--:-- Ryan Knudsen: Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Tuesday, October 29th.
--:-- Ryan Knudsen: During the last presidential election, Chris Krebs was the head of election cybersecurity for the Department of Homeland Security. His job was to basically watch over the nation's voting systems, make sure they weren't hacked, and that foreign nations or bad actors didn't try to break in and change the outcome.
--:-- Ryan Knudsen: After the 2020 results came in, showing Joe Biden had defeated President Donald Trump, Krebs and other cybersecurity officials released a statement saying that the 2020 election was, quote, the most secure in American history, and that, quote, Trump disagreed with that assessment. He claimed, without evidence, that the election was rigged and stolen from him.
--:-- Ryan Knudsen: So after Krebs put out that statement, Breaking news out of the White House. President Trump has just fired Christopher Krebs. He's the director of the Federal Election Security Agency that repeatedly vouched for the accuracy of the 2020 election.
--:-- Ryan Knudsen: It called the election the most secure ever and directly contradicted the president's false claims of voter fraud. President Trump fired Krebs via tweet.
--:-- Ryan Knudsen: Krebs responded on Twitter, writing, quote, Honored to serve. We did it right. Defend today, secure tomorrow. And yes, I misspelled tomorrow.
--:-- Ryan Knudsen: Last week, our colleague Rolf Winkler interviewed Krebs at the Wall Street Journal's Tech Live conference. Rolf had Krebs' tweet posted on the screen behind him.
--:-- Ryan Knudsen: Thanks for that. That was fun. Speaking of tomorrow, did you go into work the next day?
--:-- Ryan Knudsen: I did, because I had five computers at home. It was the middle of COVID, so there was about half the time working from home, the other half in the office, probably had three iPads, six phones, had to return all that stuff.
--:-- Ryan Knudsen: So I get into the office and my HR head calls and says, hey, so your separation papers, they left the reason for separation blank. So you get to fill that in? So like, do you want to say you resigned or that you were fired?
--:-- Ryan Knudsen: I'm like, are you serious? 88 million people just saw that I was fired.
--:-- Ryan Knudsen: After getting fired, Krebs went back into the private sector. Now, he's the director of a cybersecurity firm called Sentinel One.
--:-- Ryan Knudsen: And in this job, he's continued to have a front row seat to election security and the rise of new threats from foreign adversaries.
--:-- Ryan Knudsen: And he says what he sees from Chinese hacking groups is getting more and more serious.
--:-- Ryan Knudsen: So my view right now is that if it were not for the U.S. election all the attention around the political outcome, but also some of the interference that we're seeing from the Iranians, from the Russians, from the Chinese, if it were not for that, we would be wall-to-wall coverage of the escalation and the tension emanating from China.
--:-- Ryan Knudsen: Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Tuesday, October 29th. Coming up on the show, cybersecurity expert Chris Krebs on the security of this year's presidential election and the rapid rise of cyber threats from China.
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--:-- Ryan Knudler: Here's our colleague Rolf Winkler on stage with Chris Krebs last week at the Wall Street Journal's Tech Live conference in California.
--:-- Rolf Winkler: I want to turn to the present election. What worries you about the election in two weeks?
--:-- Chris Krebs: Yeah, so I was watching CBS morning show this morning and Jen Easterly, my successor, was on and it was like an out-of-body experience. She's saying the exact same things I was saying four years ago. The threats have not changed, right? And I could even go back to 2016 and tell you that the threats have not changed.
--:-- Chris Krebs: So when you look at what the Russians did, it was primarily three things. One is they were looking into election equipment. The second is they were hacking political campaigns and leaking documentation. And the third is they were launching a much broader information operation to kind of destabilize public trust.
--:-- Chris Krebs: So on the first thread of going after election systems, we have seen the Russians, we've seen the Iranians, you know, make efforts to look into different counties and states across the U.S. to get into those systems. But they are much more secure than they've ever been.
--:-- Rolf Winkler: A lot of paper. Yeah, well, so what he's talking about is votes cast in the United States. At this point, for the 24 election, 98% of votes cast will have a paper record associated with it. What's that good for? Auditing. You can go back and count. You can count again.
--:-- Rolf Winkler: In 2016, that was fewer than 80%. So one of the big initiatives that we had after the 2016 election was to eliminate some of those touchscreen systems that came into vogue after what? The 2000 election, when they got rid of the, you know, due to the hanging chads, they got rid of the pull arm system.
--:-- Rolf Winkler: So we went to more digitized systems, but not necessarily as many with that sidecar that would spit out a ballot. There aren't as many systems that they can hack into and change votes.
--:-- Rolf Winkler: Well, yeah, so first off, the systems that you touch to vote are not connected to the Internet, right? To get access to one of these systems, you need some time to spend with it, to crack it open. And they are under lock and key. They are supervised throughout.
--:-- Rolf Winkler: But the most important thing is they are tested before, they are tested during, and they are tested after the election. It's called logic and accuracy testing, and they pull them out and they test them throughout.
--:-- Rolf Winkler: But again, the most important part is there is a ballot associated with your vote. OK, so if this we don't have to worry about, what do we have to worry about?
--:-- Rolf Winkler: All right. So the biggest issue right now we're seeing is this full-fledged assault throughout the information ecosystem. It's social media. It's traditional media.
--:-- Rolf Winkler: We're seeing the Russians try to buy and influence influencers, popular podcasters, $10 million. And they don't know what's happening necessarily. They don't know who's their witting or unwitting.
--:-- Rolf Winkler: Yeah. But but ultimately they're being propped up as agents of influence on behalf of the Russian government.
--:-- Rolf Winkler: I think the issue is that more than anything, social media, the incentive dynamics or the incentive structures in social media have changed to such a degree where there are no consequences. It's all about engagement.
--:-- Rolf Winkler: You know, on on X, you can get paid for for views in some of the podcast. gas culture, same thing. It's all about getting as many people onto the platform. How do you do that?
--:-- Rolf Winkler: If Harris wins this election, there's maybe a good chance that it'll be disputed. Do you think that will happen? And how should the country respond?
--:-- Chris Krebs: Look, I think there are legal challenges that are already in flight to, for instance, challenge military voters, overseas voters, the UACAVA process. I think that is probably setting up as a pretext for challenges.
--:-- Chris Krebs: I'll say this, though. I think that the process itself, the certification of votes January 6th through inauguration, I think those guardrails will hold. I do.
--:-- Chris Krebs: But they held in 2020 and we're where we are today. And, you know, 70 plus percent of Republicans think the election was stolen. So it's not necessarily about the technical administration of the process.
--:-- Chris Krebs: It's about the narrative and in the myth building that happens around it. And the conspiracy theories, they run deep and they're very, very difficult to counter and debunk.
--:-- Chris Krebs: And in some cases, a lot of the stuff that I'm seeing today, when I talk to election officials, they're not even thinking about engaging those that are true believers. They see them as lost and gone.
--:-- Chris Krebs: It's those that are on the fence and could be tipping into the fever swamps. How do you engage those folks and get them accurate information on what's really happening in election administration?
--:-- Rolf Winkler: Who are you going to vote for in this election? That is a heck of a question. I mean, I think it's pretty clear based on my Twitter history in my personnel record, you know, where I stand on this one.
--:-- Rolf Winkler: You're a lifelong Republican. Yeah, look, I served in the Bush administration. I was there in the early days of the Department of Homeland Security.
--:-- Rolf Winkler: I came in in support of, you know, not necessarily the Republican Party, but public service in the Constitution in 2017. I think I played that through all the way up through the election in 2020.
--:-- Rolf Winkler: So, but at this point, I'm voting Harris.
--:-- Rolf Winkler: Coming up, Chris Krebs on the rise of Chinese hacking threats.
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--:-- Rolf Winkler: Now, you are at a cybersecurity firm, Sentinel One. Yep. And the thing that keeps you up at night is the attacks that have come out of China. Yeah. The typhoons that are washing ashore. That's what we're calling them. Salt Typhoon, Volt Typhoon, Flax Typhoon. Crimson, Gingham. Keep going.
--:-- Rolf Winkler: Oh, I didn't know about those. Typhoon. That's the name given to hacking groups connected to the Chinese government.
--:-- Rolf Winkler: These groups, like Salt Typhoon and Volt Typhoon, are embedding themselves in America's critical infrastructure and broadband networks.
--:-- Rolf Winkler: A spokesman at the Chinese embassy in Washington has denied that Beijing is responsible for the alleged breaches. Give us the highlights and tell us which are the ones we need to be most worried about and why.
--:-- Chris Krebs: So in the last several years, there's been a marked shift in the aggressiveness of China, not just in cybersecurity, but in general military buildup and preparedness.
--:-- Chris Krebs: In fact, the CIA director, Bill Burns, has said that based on their analysis, that President Xi has directed his military to be ready for a takeover of Taiwan by 2027.
--:-- Chris Krebs: Now, the political decision to invade or not to invade has not necessarily been made, but the preparedness, the readiness for that invasion, 2027, that has been issued.
--:-- Chris Krebs: Therefore, the U.S. National Security Establishment, so this was General Milley previously, now the current leadership, the director of the FBI, Chris Wray, the director of national intelligence, has called China the pacing threat.
--:-- Chris Krebs: They're the ones by which we measure our capabilities. And unfortunately, at this point, in cyber, at least, they're outstripping us. 600,000 cyber offensive operators. That's more than the U.S. and our allies.
--:-- Chris Krebs: That's more than all of those countries combined. It is a significant risk. When you say 600,000 operators, you mean... Hands-on keyboards.
--:-- Chris Krebs: Okay. Yeah. I mean, I'm talking hands-on keyboards, that many between the Ministry of State Security, the People's Liberation Army. I mean, it is a significant threat.
--:-- Chris Krebs: So what are they doing? They're reaching into U.S. companies and Western companies, taking intellectual property and know-how and bringing it back, sharing it with national champions, operationalizing, subsequently supplanting companies in the market.
--:-- Chris Krebs: But it feels like we've moved past just the corporate espionage. So they are, firstly, they are absolutely still in the steal everything phase. Okay. So they're coming in, they're taking everything from health records to financial data, throwing it into a big data ocean, and then running tools, including some AI capabilities over the top, to look for correlations, patterns of life, to expose intelligence operatives and things like that.
--:-- Chris Krebs: But the most concerning thing is that they've also directed their military to start pre-positioning in critical infrastructure. So they are getting into telecommunications firms. They're getting into our military support and logistics outposts in Guam, in Okinawa, in Diego Garcia, in Honolulu, in Australia, on the West Coast here, ports of L.A. and Long Beach.
--:-- Chris Krebs: They want to be able to disrupt our ability to project force in support of Taiwan should they make that move. So that in and of itself is concerning. Why? Well, I mean, it's very easy, I think, for people to, we get lots of stories about cyber attacks and our personal information is compromised in something and we just keep going on with our daily lives and we don't really notice anything's different.
--:-- Chris Krebs: Like, why do we care? Well, look, look what happened, what has happened rather in Ukraine for several years, dating back to 2015. The Russians, the GRU, which is their military intelligence unit, they brought down the Ukrainian grid several times.
--:-- Chris Krebs: That's what China is preparing for. Not just the ability to turn off support to our military, but the second prong of the Volt Typhoon attack, which is the PLA, the military, is to, in an almost stochastic, ad hoc manner, hit civilian critical infrastructure.
--:-- Chris Krebs: So to turn off the water in Omaha. There no rhyme or reason They are scanning You think that possible You think they have the capability today to turn off water across the country or turn off our grid So not wholesale right They can't snap their fingers and shut down the entirety of the U.S. grid.
--:-- Chris Krebs: It's not wired like that. It's fairly resilient, but there are things they could do at a regional level for temporary disruption. And this is why they, this is the difference between the Chinese and the Russians in the U.S.
--:-- Chris Krebs: When we think about cybersecurity, we almost exclusively think about it in a technical construct. It's just, is the thing secure? Can it be hacked? Can it be damaged?
--:-- Chris Krebs: The way the Chinese and the Russians think about it is in two different parallels. One is the technical attacks. So information technical. The second is information psychological.
--:-- Chris Krebs: So they combine the technical attack, which doesn't have to be at a national level. It can be at a regional level, but they combine it with the psychological effect where they have the impact and the outcome, but then they amplify it through social media and other sorts of these psychological operations, disinfo, and they get it to multiply and it creates civil unrest.
--:-- Chris Krebs: It creates societal panic. That is what's so concerning right now about Volt Typhoon in that second prong of the Chinese, the People's Republic of China, their strategy.
--:-- Chris Krebs: What do we do about it? Well, this is the real challenge. There's not a lot the U.S. military can do to counter these activities coming out of China because if you tear down their command and control infrastructure, they'll just repopulate and build a new one the next day they just keep cycling.
--:-- Chris Krebs: We can indict we can name and shame and indict these officers for the pla and the mss no not many are going to be extra but they're not but they're not yet well first off they're not being extradited but they're probably not leaving china anyway so the long arm of the law can't reach them so this is where we have a bit of a gap in our defensive strategy where we need actually this is where corporate responsibility comes in and the business leaders that I'm talking to, I think, are beginning to appreciate, oh, wait, we're now in the crosshairs.
--:-- Chris Krebs: We're on the front lines of modern warfare because we've democratized the internet, because we've reduced barriers to entry. And it's not just China. It's not just Russia. It's also now we've got a global outbreak of ransomware.
--:-- Chris Krebs: And the waste through the economy is absolutely out of control right now. And it's hitting hospitals, it's hitting schools, state and local governments. How do we fight back against that?
--:-- Chris Krebs: This is what I think has really emerged over the last 18 months, is that ransomware is effectively a tool of geopolitical warfare as well. Five, six, seven, eight years ago, it was really what it was meant to be. which is criminals, that have figured out how to monetize misconfigured and vulnerable systems.
--:-- Chris Krebs: And by ransomware, you sort of mean get inside a system, lock it down, and say you've got to pay us millions of dollars if you want the keys back. So you get your entry, you get in, you deploy malware that spreads throughout the system and encrypts the servers.
--:-- Chris Krebs: Now, that's evolved as well because before they encrypt, they're also exfiltrating. They're taking the data out somewhere else, and they're saying, first pay us to unlock it, but also pay us not to release this data.
--:-- Chris Krebs: On China, I mean, is there any way for us to offensively counteract what they've done? I mean, can we get into their infrastructure? Are we doing that? Well, from a military perspective, and, you know, look, I'm not going to comment on Cyber Command and other operations.
--:-- Chris Krebs: For one, you know, it's been a few years. But we have significant capabilities. You know, the problem is that we have the glassiest house. So we can have big rocks, but when the house is down the street, they're the glassiest.
--:-- Chris Krebs: Because from a digital perspective, when you look at the top 10 most valuable companies in the world, what, eight of them are tech companies, seven of them are U.S. tech companies. I mean, that's a great thing. We've created enormous value by digitizing virtually everything.
--:-- Chris Krebs: We've also created enormous risk and enormous liability in doing so. And for now, the gains and the losses of the ledger are still heavily in the favor of productivity across the economy.
--:-- Chris Krebs: But the risks are starting to build up. And I think that is where we have to be thinking very, very clearly about what the foreign risk is, the Chinese in particular, and what that means to individual companies that can be looped into an operation and exploited by the Chinese.
--:-- Ryan Knudsen: Okay, we got to leave it there. Thanks, everyone. Thank you. Thanks, Chris. That's all for today, Tuesday, October 29th. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening. See you tomorrow.
