Play it again uncle sam

It shouldn’t surprise anyone that the US government’s black boxes for economic data could be manipulated

Future of Finance
Future of Finance

Yesterday, the Wall Street Journal reported that the Federal Bureau of Investigation (FBI) had found “vulnerabilities” (paywall) in the US government’s system for distributing data. According to the article the “black boxes” several departments use to ensure that data is released simultaneously to all news outlets at a scheduled time are easy to manipulate. Depressingly easy, in fact, as the graphic accompanying the article (reproduced below) shows.

WSJ data releases vulnerabilities
The easily penetrable black box.(Wall Street Journal)

But this is not the first time the black boxes have come under fire. WSJ cites a document compiled by the inspector general of the Department of Commerce, but in 2011 the Department of Labor brought in Sandia National Laboratories (SNL) to do a similar study (pdf).

At that time, the department’s press lockup room—in which reporters are given data half an hour early, ostensibly to prepare news reports—was also open to a variety of different people, including high-speed traders. Policies for maintaining secrecy were abysmal prior to the internal investigation; for example, officials would frequently have to remind lockup participants to surrender cell phones—after they had entered the lockup. The lockup room was also pretty messy:

economic releases clutter department of labor
SNL wrote: “Cluttered press work area, showing what appear to be networking appliances to the left of the workstation and the monitor. Note the two Black Boxes atop the network gear.”(Department of Labor/Sandia National Laboratories)

The most blatant of these violations were reportedly rectified. Some companies were booted from the lockup, reporters were told to bring in only paper and pens, and access to communications equipment was restricted.

But the report had also criticized the black boxes specifically. In fact, it recommended that the Department of Labor “replace computers and other IT equipment in the Press lockup facility with DOL owned equipment and remove the private data lines currently in use. This would eliminate the need for the Black Boxes altogether” (p. 1).

It’s not that the black boxes themselves were inherently ineffective, Sandia concluded. But the poor management of the lockup made them vulnerable to manipulation:

The current concept of operations governing their use makes compromising or circumventing this control mechanism a plausible occurrence. The cluttered nature of the facility, plethora of non‐DOL equipment, and multiple instances of Black Boxes for some press organizations [translation: some news organizations had multiple black boxes], creates opportunities to mask activities designed to neutralize these control devices (p. 29).

Surprise! Some of these problems were eerily similar to the problems the Department of Commerce discovered: Whether because of the clutter or because outside contractors were allowed in, the boxes could be tampered with.

Sandia gave the Department of Labor some other options that didn’t include eliminating the black boxes because doing so might cost money. But after two reports, maybe it’s time to try something new.

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