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October 4, 2018
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One miniscule microchip, found on Chinese-built motherboards, may have infiltrated the world's biggest companies and the depths of the U.S. government. But the extent of its devastation — and its future potential — is still unknown, a massive investigation by Bloomberg Businessweek reveals.

Back when it was still developing Prime Video, Amazon aimed to and later did acquire Elemental Technologies, a startup whose video-streaming software had already landed it a CIA contract. Elemental's video-compressing servers were assembled by Californian company Supermicro, which in turn built its motherboards in China. And during the pre-acquisition process, those motherboards — essentially the brains of servers — were reportedly revealed to contain a rice-grain-sized chip that wasn't part of their original blueprint, "sending a shudder through the intelligence community," Businessweek says.

Elemental's servers were in U.S. Navy ships and Defense Department data centers, Businessweek interviews with U.S. officials reveal. Supermicro also reportedly had hundreds of customers beyond Elemental, including Apple, a top bank, and government contractors. And since this was a physical infestation, the consequences could be far more severe than a wireless hacking. The 2015 incident reportedly sparked an ongoing, top-secret federal investigation, which so far has revealed "the chips allowed the attackers to create a stealth doorway into any network that included the altered machines," Businessweek reports. The probe also concluded that Chinese subcontractors implanted the chips, officials tell Businessweek.

Apple, Amazon, and Supermicro denied knowing about an investigation into the malicious chips, with Amazon also saying "it's untrue that [Amazon Web Services] knew about a supply chain compromise, an issue with malicious chips, or hardware modifications when acquiring Elemental." The Chinese government claimed to be "a resolute defender of cybersecurity" in statements to Bloomberg. Yet former and current national security officials say the companies knew they were victims of a hack and that Amazon cooperated with the government's probe.

Read the whole report at Bloomberg Businessweek. Kathryn Krawczyk

2:24 p.m. ET
TOSHIFUMI KITAMURA/AFP/Getty Images

President Trump loves the troops, but do they love him back?

In a new Military Times poll, 44 percent of active-duty personnel said they approve of Trump, compared to 43 percent who disapprove. It's not the warmest reception, but at least it's higher than his approval with the general public. Still, his numbers within the military have sunk — in fall 2016, 46 percent of active-duty troops told the Military Times they approved of Trump, while just 37 percent said they disapproved. Analysis suggests the biggest change since 2016 is that many troops have made up their minds, instead of saying they have "no opinion" on Trump.

Though 43 percent disapprove of Trump, that's much better than his national disapproval rating among civilians. A recent Gallup survey found that 51 percent of Americans disapprove of the president. Among military women, Trump's disapproval rating in this poll, 68 percent, is higher than it was among women in general in a recent CNN poll, 62 percent.

Interestingly, though, about 60 percent of troops in this same survey said they approve of Trump's handling of the military and, in fact, believe it is in better shape now than it was under former President Barack Obama. Troops also overwhelmingly love Secretary of Defense James Mattis, with 84 percent approving of the retired four-star Marine Corps general who Trump recently called "sort of a Democrat."

The Military Times surveyed 829 active-duty troops online between Sept. 20 and Oct. 2. The margin of error is 2 percentage points. Brendan Morrow

12:57 p.m. ET

President Trump's latest shockingly sexist insult is already drawing a strong rebuke from at least one congressional Republican.

Trump on Tuesday referred to Stormy Daniels, the adult film star who claims she had an affair with Trump in 2006, as "Horseface." Rep. Ryan Costello (R-Pa.) denounced the remark as "embarrassing," and called it "unbecoming of any man, let alone the POTUS." He also said it's "obvious" that this sort of language "enables teenage boys to feel they have a license to refer to girls [with] such names."

Costello can't be particularly happy to be tweeting about this. He announced earlier this year that he would be retiring from Congress, saying that all he does is "answer questions about Donald Trump," reports The Hill. In fact, he cited the Stormy Daniels scandal specifically as one of the reasons he's fed up with modern politics. He explained that the constant "talking about porn stars and the president" means "it's the right time for me to perhaps consider another line of work." Brendan Morrow

12:30 p.m. ET

Stormy Daniels is not taking President Trump's latest demeaning insult in stride.

After Trump called Daniels, the adult film star who claims she had an affair with Trump in 2006, "Horseface" in a Tuesday tweet, she responded by saying the president has "demonstrated his incompetence, hatred of women and lack of self control on Twitter AGAIN!" Trump's insult was in response to news that Daniels' defamation lawsuit against him was dismissed by a federal judge, which he took to mean he can now "go after her."

Daniels also mocked Trump by referencing his "umm...shortcomings," and joked that he "perhaps" has a "penchant for bestiality." Trump has privately attacked Daniels' appearance and in recent weeks has been wanting to fire back at her for "mocking his manhood" in her book, The New York Times' Maggie Haberman reports. Now, Trump has done just that, and it sounds like Daniels welcomes this escalating war of words. "Game on, Tiny," she wrote. Brendan Morrow

12:18 p.m. ET

President Trump on Tuesday celebrated a federal judge's decision to dismiss Stormy Daniels' defamation lawsuit against him, and launched an insult her way in the process.

Daniels, who says she had an affair with Trump in 2006, was ordered to pay his legal fees after a judge said on Monday that Trump calling Daniels' allegations "a total con job" did not constitute defamation.

This was the first time Trump called Daniels out by her (misspelled) name, aside from one formal string of tweets using the porn star's real name in May. With the newest tweet, Daniels joined the long list of women whose appearances Trump has publicly disparaged. Trump has apparently called Daniels "Horseface" in the past, but "privately," The New York Times' Maggie Haberman reported.

Daniels and her lawyer Michael Avenatti have vocally criticized the president ever since Daniels confirmed the leaked story of her alleged affair with Trump. The duo launched scathing tweets in response to Trump's insult, calling him a "misogynist" and joking about his apparent "penchant for bestiality." Kathryn Krawczyk

10:53 a.m. ET

President Trump has insisted on rebranding Sen. Elizabeth Warren (D-Mass.) as "Pocahontas" — despite Warren's attempt to rebut his criticism, Trump is not letting it go.

Trump on Tuesday called Warren a "complete and total fraud" whose claims of Native American ancestry were "a scam and a lie." He derided Warren's Monday video revealing the results of a DNA test that indicated "strong evidence" of her Native American ancestry. The test, according to Trump, was "bogus."

Warren released the video in response to Trump's July promise that he would give $1 million to her "favorite charity" if a DNA test proved she had Cherokee ancestry. Trump on Monday declared he never made the promise, then later said he'd have to "test [Warren] personally" if she really wanted the money.

In his string of tweets, Trump thanked Cherokee Nation for "revealing" Warren's results as a "scam and a lie." The tribe called Warren's DNA test "useless to determine tribal citizenship" in a Monday statement.

Lastly, Trump claimed that Harvard University, where the senator previously taught, only hired Warren because they "called her 'a person of color.'" Warren's "claim to Native American ethnicity was never considered by the Harvard Law faculty" when deciding to hire her, a Boston Globe investigation found. Kathryn Krawczyk

10:41 a.m. ET

President Trump would like you to forget that he boasted of his business deals in Saudi Arabia many times throughout his presidential campaign.

The president on Tuesday tweeted that he has "no financial interests in Saudi Arabia," and any suggestion otherwise is just "FAKE NEWS." Trump distanced himself from foreign interests after critics suggested his business with Saudi Arabia may influence his response to the disappearance of journalist Jamal Khashoggi, who Turkish officials believe was murdered when he went to visit the Saudi consulate.

But Trump has long touted his past dealings with Saudi Arabia. "I love the Saudis," he said at his very first campaign event at Trump Tower. "Many are in this building." Trump sold a full floor of Trump World Tower to the Kingdom of Saudi Arabia for $12 million in 2001, reports CBS News. More recently, CNN reports, a lobbying firm for Saudi Arabia paid the Trump International Hotel about $270,000 between 2016 and 2017. And per The Washington Post, Trump's hotels have seen a substantial uptick in Saudi visitors this year.

In 2015, Trump said that he "makes a lot of money with" the Saudis and that "they pay me millions and hundreds of millions." And at a rally, he suggested he likes Saudi Arabia specifically because of his business dealings there. "They buy apartments from me," he said. "They spend $40 million, $50 million. Am I supposed to dislike them? I like them very much." Brendan Morrow

10:33 a.m. ET
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The police cannot simply kill your dog because you have failed to license it with the city, the Sixth Circuit Court of Appeals ruled Monday, reversing a lower court decision.

The case in question involved a police raid on the Detroit home of Nikita Smith in response to a report that marijuana was sold there. While executing the search warrant, officers fatally shot Smith's three dogs, one of which was pregnant. An officer allegedly commented after shooting a dog, "Did you see that? I got that one good." The raid turned up 25.8 grams of marijuana, and Smith was given a misdemeanor charge that was later dismissed.

She sued over the death of her dogs, and a district court ruled the suit could not go forward because Smith did not have "legitimate possessory interest" in the dogs "because they were unlicensed." The appeals court disagreed, holding that just "as the police cannot destroy every unlicensed car or gun on the spot, they cannot kill every unlicensed dog on the spot." Smith's suit can now proceed.

"The opinion establishes that pet owners' Fourth Amendment rights do not depend on a license," said Smith's lawyer, Chris Olson. "More importantly, the opinion foreclosed a post hoc 'get out of jail free card' for police officers that unreasonably shoot dogs every day in this country." Bonnie Kristian

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