Israeli intelligence officials spying on Russian government hackers found they were using Kaspersky Lab antivirus software that is also used by 400 million people globally, including USA government agencies, according to media reports on Tuesday.
Kaspersky Lab denied to the Times any knowledge of, or involvement in, the Russian hacking.
Now, a new damning report says that the functionality discovered in the software could not have been put there without the company's knowledge.
In a binding directive, acting homeland security secretary Elaine Duke ordered that federal civilian agencies identify Kaspersky Lab software on their networks.
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Since then, U.S. intelligence agencies have been able to confirm that the antivirus software can be used to search computers for classified materials.
"The BSI has no evidence for misconduct by the company or weaknesses in its software", the German intelligence agency said in an emailed statement to Reuters. They added there was no evidence of weakness in the software.
Current and former United States officials with knowledge of the matter told The Wall Street Journal that the Kaspersky antivirus was used to perform secret searches for specific terms including "top secret", in addition to its usual antivirus scanning operations.
Kaspersky first noticed intrusion by Israel referenced in The New York Times story back in 2015, when it reported that "a sophisticated cyberespionage actor" had infiltrated its systems using code that resembled a previous attack.
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Germany's BSI, which also uses Kaspersky products for technical analyses, said it was in touch with USA officials and other security agencies about the issue so it could take action and issue a warning on short notice if required. Eugene Kaspersky, the company's co-founder and chief executive, continues to deny accusations that the company practices espionage on behalf of the Russian government.
"Kaspersky Lab has never helped, nor will help, any government in the world with its cyber-espionage efforts", the company said in a statement quoted by the Times.
USA intelligence agencies have determined that Russian President Vladimir Putin organized a vast digital influence operation to assist Donald Trump win the presidency, a charge Moscow still denies.
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