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INVESTIGATIVE REPORTING
                      All Daily Division                                                                                                                               HACKER STEALS
                                                                                                                                                                       RESIDENTS’ DATA          Breathtaking heist exposes 387,000 credit,
                                                                                                                                                                                                   3.6 million Social Security numbers
                                    Earlier breaches may have                                                                                                              MORE ON THE STORY »»                                         Not the first time Earlier breaches may have affected 410,000, 7A                                                     Profit driven Hackers turn data into cash, 4A

                                    affected 410,000 in state

SECOND PLACE:
                                    Many involved health care                                     of the notices sent to af-
                                                                                                  fected consumers. A
                                                                                                                                 public access to the
                                                                                                                                 names.
                                                                                                                                                               financial organizations
                                                                                                                                                               turned in 12 breach no-
                                    organizations, agency report says                             breach is defined as the          The law requires ev-       tices affecting almost
                                                                                                  unauthorized access of         ery business or agency        19,000 consumers; and
                                    By Tim Smith                      The report doesn’t in-      items containing per-          reporting to them to noti-    other industries submit-
                                    Capital Bureau                 clude the most recent fis-     sonal identifying infor-       fy affected customers or      ted 29 notices affecting
                                    tcsmith@greenvilleonline.com   cal year, or the database      mation. It doesn’t neces-      residents.                    about 17,000 residents,
                                                                   theft earlier this year of     sarily mean the informa-          The law went into ef-      according to the data
                                       COLUMBIA — South            almost 230,000 records         tion was actually stolen       fect in July 2009, al-        from Consumer Affairs.
                                    Carolina state agencies        from the Department of         or misused.                    though some companies            A total of six breaches
                                    and businesses over a          Health and Human Ser-              Some organizations         reported breaches for         were reported last year
                                    three-year period report-      vices, said Juliana Har-       didn’t report numbers of       2008 as well.                 but the number of people
                                    ed dozens of computer se-      ris, spokeswoman for the       people affected, officials        The agency has so far      affected far exceeded
                                    curity breaches that po-       agency.                        said, so the actual num-       received a total of 56 no-    previous years, accord-
                                    tentially could affect at         State law requires          ber could be much high-        tices of computer breach-     ing to the report, which
                                    least 410,000 people, a re-    businesses or govern-          er.                            es with a total impact of     doesn’t detail any conse-
                                    port obtained by Green-        ment agencies to report            The report doesn’t list    410,865 residents, ac-        quences of the breaches.
                                    villeOnline.com shows.         computer          security     the names of businesses        cording to the report.           Health-care organiza-
                                       Much of that, accord-       breaches to the Consum-        or government agencies            Of the 56 disclosures,     tions alone reported




 The Greenville News
                                    ing to a report by the state   er Affairs Office if the       reporting the security         the health-care industry,     325,000 people impacted
                                    Department of Consum-          potential impact is at         breaches.                      such as hospitals, submit-    from three security
                                    er Affairs, came from          least 1,000 people.                GreenvilleOnline.com       ted nine notices affecting    breaches in 2011, accord-
                                    health care organizations         They must also notify       has filed a South Carolina     340,000 residents. Gov-       ing to the data.
                                    last year, which reported      the major credit bureaus       Freedom of Information         ernment agencies sub-
                                    breaches affecting a pos-      and include the timing,        Act request, which the         mitted six breaches af-
                                    sible 325,000 people.          distribution and content       agency required, to gain       fecting 35,000 residents;




                                     WARNING                       cies     have      already
                                                                   strengthened their infor-
                                                                                                  tion security system is
                                                                                                  only a function of how
                                                                                                                                 well above the others,
                                                                                                                                 four or five in the middle
                                                                                                                                                               employees with duties
                                                                                                                                                               that require such access.
                                                                   mation security, and           bad somebody wants to          and two agencies with            Updated tools now al-
                                     Continued from Page 1A        we’re not going to stop        look at it. I can assure       more substantive find-        low officials to identify
                                                                   until we have the strong-      you, if somebody wants         ings.                         personal       information
                                     Motor Vehicles told law-      est information-security       to get into your system,          He would not disclose      contained in emails.
                                     makers that foreign           practices in the country.”     they can get into your         the identities of the agen-      And a new policy on
                                     hackers were attacking           Lindsey      Kremlick,      system. The question is        cies or the exact details     outside employment “is




 Tim Smith, David Dykes,
                                     his agency’s computer         spokeswoman for the            how much time, energy          but said he will eventual-    designed to deter em-
                                     systems on a daily basis,     state Budget and Control       and commitment they            ly release his reports.       ployees from improperly
                                     trying to get into data-      Board, which houses the        have and how hard are             He said the Depart-        benefiting from their po-
                                     bases that contained a        state’s information tech-      you going to make it for       ment of Revenue is            sition and/or the data
                                     treasure trove of driver      nology office, said there      them to minimize that          among the nine reviewed       they may have access
                                     personal information.         is no centralized comput-      risk. There is no risk-less    but would not discuss his     to,” according to the
                                        In April, a state Medi-    er system for state agen-      system.”                       findings yet, saying he       agency’s summary ob-
                                     caid     employee      was    cies in South Carolina,           State Law Enforce-          wants permission from         tained by GreenvilleOn-                                                                                                                                                          Gov. Nikki Haley expressed her anger
                                     charged with six counts       making it impossible to        ment Division Chief            law enforcement first.        line.com.                                                                                                                                                                        Friday towards a hacker who breached
                                     of violating confidential-
                                     ity and Medicaid laws af-
                                     ter authorities accused
                                                                   know exactly how many
                                                                   security breaches have
                                                                   occurred.
                                                                                                  Mark Keel said South
                                                                                                  Carolina is not unique in
                                                                                                  attempts by hackers to
                                                                                                                                 Common problems
                                                                                                                                    The most common
                                                                                                                                                                  At the Department Tim Smith
                                                                                                                                                               Employment and Work-
                                                                                                                                                                                    By of
                                                                                                                                                               force, remote access to bureau
                                                                                                                                                                                      Capital
                                                                                                                                                                                                                                                                                              Government remedy                                 Department of Revenue information. At
                                                                                                                                                                                                                                                                                                                                                right is state Department of Revenue
                                     him of transferring rec-
                                     ords on nearly 230,000
                                     Medicaid patients to his
                                                                       “Agencies indepen-
                                                                   dently manage their own
                                                                   information technology
                                                                                                  breach computer securi-
                                                                                                  ty at state agencies.
                                                                                                     “It’s nationwide,” he
                                                                                                                                 problems he found, he
                                                                                                                                 said, were that agencies
                                                                                                                                 did not have a response
                                                                                                                                                               computer systems is now
                                                                                                                                                                           COLUMBIA —
                                                                                                                                                               secured using a “best- The first intrusion
                                                                                                                                                               practices” authentica- unnoticed by any
                                                                                                                                                                      began in August,                          SPEAK OUT
                                                                                                                                                                                                                                                                                              frustrates residents                              Director James Etter. HEIDI HEILBRUNN/STAFF


                                     email account and then        including data, applica-       said. “Systems are con-        plan in case of a security    tion, controls have been
                                                                                                                                                                      officials operating the Department                                                         By David Dykes
                                     sending a copy to another     tions, security and infra-     stantly being hit trying to    breach, lacked adequate       implemented to revokecomputer system,            » Go to Greenville                                                                                 MAKING YOUR
                                     person.                       structure,” she said.          find a way into them,          security for the paper
                                                                                                                                                                      of Revenue’s
                                                                                                                                                               access to computer sys-                          Online.com/
                                                                                                                                                                                                                                                                       Staff Writer
                                                                                                                                                                                                                                                                                                                   VOICE HEARD                  WHAT YOU CAN DO
                                        And in August, the         “Agencies are not re-          whether it’s just to plant a   records that contain con-     tems once an employee is not far from the
                                                                                                                                                                      which is located




 Eric Connor and
                                                                                                                                                                                                                Facebook to tell us                        A crush of South Carolina the deluge of calls from resi- Taxpayers are being asked to call 1-866-578-
                                     University of South Car-      quired to utilize the Bud-     virus or whatever. That’s      fidential information and     terminated, security has the State Law En-
                                                                                                                                                                      headquarters of

                                                                                                                                                                                                                      Hackers can make money off data
                                     olina’s College of Educa-     get and Control Board’s        just a constant thing that     did not regularly search      been forcement Division.
                                                                                                                                                                        increased over                          how you think the                      residents, confused and wor- dents who were urged by Gov. 5422 to determine if their information is
                                     tion disclosed that rec-      Division of State Infor-       we see.”                       for personal information                  By the time the computer state handled the
                                                                                                                                                               stored paper documents                                                                  ried about their vulnerability, Nikki Haley and others to vis- affected. Due to high call volume on Friday,
                                     ords of 34,000 students,      mation       Technology’s         Marcos Vieyra, chief        that might be stored in       and officials are scan- the U.S. Secret Ser-
                                                                                                                                                                      crimes office of                          security breach and if                 did what their governor it the firm’s website or call to many residents reported being unable to get
                                     faculty and researchers       (DSIT) IT services. For        information security of-       multiple computer files.      ning all computers used                          they should do more.
                                     had been exposed during       these reasons, we cannot       ficer for the University          Maley characterized        in the agency’s SCWorks a problem on Oct.By Byron Acohido
                                                                                                                                                                      vice discovered                                                                  urged them to do Thecalling a ondetermine if theiraround an onlinethrough, but state officials say the service is
                                                                                                                                                                                                                                                          ernment databases. in first hinges           ground that revolves informa-               ta thief is running and also on market
                                     a security breach by an       accurately provide an in-      of South Carolina, said at-    the findings as problems             10, foreign hacker had taken aUSA TODAY join the
                                                                                                                                                               centers foraany personal
                                                                                                                                                                                                                And                                    toll-freegullibility, the other on moderatetion is affected.rich and efficient asworking to add operators.
                                                                                                                                                                                                                                                          human number for identity                    marketplace as                              conditions.”
                                     overseas hacker.                                                                            with the “icing” of com-             database from the Revenue De- discussion on Twitter
                                                                                                                                                               information.                                                                               hacking skills:
                                                                                                                                                                                                                                                       protection, quickly over-                       eBay. Buyers added and are
                                                                                                                                                                                                                                                                                                        “We have of stolen data include                Recent chatter in the cyber under-
                                                                                                                                                                                                                                                             ■ Spear phishing. From
                                        But even after that, of-                                                                 puter security rather                partment’s computers exposing 3.6their tracks while cracking into compa-whelming the system. society’s per-still in the process ofinformationac- ground suggest that money launderers
                                                                                                                                                                  At the Department of                        Cyber criminals’ expertise at hiding
                                                                                                                                                                                                                with the hashtag                                                                       crime rings that use the
                                                                                                                                                                                                                                                          vasive use of web commerce and social hijack funds from online adding     financial
                                                                                                                                                                                                                                                                                                                                              to
                                                                                                                                                                                                                                                                                                                                                   may be having some difficulty hiring
                                                                                                                                                                                                                                                                                                                                                                                                           INSIDE
                                     ficials    believed     the   “It’s been my experience that your                            than with the “cake.”                                                          #schacked.
                                                                                                                                                               Labor, million Social Security numbersny and government networks has ad- networks officials social engineering:more operators in orderusing stolen mules, who sometimes carry out the
                                                                                                                                                                          Licensing and                                                                    State has arisen said they                  counts. Others specialize in to an-
                                     state’s computers, at                                                                          Davis said the re-         Regulation, pending use
                                     least those operated by       information security system is only                           sponse plan is important
                                                                                                                                                                      and 387,000 credit and debit cardvanced considerably over the past dec-wereability for a data thief to extensivelyswer taxpayers’ series of online ac- risky final step of extracting cash from
                                                                                                                                                               policies will provide for
                                                                                                                                                                                                                                                          the scrambling with an                       identities to set up calls,” said
                                                                                                                                                                                                           ade.                                           profile a targeted victim and subse- counts through which to launder illicit the last of series of counterfeited online
                                     Gov. Nikki Haley’s 16         a function of how bad somebody                                because it’s more a mat-             numbers, one of                           SEE MORE
                                                                                                                                                               more monitoring of In- the largest com- Data thieves today commonly alteridentity-protection into clicking on online cash transfers.
                                                                                                                                                                                                                                                          quently fool that person firm to                                                           Abby .......................4D Obituaries ..............6B
                                                                                                                                                                                                                                                                                                                                                   accounts.
                                     cabinet agencies, were                                                                      ter of when than if an        ternet puter breaches in the state or na-the fonts, web addresses and strings ofadd infected attachment or web link.
                                                                                                                                                                         usage, officials                                                                 an operators to respond to                      Recently, PROTECT, Page 7A has
                                                                                                                                                                                                                                                                                                                See stolen identity data               “There may not be enough takers (for
                                                                                                                                                                                                                                                                                                                                                     Area news ..............1B Religion..................2D
                                     safely protecting data        wants to look at it.”                                         agency will be hacked.               tion.
                                                                                                                                                               are working on a mecha-                     alphanumeric video from their attack
                                                                                                                                                                                                                » Watch characters in                        ■ The infection turns control of the come under rising demand from tax stolen data) in the black market,” Cobb
                                                                                                                                                                                                                                                                                                                                                     Automotive............1F Sports ......................1C
                                     with personal informa-        STATE INSPECTOR GENERAL PATRICK MALEY                            “There is so much ef-                  The breathtaking breach hascode to throwa lot of spoofing the scent. victim uses over or the attacker. If the len names, addresses and Social Securi- says.
                                                                                                                                                               nism for generating doc-
                                                                                                                                                                                                              “There is
                                                                                                                                                                                                                          investigators off
                                                                                                                                                                                                                the governor’s
                                                                                                                                                                                                                                             and head
                                                                                                                                                                                                                                                          victim’s PC
                                                                                                                                                                                                                                                                         his
                                                                                                                                                                                                                                                                              to
                                                                                                                                                                                                                                                                                 her computer for
                                                                                                                                                                                                                                                                                                       fraudsters. One popular caper uses sto-
                                                                                                                                                                                                                                                                                                                                                     Bridge.....................4D attempting to
                                                                                                                                                                                                                                                                                                                                                       Security experts say Television...............4D
                                     tion.                                                                                       fort now to steal this data          launched a high-stakes interna-fakes going on topress it seem like an at- work, the intruder now has a foothold to ty numbers to generate faked tax re- get the victimized company Things to to
                                                                                                                                                               uments that limits and                           afternoon make
                                                                                                                                                                                                                                                                                                                                                     Business..................6A      or agency do..........8D
                                        In fact, records show,                                                                   and get this data,” Davis     logs all user activity, and                 tackconference and view
                                                                                                                                                                                                                                                                                                 State had warnings
                                                                                                                                                                                                                 is originating from a different re- probe an organization’s network, map turns. Refunds get directed to a debit pay a ransom for the return of stolen da-
                                                                                                                                                               building security is being investigation andgion,” timeline Baumgartner, senior se- the location of key databases and pilfer card account — set up with a stolen iden- taClassifieds ..............6D U.S./World .............2A
                                                                                                                                                                      tional criminal




 Ron Barnett
                                     by the time Department                                                                      said. “You just can’t pro-                                                     a says Kurt of the                                                                                                                    is rare.
                                     of Revenue computers          ventory of all statewide       tacks by hackers on his        tect it 100 percent of the    audited and restrictedNikki Haley, whosecurity researcher at Kaspersky Lab.
                                                                                                                                                                      prompted Gov.
                                     were          successfully    computer           systems,    system are “extremely          time. And you can’t pro-              on an as-needed                          state’s response to more sophis- data, typically over the course of months tity — then used to make cash withdraw- isComics ....................5D because .....................8A
                                                                                                                                                               based administration had another mas- Generally speaking, the                              or even years.                               card is
                                                                                                                                                                                                                                                                                                               that the thief controls. A debit        “The selling of data backVoices
                                                                                                                                                                                                                                                                                                                                                      a higher risk strategy,
                                                                                                                                                                                                                                                                                                                                                                                        to someone
                                                                                                                                                                                                                                                                                                                                                                                               it’s a
                                                                                                                                                                                                                the attack, the                                                                                                                      Lifestyle ..................1D Weather .................5B
                                     hacked, state Inspector       spending information re-       common.” He said hack-         tect it from every effort.”          sive theft of confidential informa-ticated cyber attacks that are being con-
                                                                                                                                                               basis for work outside                                                                        ■ SQL injection attacks. SQL hacks als at an ATM.
                                                                                                                                                                                                                                                                   By Tim Smith                         And the former FBI agent                   one-off attempt to cash in that’s much
                                     General Patrick Maley         lated to computer securi-      ers are drawn to college          Maley said each agen-      normal hours. another cabinet agency ear-ducted daily for criminal gain appear to involve querying Bureau
                                                                                                                                                                      tion at                                   governor’s executive                                         the databases underly-       Last July, the Treasury Inspector easier to trace,” Cobb says.
                                                                                                                                                                                                           originate in Russia, while “noisier” at- ing a web Capitalpage until a database hiccupsdirected for Tax Administration issued a
                                                                                                                                                                                                                                                                                                       General by Gov. Nikki Haley                     Another reason a data thief might try
                                     had already delivered a
                                     letter to Haley informing
                                                                   ty, or statistics related to
                                                                   security breaches for the
                                                                                                  computer systems for
                                                                                                  their open networks, fast
                                                                                                                                 cy was asked whether it
                                                                                                                                 had experienced comput-              lier this year, to order an assess-tacks tend and learn more other na- and accepts an injection of maliciousto report showing that the IRSafter to pre- to sell stolen data back toHigh 72
                                                                                                                                                                  And at the Depart-
                                                                                                                                                               ment of Transportation,
                                                                                                                                                                                                                order to originate from                                                                 review the system failed a                                                       the victim
                                                                                                                                                                                                                about the security
                                                                                                                                                                                                           tions in Asia and Eastern Europe, tech code. Up until— The warnings
                                                                                                                                                                                                                                                           COLUMBIA early 2008, SQL hacksseries of breaches at agencies                                                                Low 51
                                                                                                                                                                                                                                                                                                       vent 1.5 million potentially fraudulent would be if the data is of a highly sensi-
                                     her that his review of        state.”                        Internet access and pro-       er security breaches or       Social ment of all the state’s computersecurity experts say.
                                                                                                                                                                       Security numbers                                                                   were done manually, one web site at a tax returns from being processed last tive nature, such that certain parties
                                                                                                                                                                                                                threat from hackers.
                                     nine cabinet agencies, in-        She said computer at-      prietary research data.        loss of information.          have systems.
                                                                                                                                                                       been eliminated                        The cutting-edge Russian attackswere there. time. In the spring of 2008, a bright hack-said with some refunds to identity would be highly motivated to pay a ran-
                                                                                                                                                                                                                                                                                                       year, resulting in resignation
                                     cluding the Department        tacks are a continuing            Preventing breaches,           Davis said officials re-               Many questions remain unan-tend to be stealthy, while noisy attacks er came up with aa hacker was that if a of more than $5.2 billion. The In- som, Baumgartner observes. Alterna-
                                                                                                                                                               from all reports and en-                                                                    But even as way to quickly locate thieves hacker wanted to get                                        www.greenvilleonline.com
                                     of Revenue, had found         threat for any organiza-       he said, “is a constant        ported such instances         cryption has been added
                                                                                                                                                                      swered. Officials are still unsuretend to be persistent and resilient.cracking into weakly-protected data-into a system estimated that the IRS tively, the thiefCirculation hotline
                                                                                                                                                                                                                                                          thousands of the state De-                   spector General bad enough,                                     could simply be bluffing,
                                     them to be in “substantial    tion operating computer        struggle.”                     were “rare.”
                                     compliance with sound         systems.                          Maley said he dis-             “Other than one or two
                                                                                                                                                                      the state’s system is entirely but-“Noisy attacks areon all more prevalentpartment of Revenuetechnique isthen no system is safe. theft over he Two things are 800-736-7136
                                                                                                                                                               onto files with personal
                                                                                                                                                               information.                                and less stealthy
                                                                                                                                                                                                                               much                       bases and automatically inject them could issue $21 billion in fraudulent tax
                                                                                                                                                                                                                                      sorts of opera- with malicious code. That data-                  refunds as a result of identity
                                                                                                                                                                                                                                                                                                                                                       says.
                                                                                                                                                                                                                                                                                                                                                                              certain: Information
                                                                                                                                                                                                                                                                                                                                                                 Classified Ads 298-4221
                                     computer security prac-           “These threats exist       counted four agencies          records getting compro-              toned up. And investigators and thetional levels,” Baumgartner says. “Andbase, the top expert for the
                                                                                                                                                                  Maley said one issue                                                                    now widely used to crack into weakly the next five years.the director
                                                                                                                                                                                                                                                                                                        In February,                               Technology is complex and data thieves
                                                                                                                                                                                                                                                                                                                                                                         © Copyright 2012
                                     tices.”                       for individuals, all levels    from his review because        mised here and there,         that hegovernor declined to answer anytheykeep returning to their the attackersstateand government web comput-
                                                                                                                                                                       found is that while                 will
                                                                                                                                                                                                                 tend to be prolonged;
                                                                                                                                                                                                                                        target, some- ny
                                                                                                                                                                                                                                                          protected databases underlying compa-of the state Department variety are endlessly inventive at cashing in. Co.
                                                                                                                                                                                                                                                               hired to assess                            “We’re seeing a considerable of                      Greenville News-Piedmont
                                        Haley in April had         of government and pri-         they did not have any per-     none of them reported         all the agencies have                       times for years.”                           er the Internet. 16 agencies all across in the ways in whichinto money,” says stand the formatGannettstored data and
                                                                                                                                                                                                                                                          security at                sites
                                                                                                                                                                                                                                                                                            was        turning stolen data
                                                                                                                                                                                                                                                                                                                               cyber thieves are       “Some dataA    owners don’t fully under-
                                                                                                                                                                                                                                                                                                                                                                          of their
                                                                                                                                                                                                                                                                                                                                                                                    Newspaper
                                     threatened to fire any su-    vate industry that oper-       sonal information stored       anything over the past        computer security poli- See HACK, Page 4A There are two main ways criminals le-sounding notes of confidence.                                   See WARNING, Page 7A                                 136th year No. 251 • 36 pages
                                                                                                                                                                                                                                                             Most often data thieves are in the hunt Stephen Cobb, security analyst at antivi- can be fooled into thinking an attacker
                                     pervisor of any of her        ate computer systems,”         on anyone other than em-       five or 10 years,” he said.   cies and training pro-                      verage the intrinsic anonymity of the In- for information they can quickly sell to rus firm ESET. “It’s based on the type of has data when Printed not,” Baumgartn-
                                                                                                                                                                                                                                                                                                                                                                      they do on recycled paper.




Hackers steal residents’ data
                                     cabinet agencies if anoth-    she said. “However, most       ployees.                          Maley said agencies        grams on security, they                     ternet to crack into company and gov- the highest bidder in a cyber under- data stolen, the type of operations the da- er says.
                                     er database security          attempts are blocked              He also did not review      “were fixing things that      are not uniform.
                                     breach occurred and           through hardware and           security around the De-        needed to be fixed.”             That’s because the
                                     asked Maley to check the      software measures, user        partment of Health and                                       state has 100 agencies,
                                     security at each of her
                                     agencies’ computer sys-
                                                                   behavior and system
                                                                   monitoring.”
                                                                                                  Human Services because
                                                                                                  consultants were already
                                                                                                                                 Agency actions
                                                                                                                                    Some of the nine agen-
                                                                                                                                                               boards, universities and
                                                                                                                                                               colleges with computer
                                                                                                                                                                                                                      HACK                                                                                                                         monitoring tools. On Oct. 16, Mandiant
                                                                                                                                                                                                                                                                                                                                                   discovered that four intrusions had oc-
                                                                                                                                                                                                                                                                                                                                                   curred and that data was taken on Sept.
                                     tems.                                                        examining what hap-            cies reported reporting       systems, he said, with no
                                        “State government is       ‘No risk-less                  pened in the database          back to the governor on       one security policy or au-
                                                                                                                                                                                                           Continued from Page 1A                                                                                                                  13.
                                                                                                                                                                                                                                                                                                                                                       The firm continues to work to deter-
                                     entrusted with vital per-     system’                        theft and would make           actions they had taken        thority controlling each.                   substantive questions about the investi-                                                                                                mine what exactly was taken and wheth-
                                     sonal information from           Maley, a former FBI         recommendations.               said they had done many          However, he said the                     gation — including whether the database                                                                                                 er numbers were stolen or just exposed.
                                     South Carolinians, it’s       agent, told GreenvilleOn-         For the others, he said     things to tighten securi-     information technology                      may have been copied and whether tax-                                                                                                       “We’re making great progress,” said
                                     our job to secure that per-   line.com that a system’s       his office examined each       ty, while others men-         committee has devel-                        payers paid a ransom to the hacker to re-                                                                                               Marshall Heilman, director of the firm.
                                     sonal information, and        security has to be viewed      agency based on nine           tioned more of what they      oped uniform standards                      trieve it.                                                                                                                              “Those investigations are measured in
                                     that’s why the governor       in terms of the risk the       system security stan-          already had in place.         that may soon be recom-                        Haley administration officials, the                                                                                                  weeks and months, not hours and days.”
                                                                                                                                                                                                           State Law Enforcement Division and the                                                                                                      Keel and the Secret Service’s Wil-
                                     asked Inspector General       operators are willing to       dards used by a state in-         The Department of          mended to all agencies                      Secret Service disclosed the breach pub-                                                                                                liams refused to answer questions about
                                     Patrick Maley to review       assume.                        formation      technology      Health and Human Ser-         and schools.                                licly on Friday, raising questions about                                                                                                the investigation in an exclusive inter-
                                     information security at          “I feel like they have a    committee made up of           vices, for instance, has         “There were no gap-                      why officials kept it shrouded in secrecy                                                                                               view with GreenvilleOnline.com and
                                     cabinet agencies and          fundamentally sound in-        chief information offi-        instituted new data ac-       ing holes of the security                   while the records of millions of the state’s                                                                                            WLTX in Columbia, which first received
                                     make recommendations          formation security sys-        cers from various agen-        cess and security poli-       systems of these 16 agen-                   residents were nakedly exposed, and                                                                                                     a tip about the breach, including the
                                     for how to strengthen it,”    tem based on the risk,” he     cies and universities.         cies, including policies to   cies,” he said. “But there                  whether the system was now secure and                                                                                                   country where they believe the hacker
                                     Haley spokesman Rob           said of the cabinet agen-         What he and investiga-      restrict access to data to    were areas to improve.”                     whether taxpayers remain at risk.                                                                                                       resides.
                                     Godfrey told Greenville-      cies.                          tor George Davis found,                                                                                                The juxtaposition of the public mes-                                                                                                                              “It would be inappropriate for me to
                                                                                                                                                                                                                      sages by Haley and her administration                                                                                                                            comment,” Keel said. “We have a very
                                     Online.com.                      “It’s been my experi-       he said, was a bell curve                                                                                           on Friday were at times jarring.                                    State Law Enforcement Division Chief Mark Keel said authorities were “making every           sensitive investigation. Obviously, we
                                        “Many cabinet agen-        ence that your informa-        of results — two or three                                                                                              While one moment seeking to reas-                                effort that we can to bring someone to justice for this breach.” HEIDI HEILBRUNN/STAFF       are making every effort that we can to
                                                                                                                                                                                                                      sure residents, the governor at other                                                                                                                            bring someone to justice for this breach.
                                                                                                                                                                                                                      points implored them with a visible de-                             will be borne by the taxpayer. State gov-      policy, the agencies were basically sound     And it would be inappropriate for me to
                                                                                                                                                                                                                      gree of urgency to call a toll-free number                          ernment is paying for the cost of the          and the Revenue Department’s system           comment any further.”
                                                                                                                                                                                                                      and enroll in a credit-protection service                           credit-protection service for millions of      was the “best” among them.                        Keel said it’s not known “who is a vic-
                                                                                                                                                                                                                      being offered as a salve.                                           residents and the burden to taxpayers              By then, the hacker had taken the         tim and who is not yet. That part is very
                                                                                                                                                                                                                         The service, however, was quickly                                couldn’t be determined by GreenvilleOn-        database.                                     frustrating. These things don’t surprise
                                                                                                                                                                                                                      overwhelmed with callers. The website                               line.com on Friday.                                Officials refused to go into details of   me any more. We hear about these things
                                                                                                                                                                                                                      to which officials directed residents                                  Reactions from taxpayers ranged             what they have so far discovered about        happening all the time. We obviously hat-
                                                                                                                                                                                                                      wasn’t able to process those with ques-                             from shock and concern to resigned eye-        how the breach occurred and who was           ed it happened in South Carolina. But it’s
                                                                                                                                                                                                                      tions and by Friday afternoon the toll-                             rolling about their government in Colum-       behind it, but said the August intrusion      bad no matter where it affects people.”
                                                                                                                                                                                                                      free number wasn’t accepting any more                               bia.                                           was basically a scouting mission by the           Etter said Mandiant is working to de-
                                                                                                                                                                                                                      calls.                                                                 “It seems like just more of the same,”      hacker.                                       termine exactly what information was
                                                                                                                                                                                                                         The breach, officials said, potentially                          said Randall Young of Greenville. “You             “To the best of our knowledge, it was     taken as opposed to just exposed.
                                                                                                                                                                                                                      affects anyone who has filed a state tax                            read about it every day. It’s nothing new.”    kind of a look-see, what’s here,” said            As the investigation into the breaches
                                                                                                                                                                                                                      return since1998. Even weeks into the in-                           He added, “I don’t think anything’s really     James Etter, director of the Department       continues, Haley ordered an assessment
                                                                                                                                                                                                                      vestigation and during Friday’s public                              secure. The hackers are as smart as the        of Revenue. “They were not doing any-         of the entire state system of computers to
                                                                                                                                                                                                                      unveiling of it, law enforcement investi-                           people who program it.”                        thing with the data in August. They got in,   see if they, too, are vulnerable to similar
                                                                                                                                                                                                                      gators and Haley administration offi-                                  Some residents expressed doubt              ‘Now, let’s see what we’ve got.’”             attacks and thefts.
                                                                                                                                                                                                                      cials couldn’t say who, or precisely how                            about whether state government is tak-             Three more breaches followed — the
                                                                                                                                                                                                                      many, are at risk of having their identi-                           ing enough steps to safeguard sensitive        first, another “browse” on Sept. 3, Etter     Public kept in dark
                                                                                                                                                                                                                      ties stolen.                                                        personal information.                          said, and then two more, concluding with          Asked why they didn’t notify the pub-
                                                                                                                                                                                                                         All but 16,000 of the credit and debit                              “It makes me question the state and         the data theft on Sept. 13, Etter said.       lic, Keel and Williams said they decided
                                                                                                                                                                                                                      cards, officials said, were encrypted —                             how it was securing that kind of informa-          Authorities somehow discovered the        to notify the public after the investiga-
                                                                                                                                                                                                                      meaning they were coded against being                               tion,” said Misha Morris, a recent Clem-       intrusions on Oct. 10. A Secret Service       tion reached a series of “benchmarks.”
                                                                                                                                                                                                                      used by outside groups. But they said                               son graduate and Seneca resident. “It’s        agent, Mike Williams, said the agency’s       They said it was in the public’s best inter-
                                                                                                                                                                                                                      they don’t know whether hackers could                               scary.”                                        computer crimes office first uncovered        est that the investigation proceed fur-
                                                                                                                                                                                                                      break the encryption. The remaining                                    Lauren Hamilton, a 26-year-old              the intrusion and notified state authori-     ther before public notification.
                                                                                                                                                                                                                      credit cards are so old, investigators                              Greenville resident, gasped aloud at the       ties.                                             “We believed that during the course of
                                                                                                                                                                                                                      said, that they don’t believe they are at                           news of the breach.                                The Revenue Department was told by        the investigation that there were these
                                                                                                                                                                                                                      risk of being used.                                                    “I have a house. I pay for student          the state’s Division of Information Tech-     benchmarks that if we could reach, we
                                                                                                                                                                                                                         None of the Social Security numbers                              loans. I have to pay for that stuff. I’m not   nology, which then consulted with law en-     would do a better job of trying to protect
                                                                                                                                                                                                                      were encrypted and officials said they                              trying to let my credit get ruined,” she       forcement and contacted a computer se-        the public,” Keel said, declining to ex-
                                                                                                                                                                                                                      are studying whether they can do that —                             said.                                          curity firm recommended by the Secret         plain what the benchmarks were.
                                                                                                                                                                                                                      raising other questions about whether                                                                              Service — Mandiant — to “find and fix             No public funds were exposed or ac-
                                                                                                                                                                                                                      safeguards exist that weren’t used.                                 Haley reacts                                   the leak.”                                    cessed, officials said. The servers con-
                                                                                                                                                                                                                                                                                             The breach occurred, ironically, just           The Revenue Department contacted          taining funds were separate from those
                                                                                                                                                                                                                      Residents shocked                                                   as Haley’s inspector general, Patrick Ma-      Haley, and SLED Chief Mark Keel talked        containing the data that was taken, they
                                                                                                                                                                                                                         The governor at times used bellicose                             ley, was finishing his review of the secu-     to the governor as well.                      said.
                                                                                                                                                                                                                      language about wanting to slam the hack-                            rity for confidential information at Ha-           “I’m not real fond of computers,” Keel        Etter said initially that the “hole” in
                                                                                                                                                                                                                      er against a wall, and in a self-edited com-                        ley’s 16 cabinet agencies.                     said. “I was angry.”                          the Revenue Department’s computer
                                                                                                                                                                                                                      ment about kicking the hacker.                                         The review was sparked by the theft             But officials said they weren’t sure      system had been sealed on Oct. 20. But he
                                                                                                                                                                                                                         She acknowledged, however, that,                                 of data on nearly 239,000 Medicare and         what had happened, whether any data           later said officials were still examining
                                                                                                                                                                                                                      “It’s not a good day for South Carolina.”                           Medicaid recipients in April from the          had been stolen or whether any taxpay-        the system to be sure there were no other
                                                                                                                                                                                                                      She added, “South Carolina has come un-                             state Department of Health and Human           ers’ personal identification information      holes.
                                                                                                                                                                                                                      der attack but South Carolina is going to                           Services. An agency worker was                 had been exposed.                                 South Carolina, like many states,
                                                                                                                                                                                                                      fight back in every way possible to make                            charged and the case is pending, officials         The next day, Revenue Department          doesn’t operate a centrally controlled
                                                                                                                                                                                                                      sure every taxpayer is taken care of.”                              said.                                          officials began an internal investigation     system. Instead, most of the 100 boards,
                                                                                                                                                                                                                         The cost of fighting back, however,                                 Haley reacted defensively to ques-          of all outside contractors and certain em-    agencies, universities and commissions
                                                                                                                                                                                                                                                                                          tions about whether enough was done to         ployees to see if they had been involved      operate their own systems that officials
                                                                                                                                                                                                                                                                                          secure the state’s system after the            in any security breaches. They also be-       say complicates security measures.
                                                                                                                                                                                                                                                                                          breach in April.                               gan working on a plan to notify the public.       Maley said there are no mandatory
                                                                                                                                                                                                                                                                                             “This is totally different,” she said                                                     standards, which he said prevents him
                                                                                                                                                                                                                                                                                          about the Revenue Department hacking,          Outside experts                               “from feeling comfortable across the en-
                                                                                                                                                                                                                              Publisher                  CUSTOMER SERVICE                 stressing that the April incident came            While law enforcement officials            tire spectrum.”
                                                                                                                                                                                                                        STEVEN R. BRANDT
                                                                                                                                                                                                                       srbrandt@greenvillenews.com
                                                                                                                                                                                                                                                              (800) 736-7136              from inside the Department of Health           pushed ahead with their secret investiga-         Taxpayers are being asked to call 1-
                                                                                                                                                                                                                               (864) 298-4416        Hours: Mon.-Fri. 8 a.m.- 7 p.m.      and Human Services. “This is unprece-          tion, state computer officials began mon-     866-578-5422 to determine if their infor-
                                                                                                                                                                                                                                                     Sat. 7-11 a.m., Sun. 7 a.m.-1 p.m.
                                                                                                                                                                                                                            Executive Editor
                                                                                                                                                                                                                           JOHN S. PITTMAN
                                                                                                                                                                                                                                                       Walk-in hours: Mon.-Fri. 8         dented. This is an international attack        itoring Revenue Department computers          mation is affected. The state will provide
                                                                                                                                                                                                                              (864) 298-4165                    a.m.- 5 p.m.              that did not come from the inside.”            for any unusual withdrawals of data.          those affected with one year of credit
                                                                                                                                                                                                                            Managing Editor
                                                                                                                                                                                                                           J. CHRIS WESTON
                                                                                                                                                                                                                                                                                             In his September letter to Haley, Ma-       Revenue officials, meanwhile, decided if      monitoring and identify-theft protec-
                                                                                                                                                                                                                              (864) 298-4471
                                                                                                                                                                                                                                                           FULL ACCESS                    ley concluded that while the systems of        they saw data being withdrawn, they           tion, officials said.
                                                                                                                                                                                                                          VP/Sales & Marketing
                                                                                                                                                                                                                                                        SUBSCRIPTION RATES                cabinet agencies he had finished examin-       would shut down the system.
                                                                                                                                                                                                                            MAGGIE KROST
                                                                                                                                                                                                                         mkrost@greenvillenews.com
                                                                                                                                                                                                                                                     Full Access including
                                                                                                                                                                                                                                                     Mon.-Sun. print delivery: $24.00
                                                                                                                                                                                                                                                                                          ing could be tweaked and there was a              Four days later, officials said, Man-      ■ Staff writer Amy Clarke Burns contributed to
                                                                                                                                                                                                                              (864) 298-4342
                                                                                                                                                                                                                                                     per month ($22.00 per month if       need for a statewide uniform security          diant began installing surveillance and       this report.
                                                                                                                                                                                                                        General Manager, Gannett
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  • 1. INVESTIGATIVE REPORTING All Daily Division HACKER STEALS RESIDENTS’ DATA Breathtaking heist exposes 387,000 credit, 3.6 million Social Security numbers Earlier breaches may have MORE ON THE STORY »» Not the first time Earlier breaches may have affected 410,000, 7A Profit driven Hackers turn data into cash, 4A affected 410,000 in state SECOND PLACE: Many involved health care of the notices sent to af- fected consumers. A public access to the names. financial organizations turned in 12 breach no- organizations, agency report says breach is defined as the The law requires ev- tices affecting almost unauthorized access of ery business or agency 19,000 consumers; and By Tim Smith The report doesn’t in- items containing per- reporting to them to noti- other industries submit- Capital Bureau clude the most recent fis- sonal identifying infor- fy affected customers or ted 29 notices affecting tcsmith@greenvilleonline.com cal year, or the database mation. It doesn’t neces- residents. about 17,000 residents, theft earlier this year of sarily mean the informa- The law went into ef- according to the data COLUMBIA — South almost 230,000 records tion was actually stolen fect in July 2009, al- from Consumer Affairs. Carolina state agencies from the Department of or misused. though some companies A total of six breaches and businesses over a Health and Human Ser- Some organizations reported breaches for were reported last year three-year period report- vices, said Juliana Har- didn’t report numbers of 2008 as well. but the number of people ed dozens of computer se- ris, spokeswoman for the people affected, officials The agency has so far affected far exceeded curity breaches that po- agency. said, so the actual num- received a total of 56 no- previous years, accord- tentially could affect at State law requires ber could be much high- tices of computer breach- ing to the report, which least 410,000 people, a re- businesses or govern- er. es with a total impact of doesn’t detail any conse- port obtained by Green- ment agencies to report The report doesn’t list 410,865 residents, ac- quences of the breaches. villeOnline.com shows. computer security the names of businesses cording to the report. Health-care organiza- Much of that, accord- breaches to the Consum- or government agencies Of the 56 disclosures, tions alone reported The Greenville News ing to a report by the state er Affairs Office if the reporting the security the health-care industry, 325,000 people impacted Department of Consum- potential impact is at breaches. such as hospitals, submit- from three security er Affairs, came from least 1,000 people. GreenvilleOnline.com ted nine notices affecting breaches in 2011, accord- health care organizations They must also notify has filed a South Carolina 340,000 residents. Gov- ing to the data. last year, which reported the major credit bureaus Freedom of Information ernment agencies sub- breaches affecting a pos- and include the timing, Act request, which the mitted six breaches af- sible 325,000 people. distribution and content agency required, to gain fecting 35,000 residents; WARNING cies have already strengthened their infor- tion security system is only a function of how well above the others, four or five in the middle employees with duties that require such access. mation security, and bad somebody wants to and two agencies with Updated tools now al- Continued from Page 1A we’re not going to stop look at it. I can assure more substantive find- low officials to identify until we have the strong- you, if somebody wants ings. personal information Motor Vehicles told law- est information-security to get into your system, He would not disclose contained in emails. makers that foreign practices in the country.” they can get into your the identities of the agen- And a new policy on hackers were attacking Lindsey Kremlick, system. The question is cies or the exact details outside employment “is Tim Smith, David Dykes, his agency’s computer spokeswoman for the how much time, energy but said he will eventual- designed to deter em- systems on a daily basis, state Budget and Control and commitment they ly release his reports. ployees from improperly trying to get into data- Board, which houses the have and how hard are He said the Depart- benefiting from their po- bases that contained a state’s information tech- you going to make it for ment of Revenue is sition and/or the data treasure trove of driver nology office, said there them to minimize that among the nine reviewed they may have access personal information. is no centralized comput- risk. There is no risk-less but would not discuss his to,” according to the In April, a state Medi- er system for state agen- system.” findings yet, saying he agency’s summary ob- caid employee was cies in South Carolina, State Law Enforce- wants permission from tained by GreenvilleOn- Gov. Nikki Haley expressed her anger charged with six counts making it impossible to ment Division Chief law enforcement first. line.com. Friday towards a hacker who breached of violating confidential- ity and Medicaid laws af- ter authorities accused know exactly how many security breaches have occurred. Mark Keel said South Carolina is not unique in attempts by hackers to Common problems The most common At the Department Tim Smith Employment and Work- By of force, remote access to bureau Capital Government remedy Department of Revenue information. At right is state Department of Revenue him of transferring rec- ords on nearly 230,000 Medicaid patients to his “Agencies indepen- dently manage their own information technology breach computer securi- ty at state agencies. “It’s nationwide,” he problems he found, he said, were that agencies did not have a response computer systems is now COLUMBIA — secured using a “best- The first intrusion practices” authentica- unnoticed by any began in August, SPEAK OUT frustrates residents Director James Etter. HEIDI HEILBRUNN/STAFF email account and then including data, applica- said. “Systems are con- plan in case of a security tion, controls have been officials operating the Department By David Dykes sending a copy to another tions, security and infra- stantly being hit trying to breach, lacked adequate implemented to revokecomputer system, » Go to Greenville MAKING YOUR person. structure,” she said. find a way into them, security for the paper of Revenue’s access to computer sys- Online.com/ Staff Writer VOICE HEARD WHAT YOU CAN DO And in August, the “Agencies are not re- whether it’s just to plant a records that contain con- tems once an employee is not far from the which is located Eric Connor and Facebook to tell us A crush of South Carolina the deluge of calls from resi- Taxpayers are being asked to call 1-866-578- University of South Car- quired to utilize the Bud- virus or whatever. That’s fidential information and terminated, security has the State Law En- headquarters of Hackers can make money off data olina’s College of Educa- get and Control Board’s just a constant thing that did not regularly search been forcement Division. increased over how you think the residents, confused and wor- dents who were urged by Gov. 5422 to determine if their information is tion disclosed that rec- Division of State Infor- we see.” for personal information By the time the computer state handled the stored paper documents ried about their vulnerability, Nikki Haley and others to vis- affected. Due to high call volume on Friday, ords of 34,000 students, mation Technology’s Marcos Vieyra, chief that might be stored in and officials are scan- the U.S. Secret Ser- crimes office of security breach and if did what their governor it the firm’s website or call to many residents reported being unable to get faculty and researchers (DSIT) IT services. For information security of- multiple computer files. ning all computers used they should do more. had been exposed during these reasons, we cannot ficer for the University Maley characterized in the agency’s SCWorks a problem on Oct.By Byron Acohido vice discovered urged them to do Thecalling a ondetermine if theiraround an onlinethrough, but state officials say the service is ernment databases. in first hinges ground that revolves informa- ta thief is running and also on market a security breach by an accurately provide an in- of South Carolina, said at- the findings as problems 10, foreign hacker had taken aUSA TODAY join the centers foraany personal And toll-freegullibility, the other on moderatetion is affected.rich and efficient asworking to add operators. human number for identity marketplace as conditions.” overseas hacker. with the “icing” of com- database from the Revenue De- discussion on Twitter information. hacking skills: protection, quickly over- eBay. Buyers added and are “We have of stolen data include Recent chatter in the cyber under- ■ Spear phishing. From But even after that, of- puter security rather partment’s computers exposing 3.6their tracks while cracking into compa-whelming the system. society’s per-still in the process ofinformationac- ground suggest that money launderers At the Department of Cyber criminals’ expertise at hiding with the hashtag crime rings that use the vasive use of web commerce and social hijack funds from online adding financial to may be having some difficulty hiring INSIDE ficials believed the “It’s been my experience that your than with the “cake.” #schacked. Labor, million Social Security numbersny and government networks has ad- networks officials social engineering:more operators in orderusing stolen mules, who sometimes carry out the Licensing and State has arisen said they counts. Others specialize in to an- state’s computers, at Davis said the re- Regulation, pending use least those operated by information security system is only sponse plan is important and 387,000 credit and debit cardvanced considerably over the past dec-wereability for a data thief to extensivelyswer taxpayers’ series of online ac- risky final step of extracting cash from policies will provide for the scrambling with an identities to set up calls,” said ade. profile a targeted victim and subse- counts through which to launder illicit the last of series of counterfeited online Gov. Nikki Haley’s 16 a function of how bad somebody because it’s more a mat- numbers, one of SEE MORE more monitoring of In- the largest com- Data thieves today commonly alteridentity-protection into clicking on online cash transfers. quently fool that person firm to Abby .......................4D Obituaries ..............6B accounts. cabinet agencies, were ter of when than if an ternet puter breaches in the state or na-the fonts, web addresses and strings ofadd infected attachment or web link. usage, officials an operators to respond to Recently, PROTECT, Page 7A has See stolen identity data “There may not be enough takers (for Area news ..............1B Religion..................2D safely protecting data wants to look at it.” agency will be hacked. tion. are working on a mecha- alphanumeric video from their attack » Watch characters in ■ The infection turns control of the come under rising demand from tax stolen data) in the black market,” Cobb Automotive............1F Sports ......................1C with personal informa- STATE INSPECTOR GENERAL PATRICK MALEY “There is so much ef- The breathtaking breach hascode to throwa lot of spoofing the scent. victim uses over or the attacker. If the len names, addresses and Social Securi- says. nism for generating doc- “There is investigators off the governor’s and head victim’s PC his to her computer for fraudsters. One popular caper uses sto- Bridge.....................4D attempting to Security experts say Television...............4D tion. fort now to steal this data launched a high-stakes interna-fakes going on topress it seem like an at- work, the intruder now has a foothold to ty numbers to generate faked tax re- get the victimized company Things to to uments that limits and afternoon make Business..................6A or agency do..........8D In fact, records show, and get this data,” Davis logs all user activity, and tackconference and view State had warnings is originating from a different re- probe an organization’s network, map turns. Refunds get directed to a debit pay a ransom for the return of stolen da- building security is being investigation andgion,” timeline Baumgartner, senior se- the location of key databases and pilfer card account — set up with a stolen iden- taClassifieds ..............6D U.S./World .............2A tional criminal Ron Barnett by the time Department said. “You just can’t pro- a says Kurt of the is rare. of Revenue computers ventory of all statewide tacks by hackers on his tect it 100 percent of the audited and restrictedNikki Haley, whosecurity researcher at Kaspersky Lab. prompted Gov. were successfully computer systems, system are “extremely time. And you can’t pro- on an as-needed state’s response to more sophis- data, typically over the course of months tity — then used to make cash withdraw- isComics ....................5D because .....................8A based administration had another mas- Generally speaking, the or even years. card is that the thief controls. A debit “The selling of data backVoices a higher risk strategy, to someone it’s a the attack, the Lifestyle ..................1D Weather .................5B hacked, state Inspector spending information re- common.” He said hack- tect it from every effort.” sive theft of confidential informa-ticated cyber attacks that are being con- basis for work outside ■ SQL injection attacks. SQL hacks als at an ATM. By Tim Smith And the former FBI agent one-off attempt to cash in that’s much General Patrick Maley lated to computer securi- ers are drawn to college Maley said each agen- normal hours. another cabinet agency ear-ducted daily for criminal gain appear to involve querying Bureau tion at governor’s executive the databases underly- Last July, the Treasury Inspector easier to trace,” Cobb says. originate in Russia, while “noisier” at- ing a web Capitalpage until a database hiccupsdirected for Tax Administration issued a General by Gov. Nikki Haley Another reason a data thief might try had already delivered a letter to Haley informing ty, or statistics related to security breaches for the computer systems for their open networks, fast cy was asked whether it had experienced comput- lier this year, to order an assess-tacks tend and learn more other na- and accepts an injection of maliciousto report showing that the IRSafter to pre- to sell stolen data back toHigh 72 And at the Depart- ment of Transportation, order to originate from review the system failed a the victim about the security tions in Asia and Eastern Europe, tech code. Up until— The warnings COLUMBIA early 2008, SQL hacksseries of breaches at agencies Low 51 vent 1.5 million potentially fraudulent would be if the data is of a highly sensi- her that his review of state.” Internet access and pro- er security breaches or Social ment of all the state’s computersecurity experts say. Security numbers were done manually, one web site at a tax returns from being processed last tive nature, such that certain parties threat from hackers. nine cabinet agencies, in- She said computer at- prietary research data. loss of information. have systems. been eliminated The cutting-edge Russian attackswere there. time. In the spring of 2008, a bright hack-said with some refunds to identity would be highly motivated to pay a ran- year, resulting in resignation cluding the Department tacks are a continuing Preventing breaches, Davis said officials re- Many questions remain unan-tend to be stealthy, while noisy attacks er came up with aa hacker was that if a of more than $5.2 billion. The In- som, Baumgartner observes. Alterna- from all reports and en- But even as way to quickly locate thieves hacker wanted to get www.greenvilleonline.com of Revenue, had found threat for any organiza- he said, “is a constant ported such instances cryption has been added swered. Officials are still unsuretend to be persistent and resilient.cracking into weakly-protected data-into a system estimated that the IRS tively, the thiefCirculation hotline thousands of the state De- spector General bad enough, could simply be bluffing, them to be in “substantial tion operating computer struggle.” were “rare.” compliance with sound systems. Maley said he dis- “Other than one or two the state’s system is entirely but-“Noisy attacks areon all more prevalentpartment of Revenuetechnique isthen no system is safe. theft over he Two things are 800-736-7136 onto files with personal information. and less stealthy much bases and automatically inject them could issue $21 billion in fraudulent tax sorts of opera- with malicious code. That data- refunds as a result of identity says. certain: Information Classified Ads 298-4221 computer security prac- “These threats exist counted four agencies records getting compro- toned up. And investigators and thetional levels,” Baumgartner says. “Andbase, the top expert for the Maley said one issue now widely used to crack into weakly the next five years.the director In February, Technology is complex and data thieves © Copyright 2012 tices.” for individuals, all levels from his review because mised here and there, that hegovernor declined to answer anytheykeep returning to their the attackersstateand government web comput- found is that while will tend to be prolonged; target, some- ny protected databases underlying compa-of the state Department variety are endlessly inventive at cashing in. Co. hired to assess “We’re seeing a considerable of Greenville News-Piedmont Haley in April had of government and pri- they did not have any per- none of them reported all the agencies have times for years.” er the Internet. 16 agencies all across in the ways in whichinto money,” says stand the formatGannettstored data and security at sites was turning stolen data cyber thieves are “Some dataA owners don’t fully under- of their Newspaper threatened to fire any su- vate industry that oper- sonal information stored anything over the past computer security poli- See HACK, Page 4A There are two main ways criminals le-sounding notes of confidence. See WARNING, Page 7A 136th year No. 251 • 36 pages Most often data thieves are in the hunt Stephen Cobb, security analyst at antivi- can be fooled into thinking an attacker pervisor of any of her ate computer systems,” on anyone other than em- five or 10 years,” he said. cies and training pro- verage the intrinsic anonymity of the In- for information they can quickly sell to rus firm ESET. “It’s based on the type of has data when Printed not,” Baumgartn- they do on recycled paper. Hackers steal residents’ data cabinet agencies if anoth- she said. “However, most ployees. Maley said agencies grams on security, they ternet to crack into company and gov- the highest bidder in a cyber under- data stolen, the type of operations the da- er says. er database security attempts are blocked He also did not review “were fixing things that are not uniform. breach occurred and through hardware and security around the De- needed to be fixed.” That’s because the asked Maley to check the software measures, user partment of Health and state has 100 agencies, security at each of her agencies’ computer sys- behavior and system monitoring.” Human Services because consultants were already Agency actions Some of the nine agen- boards, universities and colleges with computer HACK monitoring tools. On Oct. 16, Mandiant discovered that four intrusions had oc- curred and that data was taken on Sept. tems. examining what hap- cies reported reporting systems, he said, with no “State government is ‘No risk-less pened in the database back to the governor on one security policy or au- Continued from Page 1A 13. The firm continues to work to deter- entrusted with vital per- system’ theft and would make actions they had taken thority controlling each. substantive questions about the investi- mine what exactly was taken and wheth- sonal information from Maley, a former FBI recommendations. said they had done many However, he said the gation — including whether the database er numbers were stolen or just exposed. South Carolinians, it’s agent, told GreenvilleOn- For the others, he said things to tighten securi- information technology may have been copied and whether tax- “We’re making great progress,” said our job to secure that per- line.com that a system’s his office examined each ty, while others men- committee has devel- payers paid a ransom to the hacker to re- Marshall Heilman, director of the firm. sonal information, and security has to be viewed agency based on nine tioned more of what they oped uniform standards trieve it. “Those investigations are measured in that’s why the governor in terms of the risk the system security stan- already had in place. that may soon be recom- Haley administration officials, the weeks and months, not hours and days.” State Law Enforcement Division and the Keel and the Secret Service’s Wil- asked Inspector General operators are willing to dards used by a state in- The Department of mended to all agencies Secret Service disclosed the breach pub- liams refused to answer questions about Patrick Maley to review assume. formation technology Health and Human Ser- and schools. licly on Friday, raising questions about the investigation in an exclusive inter- information security at “I feel like they have a committee made up of vices, for instance, has “There were no gap- why officials kept it shrouded in secrecy view with GreenvilleOnline.com and cabinet agencies and fundamentally sound in- chief information offi- instituted new data ac- ing holes of the security while the records of millions of the state’s WLTX in Columbia, which first received make recommendations formation security sys- cers from various agen- cess and security poli- systems of these 16 agen- residents were nakedly exposed, and a tip about the breach, including the for how to strengthen it,” tem based on the risk,” he cies and universities. cies, including policies to cies,” he said. “But there whether the system was now secure and country where they believe the hacker Haley spokesman Rob said of the cabinet agen- What he and investiga- restrict access to data to were areas to improve.” whether taxpayers remain at risk. resides. Godfrey told Greenville- cies. tor George Davis found, The juxtaposition of the public mes- “It would be inappropriate for me to sages by Haley and her administration comment,” Keel said. “We have a very Online.com. “It’s been my experi- he said, was a bell curve on Friday were at times jarring. State Law Enforcement Division Chief Mark Keel said authorities were “making every sensitive investigation. Obviously, we “Many cabinet agen- ence that your informa- of results — two or three While one moment seeking to reas- effort that we can to bring someone to justice for this breach.” HEIDI HEILBRUNN/STAFF are making every effort that we can to sure residents, the governor at other bring someone to justice for this breach. points implored them with a visible de- will be borne by the taxpayer. State gov- policy, the agencies were basically sound And it would be inappropriate for me to gree of urgency to call a toll-free number ernment is paying for the cost of the and the Revenue Department’s system comment any further.” and enroll in a credit-protection service credit-protection service for millions of was the “best” among them. Keel said it’s not known “who is a vic- being offered as a salve. residents and the burden to taxpayers By then, the hacker had taken the tim and who is not yet. That part is very The service, however, was quickly couldn’t be determined by GreenvilleOn- database. frustrating. These things don’t surprise overwhelmed with callers. The website line.com on Friday. Officials refused to go into details of me any more. We hear about these things to which officials directed residents Reactions from taxpayers ranged what they have so far discovered about happening all the time. We obviously hat- wasn’t able to process those with ques- from shock and concern to resigned eye- how the breach occurred and who was ed it happened in South Carolina. But it’s tions and by Friday afternoon the toll- rolling about their government in Colum- behind it, but said the August intrusion bad no matter where it affects people.” free number wasn’t accepting any more bia. was basically a scouting mission by the Etter said Mandiant is working to de- calls. “It seems like just more of the same,” hacker. termine exactly what information was The breach, officials said, potentially said Randall Young of Greenville. “You “To the best of our knowledge, it was taken as opposed to just exposed. affects anyone who has filed a state tax read about it every day. It’s nothing new.” kind of a look-see, what’s here,” said As the investigation into the breaches return since1998. Even weeks into the in- He added, “I don’t think anything’s really James Etter, director of the Department continues, Haley ordered an assessment vestigation and during Friday’s public secure. The hackers are as smart as the of Revenue. “They were not doing any- of the entire state system of computers to unveiling of it, law enforcement investi- people who program it.” thing with the data in August. They got in, see if they, too, are vulnerable to similar gators and Haley administration offi- Some residents expressed doubt ‘Now, let’s see what we’ve got.’” attacks and thefts. cials couldn’t say who, or precisely how about whether state government is tak- Three more breaches followed — the many, are at risk of having their identi- ing enough steps to safeguard sensitive first, another “browse” on Sept. 3, Etter Public kept in dark ties stolen. personal information. said, and then two more, concluding with Asked why they didn’t notify the pub- All but 16,000 of the credit and debit “It makes me question the state and the data theft on Sept. 13, Etter said. lic, Keel and Williams said they decided cards, officials said, were encrypted — how it was securing that kind of informa- Authorities somehow discovered the to notify the public after the investiga- meaning they were coded against being tion,” said Misha Morris, a recent Clem- intrusions on Oct. 10. A Secret Service tion reached a series of “benchmarks.” used by outside groups. But they said son graduate and Seneca resident. “It’s agent, Mike Williams, said the agency’s They said it was in the public’s best inter- they don’t know whether hackers could scary.” computer crimes office first uncovered est that the investigation proceed fur- break the encryption. The remaining Lauren Hamilton, a 26-year-old the intrusion and notified state authori- ther before public notification. credit cards are so old, investigators Greenville resident, gasped aloud at the ties. “We believed that during the course of said, that they don’t believe they are at news of the breach. The Revenue Department was told by the investigation that there were these risk of being used. “I have a house. I pay for student the state’s Division of Information Tech- benchmarks that if we could reach, we None of the Social Security numbers loans. I have to pay for that stuff. I’m not nology, which then consulted with law en- would do a better job of trying to protect were encrypted and officials said they trying to let my credit get ruined,” she forcement and contacted a computer se- the public,” Keel said, declining to ex- are studying whether they can do that — said. curity firm recommended by the Secret plain what the benchmarks were. raising other questions about whether Service — Mandiant — to “find and fix No public funds were exposed or ac- safeguards exist that weren’t used. Haley reacts the leak.” cessed, officials said. The servers con- The breach occurred, ironically, just The Revenue Department contacted taining funds were separate from those Residents shocked as Haley’s inspector general, Patrick Ma- Haley, and SLED Chief Mark Keel talked containing the data that was taken, they The governor at times used bellicose ley, was finishing his review of the secu- to the governor as well. said. language about wanting to slam the hack- rity for confidential information at Ha- “I’m not real fond of computers,” Keel Etter said initially that the “hole” in er against a wall, and in a self-edited com- ley’s 16 cabinet agencies. said. “I was angry.” the Revenue Department’s computer ment about kicking the hacker. The review was sparked by the theft But officials said they weren’t sure system had been sealed on Oct. 20. But he She acknowledged, however, that, of data on nearly 239,000 Medicare and what had happened, whether any data later said officials were still examining “It’s not a good day for South Carolina.” Medicaid recipients in April from the had been stolen or whether any taxpay- the system to be sure there were no other She added, “South Carolina has come un- state Department of Health and Human ers’ personal identification information holes. der attack but South Carolina is going to Services. An agency worker was had been exposed. South Carolina, like many states, fight back in every way possible to make charged and the case is pending, officials The next day, Revenue Department doesn’t operate a centrally controlled sure every taxpayer is taken care of.” said. officials began an internal investigation system. Instead, most of the 100 boards, The cost of fighting back, however, Haley reacted defensively to ques- of all outside contractors and certain em- agencies, universities and commissions tions about whether enough was done to ployees to see if they had been involved operate their own systems that officials secure the state’s system after the in any security breaches. They also be- say complicates security measures. breach in April. gan working on a plan to notify the public. Maley said there are no mandatory “This is totally different,” she said standards, which he said prevents him about the Revenue Department hacking, Outside experts “from feeling comfortable across the en- Publisher CUSTOMER SERVICE stressing that the April incident came While law enforcement officials tire spectrum.” STEVEN R. BRANDT srbrandt@greenvillenews.com (800) 736-7136 from inside the Department of Health pushed ahead with their secret investiga- Taxpayers are being asked to call 1- (864) 298-4416 Hours: Mon.-Fri. 8 a.m.- 7 p.m. and Human Services. “This is unprece- tion, state computer officials began mon- 866-578-5422 to determine if their infor- Sat. 7-11 a.m., Sun. 7 a.m.-1 p.m. Executive Editor JOHN S. PITTMAN Walk-in hours: Mon.-Fri. 8 dented. This is an international attack itoring Revenue Department computers mation is affected. The state will provide (864) 298-4165 a.m.- 5 p.m. that did not come from the inside.” for any unusual withdrawals of data. those affected with one year of credit Managing Editor J. CHRIS WESTON In his September letter to Haley, Ma- Revenue officials, meanwhile, decided if monitoring and identify-theft protec- (864) 298-4471 FULL ACCESS ley concluded that while the systems of they saw data being withdrawn, they tion, officials said. VP/Sales & Marketing SUBSCRIPTION RATES cabinet agencies he had finished examin- would shut down the system. MAGGIE KROST mkrost@greenvillenews.com Full Access including Mon.-Sun. print delivery: $24.00 ing could be tweaked and there was a Four days later, officials said, Man- ■ Staff writer Amy Clarke Burns contributed to (864) 298-4342 per month ($22.00 per month if need for a statewide uniform security diant began installing surveillance and this report. General Manager, Gannett