Coverage: Sony versus the North Koreans

Sony has been hacked, and some are saying it’s because the North Koreans are angry over a new movie. One thing is certain, the damage is widespread and causing some embarrassment.

Bruce Einhorn had these details for Bloomberg Businessweek:

Sony (SNE) was warned. After learning of the company’s plans to release a James Franco-Seth Rogen comedy about a plot to assassinate Kim Jong Un, North Korea declared war in June. At the time, a Foreign Ministry spokesman said all North Koreans were determined “to mercilessly destroy anyone who dares hurt or attack the supreme leadership of the country, even a bit.”

Thanks to threats like that, North Korea is a prime suspect in the hacking attack that crippled Sony Pictures last week. The attackers made off with several new Sony movies, including Brad Pitt’s Fury and the remake of Annie, and they apparently made them available online. One movie that the hackers haven’t leaked is The Interview, the Franco and Rogen film that got the North Koreans so outraged with Sony in the first place.

An investigation is underway, with the FBI taking part, and it’s too early to say whether Kim’s regime had any role in the hack. But “the facts and the evidence really point to the East on this one,” Joe Loomis, CyberSponse chief executive officer and founder, told Bloomberg Television. The incident is an example of a “new type of warfare coming along now,” he added, “where you have a foreign country attacking a corporation.”

Writing for Time, Sam Frizell pointed out that it wasn’t just movies that were leaked. The data revealed included salaries of more than 6,000 employees:

Documents containing Sony Pictures employees’ personal information were leaked late Monday in the wake of a massive online attack against the company.

The internal documents listed the names, titles and salaries of more than 6,000 Sony Pictures employees, including senior executives, Fusion reports. Included in the data were 3,803 employees’ social security numbers, including all the company’s top executives.

Seventeen executives make over $1 million per year, the documents reveal. Only one of them, co-chair of Sony Pictures Entertainment Amy Pascal, is a woman. The information was posted onto the anonymous uploading site Pastebin.

According to Fusion, Pascal and CEO Michael Lynton are paid $3 million per year.

Reuters’ Mark Hosenball and Jim Finkle reported that employees were using paper after Sony shut down its computer network:

The hack, which was launched Nov. 24, caused Sony Pictures Entertainment to shut down its internal computer network. Employees had to resort to using paper and pen to conduct their business.

Spokesmen with the FBI and Department of Homeland Security, which are investigating the breach, declined to comment.

Representatives with the Sony Corp California-based entertainment unit have declined to comment on the extent of the breach or discuss who they suspect is behind the attack.

The technology news site Re/code reported Nov. 28 that Sony was investigating whether hackers working on behalf of the North Korean government were responsible for the attack as retribution for the company’s backing of the film “The Interview.”

The movie, which is due to be released in the United States and Canada on Dec. 25, is a comedy about a CIA plot to assassinate North Korean leader Kim Jong Un. Pyongyang denounced the film as “an act of war” in a letter to U.N. Secretary-General Ban Ki-moon in June.

Tom Risen wrote for US News about how North Korea could possibly develop the technology to hack into Sony’s system:

Technologically deficient North Korea is able to develop cybersecurity capabilities by spending much of its money on it military and siphoning economic and technological aid from its few allies, which include Russia, China and Iran, says Amy Chang, a research associate at the Center for a New American Security think tank.

“A totalitarian state with what seems like full control over its population can divert a lot of resources to develop cybersecurity,” Chang says. ‘They can train people to be hackers from a very young age.”

Since North Korea has very little Internet infrastructure it is likely that they conduct their attacks using overseas networks, Chang says. Little is known about North Korea but typical ways to host malicious Web traffic in foreign nations include hijacking computers through attacks called bot nets.

China hosts some of the cyberwarfare operations of North Korea’s websites on its growing networks, according to a report published earlier this year by Hewlett Packard. China also provides space in its city of Shenyang to North Korea’s Unit 121, which has launched numerous attacks against U.S. and South Korean government networks during the past decade, the report adds. North Korea maintains a large land army including thousands of armored vehicles and is pursuing nuclear weapons, but in recent years has suffered oil, fuel, electricity and food shortages, the report adds.

No matter how they got in, the damage was revealing for the industry as well as Sony.

Fortune’s Erik Sherman reported that Sony’s lack of diversity in its upper ranks is likely affecting the types of movies that are getting made:

Seventeen employees appear to earn $1 million or more per year. Only one – Amy B. Pascal, the co-chair of Sony Pictures Entertainment and chairman of SPE’s Motion Picture Group – is a woman. Roose wrote that quick Internet searches suggested that of the 17 million-earning executives, 15 were white, one was African-American, and another South Asian. That would make Sony Picture’s top paid executives 94 percent male and 88 percent white.

These SPE management diversity stats would make high tech and banking look good by comparison. Both have been criticized for underrepresentation of minorities and women in workforces as a whole and in management.

The uniformity in the executive ranks could be one reason Hollywood productions, in particular, have a heavy white male presence.

It’s unlikely that the leaked information will cause any changes in the way the company is managed at the top or the types of movies that are produced. But having a conversation about who is making entertainment decisions and the continued lack of diversity in the industry is important. I’ll bet that’s something the North Koreans weren’t expecting when they broke into the computer system.