Overnight Cybersecurity: FBI ruffles feathers in cyber fights

Welcome to OVERNIGHT CYBERSECURITY, your daily rundown of the biggest news in the world of hacking and data privacy. We’re here to connect the dots as leaders in government, policy and industry try to counter the rise in cyber threats. What lies ahead for Congress, the administration and the latest company under siege? Whether you’re a consumer, a techie or a D.C. lifer, we’re here to give you…

THE BIG STORIES:

–YOU CAN GO YOUR OWN WAY: The aggressive posture of the FBI under Director James Comey is becoming a political problem for the White House. The FBI’s demand that Apple help unlock an iPhone used by one of the San Bernardino killers has outraged Silicon Valley, a key source of political support for President Obama and Democrats. Comey, meanwhile, has stirred tensions by linking rising violent crime rates to the Black Lives Matter movement and warning about “gaps” in the screening process for Syrian refugees. Then there’s the biggest issue of all: the FBI’s investigation into the private email server used by Hillary Clinton, Obama’s former secretary of State and the leading contender to win the Democratic presidential nomination. A decision by the FBI to charge Clinton or her top aides for mishandling classified information would be a shock to the political system. In these cases and more, Comey — a Republican who donated in 2012 to Mitt Romney — has proven he is “not attached to the strings of the White House,” said Ron Hosko, the former head of the FBI’s criminal investigative division and a critic of Obama’s law enforcement strategies. Publicly, administration officials have not betrayed any worries about the Clinton probe. They have also downplayed any differences of opinion on Apple. But former officials say the FBI’s moves are clearly ruffling feathers within the administration. To read our full piece, check back in the morning.

{mosads}–DO YOU EXPECT ME TO TALK?: A pair of leading Republican senators are asking a former State Department official who reached an immunity deal with the Justice Department last week to answer their questions about Hillary Clinton’s “homebrew” email server. In a letter sent last week but released on Tuesday, Sens. Chuck Grassley (R-Iowa) and Ron Johnson (R-Wis.) told the aide, Bryan Pagliano, that he shouldn’t have any reason not to appear. “Because the Department of Justice has granted you immunity from prosecution in this situation, there is no longer reasonable cause for you to believe that discussing these matters with the relevant oversight committees could result in your prosecution,” wrote Grassley and Johnson, who lead the Judiciary and Homeland Security committees, respectively. Pagliano was believed to be in charge of setting up Clinton’s email server at her New York home while she was secretary of State. He also worked on Clinton’s 2008 presidential campaign. Last year, he invoked his Fifth Amendment right against self-incrimination to decline Grassley and Johnson’s request to testify on Capitol Hill. But last week, reports emerged that he had reached a deal with the Justice Department to be granted immunity in exchange for information about the issue. To read our full piece, click here.

–YAHOO ANSWERS: Homeland Security Secretary Jeh Johnson faced a mostly friendly panel of lawmakers on Tuesday at a Senate Homeland Security Committee hearing. But that didn’t mean there weren’t some notable cyber moments. The DHS head encouraged lawmakers to draft encryption legislation that would bring all sides to the table. “If we are to grapple with this problem, I think that smart people can solve the problem, but we have to ensure all the stakeholders are represented in that discussion,” Johnson told the committee at the hearing on his agency’s budget. Capitol Hill is currently weighing legislative action in the ongoing debate over when government should have access to secure data. Johnson’s comments appeared to align with legislation that would establish a national commission to explore law enforcement could get at secure data without infringing on people’s privacy rights. The DHS chief did not specifically mention the bill, though. The hearing also touched on the recent cyberattack in Ukraine that caused a massive power outage. The December digital assault, widely believed to be the first example of hackers causing a widespread power outage, put energy companies around the world on edge as DHS officials flew in to assist with the investigation. The attack “should be, and must be, a wake-up call for those who haven’t already been awakened by this problem and this risk,” Johnson said. The DHS has concluded the malicious software that downed the grid in Ukraine hasn’t hit the U.S. yet. To read more about Johnson’s comments on encryption legislation, click here. To read more about his comments on the Ukrainian cyberattack, click here.

UPDATE ON CYBER POLICY:

–CHIFFREMENT IS FRENCH FOR ‘ENCRYPTION.’ Per the Associated Press:

“France’s lower house of Parliament has approved a measure aiming to give prison sentences to technology company executives who refuse to give data to investigators in terrorism-related cases.

The bill, adopted Tuesday by 474 votes to 32 in the National Assembly, will now have to be debated by the Senate.

One measure would punish executives in companies like Apple and Google with a fine of up to 350,000 euros ($386,000) and a five-year prison sentence if they deny prosecutors access to a suspect’s encrypted data.

During the debate, French lawmakers referred to the case that has opposed Apple to the U.S. government regarding an iPhone used by the shooter who killed 14 people in San Bernardino, California.”

Here’s the link.

LIGHTER CLICK:

–OLMEC IS MY SPIRIT ANIMAL. After years of public pressure, researchers have finally crunched the numbers to determine the best teams from the “Citizen Kane” of TV shows, “Legends Of The Hidden Temple.”

Read on at the A.V. Club, here.

TWO COMPANIES IN THE SPOTLIGHT:

–HOME DEPOT. If you were a victim of the Home Depot data breach, it’s time to get, get, get that paper.

The home improvement retailer has agreed to pay at least $19.5 million to settle consumer lawsuits brought over a massive 2014 data breach that exposed more than 50 million customers’ data, according to multiple reports. Of the compensation, $13 million will establish a reimbursement fund for affected shoppers. At least $6.5 million will pay for 18 months of identity protection services for breach victims, Reuters reported.

As part of the deal, the home improvement retailer will also bolster its data security program, hiring a chief information security officer to run the efforts. The company agreed to pay legal fees for the affected customers as well. These costs could exceed $8.7 million, according to court papers. The settlement will add to Home Depot’s rising bill from the break. The company said in November it had already incurred $152 million in expenses.

To read our full piece, click here.

–FIRE EYE. From The Wall Street Journal: “Cybersecurity firm FireEye Inc. signaled Tuesday that it would report a loss this year that is narrower than previously anticipated.”

Read on here.

A LOOK AHEAD:

WEDNESDAY

–The Senate Judiciary Committee will hold a hearing on oversight of the Department of Justice at 9:30 a.m. Attorney General Loretta Lynch will testify.

IN CASE YOU MISSED IT:

Links from our blog, The Hill, and around the Web.

National Security Agency leaker Edward Snowden on Tuesday had harsh words for the FBI’s claim that only Apple can break into the iPhone used by one of the San Bernardino, Calif., terrorists. (The Hill)

More than 1,000 U.S. cybersecurity professionals are participating in — and testing how well they respond to — a mock attack, in an annual government exercise. (The Associated Press)

The FBI has used this warrant to hack into over a thousand computers. (Motherboard)

Chinese telecommunications equipment maker ZTE urged its U.S. suppliers to apply for export licenses to satisfy newly imposed U.S. trade restrictions. (Reuters)

Apple co-founder Steve Wozniak on Apple vs. FBI: ‘I side with Apple on this one.’ (Mashable)

Microsoft founder Bill Gates continued to flesh out his middle-ground stance on the Apple-FBI standoff in a reddit AMA. (CBS News)

If you’d like to receive our newsletter in your inbox, please sign up here: http://goo.gl/KZ0b4A