Kaspersky accused of having close ties to sauna-loving Russian spies

23 Mar 2015 | Author: | No comments yet »

Bloomberg Vs. Kaspersky: Cybersecurity Tycoon Laughs At KGB Accusations.

Before American computer-security company FireEye releases a report on new hacker activity, it sometimes gives the U.S. government an advance copy. The company’s connections to the Kremlin have long been known and reported on, but Bloomberg reports that several executives have been replaced with people closely aligned with Russia’s military and intelligence operations.

An extraordinary story appeared on the Bloomberg website at the end of last week, accusing security company Kaspersky Lab of having “close ties to Russian spies”. “while Kaspersky Lab has published a series of reports that examined alleged electronic espionage by the U.S., Israel, and the U.K., the company hasn’t pursued alleged Russian operations with the same vigor.” Awkwardly, just two days before the Bloomberg article Kaspersky researchers published further details of what they call the “Crouching Yeti” group who have been targeting industrial, manufacturing and pharmaceutical industries with targeted attacks since the end of 2010.Bloomberg Business published a story yesterday casting Eugene Kaspersky, CEO of cybersecurity giant Kaspersky Labs, as a Kremlin flack, selectively targeting U.S. malware and giving a pass to Russian cyberattacks. The Moscow-based company ranks sixth in revenue among security-software makers, taking in US$667 million in 2013, and is a favorite among Best Buy’s Geek Squad technicians and reviewers on Amazon.com. Crouching Yeti, also known by some as Energetic Bear or Dragonfly, have – according to the Kaspersky Lab report – been mostly targeting the United States, Spain, Japan, Germany, France, Italy, Turkey, Ireland, Poland, and China. Kaspersky insists that Russian intelligence officials can’t associate that data with individual customers, but sources who spoke to Bloomberg said the data can be altered to gather identifying information from users.

Founder and Chief Executive Officer Eugene Kaspersky was educated at a KGB-sponsored cryptography institute, then worked for Russian military intelligence, and in 2007, one of the company’s Japanese ad campaigns used the slogan “A Specialist in Cryptography from KGB”. In any case, it’s unsettling that a major cybersecurity company serving millions of people (including Americans) is working so closely with a country that harbors some of world’s top hackers. The sales tactic, a local partner’s idea, was “quickly removed by headquarters”, according to Kaspersky Lab, as the company recruited senior managers in the US and Europe to expand its business and readied an initial public offering with a US investment firm.

Kaspersky wrote in his titanic take-down of Bloomberg’s story. “So it came as little surprise that a large part of the rest of the article is simply false. The most significant implication of Bloomberg’s report is that while Kaspersky often goes after foreign hackers, the company looks the other way when it comes to malicious figures on its own turf. Personally, I have no doubt that security companies (not just Kaspersky) have awkward business decisions to make regarding their publicising of state-sponsored attacks where they might feel pressure from government customers to keep them quiet. “Some [staff] actively aid criminal investigations by the FSB, the KGB’s successor, using data from some of the 400 million customers who rely on Kaspersky Lab’s software, say six current and former employees who declined to discuss the matter publicly because they feared reprisals.” You know what, I’d be surprised if a company that counters internet crime doesn’t occasionally work with law enforcement and intelligence agencies tasked with protecting their countries from attack. Since then, high-level managers have left or been fired, their jobs often filled by people with closer ties to Russia’s military or intelligence services. But what also concerns critics about Kaspersky, on top of his personal connections, are statements he’s made about his visions for the future of cybersecurity.

Wired reports that Kaspersky supports government regulation of social networks, claiming that there’s “too much freedom” on these channels. “Freedom is good,” Wired quotes him as saying, referring to sites like Facebook. “But the bad guys — they can abuse this freedom to manipulate public opinion.” Kaspersky’s position and opinions, as explained by Noah Schactman in Wired, encapsulates “the paradox of Eugene Kaspersky: a close associate of the autocratic Putin regime who is charged with safeguarding the data of millions of Americans; a supposedly-retired intelligence officer who is busy today revealing the covert activities of other nations; a vital presence in the open and free Internet who doesn’t want us to be too free.” Back in 2012, Kaspersky responded to Wired’s report, writing on his website: “Kaspersky Lab is a private international company that registered its holding in Great Britain in 2006. Kaspersky says in an interview that the group saunas are purely social: “When I go to banya, they’re friends.”” As far as I know, the sanitary habits of the chief executives of other anti-virus companies have not been scrutinised so closely. But what’s important here is less about whether a man likes to sit in an intensely hot steam room, but the kind of company he keeps – and how that might influence them and their business. The Bloomberg report suggests that Eugene Kaspersky’s sauna trips might be evidence that the company has too close a relationship with Russian intelligence, but the man himself has robustly denied their purpose is to meet up with intelligence contacts: “sometimes I do go to the banya (sauna) with my colleagues.

Some people close to Kaspersky said the report captured the spirit of the company — non-Russian employees are sometimes asked, half-jokingly, if they work for foreign intelligence services. In February, Kaspersky Lab researchers released a remarkably detailed report about the tactics of a hacker collective known as the Equation Group, which has targeted Russia, Iran, and Pakistan, and which cybersecurity analysts believe to be a cover for the US National Security Agency. Kaspersky Lab hasn’t issued a similar report about Russia’s links to sophisticated spyware known as Sofacy, which has attacked NATO and foreign ministries in Eastern Europe. The company made news this year when it released a detailed report on what former U.S. officials said was an American hacking campaign to spy on Russia, China and some countries in the Middle East.

Kaspersky’s founder is at least prepared to laugh about the allegations, claiming that the company’s next conference for researchers will have the appropriate facilities: For a somewhat more balanced view of how internet security firms have found themselves tied up in politics, read this Reuters report which predates the schlocky Bloomberg article. Ultimately, he used a cybersecurity metaphor to characterize Bloomberg’s story: “Much like our antivirus often does, they performed a full system scan –and found nothing,” Mr. Any government relationships can make a company’s products harder to sell in a paranoid global marketplace, says Rick Holland, principal analyst of security and risk management for Forrester Research. “It’s a challenge for any security company out there,” Holland says. “What are your ties to government?” Kaspersky Lab’s ties dramatically increased after two waves of executive departures, say four of the former insiders.

External audit successfully passed.” An article has been published in Bloomberg Businessweek about Kaspersky Lab including factual inaccuracies and relying on anonymous, third-party information from “former and current employees.” The story is more an opinion piece rather than a factual investigative story. Afterward, Chief Business Officer Garry Kondakov circulated an internal e-mail saying that from then on, the company’s highest positions would be held only by Russians, say two people who saw the e-mail. Chief Legal Officer Igor Chekunov, who regularly joins Kaspersky’s banya nights, is the point man for the company’s work with the Russian government, three of the insiders say.

Ronald Prins, co-founder and director of Fox-IT, the Dutch cybersecurity company, acknowledged that the Dutch military buys encryption tools and hacking lessons from the firm. More important, Kaspersky has struggled to win federal US contracts. “There’s a cyber isolationism that’s definitely emerging,” says Holland, the Forrester analyst. “They have to overcome any perceived or actual alliances.” BLOOMBERG More from WSJ.D: And make sure to visit WSJ.D for all of our news, personal tech coverage, analysis and more, and add our XML feed to your favorite reader.

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