Sony Hack: 8 Startling Revelations From Fortune's Exposé
Former co-chairman Amy Pascal's assistant made $300,000 a year, CEO Michael Lynton pursued other jobs and more notable findings from a new investigation.
The hacking of Sony Pictures Entertainment’s computers by North Korea at the end of 2014 over its movie, The Interview, that featured the graphic death of leader Kim Jong Un, continues to be one of the biggest stories of 2015. Fortune magazine features a long investigative report on the hacking in its July 1 issue (the first of three parts is online here), “Inside the Hack of the Century: What Really Happened. Why Sony Should Have Seen It Coming. And Why It Should Terrify Corporate America” by Peter Elkind. The article contains much new information. Here’s eight of the biggest revelations in the story.
1. Security experts were shocked at Sony’s lax defenses
Executives from cyber-security firm Norse Corp. were shocked that they were allowed into Sony’s information security office unaccompanied and could see logged in computers running in unoccupied terminals. Mickey Shapiro, an entertainment lawyer escorting the Norse team, said, “If we were bad guys, we could have done something horrible.”
2. Contrary to Michael Lynton’s claim that it was a "highly sophisticated attack,” the hackers were only “average”
In interviews, Sony CEO Michael Lynton called the crisis “the worst cyberattack in U.S. history” and “highly sophisticated.” But Ed Skoudis, a cyberattack expert interviewed by Fortune described the hackers as midlevel students, adding, “I didn’t see the bad guys jumping over any extreme hurdles, because there weren’t any extreme hurdles in place.”
3. Lynton interviewed for four jobs in the last 18 months, including the presidencies of Tulane and NYU
Even before the attacks, things at Sony were so bad (budget reductions and challenges from activist investor Daniel Loeb) that Lynton sought other jobs, even ones for which he was clearly unqualified. He put his name in to be the president of Tulane and New York University, even personally lobbying NYU trustees. But his lack of a Ph.D. and any experience in higher education led both schools to terminate his candidacy very early on. He also applied to run the Smithsonian Institution but again was rejected because of his lack of experience in that sphere.
4. Amy Pascal made fun of Lynton for simultaneously being cheap and a snob
Lynton, who made almost $10 million a year but drove a VW Golf, was notoriously cheap. In one email, then-Sony co-chairman Pascal (she stepped down in February) wrote, “the kind of guy who wears the same pair of shoes every day but what you wouldn’t know is that they were made by the poshest most expensive cobbler in switzerland.”
5. TV chief Steve Mosko complained that Pascal and Lynton threw him “under the bus”
Despite the fact that TV accounted for the majority of Sony Entertainment’s profits, Mosko felt neglected — and that negative publicity about him came from his bosses. He wrote Pascal, "I’ve always delivered for you guys … and getting thrown under the bus and treated like the help … it’s f—ed up.” To Lynton he added, “I feel a ton of hostility coming my way and I’m not sure why … every year we find a way to deliver … and then some.”
6. Pascal’s assistant made $300,000, not $250,000
Pascal was angry when THR reported that her assistant made “well over” $250,000 a year. She wrote to another executive, “This is truely the most ridiculous inaccurate article I have ever read.” But Fortune says the assistant actually made more, much more: $300,000 a year.
7. It was a Sony executive who suggested making Kim Jong Un the antagonist in The Interview
In screenwriter Dan Sterling’s original draft of the Interview script, the dictator was the fictional Kim Il-hwan. A studio executive (Sterling is too diplomatic or afraid to say who) suggested he change it to the real North Korean leader, Kim Jong Un.
8. Michael Lynton ordered his assistants to keep investor Dan Loeb away from him
Through his Third Point Investments, Loeb bought more than 6 percent of Sony and pressured the company to make changes. Lynton and Pascal thought Amazing Spider-Man 2 would change the studio's fortunes, projecting it would gross $865 million worldwide (it only took in $709 million). They were so high on the movie they invited Loeb to the premiere to make a good impression. But Lynton's distaste for the investor was such that he instructed his assistants to make sure Loeb sat "nowhere near Amy or me."
June 25, 2:59 p.m. The article was updated to revise point No. 8.