| Welcome to Hillicon Valley, The Hill's newsletter detailing all you need to know about the tech and cyber news from Capitol Hill to Silicon Valley. Follow the cyber team, Olivia Beavers (@olivia_beavers) and Morgan Chalfant (@mchalfant16), and the tech team, Harper Neidig (@hneidig) and Ali Breland (@alibreland). HACKED MILITARY DOCS PUT UP FOR SALE ON THE DARK WEB: New research claims that a criminal hacker tried to sell files on the U.S. military's MQ-9 Reaper drones on the dark web. The unidentified hacker harvested the documents from a U.S. Air Force captain's computer by exploiting a widely known security vulnerability in Netgear routers, according to research by threat intelligence firm Recorded Future. How it's being handled: U.S. officials are now investigating the incident as a result of the reporting, an Air Force spokesman told The Hill. While the documents themselves were not classified, the researchers described them as "highly sensitive" in nature and said they "could provide an adversary the ability to assess technical capabilities and weaknesses in one of the most technologically advanced aircrafts." The analysts said they notified officials at the Department of Homeland Security (DHS) of their findings and that the hacker was ultimately blocked from selling the documents. It is unclear, however, if any of the data was copied or shared. A Homeland Security official confirmed to The Hill that Recorded Future reached out to the department about the incident. A spokesperson for the Air Force said Wednesday that the service is "aware of the reporting and there is an investigation into the incident." The MQ-9 Reaper is an armed unmanned aerial vehicle, or UAV, made by General Atomics and used by the Air Force and Navy and by Homeland Security to monitor the U.S. border. What they found: Analysts at Recorded Future's Insikt Group spotted the hacker trying to sell what appeared to be U.S. Air Force documents for $150 while monitoring criminal activities on the dark web last month. Criminal actors often use the dark web to peddle stolen login credentials and sensitive personal information, like Social Security numbers, but it is much more rare to see actors trying to sell military documents online. How they discovered it: The researchers "engaged" the hacker, who spoke English, and confirmed the validity of the stolen documents, which included MQ-9 Reaper maintenance course books and a list of airmen assigned to the Reaper's aircraft maintenance unit, the report says. The hacker also shared information with the analysts about his tactics. Read more from our story here. UK HITS FACEBOOK WITH ITS FIRST FINE OVER CAMBRIDGE ANALYTICA: Facebook on Tuesday was hit with its first fine related to the Cambridge Analytica scandal, which involved the data firm obtaining personal information on tens of millions of Facebook users without their consent. The Information Commissioner's Office (ICO), a privacy and data watchdog in the United Kingdom, announced Tuesday that it would fine Facebook the maximum-allowed penalty of $664,000 for what it said was improperly overlooked warning signs and for lacking overall privacy protections that could have prevented Cambridge Analytica from obtaining the sensitive data, The Washington Post reported. The office, which usually does not publish its findings, said it was doing so due to increased public interest in the subject. Facebook's response: In a statement, Facebook responded to the findings by acknowledging it "should have done more to investigate claims about Cambridge Analytica and take action in 2015." "We have been working closely with the ICO in their investigation of Cambridge Analytica, just as we have with authorities in the US and other countries," Facebook's chief privacy officer, Erin Egan, added in a statement reported by the Post. "We're reviewing the report and will respond to the ICO soon." Elizabeth Denham, the Information Commissioner, wrote in her accompanying report that Facebook should have done more to explain to its users why they were targeted for specific political advertisements or messaging. "A significant finding of the ICO investigation is the conclusion that Facebook has not been sufficiently transparent to enable users to understand how and why they might be targeted by a political party or campaign," Denham wrote. "Whilst these concerns about Facebook's advertising model exist generally in relation to its commercial use, they are heightened when these tools are used for political campaigning." Read more here. 2018 RUSSIAN MEDDLING DOESN'T COMPARE TO 2016: A top official at the Department of Homeland Security said Wednesday that U.S. intelligence officials have seen no evidence of Russia trying to interfere in the 2018 midterms that "rises to the level of 2016." However, the U.S. intelligence community continues to see Russian attempts to use social media and other avenues to identify divisive issues and sow discord among the American public, Christopher Krebs, who leads Homeland Security's cyber unit, said during congressional testimony. "We are not seeing ... anything that rises to the level of 2016–directed, focused, robust campaign," Krebs told the House Homeland Security Committee on Wednesday. But, he added, "the intelligence community continues to see Russian activity in the sowing discord across the American public." Krebs elaborated that intelligence shows Russia continuing to engage in information operations, though not on the scale that Moscow did in 2016. Those efforts, Krebs said, have not been directed specifically at the midterms, politicians or political campaigns, but instead have been aimed at sowing discord. Moscow is using "social media, false-flag personas, sympathetic spokesman, and other means to influence or inflame positions on opposite ends of controversial issues," he said. Read more here. BUT HOLD ON... NEW ELECTION MEDDLING OVERSEAS? Hackers believed to be linked to the Chinese government recently broke into Cambodian organizations involved in the country's upcoming elections, according to U.S.-based cybersecurity firm FireEye. The new revelations are a sign that the Chinese espionage group is expanding operations beyond its usual targets, which have included defense and maritime organizations in the U.S. and Europe. The hackers successfully breached multiple entities in Cambodia involved in government operations and the country's upcoming general elections, which are scheduled for July 29, according to researchers at FireEye who analyzed command and control servers used to launch malware in the attacks. The cyber firm also tracked a separate phishing email campaign targeting opposition figures in Cambodia. "The targeting of the election commission is particularly significant, given the critical role it plays in facilitating voting," FireEye said in research published late Tuesday. "There is not yet enough information to determine why the organization was compromised – simply gathering intelligence or as part of a more complex operation." Ben Read, senior manager of cyber espionage analysis at FireEye, said that the firm has "high confidence" the group is acting on behalf of Beijing's government. Why this is attracting attention: The details come amid heightened awareness of foreign influence efforts targeting elections, following Russia's alleged campaign to meddle in the 2016 U.S. presidential election. As part of the effort, Moscow-linked hackers targeted state election systems, and in one case penetrated a voter database in Illinois. Read more here. SENATORS PRESS ELECTION OFFICIALS ON STATE CYBERSECURITY: Senators on Wednesday pressed top officials from the U.S. Election Assistance Commission (EAC) about their efforts to boost state cybersecurity election systems, with a focus on whether each state should have a mechanism in place to audit their results. "Many elections across the nation do not have auditable elections, they are done completely electronically," Sen. James Lankford (R-Okla.) told the panel of witnesses at a hearing on election security preparedness convened by the Senate Rules and Administration Committee. Thomas Hicks, the head of the EAC, indicated that states decide whether they want to have auditable elections. Sen. Angus King (I-Maine) pressed Hicks on whether there should always be a paper backup to determine accurate counts. "It depends on the state," Hicks said. "If we can do security with paper, to make sure it is accessible to those who have disabilities, then I would say that is 100 percent right that we should have a paper backup." Hicks said states are not required to have an auditable ballot trail, despite requirements under the Help America Vote Act (HAVA) that they must abide by in order to receive federal money. Read more here. US MOVES CLOSER TO LIFTING BAN ON ZTE: The Trump administration has signed an agreement with ZTE that will help the Chinese telecommunications giant move to reboot its operations, the Department of Commerce announced Wednesday. The Chinese phone maker had shut down its operation in the U.S. after Commerce issued a ban in April on U.S. businesses selling equipment to ZTE, a punishment for the company violating U.S. sanctions against Iran. The agency said in a statement on Wednesday that it had signed an agreement with ZTE to lift the ban on it doing business with U.S. companies once ZTE puts a mandated $400 million in an escrow account. The escrow agreement is a part of a $1.4 billion penalty settlement between the Commerce Department and ZTE. Should the company not meet its side of the agreement, it will forfeit the $400 million in the escrow account. ZTE has already paid $1 billion to the agency. Read more here. FCC WANTS TO UPGRADE ITS COMMENT SYSTEM: The Federal Communications Commission (FCC) is planning to overhaul its comment filing system following reports of widespread fake submissions during the commenting period on the net neutrality rollback last year. FCC Chairman Ajit Pai said in a letter to Sens. Pat Toomey (R-Pa.) and Jeff Merkley (D-Ore.) that the commission has put in a request with the House and Senate Appropriations committees to upgrade its Electronic Comment Filing System to crack down on comments from bots, noting that the FCC "inherited" this system from the Obama administration. "In addition to being technologically behind the times, the system that this Commission inherited from the prior Administration was designed to make it as easy as possible to file comments," Pai wrote in the letter dated July 6. "But while facilitating widespread public participation in the rulemaking process is a worthy and important goal, we believe that we can accomplish that goal while at the same time updating our system to minimize the potential for abusive behavior." Read more here. I OBJECT: The White House on Wednesday released a statement on the House version of an intelligence authorization bill for fiscal years 2018 and 2019. The statement lays out several objects to provisions in the bill, including many that are cyber-related. For instance, the White House is bucking one provision that would establish an energy infrastructure security center within the Office of Director of National Intelligence to handle cyber threats to energy infrastructure. "The Administration has significant concerns regarding" this section, the statement says. "The proposed center would create a vast infrastructure not needed to evaluate or mitigate cyber threats to critical energy infrastructure. The Administration would instead continue to pursue activities to study, understand, and develop mitigations that address the cybersecurity threat to critical infrastructure." SENATE DEMS WANT DOJ TO REVIEW COMCAST BID FOR FOX: A group of Senate Democrats are urging the Justice Department to scrutinize Comcast's $65 billion bid to buy much of 21st Century Fox. The senators wrote to Makan Delrahim, the head of the Justice Department's antitrust division, asking him to review whether Comcast would be able to use Fox's entertainment offerings to suppress its competitors. "In addition to horizontal concerns over local stations and regional sports programming, further consolidation that enhances and reinforces Comcast's vertically integrated status as both a distributor and creator of media poses unique challenges, especially given that the merger would provide a majority stake in the streaming service Hulu," the letter reads. The letter was signed by Sens. Richard Blumenthal (D-Conn.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.) and Ed Markey (D-Mass.). Comcast declined to comment on the letter. Read more here. CAREFUL WHAT YOU SAY OVER THE PHONE: The latest filing by special counsel Robert Mueller says former Trump campaign manager Paul Manafort bragged over the phone that he is being treated like a "VIP" in prison with access to a personal phone and laptop by not having to wear a prison uniform. Federal prosecutors on Wednesday submitted files opposing Manafort's request to delay his trial for months, a filing that reveals details of Manafort's life behind bars. Manafort had filed to delay one of his two scheduled trials, claiming that his incarceration at Virginia's Northern Neck Regional Jail over alleged witness tampering left him without adequate time to prepare for trial. But in the Wednesday filing, Mueller argued that Manafort's claims do not hold up because Manafort has said in multiple prison calls that he has had full access to his files and attorneys. Read more here. DOJ PUSHING FOR AT&T APPEAL: Officials in the Justice Department's Antitrust Division are seeking to appeal a federal judge's decision to sign off on the $85 billion merger of AT&T and Time Warner, Fox Business Network reported Wednesday. However, the plan to file an appeal is facing pushback from the U.S. Solicitor General's office, which must approve appeals from the Justice Department in any federal court or the Supreme Court, FBN reported. One official told FBN that the office of U.S. Solicitor General Noel Francisco believes that "the government has limited capabilities of successful appeals and you don't want to squander those on cases that are borderline." U.S. District Judge Richard Leon ruled on June 12 that AT&T could move forward with its purchase of Time Warner, giving the telecommunications giant an entry point to the content business. UBER'S HR CHIEF STEPS DOWN: Uber's top human resources official resigned Tuesday after an investigation found that she had dismissed allegations of racial discrimination at the company. Reuters reported Tuesday that Uber's chief people officer, Liane Hornsey, resigned in an email to employees but did not provide a reason for her departure. An anonymous group of Uber employees of color told Reuters that Hornsey had used discriminatory terms and that she had made demeaning comments toward Uber's Global Head of Diversity and Inclusion Bernard Coleman and former Chief Brand Officer Bozoma Saint John. SINCLAIR STREAMING SERVICE? Sinclair Broadcast Group is working on a streaming news service that could launch later this year, BuzzFeed News reported Wednesday. The company has submitted a trademark application for a free streaming app, called STIRR, BuzzFeed reported. Sources familiar with the project told the news outlet that the app would offer local and national news, as well as other on-demand programming. A spokesperson for Sinclair declined to comment to BuzzFeed. The app would represent the latest effort from Sinclair to expand its reach. TRUMP, OBAMA HIT HARD BY TWITTER PURGE: Twitter is beginning to pull inactive and locked accounts from users' follower counts -- a move that's already costing prominent users like President Trump and former President Obama tens of thousands of followers. Trump had lost about 100,000 of his roughly 53.4 million Twitter followers as of Tuesday night, The Washington Post reported, while Obama had lost about 400,000 of his 104 million followers during the same period of time. The drop in followers came shortly before Twitter formally announced Wednesday that it would start removing "locked accounts" from follower counts as part of a push "to build trust and encourage healthy conversation on Twitter." FBI AGENT SET FOR PUBLIC GRILLING: House Republicans are sharpening their knives for Peter Strzok and Lisa Page, the counterintelligence agent and former FBI lawyer who exchanged a series of anti-Trump text messages during the 2016 campaign. Two powerful committees -- Judiciary and Oversight and Government Reform -- will publicly grill Strzok on Thursday. And conservatives have given Page 48 hours to comply with a subpoena that she flouted on Wednesday morning, either by appearing behind closed doors on Friday or alongside Strzok in public on Thursday. The fight over Strzok and Page has become increasingly acrimonious. House Speaker Paul Ryan (R-Wis.) threatened to hold Page in contempt on Wednesday, while a lawyer for Page accused Republicans of "bullying" tactics in their investigation into the bureau's handling of investigations during the 2016 election. Strzok, who is under subpoena to testify Thursday morning, has agreed to appear but has criticized House Republicans as having a "disdain for the truth." He has called for lawmakers to release the transcript of an 11-hour interview he gave investigators behind closed doors last month. House GOP members see Strzok and Page, who were having an extramarital affair at the time they were exchanging thousands of texts, as the key to unraveling what they say was systemic anti-Trump bias at the Department of Justice during the election. Read more here and keep reading for details on Strzok's hearing below. ON TAP FOR TOMORROW: Strzok is expected to testify Thursday morning at 10 a.m. before the House Judiciary and House Oversight committees. He has become a key target on the right ever since an internal DOJ investigation uncovered anti-Trump texts that he had sent to then-FBI lawyer Lisa Page during the 2016 election. So, in other words: It will be lit. The House Homeland Security Committee holds a hearing on threats to the Department of Homeland Security supply chain at 10:00 a.m. The House Science Committee is holding a hearing on "big data challenges and advanced computing solutions" at 10:00 a.m. The FCC is holding its monthly open meeting at 10:30 a.m. A LIGHTER TWITTER CLICK: It's true. This did happen today and some of us here may have taken part... SOME OP-EDS TO CHEW ON: America's 'culture of security' imperative is here. US, EU must work together in wake of Facebook data breach. NOTABLE LINKS FROM AROUND THE WEB: Apple fixed a glitch that caused a Taiwan flag emoji to crash iPhones in China. (The Telegraph) Ex-Apple engineer caught fleeing to China with secrets to self-driving cars, FBI says. (USA Today) A Russian internet company had access to Facebook user data. (CNN) Meet Robert Mueller's 'new army.' (The Daily Beast) Broadcom is closing in on a deal to purchase CA Technologies. (Wall Street Journal) ThreatConnect is out with a new survey on cyber threat intelligence sharing. | 
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