The President's Daily Brief - PDB Situation Report | July 27, 2024: Secret Service Shake-Up & IT Outage Chaos

Episode Date: July 27, 2024

In this episode of The President's Daily Brief: We'll start things off with this week's resignation of Secret Service Director Kimberly Cheatle, following the attempted assassination of former President Donald Trump and her disastrous testimony before the House Oversight Committee. Former Secret Service agent Michael Matranga will join us to provide some insight. Later in the show, it's been described as the largest IT outage in history. Businesses worldwide are still grappling with the fallout caused by a software update from cybersecurity giant CrowdStrike. We'll talk to cybersecurity expert and former FBI Counterintelligence agent Eric O'Neill about that. To listen to the show ad-free, become a premium member of The President’s Daily Brief by visiting PDBPremium.com. Please remember to subscribe if you enjoyed this episode of The President's Daily Brief. YouTube: youtube.com/@presidentsdailybrief ☕ Blackout Coffee: https://www.blackoutcoffee.com/PDB Code: PDB 🏅 Patriot Gold: https://www.patriotgoldgroup.com Say Mike Baker sent you 💵 Tax Network: https://www.tnusa.com Learn more about your ad choices. Visit megaphone.fm/adchoices

USAA knows dynamic duos can save the day, like superheroes and sidekicks or auto and home insurance. With USAA, you can bundle your auto and home and save up to 10%. Tap the banner to learn more and get a quote at USAA.com slash bundle. Restrictions apply. Welcome to the PDB Situation Report. I'm Mike Baker. Your eyes and ears on the world stage. Let's get briefed. We'll start things off with this week's resignation of Secret Service Director Kimberly Cheedle.

You may have heard about this following the attempt to assassinated. of former President Trump and Cheetos disastrous, I don't know another word for it, testimony, before the House Accountability and Oversight Committee. Former Secret Service agent Michael Matrango will join us to provide some insight. Now, later in the show, it's been described as the largest IT outage in history. Now, I don't know how long we've had IT in the history of the world, so it may not be as dramatic as that sounds, but still the biggest IT outage in history. Businesses worldwide are still grapple.

with the fallout caused by a software update from cybersecurity giant crowd strike. We'll talk to cybersecurity expert and former FBI counterintelligence agent Eric O'Neill about that. But first, the situation report spotlight. This week, Secret Service Director Kimberly Cheedel resigned after major backlash over her agency's failure to stop the attempted assassination of former President Trump at a campaign rally in Pennsylvania earlier this month. Now, Cheeto, appointed by President Biden back in 2022, stepped down shortly after nearly five hours of intense questioning from both sides of the aisle. This was one of the few times that it was actually a bipartisan event in Washington, D.C.

So full marks to Cheetah for being able to get people like Jamie Raskin on the Democrat side and James Comer on the Republican side to agree about anything. But after five hours of intense questioning during this House oversight, accountability committee hearing, she did eventually hand in her resignation. She initially refused to relinquish her position, despite calling it the most significant operational failure at the Secret Service in decades. Of course, earlier, shortly after the assassination attempt, she had said that the buck stops with her. Apparently, she had no idea what that phrase meant. In her resignation letter, though, eventually, Cheathle admitted, quote, on July 13th, we fell short. As your director, I take full responsibility.

President Biden praised Cheel's dedication and integrity, highlighting her long service. Now, meanwhile, Speaker Mike Johnson took a different act. He said her resignation was overdue, and other lawmakers called for rebuilding trust in the Secret Service. The agency, of course, is still under fire for its handling of security at the rally in Butler Township, Pennsylvania, where 20-year-old gunman Thomas Crooks fired multiple shots at Trump from an unsecured, somewhat-sleeved, sloped rooftop about 150 yards away. Here for more on all of this is Michael Matrango. We're very lucky to have him here with us today on the Situation Report.

He's a former U.S. Secret Service agent is assigned to, among other things, a Special Operations Division, Counter-Assault Team, and the Presidential Protective Division. Thank you very much, Michael. We very much appreciate your time. And let me start off with a very specific question. What the hell happened? Well, thank you for having me. I appreciate it. I think what we saw on July 13th was what we all know was a catastrophic failure in communications. And those of us that have operated in the security space at a high level need to understand, or we already understand. But I think that the American people need to understand that you can be as good as you need to be physically and be a fantastic marksman. But at the end, you know, you can be as good as you need to be physically and, you know, be a fantastic marksman. But at the end,

of the day, communication is key. And if you can't communicate, you've got nothing. I mean, you know, through that testimony, we witnessed, you know, catastrophic failure after catastrophic failure. And some of the things that we were able to identify through the testimony was that, you know, Butler Township Police or another agency identified him as suspicious at least an hour out. And then 18 minutes prior, they took a photo of him exhibiting unusual and suspicious behavior. And then what we know is that he was at least on the roof for three minutes while they knew he was on the roof as they attempted to engage him and then were met with him pointing a rifle at an officer who had been hoisted upon the roof to get some visual identification.

And so my question has always been is, let's just say that three-minute time period, why was there not communications relayed within that three minutes to get the president or former president off the stage? Where was that breakdown in communication? I'm waiting on the testimony or the investigation to reveal that timeline of, you know, radio communication so we can see where that failure was. Well, I think, Michael, you could even go further back than that, right? If you follow the timeline that at least has been provided, right?

And some of this is still coming together, as Christopher Ray said during his hearing. But it appears as if the first eyeballs on the shooter came at about 10 minutes after five, right? President Trump was shot at, I believe, roughly 11 minutes after six. So the question there is, not even so much is, you know, why wasn't he taken off the stage? But if they knew they had an unresolved suspicious individual that they were still searching for, why didn't they hold President Trump off in a secure site until they resolved the matter? Well, I think that simple answers this is that, you know, any town USA where these,

you know, protective sites and visits are conducted, we have suspicious people or the Secret Service has suspicious people at every site. I don't recall a site where we did not have some type of suspicious behavior exhibited by individuals. And some, you know, some of these things are just, you know, people that are excited about being in the presence of the president. You know, they're there for the rally. They're exhibiting unusual behavior. And, you know, one of the things that I would say and that I've said on record is that, you know, there is a point where a person becomes not suspicious, but an actual threat. And so what we know is that I believe that at least 20 minutes prior to, you know, the president or former president taking the stage that he was a threat at that point.

And so my question to the local authorities and to the Secret Service is that why was he deemed not to be a threat and suspicious at that point? You know, at the end of the day, that three minutes get out. Well, I don't know. That's a very important. I'm sorry for interrupting, Michael. That's a very good point because is there any insight or information? Was he deemed not to be a suspicious character? Did they resolve that matter?

Because, I mean, they had multiple sightings of them in relatively short order. Again, looking at timeline information that has so far appeared to be validated or provided. You know, the Secret Service wasn't advised about this until somewhere in the 10th. minutes before 6 p.m. time frame. But the question I guess is, you know, was it resolved or were they still looking? Because the local police indicated that they actually left their post inside the AGR building to go look for this individual, which is how they ended up, you know, not having eyeballs on that rooftop. Yeah. I think the simple answer is that, no, I don't think it was resolved. I think that he was deemed suspicious from the moment that they identified him as suspicious or his behavior is suspicious.

And I think up until the moment where the shots were fired, they had a suspicious person who they could not locate for a period of time, which is why they left their post to go search for this individual. My question is that if you've left your post to go search for someone who is suspicious, wouldn't that be deemed a threat? If you have local law enforcement assets in the AGR building that are assigned to that building to secure that area of responsibility that feel the need that this person is enough of a suspicion that we need to abandon our post to go to look for that individual, I think at that point we need to determine, hey, this is a threat. Let's take a tactical pause. Let's take a deep breath. Let's not bring the former president out on stage. Let's delay until we can find out and get some resolution here. But that's not what happened.

And I think that's where the catastrophic failure occurred, amongst other things after that subsequently. Now, I mean, the fact that they were all operating on various frequencies, that's not unusual. That tends to happen more well more often than not. It does seem like there was a breakdown in basic, you know, communications relay and protocol. But I think from your perspective, and this is probably not a fair question to ask you, but. Okay. I'll do my best. What do you, what do you, yeah, what's

I mean, I'm going to ask it anyway. It's not like I'm caveating by saying I'm not going to ask you an unfair question. But what do you, what do you put this down to? If you had to, based on all your experience and what you've seen so far from this series of breakdowns, what would you put this down to? Is it is it is it poor training on the part of the assets on the ground, both Secret Service and local law enforcement? Is it is insufficient resources? Is it a top down leadership issue? I mean, where do you go with this? I think in order of priority, I would start with complacency. That's the first. You know, we haven't, I mean, we've had attempts and there's been other things that have occurred that, you know, the general public,

is not aware of, but the actual attempt, what was almost a successful attempt has not occurred in 43 years. So I think there is a certain level of complacency there. I believe that knowing what I know of having individual, you know, contacts still within the Secret Service, that the training level has drastically reduced. I think that there's a catastrophic failure in leadership of the service continuing to promote people not based upon their qualifications, but other reasons, filling quotas. You know, the director herself has said that, you know, or the former director now has said

that her intention was to have a 30% all-woman workforce by 2030. I think that that is the wrong approach that at this level in the game, where we're protecting America's, you know, leaders and the world's most powerful man or woman. that there should be no standard. And we should not be promoting individuals based upon sex or sexual orientation or gender. And I think that, you know, that yes, resources had a lot to play into that. And so I would question a couple things. And, you know, through the testimony, what we learned was that, you know, the first lady,

though she is the first lady, she has no real impact. I guess in the succession of the United States. Now, yes, obviously there's going to be a significant impact to the United States or to the president, should his wife be assassinated. But she was in the same region. And through the testimony, what we learned is that, you know, there were three post-standers, which is kind of minimal as far as importance, but it shows you where the thinking was, is that there were three poststanders assigned to the Trump rally that were Secret Service poststanders,

and then 12 assigned to her indoor 400-person rally, the two are not equal. You know, with the political divisive rhetoric in the country right now, if something were to happen to former President Trump versus the first lady, there's a greater impact. Not only that, but we had a confirmed intel briefing that Iran had made a recent threat towards former President Trump. So we have a foreign state now saying that they want to assassinate the former president, yet he gets less resources than the First Lady of the United States. It's just something that I think the service in general needs to reevaluate themselves.

And I think DHS seriously needs to reevaluate the United States Secret Services dual mission because I believe that it is hindering the operational planning and logistics and execution of the plan of the United States. Secret Service. Yeah, I applaud your diplomacy, Michael, by the way. I'll maybe paraphrase what you're saying in my own words, which is in the world of security and security and operations and intelligence, where people's lives are regularly at stake, DEI has no place there at all. Yeah. Well, I agree with that. It should be entirely merit-based. It should, 100%. I mean, you know, I can recall, you know, under another female, you know, listen, I've got daughters, but my daughters would never expect to be given anything because I've taught them that if they want to operate in a generally, you know, male dominated area, you have to be able to meet or exceed what the males do. And so under another female leadership of the United States Secret Service, Julia Pearson, we had another incident, which, you know, she immediately resigned, which, you know, was the right thing to do. but, you know, under a Julia Pearson leadership, I can recall being on the counter assault team

and us hearing rumblings that Julia Pearson was trying to change the physical fitness standards for the Special Operations Division so that she could get a woman through. And so I remember us always asking the question, well, if I have to run a mile and a half and nine minutes and 30 seconds and we're to combat situation, but yet the female who made it through the class is running a 12 minute mile and a half. You know, she's combat and effective and she's no support to me. And so I will go on record stating that at this level, there's too much at risk. There's too much at stake.

I don't care if you're a male or you're a female. You can either do the job or you cannot do the job because there's just as many weak males out there that are on the job that shouldn't be there as well. So there should be one standard. And that's it. You either make it or you don't. And if we continue down this route, we're going to continue to see these failures. And we have to stop that.

Well, yeah, I think the first step in that direction was to have Cheeto finally realize that she had to step down. So it's, you know, I applaud her during the right thing. She should have done it days and days before. But regardless, Michael, if you'll stay right there, we do have to take a quick break because we've got some wonderful sponsors. But we'll have more on this after this quick break. Hey, if you've been paying attention to the financial news, and hopefully you have been, experts are beginning to express concern that the U.S. dollar may lose its status as the world's standard. The warning signs, look, are there, Saudi Arabia ending the petro dollar.

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Just tell the manager you'll sue. Instant room upgrade. Stop taking bad travel advice. Start comparing hundreds of sites with kayak and get your trip right. Kayak, got that right. Welcome back to the PDB Situation Report. I'm joined once again by a former United States Secret Service agent, Michael Matranga. We're covering, as you can imagine, a variety of topics related to the recent assassination attempt on President Trump's life.

Michael, earlier, you mentioned briefly when we were talking about what could have contributed to this breakdown. You mentioned something that I find intriguing, and that is the level of training that agents received, not just initially when they onboard, but throughout their career. Can you talk to me about that? What was it like for you? How much time was spent in training when you weren't doing? And what do you think it's like now based on what you know? Well, I can tell you that, you know, this is going to come across.

is cocky, and it's not intended that way because it's the fact. And there's very few elements within the Secret Service that are actually tested to a point where you either pass or you fail. And one of those being the United States Secret Service counter assault theme, the counter-sniper team, our emergency response team, which are all capable, and those all fall under our special operations division. But the way that the Secret Service is set up is that, you know, though I am a proud member or former member of the presidential protective detail,

what I will tell you is outside of being on the special operations division in waiting my time and earning my spot being on counter assault, I didn't do anything that was out of the ordinary to become an agent on the presidential protective detail. There is a small training that is required when those individuals from the field are pulled to go to the detail. But it's essentially, it's not a real pass or fail. And, you know, it's not something that I would consider that if we're going to be the elite

protective force in the world, you know, there needs to be a higher standard. The problem is that the agency and not only the agency, but DHS has gotten to a point where we're so weak that we don't want to offend someone based upon their inability to perform. And so these are the things that have to change if we're going to continue down this route of being labeled as one of the elite protective forces in the world. That's the perception the American people have of the United States Secret Service. We can no longer continue this smoke and mirrors approach. You either have to perform because the stake and the risks are higher now. There's more political divisiveness now than ever.

And so, you know, with the Secret Services Counter Assault theme, you know, we go through a two-week tryout, we go through a six-week basic. And then once you become operational, every six weeks, you go through a two-week training cycle where we're tested. We do attack on principles. We test our marksmanship. We work on individual tactics. We do defensive tactics. Those are things that are not done at the protective details any longer. It's just not.

you know, we've sent home many people, but I don't think that there are many people that are sent home from what we call protective detail training. And these are the people that are, you know, working hand in hand, protecting the president of the United States, vice president and their families. And listen, I want to be clear. There are some very, very capable and well respected individuals on the presidential detail, on the vice presidential detail. And there's no reflection of them. just my criticism is based upon the policy that the Secret Service and the DHS has that, you know, basically mediocre is okay. And that is, that just can't be.

There's those that can and there's those that can't. And we can no longer keep this path. Yeah, I mean, there's a standard, you know, practice with special operations and, you know, as certain elements is that if you're not doing your training, right, that's just, that's just what you do. You're always, you're always training. during your downtime. Is there a way for you to quantify, let's just take a protective detail agent.

Is there a way to quantify how much training they get during the course of any normal year? And realizing, of course, look, their job is, it's chaotic, it's busy, it kind of depends on the schedules of the protectee, and there's a lot of work involved there. But on average, any sense of how much training, they receive or are given continuously through their career on an annual basis?

Well, I can tell you what's supposed to happen and what does happen, what's reality. And they're supposed to have training once a month. But I can tell you, due to the operational tempo. And this is primarily one of the big reasons of the failures of the Secret Service that we've seen lately, is that if you go back to the Obama administration, the Trump administration, the Biden administration, and you start looking at the increase of protective detail assignments that have been heaped upon the men and women of the Secret Service and how that has affected their operational tempo. This is why you've had good men and women like myself who are dedicated, who have a servant heart, who are capable, have just been completely burnt out. And we left because the service could not uphold their word as far as, you know, duration of assignments.

and operational tempo. The fact of the matter is, is that I would say, and some people may be upset about it, but I don't care because they know that it's true, is that the training cycle that should be happening is not because of the operational tempo that has been thrust upon the men and women

of the Secret Service by the administration, adding additional protectees to the responsibility of the United States Secret Service. I can recall back when I was on counter assault under Obama and the presidential detail, there were so many cabinet members that we were protecting. And we, you know, the men and women of the Secret Service are quiet professionals. They're not going to complain about this. But the agency and the leadership has to say, sir, madam, president, we can no longer sustain

with the workforce that we have, the amount of individuals that you're having us protect. you know, we have to start looking at, are these people in direct succession, you know, to the continuity of in operations of the United States of America? And the answer is no. And I'm not saying that we should put, you know, risk levels on certain individuals' lives. But when we're protecting, you know, I'm just throwing this out there, you know, the Commerce Secretary or somebody else, you know, at what cost, I guess would be my question. What cost? Because yesterday or day before, we heard the director say that they are now covering 36 permanent protectees on behalf of this administration. And we were never designed to do that. And so I truly believe that DHS and the Secret Service need to examine their protective mission

and their investigative mission to determine, is the investigative mission really worth us salvaging? Because in order for us or the Secret Service to do this right, we solely need to protect on the protect we need to focus on the protective mission and if that means us giving up that investigative responsibility to the fbi or give that to the dhs and putting secret service under a different department perhaps the treasury going back there and solely protecting america's leaders then that's what we need to do this is i think a monumental opportunity for the secret service to advocate for that so i mean that's a very interesting point right, is to, because I was thinking when you started talking about this, my mind went where I think a lot of people do, which is, okay, well, you need more resources, right? You need to be able to hire

more agents without lowering the qualifications, without lowering the standards, right? Sometimes that can be difficult because there may be a finite pool of capable candidates out there. But in terms of resources, yeah, we look and we go, okay, well, just we need to hire more qualified agents. look, I love the IRS as much as the next person, but, you know, they've been making this big spiel about, you know, they're hiring 88,000 new agents for the IRS. And yet, you know, the Secret Service is running so lean and the demands are so high that they're having these problems. And they're relying more and more on local, you know, law enforcement, whether it's Butler

County or Washington County or Beaver County or wherever in the states. And those standards may vary greatly from, you know, local. law enforcement from one to the other. But it is interesting what you're saying is maybe hive off some of the responsibilities of Secret Service to other agencies that may be better equipped to handle those things and let the Secret Service focus on that primary mission of keeping people alive. Or give us a tenth of the amount of the IRS agents that they're hiring so that we can sort through and identify the best amongst who we have to fulfill that potential.

mission and the rest, hey, I'm sorry, you're just not cut for it. You're going to be working T-checks out in Houston or L.A. because that's what your investigative capabilities. I mean, that's what your capabilities are, you know? And so, listen, I'm not, I'm not discounting the actions or the integrity of the men and women of the Secret Service. I'm just saying that if we're going to do this right, we have to do this right at this point. The political rhetoric and divisiveness in this country is at a boiling point. We are going to continue to to see political violence at an all time high from this way forward if we continue on this path. We can no longer sustain with the minimal staffing that we have.

If you recall, the director said that we had about 8,000 employees. That's 8,000 employees. That is not 8,000 agents. We have roughly, I want to say 3,000 agents at best for 36 protectees. So, you know, like I said, I watched the testimony and I just wanted the director to just finally stand up one time for the men and women of the Secret Service and say, we need more assets. We need more resources. We need more bodies. We need a bigger budget.

We need a slim down scope of what we're doing so that we can protect America's leaders. But she failed. And, you know, what's worse than that? And, you know, this individual is a good person. But, you know, I saw where Secretary Mayorkas promoted Mr. Roe to the now acting director. And I found that very ironic that the director just took one for the team and she resigned as she should have because there was no coming back from that testimony. But Mr. Roe was the deputy director of the Office of Protective Operations who is equally, if not more responsible for the 13th's failure. So what is the DHS doing?

You know, how ironic is that? You're the deputy director of OPO and now you're the acting director because the director stepped down due to her saying it was her responsibility. You were equally as important of a person that was responsible. So I question Secretary Mayorka's decision. Let me ask you. I'm sorry for interrupting, Michael, but I'm aware of the time and your time. are you confident? I mean, obviously, Kimberly Cheedle stepped down, right?

And as you pointed out, there was no other option there. But in terms of the review, right, the internal review, I'm not so much worried about, you know, the investigations. The committee hearings up on Capitol Hill are typically are just performative art, right? It's a chance for the Democrats and the Republicans to, you know, posture and do a little bit of theater and score points, right? So you rarely get actual intelligent operational questions being asked in that environment. But are you confident that right now they have completed a hot wash, a debrief of an assessment of what happened,

and they have very clear, proactive points that will prevent this sort of breakdown again? No, I'm not. And the reason why I say that is I was just as troubled as most Americans to hear. the director out of her own mouth say that she had not been to the scene. This is the perfect example of people being promoted to leadership positions in which they should not be. If I were the director of the Secret Service, you bet your butt within 24 hours, I would have been on scene, on that roof, looking at the vantage point. I would have been on stage, looking at from where the shooter was. And I would have been assessing this myself,

but that's not the type of leadership the Secret Service is promoting at this point. They don't want men like me, or Dan Bongino or other individuals who talk direct. They want people that are just going to do the political thing. And that goes to another point is, you know, Kimberly Cheetle was not qualified to be the director in the first place. Her years of service does not qualify her.

Nice lady? Great. Congratulations on your service. We appreciate it. But I can tell you there are men and women in the United States Secret Service right now. We just went and buried one of the best special operations direct instructors two months ago. There was about 150 of us who went back to send him off in a show of respect. I could have picked up a rock and thrown a rock into that group of men. And any one of them could have done a better job because they understand the operations.

And they are not so far removed away from the field that they don't. get it anymore. What happened to America's leaders that are down in the trenches, that are riding in the trucks, that are walking the scene, that are going back to the scene of an attempted assassination and looking and going hands on? Where are those people? Where are those leaders? Yeah, I think we feel the same way about, I mean, my former organization, the CIA, we always felt that the best director would rise up through the ranks, right? You don't bring somebody in from the outside. Not that we haven't had some good ones over the years. But you want somebody who understands the organization, who understands the operational imperatives and the concerns that the operational people have

in their core, right, in their gut. They know what is required to do such a difficult job. Michael, the problem is this, though, fascinating. There's too much politics involved. Director Chito was appointed to that position because she was a female and she was homosexual. And that's the facts. She fell in line with the political agenda and narrative of this administration, and that's why she was put there. And we've got to stop that. I can think of three people right now that can lead this agency, one of them being in

the current detail leader of the president of the United States. You want a leader? That's a leader. That's the man. That's the one that they should have went to because he's operational and he will do exactly what everybody else does. That's the guy. Yeah.

Well, look, I hate to be. cynical, Michael, to wrap this up. But I think if what we're saying is that merit and competency are going to rule the day rather than, you know, DEI and identity politics, I don't think that's where we're heading. Oh, I don't think so. This has been, this has been fascinating, Michael, and I very much appreciate your time. Michael McGrange, a former Secret Service agent, I do hope you'll come back and talk to us more because there's a lot to unpack here with this entire situation. Thank you so much for joining us and sharing our insights.

You're welcome. Thank you. Take care. Thank you, man. All right. Wow, there's a lot there. Coming up next, we examine what's been termed the largest IT outage in history. And honestly, I will research this and find out how long the world has had IT. And then we can put this into context because I don't think this goes back a couple thousand years. But it was the largest IT outage in history. Businesses globally are still reeling from the aftermath. of a software update by cybersecurity leader CrowdStrike.

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Visit TNUSA.com today. Welcome back to the PDB Situation Report. Companies around the world are still recovering from last week's global IT infrastructure failure caused by a faulty software update. Stop, let's roll that back. Up a date. I'm just trying to add extra consonants because it's fun. All right, here we go. Are you guys still rolling?

Stand by. Ready when you are. All right, cool. Thanks. C Block in three, two, one. Welcome back to the PDB Situation Report. Companies around the world are still recovering from last week's global IT infrastructure failure caused by a faulty software update from cybersecurity giant crowd strike.

In total, approximately 8.5 million computers crashed a blue screen, grounding flights, crippling hospitals, and even bringing down emergency services. Now, for some perspective, the IT outage caused Delta Airlines to cancel more flights in less than a week that it did in 2018 and 2019 combined in two years time. Insurers are now estimating that the outage will cost U.S. Fortune 500 companies $5.4 billion. Now, for its part, CrowdStrike is apologizing for the snafu. Oh, that's nice. and in part, they're apologizing by offering their partners $10 Uber Eats gift cards for all the additional work that they had to do fixing their systems.

Who the hell at CrowdStrike came up with that idea? I got an idea, boss. Here, really? We crashed global IT infrastructure. Here, please enjoy this $10 gift card. It's on us. You're welcome. Apparently, CrowdStrike uses the same crisis communications firm as Kimberly Cheedle

and the Secret Service. For more on this story, the outage, not the Uber-Eats gift cards, I want to bring in cybersecurity expert and former FBI counterintelligence agent Eric O'Neill. Eric, thank you very much for taking the time to join us here on the Situation Report. Hey, Mike, it's great to be here. Now, let's start at the 30,000-foot level. For the sake of our viewers, can you describe what happened here? Well, CrowdStrike is now the biggest name in cybersecurity, but back then it was a lot. you know, just a week ago, it was one of the preeminent cybersecurity companies, if you're in the

business of cybersecurity or you're a company wanting to secure all of what's called endpoints. So an endpoint is something like a laptop computer, a desktop computer, your phone, anything that a person holds in their hand and they're going to access data through. And endpoint security is kind of like that huge bouncer at the front of the most exclusive Hollywood club who keeps everybody who isn't on the list from getting in out. And nobody gets in without being on the list being allowed to get in. That's what that endpoint security does. Crowdstrike does that very well. And it turns out, most of the companies on earth. And what happened is the company rolled out an update to that sensor, that endpoint detection response sensor that works on every one of those endpoints, your computer,

your laptop, your phone, and protects you. The problem was the update had a flaw in it that triggered a problem with Windows, only Windows, not Linux or Mac, and caused Windows to go into what's called a reboot crash. So every time you tried to boot up your computer, it would crash and then reboot and crash because it was looking for that CrowdStrike file, found the corrupted problem, and then that triggered the crash. So there was no way to just send a patch and fix their problem, which caused all those millions of computers to crash and chaos all over the world. Yeah, I mean, that's putting it lightly and diplomatically chaos.

But, and correct me if I'm wrong, Eric, is that this is probably not the first update that CrowdStrike is sent out. So what was different about this? I would assume, and maybe you can walk us through this, I would assume that there's a process, right, for testing these updates in a secure environment before they just launch them out into the world. That's exactly right, Mike. CrowdStrike is the second biggest cybersecurity company after Microsoft. They own a large part of the cybersecurity market, and they've been rolling out daily, hourly updates to these sensors for a long time. And I can't imagine that they continually are in the past, have done what they just did. So to get people up to speed, what they did for reasons that completely confound me, is rolled out this patch, this update to everyone all at once.

And you never do that. No company does that unless they want a problem like this one. You always send out some test updates first to a small segment of the community that's using your product. Make sure that goes well. Those are sort of the test subjects. And then further, this is why big companies have the early adoption plans where you can opt in to getting updates before everyone else. you're opting in to be a test subject so that you're absorbing the problems before they roll it out to everyone else. So CrowdStrike made a mistake.

I think they've owned up to the mistake, but they haven't really explained why they made such a huge mistake. Right. I mean, it's, I don't want to draw comparisons to apples and oranges. Obviously, this is not a good analogy, but you could argue the same thing with the Secret Service, not offering up an explanation as to exactly how they had the security breakdowns there. but with CrowdStrike, even before they roll them out to the early adopters, right, to that test group, don't they have a process where they internally, they vet this product, this update, before they even send it out to the test subjects?

Yes, they should have quality control. Somehow the quality control process, which should be incredibly robust, failed. their process to roll it out bit by bit to some users and then more users and then all the users failed. And your analogy is great. It is just right. I am as perplexed by this as a cybersecurity expert as I am with the failures of the Secret Service in trying to protect President Trump as a former FBI counterintelligence expert.

So we have two things back to back that just don't make a lot of sense and we're all looking for answers. Yeah, no, exactly. Look, it was interesting because in the immediate aftermath, as the outage was building, right, as it was taking place, there was a lot of talk. This is a, you know, it's a cybersecurity issue. It's an attack, right? By, you know, a hostile state actor or hackers or, you know, some non-state group.

And that became quickly apparent that it wasn't that. But it does shine a light on the interdependence, right? how small the world is now because of the connectivity involved around the globe with IT infrastructure. Talk to me about that a little bit. I mean, to what degree is, if we just narrow it down, is the U.S. prepared in the event that this were to be something more nefarious, and you would assume would actually be harder hitting? Yeah, so there's a lot to unpack right there. First of all, starting off with how vulnerable we are.

The pandemic, hysteria, especially around the pandemic, threw us into a situation where one day we were all working in offices, and the next day, everybody was working from home, and IT had to rapidly figure out, how are we going to do this? And so it created this forced mass adoption of the cloud. The cloud as the first model and way that we communicate, that we share information, that we collaborate, that we work, heck, that we play, that we find our entertainment, everything. everything we do is now cloud. Just look at our kids who can't get their noses out of their phones and into maybe a proper book, right, or get together with their friends instead of texting them. And so in this environment where suddenly everybody force adopted using cloud technology, and cloud technology was always going to be the future, it meant that we became a little bit more sensitive or vulnerable to these mass problems, like a patch that's used by everyone who uses one single vendor that causes a problem and then causes everyone to crash. Now, on the idea

of are we vulnerable from an attack, well, this isn't the first time this happened. Just a few years ago, actually, during the pandemic, two major cybersecurity companies, companies that are IT companies, were hit. Solar Winds was hit by the Russian intelligence, cyber espionage, who were able to insert a Trojan into a patch just before SolarWind sent it out and it went out to all their customers, including a lot of Fortune 500s and a lot of government agencies, including the Department of Homeland Security and Treasury and others. Of course, the Russians, when they sent out that little Trojan horse that got into all those companies and agencies, lurked and watched and data-mined information until they were finally found out. And then right on the heels of that, Russian cybercrime group attacked another company.

that also has customers all over the world called Kasea, and they were able to insert their own code into a patch that went out and compromise all those companies, or a large subset of them, with ransomware attack. And then they went to Kasea and said, if you pay us $70 million, we'll give you the master key to let all your customers out. So this wasn't something that we didn't know about.

And these three issues right here, cybercrime, cyber espionage, and just a flawed patch, demonstrate how vulnerable we are to an attack. So if we take it to your last point, Mike, looking at critical infrastructure, and that's something I spend a lot of time on, and that's something I worry about a lot. We are very vulnerable in our critical infrastructure. Not only has Russia and China been caught launching probe attacks into our critical infrastructure, Russia has an ATP, an attack, group called sandworm that has been inner critical infrastructure for years, just trying to see how deep they can get into the power grid, which is where they want to go. And then China has typhoon. Iran and North Korea have also been playing in that space. And I suspect that there's a lot of coordination between those four countries who do want to do us harm in some way, shape, or form.

It means that in the future... I've talked about this. Yeah, go ahead. I'm sorry, Eric, too. Sorry to interrupt you. I couldn't agree with you more in terms of critical infrastructure and the vulnerability, and also the aggressiveness with which the state actors, particularly China and Russia, obviously, and Iran to some degree, some degree North Korea, but they're aided by China. But the way that they probe and map out and test and collect whatever they can collect data on our various critical infrastructures, I've been talking about this for years. When you look at, okay, what are the top crises around the globe, what are our top vulnerabilities,

you know, our infrastructure is always right up there in the top five. So, again, I couldn't agree with more. If you'll stay right there, we're going to take a quick break. Eric O'Neill is with us. When we come back, Eric, if we'd like to talk about counterintelligence, we'll be right back after a quick break. Hey, if you're a listener to the PDB, and by God you should be, you know there's a lot going on in the world today, and that's an understatement.

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Eric, thanks again for being here with us. We were talking about before the break about the crowd strike outage. I'd like to shift gears just a little bit right now. I'd like you to put your counterintelligence hat on and say it's a good looking hat too. And talk to me from your perspective and all your experience, the top counterintelligence threat to the United States to our national security at this point. Yeah, the top counterintelligence threat hands down is cyber-svester. from China and Russia. They have been stealing information from agencies, from industry. They've

stolen economic information. And like we were just talking about, they've been embedding themselves in our power grid and other areas of critical infrastructure. And all of this is a precursor to a potential future war. Right now, we're in the middle of the cyber war. People don't realize it, but there has been a battle between the United States and foreign threat actors to deny them access to our information and the ability to take down our critical infrastructure. And it is a constant battle. And to what degree are we learning lessons? I mean, our posture right now, I mean, obviously there's an offensive side, there's a defensive side.

If we're just talking about awareness of the threat and developing systems and protocols and capabilities to defend against that. I'm not talking about what we do on the offensive side. How are we doing as a nation? We're learning quite a bit. And the United States has done a good job in identifying these attacks. The problem is, as good as we are at hunting threats, those threats are always going to remain,

and they're going to land because our infrastructure just isn't strengthened to defend against them. I mean, if we're just talking about our power grid and critical infrastructure, that relies on what's called SCADA networks, which are the transmission and control networks, and those can be on everything from aged computers that are unpatched in various locations. You know, there was a report that was done just a year or so ago when a couple of, you know, domestic terrorists took shots at power transmission stations in North Carolina, and were able to cause millions of dollar damage by just shooting them with a gun and taking them down. Thousands of people lost power.

And then there were some reports done, and it turns out that if you take out just nine key transmission stations throughout the U.S., that's just nine shooting them and they're not very well guarded, you can cause massive chaos in the transmission of power throughout the United States. So I've always thought that if I were a China or Russia and I wanted to start a real war against the United States, it would be a kinetic, you know, embedded people, maybe coming through our porous border, taking out those stations. At the same time, there's a large-scale cyber attack leveraging all of the work that they've been doing to launch probe attacks and embed themselves. That could be very disruptive for the United States and, of course, could turn our eyes inward at a time when, say, China wants to invade Taiwan or Russia wants to push hard into Ukraine. Yeah, I think you're pointing out some really critical issues here because, again, I think if you look at where, where's the next, you know, global conflict? How is it going to be played out, right? There will be a traditional battlefield element to it. That's never really going to go away.

But in cyberspace and in space as well, I think that's where you're going to see the efforts to bring it to the home front. meaning bring the pain to the population, whether it's here in the states or anywhere else. But the idea being you shut down the power, you shut down water facilities, you shut down transportation, which shuts down food deliveries and pharmaceutical deliveries and all these other cascading problems that can happen on the home front because they've spent, and by they, I mean basically China, Russia, they've spent all this time mapping out and identifying the weaknesses within our systems.

And to your point, look, the power grids, east, west, Texas, they were never built to withstand, you know, a cyber attack. They didn't, you know, they had no concept of that at the time that they were constructing these grids as sort of a patchwork quilt system across the nation. But, you know, from your experience in what you've seen, are you satisfied, I guess, with the U.S. governments, whether it's this administration, previous administration, ever. With their approach towards China, let's just single them out first, with their approach towards China in terms of trying to deal with that potential threat? I think the Trump administration was a little harder on them and a little bit more focused on them than the Biden administration has. We'll see what happens after the next election. But I think that we need to get a bit tougher on China, look for a decade or more, everyone in cybersecurity has known that we have significant

data loss in terms of intellectual property, economics, information that drives our economy and business innovation by Chinese espionage. Chinese are incredibly good at stealing economic information, and they will embed themselves in the U.S., they will launch cyber attacks, They will recruit people, you know, students from colleges in order to get that. And, you know, our attempts to try to indict them, even though we know where they are have gone nowhere, their intelligence officers. Sanctions don't, certainly aren't going to stop it. So I think that we need to take a broader look at how we defend ourselves against these threats and also what we do in response, whether it's heavier sanctions or something further. But I think that that is something right there that the U.S. needs to look harder at.

And even though we've been looking at it in detail for some time, it hasn't, we haven't really moved the needle into a place where we're stopping China from stealing. When we talk about cyber crime, cyber espionage, cyber shenanigans in general, how important, from your perspective, is a public-private partnership, meaning the government working with the private sector. Yeah, that public-private partnership, and there are a number of them that work well are critical. The government has an advantage in intelligence. They have people like me, like what I used to do, working undercover, working in counterintelligence

overseas here, receiving information, intercepting information, and learning about potential future threats. And then, of course, that information, when it works well, is handed over to companies, industry, cybersecurity companies so that we can defend against the present threat instead of just waiting for something to land and then responding to it. So that public-private partnership is really critical to cybersecurity, and it's something that we should continue to build and foster. Is it getting better?

I mean, again, from what you've seen compared to randomly pick, you know, three years ago, five years ago, is the effort to have. have a two-way dialogue between the FBI, for instance, and private sector businesses who are facing these threats or dealing with attacks, is it getting better? I think it gets better every year. CSA is certainly making great strides in that public-private partnership. The FBI's IC3, the Internet Crime Complaint Center, is a great repository of information. And you can report, for example, a ransomware attack to them, and they will see if they will see if

they can assist. They've done a lot of work to go into the dark web, for example, if we're going to talk about cybercrime and try and take down some of these large cybercrime syndicate gangs that are now the fastest growing business on Earth. So yes, the government's doing the work. It's just a lot of work. Cyber security versus cyber crime and cyber espionage is a massive need. We need to build it. We need to get stronger because You know, that future war is now. And we're right on the cusp of the large-scale cyber attack. And so we need to be more resilient.

We need to be prepared for it. And we need to be redundant in our systems. Yeah, I think that's a great message. The future war is actually now. I hope when we call you again, Eric, that you'll see our number and you'll say, oh, hey, that conversation wasn't so bad. And you'll pick up the phone because we'd love to have you come back. Eric O'Neill, thank you very much for joining us today on the Situation Report.

Mike, it's great to be here and I'll absolutely come back anytime. Excellent, man. Excellent. Thank you so much, man. Well, that's all the time we have for the PDB Situation Report. Look, if you have any questions or comments, maybe you've got a humorous anecdote, maybe you've got a limerick, reach out at pdb at thefirsttv.com. The PDB staff, I mean all of them, including our crack team of interns.

They love getting your emails and your faxes and your beeper messages and your, you know, Western Union telegrams. And every month, what we do is we take a bunch of your questions and your comments and we include them in a monthly episode that we call Ask Me Anything. Now, to listen to the podcast of this show AdFree, become a premium member of the president's daily brief. It's very simple by visiting PDB Premium.com. And remember, how could you forget? New episodes of the PDB Situation Report air every Friday at 10 p.m. on the first day. TV. And of course, on all podcast platforms and our YouTube channel at President's Daily Brief. I'm Mike Baker. Until next time, you know the drill. Stay informed. Stay safe. Stay cool.