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Cyber Czar Challenged By Thieves and Government

There is a twisted irony to President Obama naming his new cyber security coordinator the same day it is revealed that Cititbank, one of the world's largest banks and a recipient of federal Tarp funds, may have lost tens of millions of dollars to Russian hackers.

The FBI is investigating the alleged computer security breaches, although Citibank is denying the incidents. Obama's selection of former Microsoft executive Howard Schmidt as cyber chief is just the latest development in a year-long search for an administrator and an action plan while scores of businesses and government agency web sites continue to be compromised.

Although it may be easy to minimize the piracy of films and other intellectual property in that broader context, they are forms of cyber theft that have undercut the entertainment and media industries for years.

The Motion Picture Assn. of America has finally tallied losses for 2005, which are upwards of $6 billion for US movie studios and more than $18 billion for the global film industry. Domestic illegal film downloads are among the most visible forms of damage across all industries caused by foreign cyber pirates and organized crime as documented earlier this year by the Rand Corporation, a non-profit think tank.

The widespread devastation caused by cyber crime has worsened in 2009. Alleged North Korean cyber attacks on some US government and commercial web sites, corporate documents stolen from Twitter, and breaches to Twitter and The New York Times web sites earlier this year prompted more headlines than change in government enforcement. More recent concerns about security flaws in cloud computing, where much of online eventually will shift, have mostly left government officials scratching their heads.

The alleged cyber thefts at Citibank several months ago, as reported in The Wall Street Journal, were not the first. The FBI estimates that online crime losses in the US exceeded $260 million in 2008, although financial institutions generally decline to disclose such information. There also is unquantifiable damage to national security and personal privacy.

What level of cyber disaster will it take to prompt government authorities into expedient, constructive action to effectively protect - not control - what the President refers to as our "most valuable national asset?"

The President lost his first cyber czar in August only a few months into the job. Melissa Hathaway resigned the post over the frustration of being marginalized by Obama's economic advisors. It's not clear that anything has changed to prevent the same unproductive outcome.

Schmidt is expected to coordinate cyber policy across all military and civilian government agencies. Playing nice with others in government is a formidable task, already underscored by the fuss over who Schmidt will report to - the President or White House economic advisor Lawrence Summers. The announcement of Schmidt's appointment says only he will "have regular access to the President."

Schmidt clearly knows what he's getting into having served as security officer at Microsoft. He resigned as cyberspace security chief to President Bush from 2001 to 2003 after being stymied in his ability to move forward with a National Strategy to Secure Cyberspace.

"Handing the keys to the Internet is extreme and a long-shot given Washington's track record of understanding technology and doing anything at the speed of the Internet," ZDNet columnist Sam Diaz wrote earlier this year.

Such low expectations, and the occurrence of more cyber attacks, are the only certainties.

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