[iwar] interesting story
From: Fred Cohen
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Date: Sat, 10 Jun 2000 07:16:51 -0700 (PDT)
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Subject: [iwar] interesting story
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Subject: Havenco Promises Cyber Freedom
Havenco Promises Cyber Freedom (ABCNEWS.com)
By Simon McGregor-Wood
L O N D O N, June 7 - 2000
Seven miles off the coast of southern England, a group of American
Internet entrepreneurs is planning to set up the world=92s first
offshore data haven.=20
Based on the independent principality of Sealand, the self-proclaimed
smallest principality in the world, the new company called Havenco
promises prospective clients complete security for their computer files
and freedom from the laws and regulations of any government.=20
At a time when governments are creating new laws to control and
police the Internet, Havenco =97 complete with its own armed guards,
radar defense and its own passport control =97 hopes its new home may
prove as popular as offshore tax havens.=20
Earnest American computer technicians have flocked to Sealand=92s
shores, preparing to install millions of dollars worth of computer
equipment designed for clients who want their transactions and e-mail
free from outside interference and investigation. Customers will buy
servers or space on servers housed deep within the support legs of the
former military bunker=92s platform.=20
Sean Hastings is the pony-tailed 32-year-old CEO of Havenco,
currently living on Sealand and overseeing the frantic work. Havenco
will offer an environment where you can put your business, where the
regulatory environment won=92t change on you=85 There have been cases in
the United States where people=92s computers have been seized or their
files gone through, based on little or no evidence.=94 Hastings and his
colleagues are promising that this will never happen on Sealand. And if
its short history is any indication of what its future might hold,
Hastings could be right.=20
Sealand started life during World War II as a gun platform to repel Nazi
attacks by air and sea. About two decades after the war, retired
British Army Major Roy Bates took possession of the abandoned artificial
island and declared the =93land=92s=94 independence from Britain in
1968. (See sidebar for fuller history.)
Hastings and his colleagues passionately believe in the freedom of the
Internet and are offering clients the prospect of complete secrecy and
anonymity. Critics think their services will only attract those with
something to hide.=20
If you are in the business of producing products that might turn
out to be dangerous, several years down the line you=92re worried about
class actions. If all your key scientific data is offshore, then there
is no way in which the victims are going to be able to get disclosure
via the courts,=94 said Peter Somer, a communications lawyer from the
London School of Economics.=20
It remains to be seen whether the British Government will continue
to turn a blind eye to Sealand and its new business venture. In the
next few weeks it will be introducing a new law reinforcing the
government=92s powers to seize and investigate electronic files and
e-mails. Will the government pursue this law? Even into the
historically sovereign territory of Sealand?=20
Roy Bates says whatever happens, he is determined to maintain his
principality=92s independence, =93I wouldn=92t let them retake Sealand.
End of story. I wouldn=92t let it happen.
ABCNEWS=92 Richard Gizbert contributed to this report
Full Story=20
http://abcnews.go.com/sections/tech/DailyNews/sealand000606.html
________________________________________________________________________
Subject: Ex-Soviet Spy Takes on Internet Mission in U.S
Ex-Soviet Spy Takes on Internet Mission in U.S., Using Old Skills
By JAMES RISEN
NY TIMES
WASHINGTON, June 7 -- In 1980, Victor Sheymov was a Soviet man in a hurry.
At 33, he was the youngest major in the K.G.B., in charge of coordinating
security for the Soviet spy agency's code and communications systems
worldwide. An engineer and computer specialist by training, Major Sheymov
was clearly headed for big things as a member of the Soviet elite.
Yet Major Sheymov also had a secret. After intensive reading and study, he
had concluded that the Communist system in which he had thrived was based
on a big lie. He was in a hurry to get out.
So he contacted the Central Intelligence Agency, which spirited Major
Sheymov and his wife and daughter out of Moscow and resettled them in the
United States. He soon began work as a consultant to the National Security
Agency, the United States' super-secret eavesdropping arm. For the rest of
the cold war, Mr. Sheymov helped the agency try to breach the K.G.B. code
systems that he had once worked so hard to defend. In his spare time, he
earned a master's degree in business administration. Now, 20 years later,
Victor Sheymov is again a man in a hurry, but this time to cash in on the
Internet gold rush of his adopted capitalist country. He has teamed up
with American cold-war veterans from the security agency to put their old
cyberspy skills to use in the new world of Silicon startups.
Mr. Sheymov has struck out on his own to develop a new computer security
system that he contends could make computer networks nearly impervious to
penetration by outside hackers. He has brought in computer experts from
the security agency and elsewhere to help design the new system, and has
persuaded a former director of central intelligence, R. James Woolsey, to
join his new company's board.
Mr. Sheymov developed a new algorithm, on which he has a patent pending,
after accepting a challenge from a cybersecurity expert in the federal
government.
''I was kidding him, saying, 'I can't believe you guys can't stop these
kids from breaking in,' '' Mr. Sheymov recalled. ''So he said, 'If you're
so smart, why don't you do it.' That got me thinking.''
His software is still at least six months away from the market. But the
spy-versus-spy backdrop to Mr. Sheymov's new company, Invicta Networks of
Laurel, Md., is certain to provide a compelling storyline that will help
it attract the kind of attention that other computer startups would kill
for.
The story behind Mr. Sheymov's company also provides a glimpse into the
shadowy role the National Security Agency plays in computer security and
professional hacking, and underscores its potential as an incubator for
startups in the booming computer security industry.
One of the secrets of the security agency, which is in Fort Meade, Md.,
not far from Mr. Sheymov's Laurel offices, had been that it employs
professional hackers who try to break into the computer networks of
foreign governments, terrorists and international drug cartels. It also
employs computer security experts who try to stay one step ahead of
hackers to protect government computer systems.
Mr. Woolsey notes that cybersecurity and computer hacking are two subsets
of the computer world where the government -- and the security agency, in
particular -- have long been ahead of private industry.
Now, with viruses, e-mail ''spamming'' and hacking all emerging as major
national headaches and as national security threats, at least a few
veterans of the security agency are moving into the private sector,
holding out the possibility that the Maryland region around Fort Meade
could soon be transformed into a new hotbed of the cybersecurity industry.
In fact, when Mr. Sheymov sought to test his computer security system
against the best hackers he could find, he turned to another company
staffed with security agency veterans, Netsafe Inc. of Annapolis, Md.,
which conducts ''ethical hacking'' to help companies determine the
security of their computer networks.
Netsafe's hacking team tried unsuccessfully to break into Mr. Sheymov's
system.
''We tried and couldn't get into it,'' said Joe Patanella, the president
of Netsafe, an 18-year veteran of the National Security Agency.
Mr. Patanella cautioned that Netsafe's test of Mr. Sheymov's system was
not a real-world exercise, because his software had not been installed on
a live corporate computer system. But he came away impressed.
Mr. Patanella said, ''It certainly has good access control capability,''
which is computerese meaning that Mr. Sheymov's system was hard to breach.
Computer riches may now be within sight, but Mr. Sheymov's American dream
has been a long time coming. In his time with the Soviet spy agency, his
expertise on communications security -- and his detailed knowledge of the
inner workings of the K.G.B. -- rendered him such a national security
asset that his Moscow apartment was bugged and he was subjected to regular
surveillance. When he traveled abroad, he was required to stay on Soviet
Embassy grounds rather than in hotels.
But on duty in Warsaw, he slipped away from his minders long enough to
contact the Central Intelligence Agency, and the Americans immediately
realized he was potentially one of the most important defectors of the
cold war.
For years after he defected, he was locked in a bitter dispute with the
C.I.A. over the amount of money he was owed by the federal government for
his defection and collaboration against the K.G.B.
Mr. Sheymov believed he had been promised $1 million by the C.I.A. before
he defected, but he received far less after he arrived here. Agency
officials, on the other hand, came to believe that Mr. Sheymov could never
be satisfied, and had a bottomless appetite for ever-larger helpings of
C.I.A. money.
''The C.I.A. cheated me in a major way,'' Mr. Sheymov insists.
Current and former officials familiar with Mr. Sheymov's case against the
C.I.A. have equally unkind things to say about him in response.
Finally, Mr. Sheymov hired Mr. Woolsey, a Washington lawyer who was C.I.A.
director in 1993 and 1994, to represent him in his battle with the agency.
The sides finally reached a settlement last October, and, while Mr.
Sheymov remains dissatisfied, he agreed not to reveal its terms.
But with his new computer company, Mr. Sheymov seems to have put his wars
with the C.I.A. in the past.
''A lot of defectors have trouble adjusting after they have come to the
United States,'' Mr. Woolsey said. ''But Victor is one of those guys who
could thrive in any system. He is one of those guys who, if you put him
down on a desert island, he would build a house and then create a
signaling system to catch the attention of passing ships.''
http://www.nytimes.com/library/national/060800soviet-hacker.html
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