THE KEY

The Trump administration’s commitment to its cutting ties with Chinese telecom giant Huawei is going to face a stress test today as U.S. companies press their case to keep supplying Huawei with software and parts. 

Companies such as Qualcomm, Intel and Google will meet with National Economic Council Director Larry Kudlow as the clock ticks toward an Aug. 19 deadline, when the Commerce Department has ordered a halt of all such sales to Huawei.

They want the Trump administration to carve out exceptions for “sales of chips and other parts for Huawei-made smartphones and laptops,” my colleagues Jeanne Whalen, Reed Albergotti and David J. Lynch report. “Tech companies are also asking the administration to relax the anti-Huawei rules that now bar them from participating alongside the Chinese company in global standards-setting bodies, which establish technical rules that underpin global networks." 

Those requests will pit China hawks in the administration — who want to send a tough message to Beijing — against officials including Treasury Secretary Steven Mnuchin who are worried the ban will hurt American businesses more than it hurts Huawei, Jeanne, Reed and David report.

And if the administration retreats too far, they risk damaging the administration’s credibility as it continues to make the case for allies to join the U.S. in banning Huawei from building out portions of their next-generation 5G networks. 

Despite months of U.S. efforts, only a handful of nations, including Australia and New Zealand, have agreed to completely ban Huawei from their 5G networks and some U.S. allies, including Britain and Germany, appear poised to allow Huawei to build some portions of those networks — a fact Huawei was crowing about over the weekend on Twitter.

U.S. officials are especially concerned about Huawei’s role in 5G because the next-generation networks will carry much more data than existing wireless networks, providing far more spying opportunities. The super-fast networks will also enable a new generation of connected devices, such as driverless cars, raising the possibility of dangerous digital sabotage. Huawei has steadfastly denied that it has ever spied for Beijing and said it would refuse to do so if asked by the Chinese government.

All eyes are on President Trump, who suggested in June after a meeting with Chinese president Xi Jinping that he might be open to loosening the restrictions on U.S. suppliers to Huawei. But his administration never explicitly detailed a plan. Now, broader trade talks between the United States and China are largely at a standstill while Beijing waits to see how far the United States will bend on Huawei, the Wall Street Journal’s William Mauldin and Chao Deng reported last week.

Loosening the Huawei restrictions could also spark blowback from China hawks in Congress who have introduced legislation that would require congressional approval for any changes to the bans. Sen. Mark R. Warner (D-Va.), one of the bill's sponsors, warned me last week that it would be devastating to the U.S. government’s credibility if it fully reversed the Commerce Department ban.

The bill was also sponsored by Republicans including Sens. Tom Cotton (Okla.), Marco Rubio (Fla.) and Mitt Romney (Utah).

Warner is less concerned about easing restrictions on supplying Huawei with cellphone components that aren’t related to 5G, he told me. He faulted the Trump administration for not exempting specific products that didn’t pose spying concerns before rolling out the ban.

Under the bill, the Commerce Department would be allowed to grant waivers to the ban, but Congress would have 30 days to pass resolutions disapproving them. 

PINGED, PATCHED, PWNED

PINGED: The credit ratings agency Equifax will pay as much as $700 million to settle numerous federal and state investigations into its 2017 data breach that compromised the personal information of more than 147 million Americans according to an agreement announced this morning, my colleague Tony Room reports. “The punishment includes payments to affected consumers, fines to peeved regulators and a host of required changes to the credit-reporting agency’s business practices,” Tony reports.

“This is the largest data breach settlement in U.S. history,” Pennsylvania Attorney General Josh Shapiro said when announcing the settlement, blaming the breach on “corporate greed” and Equifax executives “[putting] an extra dollar of profit into their pocket, as opposed to that dollar going into the infrastructure of the company to protect their data.”

Under the agreement with 48 states and the District of Columbia and Puerto Rico, Equifax will set aside up to $425 million for breach victims and offer them 10 years of credit-monitoring. The company will also invest more heavily into its own cybersecurity and pay states themselves $175 million, Tony reports.

PATCHED: Director of National Intelligence Dan Coats has created a new position to coordinate efforts between U.S. intelligence agencies to respond to foreign election interference efforts, he announced at the Aspen Security Forum on Friday. As the first Election Threats Executive, intelligence veteran Shelby Pierson will coordinate officials from key intelligence agencies including the Federal Bureau of Investigation and National Security Agency in efforts to secure U.S. elections from foreign attacks, the New York Times's Julian E. Barnes reports.

Coats called election security an “ongoing” challenge at the conference and acknowledged that influence operations by Russia, China and other countries probably will extend beyond 2020, requiring increased coordination within the intelligence community. Pierson was also involved in the intelligence community's  2018 election monitoring efforts.

PWNED: The White House has finally agreed to share with select members of the House Armed Services Committee the classified contents of a presidential directive it issued last September loosening the reins on offensive hacking operations, ranking Republican Rep. Mac Thornberry (Texas) said at the Aspen Security Forum on Friday. A bipartisan group of lawmakers has been pushing for the release of the directive for more than a year, recently passing a provision in the House version of an annual defense bill to force the White House to reveal the document. The provision, if it also becomes law, will also require the defense secretary to notify Congress of any offensive hacking operations it launches within 15 days.

Thornberry could not elaborate on timing, but said the White House briefing would be “soon.”

The White House previously argued that sharing the information could “unduly hinder cyber operations.” But lawmakers say not sharing the memo deprives them of important oversight of cyberattacks that could escalate foreign tensions.

“We want to make sure we’re not creating more of a Wild West than already exists,” Rep. Jim Langevin (D-R.I.) told me last week.

PUBLIC KEY

— Cybersecurity news from the public sector:

World
One tweet called for the release of Digga D, a drill rap artist who was jailed after he was caught with a group carrying machetes and baseball bats.
Karla Adam
Public Safety
Harold T. Martin III stored years’ worth of secret information at home but did not share it, prosecutors said.
Dan Morse and Tom Jackman
Four members of the House Armed Services Committee, including ranking member Rep. Mac Thornberry, R-Texas, said moving forward with the contract was critical to U.S. national security interests.
CNBC
Politics
The California Democrat recalled his surprise when a Microsoft representative said at a conference last year that three Senate campaigns had been attacked by what seemed like the same Russian government-linked group that interfered in the 2016 election.
Hannah Knowles
PRIVATE KEY

— Cybersecurity news from the private sector:

SyTech, the hacked company, was working on research projects for the FSB, Russia's intelligence service.
ZDNet
Google is poised to pay a modest $13 million to end a 2010 privacy lawsuit that was once called the biggest U.S. wiretap case ever and threatened the internet giant with billions of dollars in damages.
Bloomberg
Cybercriminals are increasingly targeting real-estate deals, breaking into email accounts to craft custom scams.
Wall Street Journal
Hackers are breaching college networks and creating fake accounts that are used "almost immediately for criminal activity."
ZDNet
THE NEW WILD WEST

— Cybersecurity news from the abroad:

British officials did not attend discussion about Chinese tech giant Huawei.
Politico EU
ZERO DAYBOOK

Coming up:

  • The House Appropriations Committee will host a hearing on the budget and oversight of the White House Office of Science and Technology Policy at 10:15 a.m. Wednesday.
  • Former special counsel Robert S. Mueller III will go in front of the House Intelligence Committee to testify about the Investigation into Russian Interference in the 2016 Presidential Election on Wednesday at 12 p.m.
  • The House Appropriations Committee will host a hearing on U.S. Customs and Border Protection Border Patrol Oversight on Wednesday at 2 p.m.
  • The House Select Committee on the Modernization of Congress will host a hearing on lessons from the states in modernization at 2 p.m.