One password allowed hackers to disrupt Colonial Pipeline, CEO tells
senators
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[June 09, 2021]
By Stephanie Kelly and Jessica Resnick-Ault
NEW YORK (Reuters) - The head of Colonial
Pipeline told U.S. senators on Tuesday that hackers who launched last
month's cyber attack against the company and disrupted fuel supplies to
the U.S. Southeast were able to get into the system by stealing a single
password.
Colonial Pipeline Chief Executive Joseph Blount told a U.S. Senate
committee that the attack occurred using a legacy Virtual Private
Network (VPN) system that did not have multifactor authentication in
place. That means it could be accessed through a password without a
second step such as a text message, a common security safeguard in more
recent software.
"In the case of this particular legacy VPN, it only had single-factor
authentication," Blount said. "It was a complicated password, I want to
be clear on that. It was not a Colonial123-type password."
The panel was convened to examine threats to critical U.S.
infrastructure and the Colonial attack, which shut key conduits
delivering fuel from Gulf Coast refineries to major East Coast markets.
Cyberattacks also hit U.S. meatpacking plants owned by JBS, showing the
breadth of infrastructure facing cyber threats.
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The Colonial Pipeline hack demonstrated that much of the company's
infrastructure remains highly vulnerable and the government and
companies must work harder to prevent future hacks, senators said during
the hearing.
Security experts call the use of a single-factor login system a sign of
poor cybersecurity "hygiene." They recommend two-factor authentication,
which requires a secondary measure like a mobile text or hardware token,
and most major companies require this across all internal applications.
Senators questioned Blount about the company's preparations and the
timeline for responding to the ransomware attack, which shut the line
for days and led to a spike in gasoline prices, panic buying and
localized fuel shortages.
"I'm alarmed this breach ever occurred in the first place," said Senator
Gary Peters, the committee's chairman. "Make no mistake: if we do not
step up our cyber security readiness, the consequences will be severe."
The FBI attributed the hack to a gang called DarkSide. Some senators
suggested Colonial had not sufficiently consulted with the U.S.
government before paying the ransom against federal guidelines.
Blount said he made the decision to pay ransom and to keep the payment
as confidential as possible because of concern for security.
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![](../images/060921pics/news_n25.jpg)
Joseph Blount, JR., President and Chief Executive Officer, Colonial
Pipeline is sworn in as he attends a hearing to examine threats to
critical infrastructure, focusing on examining the Colonial Pipeline
cyber attack at the U.S. Capitol in Washington, U.S., June 8, 2021.
Andrew Caballero-Reynolds/Pool via REUTERS
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"It was our understanding that the decision was
solely ours to make about whether to pay the ransom," he said.
Blount said Colonial did not have a plan in place to prevent a
ransomware attack, but did have an emergency response plan. The
company notified the FBI within hours.
Blount said Colonial has invested over $200 million over the last
five years in its IT systems. When pressed to answer how much
Colonial has spent to keep its pipeline cyber secure, Blount
repeated that amount. A company spokesperson later clarified the
$200 million was for IT overall, which includes cyber security.
On Friday, U.S. Deputy Attorney General Lisa Monaco urged companies
to tell federal authorities whether they paid ransom to
cyberattackers, information that can help investigators.
Blount said even after getting the key from the hackers, the company
is still recovering from the attack and is bringing back seven
finance systems that have been offline since May 7.
On Monday, the Justice Department said it had recovered some $2.3
million in cryptocurrency ransom paid by Colonial Pipeline.
Colonial Pipeline previously had said it paid the hackers nearly $5
million to regain access. The value of the cryptocurrency bitcoin
has dropped to below $35,000 in recent weeks after hitting a high of
$63,000 in April.
As a result, the government recovered about 60 of the 75 bitcoin
paid, but the value has dropped, falling short of the total dollar
amount Colonial paid.
Bitcoin seizures are rare, but authorities have stepped up their
expertise in tracking the flow of digital money as ransomware has
become a growing national security threat and put a further strain
on relations between the United States and Russia, where many of the
gangs are based.
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(Reporting By Stephanie Kelly and Jessica Resnick-Ault, additional
reporting from Christopher Bank; Editing by Marguerita Choy and
David Gregorio)
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