Overnight Technology

Hillicon Valley: Fallout from bombshell DOJ report on Clinton probe | AT&T win could see new wave of mergers | World Cup cyber warning | Facebook comms chief stepping down

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The Cyber and Tech overnights have joined forces to give you Hillicon Valley, The Hill’s new comprehensive newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley.

Welcome! Follow the cyber team, Olivia Beavers (@olivia_beavers) and Morgan Chalfant (@mchalfant16), and the tech team, Harper Neidig (@hneidig) and Ali Breland (@alibreland), on Twitter. Send us your scoops, tips and hot NBA trade rumors.


DOJ watchdog faults Comey over handling of Clinton probe: In a highly critical report released Thursday afternoon, Justice Department Inspector General Michael Horowitz hammered former FBI Director James Comey for poor judgment during the 2016 election, but found no evidence to show his key decisions in the investigation into former Secretary of State Hillary Clinton’s emails were improperly influenced by political bias.

The report nonetheless raised swirling questions about the role of FBI counterintelligence agent Peter Strzok, whose texts with FBI lawyer Lisa Page suggested he “might be willing” to take official action to impact Trump’s electoral prospects, the inspector general found.


In perhaps the most explosive new revelation from the report, Strzok told Page “We’ll stop it,” after being asked, “[Trump’s] not ever going to become president, right? Right?!”

That text, the report said, was “indicative of a biased state of mind” — and suggested that Strzok may have intentionally slow-rolled the review of emails connected to the Clinton investigation discovered after the probe was closed, which were on a laptop belonging to former New York Rep. Anthony Weiner(D). Strzok, as the No. 2 official in the Clinton investigation, was one of several people who was made aware of the existence of the emails when they were initially uncovered.

Investigators did not find any evidence that political bias or improper influence impacted any decisions made in the Clinton case prior to Comey’s announcement that he was closing the case — including the decision not to recommend charges against Clinton.

Prosecutors’ decision not to charge Clinton with “gross negligence” in her handling of classified materials — something conservatives say should have been done — was “consistent with the Department’s historical approach in prior cases under different leadership, including in the 2008 decision not to prosecute former Attorney General Alberto Gonzales for mishandling classified documents,” investigators found.

Horowitz’s report also carefully cabins Strzok’s influence on decisionmaking in the course of the investigation. Despite the “cloud” that the text exchanges between Strzok and Page cast on the investigation, Strzok was not the sole decisionmaker in any of the investigations the inspector general examined. And in some instances prior to the July announcement, the report notes, Strzok and Page “advocated for more aggressive investigative measures in the Midyear investigation, such as the use of grand jury subpoenas and search warrants to obtain evidence.”

But the report was deeply critical of Comey’s conduct in the investigation, characterizing his decision not to tell Department of Justice leadership about his plan to make a separate statement exonerating Clinton in July of 2016 as “extraordinary and insubordinate.”

To read our coverage of the explosive report, click here and here.


AT&T COURT WIN COULD LEAD TO NEW ERA OF DEALMAKING: AT&T’s victory in the landmark trial over its $85 billion deal with Time Warner could herald a new era of megamergers and hurt the government’s efforts to block such plans.

“Anytime the government loses a substantial case is a moment of optimism for deal-makers,” said Jonathan Rubin, an antitrust attorney at the Washington law firm MoginRubin.

He added that “for lawyers, it shows how you go about defending” such a deal.

The big question: Observers will be closely watching to see if the Justice Department seeks an injunction against the merger or appeals the decision. But a larger question will be how regulators handle future megadeals and vertical mergers, which they are sure to see plenty of in the months and years to come.

The AT&T decision was the first court ruling on a vertical merger in decades, and the loss is a huge blow for the Justice Department. But after years of consolidation in industries like telecommunications, antitrust enforcers are sure to be tested by more vertical mergers as dealmakers try to expand into new markets.

Sen. Richard Blumenthal (D-Conn.), a critic of the AT&T deal, urged the department and the Federal Trade Commission (FTC), which also reviews mergers, to continue “vigorously scrutinizing mergers with similar negative impacts on consumers.”

“Antitrust agencies should not compound the court’s mistake in this case by trimming their sails in future merger reviews,” Blumenthal said in a statement.

We break it down here.


CYBER WARNINGS FOR WORLD CUP: Top security officials are warning Americans who are traveling to Russia for the 2018 FIFA World Cup this week that Moscow-linked hackers may try to target them as they attend the international soccer event.

The officials say U.S. travelers should be extra cautious about what devices they bring, which servers they connect to and the types of data they access while in Moscow.

Key quote: “When it comes to Russia, Russia by far — more than any country in the world — is probably some of the most well-versed cyber crime, both from the organized crime side and their intelligence networks, in the world,” said Robert Anderson, a former national security executive at the FBI who now serves as a security expert with the Chertoff Group.

Russia’s strong cyber crime talent compounded with unsuspecting tourists may form a perfect storm for cyberattacks, experts say.

“I think it is an incredibly rich environment for anyone wanting to conduct cyber mischief,” said Larry Pfeiffer, who served as the chief of staff to former CIA Director Michael Hayden.

“You are going to have a lot of very happy, very drunk, very distracted people whose cyber hygiene will probably be less than optimal,” added Pfeiffer, who is now a senior adviser to the Chertoff Group.

Some cyber safety tips: Experts particularly warned about the risks of using public Wi-Fi systems, whether it is in a hotel lobby or a coffee shop located close to the games. If a traveler logs on to a public Wi-Fi network with a computer or cellular device, hackers could then also gain access to a range of information, from someone’s banking information to details about their phone contacts.

“I would never use public Wi-Fi over there. Ever. Period,” said Megan Stifel, a former top cyber official at the National Security Council.

The security experts advised World Cup attendees not to bring personal devices with them — that is, if they haven’t already arrived on Russian soil. The World Cup’s opening game kicked off on Thursday, with Russia taking on Saudi Arabia.

To read more, click here.


RESEARCHER AT CENTER OF CAMBRIDGE ANALYTICA SCANDAL TO TESTIFY NEXT WEEK: Aleksandr Kogan, the researcher who handed over a massive trove of Facebook user data to Cambridge Analytica, will testify next week before the Senate Commerce Committee’s consumer protection panel.

The hearing will focus on the data scandal and its risks to consumers.

Kogan created a Facebook app with a personality quiz that harvested personal information from 87 million users without their knowledge or permission.

The hearing comes two months after Facebook CEO Mark Zuckerberg was dragged to Capitol Hill to answer for his company’s role in the debacle.

Details here.


HOUSE DEM BLASTS FACEBOOK: The top Democrat on the House Energy and Commerce Committee says that Facebook CEO Mark Zuckerberg has failed to follow up with the panel to answer questions that he couldn’t during an April hearing.

“It has been nine weeks since Facebook CEO Mark Zuckerberg testified before the House Energy and Commerce Committee, and we are still waiting for answers to our outstanding questions,” Rep. Frank Pallone Jr. (D-N.J.) said in a statement, adding that the company also hasn’t followed up on a closed-door briefing it gave the panel prior to the hearing.

“Facebook’s refusal to respond is disappointing and frustrating, especially since some of our questions seem to have been partially answered in the press,” Pallone said. “Mr. Zuckerberg, I call on you to keep your word and get back to members of Congress promptly.”

More on the controversy here.


What Facebook has done: Even though the company doesn’t yet have answers for House Energy and Commerce, it has given information to the Senate Judiciary and Commerce Committees, which Zuckerberg also testified before.

The answers don’t yield much new info (especially in its answers to antitrust questions), but it does give a look into things that are often overlooked about Facebook — like the full extent of the granular info the company collects on its users.


TOP FACEBOOK EXEC STEPPING DOWN: Facebook’s top communications executive is stepping down after a decade with the company.

Elliot Schrage, the social network’s vice president for public policy and communications, announced the move on his Facebook page Thursday.

“After more than a decade at Facebook, I’ve decided it’s time to start a new chapter in my life,” Schrage wrote. “Leading policy and communications for hyper growth technology companies is a joy — but it’s also intense and leaves little room for much else.”


LAWMAKERS PREP FOR COMING WAVE OF SELF-DRIVING CARS: Lawmakers at a hearing Wednesday grappled with how to prepare the nation’s infrastructure for the coming wave of self-driving vehicles.

The Senate Committee on Environment and Public Works heard from transportation experts on the work to be done to improve both roads, broadband as well as the safety technology behind autonomous cars.


ELON MUSK TO BUILD EXPRESS ROUTE TO CHICAGO AIRPORT: A company owned by Elon Musk has been chosen to dig an express route linking Chicago’s downtown area to the O’Hare International Airport.

The Boring Company on Thursday confirmed a report in The Chicago Tribune that said Mayor Rahm Emanuel’s office picked the company and would participate in talks over a high-speed project called the Chicago Express Loop.

“Bringing Chicago’s economic engines closer together will keep the city on the cutting edge of progress, create thousands of good-paying jobs and strengthen our great city for future generations,” said Emanuel in a statement.


A LIGHTER TWITTER CLICK: When you ask a bot to do your marketing homework.


LONG READ OF THE DAY:  Facebook has been soliciting research from academics across the country. Bloomberg Businessweek details how Facebook will strike up relationships with professors, giving them $25,000 no-strings-attached for research. Facebook doesn’t impose rules or bully researchers according to the report, but Businessweek writes about how the company establishes subtle boundaries guiding academics away from doing work that could be too critical of Facebook.


AN OP-ED TO CHEW ONTrump must still hold North Korea accountable for cyberattacks.



New America will host an event on harnessing satellite spectrum for broadband at noon.

Manafort set to appear in court for his arraignment in federal district court in D.C. starting at 10 a.m.



Steve Bannon buys into Bitcoin. (The New York Times)

Antitrust law never envisioned massive tech companies like Google. (The Boston Globe)

Alt-right conspiracy icon QAnon’s predictions around the IG report took a big hit today, but that didn’t spot the anonymous poster from pivoting.  

Microsoft takes aim at Amazon with push for checkout-free retail. (Reuters)

GAO report: Agencies Need to Improve Baseline Assessments. (GAO)

A startup is hawking a $15,000 iPhone-hacking box to law enforcement. (The Wall Street Journal)

Tags Frank Pallone Jr. Hillary Clinton James Comey Mark Zuckerberg Steve Bannon

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