BREAKING: Senate committee to probe SC hack

ashain@thestate.comNovember 9, 2012 

The Senate has established an investigative committee to examine the theft of nearly 4.5 million state tax records from the S.C. Department of Revenue by an overseas hacker.

Sens. Kevin Bryant, R-Anderson, and William O’Dell, R-Abbeville, will co-chair the committee. Democratic Sens. John Matthews of Orangeburg and Darrell Jackson of Richland also are on the panel. An initial meeting has not been set.

The Senate Finance Committee held a hearing last week to ask Revenue Department director James Etter about the data breach. Under questioning from senators, Etter revealed for the first time that business records were among the stolen data.

“I don’t think any senator was satisfied with the answers we got,” Senate Finance Chairman Hugh Leatherman, a Florence Republican who created the committee, said. “More questions were raised than answers were provided."

Leatherman said the committee "will not play the blame game or compromise any criminal investigation. We want to provide an open and transparent inquiry to find out what happened, make sure it is being corrected and, above all, ensure that everything possible is being done to protect individual and corporate taxpayers.”

Gov. Nikki Haley said Thursday she expects an investigative report will be finished next week. She also asked the state Inspector General to work with information technology departments across the state agencies to develop a cyber-security plan.

A hacker stole tax records for 3.8 million consumers and 657,000 businesses in mid-September using state-approved credentials at the Revenue Department. The state learned of the hack from the Secret Service on Oct. 10.

The public was informed more than two weeks later. Authorities said they needed time to investigate the breach, but many lawmakers and taxpayers were angered by the delay.

The state is offering a free-year of credit monitoring and lifetime credit-fraud resolution for consumers from Experian and a free credit monitoring for businesses from Dun & Bradstreet Credibility Corp and Experian.

Senators at the hearing expressed concerns that people must enroll themselves to get help instead of the state doing that for them.

“There is concern that tens of thousands of people—especially the elderly—will not be able to do this," Leatherman said.

South Carolina officials said automatic enrollment would violate peoples' privacy.

South Carolina will pay as much as $12 million to Experian for the consumer services. The companies offered the business monitoring for free.

The state also is paying for cyber-security and public-relations firms and for outside legal advice.

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