Hackers Linked to China’s Army Seen From EU to D.C.
By Michael Riley and Dune Lawrence, Bloomberg, Jul 26, 2012
The hackers clocked in at precisely 9:23 a.m. Brussels time on July 18 last year, and set to their task. In just 14 minutes of quick keyboard work, they scooped up the e-mails of the president of the European Union Council, Herman Van Rompuy, Europe’s point man for shepherding the delicate politics of the bailout for Greece, according to a computer record of the hackers’ activity.
Over 10 days last July, the hackers returned to the council’s computers four times, accessing the internal communications of 11 of the EU’s economic, security and foreign affairs officials. The breach, unreported until now, potentially gave the intruders an unvarnished view of the financial crisis gripping Europe.
And the spies were themselves being watched. Working together in secret, some 30 North American private security researchers were tracking one of the biggest and busiest hacking groups in China.
Observed for years by U.S. intelligence, which dubbed it Byzantine Candor, the team of hackers also is known in security circles as the Comment group for its trademark of infiltrating computers using hidden webpage computer code known as “comments.”
During almost two months of monitoring last year, the researchers say they were struck by the sheer scale of the hackers’ work as data bled from one victim after the next: from oilfield services leader Halliburton Co. (HAL) to Washington law firm Wiley Rein LLP; from a Canadian magistrate involved in a sensitive China extradition case to Kolkata-based tobacco and technology conglomerate ITC Ltd. (ITC)
The researchers identified 20 victims in all—many of them organizations with secrets that could give China an edge as it strives to become the world’s largest economy. The targets included lawyers pursuing trade claims against the country’s exporters and an energy company preparing to drill in waters China claims as its own.
“What the general public hears about—stolen credit card numbers, somebody hacked LinkedIn (LNKD)—that’s the tip of the iceberg, the unclassified stuff,” said Shawn Henry, former executive assistant director of the FBI in charge of the agency’s cyber division until leaving earlier this year. “I’ve been circling the iceberg in a submarine. This is the biggest vacuuming up of U.S. proprietary data that we’ve ever seen. It’s a machine.”
Exploiting a hole in the hackers’ security, the researchers created a digital diary, logging the intruders’ every move as they crept into networks, shut off anti-virus systems, camouflaged themselves as system administrators and covered their tracks, making them almost immune to detection by their victims.
The minute-by-minute accounts spin a never-before told story of the workaday routines and relentless onslaught of a group so successful that a cyber unit within the Air Force’s Office of Special Investigations in San Antonio is dedicated to tracking it, according to a person familiar with the unit.
Those logs—a record of the hackers’ commands to their victims’ computers—also reveal the highly organized effort behind a group that more than any other is believed to be at the spear point of the vast hacking industry in China. Byzantine Candor is linked to China’s military, the People’s Liberation Army, according to a 2008 diplomatic cable released by WikiLeaks. Two former intelligence officials verified the substance of the document.
The methods behind China-based looting of technology and data—and most of the victims—have remained for more than a decade in the murky world of hackers and spies, fully known in the U.S. only to a small community of investigators with classified clearances.
“Until we can have this conversation in a transparent way, we are going to be hard pressed to solve the problem,” said Amit Yoran, former National Cyber Security Division director at the Department of Homeland Security.
Yoran now works for RSA Security Inc., a Bedford, Massachusetts-based security company which was hacked by Chinese teams last year. “I’m just not sure America is ready for that,” he said.
What started as assaults on military and defense contractors has widened into a rash of attacks from which no corporate entity is safe, say U.S. intelligence officials, who are raising the alarm in increasingly dire terms.
In an essay in the Wall Street Journal July 19, President Barack Obama warned that “the cyber threat to our nation is one of the most serious economic and national security challenges we face.” Ten days earlier, in a speech given in Washington, National Security Agency director Keith Alexander said cyber espionage constitutes “the greatest transfer of wealth in history,” and cited a figure of $1 trillion spent globally every year by companies trying to protect themselves.
The networks of major oil companies have been harvested for seismic maps charting oil reserves; patent law firms for their clients’ trade secrets; and investment banks for market analysis that might impact the global ventures of state-owned companies, according to computer security experts who asked not to be named and declined to give more details.