US & World

Sony hack: Obama pledges proportional response; Insider: 'We've been outsmarted at every move'

North Korean leader Kim Jong Un with top brass in a photo released by the state-run KCNA. The chart in the background reportedly reads
North Korean leader Kim Jong Un with top brass in a photo released by the state-run KCNA. The chart in the background reportedly reads "U.S. mainland strike plan." On Friday, December 19, 2014, the FBI formally accused North Korea of being responsible for the cyber attack on Sony Pictures Entertainment.
KCNA/Xinhua/Landov

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President Barack Obama said Friday that Sony Pictures Entertainment "made a mistake" in shelving a satirical film about a plot to assassinate North Korea's leader, and he vowed the United States will respond proportionally "in a place and manner and time that we choose" to a hack attack the FBI had earlier in the day blamed on the secretive Communist regime.

Updates

Update 4:23 p.m. CEO tells NPR Sony 'did not capitulate,' is exploring options

On a day when President Barack Obama added his voice to criticisms over the decision to pull the satire "The Interview", Sony Pictures CEO Michael Lynton says the studio "did not capitulate" to hackers, and that its actions have been misunderstood.

Lynton defended his studio in an interview on All Things Considered, saying that Sony still wants an audience to see "The Interview" — if not in theaters, then by other means.

His remarks came shortly after President Obama called the decision to cancel the film's planned national release "a mistake."

Discussing the film this afternoon, Lynton said that Sony viewed the film as part of film's satirical tradition, saying that under the current circumstances, "It is very important and we would very much like the American public to see this movie."

Here are more highlights from the interview by NPR's Melissa Block:

On President Obama's position

"First, I was surprised by the remark. But, I think actually the president and I are coming from the same place. We are obviously both strong proponents of the First Amendment.

"I think the issue here is that there's been a general misunderstanding with the press and the public about how these events unfolded, and the fact that we have been absolutely diligent about making certain that this movie get out into movie theaters. And it was only when the movie theaters themselves had said they couldn't take the movie, that we had to say that we couldn't release it on the 25th of December."

The question of blackmail

"We did not capitulate. We don't own movie theaters, and we require movie theater owners to be there for us to distribute our film. We very much wanted to keep the picture in release. When the movie theaters decided that they could not put our movie in their theaters, we had no choice at that point but to not have the movie come out on the 25th of December. This was not our decision."

A video-on-demand release?

"Yes, those are other avenues and we are actively exploring them .... to date, we don't have any takers — neither on the video demand side nor on the e-commerce side. People have been generally fearful about the possibility of their systems being corrupted, and so there have been a lot of conversations about the robustness of various systems to be able to make sure they're not hacked, if and when we put the movie out digitally."

"I shouldn't say if — when. We would very much like that to happen. But we do need partners to make that happen. We ourselves do not have a distribution platform to put the movie out."

How about streaming on Playstation systems?

"That can be explored, I think in general we need to bring together a coalition of platforms to make this operate properly."

On Sony's cyber security

"We were extremely well prepared for conventional cyber security. What the FBI and Mandiant, who was the expert who we hired to come in and do the forensics on this, have come out in public and said, is that 90 percent of all U.S. corporations would not have withstood the cyber attack that we experienced."

Thanks to NPR's Serri Graslie for quickly transcribing Lynton's interview.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.
 

Update 3:44 p.m. Inside Sony after the hack: 'We’ve been outsmarted at every move'

The first thing people see when they walk onto the Sony lot is a giant 100,000-pound steel rainbow sculpture that rises over the Culver City lot. But lately, it’s been all dark storm clouds above the studio. Even before this disaster, there was a bruising fight with activist investor Daniel Loeb — then layoffs.
 
When employees at Sony Pictures returned from the Thanksgiving holiday, they learned they had been victims of a massive hacking operation. The news has only gotten worse since then.
 
Friday in his end-of-the-year press conference, President Barack Obama was uncharacteristically blunt when asked whether Sony should have pulled “The Interview” from theaters.
 
“I think they made a mistake,” he said.
 
Many employees at Sony watched the president's news conference, according to a Sony staffer, who declined to be identified because the company has told employees not to speak to reporters.
 
“I think the Obama slam is awesome, but he could have taken a more active role in this if he’d had an opinion,” said the employee.
 
The employee said staffers have been frustrated by a lack of communication from top levels of the company, often learning about new developments in the unfolding saga by reading them in the news. Confidence in the company’s leadership — already low before the hacking — has dropped even more.
 
“I think this was handled very poorly with everybody focused on the wrong thing,” said the employee. “We’ve been outsmarted at every move.”
 
An estimated 47,000 current and former Sony employees as well as contractors had their personal information stolen, which includes Social Security numbers, addresses and birthdays.
 
“From the top down it’s been a crisis, and everyone’s been affected,” said Martin, who has worked as a sound designer on over a dozen Sony films over the last decade. (He declined to give his last name) “The security breach has an effect on the psychology of the company. It’s like when your house is robbed. You don’t quite feel the same when you walk in your living room after that.”
 
He said the company let him know his personal information might be at risk and gave him a toll-free number to get help.
 
“I think they’ve handled it well,” Martin said.
 
But a former employee who left Sony two years ago, who spoke on the condition of anonymity because he signed a non-disclosure agreement, said the company never notified him that his personal information was stolen.
 
He found out when he got an alert from LifeLock, a credit monitoring service he subscribes to.
 
He still hasn’t heard anything from Sony.
 
“If they know that an employee’s personal data has been compromised, I think they should have reached out,” said the staffer, who worked at Sony Pictures for close to seven years.

At least four lawsuits have been filed against the company on behalf of current or former Sony employees, alleging the studio did not do enough to protect its employees' personal information.
 
"An epic nightmare, much better suited to a cinematic thriller than to real life, is unfolding in slow motion for Sony's employees,” one of the suits reads.

Ben Bergman/KPCC

Update 1:16 p.m. Sony president says they 'have not caved'; DGA calls for 'The Interview's' release; actors criticize decision not to show film

Sony president Michael Lynton responded in a CNN interview to comments by President Barack Obama saying that Sony had "made a mistake" in not releasing "The Interview" following hacker threats, Deadline reports.

"We have not caved, we have not given in, we have not backed down," Lynton said, according to Deadline.

"The movie theaters came to us one by one over the course of a very short time. We were very surprised by it," Lynton said, according to the Hollywood Reporter. "They announced that they would not carry the movie. At that point in time we had no alternative to not proceed with a theatrical release on the 25th of December."

Lynton said that the president, the press and the public were all mistaken about what happened with "The Interview" not being released, Deadline reports. "We do not own movie theaters. We cannot decide what will be played in movie theaters," Lynton said.

Lynton himself has 12,000 of his emails leaked by hackers as part of the Sony hack, according to the Reporter.

The Directors Guild of America released a statement form DGA President Paris Barclay saying that they wanted to see "The Interview" released.

"We stand by our director members Seth Rogen and Evan Goldberg and hope that a way can be found to distribute the film by some means, to demonstrate that our industry is not cowed by extremists of any type," Barclay said in the statement.

Barclay also called for increased efforts from the federal government to protect against cyber crime, as well as commenting on threats from the situation to freedom of expression.

"We hope that instead of the ‘chilling effect’ on controversial content, this incident becomes a rallying point for all of us who care about freedom of expression to come together and champion this inalienable right," Barclay said in the statement.

Several Hollywood heavyweights spoke out about the situation on Friday, including George Clooney doing an interview with Deadline talking about a petition he had tried to get others in Hollywood to sign saying they would stand by Sony in not submitting to the hackers' demands.

Actor and activist Sean Penn sent a statement to Mother Jones with his thoughts on the Sony hack, saying that he thinks distributors and Sony are inviting a threat from ISIS in their decision not to show the film.

Mike Roe/KPCC

11:31 a.m.: Obama pledges proportional response

President Barack Obama said Friday the U.S. will respond "proportionally" to North Korea's punishing hack of Sony Pictures Entertainment at a place, time and manner "that we choose."

Obama said the attack "caused a lot of damage."

"We will respond proportionally and we will respond in a place and time and manner that we choose," Obama said.

The FBI announced earlier Friday that North Korea was responsible.

The attack escalated to terrorist threats that prompted Sony to cancel its Christmas release of "The Interview."

He commented during a year-end news conference Friday at the White House.

— Associated Press

11:17 a.m.: Sony decision to scrap film was 'mistake,' Obama says

President Barack Obama said Friday he thinks Sony Pictures Entertainment "made a mistake" by canceling release of "The Interview," the comedy about an assassination attempt against North Korea's leader that authorities think prompted the communist nation to hack the studio's networks.

Obama said we "can't start changing our patterns of behavior" and that we can't have a society in which "some dictator some place can start imposing censorship in the United States."

The president delivered the remarks during his year-end press conference.

— KPCC staff

8:56 a.m.: FBI formally accuses North Korea of studio cyber attack

Federal investigators have formally accused North Korea of hacking Sony Pictures Entertainment.

A group calling itself "Guardians of Peace" broke into Sony's networks back in November, exposing the sensitive personal information of employees, troves of internal emails and documents, and even entire films. The cyber attack fueled intense speculation that the communist nation was involved when demands were made to stop the release of "The Interview," the comedy about an assassination attempt on North Korean leader Kim Jong Un.

On Friday, the Federal Bureau of Investigation released a statement indicating that it had been working closely with Sony and now had enough information to conclude the isolated communist nation was responsible for the attacks.

"North Korea’s actions were intended to inflict significant harm on a U.S. business and suppress the right of American citizens to express themselves. Such acts of intimidation fall outside the bounds of acceptable state behavior," the FBI said in the statement.

The FBI said it based its conclusion in part on analysis of the software — known because of its destructive intent as malware — that was used in the attack, on an overlap in the infrastructure used in other cyber activity that has been linked to North Korea, and on similarities to an attack from that country on South Korean banks and media outlets in March 2013.

"We are deeply concerned about the destructive nature of this attack on a private sector entity and the ordinary citizens who worked there. Further, North Korea’s attack on SPE reaffirms that cyber threats pose one of the gravest national security dangers to the United States," the FBI said in its statement.

A technical analysis of the malware used revealed that there were "similarities in specific lines of code, encryption algorithms, data deletion methods and compromised networks" to other activity linked to North Korea, according to the FBI.

The investigation revealed that several Internet Protocol, or IP, addresses associated with North Korean infrastructure communicated with IP addresses that were coded directly into the malware.

Beyond these clues, the FBI said it could not reveal any other techniques or sources used in the investigation.

The toll on Sony has been steep.

The studio ultimately decided to cancel the Dec. 25 premiere of "The Interview" and said it had no further plans to release it, a move that some critics have decried as setting a dangerous precedent for free speech and an invitation to other cyber attacks in the future.

In addition to the financial hit Sony was expected to take by withholding the film, the studio has been hit with a series of lawsuits and bad publicity through the leak of sensitive internal emails. Some analysts are predicting a potential shake-up among the studio's corporate leadership.

— KPCC staff

This story has been updated.