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Breakingviews - Sensitive U.S. hack is one more problem for Biden

A lock icon, signifying an encrypted Internet connection, is seen on an Internet Explorer browser in a photo illustration in Paris April 15, 2014. REUTERS/Mal Langsdon

NEW YORK (Reuters Breakingviews) - For some government departments and big companies, 2020 just got even worse. Widely used network-management software produced by Austin, Texas-based SolarWinds was hacked, allowing monitoring, perhaps by Russia. With the U.S. military and the Treasury Department potential targets, it’s one more significant headache for President-elect Joe Biden.

The SolarWinds software helps organizations monitor what’s going on inside their networks: where users log in, what kind of traffic is flowing and so on. According to a FireEye research report, malicious elements were introduced into software updates for SolarWinds products. The company said these were released between March and June. Hacking may have been targeted because manual intervention was required, but a state actor has the resources to cover quite a bit of ground.

The latest intrusion, in which Russia denies involvement despite reports to the contrary, came to light last week when cybersecurity outfit FireEye said it had been hacked itself. Over the weekend, it became clear problems could be far wider and email traffic at the U.S. Treasury and the Commerce Department may have been monitored for months, according to Reuters.

It’s an embarrassing-looking incident for SolarWinds, worth $7.4 billion at Friday’s market closing price. The stock fell more than 10% in morning trade on Monday. But it’s a bigger deal for those who turn out to have been affected. SolarWinds says its customers include all five branches of the U.S. armed forces, hundreds of the biggest companies, top auditing firms and more.

The attention of the public, governments and corporate boards has been absorbed all year by the massive demands of the Covid-19 pandemic. Hackers, though, have seized the moment, with episodes of ransomware, for example, surging this year according to news reports.

It’s a rude reminder for company directors that if they’ve diverted attention to Covid-19, they had better return to cybersecurity pronto. It’s also potentially a big problem for Biden’s incoming administration in Washington. On top of managing the coronavirus response, it means the politically toxic mix of hacking, Russia and sensitive emails could be back on the agenda.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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