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CHICK-NEWS as with other media dutifully reported on the situation quoting the press release authorized by the CEO. On Wednesday June 9th the Company issued a statement confirming it had paid the equivalent of $11 million in ransom, a fact that was known previously to officers of the Company but not revealed.
The June 9th statement raises more questions than were settled by the bland and reassuring content:
- Why if the company apparently spends more than $200 million annually on IT and employs more than 850 IT professionals was a group of admittedly sophisticated hackers able to penetrate security and literally close down company operations?
- The CEO stated, “We felt the decision (to pay ransom) had to be made to prevent any potential risks for our customers.” This is gaslighting. The primary concerns were partly restoration of company function, given the potential losses involved and preservation of Company documentation.
- But why pay the $11 million ransom after the company ascertained that it could operate plants?
The June 9th statement was somewhat self-congratulatory in that it attributes resolution to “cyber security protocols, redundant systems and encrypted backup service.” If these had been effective the Company would not have been impacted in the first instance and would most certainly have detected attempts at infiltration and not have had to pay $11 million.
The magnitude of the ransom and the circumstances and timing of the $11 million payment has elicited a response from Congress. Rep. Carolyn Maloney (D-NY) Chair of the House Oversight Committee has requested all relevant documents and information relating to the decision made by JBS USA to pay the ransom.
A tactic of ransomware hackers has been to not only lock computer systems but also to threaten to release company data and documents. It is possible that JBS could have restarted operations using their claimed redundant systems and encrypted backup servers but feared the release of memos, internal documents and financial data. This would have been embarrassing to JBS USA and JBS S.A the holding company, given many aspects of recent history and the ultimate intention to file for an IPO on the NYSE.
Cooperation between the Colonial Pipeline Company and the FBI resulted in clawing back the 69 Bitcoin that comprised the ransom. It will be interesting to determine whether JBS USA presses forward with an attempt to reclaim the ransom or whether the $11 million was a justifiable expense to maintain confidentiality and avoid release of documents. They are obviously aware of the 2016 case involving Mossack Fonesca, a legal firm in Panama representing shady oligarchs and politicians who were hiding money offshore and also the politically calamitous hack of the Democratic National Committee in 2016.
A higher level of transparency would be beneficial to the image of the holding company and its U.S. subsidiary. Congress is entitled to learn the circumstances of this attack, why such a large ransom was handed over to criminals so quickly and whether the Company cooperated with appropriate Federal agencies.
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