent put his hand over his heart. “Salam habibi,” he said. “I’m from the CIA, and I want you to board a plane with me to the United States.” The agent could read the Iranian’s reactions on his face: a mix of shock, fear and curiosity. From prior experience with defectors, he knew the thousand questions flooding the scientist’s mind: What about my family? How will you protect me? Where will I live? How will I support myself? How do I get a visa? Do I have time to pack? What happens if I say no?

The scientist started to ask one, but the agent interrupted him. “First, get the ice bucket,” he said.

“Why?”

“If any of your guards wake up, you can tell them you’re going to get some ice.”

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Facebook Moves To Prevent Advertisers From Targeting Haters

Facebook Moves To Prevent Advertisers From Targeting Haters

Reprinted with permission from ProPublica.

In the wake of ProPublica’s report Thursday that Facebook advertisers could have directed pitches to almost 2,300 people interested in “Jew hater” and other anti-Semitic topics, the world’s largest social network said it would no longer allow advertisers to target groups identified by self-reported information.

“As people fill in their education or employer on their profile, we have found a small percentage of people who have entered offensive responses,” the company said in a statement. “…We are removing these self-reported targeting fields until we have the right processes in place to prevent this issue.”

Facebook had already removed the anti-Semitic categories — which also included “How to burn jews” and “History of ‘why jews ruin the world’” — after we asked the company about them earlier this week. Then, after our article was published, Slate reported that Facebook advertisers could target people interested in other topics such as “Kill Muslim Radicals” and “Ku-Klux-Klan.” Facebook’s algorithm automatically transforms people’s self-reported interests, employers and fields of study into advertising categories.

Because audiences in the hateful categories were “incredibly low,” the ad campaigns targeting them reached “an extremely small number of people,” Facebook said. Its statement didn’t identify the advertisers. Conceivably, those who might find it helpful to target anti-Semites could range from recruiters for far-right groups to marketers of Nazi memorabilia.

ProPublica documented that the anti-Semitic ad categories were real by paying $30 to target those groups with three “promoted posts” — in which a ProPublica article or post was displayed in their news feeds. Facebook approved all three ads within 15 minutes.

Facebook’s advertising has become a focus of national attention since it disclosed last week that it had discovered $100,000 worth of ads placed during the 2016 presidential election season by “inauthentic” accounts that appeared to be affiliated with Russia.

Like many tech companies, Facebook has long taken a hands-off approach to its advertising business. Unlike traditional media companies that select the audiences they offer advertisers, Facebook generates its ad categories automatically based both on what users explicitly share with Facebook and what they implicitly convey through their online activity.

Traditionally, tech companies have contended that it’s not their role to censor the internet or to discourage legitimate political expression. In the wake of the violent protests in Charlottesville by right-wing groups that included self-described Nazis, Facebook and other tech companies vowed to strengthen their monitoring of hate speech.

Facebook CEO Mark Zuckerberg wrote at the time that “there is no place for hate in our community,” and pledged to keep a closer eye on hateful posts and threats of violence on Facebook. “It’s a disgrace that we still need to say that neo-Nazis and white supremacists are wrong — as if this is somehow not obvious,” he wrote.

 

Who’s Taking College Spots From Top Asian-Americans? Privileged Whites

Who’s Taking College Spots From Top Asian-Americans? Privileged Whites

Reprinted with permission from ProPublica.

More than a decade ago, I chatted with Asian-American seniors at Hunter College High School in New York City about their college admission prospects. One young woman told me she had scored 1530 out of a maximum 1600 on the SAT. When I congratulated her, she said that her score was what she and her friends called “an Asian fail.” She predicted it wouldn’t be enough to get into her dream school, Yale. She was right. The next day, she learned that Yale had rejected her.

I remembered our conversation when I read last week that the Justice Department plans to investigate a complaint by Asian-American organizations that Harvard discriminates against them by giving an edge to other racial minorities. My immediate response was: right victim, wrong culprit.

Asian Americans are indeed treated unfairly in admissions, but affirmative action is a convenient scapegoat for those who seek to pit minority groups against each other. A more logical target would be “the preferences of privilege,” as I called them in my 2006 book, “The Price of Admission.”

These policies elevate predominantly white, affluent applicants: children of alumni, big non-alumni donors, politicians and celebrities, as well as recruited athletes in upper-crust sports like golf, sailing, horseback riding, crew and even, at some colleges, polo. The number of whites enjoying the preferences of privilege, I concluded, outweighed the number of minorities aided by affirmative action.

By giving more slots to already advantaged students, these preferences displace more deserving candidates from other backgrounds, including Asian Americans and middle-class whites, without achieving the goals of affirmative action, such as diversity and redressing historical discrimination.

Jared Kushner, President Donald Trump’s son-in-law and senior adviser, has become the poster boy for this practice. As I reported in my book, Harvard accepted Kushner soon after receiving a $2.5 million pledge from his father, a real-estate developer and New York University graduate. While sources at Jared’s high school told me that he wasn’t near the top of his class, and didn’t always take the most challenging courses, a spokeswoman for Kushner Companies has described him as “an excellent student” and denied that his father’s gift was intended to improve his chances of admission.

In my book, I described Asian Americans as “the new Jews.” Like Jews before the 1960s, whose Ivy League enrollment was restricted by quotas, Asian Americans are overrepresented at selective colleges compared with their U.S. population, but are shortchanged relative to their academic performance.

Much as Ivy League administrators once justified anti-Jewish policies with ethnic stereotypes, so Asian Americans, I found, were typecast in college admissions offices. Asked why the Massachusetts Institute of Technology had turned down one high-achieving Korean-American youth, the then dean of admissions told me it was possible that he “looked like a thousand other Korean kids with the exact same profile of grades and activities and temperament. My guess is that he just wasn’t involved or interesting enough to surface to the top.”

My research indicated that college admissions officers tended to compare stellar Asian-American candidates to each other, rather than to the rest of the applicant pool. The result at some universities amounted to an informal quota system, with the percentage of Asian Americans admitted as freshman changing little from year to year. The proportion at Harvard, which long hovered below 20 percent, reached 22.2 percent for the class of 2021. Who takes the places of the spurned Asians? As far back as 1990, an investigation of Harvard by the U.S. Department of Education’s Office for Civil Rights pointed to recipients of so-called “white affirmative action.”

Harvard admitted Asian-American applicants “at a significantly lower rate than white applicants” despite their “slightly stronger” SAT scores and grades, it found. Accounting for most of the admissions gap was “preference given to legacies and recruited athletes — groups that are predominantly white.” In that era, Asian Americans composed 15.7 percent of all Harvard applicants but only 3.5 percent of alumni children and 4.1 percent of recruited athletes.

Unlike affirmative action, the preferences of privilege aren’t inherently race-based, which makes it tougher to challenge them legally.

When I was researching my book in the early 2000s, several admissions deans assured me that the ranks of alumni children would become more diverse in future as the children of minorities who gained access to elite universities with the advent of affirmative action attained college age. But that doesn’t seem to have happened.

Based on a Harvard Crimson survey of freshmen entering Harvard in 2016, legacies remain a largely homogeneous group. They made up 15 percent of the student body, but 26.6 percent of those whose parents had a combined annual income of $500,000 or more. Of freshmen who identified themselves as white, 35 percent said that a family member had gone to Harvard as an undergraduate. Two-thirds of students whose parents had a combined annual income of more than $500,000 said that family members had attended Harvard.

Meanwhile, the practice of giving admissions breaks to children of current or prospective donors has only intensified. With other sources of revenue failing to keep pace with costs — the pace of tuition increases is declining, as is the percentage of alumni who donate to the country’s top 20 schools — universities are more dependent than ever on major givers, and thus under more pressure to accept their children. In 2015 alone, seven individuals made gifts of more than $100 million apiece to higher education, including one bequest.

“Recognizing that the market is more competitive and that we’re constrained in our ability to raise prices, we are going to be more dependent on philanthropy,” Donald Heller, provost and vice president of academic affairs at the University of San Francisco, told me last fall. “That means there’s probably more pressure on admissions offices around legacies and development admits” — applicants recommended by the development (i.e., fundraising) office.

In an era of widening economic and social inequity, and of backlash against minority groups, the way to open more slots for outstanding Asian-American applicants is not to ban affirmative action. A better approach for eliminating the “Asian fail” is to curtail preferences for rich whites.

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The Story Behind Jared Kushner’s Curious Acceptance Into Harvard

The Story Behind Jared Kushner’s Curious Acceptance Into Harvard

Reprinted with permission from ProPublica. This story was co-published with The Guardian.

I would like to express my gratitude to Jared Kushner for reviving interest in my 2006 book, “The Price of Admission.” I have never met or spoken with him, and it’s rare in this life to find such a selfless benefactor. Of course, I doubt he became Donald Trump’s son-in-law and consigliere merely to boost my lagging sales, but still, I’m thankful.

My book exposed a grubby secret of American higher education: that the rich buy their under-achieving children’s way into elite universities with massive, tax-deductible donations. It reported that New Jersey real estate developer Charles Kushner had pledged $2.5 million to Harvard University in 1998, not long before his son Jared was admitted to the prestigious Ivy League school. At the time, Harvard accepted about one of every nine applicants. (Nowadays, it only takes one out of twenty.

I also quoted administrators at Jared’s high school, who described him as a less than stellar student and expressed dismay at Harvard’s decision.

“There was no way anybody in the administrative office of the school thought he would on the merits get into Harvard,” a former official at The Frisch School in Paramus, New Jersey, told me. “His GPA did not warrant it, his SAT scores did not warrant it. We thought for sure, there was no way this was going to happen. Then, lo and behold, Jared was accepted. It was a little bit disappointing because there were at the time other kids we thought should really get in on the merits, and they did not.”

Risa Heller, a spokeswoman for Kushner Companies, said in an email Thursday that “the allegation” that Charles Kushner’s gift to Harvard was related to Jared’s admission “is and always has been false.” His parents, Charles and Seryl Kushner, “are enormously generous and have donated over 100 million dollars to universities, hospitals and other charitable causes. Jared Kushner was an excellent student in high school and graduated from Harvard with honors.” (About 90 percent of Jared’s 2003 class at Harvard also graduated with honors.)

My Kushner discoveries were an offshoot of my research for a chapter on Harvard donors. Somebody had slipped me a document I had long coveted: the membership list of Harvard’s Committee on University Resources. The university wooed more than 400 of its biggest givers and most promising prospects by putting them on this committee and inviting them to campus periodically to be wined, dined, and subjected to lectures by eminent professors.

My idea was to figure out how many children of these corporate titans, oil barons, money managers, lawyers, high-tech consultants and old-money heirs had gone to Harvard. A disproportionate tally might suggest that the university eased its standards for the offspring of wealthy backers.

I began working through the list, poring over “Who’s Who in America” and Harvard class reunion reports for family information. Charles and Seryl Kushner were both on the committee. I had never heard of them, but their joint presence struck me as a sign that Harvard’s fundraising machine held the couple in especially fond regard.

The clips showed that Charles Kushner’s empire encompassed 25,000 New Jersey apartments, along with extensive office, industrial and retail space and undeveloped land. Unlike most of his fellow committee members, though, Kushner was not a Harvard man. He had graduated from New York University. This eliminated the sentimental tug of the alma mater as a reason for him to give to Harvard, leaving another likely explanation: his children.

Sure enough, his sons Jared and Joshua had both enrolled there.

Charles Kushner differed from his peers on the committee in another way; he had a criminal record. Five years after Jared entered Harvard, the elder Kushner pleaded guilty in 2004 to tax violations, illegal campaign donations, and retaliating against a witness. (As it happens, the prosecutor in the case was Chris Christie, recently ousted as the head of Trump’s transition team.) Charles Kushner had hired a prostitute to seduce his brother-in-law, who was cooperating with federal authorities. Kushner then had a videotape of the tryst sent to his sister. He was sentenced to two years in federal prison.

I completed my analysis, which justified my hunch. Of the 400-plus tycoons on Harvard’s list — which included people who were childless or too young to have college-age offspring — more than half had sent at least one child to the university.

I also decided that the Kushner-Harvard relationship deserved special attention. Although the university often heralded big gifts in press releases or a bulletin called — in a classic example of fundraising wit, “Re:sources” — a search of these outlets came up empty. Harvard didn’t seem eager to be publicly associated with Charles Kushner.

While looking into Kushner’s taxes, though, federal authorities had subpoenaed records of his charitable giving. I learned that in 1998, when Jared was attending The Frisch School and starting to look at colleges, his father had pledged $2.5 million to Harvard, to be paid in annual installments of $250,000. Charles Kushner also visited Neil Rudenstine, then Harvard president, and discussed funding a scholarship program for low- and middle-income students.

I phoned a Harvard official, with whom I was on friendly terms. First I asked whether the gift played any role in Jared’s admission. “You know we don’t comment on individual applicants,” he said. When I pressed further, he hung up. We haven’t spoken since.

At Harvard, Jared Kushner majored in government. Now the 35-year-old is poised to become the power behind the presidency. What he plans to do, and in what direction he and his father-in-law will lead the country, are far more important than his high school grades.

IMAGE: U.S. President-elect Donald Trump greets supporters along with his wife Melania and family during his election night rally in Manhattan, New York, U.S., November 9, 2016. REUTERS/Mike Segar