From: Brooks Spradling (MKT-US-C)
Sent: Wednesday, August 25, 2010 3:13:47 AM
Subject: NEWSBANK :: Intel’s McAfee Deal: A National Security Nightmare
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Intel’s McAfee Deal: A National Security Nightmare
Posted by Jeffrey Carr
When I read the news Thursday that Intel is buying McAfee for $7.68 billion, I was stunned by its national security implications.
Intel has had a cozy relationship with the Russian government and its Federal Security Service (FSB) since 2002 with its sponsorship of a laboratory on wireless technology at Nizhny Novgorod State University (NNGU). The laboratory, located in the Department of Radiophysics, benefits from NNGU’s decades long experience with Russia’s defense industry, especially the radar and air defense sector. According to an August 2004 Businessweek article, the lab was working on security software for high-speed wireless applications.
The laboratory’s activity is overseen by a guidance board that includes Leonid Yurevich Rotkov, the head of the Center for Security of Information Systems and Telecommunications Facilities also located in NNGU’s Department of Radiophysics. Leonid Rotkov is a noted expert on IT security. Conference agendas show he works as a security consultant for the Federal Security Service (FSB).
Until around 2008, the Center’s website stated that it was sponsored by the Federal Security Service (FSB). This statement has since been removed. However, the faculty listing for the Center includes one individual who is also an employee of the Nizhny Novgorod Branch of Scientific Technical Center (STC) Atlas. STC Atlas was previously directly subordinate to the FSB, however, it is now a Federal State Unitary Enterprise (government owned) research institute that still works on IT security. The Nizhny Novgorod branch is one of four major STC Atlas research facilities. STC Atlas is currently certified by FSB for work on security issues including cryptology and “special studies.”
Intel’s Chairman and CEO at that time was Craig Barret who is now one of the founders of the Skolkovo Fund which will be financing the construction of the Skolkovo Innovation Center outside of Moscow. The interesting thing about this center is that its focus is to bring foreign high tech companies into Russia for R&D work on technologies that President Medvedev has identified as critical: nanoelectronics, semiconductors, photonics, robotics, cloud services, and ICT related to health care and governance. This strategy has worked incredibly well for the Peoples Republic of China (PRC). They have over 1200 foreign R&D labs operating in and around Shanghai, and the PRC’s economic growth (at least 10% each year) combined with its increase in patent filings (up 500% in the last five years) is very impressive.
Unfortunately, what’s good for Russia and China is not necessarily good for the U.S., particularly when part of that technology transfer occurs through acts of cyber espionage and insider theft. That’s the ugly truth that no one wants to speak about but everyone knows is happening – especially the leadership of Intel who seem to have no problem with the security lapses occuring at their Nizhny Novgorod lab even when told about them by U.S. government officials. In fact, Intel frequently hires highly trained Russian engineers for positions in their security department; at least one of whom simultaneously taught an InfoSec course for the FSB.
Intel CEO Paul Otellini had this to say at a recent press conference on the McAfee acquistion:
We have concluded that security has now become the third pillar of computing,” he told his listeners, “joining energy-efficient performance and Internet conductivity in importance.”
And that third pillar, Otellini believes, will be best implemented in silicon, not software. “We believe that security will be most effective when enabled in hardware,” he said. “Joining the assets of McAfee with Intel will accelerate and enhance the combination of hardware and software solutions.”
At a time when cyber espionage by Russia and China is one of the greatest threats to U.S. national security today, Intel is helping build a billion-dollar honey trap (aka Skolkovo) for U.S. companies in Russia. Now it owns one of the largest software security companies in the world. So I have to wonder, when Otellini talks about the importance of security – security against whom exactly?
Sr. Marketing Writer