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For example, the source noted, none of the sensitive files in the data dump, from employees passports to list of customers, appear to be encrypted. “How can you give all the keys to your infrastructure to a 20-something who just joined the company?” he added, referring to Pozzi, whose LinkedIn shows he’s been at Hacking Team for just over a year. “Nobody noticed that someone stole a terabyte of data? You gotta be a fuckwad,” the source said. “It means nobody was taking care of security.”

The future of the company, at this point, it’s uncertain. Employees fear this might be the beginning of the end, according to sources. One current employee, for example, started working on his resume, a source told Motherboard. It’s also unclear how customers will react to this, but a source said that it’s likely that customers from countries such as the US will pull the plug on their contracts. Hacking Team asked its customers to shut down operations, but according to one of the leaked files, as part of Hacking Team’s “crisis procedure,” it could have killed their operations remotely. The company, in fact, has “a backdoor” into every customer’s software, giving it ability to suspend it or shut it down—something that even customers aren’t told about. To make matters worse, every copy of Hacking Team’s Galileo software is watermarked, according to the source, which means Hacking Team, and now everyone with access to this data dump, can find out who operates it and who they’re targeting with it.

“The specific uses that they talk about in this [counter-terrorism] context may not be the problem, but it’s what else they can do,” said Tamir Israel, a lawyer with the University of Ottawa’s Canadian Internet Policy and Public Interest Clinic. Picking which downloads to monitor is essentially “completely at the discretion of CSE,” Israel added. The file-sharing surveillance also raises questions about the number of Canadians whose downloading habits could have been swept up as part of LEVITATION’s dragnet. By law, CSE isn’t allowed to target Canadians. In the LEVITATION presentation, however, two Canadian IP addresses that trace back to a web server in Montreal appear on a list of suspicious downloads found across the world. The same list includes downloads that CSE monitored in closely allied countries, including the United Kingdom, United States, Spain, Brazil, Germany and Portugal. It is unclear from the document whether LEVITATION has ever prevented any terrorist attacks. The agency cites only two successes of the program in the 2012 presentation: the discovery of a hostage video through a previously unknown target, and an uploaded document that contained the hostage strategy of a terrorist organization. The hostage in the discovered video was ultimately killed, according to public reports.

LEVITATION does not rely on cooperation from any of the file-sharing companies. A separate secret CSE operation codenamed ATOMIC BANJO obtains the data directly from internet cables that it has tapped into, and the agency then sifts out the unique IP address of each computer that downloaded files from the targeted websites. The IP addresses are valuable pieces of information to CSE’s analysts, helping to identify people whose downloads have been flagged as suspicious. The analysts use the IP addresses as a kind of search term, entering them into other surveillance databases that they have access to, such as the vast repositories of intercepted Internet data shared with the Canadian agency by the NSA and its British counterpart Government Communications Headquarters. If successful, the searches will return a list of results showing other websites visited by the people downloading the files – in some cases revealing associations with Facebook or Google accounts. In turn, these accounts may reveal the names and the locations of individual downloaders, opening the door for further surveillance of their activities.

Canada’s leading surveillance agency is monitoring millions of Internet users’ file downloads in a dragnet search to identify extremists, according to top-secret documents. The covert operation, revealed Wednesday by CBC News in collaboration with The Intercept, taps into Internet cables and analyzes records of up to 15 million downloads daily from popular websites commonly used to share videos, photographs, music, and other files. The revelations about the spying initiative, codenamed LEVITATION, are the first from the trove of files provided by National Security Agency whistleblower Edward Snowden to show that the Canadian government has launched its own globe-spanning Internet mass surveillance system. According to the documents, the LEVITATION program can monitor downloads in several countries across Europe, the Middle East, North Africa, and North America. It is led by the Communications Security Establishment, or CSE, Canada’s equivalent of the NSA. (The Canadian agency was formerly known as “CSEC” until a recent name change.)

The bill also allows the head of a federal agency or department “to disclose to the Secretary or a private entity providing assistance to the Secretary…information traveling to or from or stored on an agency information system, notwithstanding any other law that would otherwise restrict or prevent agency heads from disclosing such information to the Secretary.” (Emphasis added.) So confidential, proprietary or other information otherwise precluded from disclosure under laws like HIPAA or the Privacy Act get waived if the Secretary of DHS or an agency head feel that your email needs to be shared with a government contracted outfit like the Hacking Team for analysis. And the bill explicitly provides for just this kind of cyber threat analysis outsourcing:

(3) PRIVATE ENTITIES. — The Secretary may enter into contracts or other agreements, or otherwise request and obtain the assistance of, private entities that provide electronic communication or information security services to acquire, intercept, retain, use, and disclose communications and other system traffic in accordance with this subsection. The bill further states that the content of your communications, will be retained only if the communication is associated with a known or reasonably suspected information security threat, and communications and system traffic will not be subject to the operation of a countermeasure unless associated with the threats. (Emphasis added.) “Reasonably suspected” is about as squishy a definition as one can find.