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Cybercrime case names U.S. Steel, Westinghouse, Alcoa as victims [The Pittsburgh Tribune-Review :: ]
[May 19, 2014]

Cybercrime case names U.S. Steel, Westinghouse, Alcoa as victims [The Pittsburgh Tribune-Review :: ]

(Pittsburgh Tribune-Review (PA) Via Acquire Media NewsEdge) May 19--A federal grand jury filed criminal charges against five Chinese military officials accused of hacking into private-sector U.S. companies, including U.S. Steel, to gain trade secrets, according to an indictment unsealed Monday.

The 48-page indictment, the first of its kind, accused members of the People's Liberation Army, the military of the People's Republic of China, of participating in cyber-espionage on behalf of a foreign government.

"Pittsburgh has become the target of state-sponsored cyber intrusion," said David Hickton, U.S. attorney for the Western District of Pennsylvania, at a press conference with U.S. Attorney General Eric Holder. "The effect of international espionage is far-reaching. Cyber hacking affects real people in real and painful ways. ... This 21st-century burglary has to stop." Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu and Gu Chunhui are accused of hacking into companies including Western Pennsylvania's U.S. Steel, Alcoa, Westinghouse Electric and Allegheny Technologies, to gain trade secrets and steal information. The United Steelworkers union and SolarWorld AG, a German company with operations in Oregon, also were targeted, the indictment says.

Holder said the U.S. will not tolerate foreign government efforts to sabotage American companies.

"It is our hope the Chinese government will respect our justice system," Holder said. "Our intention is for the defendants to have due process in a U.S. court of law." If the defendants are tried in the U.S., the trial would take place in Pittsburgh, prosecutors said.

In a statement, China's Foreign Ministry said the U.S. charges were based on "fabricated facts" and jeopardizes China-U.S. "cooperation and mutual trust." "China is steadfast in upholding cybersecurity," said the statement. "The Chinese government, the Chinese military and their relevant personnel have never engaged or participated in cyber theft of trade secrets. The U.S. accusation against Chinese personnel is purely ungrounded and absurd." Prosecutors and investigators said the defendants are members of a special unit within the Chinese military's signal intelligence based in Shanghai. Holder said the defendants have never visited U.S. soil, so there's been no opportunity for arrest.

According to the indictment: From 2007 to 2013 Westinghouse was involved in negotiations to build and run four nuclear power plants in China. Kailiang is accused of stealing from Westinghouse computers confidential technical and design plans related to piping systems for the plant as well as internal company communications about business strategy.

In 2009 and 2012, a U.S. Steel employee was targeted with a "spear phishing" email designed to trick the employee and give Kailiang access to the worker's computer, which was used to steal host names and descriptions for more than 1,700 servers.

Hackers targeted Allegheny Technologies in 2012 while the company was engaged in litigation before the World Trade Organization with a Chinese state-owned steel company. Hackers stole network credentials for all employees.

In 2012, United Steelworkers' president issued a "call to action" against Chinese policies, urging Congress to impose duties on Chinese imports. Within days, hackers stole top-level union emails discussing strategy.

Kailiang is accused of targeting Alcoa managers in 2008 with "spearphishing" emails that fooled managers into giving access to company computers.

Assistant Attorney General John Carlin, recently installed as head of the Justice's National Security Division, this year cited prosecution of state-sponsored cyber-threats as a key goal for the Obama administration. At Monday's news conference he was blunt in his remarks about the Chinese.

"In the past, when we brought concerns such as these to Chinese government officials, they responded by publicly challenging us to provide hard evidence of their hacking that could stand up in court. Well today, we are." Despite the ominous-sounding allegations, at least one of the firms downplayed the hacking.

"To our knowledge, no material information was compromised during this incident, which occurred several years ago," said Monica Orbe, Alcoa's director of corporate affairs. "Safeguarding our data is a top priority for Alcoa, and we continue to invest resources to protect our systems." Officials with U.S. Steel, ATI and the United Steelworkers declined to comment. Officials from Westinghouse didn't immediately respond to questions.

U.S. officials have accused China's army and China-based hackers of launching attacks on American industrial and military targets, often to steal secrets or intellectual property. China has said that it faces a major threat from hackers, and the country's military is believed to be among the biggest targets of the NSA and U.S. Cyber Command.

Beijing has in the past repeatedly denied allegations that its hackers have targeted foreign websites but says China is a major victim of cyberattacks and is opposed to any form of cyber hacking.

It says it wants to see global cooperation in fighting cybercrimes instead of allegations.

"China not only does not support hacking but also opposes it," Premier Li Keqiang said last year in a news conference when asked if China would stop hacking U.S. websites. "Let's not point fingers at each other without evidence but do more to safeguard cyber security." Earlier this year, China set up an Internet security group led by President Xi Jinping. State media have described the Internet as a battleground, where cyber safety is essential to state security.

Last September, President Barack Obama discussed cybersecurity issues on the sidelines of a summit in St. Petersburg, Russia, with Chinese President Xi Jinping.

White House spokesman Ben Rhodes said at the time that Obama had addressed concerns about cyber threats emanating from China. He said Obama told Xi the U.S. sees it not through the prism of security but out of concern over theft of trade secrets.

In late March, Defense Secretary Chuck Hagel revealed that the Pentagon planned to more than triple its cybersecurity staff in the next few years to defend against Internet attacks that threaten national security.

Hagel's comments at the National Security Agency headquarters in suburban Washington came as he prepared to visit China.

"Our nation's reliance on cyberspace outpaces our cybersecurity," Hagel said at the time. "Our nation confronts the proliferation of destructive malware and a new reality of steady, ongoing and aggressive efforts to probe, access or disrupt public and private networks, and the industrial control systems that manage our water, and our energy and our food supplies." The Associated Press contributed to this report.

___ (c)2014 The Pittsburgh Tribune-Review (Greensburg, Pa.) Visit The Pittsburgh Tribune-Review (Greensburg, Pa.) at Distributed by MCT Information Services

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