Hillicon Valley: Facebook stock plummets in biggest one-day drop | Trump threatens to investigate Twitter | GOP lawmaker backs off impeaching Rosenstein | Dems demand Trump officials testify on election security

Hillicon Valley: Facebook stock plummets in biggest one-day drop | Trump threatens to investigate Twitter | GOP lawmaker backs off impeaching Rosenstein | Dems demand Trump officials testify on election security
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Welcome to Hillicon Valley, The Hill's 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).


FACEBOOK STOCKS SEE RECORD DROP: Facebook's shares dropped almost 19 percent after the company reportedly disappointed analysts with a second-quarter earnings report and warned that its efforts to respond to privacy concerns would curtail growth.

The company's market capitalization plummeted by over $119 billion to $510 billion when the markets closed, according to CNBC, the biggest one-day loss.

Facebook CEO Mark ZuckerbergMark Elliot ZuckerbergFight looms over national privacy law Facebook teaming with nonprofits to fight fake election news China may be copying Facebook to build an intelligence weapon MORE said in an earnings call Wednesday night that the numbers that fell short of estimates could be a sign of things to come for the company.

"Looking ahead, we will continue to invest heavily in security and privacy because we have a responsibility to keep people safe," Zuckerberg said. "But as I've said on past calls, we're investing so much in security that it will significantly impact our profitability."

The social network has been under the spotlight from lawmakers and regulators for its role in the spread of disinformation and a privacy scandal in which the political consulting firm Cambridge Analytica improperly obtained Facebook data on 87 million users.

Amid the scrutiny of the platform, Zuckerberg has promised to rethink the company's responsibility to its users. Facebook is also facing stricter privacy rules in Europe and multiple probes into the privacy issue in the U.S.

Read more here.


TRUMP THREATENS INVESTIGATION INTO TWITTER: President TrumpDonald John TrumpTrump rallies in Nevada amid Supreme Court flurry: 'We're gonna get Brett' Trump: 'Good news' that Obama is campaigning again Trump boosts Heller, hammers 'Wacky Jacky' opponent in Nevada MORE on Thursday vowed that the government would investigate Twitter over allegations that the social media giant has suppressed content from some conservative accounts.

"Twitter 'SHADOW BANNING' prominent Republicans. Not good. We will look into this discriminatory and illegal practice at once! Many complaints," Trump tweeted.

The president, who uses Twitter as one of his main lines of communication with the public, was responding to claims from some Republicans who claim they have been "shadow banned" from the platform and seen their engagement with users dissipate in recent weeks.

Rep. Matt GaetzMatthew (Matt) GaetzThe federal government must stop stifling medical marijuana research Hillicon Valley: Twitter chief faces GOP anger over bias | DOJ convenes meeting on bias claims | Rubio clashes with Alex Jones | DHS chief urges lawmakers to pass cyber bill | Sanders bill takes aim at Amazon Conservatives blame McCarthy for Twitter getting before favorable committee MORE. (R-Fla.), a staunch Trump ally, told The Hill on Wednesday he feels "victimized" because his visibility on Twitter has dropped for unclear reasons.

Read The Hill's interview with Gaetz here.


A spokesman for Gaetz's office said they noticed a "significant decrease" in the congressman's followers and retweets around May 15, which coincided with when Twitter implemented a new policy to crack down on what the company calls "troll-like behaviors."

Vice News first reported on Wednesday that Gaetz, Reps. Mark MeadowsMark Randall MeadowsRepublicans threaten to subpoena Nellie Ohr Conservatives left frustrated as Congress passes big spending bills Graham to renew call for second special counsel MORE (R-N.C.) and Jim JordanJames (Jim) Daniel JordanHillicon Valley: Trump cyber strategy lets US go on offense | AT&T urges court to let Time Warner merger stand | Conservatives want wife of DOJ official to testify | Facebook, nonprofits team up to fight fake news | DC camera hacker pleads guilty FBI memos detail ‘partisan axes,’ secret conflicts behind the Russia election meddling assessment Republicans threaten to subpoena Nellie Ohr MORE (R-Ohio) and Republican National Committee Chairwoman Ronna Romney McDaniel are among those who failed to appear on Twitter's auto-populated drop-down search when users entered their names.

Gaetz and McDaniel accused Twitter of political bias.

Twitter has acknowledged the issue and called it unintentional. The company said it's working to fix the issue and that it was not targeting Republicans.

"As we have said before, we do not 'shadowban'. We are aware that some accounts are not automatically populating in our search box, and shipping a change to address this," a Twitter spokesperson said in a statement. Read more here.


THE LATEST ON CONSERVATIVES' ROSENSTEIN IMPEACHMENT PUSH:  A push by House conservatives to impeach Deputy Attorney General Rod RosensteinRod Jay RosensteinVote Democrat in midterms to rein in Trump, preserve justice Trump lawyer: NBC interview with Comey firing comments was edited Trump attack on Sessions may point to his departure MORE divided GOP leadership on Thursday. Majority Whip Steve ScaliseStephen (Steve) Joseph ScaliseOn The Money: Midterms to shake up House finance panel | Chamber chief says US not in trade war | Mulvaney moving CFPB unit out of DC | Conservatives frustrated over big spending bills Midterms to shake up top posts on House finance panel On The Money: Senate approves 4B spending bill | China imposes new tariffs on billion in US goods | Ross downplays new tariffs: 'Nobody's going to actually notice' MORE (La.), the No. 3 Republican, said Thursday that he would vote in favor of impeaching Rosenstein if the resolution were brought to the floor today.

Conservative members led by Reps. Mark Meadows (R-N.C.) and Jim Jordan (R-Ohio), along with nine co-sponsors, introduced five articles of impeachment Wednesday shortly after a meeting with Department of Justice (DOJ) officials concerning document production. Conservative lawmakers have complained for months that the DOJ is stonewalling their request for documents.

Majority Leader Kevin McCarthyKevin Owen McCarthyOn The Money: Midterms to shake up House finance panel | Chamber chief says US not in trade war | Mulvaney moving CFPB unit out of DC | Conservatives frustrated over big spending bills Midterms to shake up top posts on House finance panel The Hill's Morning Report — Sponsored by United Against Nuclear Iran — Kavanaugh confirmation in sudden turmoil MORE (R-Calif.), Ryan's top deputy, would not say how he would vote on the impeachment move and indicated that the resolution should go through regular order before being brought to the House floor for a vote. Ryan dismissed the idea that impeachment is necessary.

Read on here.


MEADOWS SIGNALS HE'S BACKING OFF: After having several meetings with leadership, Meadows signaled he was tabling his efforts to impeach Rosenstein, stating that he would instead pursue contempt if the Justice Department (DOJ) does not turn over documents Congress is seeking.

While the impeachment option remains on the table, Meadows told reporters Tuesday he now hopes it will be a contempt process rather than impeachment.

When asked what will happen if he does not receive the documents two House committees are seeking by the time the House returns from August recess, Meadows said, "I think the very first order of business would be moving the House to a contempt vote."

Hear more from Meadows here.


SESSIONS DEFENDS HIS NO. 2: Attorney General Jeff SessionsJefferson (Jeff) Beauregard SessionsHillicon Valley: Trump cyber strategy lets US go on offense | AT&T urges court to let Time Warner merger stand | Conservatives want wife of DOJ official to testify | Facebook, nonprofits team up to fight fake news | DC camera hacker pleads guilty Vote Democrat in midterms to rein in Trump, preserve justice Sessions limits ability of judges to dismiss deportation cases MORE fiercely defended Rosenstein, his deputy, on Thursday morning after the group of House conservatives introduced an impeachment resolution against him.

"My deputy, Rod Rosenstein, is highly capable," Sessions said at an event in Boston when asked to address the impeachment efforts. "I have the highest confidence in him. You probably know that not only did he go to the Wharton School of Business, but he graduated from Harvard right here in this area."


SENATORS LOOK TO DEFEND INTEL COMMUNITY: A pair of senators on Thursday introduced a bipartisan resolution that both pledges to respond quickly and appropriately if a foreign nation carries out a cyberattack against the United States, and also reaffirm Congress's support for the U.S. intelligence community.

Sen. Amy KlobucharAmy Jean KlobucharSenate Democrats increase pressure for FBI investigation of Kavanaugh Election Countdown: Trump confident about midterms in Hill.TV interview | Kavanaugh controversy tests candidates | Sanders, Warren ponder if both can run | Super PACs spending big | Two states open general election voting Friday | Latest Senate polls GOP in striking distance to retake Franken seat MORE (Minn.), the top Democrat on the Senate Rules Committee, and Sen. Lindsey GrahamLindsey Olin GrahamKim, Moon toss ball to Trump in ‘last, best chance’ for Korean peace GOP senator: Kavanaugh accuser 'moving the goalposts' Collins: Kavanaugh accuser should 'reconsider,' testify on Monday MORE (R-S.C.), a senior member of the Armed Services Committee, introduced the legislation nearly one week after President Trump cast doubt on the intelligence community's assessment (ICA) that found Russia meddled in the 2016 election.

The resolution states that the "Senate unequivocally agrees with the conclusions" of the ICA that Putin sought to influence the 2016 presidential election, as well as acknowledge that U.S. elections "remain a target for Russia." It also reaffirms that it is the policy of the U.S. to "defend against and respond to cyber-attacks against our election infrastructure," and that such attacks "should be met with appropriate retaliatory actions." 

Read more here.


WE WANT A HEARING: House Democrats are prodding their Republican colleagues to examine foreign threats to upcoming U.S. elections, raising concerns that the Trump administration is not adequately tackling the threat.

The top Democrats on four House committees demanded that their Republican counterparts hold a joint hearing on election security featuring top Trump administration officials in a letter sent Thursday.

"Election security is a national security issue, and it is time this Congress treated it like one," the Democrats wrote. "We are concerned that the Trump administration is not doing enough to address vulnerabilities to our election systems."

The letter was signed by the top Democrats on the House Administration, Judiciary, Oversight and Homeland Security Committees.

Don't forget ... Several House and Senate committees have held public hearings on election security in recent weeks, including the House Homeland Security and Oversight Committees. The House and Senate Intelligence Committees have also undertaken separate investigations into Russian interference in the election, the latter of which is expected to wrap up next month.

But still ... Thursday's letter is the latest sign that Democrats don't believe GOP leaders are doing enough to investigate the issue of election security following Russian interference in the 2016 election. 

Read on.


MORE HEAT FOR 'REKOGNITION': The American Civil Liberties Union (ACLU) said on Thursday that its testing showed Amazon's facial recognition software incorrectly matched 28 of the 535 members of Congress with other individuals who had been arrested on criminal charges.

The ACLU also said Amazon's "Rekognition" tool, which is being sold to law enforcement, was significantly less accurate on minority members of Congress. The civil liberties group said it found that the software gave false matches in 39 percent of tests on minority members, who make up 20 percent of Congress.

"The results reinforced what we already know," said ACLU of California attorney Jacob Snow in an interview with The Hill. "It's flawed, and it's dangerous for communities of color and protesters."

The ACLU, which is pushing Amazon to stop selling the software to law enforcement agencies, said its test was conducted on well-lighted headshots taken with actual cameras. Because there are few regulations on facial recognition technology, officers can and in some cases have used lower-quality images taken on cell phones in the field at night, which could lead to even lower accuracy rates, critics say.

Read more here.


AND DEMOCRATS AREN'T HAPPY: Democrats in Congress lashed out at Amazon Thursday following a the ACLU report that the company's facial recognition technology misidentified 28 members of Congress and was significantly less accurate when analyzing people of color.

"Law enforcement should not use this technology until the onerous civil rights and civil liberties issues are confronted and accuracy is guaranteed," Rep. John LewisJohn LewisCongress losing faith in Nobel Prize winner Aung San Suu Kyi Obama to urge rejection of 'authoritarian politics and policies' in speech Florida's Darren Soto fends off Dem challenge from Alan Grayson MORE (D-Ga.) said in a statement. "If industry wants to engage in the public sphere, it needs to make the public good, not profit, a top priority."

Lewis and Rep. Jimmy GomezJimmy GomezHillicon Valley: Facebook stock plummets in biggest one-day drop | Trump threatens to investigate Twitter | GOP lawmaker backs off impeaching Rosenstein | Dems demand Trump officials testify on election security Dems lash out at Amazon over facial recognition software misidentification Hispanic Dems press Nielsen on family separations MORE (D-Calif.) sent a letter to Amazon CEO Jeff Bezos Thursday requesting a meeting over the technology, expressing concern that the internet giant is providing it to law enforcement agencies.

Another group of Democrats -- Sen. Ed MarkeyEdward (Ed) John MarkeyOvernight Defense: Mattis dismisses talk he may be leaving | Polish president floats 'Fort Trump' | Dem bill would ban low-yield nukes Dems introduce bill to ban low-yield nukes Some employees' personal data revealed in State Department email breach: report MORE (Mass.), Rep. Luis Gutiérrez (Ill.) and Rep. Mark DeSaulnierMark James DeSaulnierZinke on California fires: 'This is not a debate about climate change' Zinke takes forestry fight to fire-ravaged California Trump tweets on wildfires show ignorance on climate, California and politics MORE (Calif.) -- sent a letter to Bezos demanding answers about its "Rekognition" technology and sales to law enforcement.

Read more here.


HOUSE PASSES THE DEFENSE BILL BEFORE KICKING TOWN: The House on Thursday easily passed the $717 billion annual defense policy bill, keeping it on track to become law before the start of the fiscal year for the first time since fiscal 1997.

The House approved the compromise fiscal 2019 National Defense Authorization Act (NDAA) in a 359-54 vote, sending it to the Senate for a final vote expected as early as next week.

The bill includes several cyber provisions, which we dug into earlier this week. To read more from our colleagues in Defense, click here.


REPORT HIGHLIGHTS ESPIONAGE THREAT FROM CHINA, RUSSIA, IRAN: Hackers from China, Russia and Iran have been consistently stealing U.S. trade secrets, posing a significant and growing threat to the United States, a new government report says.

"Foreign economic and industrial espionage against the United States continues to represent a significant threat to America's prosperity, security, and competitive advantage," the report from the National Counterintelligence and Security Center released on Thursday states.

"Foreign intelligence services--and threat actors working on their behalf--continue to represent the most persistent and pervasive cyber intelligence threat."

China, Russia, and Iran, the document says, "stand out as three of the most capable and active cyber actors tied to economic espionage and the potential theft of U.S. trade secrets and proprietary information."

The report highlights several cyber operations based in China, Russia and Iran that have threatened U.S. firms and interests, including an ongoing operation in which an Iranian hacker group named "Rocket Kitten" targets U.S.-based defense firms to bolster its missile and space programs.

Read more here.


BIZ NEWS: Tenable, a cybersecurity firm based in Maryland, went public on Thursday. The company announced Thursday morning that it would sell 10.9 million shares at a price of $23 each in its initial public offering.

The firm is headquartered in Columbia, Md., not far from the nation's capital. It is headed by Amit Yoran, who was the founding director of the Department of Homeland Security's Computer Emergency Readiness Team. Tenable was founded just 16 years ago. More here from the Baltimore Sun.





President Trump is expected to meet Friday with members of the National Security Council on election security, as the Washington Post first reported.


... AND FOR NEXT WEEK: The Department of Homeland Security is holding its national cybersecurity summit in New York on Tuesday. The department released its list of participants Thursday afternoon, which include Vice President Mike PenceMichael (Mike) Richard PenceIndiana sisters with history of opposing Pence donate millions to Dems Hillicon Valley: Trump signs off on sanctions for election meddlers | Russian hacker pleads guilty over botnet | Reddit bans QAnon forum | FCC delays review of T-Mobile, Sprint merger | EU approves controversial copyright law Overnight Defense: Trump marks 9/11 anniversary | Mattis says Assad 'has been warned' on chemical weapons | US identifies first remains of returned Korean war troops MORE, Homeland Security Secretary Kirstjen NielsenKirstjen Michele NielsenUS to prioritize attacks against foreign adversaries under new cyber strategy Paddlers sue Trump over frequent golf visits shutting down the Potomac River FEMA administrator nearly quit amid feud with DHS chief: report MORE, FBI Director Christopher Wray, NSA Director Gen. Paul Nakasone, and several other big names.



Mueller is examining the president's tweets in his investigation. (The New York Times)

House Intel chair calls for ban on electronic voting systems. (The Hill)

New America released a report that compares the "idealized version" of the Internet as imagined by liberal and democratic policymakers with the internet reality.

Trump's former homeland security adviser raises concerns about John Bolton's moves at the NSC. (Yahoo News)

Agari releases a new report on the federal government's adoption of email security tool DMARC ahead of a key deadline.


This story was updated at 6:58 p.m.