**************************************************** US cites growing China space and cyber threat ****************************************************
China's significant military buildup includes strategic weapons designed to counter US military advantages, including electric pulse weapons, a senior Pentagon official told Congress Wednesday
James J. Shinn, assistant secretary of defense for Asian and Pacific security affairs also said during House testimony that China's arms buildup is increasing the danger of a future conflict over Taiwan
Mr. Shinn warned that one troubling aspect of the large-scale buildup is what he termed a "deliberate and well-thought-through Chinese strategy to invest in asymmetric warfare - cyber-warfare, counterspace capability, a very sophisticated ballistic and cruise missile program and, of course, undersea warfare"
He disclosed that China's military is working on exotic electromagnetic pulse (EMP) weapons that can devastate electronic systems using a burst of energy similar to that produced by a nuclear blast
Chinese EMP weaponry "is one of several examples of asymmetric warfare that we need to deal with," Mr. Shinn told the House Armed Services Committee
***************************************************** China denies hacking congressional computers *****************************************************
Lacks the necessary technology, claims China's Foreign Ministry
China on Thursday denied charges by two UScongressmen that it had hacked their offices' computers, claiming that it doesn't have technology capable of launching such attacks
"Is there any evidence? Do we have such advanced technology? Even I don't believe it," Foreign Ministry spokesman Qin Gang said in today's regularly scheduled news conference, according to the Associated Press Translations of the Foreign Ministry's Chinese-language transcript confirmed the AP account
US authorities are investigating whether Chinese officials secretly copied the contents of a government laptop during a visit to China by Commerce Secretary Carlos M Gutierrez - Associated Press May 29, 2008
CNN investigates Chinese hackers who hacked into Pentagon - March 8, 2008
Chinese Military Hacks Pentagon's computer system - Fox Sept 2007
CNN - HACKING THE PENTAGON: IS CHINA BEHIND THIS CYBERATTACK? Sep 2007
Chinese hackers pose a clear and present danger to USgovernment and private-sector computer networks and may be responsible for two major US power blackouts
National Journal Magazine by Shane Harris Sat May 31, 2008
Computer hackers in China, including those working on behalf of the Chinese government and military, have penetrated deeply into the information systems of UScompanies and government agencies, stolen proprietary information from American executives in advance of their business meetings in China, and, in a few cases, gained access to electric power plants in the United States, possibly triggering two recent and widespread blackouts in Florida and the Northeast, according to US government officials and computer-security experts
One prominent expert told National Journal he believes that China’s People’s Liberation Army played a role in the power outages. Tim Bennett, the former president of the Cyber Security Industry Alliance, a leading trade group, said that USintelligence officials have told him that the PLA in 2003 gained access to a network that controlled electric power systems serving the northeastern United States. The intelligence officials said that forensic analysis had confirmed the source, Bennett said “They said that, with confidence, it had been traced back to the PLA” These officials believe that the intrusion may have precipitated the largest blackout in North American history, which occurred in August of that year A 9,300-square-mile area, touching Michigan, Ohio, New York, and parts of Canada, lost power; an estimated 50 million people were affected
Officially, the blackout was attributed to a variety of factors, none of which involved foreign intervention. Investigators blamed “overgrown trees” that came into contact with strained high-voltage lines near facilities in Ohio owned by FirstEnergy Corp. More than 100 power plants were shut down during the cascading failure A computer virus, then in wide circulation, disrupted the communications lines that utility companies use to manage the power grid, and this exacerbated the problem The blackout prompted President Bush to address the nation the day it happened Power was mostly restored within 24 hours
There has never been an official USgovernment assertion of Chinese involvement in the outage, but intelligence and other government officials contacted for this story did not explicitly rule out a Chinese role One security analyst in the private sector with close ties to the intelligence community said that some senior intelligence officials believe that China played a role in the 2003 blackout that is still not fully understood
Bennett, whose former trade association includes some of the nation’s largest computer-security companies and who has testified before Congress on the vulnerability of information networks, also said that a blackout in February, which affected 3 million customers in South Florida, was precipitated by a cyber-hacker That outage cut off electricity along Florida’s east coast, from Daytona Beach to Monroe County, and affected eight power-generating stations Bennett said that the chief executive officer of a security firm that belonged to Bennett’s trade group told him that federal officials had hired the CEO’s company to investigate the blackout for evidence of a network intrusion, and to “reverse engineer” the incident to see if China had played a role
Bennett, who now works as a private consultant, said he decided to speak publicly about these incidents to point out that security for the nation’s critical electronic infrastructures remains intolerably weak and to emphasize that government and company officials haven’t sufficiently acknowledged these vulnerabilities
The Florida Blackout
A second information-security expert independently corroborated Bennett’s account of the Florida blackout. According to this individual, who cited sources with direct knowledge of the investigation, a Chinese PLA hacker attempting to map Florida Power & Light’s computer infrastructure apparently made a mistake “The hacker was probably supposed to be mapping the system for his bosses and just got carried away and had a ‘what happens if I pull on this’ moment” The hacker triggered a cascade effect, shutting down large portions of the Florida power grid, the security expert said “I suspect, as the system went down, the PLA hacker said something like, ‘Oops, my bad,’ in Chinese”
The power company has blamed “human error” for the incident, specifically an engineer who improperly disabled safety backups while working on a faulty switch. But federal officials are still investigating the matter and have not issued a final report, a spokeswoman for the Federal Energy Regulatory Commission said. The industry source, who conducts security research for government and corporate clients, said that hackers in China have devoted considerable time and resources to mapping the technology infrastructure of other UScompanies That assertion has been backed up by the current vice chairman of the Joint Chiefs of Staff, who said last year that Chinese sources are probing US government and commercial networks
Asked whether Washington knew of hacker involvement in the two blackouts, Joel Brenner, the government’s senior counterintelligence official, told National Journal, “I can’t comment on that” But he added, “It’s certainly possible that sort of thing could happen The kinds of network exploitation one does to explore a network and map it and learn one’s way around it has to be done whether you are going to … steal information, bring [the network] down, or corrupt it… The possible consequences of this behavior are profound”
Brenner, who works for Director of National Intelligence Mike McConnell, looks for vulnerabilities in the government’s information networks. He pointed to China as a source of attacks against USinterests. “Some [attacks], we have high confidence, are coming from government-sponsored sites,” Brenner said “The Chinese operate both through government agencies, as we do, but they also operate through sponsoring other organizations that are engaging in this kind of international hacking, whether or not under specific direction It’s a kind of cyber-militia… It’s coming in volumes that are just staggering”
The Central Intelligence Agency’s chief cyber-security officer, Tom Donahue, said that hackers had breached the computer systems of utility companies outside the United States and that they had even demanded ransom Donahue spoke at a January gathering in New Orleans of security executives from government agencies and some of the nation’s largest utility and energy companies He said he suspected that some of the hackers had inside knowledge of the utility systems and that in at least one case, an intrusion caused a power outage that affected multiple cities The CIA didn’t know who launched the attacks or why, Donahue said, “but all involved intrusions through the Internet”
Donahue’s public remarks, which were unprecedented at the time, prompted questions about whether power plants in the United States had been hacked Many computer-security experts, including Bennett, believe that his admission about foreign incidents was intended to warn American companies that if intrusions hadn’t already happened stateside, they certainly could A CIA spokesman at the time said that Donahue’s comments were “designed to highlight to the audience the challenges posed by potential cyber intrusions” The CIA declined National Journal’s request to interview Donahue
Cyber-Espionage
In addition to disruptive attacks on networks, officials are worried about the Chinese using long-established computer-hacking techniques to steal sensitive information from government agencies and US corporations
Brenner, the UScounterintelligence chief, said he knows of “a large American company” whose strategic information was obtained by its Chinese counterparts in advance of a business negotiation As Brenner recounted the story, “The delegation gets to China and realizes, ‘These guys on the other side of the table know every bottom line on every significant negotiating point’ They had to have got this by hacking into [the company’s] systems”
Bennett told a similar story about a large, well-known American company (Both he and Brenner declined to provide the names of the companies) According to Bennett, the Chinese based their starting points for negotiation on the Americans’ end points
Two sources also alleged that the hacking extends to high-level administration officials
During a trip to Beijing in December 2007, spyware programs designed to clandestinely remove information from personal computers and other electronic equipment were discovered on devices used by Commerce Secretary Carlos Gutierrez and possibly other members of a UStrade delegation, according to a computer-security expert with firsthand knowledge of the spyware used. Gutierrez was in China with the Joint Commission on Commerce and Trade, a high-level delegation that includes the UStrade representative and that meets with Chinese officials to discuss such matters as intellectual-property rights, market access, and consumer product safety. According to the computer-security expert, the spyware programs were designed to open communications channels to an outside system, and to download the contents of the infected devices at regular intervals The source said that the computer codes were identical to those found in the laptop computers and other devices of several senior executives of UScorporations who also had their electronics “slurped” while on business in China The source said he believes, based on conversations with USofficials, that the Gutierrez compromise was a source of considerable concern in the Bush administration Another source with knowledge of the incident corroborated the computer-security expert’s account
National Journal had a series of conversations with Rich Mills, a Commerce Department spokesman Asked whether spyware or other malicious software code was found on any electronic devices used by Gutierrez or people traveling with him in China in December 2007, Mills said he “could not confirm or deny” the computer-security expert’s allegations “I cannot comment on specific [information-technology] issues, but the Department of Commerce is actively working to safeguard sensitive information” Mills added that the source had provided some inaccurate information, but he did not address the veracity of the source’s claim that the delegation was electronically compromised
“China is indeed a counterintelligence threat, and specifically a cyber-counterintelligence threat,” said Brenner, who served for four years as inspector general of the National Security Agency, the intelligence organization that electronically steals other countries’ secrets Brenner said that the American company’s experience “is an example of how hard the Chinese will work at this, and how much more seriously the American corporate sector has to take the information-security issue” He called economic espionage a national security risk and said that it makes little difference to a foreign power whether it steals sensitive information from a government-operated computer or from one owned by a contractor “If you travel abroad and are the director of research or the chief executive of a large company, you’re a target,” he said
“Cyber-networks are the new frontier of counterintelligence,” Brenner emphasized “If you can steal information or disrupt an organization by attacking its networks remotely, why go to the trouble of running a spy?”
Stephen Spoonamore, CEO of Cybrinth, a cyber-security firm that works for government and corporate clients, said that Chinese hackers attempt to map the IT networks of his clients on a daily basis He said that executives from three Fortune 500 companies, all clients, had document-stealing code planted in their computers while traveling in China, the same fate that befell Gutierrez
Spoonamore challenged USofficials to be more forthcoming about the breaches that have occurred on their systems. “By not talking openly about this, they are making a truly dangerous national security problem worse,” Spoonamore said. “Secrecy in this matter benefits no one. Our nation’s intellectual capital, industrial secrets, and economic security are under daily and withering attack The oceans that surround us are no protection from sophisticated hackers, working at the speed of light on behalf of nation-states and mafias We must cease denying the scope, scale, and risks of the issue I, and a growing number of my peers believe our nation is in grave and growing danger” (continued below)
2003 New York - Canada North East blackout
A Growing Threat
Brenner said that Chinese hackers are “very good and getting better all the time… What makes the Chinese stand out is the pervasive and relentless nature of the attacks that are coming from China”
The issue has caught Congress’s attention. Rep. Jim Langevin, D-R.I., who chairs the Homeland Security panel’s Subcommittee on Emerging Threats, Cybersecurity, and Science and Technology, said that his staff has examined a range of hacker networks, from criminal syndicates to nationally supported groups. “China has been a primary concern,” he said The deepest penetrations into US systems have been traced back to sources within China, Langevin noted
(At a hearing last week, Langevin said that the private sector, which owns the vast majority of USinformation networks, including those that operate power plants, dams, and other critical infrastructure, had taken a “halfhearted approach” to improving security He cited a new report by the Government Accountability Office, which found that the Tennessee Valley Authority, the nation’s largest power generator, “has not fully implemented appropriate security practices to secure the control systems and networks used to operate its critical infrastructures” Langevin said that the TVA “risks a disruption of its operations as the result of a cyber-incident, which could impact its customers,” and he expressed “little confidence that industry is taking the appropriate actions”)
The Chinese make little distinction between hackers who work for the government and those who undertake cyber-adventures on its behalf. “There’s a huge pool of Chinese individuals, students, academics, unemployed, whatever it may be, who are, at minimum, not discouraged from trying this out,” said Rodger Baker, a senior China analyst for Stratfor, a private intelligence firm So-called patriotic-hacker groups have launched attacks from inside China, usually aimed at people they think have offended the country or pose a threat to its strategic interests At a minimum the Chinese government has done little to shut down these groups, which are typically composed of technologically skilled and highly nationalistic young men Officially, Chinese military and diplomatic officials say they have no policy of attacking other governments’ systems.
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