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CORPORATE DATA BREACHES? BLAME CEOs: PART TWO (END)

In Bureaucracy, Business, History, Law, Law Enforcement, Politics, Social commentary on August 2, 2019 at 12:43 am

On July 15, 2015, Ashley Madison joined the list of companies that failed to safeguard their customers’ most sensitive information—such as their credit card numbers, addresses, emails and phone numbers.

And Ashley Madison had more reason than most to do this—as the notorious website for cheating wives and husbands.

After all, its database is a blackmailer’s dream-come-true. Yet apparently its owners didn’t care enough about the privacy of their customers to provide adequate security.

Like so many other companies hit by hackers, Ashley Madison sought to reassure its dangerously compromised customers:

“At this time, we have been able to secure our sites, and close the unauthorized access points. We are working with law enforcement agencies, which are investigating this criminal act.”

This statement gave new meaning to the phrase, “Closing the barn door after the cow has gotten out.”

Avid Life Media assured its customers that it had hired “one of the world’s top IT security teams” to work on the breach.

Adultery-dating website Ashley Madison hacked

So why wasn’t this “top IT security team” hired at the outset?

On August 18, 2015, the hackers began releasing their pirated information. 

Ashley Madison’s customers chose to put their private information on its computer system.

Those of Equifax, didn’t. Equifax collected this from credit card companies.

From Mid-May through July, 2017, Equifax was hacked. The breach was discovered on July 29. 

But the company didn’t announce it until September 7, 2017.

As a result, the private data of nearly 150 million people was compromised.

On July 22, 2019, the Federal Trade Commission (FTC) announced that Equifax, one of the nation’s largest credit-reporting companies, would pay up to $700 million to settle with the FTC and consumers.

If approved by the federal district court Northern District of Georgia, the settlement will provide up to $425 million in monetary relief to consumers and a $100 million civil money penalty.

According to Karl A. Racine, attorney general for Washington, D.C., it’s the largest settlement ever for a data breach. 

“Equifax failed to protect consumers’ information and failed to enact reasonable security measures under California’s data security laws,” California Attorney General Xavier Becerra said in a news conference.

“That left very important personal information exposed and allowed hackers to steal consumers’ names, Social Security numbers, their birth dates, their addresses and in some instances their driver’s license number and even credit related information.”

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And for those who believe the private sector is inherently more efficient than the public one: On the week that Equifax agreed to pay $700 million for its massive 2017 data breach, Richard Smith, its disgraced former CEO, got some wonderful news: 

  • He was slated to receive as much as $19.6 million in stock bonuses since leaving the company.
  • That’s roughly 1,000 times the $20,000 maximum payout that any financially damaged consumer can collect from Equifax.
  • In addition, Equifax agreed to cover Smith’s medical bills for life, a benefit the company estimates is worth another $103,500.
  • Equifax decided he deserved a $24 million pension.
  • Smith got $50,000 in tax and financial planning services.
  • His stock bonuses cover a period that includes the former executive’s performance in 2017. 

When CBS News contacted Equifax on this development, the company refused to comment. Neither could Smith be reached.

There is a reason why these security breaches keep happening.

An October 22, 2014 “commentary” published in Forbes magazine raised the highly disturbing question: “Cybersecurity: Does Corporate America Really Care?”

And the answer is clearly: No.

Its author was John Hering, co-founder and executive director of Lookout, which bills itself as “the world leader in mobile security for consumers and enterprises alike.”

Click here: Cybersecurity: Does corporate America really care?

“One thing is clear,” wrote Hering. “CEOs need to put security on their strategic agendas alongside revenue growth and other issues given priority in boardrooms.”

Hering warned that “CEOs don’t seem to be making security a priority.” And he offered several reasons for this:

  • The sheer number of data compromises.
  • Relatively little consumer outcry.
  • Almost no impact on the companies’ standing on Wall Street.
  • Executives may consider such breaches part of the cost of doing business.

“There’s a short-term mindset and denial of convenience in board rooms,” wrote Hering.

“Top executives don’t realize their systems are vulnerable and don’t understand the risks. Sales figures and new products are top of mind; shoring up IT systems aren’t.”

There are three ways corporations can be forced to start behaving responsibly on this issue.

  1. Smart attorneys need to start filing class-action lawsuits against companies that refuse to take steps to protect their customers’ private information. There is a name for such behavior: Criminal negligence. And there are laws carrying serious penalties for it.
  2. There must be Federal legislation to ensure that multi-million-dollar fines are levied against such companies—and especially their CEOs—when such data breaches occur.
  3. The Justice Department should vigorously prosecute CEOs whose companies’ criminal negligence leads to such massive data breaches. They should be considered as accessories to crime, and, if convicted, sentenced to lengthy prison terms.

Only then will the CEO mindset of “We don’t care, we don’t have to” be replaced with: “We care, because we’ll lose our money and/or freedom if we don’t.”

CORPORATE DATA BREACHES? BLAME CEOs: PART ONE (OF TWO)

In Bureaucracy, Business, History, Law, Law Enforcement, Politics, Social commentary on August 1, 2019 at 12:08 am

Comedian Lily Tomlin rose to fame on the 1960s comedy hit, Rowan & Martin’s Laugh-In, as Ernestine, the rude, sarcastic switchboard operator for Ma Bell.

She would tap into customers’ calls, interrupt them, make snide remarks about their personal lives. And her victims included celebrities as much as run-of-the-mill customers.

Lily Tomlin as Ernestine

She introduced herself as working for “the phone company, serving everyone from presidents and kings to the scum of the earth.”

But perhaps the line for which her character is best remembered was: “We don’t care. We don’t have to. We’re the phone company.”

Watching Ernestine on Laugh-In was a blast for millions of TV viewers. But facing such corporate arrogance in real-life is no laughing matter.

Clearly, too many companies take the same attitude as Ernestine: “We don’t care. We don’t have to.”

This is especially true for companies that are supposed to safeguard their customers’ most sensitive information—such as their credit card numbers, addresses, emails and phone numbers.

Among those companies hacked:

  • Kmart
  • Staples
  • Dairy Queen
  • Target
  • Sony Pictures 
  • Primera Blue Cross
  • Home Depot
  • JPMorgan/Chase

In 2015, they were joined by health insurance giant Anthem Inc. The company announced that hackers had breached its computer system and accessed the medical records of tens of millions of its customers and employees.

Anthem, the nation’s second-largest health insurer, said the infiltrated database held records on up to 80 million people.

Among the customers’ information accessed:

  • Names
  • Birthdates
  • Social Security numbers
  • Member ID numbers
  • Addresses
  • Phone numbers
  • Email addresses 
  • Employment information

Some of the customer data may have included details on their income.

Click here: Anthem hack exposes data on 80 million; experts warn of identity theft – LA Times

Bad as that news was, worse was to come.

A February 5, 2015 story by the Wall Street Journal revealed that Anthem stored the Social Security numbers of 80 million customers without encrypting them.

The company believed that hackers used a stolen employee password to access the database

Anthem’s alleged reason for refusing to encrypt such sensitive data: Doing so would have made it harder for the company’s employees to track health care trends or share data with state and Federal health providers.

Anthem spokeswoman Kristin Binns blamed the data breach on employers and government agencies who “require us to maintain a member’s Social Security number in our systems so that their systems can uniquely identify their members.”

She said that Anthem encrypted personal data when it moves in or out of its database–-but not where it is stored.

This is a commonplace practice in the healthcare industry.

The FBI launched an investigation into the hack.

According to an anonymous source, the hackers used malware that has been used almost exclusively by Chinese cyberspies.

Naturally, China denied any wrongdoing.

Chinese Foreign Ministry spokesman Hong Lei said: “We maintain a cooperative, open and secure cyberspace, and we hope that countries around the world will make concerted efforts to that end.”

He also said that the charge that the hackers were Chinese was “groundless.”  

On July 15, 2015, Ashley Madison—the notorious website for cheating wives and husbands—joined this list.

Launched in 2001, its catchy slogan is: “Life is short.  Have an affair.”

One of its ads featured a photo of a woman apparently kneeling at the feet of a bare-chested man, her hand passionately clawing at his belt. Next to her was the caption: “Join FREE & change your life today. Guaranteed!”

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Millions of its clients suddenly found their lives changed in ways they never imagined—for the worse.

Ashley Madison claimed to have more than 37 million members.  

Its hackers were enraged at the company’s refusal to fully delete users’ profiles unless it received a $19 fee.

Referring to themselves as “The Impact Team,” they stated in an online manifesto: “Full Delete netted [Avid Life Media, the parent company of Ashley Madison] $1.7 million in revenue in 2014. It’s also a complete lie.

“Users almost always pay with credit card; their purchase details are not removed as promised, and include real names and address, which is of course the most important information the users want removed.”

On July 20, 2015, Avid Life Media defended the service, and promised to make it free.

The hackers demanded: “AM [Ashley Madison] AND EM [Established Men] MUST SHUT DOWN IMMEDIATELY PERMANENTLY.

“We have taken over all systems in your entire office and production domains, all customer information databases, source code repositories, financial records, emails.

“Shutting down AM and EM will cost you, but non-compliance will cost you more.”

The hackers threatened to “release all customer records, including profiles with all the customers’ secret sexual fantasies and matching credit card transactions, real names and addresses, and employee documents and emails.”

Avid Life Media assured its customers that it had hired “one of the world’s top IT security teams” to work on the breach:

“At this time, we have been able to secure our sites, and close the unauthorized access points. We are working with law enforcement agencies, which are investigating this criminal act.”

So why didn’t the company hire “one of the world’s top IT security teams” before the hack?

BENEDICT ARNOLD: CAPITALIST HERO – PART FOUR (END)

In Business, History, Politics, Social commentary on May 31, 2012 at 12:00 am

In a May 13 Op Ed column, Forbes magazine declared: “For De-Friending the U.S., Facebook’s Eduard Saverin is an American Hero.”

From that column by John Tamny:

The money that the rich keep for themselves will go to “today’s and tomorrow’s businessmen.”

Throughout, the editorial implies that Americans would be so much happier if only:

  • the few taxes now levied on billionaires were abolished, and
  • that money stayed firmly in their trustworthy hands.

This utterly ignores the 2008 Wall Street “meltdown,” which occurred following an eight-year period of Republican “hands-off-the-market” regulatory policies.

It also ignores the even more recent loss of at least $2 billion by JPMorgan/Chase bank, in what amounted to a case of legalized gambling.

In addition, it utterly ignores the well-documented pattern of hedonistic and corrupt behavior among the rich.  As Robert Payne (1911-1983) the respected British historian warned in his book, The Corrupt Society, in 1975:

There is no chance that the rich will behave in a socially responsible way, writes Payne.  They are far more likely to “hold on to their wealth at all costs” than allow any of it to

The rich are so self-absorbed they usually don’t sense the growing resentment of the poor.  When revolution breaks out, they call on the police and/or army to protect them.  But it’s too late.  A new government seizes private wealth and puts it to “the service of the nation.”

“A nation’s wealth is too serious a matter to be left to the wealthy.  The riches of a nation belong to us all, to be shared among all for the general welfare,” writes Payne.

Finally, Tamny ignores the dire warning of Niccolo Machiavelli, the father of political science, on the threats posed by the nobility to a republic.  (Today’s “nobility” consists of the richest 1% of the American population.)

In The Prince, he writes:

“…It is impossible to satisfy the nobility by fair dealing and without inflicting injury upon others, whereas it is very easy to satisfy the mass of the people in this way.

“For the aim of the people is more honest than that of the nobility, the latter desiring to oppress, and the former merely to avoid oppression….

“The worst that a prince has to expect from a hostile people is to be abandoned.  But from hostile nobles he has to fear not only desertion but their active opposition.”

The Forbes column ends with this salute:

“Let’s raise a glass to Eduard Saverin.”

Forbes‘ editors might just as well have invited Americans to “raise a glass” to Benedict Arnold.

In 1778, Arnold, a trusted hero of the American Revolution, sought to “better himself” by “de-friending” America in his own way.  He offered to betray West Point and its 3,000 defenders to the British for 20,000 pounds (about $1 million today).

“He’s a true American hero.”

If this is true, America has traveled a long way from the most famous line of John F. Kennedy’s Inaugral Address:

“Ask not what your country can do for you, ask what you can do for your country.”

And from these words spoken by Robert F. Kennedy on March 18, 1968, during hs brief candidacy for the Presidency:

“Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things.  Our Gross National Product now is over $800 billion a year….

“Yet the Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play.  It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.

“It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country.

“It measures everything, in short, except that which makes life worthwhile.  And it can tell us everything about America except why we are proud that we are Americans.”

And if Eduardo Saverin is a “true American hero,” America has traveled a long way–downhill–from the patriotism of Stephen Decatur.

It was Decatur, the naval hero of the War of 1812, who famously said: “Our country, right or wrong.”

Billionaire traitors like Eduardo Saverin have coined their own motto.  And so have their traitor-loving cronies like Rush Limbaugh, Grover Norquist and the editors of Forbes:

“My wallet–first and always.”

NO SENSE OF DECENCY

In History, Politics, Social commentary on February 10, 2012 at 10:05 am

“Senator, may we not drop this?….You’ve done enough. Have you no sense of decency, sir? At long last, have you left no sense of decency?”

The speaker was Joseph N. Welch, chief counsel for the United States Army–then under investigation by Joseph McCarthy’s Senate Permanent Submittee on Investigations for alleged Communist activities.

It was June 9, 1954, the 30th day of the Army-McCarthy hearings.

And it was the pivotal moment that finally destroyed the career of the Wisconsin Senator whose repeated slanders of Communist subversion had bullied and frightened Americans for four years.

Joseph McCarthy

When the Senate gallery erupted in applause, McCarthy–totally surprised at his sudden reverse of fortune–was finished.

Today, however, other Americans could stand to remember the question asked by Welch: “At long last, have you left no sense of decency?”

Americans like Herman Cain.

Herman Cain

On January 28, 2012, he threw whatever support he might still among the radical right to GOP Presidential candidate Newt Gingrich.

Newt Gingrich

Appearing with Gingrich at a Republican fundraiser, Cain said: “Speaker Gingrich is a patriot. Speaker Gingrich is not afraid of bold ideas.

“I don’t care about where he stands in the polls.  And whether my endorsement helps him or not, that’s not the point. It’s to let my supporters know that he is the closest to what I represented when I was still a candidate.”

The closest to what I represented when I was still a candidate“?  That’s hardly a compliment.

Cain withdrew from the race in December, 2011–after four women charged him with sexual harassment during his tenure as CEO of the National Restaurant Association.

Gingrich, a notorious serial adulterer, twice began affairs and issued marriage proposals while he was still married to his first and second wives.

Then there’s Donald Trump.

Donald Trump

On April 17, 2011, toying with the idea of entering the Presidential race himself, he said this about Mitt Romney, the former Massachusetts governor and GOP candidate:

“He’d buy companies. He’d close companies. He’d get rid of jobs.  I’ve built a great company.  I’m a much bigger businessman and have a much, much bigger net worth. I mean my net worth is many, many, many times Mitt Romney.

“Mitt Romney is a basically small-business guy, if you really think about  it. He was a hedge fund. He was a funds guy. He walked away with some money from a very good company that he didn’t create. He worked there. He didn’t create  it.”

Trump added that Bain Capital, the hedge fund where Romney made millions of dollars before running for governor, didn’t create any jobs.   Whereas Trump claimed that he–Trump–had created “hundreds of thousands of jobs.”

So at least some observers must have been puzzled when Trump announced, on February 2, 2012: “It’s my honor, real honor, and privilege to endorse Mitt Romney” for President.

“Mitt is tough, he’s smart, he’s sharp, he’s not going to allow bad things to continue to happen to this country that we all love. So, Governor Romney, go out and get ‘em. You can do it,” said Trump.

Mitt Romney

And Romney, in turn, had his own swooning-girl moment: “I’m so honored to have his endorsement….There are some things that you just can’t imagine in your life. This is one of them.”

Clearly, the word “hypocrisy” means nothing to Cain, Gingrich, Trump and Romney.  But it should mean something to the rest of us.

In samurai Japan, officials who publicly disgraced themselves knew what to do.  The samurai code of seppeku told them when they had crossed the line into eternal disgrace.

And it gave them a way to redeem their lost honor: With a small “belly-cutting” knife and the help of a trusted assistant who sliced off their head to spare them the agonizing pain of disembowelment.

In the armies of America and Europe, the method was slightly different: A pistol in a private room.

Considering the ready availability of firearms among right-wing Republicans, redeeming lost honor shouldn’t be a problem for any of these men.

But of course it will be.  It takes more than a trigger-pull to “do the right thing.”  It takes insight to recognize that you’ve “done the wrong thing.”   And it takes courage to act on that insight.

In men who live only for their own egos and wallets, such insight and courage will be forever missing.   They are beyond redemption.  Their lives give proof to the warning offered in Matthew 7: 17-20:

“Even so every good tree bringeth forth good fruit; but a corrupt tree bringeth forth evil fruit.  A good tree cannot bring forth evil fruit, neither can a corrupt tree bring forth good fruit.

“Every tree that bringeth not forth good fruit is hewn down, and cast into the fire. Wherefore by their fruits ye shall know them.”

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