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Cracking Down on Dissent, Russia Seeds a Surveillance Supply Chain

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Cracking Down on Dissent, Russia Seeds a Surveillance Supply Chain

As the war in Ukraine unfolded last year, Russia’s best digital spies turned to new tools to fight an enemy on another front: those inside its own borders who opposed the war.

To aid an internal crackdown, Russian authorities had amassed an arsenal of technologies to track the online lives of citizens. After it invaded Ukraine, its demand grew for more surveillance tools. That helped stoke a cottage industry of tech contractors, which built products that have become a powerful — and novel — means of digital surveillance.

The technologies have given the police and Russia’s Federal Security Service, better known as the F.S.B., access to a buffet of snooping capabilities focused on the day-to-day use of phones and websites. The tools offer ways to track certain kinds of activity on encrypted apps like WhatsApp and Signal, monitor the locations of phones, identify anonymous social media users and break into people’s accounts, according to documents from Russian surveillance providers obtained by The New York Times, as well as security experts, digital activists and a person involved with the country’s digital surveillance operations.

President Vladimir V. Putin is leaning more on technology to wield political power as Russia faces military setbacks in Ukraine, bruising economic sanctions and leadership challenges after an uprising led by Yevgeny V. Prigozhin, the commander of the Wagner paramilitary group. In doing so, Russia — which once lagged authoritarian regimes like China and Iran in using modern technology to exert control — is quickly catching up.

“It’s made people very paranoid, because if you communicate with anyone in Russia, you can’t be sure whether it’s secure or not. They are monitoring traffic very actively,” said Alena Popova, a Russian opposition political figure and digital rights activist. “It used to be only for activists. Now they have expanded it to anyone who disagrees with the war.”

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The effort has fed the coffers of a constellation of relatively unknown Russian technology firms. Many are owned by Citadel Group, a business once partially controlled by Alisher Usmanov, who was a target of European Union sanctions as one of Mr. Putin’s “favorite oligarchs.” Some of the companies are trying to expand overseas, raising the risk that the technologies do not remain inside Russia.

The firms — with names like MFI Soft, Vas Experts and Protei — generally got their start building pieces of Russia’s invasive telecom wiretapping system before producing more advanced tools for the country’s intelligence services.

Simple-to-use software that plugs directly into the telecommunications infrastructure now provides a Swiss-army knife of spying possibilities, according to the documents, which include engineering schematics, emails and screen shots. The Times obtained hundreds of files from a person with access to the internal records, about 40 of which detailed the surveillance tools.

One program outlined in the materials can identify when people make voice calls or send files on encrypted chat apps such as Telegram, Signal and WhatsApp. The software cannot intercept specific messages, but can determine whether someone is using multiple phones, map their relationship network by tracking communications with others, and triangulate what phones have been in certain locations on a given day. Another product can collect passwords entered on unencrypted websites.

These technologies complement other Russian efforts to shape public opinion and stifle dissent, like a propaganda blitz on state media, more robust internet censorship and new efforts to collect data on citizens and encourage them to report social media posts that undermine the war.

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They add up to the beginnings of an off-the-shelf tool kit for autocrats who wish to gain control of what is said and done online. One document outlining the capabilities of various tech providers referred to a “wiretap market,” a supply chain of equipment and software that pushes the limits of digital mass surveillance.

The authorities are “essentially incubating a new cohort of Russian companies that have sprung up as a result of the state’s repressive interests,” said Adrian Shahbaz, a vice president of research and analysis at the pro-democracy advocacy group Freedom House, who studies online oppression. “The spillover effects will be felt first in the surrounding region, then potentially the world.”

Over the past two decades, Russian leaders struggled to control the internet. To remedy that, they ordered up systems to eavesdrop on phone calls and unencrypted text messages. Then they demanded that providers of internet services store records of all internet traffic.

The expanding program — formally known as the System for Operative Investigative Activities, or SORM — was an imperfect means of surveillance. Russia’s telecom providers often incompletely installed and updated the technologies, meaning the system did not always work properly. The volume of data pouring in could be overwhelming and unusable.

At first, the technology was used against political rivals like supporters of Aleksei A. Navalny, the jailed opposition leader. Demand for the tools increased after the invasion of Ukraine, digital rights experts said. Russian authorities turned to local tech companies that built the old surveillance systems and asked for more.

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The push benefited companies like Citadel, which had bought many of Russia’s biggest makers of digital wiretapping equipment and controls about 60 to 80 percent of the market for telecommunications monitoring technology, according to the U.S. State Department. The United States announced sanctions against Citadel and its current owner, Anton Cherepennikov, in February.

“Sectors connected to the military and communications are getting a lot of funding right now as they adapt to new demands,” said Ksenia Ermoshina, a senior researcher who studies Russian surveillance companies with Citizen Lab, a research institute at the University of Toronto.

The new technologies give Russia’s security services a granular view of the internet. A tracking system from one Citadel subsidiary, MFI Soft, helps display information about telecom subscribers, along with statistical breakdowns of their internet traffic, on a specialized control panel for use by regional F.S.B. officers, according to one chart.

Another MFI Soft tool, NetBeholder, can map the locations of two phones over the course of the day to discern whether they simultaneously ran into each other, indicating a potential meeting between people.

A different feature, which uses location tracking to check whether several phones are frequently in the same area, deduces whether someone might be using two or more phones. With full access to telecom network subscriber information, NetBeholder’s system can also pinpoint the region in Russia each user is from or what country a foreigner comes from.

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Protei, another company, offers products that provide voice-to-text transcription for intercepted phone calls and tools for identifying “suspicious behavior,” according to one document.

Russia’s enormous data collection and the new tools make for a “killer combo,” said Ms. Ermoshina, who added that such capabilities are increasingly widespread across the country.

Citadel and Protei did not respond to requests for comment. A spokesman for Mr. Usmanov said he “has not participated in any management decisions for several years” involving the parent company, called USM, that owned Citadel until 2022. The spokesman said Mr. Usmanov owns 49 percent of USM, which sold Citadel because surveillance technology was never within the firm’s “sphere of interest.”

VAS Experts said the need for its tools had “increased due to the complex geopolitical situation” and volume of threats inside Russia. It said it “develops telecom products which include tools for lawful interception and which are used by F.S.B. officers who fight against terrorism,” adding that if the technology “will save at least one life and people well-being then we work for a reason.”

As the authorities have clamped down, some citizens have turned to encrypted messaging apps to communicate. Yet security services have also found a way to track those conversations, according to files reviewed by The Times.

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One feature of NetBeholder harnesses a technique known as deep-packet inspection, which is used by telecom service providers to analyze where their traffic is going. Akin to mapping the currents of water in a stream, the software cannot intercept the contents of messages but can identify what data is flowing where.

That means it can pinpoint when someone sends a file or connects on a voice call on encrypted apps like WhatsApp, Signal or Telegram. This gives the F.S.B. access to important metadata, which is the general information about a communication such as who is talking to whom, when and where, as well as if a file is attached to a message.

To obtain such information in the past, governments were forced to request it from the app makers like Meta, which owns WhatsApp. Those companies then decided whether to provide it.

The new tools have alarmed security experts and the makers of the encrypted services. While many knew such products were theoretically possible, it was not known that they were now being made by Russian contractors, security experts said.

Some of the encrypted app tools and other surveillance technologies have begun spreading beyond Russia. Marketing documents show efforts to sell the products in Eastern Europe and Central Asia, as well as Africa, the Middle East and South America. In January, Citizen Lab reported that Protei equipment was used by an Iranian telecom company for logging internet usage and blocking websites. Ms. Ermoshina said the systems have also been seen in Russian-occupied areas of Ukraine.

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For the makers of Signal, Telegram and WhatsApp, there are few defenses against such tracking. That’s because the authorities are capturing data from internet service providers with a bird’s-eye view of the network. Encryption can mask the specific messages being shared, but cannot block the record of the exchange.

“Signal wasn’t designed to hide the fact that you’re using Signal from your own internet service provider,” Meredith Whittaker, the president of the Signal Foundation, said in a statement. She called for people worried about such tracking to use a feature that sends traffic through a different server to obfuscate its origin and destination.

In a statement, Telegram, which does not encrypt all messages by default, also said nothing could be done to mask traffic going to and from the chat apps, but said people could use features it had created to make Telegram traffic harder to identify and follow. WhatsApp said in a statement that the surveillance tools were a “pressing threat to people’s privacy globally” and that it would continue protecting private conversations.

The new tools will likely shift the best practices of those who wish to disguise their online behavior. In Russia, the existence of a digital exchange between a suspicious person and someone else can trigger a deeper investigation or even arrest, people familiar with the process said.

Mr. Shahbaz, the Freedom House researcher, said he expected the Russian firms to eventually become rivals to the usual purveyors of surveillance tools.

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“China is the pinnacle of digital authoritarianism,” he said. “But there has been a concerted effort in Russia to overhaul the country’s internet regulations to more closely resemble China. Russia will emerge as a competitor to Chinese companies.”

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Albania Gives Jared Kushner Hotel Project a Nod as Trump Returns

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Albania Gives Jared Kushner Hotel Project a Nod as Trump Returns

The government of Albania has given preliminary approval to a plan proposed by Jared Kushner, Donald J. Trump’s son-in-law, to build a $1.4 billion luxury hotel complex on a small abandoned military base off the coast of Albania.

The project is one of several involving Mr. Trump and his extended family that directly involve foreign government entities that will be moving ahead even while Mr. Trump will be in charge of foreign policy related to these same nations.

The approval by Albania’s Strategic Investment Committee — which is led by Prime Minister Edi Rama — gives Mr. Kushner and his business partners the right to move ahead with accelerated negotiations to build the luxury resort on a 111-acre section of the 2.2-square-mile island of Sazan that will be connected by ferry to the mainland.

Mr. Kushner and the Albanian government did not respond Wednesday to requests for comment. But when previously asked about this project, both have said that the evaluation is not being influenced by Mr. Kushner’s ties to Mr. Trump or any effort to try to seek favors from the U.S. government.

“The fact that such a renowned American entrepreneur shows his interest on investing in Albania makes us very proud and happy,” a spokesman for Mr. Rama said last year in a statement to The New York Times when asked about the projects.

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Mr. Kushner’s Affinity Partners, a private equity company backed with about $4.6 billion in money mostly from Saudi Arabia and other Middle East sovereign wealth funds, is pursuing the Albania project along with Asher Abehsera, a real-estate executive that Mr. Kushner has previously teamed up with to build projects in Brooklyn, N.Y.

The Albanian government, according to an official document recently posted online, will now work with their American partners to clear the proposed hotel site of any potential buried munitions and to examine any other environmental or legal concerns that need to be resolved before the project can move ahead.

The document, dated Dec. 30, notes that the government “has the right to revoke the decision,” depending on the final project negotiations.

Mr. Kushner’s firm has said the plan is to build a five-star “eco-resort community” on the island by turning a “former military base into a vibrant international destination for hospitality and wellness.”

Ivanka Trump, Mr. Trump’s daughter, has said she is helping with the project as well. “We will execute on it,” she said about the project, during a podcast last year.

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This project is just one of two major real-estate deals that Mr. Kushner is pursuing along with Mr. Abehsera that involve foreign governments.

Separately, the partnership received preliminary approval last year to build a luxury hotel complex in Belgrade, Serbia, in the former ministry of defense building, which has sat empty for decades after it was bombed by NATO in 1999 during a war there.

Serbia and Albania have foreign policy matters pending with the United States, as both countries seek continued U.S. support for their long-stalled efforts to join the European Union, and officials in Washington are trying to convince Serbia to tighten ties with the United States, instead of Russia.

Virginia Canter, who served as White House ethics lawyer during the Obama and Clinton administrations and also an ethics adviser to the International Monetary Fund, said even if there was no attempt to gain influence with Mr. Trump, any government deal involving his family creates that impression.

“It all looks like favoritism, like they are providing access to Kushner because they want to be on the good side of Trump,” Ms. Canter said, now with State Democracy Defenders Fund, a group that tracks federal government corruption and ethics issues.

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Craft supplies retailer Joann declares bankruptcy for the second time in a year

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Craft supplies retailer Joann declares bankruptcy for the second time in a year

The craft supplies and fabric retailer Joann filed for bankruptcy for the second time in less than a year, as the chain wrestles with declining sales and inventory shortages, the company said Wednesday.

The retailer emerged from a previous Chapter 11 bankruptcy process last April after eliminating $505 million in debt. Now, with $615 million in liabilities, the company will begin a court-supervised sale of its assets to repay creditors. The company owes an additional $133 million to its suppliers.

“We hope that this process enables us to find a path that would allow Joann to continue operating,” said interim Chief Executive Michael Prendergast in a statement. “The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step.”

Joann’s more than 800 stores and websites will remain open throughout the bankruptcy process, the company said, and employees will continue to receive pay and benefits. The Hudson, Ohio-based company was founded in 1943 and has stores in 49 states, including several in Southern California.

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According to court documents, Joann began receiving unpredictable and inconsistent deliveries of yarn and sewing items from its suppliers, making it difficult to keep its shelves stocked. Joann’s suppliers also discontinued certain items the retailer relied on.

Along with the “unanticipated inventory challenges,” Joann and other retailers face pressure from inflation-wary consumers and interest rates that were for a time the highest in decades. The crafts supplier has also been hindered by competition from others in the space, including Michael’s, Etsy and Hobby Lobby, said Retail Wire Chief Executive Dominick Miserandino.

“It did not necessarily learn to evolve like its nearby competitors,” Miserandino said of Joann. “Not many people have heard of Joann in the way they’ve heard of Michael’s.”

Joann is not the first retailer to continue to struggle after going through bankruptcy. The party supply chain Party City announced last month it would be shutting down operations, after filing for and emerging from Chapter 11 bankruptcy in 2023.

Over the last two years, more than 60 companies have filed for bankruptcy for a second or third time, Bloomberg reported, based on information from BankruptcyData. That’s the most over a comparable period since 2020, when the COVID-19 pandemic kept shoppers home.

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Discount chain Big Lots filed for bankruptcy last September, and the Container Store, a retailer offering storage and organization products, declared bankruptcy last month. Companies that rely heavily on brick-and-mortar locations are scrambling to keep up with online retailers and big-box chains. Fast-casual restaurants such as Red Lobster and Rubio’s Coastal Grill have also struggled.

High prices have prompted consumers to pull back on discretionary spending, while rising operating and labor costs put additional pressure on businesses, experts said. The U.S. annual inflation rate for 2024 was 2.9%, down from 3.4% in 2023. But inflation has been on the rise since September and remains above the Federal Reserve’s goal of 2%.

If a sale process for Joann is approved, Gordon Brothers Retail Partners would serve as the stalking-horse bidder and set the floor for the auction.

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U.S. Sues Southwest Airlines Over Chronic Delays

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U.S. Sues Southwest Airlines Over Chronic Delays

The federal government sued Southwest Airlines on Wednesday, accusing the airline of harming passengers who flew on two routes that were plagued by consistent delays in 2022.

In a lawsuit, the Transportation Department said it was seeking more than $2.1 million in civil penalties over the flights between airports in Chicago and Oakland, Calif., as well as Baltimore and Cleveland, that were chronically delayed over five months that year.

“Airlines have a legal obligation to ensure that their flight schedules provide travelers with realistic departure and arrival times,” the transportation secretary, Pete Buttigieg, said in a statement. “Today’s action sends a message to all airlines that the department is prepared to go to court in order to enforce passenger protections.”

Carriers are barred from operating unrealistic flight schedules, which the Transportation Department considers an unfair, deceptive and anticompetitive practice. A “chronically delayed” flight is defined as one that operates at least 10 times a month and is late by at least 30 minutes more than half the time.

In a statement, Southwest said it was “disappointed” that the department chose to sue over the flights that took place more than two years ago. The airline said it had operated 20 million flights since the Transportation Department enacted its policy against chronically delayed flights more than a decade ago, with no other violations.

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“Any claim that these two flights represent an unrealistic schedule is simply not credible when compared with our performance over the past 15 years,” Southwest said.

Last year, Southwest canceled fewer than 1 percent of its flights, but more than 22 percent arrived at least 15 minutes later than scheduled, according to Cirium, an aviation data provider. Delta Air Lines, United Airlines, Alaska Airlines and American Airlines all had fewer such delays.

The lawsuit was filed in the United States District Court for the Northern District of California. In it, the government said that a Southwest flight from Chicago to Oakland arrived late 19 out of 25 trips in April 2022, with delays averaging more than an hour. The consistent delays continued through August of that year, averaging an hour or more. On another flight, between Baltimore and Cleveland, average delay times reached as high as 96 minutes per month during the same period. In a statement, the department said that Southwest, rather than poor weather or air traffic control, was responsible for more than 90 percent of the delays.

“Holding out these chronically delayed flights disregarded consumers’ need to have reliable information about the real arrival time of a flight and harmed thousands of passengers traveling on these Southwest flights by causing disruptions to travel plans or other plans,” the department said in the lawsuit.

The government said Southwest had violated federal rules 58 times in August 2022 after four months of consistent delays. Each violation faces a civil penalty of up to $37,377, or more than $2.1 million in total, according to the lawsuit.

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The Transportation Department on Wednesday also said that it had penalized Frontier Airlines for chronically delayed flights, fining the airline $650,000. Half that amount was paid to the Treasury and the rest is slated to be forgiven if the airline has no more chronically delayed flights over the next three years.

This month, the department ordered JetBlue Airways to pay a $2 million fine for failing to address similarly delayed flights over a span of more than a year ending in November 2023, with half the money going to passengers affected by the delays.

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