Overnight Cybersecurity: Flynn drama intensifies after Yates testimony | Five key players for Trump on cyber | Macron wins despite email hack | Concerns over data reporting law

Overnight Cybersecurity: Flynn drama intensifies after Yates testimony | Five key players for Trump on cyber | Macron wins despite email hack | Concerns over data reporting law
© Greg Nash

Welcome to OVERNIGHT CYBERSECURITY, your daily rundown of the biggest news in the world of hacking and data privacy. We're here to connect the dots as leaders in government, policy and industry try to counter the rise in cyber threats. What lies ahead for Congress, the administration and the latest company under siege? Whether you're a consumer, a techie or a D.C. lifer, we're here to give you ...

THE BIG STORY:

FORMER OBAMA OFFICIALS TESTIFY ON RUSSIAN ELECTION INTERFERENCE, MICHAEL FLYNN: Former acting attorney general Sally Yates and former director of national intelligence James Clapper testified before a Senate Judiciary Subcommittee on Monday afternoon. The big takeaways:

--YATES WARNED FLYNN VULNERABLE TO BLACKMAIL BY RUSSIA: Yates warned the White House that former national security adviser Michael Flynn created a "compromise situation" and could have been "blackmailed," she said. "We weren't the only ones that knew all of this," Yates said Monday, referring to the revelation that Flynn misled Vice President Pence about the true content of a December call with Russian Ambassador Sergey Kislyak. "The Russians also knew about what General Flynn had done. The Russians also knew that General Flynn had misled the vice president and others." "This was a problem because not only do we believe that the Russians knew this, but that they likely had proof of this information -- and that created a compromise situation, where the national security advisor essentially could be blackmailed by the Russians," she said.

ADVERTISEMENT
To read the rest of our piece, click here.

--CLAPPER UNAWARE OF EVIDENCE LINKING TRUMP CAMPAIGN, RUSSIA: The statement came in answering a question from Sen. Lindsey GrahamLindsey Olin GrahamCNN to air sexual harassment Town Hall featuring Gretchen Carlson, Anita Hill Trump wrestles with handling American enemy combatants Flake: Trump's call for DOJ to probe Democrats 'not normal' MORE (R-S.C.). Clapper had just testified that he was unaware of the investigation, having given the FBI director discretion not to inform him of intelligence investigations. Clapper noted that even after the DNI was asked to work with the FBI on classified and unclassified reports about Russian interference, he might still not be informed about any evidence, because the evidence might not have been conclusive enough to draw any conclusions.  

--WHITE HOUSE COUNSEL DISCUSSED PROSECUTION OF FLYNN WITH YATES: In the second of a series of meetings between Donald McGahn, the White House counsel, and Yates, McGahn asked about the prospect of prosecution against Flynn. Yates said that the Department of Justice had notified the White House about Flynn's dishonesty for a variety of reasons, including the potential for Russian blackmail. Yates, in a later question, clarified that she didn't think McGahn was as worried about whether Flynn had committed a crime as he was in trying to learn why the DOJ was interested in the matter.

--FUTURE ACTION NEEDED TO DETER RUSSIAN MEDDLING: Sen. Chuck GrassleyCharles (Chuck) Ernest GrassleySenators push mandatory sexual harassment training for members, staff Senate panel to hold hearing on bump stocks, background checks Senate panel to hold hearing on bump stocks MORE (R-Iowa) asked Yates and Clapper whether the United States had done enough to deter future instances of hacking and what else the country needs to do. Neither witness thought the country had gone far enough. "I think they're coming back," said Yates. Clapper advocated for new sanctions, as well as better education. "The most important thing that needs to be done here is to educate the electorate," he said. Yates argued that the U.S. needed to harden local election systems and better aid citizens in weeding out fake news. "It also wouldn't hurt to prosecute a few folks," said Yates. 

--TRUMP FIRES BACK: President Trump on Monday evening dismissed the testimony from Yates and Clapper, saying "the Russia-Trump collusion story is a total hoax."

"Sally Yates made the fake media extremely unhappy today --- she said nothing but old news!" Trump tweeted. "Director Clapper reiterated what everybody, including the fake media already knows- there is "no evidence" of collusion w/ Russia and Trump," he added.

For more on Trump's response, click here.

To catch up on all of our live coverage of the hearing, click here.

And for a recap of the day's dramatic testimony, click here.

A POLICY UPDATE: 

LAWMAKERS WARN OF ISSUES WITH DATA ACT: House Oversight Committee leaders are warning of ongoing issues with the implementation of a law passed in 2014 that was meant to modernize federal spending data.

Chairman Jason ChaffetzJason ChaffetzCurtis wins Chaffetz's former Utah House seat Top Oversight Dem pushes back on Uranium One probe Tapper hits Fox, Hannity over 'Allahu Akbar' comments after NY terror attack MORE (R-Utah), ranking member Elijah Cummings (D-Md.) and other members sent a letter to the leaders of the Treasury Department and the Office of Management and Budget on Monday urging them to address deficiencies in the implementation of the Digital Accountability and Transparency Act, also known as the DATA Act.

Congress passed the law in 2014 to implement standardized data reporting by federal agencies with the goal of putting more federal spending data online. The Treasury Department and OMB were responsible for establishing government-wide financial data standards.

Agencies are now facing the first deadline to report data in compliance with the law. On Tuesday, spending data reported by government agencies will be viewable at USASpending.gov.

However, audits by the Government Accountability Office (GAO) have pointed to ongoing challenges with agencies' implementation of the law, including shortcomings in guidance on data reporting issued by OMB.

The bipartisan lawmakers highlighted these assessments in the letter sent Monday, underscoring a set of recommendations made by GAO to improve implementation of the law.

To read the rest of our piece, click here.

A LIGHTER CLICK: 

Uber is bringing on an artificial intelligence researcher to spearhead self-driving car efforts in Canada, Forbes reports.

A HACK IN FOCUS: 

MACRON WINS DESPITE EMAIL HACK: Emmanuel Macron was successful in his bid for the French presidency over the weekend, despite a large trove of emails and other documents from his campaign being leaked online Friday. His campaign said in a statement to Reuters on Friday that it had been the target of a "massive and coordinated hack."

The documents were posted by a user by the name EMLEAKS on a website called Pastebin that allows anonymous document sharing. There are high suspicions that Russia was involved in the hack and release of the emails. Experts have for weeks been pointing to evidence of Russia using fake news, social media trolls, and other tactics used to undermine the U.S. presidential election in the lead-up to the French elections.

French authorities are now investigating the hack of Macron's campaign. Sen. Ben CardinBenjamin (Ben) Louis CardinFacebook farce shows lawmaker deviousness, demagoguery Dem senator wants details on Manafort's multiple passports US backs out of global oil anti-corruption effort MORE (D-Md.), the ranking member of the Senate Foreign Relations Committee, urged a "full investigation" into Russia's involvement in the French elections. "I hope French authorities will conduct a full investigation into scope of Russian interference in order to build even better future defenses ... in order to build even better future defenses [and] share lessons w/other democracies vulnerable to Russian aggression," Cardin wrote on Twitter.

Macron defeated Marine Le Pen, leader of France's National Front, 66 percent to 34 percent as results rolled in early Monday morning.

To read our piece on the hack Friday, click here.

WHO'S IN THE SPOTLIGHT: 

MAJOR CYBER PLAYERS: President Trump's cyber agenda is largely up in the air, with a hotly anticipated cybersecurity executive order yet to emerge from the White House. The administration has, however, put in place some key people who will have a major say on cybersecurity, cyber defense, and IT modernization.

We profiled five key players for the Trump administration on cybersecurity, including "cyber czar" Rob Joyce, senior advisor to the president Jared Kushner, advisor to Trump on strategic initiatives Chris Liddell, Homeland Security Secretary John Kelly, and Defense Secretary James Mattis.

To read the rest of our piece, click here.

IN CASE YOU MISSED IT:

Links from our blog, The Hill, and around the Web.

FCC says it was victim of cyberattack after John Oliver show. (The Hill)

Rand PaulRandal (Rand) Howard PaulGOP senator asks to be taken off Moore fundraising appeals Red state lawmakers find blue state piggy bank Prosecutors tell Paul to expect federal charges against attacker: report MORE asks Intelligence Committee for surveillance details. (The Hill)

Former President Obama reportedly warned President Trump against hiring Michael Flynn. (The Hill)

Privacy-minded lawmakers are circulating draft legislation that would limit the government's use of incidental collection of information on Americans. (New York Times)

The Supreme Court will consider whether cops need a warrant to access cell-site data. (ArsTechnica)

FBI Director James Comey says the bureau is working to improve ties with the healthcare sector to help fight cybercrime targeting hospitals. (FierceHealthcare)

The Hong Kong Securities and Futures Commission proposes new a draft rule to tighten information security. (Reuters)

Florida legislators passed a law clarifying how police pursue cases against criminals using virtual currency like Bitcoin. (Miami Herald)

The Marine Corps is testing out disposable drones to deliver supplies to troops on the battlefield. (Wired)

If you'd like to receive our newsletter in your inbox, please sign up here.