Pixel Envy

Written by Nick Heer.

Assorted Updates Regarding Bloomberg’s ‘Big Hack’ Story

I was going to split these updates into several posts, but there are so many and they all fit around similar narratives that it makes more sense to bundle them together. Previously, I wrote a little about Bloomberg’s massive report and tech companies’ responses. After that came government corroboration of the companies’ statements, as well as a report from Buzzfeed that indicated that senior Apple executives were confused by Bloomberg’s findings.

Yesterday, George Stathakopoulos, Apple’s vice president of information security, sent a letter to congress once again reiterating their claim that they have not found malicious hardware planted in their servers, and that the FBI has not been contacted nor have they been contacted by the FBI about these concerns — this is clearly contrary to Bloomberg’s specific claim that “two of the senior Apple insiders say the company reported the incident to the FBI”. I cannot find any wiggle room in either statement on that matter.

One of the few sources in Bloomberg’s story that was willing to be named has now appeared on a podcast where he expresses concern over how his hypothetical ideas about how a piece of hardware like this might work have seemingly been entirely realized in the final article.

The team of Jordan Robertson and Michael Riley have a new article out today in Bloomberg that claims that a U.S. telecommunications company found manipulated Supermicro hardware in their possession two months ago:

The security expert, Yossi Appleboum, provided documents, analysis and other evidence of the discovery following the publication of an investigative report in Bloomberg Businessweek that detailed how China’s intelligence services had ordered subcontractors to plant malicious chips in Supermicro server motherboards over a two-year period ending in 2015.

Appleboum previously worked in the technology unit of the Israeli Army Intelligence Corps and is now co-chief executive officer of Sepio Systems in Gaithersburg, Maryland. His firm specializes in hardware security and was hired to scan several large data centers belonging to the telecommunications company. Bloomberg is not identifying the company due to Appleboum’s nondisclosure agreement with the client. Unusual communications from a Supermicro server and a subsequent physical inspection revealed an implant built into the server’s Ethernet connector, a component that’s used to attach network cables to the computer, Appleboum said.

Robertson and Riley stress that this is not an identical manipulation to the type described in their earlier story, but it tracks closely: hardware on a Supermicro board that could be used to siphon or reroute data.

However, Jason Koebler, Joseph Cox, and Lorenzo Franceschi-Bicchierai of Vice contacted American telecom companies and, so far, all are denying that Bloomberg’s report could possibly describe them. A source at Apple also told them that they launched another internal investigation after the story was published and they still can’t find any evidence of what Robertson and Riley are claiming.

For what it’s worth, I don’t want Robertson and Riley to have egg on their faces. I hope the story is not entirely as described because, if it is, it is truly one of the biggest security breaches in modern history — Supermicro has supplied a lot of servers to industry giants. But I don’t want the reporters to be wrong; Bloomberg has a great reputation for publishing rigorously-researched and fact-checked longform stories; I don’t want to have lingering doubts about their future reporting. And I’m not defending the biggest corporations in the world out of loyalty or denial — they have PR teams for that, and should absolutely be criticized when relevant. And I think the central point of the article — that the supply chain of a vast majority of the world’s goods is monopolized by an authoritarian and privacy-averse government is a staggering risk — is absolutely worth taking seriously.

But something about this story is not adding up. It doesn’t make sense as-is. I want to see more evidence and a corroborating third-party judgement. Bloomberg — and Michael Riley, in fact — appear to have gotten stories like this one wrong before. I hope that isn’t the case here, despite the terrifying reality if it is, indeed, completely true.

Update: Robert M. Lee was previously contacted by the same journalists regarding other stories while working at the NSA. He thought they were well-meaning, but duped by unsupported theories that didn’t withstand technical scrutiny.