U.S. accuses China of cyber spying on American companies | Reuters - 0 views
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The United States on Monday charged five Chinese military officers and accused them of hacking into American nuclear, metal and solar companies to steal trade secrets, ratcheting up tensions between the two world powers over cyber espionage. China immediately denied the charges, saying in a strongly worded Foreign Ministry statement the U.S. grand jury indictment was "made up" and would damage trust between the two nations.Officials in Washington have argued for years that cyber espionage is a top national security concern. The indictment was the first criminal hacking charge that the United States has filed against specific foreign officials, and follows a steady increase in public criticism and private confrontation, including at a summit last year between U.S. President Barack Obama and Chinese President Xi Jinping.
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Federal prosecutors said the suspects targeted companies including Alcoa Inc, Allegheny Technologies Inc, United States Steel Corp, Toshiba Corp unit Westinghouse Electric Co, the U.S. subsidiaries of SolarWorld AG, and a steel workers' union.
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According to the indictment, Chinese state-owned companies "hired" Unit 61398 of the People's Liberation Army "to provide information technology services" including assembling a database of corporate intelligence. The Chinese companies were not named.The Shanghai-based Unit 61398 was identified last year by cybersecurity firm Mandiant as the source of a large number of espionage operations. All five defendants worked with 61398, according to the indictment.
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U.S. officials have maintained that they do not steal secrets to give an advantage to U.S. companies, but in China, Lewis said, the line between military and business prowess is unclear.Unit 61398 has hundreds of active spies and is just one of dozens of such bodies in China, said Jen Weedon, an analyst at Mandiant, now owned by global network security company FireEye Inc. She said the group is not among the most sophisticated.
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Washington announced the charges as new claims emerged last week about the scope of overseas spying by the United States. Documents leaked by Snowden showed the agency intercepted and modified equipment made by Cisco Systems Inc that was headed overseas.Cisco responded by asking Obama to curtail U.S. surveillance programs, underscoring the vulnerability of multinationals to a whipsaw of competing government interests.
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Skeptics said U.S. authorities would not be able to arrest those indicted because Beijing would not hand them over. Still, the move would prevent the individuals from traveling to the United States or other countries that have an extradition agreement with the United States.
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In an indictment filed in the Western District of Pennsylvania, prosecutors said the officers hacked into computers starting in 2006, often by infecting machines with tainted "spear phishing" emails to employees that purport to be from colleagues.Prosecutors alleged that one hacker, for example, stole cost and pricing information in 2012 from an Oregon-based solar panel production unit of SolarWorld. The company was losing market share at the time to Chinese competitors who were systematically pricing exports below production costs, according to the indictment.Another officer is accused of stealing technical and design specifications about pipes for nuclear plants from Westinghouse Electric as the company was negotiating with a Chinese company to build four power plants in China, prosecutors said.
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Yesterday I watched the DoJ press conference announcing charges. This article does not capture its spirit. AG Ben Holder faced stiff questions directed by attending reporters. One of the first questions went something like this: "Is it true that the U.S. has extradition treaty with China and these defendants will never be actually prosecuted, and if so, what's the real reason for the charges?" Others raised the hypocrisy of the U.S. move in light of what the NSA has been doing. Holder ducked the tough questions The press conference was a farce and too many of the reporters realized it. Recall that Obama was days away from traveling to China with the announced purpose of chastising its leader for waging cyberesionage against the U.S. when the first Edward Snowden pulled the moral high ground from beneath Obama's feet. This stunt looks more like it was designed to lesson the government pain by promoting Obama's "everyone does it" meme. Also not mentioned in this article, at the press confernence the five defendants were identified as generals in the Chinese Army. Might we see China respond by charging a few former and present NSA generals with cyber-espionage? Fun and games on the Beltway.