Competence is difficult to check systematically. The problem is in the auditing process. The CA auditors check a much shorter list than an application that needs FIPS compliance. They just check that the CA is using a FIPS compliant key generator, and then basic things like following a logged, standard, multi person process.
Anybody writing a system for a bank or the govt needs to have every line of code checked that it’s not doing something stupid with its crypto keys. That level of assurance would have caught this. But the process was defined too weakly.
The key generator is a FIPS certified HSM that created a strong key. They ran the key through some stupid script that zeroed out all the bytes except the last one. The point of a full FIPS audit is to check that you don’t do anything stupid with crypto like try to implement anything yourself and that you only use certified implementations. But that standard apparently doesn’t apply to CA’s. They only have to use FIPS modules to generate the keys but can do whatever idiocy they want after that. Therein lies the real problem.
