U.S. Treasury breached by hackers backed by foreign government

Hackers backed by a foreign government have been monitoring internal email traffic at the U.S. Treasury Department and an agency that decides internet and telecommunications policy, according to people familiar with the matter.

"The United States government is aware of these reports and we are taking all necessary steps to identify and remedy any possible issues related to this situation," said National Security Council spokesman John Ullyot.

There is concern within the U.S. intelligence community that the hackers who targeted the Treasury Department and the Commerce Department's National Telecommunications and Information Administration used a similar tool to break into other government agencies, according to three people briefed on the matter. The people did not say which other agencies. 

The hack is so serious it led to a National Security Council meeting at the White House on Saturday, said one of the people familiar with the matter.

The hack involves the NTIA's office software, Microsoft's Office 365. Staff emails at the agency were monitored by the hackers for months, sources said. 

A Microsoft spokesperson did not immediately respond to a request for comment. 

The hackers are "highly sophisticated" and have been able to trick the Microsoft platform's authentication controls, according to a person familiar with the incident, who spoke on condition of anonymity because they were not allowed to speak to the press. 

"This is a nation state," said a different person briefed on the matter. "We just don't know which one yet." 

The full scope of the hack is unclear. The investigation is still its early stages and involves a range of federal agencies, including the FBI, according to the three people familiar with the matter. 

The FBI, Homeland Security Department's cybersecurity division, known as CISA, and U.S. National Security Agency did not immediately respond to a request for comment. 

(Reporting by Christopher Bing; Editing by Daniel Wallis)