FDIC was hacked by China, and CIO covered it up

Insuring deposits, but not your identity. Thanks, FDIC. (credit: Matthew G. Bisanz)

A report published by the House Committee on Science, Space and Technology today found that hackers purported to be from China had compromised computers at the Federal Deposit Insurance Corporation repeatedly between 2010 and 2013. Backdoor malware was installed on 12 workstations and 10 servers by attackers—including the workstations of the chairman, chief of staff, and general counsel of FDIC. But the incidents were never reported to the US Computer Emergency Response Team (US-CERT) or other authorities, and were only brought to light after an Inspector General investigation into another serious data breach at FDIC in October of 2015.

The FDIC failed at the time of the "advanced persistent threat" attacks to report the incidents. Then-Inspector General at FDIC, Jon Rymer, lambasted FDIC officials for failing to follow their own policies on breach reporting. Further investigation into those breaches led the committee to conclude that former FDIC CIO Russ Pittman misled auditors about the extent of those breaches, and told employees not to talk about the breaches by a foreign government so as not to ruin FDIC Chairman Martin Gruenberg's chances of confirmation.

The cascade of bad news began with an FDIC Office of the Inspector General (OIG) investigation into the October "Florida incident." On October 23, 2015, a member of the Federal Deposit Insurance Corporation's Information Security and Privacy Staff (ISPS) discovered evidence in the FDIC's data loss prevention system of a significant breach of sensitive data—over 1,200 documents, including Social Security numbers from bank data for over 44,000 individuals and 30,715 banks, were copied to a USB drive by a former employee of FDIC's Risk Management Supervision field office in Gainesville, Florida. The employee had copied the files prior to leaving his position at FDIC. Despite intercepting the employee, the actual data was not recovered from him until March 25, 2016. The former employee provided a sworn statement that he had not disseminated the information, and the matter was dropped.

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