Chinese Hack Energy Company, Attack Pentagon, Try to Steal Stealth Bomber Skin

Wednesday, October 03, 2012

Dan Dieterle

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Our manufacturing powerhouse ally(?) in the East have been very busy. Amidst a flood of Chinese hacking and espionage attacks against the US, three of the latest news stories stand out.

From breaking into a large energy company, to increased attacks on the pentagon, to trying to smuggle tons(!) of stealth fighter skin material out of the US, our “Trading Partners” have been very busy indeed…

CHINA HACKS ENERGY COMPANY

First up, Calgary-based Telvent a company that monitors large sections of US energy industry has allegedly been infiltrated by Chinese hackers. According to KrebsonSecurity, Telvent discovered the breach of its internal systems on September 10th:

“Telvent said the attacker(s) installed malicious software and stole project files related to one of its core offerings — OASyS SCADA — a product that helps energy firms mesh older IT assets with more advanced “smart grid” technologies.”

Communication sent to Telvent customers show numerous files that were infected along with fake malicious update services AdobeUpdate.exe and nupdater.exe. The domains and captured network traffic seem to point to the Chinese hacker team the “Comment Group”.

This is very concerning as in the case of a possible future military conflict, attacking our power grid would be a top priority of the enemy.

INCREASED PENTAGON ATTACKS

Cyber attacks against the pentagon increased 17 fold from 2009 to 2011 and show no signs of decreasing:

“Their level of effort against the Department of Defense is constant”, Rear Admiral Samuel Cox said concerning the history of cyber threats, “It’s continuing apace, in fact, I’d say it’s still accelerating.”

China is well know for trying to steal military and scientific research, in an attempt to catch up on technology. How successful have they been? Just check out this cockpit comparison between China’s new Chengdu J-20 Stealth Fighter and the US F-22 Raptor:

In a full frontal view the planes look pretty much identical.

But where they have been successful in making physical copies, re-creating the actual technology has been a bit harder for them. Apparently, China cannot develop the engines needed for their Stealth Fighters internally and has to import them from Russia:

“China’s inability to domestically mass-produce modern high-performance jet engines at a consistently high-quality standard is an enduring Achilles’ heel of the Chinese military aerospace sector,” wrote Andrew Erickson, a Naval War College analyst. Erickson chalked up the engine gap to a lack of standardization, cooperation and quality control in Chinese industry.

And engines aren’t the only thing China is having a hard time reproducing. It seems the special skin used on the fighters is very difficult to make also. So, instead of trying to steal the plans on how to make it, they apparently have tried to smuggle tons of the material out of the US!

CHINA TRIES TO STEAL FIGHTER GRADE CARBON FIBER

Ming Suan Zhang was charged in Federal Court for “attempting to illegally export aerospace-grade carbon fiber“, and faces up to 20 years in prison.  Allegedly, Zhang and unnamed accomplices tried to obtain the carbon fiber and have it exported out of the US to China. Luckily for the US, the company that Zhang contacted was actually a front business for Homeland Security and the “buyer” Zhang talked with was actually a US agent:

“During an April teleconference, the buyers told the agent they wanted to ship “multiple tons of carbon fiber” from the U.S. to China through a third country in order to skip having to acquire an export license, and that acquiring the carbon fiber was “problematic” because it was related to a “military matter.” When the offer to use a middleman was rebuffed, the buyers asked if the carbon fiber could be mislabeled as something else, thereby sneaking past federal authorities. The agent told the buyers that what they were doing was quite illegal.”

But that didn’t stop the determined Zhang, who pressed the matter and the agent played along. An intercepted e-mail from China stated that the material was “needed for a test flight of a new Chinese fighter jet.” And Zhang also told an undercover agent that the material was indeed for a “fighter plane“.

Zhang was promptly arrested as soon as he entered the US.

Obviously China can “obtain” military secrets from foreign countries, but they apparently don’t have the technical know-how (at least for now) to completely duplicate some weapons systems. But what if China shared the secrets they obtain through cyber-espionage with other nations, like Russia?

Moves are being made to improve our cyber defenses. But for now it looks like we will just have to batten down the hatches a little tighter in the face of a rising tide of “friendly” attacks…

Cross-posted from Cyber Arms

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