Hampton looked like he was going to be sick, but he nodded and then proceeded to get the President up to speed on what had transpired. The President, for his part, kept his poker face on. Then Homeland spoke, followed by the FBI.
Sitting back in his chair, President Wally Foss looked at the ceiling, not saying much, just thinking. Then he sat forward, placing his hands on the desk in front of him as he made eye contact with the Treasury Secretary. “Kevin, I understand the electronic records at Iron Mountain were destroyed along with the bank’s internal electronic records, but if I’m not mistaken, there are printed copies of all the statements of these accounts kept as well. Surely the bank can reconstruct the accounts based on the written copies,” he offered.
Secretary Hampton just shook his head. “That was true as of a few years ago, Mr. President. However, as part of many of the banks’ efforts to ‘go green’ and cut costs, many of the financial institutions made several changes to their data storage procedures. First, they began storing data on their own electronic databases as opposed to using paper copies. Second, many of them have moved most of their databases to the cloud, thus cutting storage and security costs tremendously, since the cloud providers provide their own protection. Some banks use Iron Mountain as an additional safety mechanism to back up data on digital storage farms, but again, those are not physical copies. A few banks use a hybrid function where their records are backed up to the cloud at set intervals. If JP Morgan had been using a hybrid function, then yes, there would still be an alternative digital set of their records. However, when I spoke with the CIO at JP Morgan before coming to this meeting, he told me they had transitioned entirely to the cloud three months ago. With Iron Mountain gone, and their records at the cloud provider gone, they have no way of reconstructing them.”
“OK, I’m not understanding something, then. I could understand how the records in the cloud were hacked and deleted — someone used the CISO’s admin password to go into their files at the cloud provider and deleted them all. But how was that same individual able to delete the backups at Iron Mountain? Aren’t there procedures in place to make sure something like this couldn’t happen?” the President demanded.
“I can answer this question,” FBI Director Maria Nelson said. She had previously been the Science and Technology Director at DHS, so she had a deep IT background. The President nodded for her to go ahead. “Several decades ago, Iron Mountain, along with several other cloud storage companies, began to build out a series of hardened facilities to handle large-scale data storage. In some cases, they were even acquiring decommissioned ICBM silos and turning them into enormous server farms, just like the three-acre server farm the FBI has in Clarksburg, West Virginia.
“The JP Morgan backups were stored at two separate locations. One is located in northern New York, and the second is in an old ICBM silo in Kansas. Both of these locations are impervious to EMPs, earthquakes, fire, flood and any other natural disaster. When the bank transmits their backup to Iron Mountain, it takes nearly eighteen hours to complete because of the size of the files, so it’s done on a Saturday afternoon. When the data hits the New York site, Iron Mountain then promulgates the data to the second backup site at the same time. That is how the hacker was able to delete the entire backup. When the transfer started from the bank to Iron Mountain, the hacker was able to ride the connection from one location to the other and then delete everything. We’ve asked Iron Mountain to immediately stop any concurrent backups until we can figure out how deep and wide this penetration within the banking sector is,” she explained.
Foss turned his head slightly and let out a soft sigh. “OK, clearly the damage is bad, and as of right now, it appears it’s permanent unless something else turns up. What I want to know is, how is this going to affect the bank, and what can be done about it? Then I want to know who our suspects are, so we can figure out an appropriate response.”
Secretary Hampton replied, “I’ve been thinking about how this is going to impact the bank, Mr. President, and there are multiple ways to look at it. JP Morgan essentially just lost $274 billion, and there is no way the bank is going to make up that kind of loss, so it’s going to have to be written off. The problem is the bank’s valuation is roughly $99.62 billion, so the loss is over two and a half times the institution’s value — essentially, it’s instantly going to be insolvent. This problem is huge, Mr. President. We aren’t just talking about people’s credit cards being affected. If the bank is dissolved, we’re talking about tens of millions of people’s bank accounts being wiped out, along with their mortgages, savings, and worse, all the investment accounts tied to the bank would also be affected. This is going to tangentially impact the majority of the country, and it could lead to a complete collapse of our financial system.”
Hampton continued, “You see, banks lend money to each other, especially investment banks, which often share debts, loans, and investments with each other. These financial institutions have everything from mutual funds and EFTs to kids’ 529 college funds. Because of the bank’s current financial situation, their entire portfolio would have to be sold off at a discount, which means a lot of people are going to lose money. That’s not to mention all the money people had in savings accounts at the bank or the value of the bank’s stock itself. All of that will be at zero once word of this gets out. To make matters worse, Americans will likely fear this could happen at their own bank and will rush financial institutions all over the country just like the beginning of the Great Depression to pull their money out and make sure they don’t also lose everything they own. Do you understand the scope of the problem, Mr. President?”
“I think we need to get Wendy Oliver from the Fed over here,” the President ordered, tilting his head toward Josh to make it happen. “We need to figure this out before we leave this room, or it’s going to be massive panic before the end of the day. What are we doing to make sure this information doesn’t get out?” he asked. The gravity of the situation had now fully set in for him.
FBI Director Maria Nelson answered. “I’ve had my agents detain everyone involved who has any knowledge of what’s happened for the time being. Right now, we’ve told them they’re helping us figure out how this happened, and thus far, they’re going along with that and have been a big help. Unfortunately, though, we can only hold them for so long before some of them start to protest.”
The President nodded. He knew Director Nelson hated to use the FBI to hold American citizens without charges, but thankfully she’d recognized that it was for the greater good to keep this under wraps until they figured out what to do next. If this got out to the news before they had a plan in place, it would cause a mass panic.
“OK, we’ll resume that discussion when Wendy arrives. Until then, I want to know who our suspects are.”
DHS Director Molly Emerson spoke up. “The CISO, Preet Jindal, is of Indian-American descent, so we immediately suspected him. However, he came back clean. That still didn’t explain away how his admin code had been obtained and used. It was his code that ultimately led to this catastrophe, so we dug deeper into his family to see what we could find. We managed to get a FISA warrant issued twenty minutes after we’d learned it was his credentials used in the attack. Using the warrant, we grabbed his entire electronic profile and that of his family, along with everyone he’s been in contact with that in any way looked suspicious.
“This search led us to his wife, Aarushi. While Preet is a second-generation American, his wife was born in Mumbai and still has extensive family back in India. Preet and his wife met during a trip he made to visit family some twenty-six years ago. They’ve been married now for twenty-three years and have five children: three boys and two girls, ranging from twenty-one to sixteen. Their eldest son is currently serving in the Air Force as a linguist at the NSA. Their second son is in the Army, and he’s currently part of 81st Infantry Brigade, which, ironically, is part of the ground force currently in the Bay of Bengal. Their other children are exempt from military service while the older two are currently serving.”