Home > All, Politics, Security Issues > FBI indicts five members of the Chinese military for hacking US companies

FBI indicts five members of the Chinese military for hacking US companies

Eric Holder yesterday announced: “Today, we are announcing an indictment against five officers of the Chinese People’s Liberation Army for serious cybersecurity breaches against six American victim entities.”

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The five Chinese military men wanted by the FBI

The five Chinese military men wanted by the FBI

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The five officers are known by the aliases UglyGorilla, Jack Sun, Lao Wen, hzy_1hx and KandyGoo. They are members of the PLA’s military unit 61398 (you may recall that this is the unit accused by Mandiant last year as being the source of the APT1 hacking group). They stand accused of using spearphishing to penetrate six US companies (Westinghouse Electric, Alcoa, Allegheny Technologies Incorporated, U.S. Steel, the United Steelworkers Union and SolarWorld) to conduct economic espionage.

“This is a tactic that the U.S. government categorically denounces,” said Holder. “As President Obama has said on numerous occasions, we do not collect intelligence to provide a competitive advantage to U.S. companies, or U.S. commercial sectors.” This is from the man who lied to Congress.

It is also inaccurate. The Snowden files have shown that the NSA has bugged trade negotiations; and trade negotiations are quite plainly ‘economic’ – with US industry likely to benefit. And of course the NSA’s hacking of Chinese servers, and excluding Huawei over fears that it might be backdoored while it proceeded to backdoor Cisco equipment has sort of ceded the moral high ground.

I asked FireEye, which now owns Mandiant, if it had supplied any of the information used by the FBI in its indictment. A spokesperson told me, “The US government just used information from the APT1 report which was published. We did not actively provide information. We believe this was a natural escalation after the revelation – the PLA group went quiet but now are very active again so was only a matter of time.”

But there may be another reason for the delay between Mandiant’s initial report and this indictment… Generally speaking, law enforcement needs a victim complaint over intelligence of a crime before it can take action against the suspected criminal; so it has had to wait for the hacked companies to investigate and complain before it could commence the indictment proceedings.

Luis Corrons, PandaLabs

Luis Corrons

Luis Corrons, technical director at PandaLabs, finds this a frequent problem. “This year I have handed LEA information about 3 different criminal cases; and all 3 of them have real evidence of who is behind them. But if there is no official complaint from the victims, nothing happens. One of the cases is multinational – the local LE tried to convince a Spanish company who was victim to present a complaint, but it didn’t want to. Now the LEA is trying in different countries trying to convince victims to present a complaint.

“But this is not the only problem,” he continued.” Some investigations are really complex, and while for me it can be ‘easy’ to gather evidences, for an LEA to do it in the proper and legal way can take months or even years.”

If that’s the case here, this indictment is actually quite speedy.

But is it wise?

Much of the security industry is in favour of the US action. “This really could be a landmark moment that has the potential to change the way in which we respond to the growing threat presented by digital criminality,” said Martin Sutherland, managing director of BAE Systems Applied Intelligence, in an emailed statement. “This current case is encouraging and sets an interesting precedent for other countries combating digital crime.”

“The US government is toughening up its language against nation-state and industrial cyber-espionage,” said Bob West, chief trust officer at CipherCloud in another email. “We’re calling out the Chinese government for its role fostering theft of American intellectual property and doing it by naming specific hackers with military ties.”

“While I doubt that foreign military commanders who are prosecuted by the Department of Justice will be successfully apprehended and brought to justice,” said Tom Cross, director of security research at Lancope, “these prosecutions do send a clear message regarding what sort of behavior the United States views as unacceptable.”

In each case I asked a few questions. Most pertinent was this:

Is it not pure hypocrisy? We know from the Snowden files that the NSA has hacked Chinese servers. Holder says ‘we do not do it for economic advantage’. Leaving aside any cynicism over such a statement, isn’t it irrelevant? Holder is saying that the accused have broken US laws; but the US breaks Chinese laws. So what is the legal difference?

I have not had a reply. In fairness, it probably has as much to do with trans-Atlantic time zones as a disinclination to respond; and I will update this post with any replies that I get.

However, it is the problem I have with the US action. It is a nation that claims to uphold the rule of law – but only the rule of US law. This action says to the world, you must all abide by our laws, but our laws are the only ones that we need abide by.

Categories: All, Politics, Security Issues
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