SC revenue chief steps down after massive hacking

ashain@thestate.comNovember 20, 2012 

Computer-Internet Security

CHAD MCDERMOTT/ISTOCKPHOTO.COM

In the wake of the massive data breach of state tax records, S.C. Department of Revenue Director Jim Etter has resigned effective at the end of the year, Gov. Nikki Haley said Tuesday.

Etter will be replaced by Bill Blume, director of the S.C. Public Employee Benefit Authority.

Haley said Etter agreed to leave “to get a new set eyes on the department” after the breach.

The governor updated the number of people affected by the hacking -- 3.8 million taxpayers who have 1.9 million dependents and 699,000 businesses. Hackers have anything on a tax return including Social Security numbers.

The thieves also took bank account information belonging to 3.3 million taxpayers.

The hackers took tax information of people who file electronically, Haley said. People who file paper returns did not have their information taken.

Most of the records taken go back to 2002, Haley said, but some records date back to 1998.

The state will send letters or emails to taxpayers whose information was stolen, Haley said.

The hackers used a stolen employee password to access state tax records. The thieves got the password when a revenue department employee opened an email with a malicious computer program, said Mandiant, a Washington computer forensics firm hired by the state to investigate the incident.

Haley said she will ask lawmakers to develop an emergency cyberattack plan like the one the state uses for hurricanes. The plans would include unannounced tests of computer systems at state agencies.

The governor said the state could have done more to protect taxpayer information but an outdated security plan along with 1970s computers created a "cocktail' for the hackers to steal data that can be used to get loans and credit cards and empty bank accounts.

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