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South Carolina: Credit Card Guinea Pig?



Earlier this week we filed a report on the federal government’s massive credit card snooping program … a warrantless spy scheme that’s being run (unconstitutionally we might add) under the auspices of the recently created U.S. Consumer Financial Protection Bureau (CFPB).

Missed that story? Click here …

Anyway, this program was exposed via a Freedom of Information Act (FOIA) request filed by Judicial Watch, a Washington, D.C.-based government watchdog. Among other things, Judicial Watch’s FOIA revealed that the CFPB “has spent millions of dollars for the warrantless collection and analysis of Americans’ financial transactions.” It also revealed this information is being shared with “other agencies,” which of course means it is likely being routed to the massive National Security Agency (NSA) spy center in Utah.

Why are we writing about any of this this? Well, the credit card snooping is a major national story – part of the broader domestic spying narrative – but it’s also one which could have serious South Carolina ramifications.

What are we referring to?

Let’s rewind the tape to October 26, 2012 – when S.C. Gov. Nikki Haley revealed that her Department of Revenue (SCDOR) had been subjected to the largest state-level data breach in American history. Over a period of several weeks in August and September of last year, as-yet-unidentified hackers robbed the agency of 3.8 million Social Security numbers, 3.3 million bank account numbers, tax info for more than 650,000 businesses and nearly 400,000 credit and debit card numbers.

SCDOR never knew what happened … and it took Haley more than two weeks after belatedly discovering the breach to alert the public.

Haley initially claimed that “there wasn’t anything where anyone in state government could have done anything” to stop the breach – and that the Palmetto State used “industry standard” data security methods. Both of those claims turned out to be completely false.

In the wake of the hacking, Haley made an executive decision to spend $12 million on a controversial no-bid credit monitoring contract with Experian – a global information services firm. Of course Haley was repeatedly grilled over inconsistencies regarding the timing of the contract and the consideration (or lack thereof) given to other companies. Not only that, Haley’s administration told several flat out mistruths regarding Experian’s “exclusive” services, which it turns out other companies not only provided – but provided at cheaper costs.

So … what does the #SCHacked scandal (and Haley’s Experian deal) have to do with the federal government’s credit card snooping program?

Glad you asked … according to the Judicial Watch FOIA, around the time these mysterious hackers were draining the SCDOR of its data, the feds entered into an “indefinite delivery, indefinite quantity” contract with … you guessed it … Experian. This contract – worth more than $8 million annually – calls on the company to assist the feds in tracking the “daily consumer habits of select individuals without their awareness or consent.”

Hmmmmm …

The company also agreed to turn over sensitive proprietary information as part of its deal with the CFPB.

Adding another layer of intrigue to all this? The bizarre back story surrounding the SCDOR hacking – which remains an open case (a.k.a. “unsolved mystery”). As we reported exclusively less than forty-eight hours after the Haley administration went public with the news of the breach, our sources indicated the federal government was participating in a multi-jurisdictional “sting” aimed at apprehending the eastern European cyber terrorists alleged to have perpetrated the data heist.

Part of this “sting?” An alleged ransom demand made by the hackers – which has recently drawn the attention of S.C. Sen. Brad Hutto (D-Orangeburg).

It’s hard to know where to start with the questions, but here are a few we’ve come up with off the tops of our heads …

1) Who hacked the S.C. Department of Revenue?
2) Why is it taking state and federal agents so long to identify and apprehend the assailants?
3) Did South Carolina pay a ransom as part of law enforcement efforts to apprehend the hackers?
4) Why wasn’t the Experian contract with South Carolina competitively bid?
5) Why did the Haley administration mislead the public about the Experian contract?
6) Was the Haley administration aware South Carolina citizens’ data might or was being transferred by Experian to the federal government?
7) South Carolina is home to many politicians who criticize the federal government – was their personal financial information transferred?

Will we ever get answers to these inquiries?

Don’t hold your breath, people …


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