Colonial Pipeline CEO confirms paying $4.4 million ransom to hackers, says he did it for America

Colonial Pipeline is such a critical energy infrastructure that its shutdown just couldn’t have been allowed, the company’s CEO, Joseph Blount, said as he publicly acknowledged paying $4.4 million in ransom to the hackers.

Giving in to the demands of the blackmailers was “a highly controversial decision,” Blount told the Wall Street Journal in his first interview since the devastating cyberattack on May 7, which saw Colonial Pipeline losing access to its computer systems.

He said he authorized the payment of the ransom by nightfall that same day because it was unclear how bad the breach had been and how long it would require to make the pipeline operational again.

Colonial Pipeline claims to provide around 45% of fuel for the US East Coast. The stakes of allowing the shutdown of such an important energy infrastructure were just too high, the CEO insisted.

“I didn’t make it lightly,” he said of his decision to pay. “I will admit that I wasn’t comfortable seeing money go out the door to people like this.”

“But it was the right thing to do for the country,” Blount, who leads the company since 2017, added.

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The FBI believes that Colonial Pipeline became the victim of the DarkSide cybercriminal gang, which was allegedly based in Eastern Europe. According to blockchain analytics firm Elliptic, the group had swindled 47 companies out of $90 million in bitcoin through its ransomware. DarkSide allegedly seized its operations earlier in May due to what security researchers from Intel 471 said was “pressure from the US.”

The move by Colonial Pipeline contradicted the recommendation from the FBI, which says that companies that are hit with ransomware shouldn’t pay the perpetrators to regain access to their systems as it could lead to a spike in such crimes.

However, the swift payment couldn’t prevent the shutdown of the 8,850-km-long Colonial Pipeline after all. The hack had already done its damage and the pipeline remained inoperable for another six days, provoking a gasoline crisis on the East Coast, with many gas stations running empty and fuel prices reaching their highest levels in almost seven years.

Despite the flow of fuel being restored now, it would require tens of millions of dollars to fully restore some of the company’s business systems to their full capacity, Blount said. Colonial Pipeline is still unable to bill its customers since the hack, he confessed.

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Another thing the CEO regretted about the cyberattack was that the company has made headlines, thus losing its comfortable level of anonymity.

“We were perfectly happy having no one know who Colonial Pipeline was, and, unfortunately, that’s not the case anymore. Everybody in the world knows,” he said.

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