Hillicon Valley: Manafort found guilty on eight counts | Facebook identifies new influence campaigns | Microsoft says Russia tried to hack Senate, think tanks | States urge court to block net neutrality repeal

Hillicon Valley: Manafort found guilty on eight counts | Facebook identifies new influence campaigns | Microsoft says Russia tried to hack Senate, think tanks | States urge court to block net neutrality repeal
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Welcome to Hillicon Valley, The Hill's newsletter with 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 Jacqueline Thomsen (@jacq_thomsen), and the tech team, Harper Neidig (@hneidig) and Ali Breland (@alibreland).

 

MANAFORT FOUND GUILTY ON EIGHT FELONY CHARGES: Former Trump campaign chairman Paul ManafortPaul John ManafortDem warns Trump: 'Obstruction of justice' to fire Rosenstein Ex-White House official revises statement to Mueller after Flynn guilty plea: report Former White House lawyer sought to pay Manafort, Gates legal fees: report MORE was found guilty in a Virginia courtroom on Tuesday of eight charges of bank and tax fraud in a victory for special counsel Robert MuellerRobert Swan MuellerSasse: US should applaud choice of Mueller to lead Russia probe MORE's probe.

The jury found Manafort guilty on five charges of filing false income tax returns; one count of failing to report foreign bank accounts; and two counts of bank fraud.

Judge T.S. Ellis III declared a mistrial on the remaining 10 counts -- three counts of failing to report foreign bank accounts, five counts of bank fraud conspiracy and two counts of bank fraud.

Manafort looked stunned after the verdict was read and Ellis adjourned the proceedings. He winked at his wife, Kathleen Manafort, as he was escorted out of the room.

The decision is a win for Mueller's team of prosecutors, which faced its first test in court on the Manafort case. Russia and the 2016 election, however, were not major parts of the trial against Manafort. Read more here.

 

And in another stunner, Michael Cohen, who worked for years as President TrumpDonald John TrumpSunday shows preview: Trump sells U.N. reorganizing and Kavanaugh allegations dominate Ex-Trump staffer out at CNN amid “false and defamatory accusations” Democrats opposed to Pelosi lack challenger to topple her MORE's personal attorney, pleaded guilty on Tuesday to charges of bank fraud, tax fraud and campaign finance law violations, delivering a potentially significant legal blow to the president. More on Cohen here.

 

BREAKING - FACEBOOK IDENTIFIES MIDTERM INFLUENCE CAMPAIGNS: Facebook on Tuesday announced it had identified new campaigns on its platform to influence users ahead of November's midterm elections, saying it had removed "652 Pages, groups and accounts for coordinated inauthentic behavior."

Some of the activity came from Russia and some came from Iran, the company said in a statement. Facebook said it has found no link or coordination between those two distinct campaigns. 

"We ban this kind of behavior because we want people to be able to trust the connections they make on Facebook," Facebook said. "And while we're making progress rooting out this abuse, as we've said before, it's an ongoing challenge because the people responsible are determined and well funded."

Click here for more on this developing story.

 

MICROSOFT REVEALS RUSSIA HACKING ATTEMPTS: Microsoft on Tuesday announced that it had shut down six websites created by hackers linked to Russia's military, the latest sign of potential foreign interference ahead of the 2018 midterm elections.

The websites targeted conservative think tanks the Hudson Institute and the International Republican Institute as well as the U.S. Senate. Microsoft said the Senate domains targeted "are not specific to particular offices" or senators.

Microsoft said the false sites were created by "Fancy Bear," a group linked to the Russian Intelligence agency GRU that was also behind the hack of the Democratic National Committee (DNC) in 2016.

The domains, Microsoft said, were altered to appear similar to its own services in an attempt to possibly trick U.S. users into providing their personal information to hackers.

The technique, known as spear-phishing, was used successfully by Russian agents during the 2016 election to illegally obtain emails from Hillary ClintonHillary Diane Rodham ClintonPompeo: 'We've not been successful' in changing US-Russia relations Michael Moore ties Obama to Trump's win in Michigan in 2016 The Memo: Could Kavanaugh furor spark another ‘year of the woman’? MORE's campaign for president and the DNC.

Microsoft said a judge in the Eastern District of Virginia last week granted it control of the websites, which could have been used to launch cyberattacks on candidates and other political groups ahead of the midterm elections.

Microsoft President Brad Smith wrote in a blog post that Microsoft currently has "no evidence" that the sites were used to successfully carry out a cyberattack, nor evidence as to who would be the ultimate targets of an attack. He noted that the activity "mirrors the type" that was seen prior to the 2016 election.

"Despite last week's steps, we are concerned by the continued activity targeting these and other sites and directed toward elected officials, politicians, political groups and think tanks across the political spectrum in the United States," Smith wrote. "Taken together, this pattern mirrors the type of activity we saw prior to the 2016 election in the United States and the 2017 election in France."

Read more here.

 

TWENTY-TWO STATES URGE COURT TO BLOCK NET NEUTRALITY REPEAL: Twenty-two states and Washington, D.C., asked a federal court to block the Federal Communications Commission (FCC) from repealing its 2015 net neutrality rules, arguing that the move would allow the agency to abdicate its responsibility to oversee internet service providers.

In a filing with the U.S. Court of Appeals for the District of Columbia Circuit late Monday night, the group of Democratic state attorneys general also argued that the commission overstepped its authority in ruling that states could not implement their own net neutrality protections following the repeal of the federal rules.

"For more than fifteen years, the Federal Communications Commission has agreed that an open Internet free from blocking, throttling, or other interference by service providers is critical to ensure that all Americans have access to the advanced telecommunications services that have become essential for daily life," the states argued. "The recent Order represents a dramatic and unjustified departure from this long-standing commitment."

The FCC voted in December to repeal the rules that prohibited companies like Comcast and Verizon from blocking or throttling internet content or from creating paid fast lanes. The Republican-led commission argued that the rules were too onerous and that the industry could be policed using existing laws.

But the attorneys general on Monday argued that the FCC failed to consider what effect the absence of the rules would have on consumers and that it was too willing to believe the industry's commitments not to abuse their power over internet access.

The FCC declined to comment on the briefs. The commission must file a response by Oct. 11.

The repeal, which went into effect in June, has prompted a widespread outcry and a multipronged effort to revive the regulations. Several states have already passed their own laws or implemented the protections through executive action.

Read more here.

 

JACK AND REPUBLICANS WENT UP THE HILL...: Twitter CEO Jack Dorsey spoke with two top Republicans on Tuesday about the growing firestorm over alleged anti-conservative bias by tech companies.

Dorsey thanked House 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.) and House Energy and Commerce Committee Chairman Greg WaldenGregory (Greg) Paul WaldenHouse GOP blocks Trump-supported drug pricing provision from spending bill GOP turns its fire on Google 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 MORE (R-Ore.) for a "productive conversation today about the importance of transparency including how algorithms work," in a tweet.

"It's an important issue in the tech industry and I look forward to continuing the conversation," he added. Dorsey spoke to the lawmakers over the phone.

An Energy and Commerce Committee spokesperson told The Hill that during the conversation Walden reiterated his invitation for Dorsey to testify before the committee. 

Read more here.

 

CAN FACEBOOK TRUST YOU? Facebook has begun rating the credibility of its users as part of its effort to weed out the spread of false information on the platform.

Tessa Lyons, a Facebook product manager leading that effort, told The Washington Post in an interview published Tuesday that rating the trustworthiness of users will help Facebook determine whether they are flagging potentially false information in good faith.

It's "not uncommon for people to tell us something is false simply because they disagree with the premise of a story or they're intentionally trying to target a particular publisher," Lyons told the Post.

The platform is rating users' trustworthiness on a scale from zero to one. The move comes after Facebook revealed earlier this year that it would begin rating news outlets for the same quality, in part based on users' evaluations.

Lyons said that the latest move will assist them in their efforts to fact check and promote more credible news sources. Read more here.

 

FACEBOOK TRIES TO GET THE TARGET OFF ITS BACK: Facebook announced on Tuesday that it's removing more than 5,000 ad targeting options in an effort to reduce the potential for discrimination on its platform.

In the fall, after the options are removed, advertisers will no longer be able to exclude certain religions and races in their targeted ads on Facebook.

"We're committed to protecting people from discriminatory advertising on our platforms. That's why we're removing over 5,000 targeting options to help prevent misuse," the company wrote in a blog post announcing the decision.

Facebook defended the exclusion options as having been used in "legitimate ways to reach people," but said that it now believes "minimizing the risk of abuse is more important."

Long time coming: Lawmakers, particularly Congressional Black Caucus members have been pushing this since ProPublica first discovered the ad targeting options in 2016.

Federal officials, too: The Department of Housing and Urban Development filed a complaint against Facebook for this on Friday, so there's more to come, regardless of Facebook's actions today.

Read more here.

 

YOU HACK US, WE HACK BACK: Sen. Sheldon WhitehouseSheldon WhitehouseKavanaugh accuser agrees to testify next week Dem vows to probe 'why the FBI stood down' on Kavanaugh Senate Democrats increase pressure for FBI investigation of Kavanaugh MORE (D-R.I.) on Tuesday proposed that Congress should consider allowing companies to "hack back" at digital attackers following a cyberattack, a divisive concept in the cybersecurity community.

Whitehouse, the top Democrat on the Senate Judiciary Subcommittee on Crime and Terrorism, says the idea is worth considering because hacking back can help prevent foreign actors from carrying out cyberattacks against U.S. entities.

"We ought to think hard about how and when to license hack-back authority so capable, responsible private-sector actors can deter foreign aggression," according to Whitehouse's prepared opening remarks, which he delivered Tuesday afternoon during at a cyber-focused subcommittee hearing.

"Active cyber defense" would involve organizations using a variety of techniques to prevent cyber breaches, as well as allowing them to track down perpetrators in the event that their systems come under attack.

Supporters of hacking back say that approach would allow companies to safeguard their networks from attacks while also identifying the hackers.

However, many people working in the cybersecurity field worry that hacking back would create more problems, such as harming unintended victims and escalating cyber feuds among companies and their attackers.

Read more here.

 

FACEBOOK'S VIOLENCE PROBLEM: A new study by researchers at the University of Warwick is linking the use of Facebook to incidents of violence against refugees.

Karsten Müller and Carlo Schwarz of the University of Warwick found that German towns that had higher incidences of violent attacks targeting refugees also had a corresponding higher rate of Facebook use among the town's population.

In their comprehensive 3,335 data point study, they noticed that this correlation persisted even when the towns being assessed were controlled for other factors like wealth, demographics, prior support for far-right ideologies, newspaper sales, refugee populations and hate crime history.

Müller and Schwarz found that a single standard deviation above the average amount of Facebook usage in a town meant an almost 50 percent increase in violence against refugees.

Facebook has a problem with this in other countries too: The study's findings parallel reports that Facebook is being used to fuel violence based on ethnicity in countries like Myanmar, Sri Lanka and South Sudan.

In each country, Facebook has become ground zero for hate speech and harmful hoaxes directed at ethnic minorities. United Nations reports and investigators have argued that because of this, Facebook has helped perpetuate violence in the countries.  

Read more here.

 

TRUMP OFFICIALS, DEM SPAR OVER ELECTION HACK CLAIMS: Top officials at the FBI and Department of Homeland Security (DHS) have pushed back on claims from Sen. Bill NelsonClarence (Bill) William NelsonNelson campaign to donate K from Al Franken group to charity Political shenanigans mask true problems in Puerto Rico The Hill's Morning Report — Sponsored by United Against Nuclear Iran — The Hill interviews President Trump MORE (D-Fla.) that Russians have "penetrated" some of Florida's election systems.

In a letter to Florida election officials on Monday, DHS Secretary Kirstjen NielsenKirstjen Michele NielsenFEMA head to reimburse government for use of federal vehicles: report US to prioritize attacks against foreign adversaries under new cyber strategy Paddlers sue Trump over frequent golf visits shutting down the Potomac River MORE and FBI Director Christopher Wray said the two agencies have not observed the activity mentioned by the Democratic senator, but noted that Russian aggression in elections is a real threat.

"Although we have not seen new or ongoing compromises of state or local election infrastructure in Florida, Russian government actors have previously demonstrated both the intent and capability to conduct malicious cyber operations," Nielsen and Wray wrote in a letter to Florida Secretary of State Ken Detzner (R), a copy of which was obtained by The Hill.

Nelson made headlines earlier this month when he claimed that Russian hackers had successfully "penetrated" some of Florida's election systems ahead of the November midterm elections.

The senator stood by his assertion last week, despite facing pushback from federal and state election officials.

Read more here.

 

A LIGHTER TWITTER CLICK: What a job.

 

AN OP-ED TO CHEW ON: Congress should consider small-business exception to internet sales tax.

 

ON TAP:

The Senate Rules Committee will hold a business meeting on the Secure Elections Act on Wednesday at 10:30 a.m.

 

NOTABLE LINKS FROM AROUND THE WEB:

Stuff is cheap to order online now so people are buying more of it than ever. (The Atlantic)

A not-that-great-at-hacking 17-year-old hacked an election. (Politico Magazine)

Amazon tax on revenues would help to level the playing field. (The Guardian)

WhatsApp to clamp down on 'sinister' messages in India: IT minister (Reuters)

The breaking of Elon Musk. (Wired)

Uber taps a CFO after 3-year vacancy. (The Wall Street Journal)