Chinese Red Cross Site hacked to steal donations!

Whenever a disaster occurs, there are always dishonest people trying to steal the proceeds of charitable contributions.

This is always sad because it takes away from the people, who are in need.

Heike over at the Dark Visitor is reporting that a Red Cross site has been hacked with the intent of "electronically" removing money intended to help the earthquake victims in China:

Verified by the Ministry of Public Security, a section of the official Red Cross website has been illegally hacked. According to the report, criminal elements gained access to the section of the website that held the special accounts for earthquake disaster relief donations.

An individual named Li Bujiu, had opened four fraudulent bank accounts to steal the funding.

Full story with more details from the Dark Visitor Site (Inside the World of Chinese Hackers), here.

Thus far, we haven't seen the flood of phishing, fake charity websites and the like come about as the result of the earthquake in China, or the cyclone in Myanmar reported in the West? Even this story isn't up on Google News yet.

Reuters did recently report that fraud is occurring inside China as a result of the earthquake disaster:

Police issued a warning after a flurry of text messages hit mobile phones, soliciting disaster assistance in emotional appeals, only asking that funds be deposited in private accounts.

The Reuters story -- which does mention that the Red Cross was shut down because of too many vistors (?) and had a page listing bank accounts to contribute to (??) -- can be seen, here.

The story in Reuters references the site, http://www.crcf.org.cn, which as of this writing appears to be up and running.

Not sure why more news on disaster fraud from China isn't being seen? It could be attributed to the "Great Firewall of China," or the fact that hacking and committing fraud carries far more serious consequences in China than it does here in the West.

Generally, if caught, offenses like hacking can mean the death penalty in China. In 2006, China carried out ten times more executions than the next country who still uses captial punishment. Generally, they use one round from an assault rifle (hollow-point) to the back of the head.

Of course, that doesn't mean that there isn't a lot of hacking coming from China. We see stories all the time about Chinese hackers committing corporate and government espionage. The Dark Visitor is an excellent site, run by a former intelligence type, about the mysterious world of hacking in the People's Republic.

I guess the difference on whether you get a bullet in the head, or not depends on whether certain authorities approve of your activity (my opinion). Of course, they are not beyond setting an example from time to time if certain political conditions exist.

Last year, China executed their former food and safety chief (Zheng Xiaoyu) for taking bribes in the wake of all the news stories about defective and dangerous products being exported from China.

With all the humans rights violations, fraud, hacking and deception that occur in the People's Republic, it's amazing that so many companies in the West continue doing business with them.

Sadly enough, some believe this has been at the expense of many people in their own countries. Given the human rights violations, it is also at the expense of a lot of Chinese people, also!

Perhaps, I'm old fashioned, but I sometimes wonder when people will come first?

Sadly enough, greed often gets in the way of this concept.

U.S. China Commission Report reveals serious issues that need to be dealt with!

Reports of the Chinese hacking into government systems are nothing new. Along with the constant reports of substandard products being put on our shelves, there is little doubt that the Chinese pose a threat to our safety in a LOT of different ways.

The U.S. China Commission has just released a disturbing report, which indicates some alarming evidence that the Chinese might be a threat to our National security.

The first concern is what appears to be a growing capability to target satellites. I got the following directly from the report, which was provided to Congress:

The hearing was timely, coming only three months after a successful direct-ascent anti satellite test by China that destroyed one of its own aging weather satellites in low-earth orbit. This test was only the third of its kind by any nation in history and served as a useful reference point during the hearing to illustrate not only China’s advances in military capabilities, but also the extent to which China’s decision making process is still very much opaque. This incident raises questions about Chinese intentions in space. The Commission will address these questions as it continues to monitor developments.

In the same realm, it appears that China is actively developing capabilities to conduct "irregular warfare." It should be noted that in addition to this report there have been regular reports of hackers from China specifically targeting government systems.

This is what the current report concluded:

Several experts testified that if China were to find itself in an armed conflict with the United States and its allies such as that resulting from a Taiwan dispute, China is likely to employ an array of irregular warfare strategies against its adversaries. According to Michael Vickers, Senior Vice President for Strategic Studies at the Center for Strategic and Budgetary Assessments, a Chinese attack on Taiwan could entail special operations and cyber attacks on U.S. regional bases in Japan and South Korea, and might even include cyber attacks on the U.S. homeland that target the U.S. financial, economic, energy, and communications infrastructure.

Also covered in the report are previously documented cyber-intrusions into U.S. Government systems:

As evidenced by the trajectory of its military modernization, Chinese defense planners are seeking to accomplish the goal of undermining the U.S. military’s technological edgethrough a variety of disruptive means. Among these is cyber warfare. USSTRATCOM Commander General Cartwright testified before the Commission that China is actively engaging in cyber reconnaissance by probing the computer networks of U.S. government agencies as well as private companies. The data collected from these computer reconnaissance campaigns can be used for myriad purposes, including identifying weak points in the networks, understanding how leaders in the United States think, discovering the communication patterns of American government agencies and private companies, and attaining valuable information stored throughout the networks. General Cartwright testified that this information is akin to that which in times past had to be gathered by human intelligence over a much longer period of time. He went on to say that in today’s information environment, the exfiltration that once took years can be accomplished in a matter of minutes in one download session.

The report also concludes that the Chinese have been building up their more traditional military capabilities since 1992.

Going into the reasons why China has been able to accomplish this, the report states:

China’s policies of market liberalization have resulted in rapid export-led economic growth prompting increased foreign investment; development of China’s manufacturing capabilities; and integration into the global supply chain. China’s abundant and inexpensive labor supply has made that country an obvious place for multinational companies to expand their production. However, as Dr. Peter Navarro, Professor of Business at the University of California, Irvine, observed in his testimony, five of eight factors identified as major drivers of China’s comparative advantage—i.e., its ability to undercut the prices of global competitors—are considered unfair trading practices. These include its undervalued currency, counterfeiting and piracy, export industry subsidies, and lax health, safety, and environmental regulations. These practices violate China’s WTO commitments, especially regarding workers’ rights, market access, currency manipulation, subsidies, and the protection of intellectual property rights. These violations and unfair practices also contribute to a growing U.S. trade deficit with China, one that U.S. Census Bureau statistics confirm increased 177 percent in the past six years from $83.8 billion in 2000 to $232.5 billion in 2006.

Granting China a "Permanent Normal Trading Relationship" six years ago was sold to the American public as a means of making China a better place (more democratic) place for it's people.

Instead, we have seen a lot of questionable government activity, which includes a variety of criminal enterprises when we consider all the hacking, counterfeiting and piracy that can be directly traced back to that country.

The lack of safe manufacturing practices and counterfeiting also poses a threat to our safety. It should be noted that according to International Anticounterfeiting Coalition, counterfeiting is a $600 billion a year problem, worldwide.

There are no figures on how much of this comes from China, although most experts on this subject speculate a lot of it does. Additionally, there is a lot of evidence that a lot of counterfeit merchandise is present in our supply chain. This evidence would include products of a consumable nature such as drugs, also.

The FDA estimates that 10 percent of the drugs in our supply system are counterfeit.

A lot of this probably tied into another phenomenon traced to the Chinese known as corporate (industrial) espionage. Of course, there is probably less of a need for the Chinese to plant spies in our industrial complexes anymore. With the amount of outsourcing going on, they probably never have to set foot out of China to steal a lot of secrets from us.

According to the Washington Post, American companies are even outsourcing the manufacture of military parts:

The Pentagon is increasingly buying planes, weapons and military vehicles from private contractors that outsource the manufacturing to plants in China and elsewhere in Asia, the report said. But when questioned by the commission, defense officials admitted that they do not have the ability to track where the components of military equipment are made.

To me, given all the recent implications of Chinese intentions, this makes the least sense!

All of these factors have led to a loss of jobs within our country as corporations take advantage of cheap labor, which is often the greatest expense in any business.

This translates into record profits for the Chinese and a select few people in the West.

Given the safety, National security and economic implications, continuing down this road doesn't seem to be in the best interests of the average person.

The full report from the U.S. China Commission can be viewed, here.

Microsoft is NOT the Biggest Hacker in China!

Chinese surfers are crying foul at Microsoft's launch of the "Windows Genuine Advantage Program," which turns a screen black when it detects pirated software. It is believed up to 200 million computer users in China have counterfeit software on their machines.

China is well-known for being involved in the knock-off trade, as well as, selling dangerous and defective products in the global economy. The news has had a lot of stories about them censoring the Internet, violating user privacy and being involved in hacking on an industrial scale.

Ironically, Dhong Zengwhi, a Bejing lawyer, accused Microsoft of being the "biggest hacker in China with its intrusion into users' computer systems without their agreement or any judicial authority," according to the China Daily. His argument is that this will cause serious functional damage to users' computers and according to China's criminal law, Microsoft could be accused of breaching and hacking into computer systems. Zengwhi has filed a complaint with the Chinese government about this.

Does this mean Microsoft won't be able to out-source work to China?

I wonder if Mr. Zengwhi's opinion was when it was revealed that the Chinese were data-mining the communications of Tom-Skype users? Tom-Skype is the Chinese version of the popular Skype software, which allows people to communicate worldwide using the Internet.

Privacy violations in China aren't limited to Tom-Skype communications, either. During the recent Olympic games, the government openly monitored Internet communications, using the excuse of security to justify what many believe was censorship.

The allegation that Microsoft is the biggest hacker in China is questionable. Governments from all over the world have accused the Chinese of hacking into their systems and it isn't considered safe to carry a laptop, or even a smart-phone when visiting China. Recently, there was speculation that Commerce Secretary Carlos Gutierrez had his laptop hacked during a visit to China.

In fact, if you follow the news, the theft of intellectual property is often traced to the Chinese. The FBI has caught numerous Chinese agents stealing a lot of private and government information in the recent past.

Pirated software is a huge problem in the global economy. It is estimated that one third of all software being sold is counterfeit. A large percentage of the software sold on auction and even e-commerce sites is counterfeit, also. It isn't unknown for a consumer to think they are getting legitimate software when they are not.

Besides costing jobs and revenue to legitimate firms -- knock-off software can damage a machine, or even lead to information theft when malicious software is added to the mix.

I'm sorry that that certain people in China are outraged by Microsoft's solution to the theft of their property, but let's face it, they are hardly the biggest hacker in China.

DOD Analyst Convicted for Selling Information to China

Despite a lot of official denials, it seems pretty clear the Chinese have no qualms about stealing as much intellectual property as they can get their hands on.

On Friday, the Department of Justice announced that one Gregg William Bergersen of Alexandria, Virginia was sentenced to 57 months in prison (plus three years of supervised release) for disclosing secret information to a naturalized American citizen of Chinese descent (Tai Shen Kuo), who was then providing it to the People's Republic of China.

In his day job, Gregg Bergersen was a Department of Defense Analyst.

Kuo provided Bergersen with gifts, cash payments, dinners and gambling money in exchange for the information. The information involving military sales to Taiwan was then passed to Kuo's handler, an official of the People's Republic of China.

The official DOJ press release states that Bergersen didn't know the information was going to China. It would be interesting to discover, who he thought it was going to?

Kuo, who was found guilty on May 13th, is currently awaiting sentencing on August 8th and faces life in prison.

On May 28th, Yu Xin Kang, also of New Orleans pleaded guilty to aiding and abetting an unregistered agent of the People's Republic of China. According to court documents, Kang sometimes assisted Kuo in providing the stolen information to the unnamed foreign official. Kang faces ten years in prison.

Last year, another naturalized American citizen of Chinese descent, Chi Mak, was convicted of selling sensitive defense technology to China. This case was a family affair and Mak's sister in law and brother were caught by the FBI trying to board a plane to China with three encrypted CD's containing the stolen information.

The FBI site covered the Bergersen/Kuo case and another one involving a Boeing engineer, Dongfan “Greg” Chung, in a recent press release. Allegedly Chung was tied into the Mak case and sold information on the Space Shuttle and military aircraft to the People's Republic of China.

Although, the government isn't commenting much there is speculation that they are investigating information being stolen from Commerce Secretary Carlos M. Gutierrez's laptop during a recent visit to China. It is alleged that this information was used to hack into government computers.

Hacking incidents traced to the Chinese, although always denied by the PRC, have been reported all over North America, Europe and even Asia. A good place to learn about Chinese hacking activity is a site (maintained by a former DOD official) called The Dark Visitor (Information on Chinese Hacking) .

The Chinese are also suspected (in a lot of instances) of stealing corporate information. According to sources within the technology industry, it isn't recommended to carry laptops or other personal data storage devices when travelling in China.

On a personal note, I believe a lot of this is enabled by our free trade agreement with the People's Republic of China. While this agreement is lucrative for a few corporate entities -- the wholesale theft of intellectual property, counterfeiting, unsafe and defective products, as well as, all the human rights violations in China call for taking a hard and educated look at what is going on.

The problem is will special interests -- who represent the corporate entities making a lot of money from this -- prevent our leadership in Washington from taking effective action against what is becoming an alarming issue?

If you suspect anyone of selling government secrets, you can report them to the FBI by submitting an anonymous tip online.

In China, Censorship is Called Security

Senator Sam Brownback (Kansas) is warning that China is planning to mount a massive espionage operation on guests staying at major hotels during the upcoming Olympic Games next month.

This shouldn't surprise anyone. Although they consistently deny it, China has a history of spying on both business and government visitors. They also consistently get accused by governments around the world of hacking into sensitive systems.

Recently, there was a lot of speculation that Commerce Secretary Carlos Gutierrez's laptop was hacked during a visit to China and the information was used to hack into government computers. Saavy business types have been quoted as saying that they do not carry laptops or smartphones with them while travelling in China. Of course -- if you needed some more substantial proof China is behind a lot of espionage -- you could read about all the people getting caught by the FBI stealing sensitive information for the People's Republic.

Senator Brownback made a statement on Tuesday that he was warned that the Chinese Public Security Bureau has made it mandatory for hotels chains to install spyware and special hardware by the end of July. Failure to install the required items (or disabling them afterwards) will lead to "punishment," according to a document in the Senator's possession.

Of course, all this is being done in the name of security, according to People's Republic officials. Oddly enough -- possibly to address privacy concerns -- they plan to employ pop up windows warning people the Internet is not private in China. I'm sure this is assuring to privacy advocates, worldwide (pun intended).

The Senator's staff handed out English language translations of two separate documents he said were received by hotels, outlining the government's instructions on how to implement Internet spying software and hardware by the end of July to members of the press on Tuesday.

In many people's opinion -- the intention of this security system is monitor people -- who might want to expose China's dismal human rights record during the games. In fact, Senator Brownback was initially warned about these so-called security measures by human rights advocates.

Further evidence of this is that on Tuesday access to sites like Amnesty International or any with a Tibet address were being blocked at the main Olympic press center in Bejing, according to the article in the Los Angeles Times on this story.

Senator Brownback announced during the conference that he and Senator Bunning of Kentucky were introducing a resolution calling on China to suspends it's plan to censor free speech and spy on people. It should be noted that years ago -- when bidding for the games -- China promised to not to do this.

While many speculate the intent of this so-called "security system" is to supress free speech (censor people), I'd highly recommend anyone with sensitive information be extremely careful if they are in China during the Olympic games. The real espionage and hacking will not be as apparent as this has been. A good place to learn about Chinese hacking and espionage is the Dark Visitor site, which should give anyone a good idea what information risks they might face during a visit to China.

The problem of unsafe products from China are just a symptom of the bigger problem!

Interesting picture about consumer protection, courtesy of Flickr.

In the past couple of months, we've seen some alarming stories about dangerous products coming from China.

Dirk Lammers of the Associated Press wrote:

Poisoned pet food. Seafood laced with potentially dangerous antibiotics. Toothpaste tainted with an ingredient in antifreeze. Tires missing a key safety component. U.S. shoppers may be forgiven if they are becoming leery of Chinese-made goods and are trying to fill their shopping carts with products free of ingredients from that country. The trouble is, that may be almost impossible.

The Lammers family shopped far and wide, and came to the conclusion that merchants sell all kinds of products from China. Even more alarming, even if the label didn't say "made in China," it likely has a component (ingredient) that was.

The reason for this is simple, companies make billions off the cheap labor found in China and other less developed countries lacking the same level of consumer protection, we think (my opinion) we have.

The U.S. Bureau of Labor Statistics, which keeps tally of labor costs abroad, doesn't seem to have any data on China, or India for that matter. I mention India because, we seem to be in the market for a lot of their labor, recently.

The closest I could find was Sri Lanka, which in 2005 (most recent year available) has a labor compensation rate of 52 cents an hour.

I noticed a lot of countries left out. For instance, the region to the South of the United States, only has data for Mexico and Brazil. Mexico, which has a better economy than most of the area, has a labor cost of $1.57 an hour.

Maybe this is one of the major reasons our border to the South isn't very secure. Minimum wage, or even welfare benefits must seem like a king's ransom to some of these people.

Going back to China, I was able to find an estimate of labor costs in China by using Google. Judith Banner wrote in the Monthly Labor News Review:

Employees in China’s city manufacturing enterprises received a total compensation of $0.95 per hour, while their non-city counterparts, about whom such estimates had not previously been generally available, averaged less than half that: $0.41 per hour. Altogether, with a large majority of manufacturing employees working outside the cities, the average hourly manufacturing compensation estimated for China in 2002 was $0.57, about 3 percent of the average hourly compensation of manufacturing production workers in the United States and of many developed countries of the world.

A little higher than the government figure for Sri Lanka, but not much. Of course, I can think of a lot of countries, we outsource the cost of labor to, not included on the government list.

It makes sense -- that since a lot of these countries have a much lower standard of living, as well as, not very many consumer protection laws -- unsafe products have the capability to spread, worldwide.

In fact, with counterfeiting (another worldwide problem) thrown in, who knows what might show up in the supply chain? For example, it was recently disclosed that counterfeit drugs from China were likely being dispensed from pharmacies in the United States.

Chris Hansen, Dateline, did a pretty revealing story about this, here. The FDA did announce new rules, shortly after this, but I'm not sure this makes us very safe. All sorts of illegal drugs, make it past customs, daily.

I'm not sure if blaming China is the solution. After all, we aren't only outsourcing labor costs over there. Many of the other countries we outsource labor to, don't protect their people very well, and could care less about, consumer protection, also.

In fact, in many of these countries, people have a hard enough time keeping food on table!

Perhaps, we should take a closer look at ourselves? There are corporations here in the West, making a lot of money by stocking these products on our shelves. And at less than 60 cents an hour in labor costs, it must be extremely profitable for them.

The worker in China, or Sri Lanka isn't living very well off less than 60 cents an hour.

Perhaps, if certain companies had to start paying the true costs of padding their bottom lines with cheap labor, it wouldn't be as profitable.

I was amazed that despite all the special interests, obviously behind the recent immigration bill, that it was promptly defeated by the voice of the public. Many of us believe this bill, was at least in part, a ploy to drive down the cost of labor.

I'm not saying that all the politicians had ulterior motives, or that all corporations lack ethics, but it did reveal that the voter (individual person) has a choice, and more importantly, a voice!

It might be wise for politicians and corporations to get more on board with their voters, and customers.

If you are interested in learning more about this, I recommend Lou Dobbs, who has become extremely outspoken about a "war against the middle class." His site can be viewed, here.

Here are some references used for this post.

Article by Judith Bannister (Monthly Labor News Review), here.

Article by Dirk Lammers (AP), courtesy of the Washington Post, here.

Counterfeiting merchandise is enabled by outsourcing labor (my opinion). I've written a lot about this, here.

Previous posts about China and other dangerous activities coming from there, including espionage and hacking, can be viewed, here.

China caught stealing government information again!

The Chinese, who were recently accused of poisoning pets and selling toxic toothpaste are now being accused of hacking into government computers in Germany.

Roger Boyes of the TIMESONLINE reports:

Der Spiegel, quoting senior officials from the German equivalent of Special Branch, said that the hacking operation was discovered in May. Computers in the Chancellery, the Foreign, Economics and Research ministries had been targeted. The Federal Office for the Protection of the Constitution (BfV) conducted a comprehensive search of government IT installations and prevented a further 160 giga-bytes of information being transferred to China. Commentators described it as “the biggest digital defence ever mounted by the German state”.

The information was being siphoned off almost daily by hackers in Lanzhou, northern China, in Canton province and in Beijing. The scale and the nature of the data being stolen suggest, the investigators say, that the operation must have been steered by the State and, in particular, the People’s Liberation Army.

Naturally, the Chinese are denying involvement, but this isn't the first time we've heard of them hacking into systems, or committing government/corporate espionage.

Here are a couple of posts, I wrote awhile ago where U.S. government computers were the target:

How Dangerous is China

The Hackers from China are at it AGAIN!

Last year, the FBI arrested two men stealing technology secrets and attempting to take them to China. Their press release on this matter can be seen, here.

USA Today (David J. Lynch) also did an excellent article quoting FBI sources about the problem, which can be seen, here.

We need to start considering the consequences of continuing to allow this to go on unchecked.

Roger Boyes story (worth reading), here.

Sensitive infared cameras discovered bound for China at LAX

Dangerous and counterfeit products, hacking government systems and espionage all have one thing in common, they are likely to originate from China.

The latest example of this is being reported by the AP:

Two men attempting to board a plane to China with nearly a dozen sensitive infrared cameras in their luggage were arrested on Saturday, a federal official said.

Federal agents stopped the pair on the jetway as they were preparing to board the flight to Beijing.

The men had been in the United States for about a week, said Rick Weir, assistant special agent in charge of the Los Angeles office of the Department of Commerce's Bureau of Industry and Security.

Yong Guo Zhi, a Chinese national, and Tah Wei Chao, a naturalized U.S. citizen, were arrested for investigation of trying to take thermal imaging cameras with potential military use to China without the proper export licenses, Weir said.

In February of this year, the FBI highlighted two high profile cases involving Chinese espionage.

Again, whether it involves defective goods, hacking or stealing military secrets -- the Chinese seem to be having a field day victimizing the citizens of the United States and the World.

Is the cheap labor they provide for a lot companies worth all the risks we are taking by allowing them "free trade status?"

Additional examples of Chinese espionage, hacking and defective products written about on this blog can be seen, here.

Full AP story on this latest development in the ongoing saga, here.

Who Hacked the Halls of Congress?

Came across an interesting story about the halls of Congress being hacked in October 2006. Although no one knows or is saying, some speculate that the attack can be traced to the Chinese, who seem to get accused of hacking into a lot of government systems (worldwide). Of course, the Chinese officially deny these allegations.

Shane Harris of the National Journal reported the attack was initially discovered in one office, but cyber-investigators eventually traced it to eight members' offices, where one or more computers were infected. Besides this, seven committee offices, including the Commission on China, Ways and Means and the International Relations Committee were identified as having compromised computers in them. The International Relations Committee (now the Foreign Affairs Committee) had 25 infected computers and an infected server found in it.

The virus discovered was a trojan designed to allow malware (malicious software) to invade government machines and steal information. The investigation revealed that the trojan was probably downloaded by an employee, who clicked on a link in a spam e-mail. This method of dropping a virus on a computer is usually referred to as Phishing.

Phishing attacks are normally designed to steal personal and financial information, which is later used to commit financial crimes and identity theft. While most phishing attacks (from a historical perspective) have been financially motivated, we are now seeing more person/position-targeted attacks. This type of phishing is referred to as spear phishing or whaling. In April, there were reports of spear phishing attacks against corporate executives all over the country.

The unidentified hackers used a wide-array of attack methods and the malware was downloaded from random Internet addresses. It's suspected they were using other infected machines to launch the attacks, which makes the activity even harder to trace. In this latest instance, it makes sense; the intent was to steal confidential and sensitive information.

The article points out that there is a lot of evidence that the Chinese have "penetrated deeply" into both government and corporate systems.

Just hours before the Olympics, Joel Brenner, the top U.S. counterintelligence official, warned Americans to leave their smart phones and other wireless computer devices at home. He told CBS News that the public security services in China can turn on a cell phone and activate its microphone when the owner thinks it's off. In July, Senator Sam Brownback also warned that China was planning to mount a massive espionage operation on guests staying at major hotels during the Olympics.

Last year there was speculation in the press that Commerce Secretary Carlos Gutierrez's laptop was hacked during a visit to China and the information was used to hack into government computers. Even scarier, rumors abound that Chinese hackers have already attacked power grids and that they are developing a cyber-warfare capability.

The article's conclusion points to a just released Report of the CSIS Commission on Cybersecurity for the 44th Presidency. The study recommends that President Elect Obama establish a Cyber-Security Directorate in the NSC, who would direct a National Office for Cyberspace.

As a mere observer of all of this, I think President Elect Obama needs to take this report seriously. We need to remember (especially while a financial crisis is going on) that besides being a threat to National security, hacking also threatens our financial stability. Although this post points to the Chinese, they certainly aren't the only players in the International hacking game, and the problem it presents isn't going away. Sadly, some believe the problem is getting worse.

There is little doubt that change is needed in the way we address this problem and hopefully this is what will occur.

How Dangerous is China

David Perera of GovExec.com wrote an interesting piece deducting that Chinese hackers might be more interested in hacking our logistic systems than more classified systems that the military uses.

David Perera writes:

For Americans today, war evokes images of roadside bombs and hidden snipers in the Middle East. But Defense Department planners who are paid to think about future wars worry about the People's Republic of China. Rising powers long have challenged dominant countries for primacy - it's an old story. And now, nobody is more powerful than the United States.

Logistics information literally is the bread and butter of the military. Track the supply lines of materiel and personnel and you'll know where troops are headed. Disrupt that supply line, and you will have created a barrier to getting there quickly. Amateurs study tactics, professionals study logistics, goes the Pentagon cliché. Yet great chunks of logistics information flow across the unclassified Defense Department system, the Nonsecure Internet Protocol Router Network, or NIPRNet. The Pentagon maintains a separate network for secret information, but the NIPRNet is its daily workhorse.

The world's largest network once was one built from flagstone-paved roads extending 53,000 miles in Roman antiquity. The roads were designed as a tool for policing an empire, and also for trade and communications. Unfortunately for the Romans, barbarians found them equally useful for their own purposes - attacking legionnaires - and eventually the Roman Empire was no more.

Full story, here.

Last November, I wrote about, US Military Hacked, Sober Worm Goes Worldwide, What Next?

"The Chinese (who seem to be behind the most recent attack on the military) have been suspected of selling technology (including nuclear) to governments, who might be dangerous to world peace. All one has to do is read the story of AQ Khan, who developed nuclear weapons for Pakistan and admitted selling secrets to North Korea, Libya and Iran. There is a lot of speculation that he obtained a lot of his knowledge from the Chinese, who were caught stealing nuclear secrets from us during the Clinton Administration, Online NewsHour: Spies Among Us -- June 9, 1999."

There is also a lot of other evidence that the Chinese are heavily involved in cyber-espionage activities. The FBI Computer Crime Survey stated that China was responsible for 23.9% of the cyber attacks in their survey.

Of course, the United States is still the number one source, but one has to consider that the internet is heavily censored in China. This would lead a logical person to come to the conclusion that certain activities are being tolerated by those, who censor it.

In fact, some have dubbed it the "Great Firewall of China."

Another factor to consider is organized criminal activity of Chinese origin:

Chinese Criminal Enterprises - US Department of State

One of the activities, they are actively involved in is "illegal immigration," which could provide a conduit for planting spies in the industrial and financial sectors.

Patrick Devenny of FrontPage.com recently wrote a story, where he quoted Sun Tzu from the Art of War:

Foreknowledge cannot be gotten from ghosts and spirits, cannot be had by analogy, cannot be found out by calculation. It must be obtained from people, people who know the conditions of the enemy.

In his article, he writes:

The list of additional recent Chinese espionage cases is long and disturbing. It includes, among others, the theft of Blackhawk helicopter engines and optical devices by a South Korean man arrested last year. A Chinese-American couple in Wisconsin was arrested in 2004 for sending over $500,000 worth of computer parts to the Chinese government that can be used to improve missile guidance systems.

Statements from officials such as Szady hint that cases like these are just a small sample of the overall secret Chinese war against America. Indeed, in the words of one unnamed senior FBI source, “the Chinese are stealing us blind, the 10 year technological advantage we had is vanishing.”

Daily, we read of the threat from Terrorism. While this isn't an issue to be ignored, we can't afford to ignore what seems to be an ongoing and calculated threat from China.

AND there could be more ominous implications. One of the biggest threats today is the possibility of Iran becoming a nuclear power.

Guess who has been providing them with technology that could have stolen from us-China (courtesy of NTI).

RFID sniffing could be used by spies and criminals to commit all kinds of dastardly deeds!

Dark Reading wrote about a pretty scary flaw in RFID technology this week. Apparently, it's now possible for corporate spies and even organized retail criminal types to "sniff" RFID chips in a cargo container and use the information to commit a dastardly deed.

Apparently, truckers will be particularly vulnerable to being "sniffed" (compromised). Of course, if you use a little imagination, sniffing RFID might put more than "truckers" at risk, also.

From the story in Dark Reading:

That means your competitor could use this information for intelligence purposes. "He could get an idea of what you are shipping and how much, and how often," Perrymon says, adding that an attacker could also write to those tags, either disabling or changing them if you don't apply the proper authorization and passwords to your EPC system. That's PacketFocus's next step in its research.

And sniffing the truck's payload could also provide criminals with intelligence they wouldn’t otherwise be able to get very easily, thus helping them target their holdups or other heists, he says. "Unless they had a lot of inside information, they don't have enough information to rob that truck. Now they can scan it if it's not secure -- they don't want to rob that toilet paper truck, but if it's got plasma TVs with surround sound, [that's their] target."

RFID has been pushed by retailers, such as Walmart, and the military (not mentioned in the Dark Reading article). The Department of Defense now uses RFID to monitor it's supply management system.

Stealing shipments of plasma TVs is one thing, but on a personal level, I'm a little more worried about how some of this technology might be used by those with more sinister intentions than stealing high-tech merchandise.

So far as the passwords mentioned in the article -- easily compromised by the Packet Focus folks, they can be made more secure -- but passwords are hacked by software and more social methods, fairly frequently.

All it takes is one dishonest person with access to one, or even a honest person, who is tricked into giving up one to compromise an entire system.

Hacking for Dummies has an interesting write-up on how passwords are hacked, here.

Besides that, the bad guys are always coming up with new exploits to defeat security fixes.

Interestingly enough, according to Wikipedia, RFID's predecessor was invented by a Soviet inventor as a tool to commit espionage. It also was used the World War II era for a lot of military applications.

Perhaps, in this case, history (or the original intent) should give us a little perspective on RFID?

In the recent past, government experts have seen China show an interest in stealing (hacking) logistics (supply) information. Here is a post, I wrote about that:

How Dangerous is China

Dark Reading's interesting article, here.

I've written a few posts about RFID and it's potential abuses, which can be seen, here.

Dark Reading got it's information for the article from PacketFocus Security Solutions, which is a company that performs what is known as "ethical hacking" for the public at large. Ethical hacking is where good guys test vulnerabilities in technology to stay ahead of the bad guys.

There might very well be some useful applications for RFID, but we need to slow down, and consider the safety implications before continuing to have this technology take over our daily lives.

It's not worth the money a very few people are making off it!

Video shows mock cyber attack on power grid

Ted Bridis and Eileen Sullivan of the AP are reporting about a video, which shows how a cyber attack might shut down our utilities.

From the AP article (courtesy of the Washington Post):

The video, produced for the Homeland Security Department and obtained by The Associated Press on Wednesday, was marked "Official Use Only." It shows commands quietly triggered by simulated hackers having such a violent reaction that the enormous turbine shudders as pieces fly apart and it belches black-and-white smoke.

Although, this attack never took place, the article quotes goverment sources as saying:

President Bush's top telecommunications advisers concluded years ago that an organization such as a foreign intelligence service or a well-funded terror group "could conduct a structured attack on the electric power grid electronically, with a high degree of anonymity, and without having to set foot in the target nation." Ominously, the Idaho National Laboratory _ which produced the new video _ has described the risk as "the invisible threat."

Experts said the affected systems were not developed with security in mind.

Now for the good news:

The Homeland Security Department has been working with industries, especially electrical and nuclear companies, to enhance security measures. The electric industry is still working on their internal assessments and plans, but the nuclear sector has implemented its security measures at all its plants, the government said.

In July the Federal Energy Regulatory Commission proposed a set of standards to help protect the country's bulk electric power supply system from cyber attacks. These standards would require certain users, owners and operators of power grids to establish plans and controls.

The bad news, not mentioned in this article, is that some say foreign nations (China in particular) routinely attempt to hack into government systems.

Previous posts, I've written about alleged hacking attempts from China can be seen, here.

Of course, the Chinese government denies this is the case!

AP Story, courtesy of the Washington Post, here.

Cyber Warfare, Not Just a Theory Anymore?

Last week, the news of a cyber attack by Russia against Georgia made this type of warfare become a chilling reality. According to an article in the LA Times, it also revealed how ill-prepared most of the world is to deal with this new threat.

Most of the experts now agree that cyber attacks started well before lead started flying and were not very sophisticated by current standards. Most of the attacks were run of the mill DDOS (Distributed Denial of Service) type events designed to deface and shut down government sites.

One of the problems is that no one can actually pin the attacks to the Russians. As usual, botnets of zombie computers were used to facilitate the assault on the sites in question. Since these zombie computers are taken over by malicious software -- normally after an unsuspecting user clicks on a link in a spam e-mail -- the computers used in the attack probably resided in locations all over the world. Botnets are also used to send out the spam e-mails with the malicious links that turn systems into what are known as zombie computers, which add to the power of the botnet.

Researchers at Shadowserver, a volunteer group monitoring cyber attacks, have traced the attacks against Georgia as starting in July and being based out of the United States, according to an article in the New York Times. The Times article suggested that there might be ties in this attack to Russian organized cyber criminals.

It should be noted that the words Russia and cyber crime bring up pages of results on most search engines. Russian organized crime is also known to have a global reach so it is no surprise that some of the current DDOS attacks were traced to a server in the United States. Simply stated, these attacks can be made to appear as if they are coming from just about anywhere.

While this is one the first times cyber warfare has actually occurred, it's starting to become a topic of concern in government circles. As a matter of fact, in April it was a hot topic at the NATO summit and an EU conference. China is also known to be actively seeking a cyber warfare capability and gets accused of hacking into other government's websites all the time.

Last year, Estonia suffered cyber attacks, which were allegedly facilitated by Russian Hackers, also. In an interesting development, Network World reported that they are sending cyber defense advisors to assist the Georgians.

Wikipedia has an interesting article (Wiki) on cyber warfare. It cites that McAfee stated in their 2007 annual report that approximately 120 countries have been developing cyber warfare capabilities designed to disrupt financial markets, government computer systems and utilities. The article also lists several examples of attacks, which many suspect were facilitated by the Russians or the Chinese, that have recently occurred.

The McAfee report surmised that cyber attack capabilities are becoming a global issue as well as a threat to national security. Current events seem to be making that prediction turn into reality.

Millions of Potentially Sensitive Records from the Clinton Era Gone Missing!

A computer hard drive which contained huge amounts of personal and sensitive information from the Clinton administration is missing. Some of this information includes Social Security numbers, personal addresses and even scarier, Secret Service and White House operational procedures.

Yesterday, government officials were briefed about the compromise, which was originally discovered in April. The hard drive held a terabyte of computer data that could contain millions of individual records. A terabyte of data would be enough to fill millions of books, according to this article published by the AP.

The media is reporting that the personal information of one of Al Gore's three daughters was one of the millions of records gone missing – although it is not clear which daughter's information was compromised. Given the amount of information stolen, it's likely a lot of other notable as well as ordinary people have been compromised, too. According to articles I read, authorities are still trying to figure out exactly what was on the hard drive.

The drive was lost sometime between March 2008 and April 2009 from the National Archives and Administrations in College Park, MD, which is a Washington suburb near the University of Maryland.

The drive was left out, unsecured, in a room that is frequently left unlocked for ventilation. According to an unidentified source, a researcher who was converting the information to a digital records system left the hard drive on a shelf for an unknown period of time. When the researcher tried to resume work on the project, it was discovered to be missing.

According to Rep. Edolphus Towns, Democrat-N.Y., chairman of the House Oversight and Government Reform Committee, they are seeking more information on the breach, and the FBI is investigating.

The FBI will have a lot of suspects in this case. One hundred badge holders had access to the area. Additionally,the point of compromise is an area where workers, interns and even visitors pass on their way to the restroom.

This information would normally be stored in a secure area. Thus far, officials are quick to point out that it is unknown whether the hard drive was stolen or accidentally lost, and if any sensitive security information was lost.

At this time, either it isn't clear, or no one is saying, whether or not the data was encrypted. Encrypting data is considered a "safe and sane" security practice when dealing with data in transit and has become a legal requirement in many situations.

The House Oversight and Government Reform Committee have pointed to a problem with government agencies being compromised in the past. In a report released in 2006, the Committee came to the conclusion that the problem with agencies being compromised was government-wide. Other findings in the report include: agencies do not always know what was lost, physical security of data is essential and contractors are responsible for many of the breaches.

The report covers from 2003 to 2006 and, in light of this latest occurrence, it appears the problem still exists.

More recently, President Obama has pointed to another problem which does have national security implications and which involves protecting cyberspace from the threats that exist today. Thus far, a study has been conducted, and is being reviewed. Stories in the media have pointed to a concern with cyber warfare and with hackers from foreign countries (notably China and Russia), who have been suspected of targeting government systems.

If you are interested in learning more about Chinese hackers, there is a well written blog on the subject titled "The Dark Visitor (Information on Chinese Hacking". Another non-government source which covers data breaches in general is the Open Security Foundation.

While the implications of this latest issue have yet to be determined, it is not good news from the standpoint of how easily the information was compromised. Of course, this is merely one incident, and if you follow the news, we get bad news about data compromises all the time.

Update 5/20/09: It has now been confirmed that the missing hard drive had no encryption and a $50,000 reward is being offered for information leading to it's recovery. Source: CNet.

Phishing on the Rise

http://news.bbc.co.uk/1/hi/technology/4498939.stm

Phishing seems to be on the rise. Traditionally, "Phishing" is where a victim is duped into going to a fraudulent website and entering information that is used to make them a victim of identity theft. This is normally accomplished with SPAM e-mail, which lures a victim to what they believe is a legitimate site. New toolbars are identifying a lot of these phoney sites. This article states the the origin of a lot of it is Taiwan, South Korea and China.

More sophisticated techniques are also discussed, such as using worms to implant key loggers so that the scam artists don't have to rely on duping the victim to do it manually. E-Mail is being used less and less in favor of more sophisticated hacking techniques.

Here is a link to "APWG" (Anti Phishing Working Group) http://www.antiphishing.org/. Contained in it is a lot of good information, including how the various scams work and how to avoid becoming a victim.