CIA contractors likely source of latest WikiLeaks release: US officials

WASHINGTON (Reuters) - CIA contractors likely breached security and handed over documents about the agency's use of hacking tools to anti-secrecy group WikiLeaks, U.S. intelligence and law enforcement officials told Reuters on Wednesday.

Two officials speaking on condition of anonymity said intelligence agencies have been aware since the end of last year of the breach, which led to WikiLeaks releasing thousands of pages on Tuesday.

According to the documents, Central Intelligence Agency hackers could get into Apple Inc <AAPL.O> iPhones, devices running Google's Android software and other gadgets in order to capture text and voice messages before they were encrypted with sophisticated software.

The White House said on Wednesday that President Donald Trump was "extremely concerned" about the CIA security breach that led to the WikiLeaks release.

"Anybody who leaks classified information will be held to the highest degree of law," spokesman Sean Spicer told reporters.

The two officials told Reuters they believed the published documents about CIA hacking techniques used between 2013 and 2016 were authentic.

One of the officials with knowledge of the investigation said companies that are contractors for the CIA have been checking to see which of their employees had access to the material that WikiLeaks published, and then going over their computer logs, emails and other communications for any evidence of who might be responsible.

On Tuesday in a press release, WikiLeaks itself said the CIA had "lost control" of an archive of hacking methods and it appeared to have been circulated "among former U.S. government hackers and contractors in an unauthorized manner, one of whom has provided WikiLeaks with portions of the archive."

A U.S. government source familiar with the matter said it would be normal for the Federal Bureau of Investigation and the CIA both to open investigations into such leaks. U.S. officials previously have confirmed that prosecutors in Alexandria, Virginia for years have been conducting a federal grand jury investigation of WikiLeaks and its personnel.

A spokesman for the prosecutors declined to comment on the possibility of that probe being expanded. It is not clear if the investigation of the latest CIA leaks is part of the probe.

Some cyber security experts and technology companies have criticized the government for opting to exploit rather than disclose software vulnerabilities, though an interagency review process set up under former President Barack Obama was intended to err on the side of disclosure.

Those concerns would grow if U.S. authorities did not notify companies that CIA documents describing various hacking techniques had been compromised.

Apple, Alphabet Inc's Google, Cisco Systems Inc and Oracle Corp did not immediately respond when asked if they were notified of a CIA breach before WikiLeaks made its files public.

At Apple, none of the vulnerabilities described in the documents provoked a panic, though analysis was continuing, according to a person who spoke with engineers there.

LARGER NUMBER OF CONTRACTORS

One reason the investigation is focused on a potential leak by contractors rather than for example a hack by Russian intelligence, another official said, is that so far there is no evidence that Russian intelligence agencies tried to exploit any of the leaked material before it was published.

One European official, speaking on condition of anonymity, said the WikiLeaks material could in fact lead to closer cooperation between European intelligence agencies and U.S. counterparts, which share concerns about Russian intelligence operations.

U.S. intelligence agencies have accused Russia of seeking to tilt last year's U.S. presidential election in Trump's favor, including by hacking into Democratic Party emails. Moscow has denied the allegation.

One major security problem was that the number of contractors with access to information with the highest secrecy classification has "exploded" because of federal budget constraints, the first U.S. official said.

U.S. intelligence agencies have been unable to hire additional permanent staff needed to keep pace with technological advances such as the "internet of things" that connects cars, home security and heating systems and other devices to computer networks, or to pay salaries competitive with the private sector, the official said.

Reuters could not immediately verify the contents of the published documents. On Tuesday, several contractors and private cyber security experts said the materials appeared to be legitimate.

A person familiar with WikiLeaks' activities said the group has had the CIA hacking material for months, and that the release of the material was in the works "for a long time."

Both U.S. Senate and U.S. House of Representatives intelligence committees have either opened or are expected to open inquiries into the CIA breach, congressional officials said.

GERMAN CONCERN

In Germany on Wednesday, the chief federal prosecutor's office said that it would review the WikiLeaks documents because some suggested that the CIA ran a hacking hub from the U.S. consulate in Frankfurt.

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Chancellor Angela Merkel is scheduled to visit Washington on March 14 for her first meeting with Trump, who has sharply criticized Berlin for everything from its trade policy to what he considers inadequate levels of military spending.

The WikiLeaks documents may also complicate intelligence ties that have just begun to recover after a series of scandals, including news in 2013 that the U.S. National Security Agency had bugged Merkel's cellphone. The Frankfurt consulate was investigated by German lawmakers after that incident.

Merkel told lawmakers last month she did not know how closely Germany's spies cooperated with their U.S. counterparts until 2015 when former NSA contractor Edward Snowden revealed the BND spy agency had for years passed on information to the NSA about European companies and politicians.

Germany reduced the level of cooperation with the NSA after those revelations.

U.S. officials have acknowledged that the consulate in Frankfurt is home to a CIA base. A facility adjacent to the city's airport and the Rhein-Main Air Base has for many years been home to the CIA's "Tefran" station, a U.S. center for collecting intelligence on Iranian activities in Europe, maintaining surveillance on Iranian officials and targeting potential defectors working in Iran's nuclear weapons program.

Foreign ministry spokesman Sebastian Fischer told a regular government news conference that Germany took the issue seriously, but more work needed to be done to verify the authenticity of the documents. Berlin was in close touch with Washington about the case and such matters generally, he said.

Government spokesman Steffen Seibert said Germany's domestic intelligence agency had the job of uncovering espionage activities in Germany, and carried out its work comprehensively.

WikiLeaks reported that CIA employees had been given diplomatic passports and State Department identities to carry out their work in Frankfurt, focused on targets in Europe, the Middle East and Africa. The documents included advice for CIA experts about life in Germany, noting that shops are closed on Sundays, and to have "your cover-for-action story down pat" when they were asked by German authorities when entering the country.

(Reporting by John Walcott, Mark Hosenball, Dustin Volz, Yara Bayoumy in Washington and Matthias Sobolewski and Andrea Shalal in Berlin; Additional reporting by Joseph Menn in San Francisco; Writing by Grant McCool; Editing by Peter Graff and Bill Rigby)