1
00:00:03,600 --> 00:00:09,479
Speaker 1: Like call here in order like to welcome our witnesses today,

2
00:00:09,600 --> 00:00:13,800
Speaker 1: Director of National Intelligence Dan Coates, Dan, it's good to

3
00:00:13,840 --> 00:00:16,840
Speaker 1: see our former may. A group of U. S. Senators

4
00:00:16,840 --> 00:00:19,800
Speaker 1: held the public hearing. It was about maybe the most

5
00:00:19,840 --> 00:00:24,000
Speaker 1: divisive tech company that you've never heard of. Kaspersky Lab

6
00:00:24,079 --> 00:00:28,160
Speaker 1: software is used by not hundreds of thousands, millions of Americans.

7
00:00:28,720 --> 00:00:33,519
Speaker 1: Kaspersky Lab, that's Russia's top saber security company. This is

8
00:00:33,560 --> 00:00:37,440
Speaker 1: Marco Rubio, a Republican senator from Florida. He's sitting behind

9
00:00:37,440 --> 00:00:40,639
Speaker 1: a wooden dais with the rest of the Senate's Intelligence Committee,

10
00:00:41,040 --> 00:00:44,479
Speaker 1: and he's questioning a panel of America's most senior intelligence officials.

11
00:00:44,800 --> 00:00:46,880
Speaker 1: To each of our witnesses, I would just ask, would

12
00:00:46,880 --> 00:00:50,720
Speaker 1: any of you be comfortable with Kaspersky Lab software on

13
00:00:50,760 --> 00:00:56,280
Speaker 1: your computers? Resounding note for me, No Senator, no sir,

14
00:00:57,360 --> 00:01:02,560
Speaker 1: No Senator, no sir. This software from Kaspersky Lab that

15
00:01:02,680 --> 00:01:06,720
Speaker 1: none of these intelligence officials want on their computers. It's

16
00:01:06,760 --> 00:01:09,679
Speaker 1: not just your run of the mill application. It's anti

17
00:01:09,800 --> 00:01:14,160
Speaker 1: virus software that gets very deep access into our computers

18
00:01:14,200 --> 00:01:18,440
Speaker 1: to protect us from hackers. Their software is installed all

19
00:01:18,480 --> 00:01:20,840
Speaker 1: over the United States, in the computers of not just

20
00:01:21,080 --> 00:01:24,800
Speaker 1: US ordinary consumers, but also in the computers of banks,

21
00:01:24,800 --> 00:01:28,360
Speaker 1: power plants, internet routers, and even portions of the U. S. Government.

22
00:01:28,840 --> 00:01:32,679
Speaker 1: The intelligence officials in this hearing didn't specify why they

23
00:01:32,680 --> 00:01:37,160
Speaker 1: Seekspersky Lab as a security threat, but the senators, once

24
00:01:37,200 --> 00:01:41,240
Speaker 1: again without mentioning details, seem to be very concerned about

25
00:01:41,240 --> 00:01:44,240
Speaker 1: the ties that the company has with Russia's own government,

26
00:01:44,760 --> 00:01:47,480
Speaker 1: the very government that tried to influence and hack the

27
00:01:47,600 --> 00:01:51,280
Speaker 1: U S presidential elections last fall. Today, I'm going to

28
00:01:51,360 --> 00:01:54,440
Speaker 1: give you a peek into Cospersky's connections with people inside

29
00:01:54,520 --> 00:01:58,640
Speaker 1: Russia's intelligence services, relationships the company has tried to keep secret.

30
00:01:59,080 --> 00:02:01,040
Speaker 1: It's an investigation and that we've been working on for

31
00:02:01,080 --> 00:02:03,640
Speaker 1: about two years now. These are details that have never

32
00:02:03,680 --> 00:02:18,720
Speaker 1: been reported on before. Hi am Aki Ito, and I'm

33
00:02:18,760 --> 00:02:21,840
Speaker 1: Jordan Robertson. And this week on Decrypted, we're going to

34
00:02:21,919 --> 00:02:25,560
Speaker 1: be introducing you to Kaspersky Lab and its founder and CEO,

35
00:02:25,919 --> 00:02:30,560
Speaker 1: Eugene Kaspersky in Russia. Eugene is a celebrity entrepreneur, one

36
00:02:30,560 --> 00:02:33,519
Speaker 1: of the few really big names in Moscow's tech industry.

37
00:02:34,000 --> 00:02:36,080
Speaker 1: He's built a huge business across the U S and

38
00:02:36,080 --> 00:02:38,800
Speaker 1: Western Europe, which together make up more than half the

39
00:02:38,840 --> 00:02:43,359
Speaker 1: company sales. Kaspersky himself has publicly denied working with the

40
00:02:43,440 --> 00:02:47,200
Speaker 1: Russian government, and he's offered to answer senators questions and

41
00:02:47,240 --> 00:02:50,160
Speaker 1: to make the company's source code available to the US

42
00:02:50,240 --> 00:02:53,600
Speaker 1: government to show that there's no cause for concern. But

43
00:02:53,680 --> 00:02:57,040
Speaker 1: after listening to this episode, I think you'll understand why

44
00:02:57,160 --> 00:03:00,400
Speaker 1: the US government thinks Kaspersky maybe vone are able to

45
00:03:00,480 --> 00:03:03,760
Speaker 1: Russian government influence. Now, none of this is meant to

46
00:03:03,800 --> 00:03:07,079
Speaker 1: suggest that Kaspersky has actually used its connections with the

47
00:03:07,120 --> 00:03:10,440
Speaker 1: Russian government for malicious purposes. We do not have any

48
00:03:10,440 --> 00:03:14,240
Speaker 1: basis for believing them. But the combination of having relationships

49
00:03:14,240 --> 00:03:17,400
Speaker 1: with people in Russian intelligence, as well as the ability

50
00:03:17,440 --> 00:03:22,120
Speaker 1: to closely monitor large swaths of our digital infrastructure, is

51
00:03:22,200 --> 00:03:27,200
Speaker 1: making American officials nervous, and other unusual things are happening too.

52
00:03:27,639 --> 00:03:30,800
Speaker 1: According to one recent report, FBI agents visited the homes

53
00:03:30,800 --> 00:03:35,000
Speaker 1: of several Kaspersky employees here in the US. Kaspersky confirmed

54
00:03:35,000 --> 00:03:37,600
Speaker 1: that FBI agents have had brief interactions with some of

55
00:03:37,640 --> 00:03:40,720
Speaker 1: its US employees, but said the discussions were just due

56
00:03:40,800 --> 00:03:44,680
Speaker 1: diligence chats. Plus, we'll please some tape that has never

57
00:03:44,800 --> 00:03:49,880
Speaker 1: been aired before of using Kaspersky himself talking candidly on

58
00:03:49,920 --> 00:03:54,040
Speaker 1: the record about his relationship with some Russian government officials.

59
00:03:54,520 --> 00:04:03,080
Speaker 1: Stay with us. So. Eugene Kaspersky was educated at a

60
00:04:03,160 --> 00:04:06,760
Speaker 1: KGB sponsored cryptography institute, and he later worked for Russian

61
00:04:06,760 --> 00:04:10,280
Speaker 1: military intelligence. But the reason he's famous is for his company,

62
00:04:10,360 --> 00:04:13,040
Speaker 1: Kaspersky Lab. It was a company he started twenty years

63
00:04:13,040 --> 00:04:16,719
Speaker 1: ago in the early days of anti virus security software,

64
00:04:17,040 --> 00:04:19,560
Speaker 1: and it's made him a rich man. It's also made

65
00:04:19,640 --> 00:04:22,560
Speaker 1: him the target of some of these congressional and intelligence

66
00:04:22,560 --> 00:04:26,320
Speaker 1: community attacks. Right he's viewed at home in Russia kind

67
00:04:26,320 --> 00:04:29,240
Speaker 1: of the way we think about Mark Zuckerberg right here

68
00:04:29,279 --> 00:04:33,000
Speaker 1: in the US he is. Here's how he's viewed in Russia. Well,

69
00:04:33,200 --> 00:04:38,880
Speaker 1: he's a big boss. He's a renowned industry and business leader.

70
00:04:39,400 --> 00:04:42,839
Speaker 1: That's Oleg Demodov, a Russian cyber warfare expert with a

71
00:04:42,920 --> 00:04:46,880
Speaker 1: p i R Center, an international security research organization based

72
00:04:46,880 --> 00:04:51,680
Speaker 1: in Moscow. You cannot often see him in some regularly

73
00:04:51,800 --> 00:04:56,719
Speaker 1: regular level conference or industry events. Ah. He appears in

74
00:04:56,760 --> 00:05:01,960
Speaker 1: the public not so often, but he any any his speech,

75
00:05:02,040 --> 00:05:07,120
Speaker 1: any his statement in his blog. AH. In many cases

76
00:05:07,240 --> 00:05:10,280
Speaker 1: this is gonna be in the event Eugene is a boisterous,

77
00:05:10,279 --> 00:05:12,680
Speaker 1: barrel chested guy in his fifties. I've met him a

78
00:05:12,680 --> 00:05:14,840
Speaker 1: few times, and everyone who's met him will tell you

79
00:05:14,920 --> 00:05:18,320
Speaker 1: the same thing. He's the life of the party. He's gregarious,

80
00:05:18,400 --> 00:05:20,839
Speaker 1: quick with a joke, and you just get the sense

81
00:05:20,839 --> 00:05:23,520
Speaker 1: that this guy knows stuff that others don't like. He's

82
00:05:23,520 --> 00:05:26,000
Speaker 1: plugged into places not a lot of other people are.

83
00:05:26,520 --> 00:05:30,279
Speaker 1: And his company, Kaspersky Lab, has a big reputation too.

84
00:05:31,240 --> 00:05:34,880
Speaker 1: I can't tell you that in Moscow here, because Barresky

85
00:05:35,000 --> 00:05:41,359
Speaker 1: Lab has been regarded is probably the most successful company

86
00:05:41,400 --> 00:05:47,040
Speaker 1: in Russian information security cyber security sector, and that success

87
00:05:47,080 --> 00:05:50,480
Speaker 1: all came from the anti virus software that the company sells,

88
00:05:51,680 --> 00:05:54,720
Speaker 1: because Persky makes deals with retailers and PC makers to

89
00:05:54,800 --> 00:05:58,080
Speaker 1: install it software on the devices, in some cases even

90
00:05:58,120 --> 00:06:01,119
Speaker 1: before you buy it. And this part of Kaspersky's business

91
00:06:01,279 --> 00:06:04,120
Speaker 1: is very large. It's what the company is most known for.

92
00:06:04,560 --> 00:06:08,599
Speaker 1: I sense a butt, but Kaspersky's technology is also pervasive

93
00:06:08,600 --> 00:06:12,200
Speaker 1: in less obvious places. The company boasts some four hundred

94
00:06:12,279 --> 00:06:15,919
Speaker 1: million users worldwide, but according to one person familiar with

95
00:06:15,920 --> 00:06:18,960
Speaker 1: how the company counts users, as many as two hundred

96
00:06:19,080 --> 00:06:22,320
Speaker 1: million of those probably don't know it. That's because of

97
00:06:22,440 --> 00:06:26,719
Speaker 1: undisclosed licensing agreements that put the Kaspersky Lab anti virus

98
00:06:26,800 --> 00:06:30,000
Speaker 1: system in things like Internet routers that power large corporate

99
00:06:30,040 --> 00:06:37,320
Speaker 1: networks and even critical US infrastructure. Kaspersky was founded in Moscow,

100
00:06:37,440 --> 00:06:41,160
Speaker 1: but has quickly expanded its business to other markets. More

101
00:06:41,200 --> 00:06:43,960
Speaker 1: than half of Kaspersky Labs revenue last year came from

102
00:06:44,000 --> 00:06:46,440
Speaker 1: the U S and Europe, according to the research company

103
00:06:46,520 --> 00:06:50,120
Speaker 1: I d C. And Eugene knows it's critically important that

104
00:06:50,240 --> 00:06:53,680
Speaker 1: his clients in the West do not associate him too

105
00:06:53,680 --> 00:06:56,960
Speaker 1: closely with his government, which of course has been actively

106
00:06:57,040 --> 00:07:01,040
Speaker 1: hacking political operatives across the US and euro app. Yes,

107
00:07:01,279 --> 00:07:03,880
Speaker 1: but I do need to emphasize it's not just Russian

108
00:07:03,920 --> 00:07:06,560
Speaker 1: companies that have to work with the Russian government. I

109
00:07:06,600 --> 00:07:08,440
Speaker 1: don't think there's a tech company in the world that

110
00:07:08,480 --> 00:07:11,440
Speaker 1: can just refuse to cooperate with its home government. Right

111
00:07:11,560 --> 00:07:15,720
Speaker 1: The Edwards Snowden revelations showed a pretty cozy relationship between

112
00:07:15,720 --> 00:07:18,280
Speaker 1: the n s A and a lot of American tech companies,

113
00:07:19,000 --> 00:07:21,160
Speaker 1: so it wouldn't be surprising at all two people in

114
00:07:21,200 --> 00:07:23,840
Speaker 1: the industry if Kaspersky Lab had to keep some amount

115
00:07:23,880 --> 00:07:27,160
Speaker 1: of contact with the Russian government complying with legal requests

116
00:07:27,200 --> 00:07:29,880
Speaker 1: for information and that kind of thing. Those sorts of

117
00:07:29,880 --> 00:07:35,240
Speaker 1: requests are very routine and happened here in the US too. Um.

118
00:07:37,320 --> 00:07:40,000
Speaker 1: But then there's the stuff that you've discovered in your

119
00:07:40,040 --> 00:07:44,600
Speaker 1: reporting with our cybersecurity reporter Michael Reiley. Right. Our reporting

120
00:07:44,640 --> 00:07:48,040
Speaker 1: shows that Kaspersky has maintained a much closer working relationship

121
00:07:48,080 --> 00:07:52,560
Speaker 1: with Russia's main intelligence agency, the FSB, than Eugene Kaspersky

122
00:07:52,600 --> 00:07:56,320
Speaker 1: has publicly admitted. We found evidence that Kaspersky Lab developed

123
00:07:56,320 --> 00:08:00,720
Speaker 1: custom security technology that the FSB asked for. Plus we've

124
00:08:00,800 --> 00:08:04,440
Speaker 1: uncovered some joint projects between the company and Russian intelligence.

125
00:08:04,840 --> 00:08:08,920
Speaker 1: Coming up, we'll hear the details on Jordan's and Mike's investigation.

126
00:08:09,440 --> 00:08:25,600
Speaker 1: That's right after the short break. Hi, I'm Pagat Carrie,

127
00:08:25,640 --> 00:08:28,679
Speaker 1: a producer Here on Decrypted. We hear a lot about

128
00:08:28,720 --> 00:08:32,400
Speaker 1: the possibility that robots and algorithms could take away our jobs.

129
00:08:32,720 --> 00:08:35,719
Speaker 1: But how real is this threat? If you're seeing or

130
00:08:35,840 --> 00:08:39,920
Speaker 1: experiencing automation at work, or suspect your job will be impacted,

131
00:08:40,080 --> 00:08:42,760
Speaker 1: please get in touch with us. We want to hear

132
00:08:42,880 --> 00:08:46,440
Speaker 1: your story, even use it for a future episode. Record

133
00:08:46,480 --> 00:08:49,240
Speaker 1: a voice message on your smartphone and email it to

134
00:08:49,440 --> 00:08:59,439
Speaker 1: decrypted at Bloomberg dot net. Before the break, we were

135
00:08:59,600 --> 00:09:02,280
Speaker 1: just about have to hear the details of your investigation,

136
00:09:02,440 --> 00:09:05,319
Speaker 1: Jordan with Mike. That highlighted some of the work that

137
00:09:05,559 --> 00:09:09,959
Speaker 1: Kaspersky has done for the FSB, So let's hear these details. So,

138
00:09:10,200 --> 00:09:13,319
Speaker 1: my colleague Mike Riley and I recently reviewed internal emails

139
00:09:13,320 --> 00:09:16,679
Speaker 1: from October two thousand nine, suggesting that at least back then,

140
00:09:17,160 --> 00:09:20,280
Speaker 1: Kaspersky Lab had a close working relationship with the FSB.

141
00:09:20,720 --> 00:09:24,040
Speaker 1: Now remember that's the main intelligence agency in Russia, right,

142
00:09:24,160 --> 00:09:27,680
Speaker 1: And what did that relationship look like? These emails actually

143
00:09:27,720 --> 00:09:31,280
Speaker 1: come from Eugene Kaspersky himself discussing a project with his

144
00:09:31,400 --> 00:09:34,240
Speaker 1: senior staff. The emails show that even back in two

145
00:09:34,320 --> 00:09:38,200
Speaker 1: thousand nine, so again, eight years ago, Kaspersky was making

146
00:09:38,320 --> 00:09:42,040
Speaker 1: custom software to protect the government's own network from any

147
00:09:42,160 --> 00:09:47,160
Speaker 1: kind of external hack. And that doesn't sound that unusual, right, Well,

148
00:09:47,360 --> 00:09:49,559
Speaker 1: it's one thing to make the software and sell it

149
00:09:49,600 --> 00:09:52,880
Speaker 1: to the government, But the emails also discussed another type

150
00:09:52,920 --> 00:09:56,839
Speaker 1: of operation. Kaspersky Lab's own employees appear to have been

151
00:09:56,960 --> 00:10:01,240
Speaker 1: physically accompanying Russian agents on these raids to locate people

152
00:10:01,320 --> 00:10:04,320
Speaker 1: thought to be launching hacks or cyber attacks against the government,

153
00:10:04,640 --> 00:10:08,079
Speaker 1: so not just tracking these hackers down from their offices,

154
00:10:08,240 --> 00:10:12,040
Speaker 1: but actually riding along on the cop cars. Correct. Have

155
00:10:12,200 --> 00:10:15,800
Speaker 1: you heard of this kind of thing ever happening before? No. Never.

156
00:10:15,960 --> 00:10:18,440
Speaker 1: We talked to lots of cybersecurity experts, and I've never

157
00:10:18,520 --> 00:10:21,800
Speaker 1: spoken to one who's accompanied a federal law enforcement agent

158
00:10:21,880 --> 00:10:24,840
Speaker 1: on an arrest. It's very common for private sector security

159
00:10:24,880 --> 00:10:27,800
Speaker 1: companies here in the US to provide data on criminal

160
00:10:27,880 --> 00:10:31,400
Speaker 1: hackers to the FBI, which then makes the arrest right

161
00:10:31,640 --> 00:10:34,960
Speaker 1: And and what else did you find? Those emails, which

162
00:10:34,960 --> 00:10:37,480
Speaker 1: I should remind everyone were written in two thousand nine,

163
00:10:37,960 --> 00:10:41,360
Speaker 1: mentioned two Kaspersky Lab employees by name. One of them

164
00:10:41,840 --> 00:10:44,280
Speaker 1: was the Kaspersky employee going out on those raids with

165
00:10:44,360 --> 00:10:48,240
Speaker 1: the FSP agents. In December, the Russian government arrested that

166
00:10:48,360 --> 00:10:51,600
Speaker 1: man on treas and charges for alleged connections to get

167
00:10:51,679 --> 00:10:56,079
Speaker 1: this U S intelligence, which is quite the twist. It is.

168
00:10:56,760 --> 00:11:00,680
Speaker 1: A senior Russian intelligence official was also arrested, and while

169
00:11:00,720 --> 00:11:03,280
Speaker 1: we don't know the exact nature of the treason charges,

170
00:11:03,679 --> 00:11:06,120
Speaker 1: what is clear is that the Russian government is paying

171
00:11:06,240 --> 00:11:17,520
Speaker 1: very close attention to Kaspersky Lab and its employees for

172
00:11:17,640 --> 00:11:20,719
Speaker 1: a company that claims to have no connections to the

173
00:11:20,800 --> 00:11:26,000
Speaker 1: Russian government, having employees ride along on these raids sounds

174
00:11:26,200 --> 00:11:29,040
Speaker 1: very much like a connection. And as luck would have it,

175
00:11:29,200 --> 00:11:31,360
Speaker 1: Mike and I actually broached some of these subjects with

176
00:11:31,440 --> 00:11:35,360
Speaker 1: Eugene Kaspersky back in for a profile we did on

177
00:11:35,480 --> 00:11:39,000
Speaker 1: the company for Bloomberg Business Week. Eugene Kaspersky agreed to

178
00:11:39,080 --> 00:11:41,880
Speaker 1: let us record the interview, which was all on the record,

179
00:11:42,280 --> 00:11:45,479
Speaker 1: and Jordan's this was the first time that you confronted

180
00:11:45,720 --> 00:11:49,520
Speaker 1: Eugene Kaspersky with information you'd obtained back then about his

181
00:11:49,640 --> 00:11:54,160
Speaker 1: ties to Russian officials. Correct, and his answers were surprisingly candid,

182
00:11:54,640 --> 00:11:57,439
Speaker 1: even though he'd later deny, saying some of it okay,

183
00:11:57,480 --> 00:12:00,520
Speaker 1: So let's place some of that tape. Well, I'll play

184
00:12:00,520 --> 00:12:03,840
Speaker 1: you this bit first. This is where Eugene Kaspersky suggests

185
00:12:03,880 --> 00:12:07,160
Speaker 1: that his company's interactions with law enforcement, both in Russia

186
00:12:07,280 --> 00:12:12,160
Speaker 1: and in other countries around the world, happened routinely. Well, actually,

187
00:12:12,200 --> 00:12:15,400
Speaker 1: we're in touch with the wet us everywhere on the world.

188
00:12:15,960 --> 00:12:20,120
Speaker 1: We're in touch with the Center Police and cybersecuritiy UH.

189
00:12:20,280 --> 00:12:23,600
Speaker 1: And in the Russia, the cyber police is for their

190
00:12:23,800 --> 00:12:26,600
Speaker 1: low level cyber crime, and there was a serious attacks

191
00:12:26,640 --> 00:12:30,880
Speaker 1: like carbon for example. This level it's ah FSB development,

192
00:12:31,000 --> 00:12:34,360
Speaker 1: which is kind of DHS right side the side. So

193
00:12:34,559 --> 00:12:37,720
Speaker 1: of course we've worked very close to them because there's

194
00:12:37,760 --> 00:12:41,319
Speaker 1: so much crime in Russia. But after quite openly talking

195
00:12:41,360 --> 00:12:44,000
Speaker 1: about the work that he does with the FSB, Eugene

196
00:12:44,040 --> 00:12:47,200
Speaker 1: Kospersky reverts to this favorite punch line of his, which

197
00:12:47,280 --> 00:12:49,760
Speaker 1: is that he's closer to the FBI in America than

198
00:12:49,840 --> 00:12:52,679
Speaker 1: he is with Russian authorities. He repeated a version of

199
00:12:52,760 --> 00:12:55,280
Speaker 1: this on May eleven, where he said, and I quote,

200
00:12:55,840 --> 00:12:58,840
Speaker 1: we don't have ties to any government other than paying taxes.

201
00:12:59,360 --> 00:13:01,640
Speaker 1: We paid tax is in many countries as we are

202
00:13:01,720 --> 00:13:05,280
Speaker 1: a very international company. Here's the club. So there are

203
00:13:05,360 --> 00:13:09,360
Speaker 1: rumors about our very special links in creaming we'll have.

204
00:13:09,960 --> 00:13:11,880
Speaker 1: I'd like say that, of course we have in touch

205
00:13:11,960 --> 00:13:15,360
Speaker 1: with these guys, but I think that in Israel, in

206
00:13:15,720 --> 00:13:19,959
Speaker 1: in the United States, we have much better connections. This

207
00:13:21,440 --> 00:13:26,520
Speaker 1: love enforcement And in this interview in Mike and I

208
00:13:26,640 --> 00:13:29,160
Speaker 1: asked Eugene about this thing we heard about where he

209
00:13:29,200 --> 00:13:31,840
Speaker 1: goes to the banya with members of the Russian military

210
00:13:31,960 --> 00:13:36,800
Speaker 1: and Russian intelligence. Is a Russian sauna that's right, And

211
00:13:36,960 --> 00:13:39,959
Speaker 1: we wanted to ask specifically about this because if it's true,

212
00:13:40,520 --> 00:13:43,160
Speaker 1: that would suggest he has friendly relationships with people in

213
00:13:43,240 --> 00:13:47,000
Speaker 1: Russian intelligence. When I go to Bunnet, it's like a

214
00:13:47,760 --> 00:13:50,200
Speaker 1: difference not only from the company, but we don't talk

215
00:13:50,240 --> 00:13:54,880
Speaker 1: about business. There are those friends FSB, military generals or

216
00:13:54,920 --> 00:13:59,079
Speaker 1: some of those, or military personnel. And therefore, did we

217
00:13:59,160 --> 00:14:02,000
Speaker 1: have one guy there it's a friend of us, uh,

218
00:14:02,200 --> 00:14:07,120
Speaker 1: he's City diet As. He simply there because well, actually

219
00:14:07,200 --> 00:14:10,760
Speaker 1: he was responsible for certification, so to get the military

220
00:14:10,800 --> 00:14:12,760
Speaker 1: contract in the New States, in the Europe and the

221
00:14:12,800 --> 00:14:16,079
Speaker 1: rest of the same, you have for positivetification. So we

222
00:14:16,120 --> 00:14:26,240
Speaker 1: went to was that man for long years? Okay, so

223
00:14:26,320 --> 00:14:29,200
Speaker 1: we've got through some of the details of your investigation,

224
00:14:29,360 --> 00:14:34,360
Speaker 1: Jordan's with Mike that suggested Kaspersky Labs relationship with Russian

225
00:14:34,440 --> 00:14:38,560
Speaker 1: intelligence is much closer than the company has publicly admitted.

226
00:14:39,200 --> 00:14:42,520
Speaker 1: So let's take off the main points. Sure. First, there's

227
00:14:42,520 --> 00:14:46,400
Speaker 1: the information from the company's internal emails suggesting that Kaspersky

228
00:14:46,480 --> 00:14:50,880
Speaker 1: Lab employees participated in raids with Russian agents. Then there's

229
00:14:50,880 --> 00:14:54,040
Speaker 1: the employee who apparently went on those raids getting arrested

230
00:14:54,120 --> 00:14:57,680
Speaker 1: by the Russians on treason charges. And of course there's

231
00:14:57,680 --> 00:15:01,320
Speaker 1: Eugene Kaspersky himself telling us on the record that he

232
00:15:01,400 --> 00:15:04,000
Speaker 1: goes to these Banya knights with his friends, some of

233
00:15:04,040 --> 00:15:08,440
Speaker 1: whom are Russian military and intelligence officials. So let's swim

234
00:15:08,520 --> 00:15:13,320
Speaker 1: out to the geopolitical situation. Tensions are mounting, with Congress

235
00:15:13,520 --> 00:15:17,560
Speaker 1: and the FBI looking separately into allegations that Russia was

236
00:15:17,640 --> 00:15:20,480
Speaker 1: trying to influence the U S election. And it isn't

237
00:15:20,520 --> 00:15:24,000
Speaker 1: just a US. Russia's cyber operations have been getting increasingly

238
00:15:24,040 --> 00:15:28,360
Speaker 1: aggressive in France, the Netherlands and Germany too, So Kaspersky's

239
00:15:28,480 --> 00:15:31,960
Speaker 1: wide business network in the US, combined with a working

240
00:15:32,080 --> 00:15:35,800
Speaker 1: relationship with the Russian government, is what's making officials here

241
00:15:35,960 --> 00:15:39,720
Speaker 1: in the US nervous. For them, even the possibility of

242
00:15:39,840 --> 00:15:43,960
Speaker 1: Kaspersky's platform being used as a backdoor into computers, firewalls,

243
00:15:44,000 --> 00:15:47,120
Speaker 1: and routers around the world is terrifying, although we don't

244
00:15:47,160 --> 00:15:49,280
Speaker 1: have evidence that the company ever tried to do this.

245
00:15:49,760 --> 00:15:53,480
Speaker 1: And in a statement, Democratic Senator Jean Chaheen called the

246
00:15:53,600 --> 00:15:57,760
Speaker 1: ties between Kaspersky and the Kremlin quote alarming, and she

247
00:15:57,840 --> 00:16:00,280
Speaker 1: said it's because of that that the Congress and the

248
00:16:00,320 --> 00:16:05,120
Speaker 1: administration thinks quote Kaspersky Lab cannot be trusted to protect

249
00:16:05,160 --> 00:16:10,280
Speaker 1: critical infrastructure, particularly computer systems vital to our nations security,

250
00:16:10,720 --> 00:16:13,080
Speaker 1: and that fear comes from the very nature of the

251
00:16:13,160 --> 00:16:17,640
Speaker 1: software that Kaspersky has installed on our computers. They would

252
00:16:17,720 --> 00:16:21,920
Speaker 1: know the security posture and the security risk of their customers,

253
00:16:22,000 --> 00:16:25,080
Speaker 1: so they would know if a certain customer is not

254
00:16:25,320 --> 00:16:30,920
Speaker 1: very security oriented and has a lot of threats detected

255
00:16:31,040 --> 00:16:33,360
Speaker 1: on its end points, they would get a snapshot of

256
00:16:33,800 --> 00:16:41,480
Speaker 1: what the architecture is somewhat like. That's Rob Westerfeld, who's

257
00:16:41,480 --> 00:16:44,520
Speaker 1: an analyst with market research firm I d C. What

258
00:16:44,720 --> 00:16:47,520
Speaker 1: Rob saying here is that Kaspersky Lab could easily find

259
00:16:47,560 --> 00:16:49,920
Speaker 1: out which of its clients would be most vulnerable to

260
00:16:49,960 --> 00:16:53,920
Speaker 1: an attack. That's enormously valuable in securing those systems or

261
00:16:54,280 --> 00:16:58,000
Speaker 1: planning an attack. And let's be super clear here, this

262
00:16:58,280 --> 00:17:03,040
Speaker 1: is all very hypothetical. There's absolutely no evidence that Kaspersky

263
00:17:03,200 --> 00:17:07,600
Speaker 1: is misusing its access. That's right, it's just as potential

264
00:17:07,800 --> 00:17:11,240
Speaker 1: that's getting officials worried. There's always a risk there, and

265
00:17:11,600 --> 00:17:14,360
Speaker 1: there could be a risk. That risk could be repeated

266
00:17:14,400 --> 00:17:17,440
Speaker 1: by any security vendor. They could have a rogue employee

267
00:17:17,520 --> 00:17:20,560
Speaker 1: that is doing that, and so you know, it's a

268
00:17:20,720 --> 00:17:26,240
Speaker 1: virtually impossible for a security vendor to be probed extremely

269
00:17:26,359 --> 00:17:30,159
Speaker 1: heavily in order to tell whether the level of that

270
00:17:30,440 --> 00:17:36,080
Speaker 1: risk exists. Although in Russia many people blame the scrutiny

271
00:17:36,200 --> 00:17:39,880
Speaker 1: Kaspersky Lab is under on politics, here's the security analyst.

272
00:17:39,920 --> 00:17:44,600
Speaker 1: Oh leg Again, people in Russia understand well why this

273
00:17:44,720 --> 00:17:47,760
Speaker 1: is happening now, this is a kind of alarm is

274
00:17:48,200 --> 00:17:54,480
Speaker 1: wideless bread in the American military communities, special services community,

275
00:17:54,600 --> 00:17:58,399
Speaker 1: and tolist extent less extent law enforcement community with regard

276
00:17:58,480 --> 00:18:02,000
Speaker 1: to Russia and the so called the Russian threat in cyberspace.

277
00:18:02,520 --> 00:18:04,399
Speaker 1: So at the top of the show, we mentioned that

278
00:18:04,600 --> 00:18:11,040
Speaker 1: FBI asians visited the homes of some of Kaspersky's US employees. Jordan,

279
00:18:11,119 --> 00:18:13,840
Speaker 1: would we know about this so far? Well, we don't

280
00:18:13,880 --> 00:18:16,960
Speaker 1: know exactly why the FBI agents decided to make those visits.

281
00:18:17,200 --> 00:18:20,040
Speaker 1: Reports say it has to do with a counterintelligence inquiry.

282
00:18:20,560 --> 00:18:23,880
Speaker 1: And what does that mean? So counterintelligence means they're looking

283
00:18:23,920 --> 00:18:27,600
Speaker 1: for foreign spies right here in the US. That's pretty interesting. Now,

284
00:18:27,680 --> 00:18:30,760
Speaker 1: that doesn't necessarily mean the FBI thinks that Caspersky employees

285
00:18:30,840 --> 00:18:33,720
Speaker 1: themselves are involved in espionage, or even that they know

286
00:18:33,760 --> 00:18:36,960
Speaker 1: anything about it, but for whatever reason, the FBI apparently

287
00:18:37,000 --> 00:18:38,840
Speaker 1: thought it was worth the effort to pay them a visit.

288
00:18:39,320 --> 00:18:41,840
Speaker 1: We also saw news of a Senate bill that will

289
00:18:41,920 --> 00:18:46,320
Speaker 1: ban the Department of Defense from using Kaspersky software. The

290
00:18:46,480 --> 00:18:50,960
Speaker 1: legislation said that Kaspersky Lab quote might be vulnerable to

291
00:18:51,080 --> 00:18:54,800
Speaker 1: Russian government influence. Now let's make this clear. It's not

292
00:18:54,920 --> 00:18:57,920
Speaker 1: like the Pentagon us as much Kaspersky Lab software anyway,

293
00:18:58,200 --> 00:19:00,360
Speaker 1: so the idea may not actually do all that much.

294
00:19:01,280 --> 00:19:05,400
Speaker 1: But we recently reported at Bloomberg that Russia is threatening

295
00:19:05,600 --> 00:19:09,680
Speaker 1: some kind of retaliation if this bill goes through. We

296
00:19:09,760 --> 00:19:12,480
Speaker 1: don't have details on what kind of measures that could entail,

297
00:19:12,880 --> 00:19:15,399
Speaker 1: but the threat from Russia shows just how important this

298
00:19:15,520 --> 00:19:27,479
Speaker 1: one company could become. In response to this escalated concern

299
00:19:27,560 --> 00:19:31,120
Speaker 1: over Cospersky Lab, Eugene Coosperski himself went on Reddit. During

300
00:19:31,119 --> 00:19:33,160
Speaker 1: the Senate hearing we've mentioned at the top of the show,

301
00:19:33,840 --> 00:19:36,440
Speaker 1: he repeated the same message he's maintained for years, that

302
00:19:36,560 --> 00:19:40,160
Speaker 1: the allegations are unfounded conspiracy theories and amount to simple

303
00:19:40,240 --> 00:19:43,720
Speaker 1: Russia baiting. Eugene Kaspersky said his only ties to the

304
00:19:43,800 --> 00:19:47,360
Speaker 1: Russian government are the taxes his company pays and even

305
00:19:47,440 --> 00:19:50,240
Speaker 1: went so far as to say that Caspersky Lab doesn't

306
00:19:50,240 --> 00:19:55,359
Speaker 1: share any user data with any government, including Russian And

307
00:19:55,440 --> 00:19:58,639
Speaker 1: by the way, we ask Spersky Lab for comment on

308
00:19:58,720 --> 00:20:03,440
Speaker 1: our story today, they said, quote, Kaspersky Lap has always

309
00:20:03,480 --> 00:20:07,760
Speaker 1: acknowledged that it provides appropriate products and services to governments

310
00:20:07,920 --> 00:20:11,959
Speaker 1: around the world to protect those organizations from cyber threats.

311
00:20:12,560 --> 00:20:16,320
Speaker 1: But it does not have any unethical ties or affiliations

312
00:20:16,480 --> 00:20:23,440
Speaker 1: with any government, including Russia. And where do you think

313
00:20:23,480 --> 00:20:25,320
Speaker 1: this is gonna go? What do you think it's going

314
00:20:25,359 --> 00:20:29,320
Speaker 1: to happen next? Well, the latest development is Eugene Kaspersky

315
00:20:29,400 --> 00:20:32,800
Speaker 1: has offered to give the US government his company source

316
00:20:32,880 --> 00:20:36,000
Speaker 1: code for review. This is not an uncommon thing for

317
00:20:36,160 --> 00:20:39,240
Speaker 1: companies doing business with the federal government, but many security

318
00:20:39,280 --> 00:20:41,879
Speaker 1: experts say it's not the point. Uh. The point, they

319
00:20:42,000 --> 00:20:45,879
Speaker 1: say is that this software could be used for potentially

320
00:20:45,920 --> 00:20:49,680
Speaker 1: malicious purposes independent of what's in the source code. And

321
00:20:49,800 --> 00:20:54,320
Speaker 1: the reason is security software receives continuous updates, and if

322
00:20:54,359 --> 00:20:57,120
Speaker 1: any of those updates are malicious, uh, the theory goes,

323
00:20:57,760 --> 00:21:00,960
Speaker 1: the software could be used for for bad intentions. So

324
00:21:01,119 --> 00:21:04,760
Speaker 1: Jordan's with the US relationship with Russia, where it is now,

325
00:21:05,080 --> 00:21:08,480
Speaker 1: just tensions being higher than they have in a really

326
00:21:08,560 --> 00:21:12,280
Speaker 1: long time. Do you think a company like Kaspersky Lab

327
00:21:12,359 --> 00:21:15,840
Speaker 1: even stands a chance in the federal government market. I

328
00:21:15,880 --> 00:21:18,040
Speaker 1: think Caspersky Lab is going to find it very very

329
00:21:18,160 --> 00:21:21,359
Speaker 1: hard to penetrate the US federal market, and they've all

330
00:21:21,400 --> 00:21:25,119
Speaker 1: but acknowledged that this really isn't a market they're pursuing. However,

331
00:21:25,280 --> 00:21:28,400
Speaker 1: on the consumer side, their software is actually really good

332
00:21:28,440 --> 00:21:30,280
Speaker 1: at what it does, and it has the endorsement of

333
00:21:30,359 --> 00:21:33,320
Speaker 1: a lot of cybersecurity professionals, so on that side they

334
00:21:33,600 --> 00:21:37,480
Speaker 1: still see potential for very very big growth. But really,

335
00:21:37,520 --> 00:21:40,960
Speaker 1: what's happening here is just as the US doesn't buy

336
00:21:41,200 --> 00:21:44,960
Speaker 1: missiles and other weapons systems from foreign countries, we're starting

337
00:21:45,000 --> 00:21:47,800
Speaker 1: to see the same thing play out in the cybersecurity market,

338
00:21:48,119 --> 00:21:51,639
Speaker 1: where if your security software is made by made in

339
00:21:51,720 --> 00:21:55,040
Speaker 1: a country that is considered an adversary, you may not

340
00:21:55,240 --> 00:22:06,639
Speaker 1: have great success here in the US. And that's it

341
00:22:06,800 --> 00:22:10,280
Speaker 1: for this week's episode of Decrypted. Thanks for listening. Let

342
00:22:10,400 --> 00:22:12,200
Speaker 1: us know what you thought of the show. Please record

343
00:22:12,240 --> 00:22:15,320
Speaker 1: a voice message and send it to Decrypted at Bloomberg

344
00:22:15,359 --> 00:22:18,800
Speaker 1: dot net. Also, I'm on Twitter at Jordan's are one

345
00:22:18,880 --> 00:22:22,600
Speaker 1: thousand and I'm at Akio seven. If you haven't already,

346
00:22:22,800 --> 00:22:26,160
Speaker 1: please subscribe to our show wherever you get your podcasts,

347
00:22:26,440 --> 00:22:29,120
Speaker 1: and while you're there, leave us a rating and a review.

348
00:22:29,480 --> 00:22:31,760
Speaker 1: This really helps us find more listeners for a show.

349
00:22:32,080 --> 00:22:35,480
Speaker 1: This episode was produced by Pia Gadkari Liz Smith at

350
00:22:35,560 --> 00:22:38,639
Speaker 1: Magnus Hendrickson. Thanks to Nico Grant for his help on

351
00:22:38,720 --> 00:22:41,639
Speaker 1: this show. My business Week story was co written by

352
00:22:41,760 --> 00:22:44,960
Speaker 1: Michael Reilly and edited by Jeff Muscus. You can read

353
00:22:45,000 --> 00:22:47,639
Speaker 1: it at Bloomberg dot com, slash business Week, or in

354
00:22:47,680 --> 00:22:50,680
Speaker 1: the New Business Week app. Alec McCabe is head of

355
00:22:50,720 --> 00:22:52,800
Speaker 1: Bloomberg podcast. We'll see you next week.