Mossack Fonseca Clients Awake To Find Themselves Adrift Offshore In A Leaky Boat

Today the executives of Panamanian-headquartered international legal and trust services firm Mossack Fonseca awoke to news that 11 million confidential documents spanning 40 years of the firms operation had been leaked to 107 media organisations in 78 countries. The documents purport to show how Mossack Fonseca has helped clients launder money, dodge sanctions and evade tax. Neither the identity of the leaker, nor the source material of documents itself have been publicly revealed. Instead, the source and his or her precise motivations remain secret, and we can expect a drip-feed of stories and revelations over the coming weeks and months as media organisations seek to maximise their commercial return from the 9-months of work we understand this investigation to have taken.

Putting to one side the moral and ethical arguments for and against the use of offshore tax havens, what do the Panama Papers tell us about the state of Information Security at Mossack Fonseca?

Back in 2010, we wrote about the US State Department leak of over a quarter of a million sensitive and secret cables spanning 35 years. We detailed ways in which an organisation, any organisation, can reduce the likelihood of sensitive confidential files (including personal and private information of its clients) escaping into the public domain. We described a framework that any organisation can use to reduce the likelihood of a catastrophic leak of company secret information. That article is here.

Let’s examine this latest leak, and consider whether or not Mossack Fonseca could have learned something from the events of 2010. We will take each consideration in our framework in-turn.

Recognise Where You Are Vulnerable
Given how little we know about who provided the confidential information and their motivations, it's hard to make many assumptions about whether or not the firm knew it was vulnerable to this particular person or the methods they may have used to steal information. The leak may have come from an insider, a longstanding employee, perhaps even a senior executive, he or she may have been acting alone or with help, and may even have been coerced into exfiltrating the documents by an as-yet unknown 3rd party. However given what little we do know it seems unlikely that the board of directors at Mossack Fonseca truly understood quite how vulnerable they were to such a leak. If they did then they would have done something about it.  According to public sources, the company has between 200 and 500 staff around the world, and 20 former members of staff. It is a relatively small firm where Information Security should have been a tractable problem. When considering your vulnerability to a leak, think about the following:

• Where is confidential information kept in your organisation?
• In how many different places can it currently be found?
• Are multiple copies routinely created of confidential information?
• How many different access methods are there to this information?
• What size community of users have access to it?
• What controls are there over who can access what, where, and when?

Know If You Are A Target
The company must have known it was a target, their entire industry relies on confidentiality and secrecy. With current and former politicians, powerful businessmen and celebrities as clients, that much should have been obvious. Political enemies, nation states, criminals, and blackmailers would all have liked to get their hands on their information. Mossack Fonseca should have been devoting significant effort to its Information Security programs.

"Some organisations attract leaks because they are repositories for particular confidential information, or because the information they hold is highly newsworthy, others find themselves subject to leaks because their employees sometimes struggle with difficult and conflicting concerns about the nature of their work. While your newsworthiness may fluctuate over time, certain sectors tend to experience a perennial popularity with leakers. If you are in the energy, pharmaceutical, government, or banking sectors, you should consider yourself a prime candidate for leakers at this time. Companies engaged in arms manufacture or doing any kind of business in troubled parts of the world are likewise a target. Are you an aggregator of sensitive information from several of the sources above? If you operate a law or consultancy firm, or other business where you are entrusted with sensitive information from clients in these industries or geographies, then you will be a target for leaks."

Diligence & Statutory Obligations (Compliance)
While offshore locations are often preferred because they are relatively light on controls and heavy on individual privacy protection, increasingly they are having compliance obligations forced upon them. Whether or not this leak lands Mossack Fonseca in violation of compliance will be academic if their clients desert them as a result of it.

Segment Your Data
Given that the information leaked covers such a long period of time (many decades) and appears to include files on a diverse range of clients from statesmen to self-help gurus, it appears that nobody at Mossack Fonseca was segmenting their data. It is as-if there was one huge shared drive, one Email system, and the whole lot was dumped out. Segmenting data helps to contain information security failures, losing one class of systems or documents does not expose the whole.

• Segment by status: active client versus inactive/former clients.
• Segment by “security level” of the information: secret, confidential, unclassified.
• Segment by time: don’t keep files for completed projects with open client files.
• Segment by user/group: litigation versus patent, analysts versus sales.

Although it can reduce staff productivity and increase cognitive load, encryption can be used to reinforce the segmentation process. Did Mossack Fonseca individually encrypt the most sensitive documents or indeed any document in their organisation? It seems unlikely. Encryption of individual documents, or individual client folders is another way of limiting widespread uncontrolled disclosure of confidential information. It is not difficult to imagine a regime of individual passwords for individual projects, clients, or business units.

The Human Element, Maturity & Common Sense

We may never learn who is behind the leak, or hear first hand exactly what motivated them. We may never know if they are a current or former employee, a state-level actor, or just a particularly thorough and successful activist. We don't know anything about the firm’s culture or leadership at this point. All these things make it hard to comment on whether or not there is anything the firm could have done to avert this situation. In most instances where a company has lost control of its confidential information, there are things that could have been done with respect to the human element, to significantly reduce the chance of such a disastrous disclosure.  Staff vetting, the establishment of an ethics committee, monitoring, and a strong internal audit function can all help reduce the likelihood of such a large and damaging loss of confidential information.

Handling A Leak
The story is only just beginning for Mossack Fonseca and their clients, thus far we haven't seen a response from them either publicly or have any idea what they are doing internally.  What is clear already though is that this story is far from over and that there will be a continuous drip-drip of disclosures over the next few weeks and months. It is interesting that rather than making the entire document archive available online, the media organisations involved are choosing to be very selective about who and what they choose to write about.

What Next?

As Information Security professionals we have probably learned as much as we can from this disclosure. We expect the majority of the disclosures to be politically-motivated in nature, with a focus on Russia, Syria, Zimbabwe, North Korea, and any of those “twitter revolution” countries that haven't quite come around to the wests way of thinking. We expect disclosures about leaders of EU member states with politicians whose views differ significantly to those of Germany and the US, such as the Visegrad group (Czech Republic, Hungary, Poland and Slovakia), and a sprinkling of celebrities, nobility, and more minor politicians or from countries that don't really matter very much. We expect the disclosures to almost entirely avoid large western corporations and the interests of those who own and operate them, which is interesting given that group probably makes up the majority of Mossack Fonseca’s clients.

360is are able to assist in improving your organisation’s Information Security posture, and in implementing the advice given in this article. While it may be impossible to guarantee that your confidential information will stay that way, you can significantly reduce the chances of the kind of widespread leak experienced by the Mossack Fonseca today, or the US State Department in December 2010. To speak to one of our consultants, visit our contact page and request a meeting.                                                                       

City Security Magazine, How To Avoid Leaks

Leaks are news, whether they are about Governments, Corporations, or individuals. City Security Magazine, the print and digital magazine that promotes security issues across the UK, carries an article from 360is on how to reduce your chances of becoming the next SONY, NSA, US State Department, or celebrity to suffer a breach of Information Security and have private and confidential information leaked to the public domain.

360is are able to assist in improving your organisation’s Information Security posture, and in implementing the advice given in the article. While it may be impossible to guarantee that your confidential information will stay that way, you can significantly reduce the chances of the kind of widespread leak experienced by the US State Department, the NSA, or SONY.
To speak to one of our consultants, visit our contact page and request a meeting.

WikiLeak's Lessons For UK Information Security Professionals

“A government is the only known vessel that leaks from the top” - James Reston, Journalist

Rarely does a story with a strong Information Security thread garner quite so much attention in the mainstream press. However, when the leaking of secret state information is combined with pent-up public interest in subject matter like current and future adventures in the middle east, climate change, the banking crisis, and international relations, demand meets supply and column inches result.

The WikiLeaks publication of US State Department cables in November/December 2010 was featured in the recent Q4 2010 issue of Executive Intelligence, the 360is Quarterly for UK CSOs/CIOs and IT Security Directors:

"On November 28th, the whistle-blower web site WikiLeaks began disclosing the first 220 of 251,287 US State Department cables dating from the 1966 to 2010. These cables ranged from SECRET//NOFORN to UNCLASSIFIED in their protective marking, and contained many unguarded, frank, and often critical comments from US diplomats on a range of subjects."

Putting to one side the virtues or vices of making this particular information public, what lessons can we learn from it as Information Security professionals? What actions should we propose to our directors while the subject of information security is fresh in the mind of the main board? What tactical, practical advice can we put into action in light of what this WikiLeaks episode has taught us?

Information Security problems of this type are a subject that many find difficult to discuss. For the most part we are talking about the actions of insiders; employees, contractors, or close members of your supply chain. Managers find the broad subject of insiders harder to broach than that of the threat from external attack. However, most of the practical advice we have for our clients is around process rather than people, and can be implemented without alienating staff or making them spied upon.

(1) Recognise Where You Are Vulnerable
As with external Information Security threats, the key to improving your internal Information Security posture is to first recognise where you are vulnerable. Understanding your current vulnerability to leaks should be a part of formal Information Risk Management. Make a start by writing down answers to the following questions:

• Where is confidential information kept in your organisation?
• In how many different places can it currently be found?
• Are multiple copies routinely created of confidential information?
• How many different access methods are there to this information?
• What size community of users have access to it?
• What controls are there over who can access what, where, and when?

Armed with answers to these questions and the rest of this article, you may begin a process of prioritisation, focusing on where your most leak-worthy data is kept. Target areas where the greatest quantity of the most confidential information is held, made available to the largest user community, with the minimum of controls.

The full details of how the US State Department leak came to pass have yet to be released and may never be fully disclosed. However, given the current speculation that a relatively low level, young Private of a few years service had access to all this material, and did not arouse suspicion when extracting it, the US State Department would score very low on any Information Security scorecard one can imagine.

(2) Know If You Are A Target

Some organisations attract leaks because they are repositories for particular confidential information, or because the information they hold is highly newsworthy, others find themselves subject to leaks because their employees sometimes struggle with difficult and conflicting concerns about the nature of their work. While your newsworthiness may fluctuate over time, certain sectors tend to experience a perennial popularity with leakers. If you are in the energy, pharmaceutical, government, or banking sectors, you should consider yourself a prime candidate for leakers at this time. Companies engaged in arms manufacture or doing any kind of business in troubled parts of the world are likewise a target. Are you an aggregation point for sensitive information from several of the sources above? If you operate a law or consultancy firm, or other business where you are entrusted with sensitive information from clients in these industries or geographies, then you will be a target for leaks.

As both a prominent government office and an aggregation point for all types of sensitive information from diplomats around the world, the US State Department is one of the more likely targets for leakers.

(3) Diligence And Statutory Obligations (Compliance)

As a minimum, you as the designated Information Security officer should ensure your organisation's  awareness of, and adherence to, the minimum standards for compliance. As CSO (or equivalent, most UK firms do not have a CSO) failure to do so will eventually end up being a problem that lands at your office door. Confidentiality and privacy are key tenets of several pieces of compliance legislation designed to protect the information of individuals, particularly where you may be required to hold personally identifiable information. However, you may have obligations even if you do not handle this kind of information. Of particular relevance to UK companies are the Data Protections Act, the UK Corporate Governance Code, the Freedom Of Information Act, and for many, PCI. All of these have Information Security connotations although some more oblique than others.

Although the US State Department may not be subject to the same compliance legislation as your organisation, they failed to honour even basic obligations (be they explicit or assumed) in keeping sensitive information confidential.

(4) Segment Your Data

Do you currently segment your sensitive information, or do you maintain a single monolithic store for all confidential material? If a potential leaker were to gain access to that store, what is the scope of disclosure that you might suffer? By segmenting your sensitive data you have a better chance of limiting the scope of a leak.

• Segment by status: active client versus inactive/former clients.
• Segment by "security level" of the information: secret, confidential, unclassified.
• Segment by time: don't keep files for completed projects with the currently open client files.
• Segment by user/group: litigation versus patent, analysts versus sales, buy-side versus sell-side.

Segmenting your sensitive information sounds complicated but it can be as simple as not keeping project files older than 3 months in the same place as current files, along with a process for individuals to obtain access to the archive with the proper authorisation and oversight. Increasingly, Email is used as a long term information store, ignoring the huge problems created by doing that, secure Email archiving and retrieval products can facilitate the same segmentation of Email that you would have with traditional file stores.

Enforcing the most basic file-folder security on drive shares (by user, by group), or more complex access control lists (if supported by your storage) can dramatically reduce your vulnerability to a State-Department-sized leak.

Finally, do you individually encrypt the most sensitive documents or indeed any documents in your organisation? Encryption of individual documents, or individual client folders is another way of limiting widespread uncontrolled disclosure of confidential information. It is not difficult to imagine a regime of individual passwords for individual projects, clients, or business units.

It is unknown whether or not there was any real segmentation where the US State Department cables were stored. It does not seem likely. Either that or there was a requirement for segmentation and this requirement was routinely ignored. One can find no other reason why cables ranging over 30 years and 6 security levels from hundreds of sources were so readily available to 1 junior staff member.

(5) The Human Element, A Matter Of Staff Maturity And Common Sense

Don't give low-level or casual staff a high-level of security clearance, this includes staff working in IT. Of course in order for the phrase "low or high level" to have any meaning at all, you first need to have implemented something from (4).

Regardless of employee seniority or access, some staff may still feel compelled to leak. What then?

Consider establishing an internal ethics board where staff can take their concerns and have them heard. However, your best chance of preventing information leaks comes during the initial staff recruiting and vetting process. Do you vet staff who regularly handle highly sensitive or client confidential information?
Having worked for many city institutions, 360is consultants are able to recommend the services of a suitable staff vetting agency. Instruction is also available for your fellow directors and senior company officers on the correct way to invoke UK Legal Professional Privilege, and general handling practices for the most sensitive communications.
Some of our clients have a regular rotation of staff, preventing any one person getting too comfortable (and possibly carefree) with sensitive information. In some cases this is an option, but for most firms it does not fit their operational model.

If the current speculation is to be believed, a relatively low-level, young Private, of only a few years service had access to the leaked material. In addition to this, it is also speculated that over a million other individuals had access to some or all of the information. This would suggest that either the information should not have been marked secret/confidential at all, or that there has been a failure to consider the human element in it's handling. Even the most optimistic Information Security professional will find it hard to believe that any "secret" shared with a million individuals will remain secret for very long.

(6) Handling A Leak

Sooner or later your confidential information will escape either accidentally or with help from an external hacker or an insider with access. Once this happens, it is the way in which your organisation handles the leak that partly determines total cost to your organisation in terms of reputation and revenue loss.

At what point do you inform your clients if there are potential implications for them? Who will handle enquiries from the press? What assurances will you offer partners, suppliers, and customers/clients that information concerning your business dealings will be better protected in future? How can you "get ahead of the story" and start taking control of the incident?

• Put a plan in place now
• Rehearse that plan periodically
• Use external professional crisis management if you lack relevant experience in-house
• Understand any legal obligations to clients, partners, and the regulator
• Ensure the right personnel are press/media trained

360is consultants recommend bringing in a professional response team who have handled these types of situations before. Most managers are not trained in dealing with the media and can quickly find themselves in an awkward position without proper preparation. 360is are able to assist such a team in formulating technical answers to some of the questions that will need to be supplied both to post-incident internal investigators and journalists.

We will leave an assessment of the State Department's handling of this episode to the reader, but suggest you consider these questions:

Have they managed to "get ahead of the story" or are they still reacting to it?

Do their partners feel re-assured that this is any less likely to happen in future?

Have their actions, post-incident, served to increase, decrease, or had no effect on public perception of Information Security within their organisation?

More From 360is Executive Intelligence
This briefing on preventing leaks and the WikiLeaks episode of December 2010 is referenced in "Executive Intelligence" the quarterly security briefing provided by 360is to our current and former clients. Executive Intelligence is now available to all UK Information Security Professionals in our network. Find out how to subscribe to our UK quarterly security newsletter.

The full text of this article is available in PDF form via the Resources section of our web site here.