Homeland Security hasn’t done enough to protect election infrastructure, says watchdog

Homeland Security could do more to protect election infrastructure ahead, according to a new report by the department’s watchdog.

The report from the inspector general, out Wednesday, said progress had been made but Homeland Security, the department charged with protecting elections and the back-end voting machine infrastructure, still “does not have dedicated staff” focused on election infrastructure. The department’s new agency, Cybersecurity and Infrastructure Security Agency (CISA), which under its creation last year was charged with reducing the nation’s cybersecurity risks, was also “not adequately staffed” to support to state and local election officials to help secure election infrastructure.

Making matter worse, the 102 advisors tasked with protecting more than a dozen critical infrastructure sectors — including elections — have shifting priorities, and are often told to “focus on the next widespread or known event,” such as preventing school shootings and preparing for major events.

From the report:

“CISA officials acknowledged that staffing shortages have hindered DHS’ efforts to secure the Nation’s election infrastructure. At the same time, they advised that the Department is “taking actions to alleviate” the concerns by hiring more cybersecurity advisors.”

Aside from understaffing, security clearances are slow to process for local and state officials, making it difficult to share classified information about threats faced with election staff on the ground. Meanwhile, many of those officials reported a “mistrust of federal government assistance,” which also hampered Homeland Security’s efforts to provide security assessments, according to the watchdog.

“Addressing these issues is essential for continued improvement in the services, outreach, and quality of information DHS shares with election stakeholders,” said the report.

It comes just weeks after the Justice Department and Homeland Security said there was “no evidence to date” that any foreign government had a “material impact” on voting machines or infrastructure during the 2018 midterm elections. Security experts have for years complained that the older and outdated electronic voting machines can be easily hacked to alter the results. Many of these machines don’t print a paper confirmation, making it difficult or impossible to know if votes were accurately counted.

With less than two years before the 2020 presidential election, the inspector general said the department has more work to do.

The report said that despite federal requirements, Homeland Security “has not completed the plans and strategies critical to identifying emerging threats and mitigation activities, or established metrics to measure progress in securing the election infrastructure.” The watchdog said the department had to contend with senior leadership turnover — including two department secretaries in a single year — has left the department without sufficient guidance or planning.

“Until such issues are addressed and resolved, Homeland Security cannot ensure effective guidance and a well-coordinated approach to securing the Nation’s election infrastructure,” the report said

The report wasn’t all bad news. The watchdog said the government’s assistance to state and local governments has improved, with a greater number of cybersecurity reviews and risk assessments in more states. The watchdog also praised the government for improving the quality of information to election officials, despite hold-ups to security clearance.

Homeland Security said it agreed with the watchdog’s five recommendations.

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DOJ charges former US Air Force officer with spying for Iran

Prosecutors have brought charges against a former Air Force officer for allegedly spying for Iran, the Justice Department confirmed Wednesday.

Monica Witt, a former Air Force counter-intelligence officer, is accused of defecting to Iran in 2013, after leaving the military in 2008 after more than a decade’s service and later working as a defense contractor.

Prosecutors said the officer, who according to the unsealed indictment had the highest level of top secret clearance, disclosed the details of a highly classified intelligence-gathering program that involved an intelligence operation against “a specific target.” Witt is also accused of disclosing the true identity of a U.S. intelligence officer to the Iranian Revolutionary Guard, which conducts the country’s cyber-operation, after she stopped working for the U.S. government.

Witt, a former Texas resident, first traveled to Iran in 2012 to attend a conference, which is where prosecutors allege she was recruited.

FBI executive assistant director for national security Jay Tabb said the indictments follow “years of investigative work,” adding that her alleged actions “could cause serious damage to national security.”

A previously released FBI missing persons report asking for information regarding Monica Elfriede Witt. (Image: FBI/supplied)

Once deemed missing by the FBI, the agency has since issued an arrest warrant for Witt, who is still believed to be in Iran.

Prosecutors also charged four other Iranian nationals accused of working for the Revolutionary Guard — Mojtaba Masoumpour, Behzad Mesri, Hossein Parvar and Mohamad Paryar — with cyber-offenses relating to targeting U.S. government agents who once worked with Witt.

Prosecutors said the “skilled cyber actors,” with Witt’s help,  targeted her former colleagues with malware, which allowed the hackers to spy on the victims’ webcams and keystrokes.

Officials said that the hackers “tested its malware and gathered information from target computers or networks, and sent spearphishing messages to its targets.” In one case, prosecutors said the hackers created a fake Facebook account of a former colleague of Witt’s, which resulted in several of the targets to accept the fake account’s friend requests.

The government also issued sanctions against two companies, including New Horizon, which sets up the annual conference which Witt attended, for providing financial and technical support to the Revolutionary Guard. Treasury Secretary Steven Mnuchin said it took the action “against malicious Iranian cyber actors and covert operations that have targeted Americans at home and overseas as part of our ongoing efforts to counter the Iranian regime’s cyber attacks,” specifically attempts to install malware to compromise the computers of U.S. personnel.

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US announces criminal charges against Huawei, seeks to extradite its CFO

In a press event today, the U.S. Department of Justice revealed that it is pursuing criminal charges against Chinese mobile giant Huawei. Following a story from The Wall Street Journal earlier this month, TechCrunch previously reported that the indictments were set to be unsealed soon.

A grand jury in Seattle has charged Huawei with conspiracy to steal trade secrets, attempted theft of trade secrets, seven counts of wire fraud and one count of obstruction of justice for the company’s alleged attempts to move potential witnesses back to China. The indictments grew out of a civil suit dating all the way back to 2014 in which T-Mobile sued Huawei for stealing trade secrets related to a robotic phone-testing device known as “Tappy.”

“As I told Chinese officials in August, China must hold its citizens and Chinese companies accountable for complying with the law,” Acting Attorney General Matthew Whitaker said.

In addition to the company itself, Huawei CFO Meng Wanzhou and Huawei affiliates Skycom Huawei Device USA also face charges in a 13-count indictment from a grand jury in New York. Meng, the daughter of the company’s founder, faces charges of bank fraud, wire fraud and conspiracy to commit bank and wire fraud.

In December, Canada arrested the Huawei executive on charges related to deceptive practices designed to skirt U.S. sanctions against Iran. She remained free on bail in Vancouver as Canada waited for the U.S. to make a formal request for her extradition before a January 30 deadline.

Tensions between the U.S. and China have escalated considerably over the last year, with U.S. agencies and lawmakers increasingly cautioning that Huawei poses a major security threat. Still, the U.S. has yet to furnish proof of its claims. The conspicuous absence points to the fact that the U.S. is likely wary of allowing China to participate in building out the infrastructure for 5G mobile networks to prevent future spying — even if it lacks proof that China is leveraging its hardware for spying against domestic interests now. Pursuing aggressive criminal charges against the company is another way to make the point that Huawei’s hardware is off limits for the U.S. and its allies.

“To the detriment of American ingenuity, Huawei continually disregarded the laws of the United States in the hopes of gaining an unfair economic advantage,” FBI Director Christopher Wray said in the announcement. “As the volume of these charges prove, the FBI will not tolerate corrupt businesses that violate the laws that allow American companies and the United States to thrive.”

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A simple data analysis disproves the argument for building a border wall

Sometimes the end justifies the means. Other times it clearly doesn’t. But in the new bizarro world that is the modern day U.S. political climate, increasingly the means has become the new end itself.

Currently taking center stage for this phenomenon is the now notorious border wall. President Trump is insisting we need a border wall; Democrats of course insisting we don’t.

The better question here might be a border wall for what end goal exactly? What problem is the wall supposed to solve and would it actually do the job? If you wade through the president’s soundbites and campaign rally chants around illegal immigration, the answer would seem to be we should erect a wall to deal with the growing crime and drug issues flooding into our nation at the hands of malicious illegal immigrants. The bad hombres if you will.

In fact, we’re told by the president that the invasion on our border has become such a dire issue that it’s a crisis worth shutting down the government over, leaving a trail of 800,000 American families as political pawns along the path of this game of chicken. But is there really a historic attack on our borders of would-be criminals looking to raid America?

During a recent trip to Rio Grande, Texas, which sits at the border of Mexico, the president remarked that we have never seen so many Border Patrol apprehensions “ever in our history.” Fortunately, for our dedicated border patrol agents, who incidentally under the shutdown are no longer getting paid, that statement is not at all true.

A look at the actual apprehension data from the Department of Homeland Security tells us just how rudely inaccurate the comment was. Turns out border apprehensions have fallen by a pretty staggering 76% from their peak of 1.67M back in 2000. In fact, the last several years have seen apprehension figures drop so significantly they now match levels not seen in nearly 50 years.

Driving the massive reduction in apprehensions back to early 1970’s levels were a few key changes: (1) A tripling of border patrol agents from around 6,000/7,000 levels in the late 90’s to north of 19,000, (2) investment in a “virtual fence” of mobile and fixed surveillance technologies (radar, drones, sensors, mobile and fixed cameras, night-vision goggles, etc.), which agents have called a “game changer,” and (3) some targeted fencing courtesy of the Secure Fence Act. These investments (along with an improving Mexican economy) seemed to have had the desired effect, driving down border apprehensions dramatically from their chaotic peak.

But, wouldn’t fewer apprehensions mean more illegal immigrants must be getting through the border? Why would lower apprehensions also mean lower “invasions” of illegal immigrants? Well, because intuition and the U.S. Customs and Border Protection (CBP) tells us so. According to the CBP website (which is a division of the Department of Homeland Security): “It may seem counterintuitive, but high apprehension numbers are evidence of a border out of control, where there are few barriers, real or perceived, to entry into the U.S. High apprehensions are seen as evidence of low deterrents to violate U.S. law.”

Further validation of this comes when you examine annual apprehensions per Border Patrol agent, per year. If we had just doubled or tripled agents and they were still being overwhelmed at the same rate they were in the 1990’s or early 2000’s, we might have a true national crisis on our hands. On the contrary, in 1993, Border Patrol agents averaged 313 apprehensions per agent during the year, but in 2017 that figure had plummeted to just 16 border apprehensions per agent. A 95% reduction we’ve likely never taken a moment to either recognize, or tie back to the previous border security investments that were made.

If apprehension data can be taken as a reasonable barometer for illegal immigration activity, and illegal immigration activity has dropped significantly over the last several years, then you might even expect to see a leveling off of the growth of undocumented immigrants already residing within the U.S. The most recent data from Pew Research (generally recognized as the best at tracking this) confirms just that, suggesting that the number of undocumented immigrants in the U.S. not only peaked around 2007, but seems to be in a gradual decline since then, dropping from 12.2M to 10.7M. This makes sense given the apprehension data above.

But even if illegal immigration is in significant decline, and the total number of undocumented immigrants living in the U.S. is also declining, then the goal of the wall must presumably be to keep out the abundance of murderers, rapists, and drug smugglers that the president has frequently reminded us are pouring across the border and committing crimes at alarming rates. The challenge here is that appears to also not be the case. Though the majority of heroin and other opioids abused by Americans do originate in Mexico, the president’s own Department of Justice confirmed in 2018 in a 164-page report that only a small percentage of these drugs are seized outside of legal Ports of Entry (e.g. via illegal immigrants), and that the majority comes into the country through legal Ports of Entry either in privately owned vehicles or on tractor trailers, where it’s typically mixed in with legal goods being trucked into the U.S.

Meanwhile, a 2018 study by the Cato Institute – not particularly known for being a bastion of Democratic party stances – examined criminal activity in the state of Texas based on immigration status. Turns out, not only are illegal immigrant arrest and conviction rates not higher than native-born Americans, they are appreciably lower. The below chart shows that conviction rates for crimes (includes homicides, sex crimes, and larceny) committed by illegal immigrants was about 50% lower than those of native-born Americans (as a % of their respective populations).

Looking at arrests instead of convictions yields a similar outcome, where total arrests of illegal immigrants for those same crimes were 40% lower than those native to the U.S.

In our current meme-driven culture, where many conservatives are quick to remind everyone that all lives matter, the irony should not be lost that that principle seems to step aside here for a disturbing fixation on anecdotal headline crimes from a group that actually looks to be a dramatically safer member of the community.

A couple decades ago we clearly had a border crisis. Illegal immigrants were pouring into the border and border patrol was overwhelmed trying to control the hemorrhaging. But the sustained reduction since then to early 1970’s levels is perhaps the rare example of the public sector actually helping address a problem.

Now if the stated goal was, for example, to get illegal immigration to as close to zero as possible because it otherwise (1) creates an undue economic burden on the country and/or (2) is an unfair jumping the line over those trying to enter legally, those are reasonable assertions that would potentially win over voters beyond the campaign choir. But that’s not the conversation coming out of the White House, probably because it’s difficult to build fiery bite-size campaign slogans and chants around “BUILD THE WALL TO FURTHER REDUCE ANNUAL AGENT APPREHENSIONS FROM 16 TO 0!” No doubt it’s a bit messy, and not nearly as frothy.

So if we don’t have a border invasion crisis…and existing undocumented immigrants seem to be both declining in numbers and a much safer part of the population…is the purpose of building a wall then really just to fulfill a campaign rally promise? It feels like the answer to that is yes.

Consequently, we end up left with a situation where we’ve actually done an encouraging about face on border security from the legitimate crisis of 18+ years ago – yet the repeatedly peddled need is to “build-the-wall.” But building the wall is undoubtedly not a well-reasoned means to some clear end, but rather the end goal itself, perpetually requiring the salesman to navigate the thin ridge between ignorant and dishonest cliffs.

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President Bolsonaro should boost Brazil’s entrepreneurial ecosystem

In late October following a significant victory for Jair Bolsonaro in Brazil’s presidential elections, the stock market for Latin America’s largest country shot up. Financial markets reacted favorably to the news because Bolsonaro, a free-market proponent, promises to deliver broad economic reforms, fight corruption and work to reshape Brazil through a pro-business agenda. While some have dubbed him as a far-right “Trump of the Tropics” against a backdrop of many Brazilians feeling that government has failed them, the business outlook is extremely positive.

When President-elect Bolsonaro appointed Santander executive Roberto Campos as new head of Brazil’s central bank in mid-November, Brazil’s stock market cheered again with Sao Paulo’s Bovespa stocks surging as much as 2.65 percent on the day news was announced. According to Reuters, “analysts said Bolsonaro, a former army captain and lawmaker who has admitted to having scant knowledge of economics, was assembling an experienced economic team to implement his plans to slash government spending, simplify Brazil’s complex tax system and sell off state-run companies.”

Admittedly, there are some challenges as well. Most notably, pension-system reform tops the list of priorities to get on the right track quickly. A costly pension system is increasing the country’s debt and contributed to Brazil losing its investment-grade credit rating in 2015. According to the new administration, Brazil’s domestic product could grow by 3.5 percent during 2019 if Congress approves pension reform soon. The other issue that’s cropped up to tarnish the glow of Bolsonaro coming into power are suspect payments made to his son that are being examined by COAF, the financial crimes unit.

While the jury is still out on Bolsonaro’s impact on Brazilian society at large after being portrayed as the Brazilian Trump by the opposition party, he’s come across as less authoritarian during his first days in office. Since the election, his tone is calmer and he’s repeatedly said that he plans to govern for all Brazilians, not just those who voted for him. In his first speech as president, he invited his wife to speak first which has never happened before.

Still, according to The New York Times, “some Brazilians remain deeply divided on the new president, a former army captain who has hailed the country’s military dictators and made disparaging remarks about women and minority groups.”

Others have expressed concern about his environment impact with the “an assault on environmental and Amazon protections” through an executive order within hours of taking office earlier this week. However, some major press outlets have been more upbeat: “With his mix of market-friendly economic policies and social conservativism at home, Mr. Bolsonaro plans to align Brazil more closely with developed nations and particularly the U.S.,” according to the Wall Street Journal this week.

Based on his publicly stated plans, here’s why President Bolsonaro will be good for business and how his administration will help build an even stronger entrepreneurial ecosystem in Brazil:

Bolsonaro’s Ministerial Reform

President Temer leaves office with 29 government ministries. President Bolsonaro plans to reduce the number of ministries to 22, which will reduce spending and make the government smaller and run more efficiently. We expect to see more modern technology implemented to eliminate bureaucratic red tape and government inefficiencies.

Importantly, this will open up more partnerships and contracting of tech startups’ solutions. Government contacts for new technology will be used across nearly all the ministries including mobility, transportation, health, finance, management and legal administration – which will have a positive financial impact especially for the rich and booming SaaS market players in Brazil.

Government Company Privatization

Of Brazil’s 418 government-controlled companies, there are 138 of them on the federal level that could be privatized. In comparison to Brazil’s 418, Chile has 25 government-controlled companies, the U.S. has 12, Australia and Japan each have eight, and Switzerland has four. Together, Brazil-owned companies employ more than 800,000 people today, including about 500,000 federal employees. Some of the largest ones include petroleum company Petrobras, electric utilities company EletrobrasBanco do Brasil, Latin America’s largest bank in terms of its assets, and Caixa Economica Federal, the largest 100 percent government-owned financial institution in Latin America.

The process of privatizing companies is known to be cumbersome and inefficient, and the transformation from political appointments to professional management will surge the need for better management tools, especially for enterprise SaaS solutions.

STEAM Education to Boost Brazil’s Tech Talent

Based on Bolsonaro’s original plan to move the oversight of university and post-graduate education from the Education Ministry to the Science and Technology Ministry, it’s clear the new presidential administration is favoring more STEAM courses that are focused on Science, Technology, Engineering, the Arts and Mathematics.

Previous administrations threw further support behind humanities-focused education programs. Similar STEAM-focused higher education systems from countries such as Singapore and South Korea have helped to generate a bigger pipeline of qualified engineers and technical talent badly needed by Brazilian startups and larger companies doing business in the country. The additional tech talent boost in the country will help Brazil better compete on the global stage.

The Chicago Boys’ “Super” Ministry

The merger of the Ministry of Economy with the Treasury, Planning and Industry and Foreign Trade and Services ministries will create a super ministry to be run by Dr. Paulo Guedes and his team of Chicago Boys. Trained at the Department of Economics in the University of Chicago under Milton Friedman and Arnold Harberger, the Chicago Boys are a group of prominent Chilean economists who are credited with transforming Chile into Latin America’s best performing economies and one of the world’s most business-friendly jurisdictions. Joaquim Levi, the recently appointed chief of BNDES (Brazilian Development Bank), is also a Chicago Boy and a strong believer in venture capital and startups.

Previously, Guedes was a general partner in Bozano Investimentos, a pioneering private equity firm, before accepting the invitation to take the helm of the world’s eighth-largest economy in Brazil. To have a team of economists who deeply understand the importance of rapid-growth companies is good news for Brazil’s entrepreneurial ecosystem. This group of 30,000 startup companies are responsible for 50 percent of the job openings in Brazil and they’re growing far faster than the country’s GDP.

Bolsonaro’s Pro-Business Cabinet Appointments

President Bolsonaro has appointed a majority of technical experts to be part of his new cabinet. Eight of them have strong technology backgrounds, and this deeper knowledge of the tech sector will better inform decisions and open the way to more funding for innovation.

One of those appointments, Sergio Moro, is the federal judge for the anti-corruption initiative knows as “Operation Car Wash.” With Moro’s nomination to Chief of the Justice Department and his anticipated fight against corruption could generate economic growth and help reduce unemployment in the country. Bolsonaro’s cabinet is also expected to simplify the crazy and overwhelming tax system. More than 40 different taxes could be whittled down to a dozen, making it easier for entrepreneurs to launch new companies.

In general terms, Brazil and Latin America have long suffered from deep inefficiencies. With Bolsonaro’s administration, there’s new promise that there will be an increase in long-term infrastructure investments, reforms to reduce corruption and bureaucratic red tape, and enthusiasm and support for startup investments in entrepreneurs who will lead the country’s fastest-growing companies and make significant technology advancements to “lift all boats.”

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