Lack of Funds Hinders Cyberattack Prevention, Analysts Say

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By David McAfee

Increased cybersecurity funding may have helped thwart a recent hacking attack on Los Angeles County employees, data security specialists told Bloomberg BNA.

The breach is the most recent in a series of data breaches and hacks affecting public agencies and companies. However, funding concerns may have limited the public organization’s ability to thwart the data breach.

The Los Angeles County District Attorney’s office announced Dec. 16 criminal charges against a Nigerian national accused of a wide-scale e-mail phishing attack on Los Angeles County employees. The alleged hacker, Austin Kelvin Onaghinor, was charged with nine counts including unauthorized computer access and identity theft.

Clifford Neuman, director of the University of Southern California Center for Computer Systems Security, said extensive cybersecurity training may not be enough to prevent “highly targeted phishing schemes.”

The recent breach was a “phishing attack in which the employees’ passwords were obtained by the criminal,” Neuman told Bloomberg BNA. The best way to defend against a phishing scheme is to implement “tighter controls on which employees can access sensitive information, so that once passwords are stolen, the criminal is able to access less data,” he said.

However, many companies and public organizations lack the necessary funding to hold employee training or implement state of the art cybersecurity protocols, the analysts said.

Low Budget, High Risk

Tim Erlin, Director of IT Security and Risk Strategy for Tripwire Inc., told Bloomberg BNA that public agencies are often at risk when it comes to data breaches because funding “can be a challenge.” The agencies “are often underfunded for information security, as they are underfunded for many things,” he said.

When it comes to information security, funding is especially challenging considering the mechanisms that apply to public agencies, Erlin said.

“The landscape of threats can change fairly rapidly, and there can often be a mismatch with budget cycles,” Erlin said. “As a particular threat increases, public agencies sometimes aren’t as flexible to change protection that they’ve put in place or purchase new tools as quickly as a large corporation might,” he said.

Gary S. Miliefsky, founder of SnoopWall Inc., echoed Erlin’s sentiments. Any organization that doesn’t have expansive data protection funding is at a higher risk for an attack, he said.

“Most organizations who are not in the Fortune 1000 are the biggest attack vector for cyber criminals—they prey on those who don’t have $500 million annual budgets for cybersecurity teams,” Miliefsky told Bloomberg BNA.

‘Crisis Funding’

Companies and public organizations that do receive funding must be cautious to not overspend on cybersecurity preparedness or in response to a data breach.

Erlin said that the “crisis funding” approach is sometimes necessary but often flawed. “Spending beyond the required priorities for a response, using it as a way to sort of augment a tight budgeting process, sets a poor precedent for a public agency,” he said. Cybersecurity and data security should “be funded in an ongoing manner,” Erlin said.

Despite arguments against crisis funding, Neuman noted, data breaches create “a demand for stronger cybersecurity expertise.” Companies and organizations should also plan and budget for costly litigation and regulatory enforcement actions related to be the breach.

But, companies need to remember the root of the problem, Neuman said. “There will be class actions, as always, but the real effort needs to go into improving the protection of data that is in our computer systems,” he said.

To contact the reporter on this story: David McAfee in Los Angeles at dMcAfee@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

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