China’s military accused of hacking scheme; cyberattacks tracked to Shanghai intel unit

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A private security company on Tuesday accused China's military of launching cyberattacks on 115 U.S. companies, including defense contractors, highlighting the need for a more robust response to China’s suspected role and security procedures.

Mandiant Corp. of Alexandria traced the attacks to a secret unit of the People’s Liberation Army (PLA) General Staff’s 3rd Department — which is known as Beijing’s equivalent of the National Security Agency in the U.S. Tuesday’s release of the report prompted calls for criminal cases against Chinese officials and an official U.S. government response.


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“Prosecutions are critical because what we’re doing now [to stop Chinese state-sponsored hacking] isn’t working,” said Stewart Baker, who held senior positions at the National Security Agency and the Department of Homeland Security. “We’re trying to defend our way out of this problem when the reality is that only by deterring, by imposing a cost on, the attackers, will we be able to begin making ourselves secure.”

The Chinese Defense Ministry repeated Beijing’s standard denials of any involvement in hacking, saying Chinese law forbids any activities harming Internet security.

“Statements to the effect that the Chinese military takes part in Internet attacks are unprofessional and are not in accordance with the facts,” it said.

But analysts around the world consider China a major player in economic cyberspying, and the White House is reportedly ready to fight back.

Officials familiar with the Obama administration’s plans told The Associated Press that a White House report to be released Wednesday would recommend steps that the U.S. could take against China or other countries, including fines and trade sanctions.

White House spokeswoman Caitlin Hayden said the Obama administration has “substantial and growing concerns about the threats to U.S. economic and national security posed by cyberintrusions, including the theft of commercial information.”

She noted that President Obama raised the issue in his State of the Union address and signed an executive order requiring government agencies to share more information about cyberthreats with the private sector.

The 76-page report by the Mandiant Corp. outlines exactly the kinds of crimes that a new Justice Department task force should prosecute, some former officials and legal analysts say.

Daniel McWhorter, Mandiant’s director of threat intelligence, said his firm traced the source of the cyberattacks to the Chinese army.

“We followed the bread crumbs,” Mr. McWhorter said, adding that his firm’s security specialists got permission from the victimized companies to monitor their networks. Almost all of the Internet addresses from which the hackers logged on came from a small area in the Shanghai suburbs that houses the PLA’s 3rd Department, he said.

The Mandiant report was sufficiently thorough as to draw humanizing portraits of some of the biggest hackers — who have such names as Ugly Gorilla and SuperHard. One hacker, named Dota, revealed himself to be a big fan of the Harry Potter novels, because his security questions were references to the J.K. Rowling children’s books and/or the movies made from them.

The tightness with which China controls Internet access makes it inconceivable that such a large operation could be going on in Shanghai without official connivance, national security scholars say.

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About the Author
Shaun Waterman

Shaun Waterman

Shaun Waterman is an award-winning reporter for The Washington Times, covering foreign affairs, defense and cybersecurity. He was a senior editor and correspondent for United Press International for nearly a decade, and has covered the Department of Homeland Security since 2003. His reporting on the Sept. 11 Commission and the tortuous process by which some of its recommendations finally became ...

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