| | |  | BY ERIC GELLER | Presented by Ford Motor Company | With help from Renuka Rayasam and Myah Ward BREACH — The story of the massive hacking campaign embroiling the federal government just keeps getting worse. Today, new evidence emerged of a wider range of victims, lawmakers stepped up their demands for answers and President-elect Joe Biden used the crisis to draw a contrast between himself and President Donald Trump. The Department of Energy has found evidence that the hackers behind the massive and sophisticated cyber operation breached networks at the Federal Energy Regulatory Commission, two national laboratories, a DOE field office and a division of the National Nuclear Security Administration, POLITICO’s Natasha Bertrand reported. DOE acknowledged the breach late today, saying investigations to this point have shown “malware has been isolated to business networks only” and that national security functions were not impacted. DOE, which manages the nation’s nuclear arsenal, joins the six previously known federal victims: the departments of Treasury, Homeland Security, State and Agriculture; the National Institutes of Health, and the Commerce Department’s telecommunications policy agency. U.S. officials believe that the campaign, in which hackers infected software updates for an IT monitoring program made by a company called SolarWinds, is the work of a Russian intelligence agency known for careful, stealthy, long-term operations. In a public alert released today, DHS’ Cybersecurity and Infrastructure Security Agency warned that kicking out the hackers would be “highly complex and challenging” and said that the infected SolarWinds code was “not the only initial infection vector.” Hours later, Reuters reported that, in addition to SolarWinds, the Russians hacked another “major technology supplier” as a way of breaking into its customers’ networks. SolarWinds has estimated that its infected code went to roughly 18,000 of its customers , but intelligence specialists cautioned that no espionage operation could possibly make use of all that access. Instead, experts said, the hackers will prioritize the most useful targets — those, such as the National Nuclear Security Administration, with the most valuable and potentially sensitive data. Officials have spent days scouring federal networks for more information about the breaches but are still unsure of what the hackers took. The National Security Council activated rarely used emergency response protocols, and a U.S. official told POLITICO that “this is probably going to be one of the most consequential cyberattacks in U.S. history.” But federal agencies weren’t the only victims. At least three states were breached, according to Bloomberg News . It is unclear whether those victims simply discovered that they had received the infected SolarWinds updates or actually saw hackers operating on their networks. The security firm Volexity recently revealed that Russian hackers used the SolarWinds backdoor in the final of three intrusions into an unnamed American think tank. The mounting toll of the cyber campaign, which the hackers stealthily began in March, prompted a flurry of inquiries from lawmakers. The top Democrats on the House Oversight and Homeland Security committees requested damage assessments about the operation today, while the leaders of the Senate Finance Committee asked the IRS if it had been hacked. Two Democratic senators have also asked the Treasury Department about its breach. Trump has said nothing about the suspected Russian cyberattack, and Biden moved today to draw a contrast with him on the issue. “My administration will make cybersecurity a top priority at every level of government,” he said in a statement , “and we will make dealing with this breach a top priority from the moment we take office.” He pledged to improve private-sector and international partnerships, upgrade technology, train more digital defenders and impose “substantial costs” on adversaries. But he offered no details about his cyber agenda — including whether he would impose costs such as sanctions or retaliatory cyberattacks for espionage operations such as this one, in which most nations, including the U.S., engage regularly. Welcome to POLITICO Nightly. Andrew Yang gives a deserved shoutout to Atlanta’s Asian food scene. Reach out: egeller@politico.com and rrayasam@politico.com or on Twitter at @ericgeller or @renurayasam.
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A Kaiser Permanente nurse gives the Pfizer-BioNTech Covid-19 vaccine to a Washington fire official during a vaccine event at Kaiser Permanente Capitol Hill. | Getty Images | | | WHO’S AT THE WHEEL? Biden vowed to assemble a world-class team capable of ending the pandemic and securing sweeping health care gains. But in the days since he rolled out his health leadership, Democrats have been occupied by a simpler challenge: figuring out who among Biden’s health team is actually in charge, health care reporter Adam Cancryn writes. The president-elect’s half-dozen initial appointments range from public health specialists to politicians, most of whom come from different professional backgrounds, and few of whom have worked together extensively before. That mix has left Democrats questioning who will ultimately shape Biden’s health agenda — and harboring lingering concerns about how his team will mesh in the midst of the high-stakes pandemic fight. “I don’t know who’s going to be driving the policy,” said Rep. Pramila Jayapal (D-Wash.), who chairs the Congressional Progressive Caucus. “I want to know how these things are actually going to happen.”
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| | BIG SCOOPS IN TRANSITION PLAYBOOK: In the runup to Inauguration Day, president-elect Joe Biden's staffing decisions are sending clear-cut signals about his priorities. What do these signals foretell? Transition Playbook is the definitive guide to one of the most consequential transfers of power in American history. Written for political insiders, this scoop-filled newsletter is breaking big news and analyzing the appointments, people and emerging power centers of the new administration. Track the transition and the first 100 days of the incoming administration. Subscribe today. | | | | | | | DIVORCE COURT — More than 30 states filed a lawsuit against Google today in an effort to break up the search giant, the latest escalation of efforts to dismantle Big Tech companies. This is the third major antitrust complaint against Google in the past two months. In October, the Justice Department and 11 Republican attorneys general sued the company over contracts with companies to make it the default search engine. Today’s suit is more broad: it also said that the company was using the same tactics in a bunch of emerging technologies like home speakers and it argues that Google has been crowding specialized search engines. Then there’s a suit filed two days ago by Texas and eight other Republican states arguing that Google has killed off promising advertising technology companies. Over time, Google has come to operate most of the technology that buys, sells and serves advertising online. One part of the complaint alleges that Google had a secret deal with Facebook that gives the social media company advantages in Google advertising auctions. Oh yes, and a group of states and the FTC are also suing Facebook to force the company to sell Instagram and WhatsApp. Nightly’s Renuka Rayasam reached out to POLITICO’s antitrust expert Leah Nylen over Slack today to walk us through the web of cases. This conversation has been edited. How long will these suits take to resolve? Awhile. Antitrust cases are notorious for taking forever. I’ve covered some that last 10 years or more, but government cases tend to move a little more quickly. It’s likely we’d see a trial and possibly even an appeal within three years. That’s about how long it took when the DOJ sued Apple for price-fixing e-books during the Obama administration. Texas has asked for a jury trial in the Google ad tech case so regular people in northern Texas will decide that one. Do you think any of these will succeed? Hard question. None of these people bring antitrust cases unless they think there’s a good chance they’ll succeed, but all of them raise pretty novel arguments. I think the DOJ’s Google case is the most straightforward. We haven’t really had a major breakup since AT&T in 1984 because Microsoft was able to persuade the Bush administration not to break it up and to accept a conduct remedy in which they were overseen by engineers for 10 years. Seems like there is a lot of antitrust momentum against Big Tech companies. Where does the Biden DOJ stand? That Facebook and Google are too big and possibly hampering innovation in the economy. Biden has been pretty mum on antitrust issues, but antitrust is a topic that is 1) generally important to Dems and 2) really really important to progressives. So the DOJ’s Google case is definitely moving forward. Let’s talk tech and antitrust. This is hard right, because so many tech services are free. Yes. Traditionally antitrust has focused a lot on price. The No. 1 thing prosecutors look for: Does this merger, or will this action, lead to price increases for consumers? But with tech, that question is harder because these services don’t cost money. About a decade ago there were people arguing that antitrust doesn’t apply in zero-cost markets. No one believes that anymore. There’s a better understanding now that even if you aren’t paying money, you are giving away something in exchange for both Facebook and Google. That’s data. Both cases argue that problematic conduct by Facebook and Google hasn’t led consumers to pay more, but it has led to less innovation and fewer choices for consumers. There aren’t alternatives to Facebook or Google that are more privacy conscious. Btw I hear you've got the anniversary of the Sherman Antitrust Act marked on a calendar. Plans to celebrate? Haha! I do. I usually have a beer for good old Sherman. It was signed July 2, 1890, so this year it turned 130. Three major lawsuits this year, not bad for a 130yo.
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| | | | | PAX TEXANA — The Texas case against Google might have come a little bit more quickly, but Texas attorney general Ken Paxton landed in the middle of his own legal mess in October, when eight senior aides in the Texas attorney general’s office reported the state’s top lawyer to law enforcement, Renu and Leah write. Many of them were fired or resigned. The aides included Paxton’s No. 2, Jeff Mateer, and two individuals who had been key players in Texas’s Google probe — Ryan Bangert and Darren McCarty. They say Paxton intervened in cases to benefit real estate developer, Nate Paul, who donated $25,000 to Paxton’s 2018 reelection campaign, according to a whistleblower lawsuit by some of the officials. At Paxton’s recommendation, Paul also hired a woman with whom Paxton had an extramarital affair. Paxton’s wife, Angela Paxton, is also a state senator. The FBI is investigating and former employees are suing. It’s not the first time Paxton has been on the receiving end of the law: He’s still fighting charges in court that he violated state securities law. But it’s the first time that Paxton’s legal troubles have led to a slowdown in his office’s work, which often includes aggressive high-profile lawsuits, like a failed attempt earlier this month to overturn election results in four states. Despite multiple securities fraud cases, Paxton didn’t draw a Republican primary challenger in 2018 and won the general election. This time around, other top Texas lawyers are considering a primary challenge in 2022, one person who is involved in those recruiting efforts told Nightly. But Paxton’s been surprisingly resilient. And Texas AG is usually a launching pad to the Senate or the Governor’s mansion in the conservative state. So maybe Ken Paxton is just getting started.
| | ‘THE GREAT UNMASKING’ — That’s how Xavier Becerra, Biden’s pick for HHS secretary, describes how the coronavirus pandemic has revealed the harsh racial and ethnic disparities in American health care. “Our disjointed health care system in America made it possible to camouflage those disparities for a long time,” Becerra, the current California attorney general and a longtime member of Congress from Los Angeles, told health editor-at-large Joanne Kenen during a POLITICO Live health care event today, his first live interview since Biden announced his pick. But given the toll the coronavirus is taking on Latinos, Black Americans and Native Americans, “There is no way that any American can now deny that people in America are receiving health care differently because of their race, ethnicity or disability.” This isn’t news to Becerra, even if the coronavirus makes it more vivid. In Congress, he represented a section of Los Angeles with a very high uninsured rate before the Affordable Care Act. And his wife, Carolina Reyes, is a physician who specializes in high risk pregnancies and births, particularly among minorities, so the topic of health disparities has been known to come up at home. “Not only do I hear about it at the dinner table,” he said. “I hear it after dinner. And when I wake up.” His solutions when he takes over HHS (assuming he’s confirmed): Lots of trust-building with communities that have lost faith in U.S. health care. Fidelity to science. A lot more attention to preventive care — and making sure everyone has access to it. Becerra, who led the coalition of AGs who defended the ACA in the case now awaiting a ruling from the Supreme Court, is also “cautiously optimistic” that the court won’t scrap the law — and he can spend the next few years building on it.
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| MODERNA GETS ITS SHOT — The nation’s second coronavirus vaccine, produced by Moderna, could be on its way to thousands of sites nationwide by this weekend — a major accomplishment for a company that has never before brought a product to market, writes health care reporter Sarah Owermohle. An independent FDA advisory committee today endorsed the shot for adults 18 and over, and the agency is expected to issue an emergency use authorization on Friday. RICHMOND TESTS POSITIVE— Rep. Cedric Richmond has tested positive for coronavirus, Biden’s transition team announced today. Richmond has shown symptoms of the disease and will be isolating following his diagnosis. He was at a Georgia campaign event with Biden on Tuesday, along with Democratic Senate candidates Jon Ossoff and Raphael Warnock. Richmond was not in close contact with Biden, Ossoff or Warnock according to CDC guidelines, and Biden tested negative for the virus today, the transition team said.
| | Welcome to Bidenology, Nightly’s look at the president-elect and what to expect in his administration. Tonight, after Biden selected Rep. Deb Haaland for Interior secretary, we go into the POLITICO Magazine archives with an excerpt from Julian Brave Noisecat ’s Nov. 30 piece, “What a Joe Biden Cabinet Pick Might Mean for Native Americans — and Democrats”: Native Americans have had an outsize presence in progressive and environmental activism. Four years ago, the Standing Rock Sioux Tribe erected a blockade in the path of the Dakota Access pipeline to defend its water and treaty rights. Haaland visited those encampments and even cooked for the demonstrators. In the wake of Standing Rock, a new generation of Indigenous millennials and Gen Z-ers dream of a future when the United States gives land back to Native nations. In theory, the next secretary of Interior could take steps to realize that goal. Given these trends and this history, I asked the congresswoman — and a number of other Native leaders and political insiders — if there was any risk her appointment could unintentionally polarize tribal issues, solidifying them as a Democratic concern. Indeed, at certain moments over the past four years, such as the decision to reinstate and expedite permits for Dakota Access, it felt like President Trump might fully upend the bipartisan status quo on tribal affairs. The congresswoman and virtually everyone I consulted, however, brushed off the concern. “I think Indian Country has worked hard to be nice to everyone.” To whomever ultimately gets the job, she said, “We want to support you. And we want you to understand and know our issues.” Ironically, it’s precisely this little-known and surprisingly bipartisan alignment on Indian affairs — an approach of necessity cultivated by tribal leaders wary of a return to this nation’s genocidal past — that has positioned Haaland as not only a potential pathbreaker, but also a unifier. Indeed, Haaland herself describes Rep. Tom Cole (R-Okla.) as a friend and mentor. “I feel like maybe him and I could be an example for how people can get along,” she told me. Cast against this history of shrewd tribal statesmanship, nominating Haaland for Interior secretary presents a rare opportunity for Biden to not only do right by Indian Country, but also to bring more Native votes to the liberal party while advancing a consensus-building candidate.
| | REGAN HEADS TO EPA — Biden will nominate Michael Regan, North Carolina’s top environmental regulator, to be administrator of the Environmental Protection Agency , people familiar with the Biden transition team’s plan tell Tyler Pager, Zack Colman and Alex Guillén. The pick is a major nod to the party’s progressive wing, which pushed Biden’s team to emphasize minority and poor communities facing threats from pollution. If confirmed, Regan, who has been praised for his environmental justice work, would be the second Black EPA chief, after Lisa Jackson, President Barack Obama’s first-term administrator.
| | NO TANNENBAUM — Governments in Europe have a Christmas dilemma — play carefree Santa or responsible Grinch. If ministers allow friends and family to gather and celebrate the holidays together, they risk upending efforts to keep the second wave of the pandemic in check, and raise the prospect of a harsher lockdown and more economic hardship in the new year. POLITICO Europe took a look at what Christmas will look like in Europe. Here are some of the restrictions: — Belgium: Non-essential shops reopened on Dec. 1, but under strict rules: only one adult per “shopping session,” which can’t last over 30 minutes. — France: The government has put in place a nightly curfew from 8 p.m. to 6 a.m., which can only be broken for work, health or essential family reasons or walking a pet. Anyone out between these hours must carry a signed declaration, or face a €135 fine — and up to €3,750 for repeat offenders. On Dec. 24, the curfew will be lifted “to share this moment with loved ones,” but crowds in public spaces “won’t be tolerated.” On Dec. 31, the curfew will be “strictly enforced.” — Germany: For Dec. 24, 25 and 26, each household will be allowed to invite four additional people “from the closest family circle.” There will be no loosening of rules for New Year’s Eve, with sales of fireworks banned. — Italy: On Dec. 3 Italy adopted a “Christmas decree” detailing the dos and don’ts over the holidays — but it’s currently working on “some additional measures,” Prime Minister Giuseppe Conte said Tuesday. Under current rules, Italians won’t be allowed to travel across regional borders from Dec. 21 to Jan. 6. And on Dec. 25 and 26, as well as Jan. 1, they won’t be allowed to leave their town of residence. The only exceptions will be to visit relatives who are alone or unwell, and for couples living in different towns and regions. — Spain: Between Dec. 23 and Jan. 6, people won’t be allowed to cross regional borders except in defined circumstances (such as work, education, taking care of dependents). On Dec. 24, 25, 31 and Jan. 1, a maximum of 10 people can gather at home from a maximum of two households. On Christmas Eve and New Year’s Eve night, a curfew will be set by regional authorities no later than 1:30 a.m. — United Kingdom: Brits will enjoy a five-day “grace period” between Dec. 23 and Dec. 27, under a deal reached between the Westminster government and the devolved administrations of Scotland, Wales and Northern Ireland. Travelers to and from Northern Ireland are allowed two extra days (Dec. 22 and 28). During this time, three different households will be allowed to mix in private homes, places of worship and outdoors, but not in hospitality or entertainment venues. A person can be the member of only one “Christmas bubble,” which can’t change once formed.
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| | NEW EPISODES OF THE GLOBAL TRANSLATIONS PODCAST: Our Global Translations podcast, presented by Citi, examines the long-term costs of the short-term thinking that drives many political and business decisions. The world has long been beset by big problems that defy political boundaries, and these issues have exploded over the past year amid a global pandemic. This podcast helps us identify and understand the impediments to smart policymaking. Subscribe for Season Two, available now. | | | | | | | BOMB DEFUSAL — Jen O’Malley Dillon, Biden’s campaign manager and incoming White House deputy chief of staff, walked back comments she made in a recent interview suggesting that congressional Republicans were “a bunch of f---ers.” In a virtual conversation today with veteran Democratic operatives Stephanie Cutter and Teddy Goff, O’Malley Dillon, who founded Precision Strategies with the two, acknowledged she “used some words that I probably could have chosen better” when speaking with author Glennon Doyle for a Glamour magazine interview published Tuesday. She went on to restate Biden’s “belief that we can get things done, and we can get them done if we come together.”
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