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The key logger in question was evidently a virus targeting online poker play. It was looking for usernames and passwords. Unfortunately, some user must have plugged that portable drive into a computer it wasn't supposed to get plugged into.

DOD has been hit numerous times during this war due to the activities of its users. This is a an example of a user using a storage device for classified and unclassified data, a huge no no.

One solution would be mobile storage that will only work between client computers and won't connect on those without client software. Another would be a drive that logs the MAC addresses it is plugged into, but that would require auditing.