WASHINGTON (CBSDC/AP) — President Barack Obama said it was a mistake for Sony to cancel its release of “The Interview” after facing threats from North Korea.

During his year-end press conference, Obama said even though he was sympathetic to the cyberattack, Sony should not have pulled the plug on the movie.

“Yes, I think they made a mistake,” Obama said.

The FBI released a statement Friday saying that North Korea was behind the cyberattack that crippled and embarrassed Sony.

Obama stated that he wished Sony executives spoke to him first before pulling the movie from theaters.

“We cannot have a society in which some dictator some place can start imposing censorship right here in the United States. Because if somebody is able to intimidate folks out of releasing a satirical movie, imagine what they start doing when they see a documentary that they don’t like or news reports that they don’t like,” Obama said. “Or even worse, imagine if producers and distributors and others start engaging in self-censorship because they don’t want to offend the sensibilities of somebody whose sensibility probably needs to be offended. That’s not who we are, that’s not what America’s about.”

Obama continued, “I think it says something interesting about North Korea that they decided to have the state mount an all-out assault on a movie studio because of a satirical movie starring Seth Rogen and James [Franco]. I love Seth and I love James, but the notion that that was a threat to them I think gives you some sense of the kind of regime we’re talking about here.”

Obama added that the U.S. will respond “proportionally.”

“We will respond proportionally and we’ll respond in a place and time and manner that we choose. It’s not something that I’ll announce here today at a press conference,” he said.

The bureau based its conclusion that North Korea was behind the attack on technical analysis of the data deletion malware used in the attack; the overlap between the infrastructure in this attack and other cyberattacks linked to North Korea; and the similarities to a cyberattack against South Korea banks in March.

“North Korea’s actions were intended to inflict significant harm on a U.S. business and suppress the right of American citizens to express themselves. Such acts of intimidation fall outside the bounds of acceptable state behavior. The FBI takes seriously any attempt—whether through cyber-enabled means, threats of violence, or otherwise—to undermine the economic and social prosperity of our citizens,” the FBI said in a statement.

Chris Dodd, the former Democratic senator from Connecticut and the current CEO of the Motion Picture Association of America, said in a statement that the fact that this was a criminal act “has been lost in a lot of the media coverage.”

“This situation is larger than a movie’s release or the contents of someone’s private emails. This is about the fact that criminals were able to hack in and steal what has now been identified as many times the volume of all of the printed material in the Library of Congress and threaten the livelihoods of thousands of Americans who work in the film and television industry, as well as the millions who simply choose to go to the movies,” Dodd said. “The Internet is a powerful force for good and it is deplorable that it is being used as a weapon not just by common criminals, but also, sophisticated cyber terrorists. We cannot allow that front to be opened again on American corporations or the American people.”

U.S. options against North Korea are limited. The U.S. already has a trade embargo in place, and there is no appetite for military action. Even if investigators could identify and prosecute the individual hackers believed responsible, there’s no guarantee that any who are overseas would ever see a U.S. courtroom. Hacking back at North Korean targets by U.S. government experts could encourage further attacks against American targets.

“We don’t sell them anything, we don’t buy anything from them and we don’t have diplomatic relations,” said William Reinsch, a former senior U.S. Commerce Department official who was responsible for enforcing international sanctions against North Korea and other countries. “There aren’t a lot of public options left.”

Sony abruptly canceled the Dec. 25 release of its comedy, “The Interview,” which the hackers had demanded partly because it included a scene depicting the assassination of North Korea’s leader. Sony cited the hackers’ threats of violence at movie theaters that planned to show the movie, although the Homeland Security Department said there was no credible intelligence of active plots. The hackers had been releasing onto the Internet huge amounts of highly sensitive — and sometimes embarrassing — confidential files they stole from inside Sony’s computer network.

North Korea has publicly denied it was involved, though it has described the hack as a “righteous deed.”

The episode is sure to cost Sony many millions of dollars, though the eventual damage is still anyone’s guess. In addition to lost box-office revenue from the movie, the studio faces lawsuits by former employees angry over leaked Social Security numbers and other personal information. And there could be damage beyond the one company.

Sony’s decision to pull the film has raised concerns that capitulating to criminals will encourage more hacking.

“By effectively yielding to aggressive acts of cyberterrorism by North Korea, that decision sets a troubling precedent that will only empower and embolden bad actors to use cyber as an offensive weapon even more aggressively in the future,” said Sen. John McCain, R-Ariz., who will soon become chairman of the Senate Armed Services Committee. He said the Obama administration has failed to control the use of cyber weapons by foreign governments.

Homeland Security Secretary Jeh Johnson said on MSNBC that the administration was “actively considering a range of options that we’ll take in response to this attack.”

The hacking attack could prompt fresh calls for North Korea to be declared a state sponsor of terrorism, said Evans Revere, a former State Department official and Northeast Asia specialist. North Korea was put on that American list of rogue states in 1988 but taken off in 2008 as the U.S. was involved in multination negotiations with the North on its nuclear weapons program.

Evidence pinning specific crimes on specific hackers is nearly always imprecise, and the Sony case is no exception.

Sony hired FireEye Inc.’s Mandiant forensics unit, which last year published a landmark report with evidence accusing a Chinese Army organization, Unit 61398, of hacking into more than 140 companies over the years. In the current investigation, security professionals examined blueprints for the hacking tools discovered inSony’s network, the Korean language setting and time zone, and then traced other computers around the world used to help coordinate the break-in, according to the person with knowledge about the investigation.

Those computers were located in Singapore and Thailand, but a third in Bolivia had previously been traced to other attacks blamed on North Korea, the person told the AP. The tools in the Sony case included components to break into the company’s network and subsequently erase all fingerprints by rendering the hard drive useless.

“The Internet’s a complicated place,” said Adam Meyers, vice president of intelligence at CrowdStrike Inc., a security company that has investigated past attacks linked to North Korea. “We’re talking about organizations that understand how to hide themselves, how to appear as if they’re coming from other places. To that end, they know that people are going to come looking for them. They throw things in the way to limit what you can do attribution on.”

Another agreed. “If you have a thousand bad pieces of circumstantial evidence, that doesn’t mean your case is strong,” said Jeffrey Carr, chief executive of Taia Global Inc., which provides threat intelligence to companies and government agencies.

An FBI “flash” bulletin sent to some companies with details of the hacking software described it as “destructive malware, a disk wiper with network beacon capabilities.” The FBI bulletin included instructions for companies to listen for telltale network traffic that would suggest they had been infected.

Other movie studios aren’t taken chances. Warner Bros. executives earlier this week ordered a company-wide password reset and sent a five-point security checklist to employees advising them to purge their computers of any unnecessary data, in an email seen by The Associated Press.

“Keep only what you need for business purposes,” the message said.

(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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