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Twitter whistleblower bringing security warnings to Congress

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WASHINGTON (AP) — Peiter “Mudge” Zatko, the Twitter whistleblower who is warning of security flaws, privacy threats and lax controls at the social platform, will take his case to Congress on Tuesday.

Senators who will hear Zatko’s testimony before the Senate Judiciary Committee are alarmed by his Twitter allegations at a time of heightened concern over the safety of powerful tech platforms.

It’s Zatko’s second Capitol Hill appearance, and in some ways a 21st-century echo of his first. In 1998, he testified before a Senate panel along with fellow members of a hacker collective who warned about the security dangers of the then-emerging internet age.

Zatko, a respected cybersecurity expert, was Twitter’s head of security until he was fired early this year. He has brought the stunning allegations to Congress and federal regulators, asserting that the influential social platform misled regulators about its cyber defenses and efforts to control millions of “spam” or fake accounts.

Sen. Dick Durbin, the Illinois Democrat who chairs the panel, has said that if Zatko’s claims are accurate, “they may show dangerous data-privacy and security risks for Twitter users around the world.”

Zatko’s accusations are also playing into billionaire tycoon Elon Musk’s battle with Twitter. The Tesla CEO is trying to get out of his $44 billion bid to buy the company; Twitter has sued to force him to complete the deal. The Delaware judge overseeing that case ruled last week that Musk can include new evidence related to Zatko’s allegations in the high-stakes trial set to start Oct. 17.

The allegation that Twitter engaged in deception in its handling of automated “spam bot” accounts is at the core of Musk’s attempt to back out of the Twitter deal.

At the same time, many of Zatko’s claims are uncorroborated and appear to have little documentary support. In a statement, Twitter has called Zatko’s description of events “a false narrative.”

Also on Tuesday, Twitter’s shareholders are scheduled to vote on the company’s pending buyout by Musk. The vote is something of a formality given that the deal is on hold while the court case plays out. But if the measure passes as expected, it would also pave the way for a Musk takeover should Twitter prevail in court.

Zatko also filed complaints with the Justice Department, the Federal Trade Commission and the Securities and Exchange Commission. Among his most serious accusations is that Twitter violated the terms of a 2011 FTC settlement by falsely claiming that it had put stronger measures in place to protect the security and privacy of its users.

The SEC is questioning Twitter about how it counts fake accounts on its platform. Twitter uses counts of its presumably real users to attract advertisers, whose payments make up about 90% of its revenue. The “spam bots” have no value to advertisers because there’s no person behind them.

San Francisco-based Twitter has an estimated 238 million daily active users worldwide. The company says it removes 1 million spam accounts daily.

Zatko’s 84-page complaint alleges that he found “extreme, egregious deficiencies” on the platform, including issues with “user privacy, digital and physical security, and platform integrity/content moderation.”

It accuses CEO Parag Agrawal and other senior executives and board members of making “false and misleading statements to users and the FTC” about these issues. Twitter denies those claims and said that Zatko was fired in January for “ineffective leadership and poor performance.” Zatko’s attorneys say the performance claim is false.

Twitter also hinted that Zatko’s complaint might be designed to bolster Musk’s legal fight with the company. Twitter called Zatko’s complaint “a false narrative” that is “riddled with inconsistencies and inaccuracies, and lacks important context.”

News of Zatko’s complaint surfaced on Aug. 23, almost two months before the Twitter-Musk trial is scheduled to begin. . One of Zatko’s attorneys has said “he’s never met Elon Musk. Doesn’t know Elon Musk. They know people in common.”

The company also says it has significantly tightened security since 2020.

Among Zatko’s specific allegations:

— The company had such poor cybersecurity that it easily could have been exposed to outside attacks or attempts to siphon off its internal data.

—The company lacked effective leadership, with its top executives practicing “deliberate ignorance” of pressing problems. Zatko described former CEO Jack Dorsey as “extremely disengaged” during the last months of his tenure, to the point where he wouldn’t even speak during meetings on complex issues. Dorsey stepped down in November 2021.

—That Twitter knowingly allowed the government of India to place its agents on the company payroll, where they had “direct unsupervised access” to highly sensitive data on users. It makes a parallel but less detailed accusation that Twitter took funding from unidentified Chinese entities who may have gained access enabling them to access the identities and sensitive data of Chinese users who secretly use Twitter, which is officially banned in China.

Better known by his hacker handle “Mudge,” Zatko, 51, first gained prominence in the 1990s. He was the best-known member of the Boston-based collective L0pht, which pioneered ethical hacking, embarrassing companies including Microsoft for poor security. His work raised awareness in the computing world that forced such major companies to take security seriously. He co-founded the consultancy @Stake, which was later acquired by Symantec.

Zatko later worked in senior positions at the Pentagon’s Defense Advanced Research Projects Agency and Google. He joined Twitter at Dorsey’s urging in late 2020, the same year the company suffered an embarrassing security breach involving hackers who broke into the Twitter accounts of world leaders, celebrities and tech moguls, including Musk, in an attempt to scam their followers out of bitcoin.

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AP technology writers Frank Bajak in Boston and Matt O’Brien in Providence, Rhode Island, contributed to this report.

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Follow Marcy Gordon at https://twitter.com/mgordonap

Marcy Gordon, The Associated Press

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Prairie premiers, governors urge Canada, U.S. to keep border crossings open longer

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Washington – Canada’s Prairie premiers and two U.S. governors want their respective countries to restore pre-pandemic operating hours at entry points along their shared land border.

The group of provincial and state leaders have written to Prime Minister Justin Trudeau and President Joe Biden to argue that curtailed hours at border crossings are hurting the economy.

The letter is signed by Alberta Premier Jason Kenney, Saskatchewan Premier Scott Moe and Manitoba Premier Heather Stefanson, as well as Montana Gov. Greg Gianforte and North Dakota Gov. Doug Burgum.

It says travellers and businesses are being forced to go out of their way to find entry points with longer hours, driving up fuel and labour costs.

The leaders say that’s also hurting smaller border communities along the Canada-U.S. border that depend on international traffic for their economic livelihoods.

The letter does not mention that the U.S. still requires visiting foreign nationals to be vaccinated against COVID-19, a requirement Canada lifted over the weekend.

“Residents and businesses on both sides of the border have expressed concern that the reduced hours of operation will become permanent,” the letter reads.

It also argues that the supply chain problems that have persisted since the onset of COVID-19 in 2020 will only linger so long as cross-border trade and travel remains curtailed by limited hours at border crossings.

“Resuming pre-pandemic operating hours will ensure the efficient and steady flow of people and goods, which will only improve trade activity and reduce inflationary pressure on both sides of the border.”

A notice on the Canada Border Services Agency website warns of limited operating hours at nearly 40 land ports of entry, mostly in the Prairie provinces, along with Quebec, New Brunswick and B.C.

This report by The Canadian Press was first published Oct. 3, 2022.

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What if Musk loses the Twitter case but defies the court?

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Twitter wants a Delaware court to order Elon Musk to buy the social media service for $44 billion, as he promised back in April. But what if a judge makes that ruling and Musk balks?

The Tesla billionaire’s reputation for dismissing government pronouncements has some worried that he might flout an unfavorable ruling of the Delaware Court of Chancery, known for its handling of high-profile business disputes.

Musk hopes to win the case that’s headed for an October trial. He’s scheduled to be deposed by Twitter attorneys starting Thursday.

But the consequences of him losing badly — either by an order of “specific performance” that forces him to complete the deal, or by walking away from Twitter but still coughing up a billion dollars or more for breach of contract — has raised concerns about how the Delaware court would enforce its final ruling.

“The problem with specific performance, especially with Elon Musk, is that it’s unclear whether the order of the court would be obeyed,” retired Delaware Supreme Court Justice Carolyn Berger told CNBC in July. “And the courts in Delaware — courts all over — are very concerned about issuing a decision or issuing an order that then is ignored, flouted.”

Berger, who was also a vice chancellor of the Chancery Court in the 1980s and 1990s, stood by those concerns in an interview with The Associated Press but said she doubted the Delaware institution would go so far as to make him complete the deal.

“The court can impose sanctions and the court can kind of coerce Musk into taking over the company,” she said. “But why would the court do that when what really is at stake is money?”

Berger said she expects Twitter to prevail, but said a less tumultuous remedy for the company and its shareholders would make Musk pay monetary damages. “The court doesn’t want to be in a position to step in and essentially run this company,” she said.

Musk and his lawyers didn’t respond to requests for comment.

Other legal observers say such defiance is almost impossible to imagine, even from a famously combative personality such as Musk. He acknowledged he might lose in August in explaining why he suddenly sold nearly $7 billion worth of Tesla shares.

“I take him at his word,” said Ann Lipton, an associate law professor at Tulane University. “He wants to win. Maybe he’s got his own judgment as to what the odds are. But he’s also being sort of practical about this. He’s getting some cash ready so he doesn’t have to dump his Tesla shares if it turns out he is ordered to buy the company.”

A ruling of specific performance could force Musk to pay up his $33.5 billion personal stake in the deal; the price increases to $44 billion with promised financing from backers such as Morgan Stanley.

The Delaware court has powers to enforce its orders, and could appoint a receivership to seize some of Musk’s assets, namely Tesla stock, if he doesn’t comply, according to Tom Lin, a law professor at Temple University.

The court has made such moves before, such as in 2013 when it held Chinese company ZTS Digital Networks in contempt and appointed a receiver with power to seize its assets. But after coercive sanctions didn’t work, the receiver asked the court five years later to issue bench warrants calling for the arrest of two senior executives the next time they visited the U.S.

Speculation that Musk could be threatened with jail time for failing to comply with a ruling is unrealistic, said Berger. “At least, not for the Court of Chancery,” said the former judge. “That’s not the way the court operates.”

But more important, Lin said Musk’s legal advisers will strongly urge him to comply with the rulings of a court that routinely takes cases involving Tesla and other firms incorporated in the state of Delaware.

“If you are an executive at a major American corporation incorporated in Delaware, it’s very hard for you to do business and defy the chancery court’s orders,” Lin said.

Concerns about Musk’s compliance derive from his past behavior dealing with various arms of the government. In a long-running dispute with the U.S. Securities and Exchange Commission, he was accused of defying a securities fraud settlement that required that his tweets be approved by a Tesla attorney before being published. He publicly feuded with California officials over whether Tesla’s electric car factory should remain shut down during the early stages of the COVID-19 pandemic.

He’s also taken a combative approach in Delaware Chancery Court, calling an opposing attorney a “bad human being” while defending Tesla’s 2016 acquisition of SolarCity against a lawsuit that blamed Musk for a deal rife with conflicts of interest and broken promises. He and his lawyers have other Delaware cases still pending, including one involving his compensation package at Tesla.

“I think we’ve got a whole lot of players who, as loose a cannon as Elon Musk is, rely on the goodwill of the Delaware courts on an ongoing basis for their businesses,” Lipton said.

Musk’s argument for winning his latest Delaware case largely rests on his allegation that Twitter misrepresented how it measures the magnitude of “spam bot” accounts that are useless to advertisers. But most legal experts believe he faces an uphill battle in convincing Chancellor Kathaleen St. Jude McCormick, the court’s head judge who is presiding over the case, that something changed since the April merger agreement that justifies terminating the deal.

The trial begins Oct. 17 and whichever side loses can appeal to the Delaware Supreme Court, which is expected to act swiftly. Musk and Twitter could also settle the case before, during or after the trial, lawyers said.

Delaware’s courts are well-respected in the business world and any move to flout them would be “shocking and unexpected,” said Paul Regan, associate professor of Widener University’s Delaware Law School who has practiced in Delaware courts since the 1980s. “If there was some kind of crisis like that, I think the reputational harm would be all on Musk, not the court.”

Matt O’brien, The Associated Press

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