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The Panama Papers, Mossack Fonseca and Security Fundamentals

The Panama Papers, Mossack Fonseca and Security Fundamentals

Blog Article Published: 04/21/2016

By Matt Wilgus, Practice Director, Schellman

The-Panama-Papers-Mossack-Fonseca-and-the-Writing-on-the-WallThe release of details contained in the Panama Papers will be one of the biggest news stories of the year. The number of high-profile individuals implicated will continue to grow as teams comb through the 11.5 million documents leaked from Mossack Fonseca, a Panamanian law firm. While the news headlines will focus on mainly world leaders, athletes and well-to-dos, the overview from The International Consortium of Investigative Journalists (ICIJ) gets into additional details. This overview is worth reading to understand what services the firm provided, who uses the services, how they can be used legally and how they can be abused.

The overview seems like something out of a John Grisham book. In fact some of the information being released is similar to a plot from a book he wrote over 25 years ago. In 1991, John Grisham published “The Firm”, a book which revolves around several lawyers working for the fictional law firm Bendini, Lambert and Locke. Some of the similarities between the book and today include a law firm that primarily exists to assist money laundering and tax evasion, part of the plot involves the details of many transactions from retrieving thousands of documents and there is a whistleblower. The fictional firm also provided services to legitimate clients, although in the book that number is about 25 percent. It is unknown what percentage of Mossack Foneseca clients were legitimate and how many would be described as Ponzi schemers, drug kingpins and tax evaders, as the ICIJ overview mentions. While the novel is fiction, the book sets the stage as something that has been seen before.

Whether the leak started from an external breach of systems or an intentional leak from an insider, it is always intriguing to know how it occurred and what could have been done. Did it start with a phishing email, a rogue employee, a web application flaw, etc.? Forbes reported that the client portal server was running Drupal 7.23, which was found to be susceptible to a SQL injection vulnerability that was announced in October 2014. There were many reports of exploitation of this vulnerability days after it was announced, so it is likely someone took advantage of the exploit. The team responsible for WordFence, a popular WordPress security plugin, provided another possible exploitation scenario related to upload functionality that existed in the Revolution Slide plugin. These are just some of the potential means that could have caused a breach at Mossack Fonseca. Other possibilities include scenarios related to weaknesses in the email server and a lack of encryption in transit. Mossack Fonseca’s does have a Data Security page on their site, although it primarily touts SSL and the fact they house all of our servers in-house as their primary security measures. In 2011, I wrote a post on how the legal profession was an easy target for breaches. Looking back I realize that technology has changed, but in many ways the weaknesses are likely to stay the same. One of the biggest changes to note from 2011 is the number of online applications law firms have now. This isn’t just the top 100 law firms; this includes smaller regional firms as well. In addition to the main corporate web site and an area to share documents (or client portal), which are now offerings that appear much more prevalent across firms of all sizes, firms have blog sites, premium service offerings, extranets and even applications that provide a gateway into all the other online applications. More applications means a larger attack surface. Unlike Mossack Fonseca, which claims it hosted everything internally, many law firms we see do use third-party SaaS offerings to handle some of these functions. Outsourcing to a third party which specializes in providing a particular service can often provide better security than a firm can provide in house.

Given the Mossack Fonseca’s focus on company formation, minimizing tax burdens, Private Interest Foundations and the like, the firm could have easily been a target given the recent groundswell of activism against tax avoidance and income inequality. While the lapse in security at Mossack Fonseca may not be representative of security at all law firms, the details surrounding their environment point to likely weaknesses in people, processes and technology which could exist in any organization.

  • People – Given what we know about potential vulnerabilities in their environment and the exfiltration of data, we can surmise that someone was not paying attention for an extended period of time. There are many security roles in an organization including, but not limited to policy development, administration and monitoring. In some environments one person may be responsible for many roles and in some cases not all responsibilities can be met. This may because no one was given the role or the person that was given the responsibility left the organization. A recent search of LinkedIn did not turn up too many IT-related profiles with Mossack Fonseca as a current or previous employer, although this doesn’t necessarily mean these individuals do not exist. Contractors may have also performed the role. That said, a third party could have been hired for a given job, say deploying the client portal, but maybe was not responsible for post implementation support.
  • Process – Being notified of vulnerabilities in the software supporting the organization is paramount to understanding where risks exist. Knowing what data is leaving the environment is also critical. The likelihood that either of these was occurring is low and if either were occurring there wasn’t necessarily anyone to act on it in a timely fashion.
  • Technology – A breakdown in people and processes can occasionally be mitigated by technology. The WordPress and Drupal sites are now protected by a third party security provider, but other sites likely are not. An up-to-date intrusion detection system (IDS) may have detected some of the threats the organization faced, or activities that occurred, although there were several potential options to exploit so one avenue or another would have likely been open. For an organization that appears to have missed some fundamental security concerns, they may have used technology to secure some data as there is a site named, which is still up.

The Panama Papers incident may once again raise awareness around data security with legal firms. Organizations performing support services to legal firms, such as eDiscovery and Case Management providers, may also want to take note. Mossack Fonseca has a link on their page for ISO Certifications. However, the only one listed is ISO 9001:2008. An ISO 27001 assessment, or certification, may not have prevented the leak, but it would have demonstrated greater consideration of security on the part of Mossack Fonseca. A penetration test would also have been beneficial, although given the vulnerabilities that existed even a vulnerability scan would have detected some of the issues.

With most data breaches, the actual data on the people and companies is less interesting (albeit potentially more valuable) than the way in which the breach occurred or the attacker persisted in the attack. As it relates to the Panama Papers, it is the opposite. The forthcoming details related to various individuals, their transactions, and the potential future tax and privacy implications are far more interesting to the public than the means whereby the exfiltration actually occurred. That said, taking a few minutes to understand how it happened and what we can learn can be a worthwhile step in preventing future breaches.

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