Hillicon Valley: Chinese firm asks feds to lift business ban | North Korean hackers grow more brazen | Panel advances DHS cyber pick | Dems want scrutiny of T-Mobile, Sprint merger

Welcome to Hillicon Valley, The Hill’s comprehensive newsletter with all you need to know about tech and cybersecurity from Capitol Hill to Silicon Valley.

 

Follow the tech team, Ali Breland (@alibreland) and Harper Neidig (@hneidig), and the cyber team, Morgan Chalfant (@mchalfant16) and Olivia Beavers (@olivia_beavers), on Twitter. Scoops/Tips/Comments/Compliments? Please reach out to us.

 

ZTE’S BIG ASK: Chinese phone maker ZTE is asking the Commerce Department to suspend its ban on doing business with American companies.

ZTE revealed the request in a financial disclosure.

Commerce, last month, decided to impose a seven-year ban on American companies selling equipment and software to ZTE, after finding that it violated sanctions rules by conspiring to sell equipment to Iran.

ZTE is very reliant on its business dealings with U.S. firms and the ban would dramatically damage its business, according to analysts.

The push is coming from the highest levels: During ongoing negotiations in Beijing last week, China reportedly tried to appeal to U.S. officials to soften the ban on ZTE selling products in the U.S.

The country, understandably, wants to protect its No. 2 phone maker from being hurt by American regulators.

The bigger picture: Though Commerce has said its actions are based on ZTE violating sanctions, it comes amid a larger wave of action from the U.S. government against Chinese technology firms.

The White House and Congress are both targeting Chinese tech companies, citing national security concerns. Commerce and the Department of Justice’s actions against ZTE were attributed to it violating sanctions with Iran, but China has dismissed those concerns.

Silicon Valley’s big worry: American firms are afraid of being caught in the crosshairs of a U.S.-China trade fight.

“Tariffs and any Chinese retaliation that could follow would hurt American consumers, businesses and workers, and not level the playing field with China,” said Ashley Berrang, a spokeswoman for the Information Technology Industry Council, a tech industry trade group.

“China could come up with a bogus antitrust concern and go after U.S. firms. They can do whatever they want. There’s no barrier to stop them,” added Rob Atkinson, the president of the Information Technology and Innovation Foundation, a Washington, D.C.-based think tank.

American tech companies worry that China could easily implement the same tactics used by the U.S. government: stopping mergers between Chinese and U.S. companies, constraining investments in foreign companies and barring foreign businesses from obtaining federal contracts.

“The risk of divestiture of orders, limits on market access — all those tools are available to the Chinese government that has been historically more hands-on than the U.S.” explained Tony Balloon, head of the corporate China practice at the law firm Alston & Bird.

 

HACKING ALERT: NORTH KOREA GROWING MORE BRAZEN IN CYBERSPACE: North Korea’s army of hackers has grown more brazen and capable over the course of several months, broadcasting a growing willingness to launch attacks on international targets.

Hackers linked to Pyongyang have deployed new tools and escalated operations against financial targets and global organizations. Over the past two years, security professionals have observed a continuous improvement in North Korea’s technical capabilities.

North Korea’s cyber capabilities are still considered inferior to those in other nations, like Russia, China and Israel. But some say North Korea’s evolution on cyber — coupled with the country’s willingness to execute attacks when motivated by geopolitical events — make Pyongyang one of the more threatening adversaries in cyberspace.

“They have demonstrated that when they have the intention they will deploy the capability,” said Adam Meyers, vice president of intelligence at CrowdStrike. “I would say that it is a formidable cyber adversary for us.”

The latest evidence: Late last month, researchers at cybersecurity firm McAfee revealed that a hacking campaign they had been tracking had widened to critical infrastructure, financial and telecommunications targets in 17 different countries.

The bigger picture: North Korea’s increased hacking activity comes against the backdrop of an anticipated historic summit between President Trump and North Korean leader Kim Jong Un that offers the prospect of North Korean denuclearization. The result of that meeting — whether good or bad — is likely to have an impact on North Korea’s activity in cyberspace against the U.S. going forward.

To read more, click here.

 

DEMS URGE ETHICS PROBE OF FCC COMMISSIONERS AT CPAC: Reps. Frank Pallone Jr. (D-N.J.) and Mike Doyle (D-Pa.) want the Office of Special Counsel (no relation to the Robert Mueller task force) to investigate whether three Republican FCC commissioners violated the Hatch Act by appearing at CPAC in February.

The call for more scrutiny comes days after the OSC revealed that it had given one of the commissioners, Mike O’Rielly, a slap on the wrist for violating the ethics law during a CPAC panel discussion during which he called on voters to re-elect President Trump.

“In addition to your finding last week that Commissioner Michael O’Rielly did in fact violate the Hatch Act during his appearance at CPAC, the three Republican FCC Commissioners have also refused to cooperate with Congressional oversight into their promotion of and participation in CPAC,” the two Democrats wrote to OSC on Monday.

“These actions raise serious concerns about whether the Chairman and Commissioners may have knowingly violated ethical restrictions. We hope you will assist us in this investigation,” they added.

An FCC spokesperson fired back: “The FCC’s career ethics officials determined that it was permissible for the three Republican Commissioners to speak at CPAC. Indeed, Cabinet members also spoke at CPAC, and the Democrats’ letter contains no explanation for why the Commissioners’ participation should be treated any differently. Sadly, we are left to conclude that the Democrats are simply trying to stop FCC Commissioners from speaking to right-of-center organizations while they have no problem with Commissioners speaking to left-of-center groups.”

Flashback: Recall that FCC Chairman Ajit Pai declined a courage award presented to him at CPAC on the advice of ethics officials at the agency.

To read more, click here.

 

SESSIONS SAYS CONGRESS MAY NEED TO ACT ON ENCRYPTION: Attorney General Jeff Sessions indicated in a Monday speech that Congress may ultimately have to wade into the debate about federal law enforcement agencies unlocking encrypted devices that are tied to ongoing investigations. Sessions, in a speech to a group of state law enforcement agencies, said the issue is “critical” because the bureau was unable to access thousands of devices related to their work of protecting the public. “Last year, the FBI was unable to access investigation-related content on more than 7,700 devices — even though they had the legal authority to do so. Each of those devices was tied to a threat to the American people,” Sessions said. “That’s why we are working with stakeholders in the private sector, in law enforcement and in Congress to find a solution to this problem. Ultimately, we may need Congress to take action on this issue,” he continued.

To read more of our piece, click here.

 

WHITE HOUSE HUSTLES FOR HASPEL: The White House is ramping up an eleventh-hour effort to build support for President Trump’s pick to lead the CIA, just days before she is scheduled to face a grilling from the Senate Intelligence Committee over her role in the agency’s controversial detention and interrogation program.

For weeks, the CIA has led the charge on promoting now-acting Director Gina Haspel — a forward-leaning public relations campaign that some critics have said is inappropriate for the clandestine agency.

Only late last week did the White House stand up the kind of broad-based press campaign typical of other high-stakes nominations, issuing a swath of laudatory press releases and briefing reporters.

On Monday, the CIA has given Congress a tranche of classified documents related to the controversial undercover background of Gina Haspel, President Trump‘s choice to lead the spy agency.

The delivery — a single cardboard box marked “hand carry” that was wheeled in on a dolly to a secure facility in the Capitol basement — comes as the agency is under fierce pressure from Democrats to declassify more information about Haspel’s involvement in its now-defunct detention and interrogation program.

To read more of our coverage, click here and here.

 

MORE RUSSIA ADS: Democrats on the House Intelligence Committee are gearing up to publicly release a trove of Facebook ads linked to Russia.

“We have been in ongoing discussions with Facebook and hope to have the final redacted ads in our possession within a matter of days. As soon as we receive them, it is our intention to share them with the public,” Rep. Adam Schiff (D-Calif.), ranking member on the committee, said in a statement to The Hill on Sunday.

The release follows an initial batch that they first put out when lawyers from Facebook, Twitter and Google testified before the committee in November.

Read more here.

 

DEFENSE BILL DEETS: The chairman of the House Armed Services Committee is proposing that Congress mandate that the National Security Council coordinate the government’s effort to counter “malign foreign influence.”

The provision is included in Chairman Mac Thornberry’s (R-Texas) mark of the fiscal 2019 defense policy bill known as the National Defense Authorization Act (NDAA), released on Monday.

While the document does not specifically mention Russian interference in the 2016 presidential election, the provision appears to be a direct response to Moscow’s influence effort.

The proposal would direct President Trump to designate a member of the National Security Council to coordinate the interagency effort against malign foreign influence. Trump would also be required to submit to Congress a strategy for countering malign foreign influence within nine months of the bill’s enactment.

The proposed legislation would specifically define malign foreign influence operations and campaigns as “the coordinated, integrated, and synchronized application of national diplomatic, informational, military, economic, business, corruption, educational, and other capabilities by hostile foreign powers to foster attitudes, behaviors, decisions, or outcomes within the United States.”

To read more click here.

 

A LIGHTER TWITTER CLICK: When the box carrying classified CIA Haspel documents says ‘HAND CARRY‘ on it… (Tweet)

 

A NOMINATION ALERT: President Trump’s choice to lead the Department of Homeland Security’s (DHS) cybersecurity and critical infrastructure protection efforts advanced a key Senate panel on Monday.

Senators on the Homeland Security and Governmental Affairs Committee approved Christopher Krebs’s nomination on Monday by a voice vote, according to a committee aide. His nomination will now go before the full Senate.

If confirmed, Krebs will manage a growing portfolio of responsibilities, which now includes protecting digital election systems from cyberattacks.

More on his nomination here.

 

FROM THE ROSE GARDEN: Melania Trump is stepping more fully into the spotlight as first lady, revealing Monday a new platform for tackling multiple issues relevant to American children.

One of those issues will be social media use, in addition to well-being and opioid abuse. The first lady in the past has pointed to cyber bullying as an issue she wants to focus on.

“I am very excited to announce Be Best, an awareness campaign dedicated to the most valuable and fragile among us — our children,” Trump said Monday. “There is one goal to Be Best — and that is to educate children about the many issues they are facing today.”

 

SENATE DEMS URGE SCRUTINY OF T-MOBILE-SPRINT DEAL: Sen. Amy Klobuchar (D-Minn.) led a group of senators on Monday in calling on the Justice Department and FCC to closely scrutinize the T-Mobile-Sprint merger, warning that it could have harmful effects on consumers.

“As more than three-quarters of American adults now own smartphones, including many who depend on these devices for their primary connection to the internet, an anticompetitive acquisition in the wireless market could result in higher prices for American consumers or force some people to forego their internet connection altogether,” the senators wrote in a letter to the two regulators.

To read more, click here.

 

ON TAP FOR TOMORROW:

The House Science Committee is holding a hearing on blockchain technology at 10 a.m. featuring representatives from the private sector as well as the head of the Department of Homeland Security’s cybersecurity research division.

The Entertainment Software Association will host its ‘Games for Impact’ on Capitol Hill in the Rayburn House Office Building Cafeteria from 5:30 p.m. to 8:00 p.m.

 

ON DEADLINE: Don’t forget that Nathan Deal, Georgia’s Republican governor, faces a deadline tomorrow to sign or veto a controversial piece of legislation that would potentially clear the way for private companies to hack into other networks for the sake of their own cybersecurity. Read more here.

 

LONGREAD OF THE DAY: Ben Tarnoff and Moira Weigel in The Guardian discuss why they think that tech’s promises to “do better” will likely fall short.

 

TECH TIDBITS:

A new report from the Anti-Defamation League (ADL) found that millions of anti-Semitic messages have been shared on Twitter in recent months. 

Google announced on Monday that it would no longer allow bail bond companies to buy advertisements on its ad platforms.

Uber is hiring a former chairman of the National Transportation Safety Board (NTSB) to advise on safety following a car crash in Arizona that killed a pedestrian.

 

NOTABLE LINKS FROM AROUND THE WEB:

A federal judge in D.C. denied Special Counsel Mueller’s request for a delay in the Internet Research Agency case. (Politico)

Two hackers have been extradited from Romania to face a slew of federal charges. (The New York Times)

Facebook’s ‘suggested friends‘ feature is attracting scrutiny. (The Telegraph)

The New York Times Magazine does a deep dive into the Bangladesh Bank cyber heist.

The Guardian breaks down how Cambridge Analytica’s psychological influence tools were supposed to work based on a conversation with whistleblower Christopher Wylie.

Facebook tweaked its algorithms and a month in the result is boosting conservative websites.

The New Yorker’s Jia Tolentino does a deep dive into the vaping trend that’s sweeping teens across the country.