FBI investigator: Many more U.S. firms hit by Chinese military hackers

| Monday, May 19, 2014, 11:03 p.m.

Hundreds of other U.S. companies have been hacked by the Chinese military officials accused in a federal indictment of breaching Pittsburgh-area companies, the FBI's top cyber investigator told the Tribune-Review.

But the attacks were much broader than those described in the indictment and have gone on for years, said J. Keith Mularski, the FBI's supervisory special agent in charge of cyber crime, who led the investigation from Pittsburgh.

A grand jury indictment unsealed on Monday charges five Chinese military officials with hacking into U.S. Steel, Alcoa, Westinghouse and Allegheny Technologies Inc., as well as the United Steelworkers of America headquarters Downtown. The U.S. headquarters of a German solar panel maker in Oregon is identified as a target.

“When you're seeing them use the resources of the whole country to put one of our companies out of business or to get a competitive advantage, it makes you angry,” said Mularski, a Pittsburgh native whose dad was a steelworker.

“The biggest message we want to send on this is that hacking commercial companies to get a competitive advantage is wrong. We can't tolerate it.”

He would not identify companies that were breached but said the FBI notifies them when it happens.

Foreign countries are engaging in “economic warfare,” said Paul Kaminski, chair of the Pentagon's Defense Science Board and a senior adviser to the director of National Intelligence. It's about time the United States sent a clear message that it is aware of the attacks and plans to fight back, he said.

“Every country, including the United States, does espionage, but one thing that's very different about our policy is that we do not use espionage to advance the interests of our private companies,” said Kaminski, who heads Virginia-based consulting company Technovation. “We don't steal trade secrets and give that to our companies.”

The Chinese hackers relied on human error by sending “spearphishing” messages that looked like legitimate company email, the indictment says. They tricked executives into downloading malware, or bad software that allowed the hackers to access computer systems.

“The gold mine is getting somebody to click,” said David Thaw, a computer security expert at the University of Pittsburgh School of Law.

It makes sense that Chinese hackers would target many U.S. companies, he said. Pittsburgh is becoming a hub for cyber security work, but hackers rarely limit themselves to a small geographic area when they can go anywhere online.

Companies like the ones named in the indictment are more likely to have computer security that could enable officials to trace the attacks and confirm what happened, said Martin Lindner, a principal engineer at Carnegie Mellon University Software Engineering Institute's CERT division.

“There's what you know and what you don't know,” Lindner said about the number of companies breached. “I believe the number will be large, but we don't know what we don't know.”

The problem for private companies is having to defend themselves against a foreign government, Mularski said.

“These companies do a good job to secure their networks, but you're up against a group that has infinite resources,” he said. “You're up against China.”

Karen Paullet, an information security professor at Robert Morris University, agreed.

“I personally don't think the Chinese will ever stop,” said Paullet, who led 20 students attending a national security seminar in Washington on Monday that included meeting with Chinese embassy officials.

“As they're getting smarter, can we afford to stay up with ways to stay secure?” she said. “Big companies probably can, at a cost to end users. But that makes you wonder about your middle-of-the-road companies. How do they sustain this?”

Andrew Conte is a Trib Total Media staff writer. Reach him at 412-320-7835 or andrewconte@tribweb.com.

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