German spy chief warns against Chinese investment in German hi-tech firms

Hans-Georg MaassenThe head of Germany’s domestic intelligence agency has warned of security risks resulting from Chinese direct investment in high-technology German and other European companies. Since 2012, Hans-Georg Maassen has served as director of the Federal Office for the Protection of the Constitution, Germany’s domestic security and counterintelligence agency. Speaking to reporters on Wednesday, Maassen said his agency had noticed an inverse correlation between cyber-espionage attacks on Germany by Chinese actors and the acquisition of German technology firms by Chinese companies. German counter-intelligence officials were puzzled, he said, about a dramatic reduction in Chinese cyber-espionage activities in 2016. But they eventually realized that cyber-espionage operations had been replaced by “lawful methods”, he said, such as direct takeovers of German hi-tech firms by Chinese companies.

The purpose of these takeovers was “to gain access to German technical know-how”, added Maassen. He went on to say that “industrial cyberespionage is no longer needed if an actor can simply exploit liberal economic regulations to buy companies, and then proceed to disembowel them, essentially cannibalize them, to gain access to their know-how”. The spy chief noted that Germany did not object to foreign investment and the free flow of capital from all countries, including China. However, he added, “certain direct investments in specific technologies can compromise domestic security”. Maassen mentioned several examples in his presentation, including the takeover of Kuka, a German robotics firm, by a Chinese investor in 2016. He said that in the past few months alone, Chinese companies have attempted to purchase stakes in 50Hertz, a German energy grid operator, German car manufacturer Daimler, and Cotesa, a German aerospace contractor.

In response to a question from a journalist about policy coordination between Germany and the European Union, Maassen said that Germany, France and Italy have been pressuring Brussels to update and modernize its screening procedures against foreign takeovers of companies that are involved in manufacturing and selling “sensitive technologies”. He noted that a new EU-wide screening mechanism should be in place by the end of 2018.

Author: Joseph Fitsanakis | Date: 12 April 2018 | Permalink

Taiwan admits for the first time that Chinese general Liu Liankun was one of its spies

Taiwan MIBThe government of Taiwan has acknowledged publicly for the first time that a Chinese major general, who was executed by Beijing in 1999 for espionage, was indeed one of its spies. The military officer was Liu Liankun, a logistician for the Chinese People’s Liberation Army, who headed its Department of General Logistics. However, China arrested Liu for espionage in 1999, and accused him of having spied for Taiwan for five years, in exchange for money. At the time, Taiwan denied that Liu spied on its behalf and refused to acknowledge that it had any role in the major general’s alleged espionage activities.

According to his Chinese government accusers, Liu passed information to Taiwan during the so-called 1996 missile crisis —known in Taiwan as the 1996 Taiwan Strait crisis. The crisis was prompted by a series of missile tests conducted by Beijing in the waters around the island of Taiwan. The crisis lasted several months, from July of 1995 to March of 1996. Many in Taiwan were convinced that China’s missile tests were the precursors of a military advance by Beijing, aimed at conquering the island one and for all. However, Taiwan’s Ministry of Defense eventually issued a press statement saying it was aware that the Chinese missiles were not equipped with armed warheads. The information was correct, but it made China realize that Taiwan was receiving information from a highly placed source inside its military. After an extensive counterintelligence investigation, the Chinese arrested Liu and accused him of having spied for Taiwan in exchange for nearly $2 million in bribes. Liu was eventually executed by lethal injection in a Beijing prison. He was 58. At the time of his conviction, Liu was the most senior Chinese military officer to have ever been convicted of spying for Taiwan.

But Taiwan continued to deny any involvement in Liu’s case. That changed last week, however, when Taiwan’s Military Information Bureau unveiled its renovated memorial, which is housed at its headquarters in Taipei City. The memorial features plaques commemorating 75 individuals who have died while carrying out MIB intelligence operations. Those featured include both intelligence officers and their assets —foreign people recruited by intelligence officers to spy for Taiwan. Among the plaques, visitors to the memorial saw one dedicated to Liu for the first time. A note beneath the plaque acknowledges Liu’s contributions during the 1996 missile crisis. But it also states that the Chinese military official also provided assistance to Taiwan during earlier crises with China in the 1990s, as well as inside information about the death of Chinese Premier Deng Xiaoping in 1997.

Author: Joseph Fitsanakis | Date: 6 April 2018 | Permalink

China hacked African Union computer servers for five years, report claims

African UnionChinese spies hacked the computer servers of the African Union headquarters in the Ethiopian capital Addis Ababa, which the Chinese government funded and built as a gift to the organization, a French newspaper has claimed. Beijing donated $200 million toward the project and hired the state-owned China State Construction Engineering Corporation to build the tower, which was completed in 2012. Since then, the impressive 330 feet, 19-storey skyscraper, with its reflective glass and brown stone exterior, has become the most recognizable feature of Addis Ababa’s skyline. The majority of the building material used to construct the tower was brought to Ethiopia from China. Beijing even paid for the cost of the furniture used in the impressive-looking building.

However, according to the Paris-based Le Monde Afrique newspaper, African Union technical staff found that the computer servers housed in the organization’s headquarters were secretly communicating with a server facility in Shanghai, China. The secret communications reportedly took place at the same time every night, namely between midnight and 2 in the morning. According to Le Monde Afrique, the African Union servers forwarded data to the servers in Shanghai from 2012, when the building opened its doors, until early 2017.

Interestingly, even though the organization was allegedly notified about the breach by its technical staff in January of 2017, there has been no public reaction on record. However, according to Le Monde Afrique, African Union officials took immediate steps to terminate the breach. These included replacing the Chinese-made servers with new servers purchased with African Union funds, without Beijing’s mediation. Additionally, new encryption was installed on the servers, and a service contract with Ethio Telecom, Ethiopia’s state-owned telecommu- nications service provider, which uses Chinese hardware, has been terminated.

On Monday, China’s Ministry of Foreign Affairs dismissed the French newspaper’s allegations as “baseless” and “complete nonsense”. A statement issued by the ministry said that Beijing would “in no way interfere with the internal policies of African countries or do anything that would hurt their interests”.

Author: Joseph Fitsanakis | Date: 30 January 2018 | Permalink

Ex-CIA case officer was arrested after being lured back to US at least once

FBIA former case officer in the Central Intelligence Agency, who was arrested this week for violating the United States Espionage Act, was lured back to America from Hong Kong at least once by counterintelligence investigators, according to reports. Jerry Chun Shing Lee, 53, served in the CIA from 1994 to 2007. He was arrested by Federal Bureau of Investigation officers on Monday, as soon as he arrived in the US from Hong Kong. He is accused of carrying with him top-secret information about CIA agents and operations, which he was not authorized to possess. It now appears that the FBI had been investigating Lee since 2010, and that he was lured to the US in 2012 so that he could be investigated. It is also possible that he was lured back to the US from his home in Hong Kong on Monday, so that he could be arrested by the FBI.

The New York Times said on Wednesday that a consortium of FBI agents and CIA officers identified Lee as a suspect in a counterintelligence case involving the loss of over a dozen CIA assets in China between 2010 and 2012. By that time, Lee had left his job as a case officer —essentially a spy handler— in the CIA and was living in Hong Kong. According to NBC, the FBI decided to lure Lee back to American soil by creating a job for him in the nation’s capital. That was the reason why Lee traveled with his family back to the US in August of 2012. The family stopped in Hawaii, where, according to court documents, the FBI surreptitiously searched Lee’s possessions in a Honolulu hotel. FBI officers also searched Lee’s belongings in a hotel in Virginia a few days later. Lee was found to have with him two notebooks containing “operational notes from asset meetings”, “operational phone numbers” and even “the addresses of CIA covert facilities” —safe houses where CIA case officers meet their assets in privacy.

According to The Times, the FBI confronted Lee five times in subsequent months, but did not inform him that his belongings had been surreptitiously searched or that he had been found to possess classified information without authorization. But the FBI did not press charges against Lee, nor did it prevent him from returning to Hong Kong with his family in the summer of 2013. Instead, it focused on establishing a connection between Lee and the catastrophic loss of CIA assets in China. It was only this week, when Lee returned to the US, that authorities decided to arrest him. The reason why Lee decided to return to the US remains unknown. The possibility that he may have been lured back to the US by the FBI, just as he was in 2012, should not be excluded.

It appears that investigators have not at this point connected Lee with the more serious charge of conveying the classified information to foreign agents. Instead, the former CIA officer is charged simply with possessing top-secret information, but not with communicating it. The charge is believed to be “the same single charge that could have been brought years ago”, namely when Lee was found to be carrying classified information with him in Hawaii.

Author: Joseph Fitsanakis | Date: 18 January 2018 | Permalink

Ex-CIA case officer arrested in New York for violating Espionage Act

CIAA former operations officer in the United States Central Intelligence Agency has been arrested on charges of illegally possessing top secret information, including lists of real names of foreign assets and addresses of CIA safe houses. The news emerged on Tuesday, as the US Department of Justice announced that the Federal Bureau of Investigation had filed a criminal complaint over the weekend. The complaint identifies the former case officer as Jerry Chun Shing Lee, also known as Zhen Cheng Li. Lee, a 53-year-old naturalized American, served in the CIA from 1994 to 2007 “in various overseas positions and locations”, according to court documents. Lee has reportedly been living in Hong Kong since his retirement from the CIA. He was arrested by FBI officers on Monday, as he arrived on a flight that landed at the John F. Kennedy International Airport in New York.

The FBI criminal complaint alleges that Lee kept on his person a number of notebooks that contained classified details of his CIA work. These included the real names of covert CIA personnel and the real names of foreign assets —providers of intelligence information that are recruited by CIA case officers. The notebooks also contained “operational notes from asset meetings” (presumably meetings between Lee and the assets he handled during his CIA career), “operational phone numbers” and even “the addresses of CIA covert facilities” —safe houses where CIA case officers meet their assets in privacy. From the court documents it appears that the FBI has been investigating Lee since at least 2012. In August of that year, the FBI surreptitiously searched Lee’s possessions in a hotel in Hawaii, where he was staying while on holiday with his family. A few days later, FBI officers also searched Lee’s possessions in a hotel in Fairfax, Virginia, and photographed them.

According to The New York Times, Lee’s arrest is connected with reports last May that the Chinese intelligence services had arrested or killed over a dozen CIA assets in China between 2010 and 2012. There is intense speculation that the Chinese acted on information they received from a mole inside a US intelligence agency, possibly the CIA. But the court documents in Lee’s case do not mention any connection to foreign intelligence and do not accuse Lee of sharing classified information with unauthorized users. As of yesterday evening, the CIA was referring all media inquiries to the Department of Justice.

Author: Joseph Fitsanakis | Date: 17 January 2018 | Research Credit: C.B. | Permalink

Nuclear scientist expelled from China kills himself in North Korean prison

Sinuiju North KoreaA North Korean nuclear scientist who defected to China but was involuntarily sent back to North Korea in November reportedly killed himself in his North Korean cell hours before he was due to be interrogated. Information about the scientist’s alleged suicide was issued on Thursday by Radio Free Asia (RFA), a multilingual news service based in Washington, DC, which is funded by the United States government. The service said its reporters spoke to an anonymous source in North Hamgyong province, North Korea’s northernmost region that borders China. The source identified the late scientist as Hyun Cheol Huh, but cautioned that this may not be his real name, because the North Korean security services are known to “use […] fake names when referring to important persons” in their custody.

Hyun was reportedly a senior nuclear researcher at North Korea’s Academy of Sciences in Pyongyang, an institution that plays a crucial role in North Korea’s biological and nuclear weapons programs. According to RFA, Hyun defected while on vacation from his work. He traveled to the Chinese border to visit relatives, but did not file an application for travel documents. These are required for travel within North Korea. He then disappeared. On November 4, China Immigration Inspection officers arrested a large group of undocumented North Korean nationals in the city of Dandong, reportedly after receiving a tip by North Korean intelligence. Among them was Hyun, who was involuntarily sent back to North Korea on November 17 by the Chinese authorities.

As is common practice with captured North Korean defectors, the scientist was placed in solitary confinement in Sinŭiju, a city on the Yalu River right across the Chinese border. But when guards entered Hyun’s cell to take him to his first interrogation, they found him dead. The source told RFA that Hyun “killed himself only a few hours after he was placed in solitary confinement at the State Security Department in Sinuiju city”. Hyun’s death was reportedly caused by poison, which he is believed to have taken with the intent of taking his own life. There was no explanation of where and how Hyun was able to secure the poison. “He must have been searched many times while being taken from China to Sinuiju, so it’s a mystery how he was able to conceal the poison he took”, the source told RFA. The source added that upon his arrest Hyun did not tell Chinese Immigration Inspection officers that he was a nuclear scientist. Doing so would probably have averted his expulsion back to North Korea.

Author: Ian Allen | Date: 29 December 2017 | Permalink

German intelligence warns European officials of fake Chinese LinkedIn profiles

BfV GermanyIn an unusual step, German intelligence officials have issued a public warning about what they said are thousands of fake LinkedIn profiles created by Chinese spies to gather information about Western targets. On Sunday, Germany’s Federal Office for the Protection of the Constitution (BfV) held a press conference in which it said that it had discovered a wide-ranging effort by spy agencies in China to establish links with Westerners. The agency said that it undertook a 9-month investigation, during which it identified 10,000 German citizens who were contacted by Chinese spy-run fake profiles on LinkedIn. Across Europe, the number of targets could be in the hundreds of thousands, according to the BfV.

The main targets of the operation appear to be members of the German and European Union parliaments. Also targeted are members of the armed forces, lobbyists and researchers in private think tanks and foundations in Germany and across Europe. These individuals were all targeted as part of “a broad attempt to infiltrate Parliaments, ministries and administrations”, said BfV Director Hans-Georg Maassen. He added that the fake LinkedIn profiles are of people who claim to be scholars, consultants, recruiters for non-existent firms, or members of think tanks. Their profile photographs are usually visually appealing and are often taken from fashion catalogs or modeling websites. During the press conference BfV officials showed examples of what they said were fake LinkedIn accounts under the names “Rachel Li” and “Alex Li”. The two identified themselves as a headhunter for a company called RiseHR and a project manager at the Center for Sino-Europe Development Studies, respectively. The information on these accounts was purely fictitious, said the BfV officials.

Individuals who have been targeted by the Chinese include European politicians and senior diplomats, according to the Germans. Many were invited to all-expenses-paid conferences or fact-finding trips to China by their LinkedIn contacts, presumably in attempts to recruit them for Chinese intelligence. At the closing of the press conference, the BfV urged European officials to refrain from posting private information on social media, including LinkedIn, because foreign intelligence operatives are actively collecting data on users’ online and offline habits, political affiliations, personal hobbies and other interests. In a statement issued on Monday, the Chinese government dismissed the German allegations, saying that the BfV’s investigation was based on “complete hearsay” and was thus “groundless”. Beijing also urged German intelligence officials to “speak and act more responsibly”.

Author: Joseph Fitsanakis | Date: 11 December 2017 | Permalink

Senior Chinese Army general accused of corruption found dead

Zhang YangA senior Chinese People’s Liberation Army (PLA) military official, who was seen as a close ally of President Xi Jinping, has allegedly committed suicide, according to Chinese state media. Zhang Yang was one of the most high-profile generals in the Chinese PLA. His rise to power after Xi became president of China was meteoric. He was appointed member of the Central Military Commission (CMC) of the Communist Party of China, which exercises political supervision of the Chinese armed forces. In addition to his role in the CMC, Zhang directed the General Political Department of the PLA’s Ground Force, which made him the top political commissar in the army.

However, in August of this year Zhang suddenly stopped making public appearances. An article soon appeared in Sing Tao, a pro-Beijing newspaper in Hong Kong, alleging that the general had been questioned by anti-corruption investigators as part of President Xi’s nationwide campaign against sleaze. At around the same time, Hong Kong media said that President Xi would soon announce sweeping changes in the makeup of the CMC. It was also announced that General Zhang would step down from his director’s role in the army’s General Political Department. But media in Beijing reported nothing about Zhang, and there was speculation that he may have been imprisoned or even executed. The rumors intensified after September 1, when a front-page article in Sing Tao claimed that he had been dishonorably discharged from the PLA and imprisoned on charges of “serious violations of [Chinese Communist] Party discipline”.

Media in Beijing remained silent until Tuesday of this week, when a report issued by Xinhua News Agency, China’s government-run news agency, said that the former general had been found dead in his home in Beijing. According to the report, Zhang was found dead by a relative on Thursday, November 23. The brief report also mentioned that Zhang had been questioned by authorities in recent months in connection with “bribery and large-scale property crimes”. The Chinese Communist Party has not commented on Zhang’s death.

Author: Ian Allen | Date: 29 November 2017 | Permalink

Revealed: China arrested US diplomat believing him to be CIA officer

US Consulate ChengduAn American diplomat stationed in China was abducted and interrogated for several hours by Chinese authorities, who believed him to be an officer of the Central Intelligence Agency working under official cover. The alleged abduction took place in early 2016 but was revealed this week by the online news outlet Politico. The website said that the diplomat, who has not been named, was stationed at the United States consulate general in Chengdu, a city of 14 million that is the administrative capital of western China’s Sichuan province. Founded in 1985, the US consulate in Chengdu is one of Washington’s seven diplomatic and consular posts in China. It is staffed by 130 people, approximately 30 of whom are Americans and 100 are locally hired Chinese citizens. The facility’s consular district includes several Chinese provinces, including the politically sensitive Tibet Autonomous Region.

On Wednesday, Politico said it spoke with “more than half a dozen current and former national security officials” in the US, who confirmed that an American diplomat stationed at the Chengdu consulate was abducted and detained for several hours. The website said that the abduction took place in January 2016. The diplomat was reportedly “grabbed off the street” in the middle of the day by plainclothes Chinese officers and driven to a detention facility in an unmarked van. He was allegedly kept there for several hours despite his diplomatic status with full immunity, which protects diplomats from being subjected to arrest and detention in the host country. American officials claim that the Chinese authorities did not notify the US consulate of the diplomat’s whereabouts until several hours later. By that time, the diplomat had been aggressively interrogated and his responses had been filmed by his captors, who claimed that he was an officer of the CIA. He was later released but left the country soon afterwards, according to Politico.

American officials told the website that the diplomat’s abduction was “an unusually bold act” that illustrates an ongoing and increasingly tense confrontation between Chinese and American intelligence services. Several American diplomats told Politico that Chinese authorities followed them around and in some cases broke into their apartments and “searched their rooms and belongings”. According to the news website, Washington responded to the American diplomat’s abduction by issuing a formal protest and threatening to expel Chinese intelligence officers operating in the US with diplomatic cover. However, it is not believed that the threat materialized.

Author: Joseph Fitsanakis | Date: 13 October 2017 | Permalink

Australian parliament reviews use of Chinese-made cell phones

ZTE CorporationThe Parliament of Australia is reportedly reviewing the use of cell phones built by a Chinese manufacturer, after an Australian news agency expressed concerns about the manufacturer’s links with the Chinese military. The cell phone in question is the popular Telstra Tough T55 handset. It is made available to Australian parliamentarians though the Information, Communications and Technology (ICT) unit of the Department of Parliamentary Services (DST). Any parliamentarian or worker in Australia’s Parliament House can order the device through the Parliament’s ICT website. According to data provided by the DST, 90 Telstra Tough T55 cell phones have been ordered through the ICT in the current financial year.

The handset is manufactured by ZTE Corporation, a leading Chinese telecommunications equipment and systems company that is headquartered in the city of Shenzhen in China’s Guangdong province. On Monday, the News Corp Australia Network, a major Australian news agency, said it had contacted the parliament with information that ZTE Corporation’s links to the Chinese military may be of concern. News Corp said it informed the DST that members of the United States Congress and the House of Representatives’ intelligence committee, have expressed serious concerns about the Chinese telecommunications manufacturer in recent years.

As intelNews reported in 2010, three American senators told the US Federal Communications Commission that the ZTE was “effectively controlled by China’s civilian and military intelligence establishment”. The senators were trying to prevent a proposed collaboration between American wireless telecommunications manufacturers and two Chinese companies, including ZTE Corporation. In 2012, the intelligence committee of the US House of Representatives investigated similar concerns. It concluded that telephone handsets manufactured by ZTE should not be used by US government employees due to the company’s strong links with the Chinese state. And in 2016, US-based security firm Kryptowire warned that some ZTE cell phone handsets contained a suspicious backdoor feature that could potentially allow their users’ private data to be shared with remote servers at regular intervals.

A DST spokesman told the News Corp Australia Network that the ZTE-manufactured cell phones had been selected for use by Australian parliamentarians based on “technical and support requirements, [DST] customers’ feedback and cost”. The spokesman added that the DST “is currently reviewing the ongoing suitability” of the T55 handsets, following reports about ZTE’s links with China’s security establishment.

Author: Ian Allen | Date: 05 September 2017 | Permalink

Australia concerned about Chinese firm’s involvement in undersea cable project

Sogavare and TurnbullAustralia has expressed concern about a plan by a Chinese telecommunications company to provide high-speed Internet to the Solomon Islands, a small Pacific island nation with which Australia shares Internet resources. The company, Huawei Technologies, a private Chinese venture, is one of the world’s leading telecommunications hardware manufacturers. In recent years, however, it has come under scrutiny by Western intelligence agencies, who view it as being too close to the Communist Party of China.

One of Huawei’s most recent large-scale projects involves the Solomon Islands, a former British overseas territory that became independent in 1978 and is today a sovereign nation. The Pacific country consist of a complex of nearly 1,000 islands of different sizes, scattered over a distance of 11,000 square miles. It lies northeast of Australia and directly east of Papua New Guinea. In 2014, the government of the Solomon Islands began an ambitious project to connect its Internet servers to those of Australia via a 2,700-mile undersea fiber optic cable. The ultimate goal of the project is to provide Solomon Islands inhabitants with reliable high-speed Internet. The project was approved by Canberra (Australian government) and Sydney (Australian private sector) and given the green light by the Asian Development Bank, which promised to fund it. But in 2016 the Solomon Islands government suddenly named Huawei Marine as the project’s main contractor. Huawei Marine, a subsidiary of Huawei Technologies, is a joint venture between the Chinese firm and Global Marine Systems, a British-headquartered company that installs undersea telecommunications cables.

The news was greeted with concern in Canberra. The Australian intelligence community has previously warned that Huawei operates as an arm of the Chinese spy services. Intelligence agencies in the United Kingdom and the United States have issued similar warnings. In 2011, a report by a research unit of the US Office of the Director of National Intelligence concluded that Huawei Technologies relied on a series of formal and informal contacts with the Chinese People’s Liberation Army and the Ministry of State Security. But a subsequent 18-month review commissioned by the White House found no evidence that Huawei spied for the Chinese government.

Canberra is concerned that, by constructing the Solomon Islands undersea cable, Huawei would be “plugging into Australia’s telecommunications infrastructure backbone”, something that, according to some intelligence officials, “presents a fundamental security issue”. To further-complicate things, opposition officials in the Solomon Islands allege that the country’s government contracted the services of Huawei after the Chinese company promised to make a multi-million dollar donation to the ruling political party. Last June, the director of the Australian Secret Intelligence Service (ASIS), Nick Warner, visited the Solomon Islands and tried to convince the country’s Prime Minister, Manasseh Sogavare, to drop Huawei from the project. The topic was also discussed in a meeting between Mr. Sogavare and his Australian counterpart, Malcolm Turnbull, in Canberra last week. Following the meeting, the Solomon Islands leader said that his government would “continue to have discussions with the Australian government to see how we can solve that […] security issue”.

Author: Ian Allen | Date: 21 August 2017 | Permalink

China dismantled large CIA spy network in 2010, say sources

CIAA few years ago, China busted an extensive network of secret operatives run by the United States Central Intelligence Agency. The CIA has yet to recover from the massive blow to its operations, say sources. The CIA has devoted substantial resources to gathering intelligence in China in recent years, and has painstakingly built a network of spies. The latter are Chinese nationals recruited by CIA officers to spy on Beijing on behalf of the United States. But, according to The New York Times, in early 2010 the CIA’s assets began to disappear one by one. By 2012, the Agency’s network of secret operatives in China had been all but wiped out.

According to the Times report, published on Saturday, the CIA lost as many as 20 agents on the ground in China, who were either executed or imprisoned by the authorities in Beijing. The paper cites “ten current and former American officials”, who claim that many of the agents had operated for years deep inside the Chinese state apparatus prior to their capture. At least one of them, say sources, was executed “in front of his colleagues in the courtyard of a government building” in an attempt to dissuade other government employees from spying on the Chinese state. At least 12 of the CIA’s assets in the country were executed between 2010 and 2012, according to The Times.

The damage to the CIA has been incalculable, according to sources, and the Agency is still recovering from the loss of an extensive network of operatives that took years to assemble. Sources described the loss of the network to the Times as “one of the worst in decades” and compared it to the loss of assets caused in the 1980s and 1990s by two notorious American spies for the Soviet Union and Russia, CIA officer Aldrich Ames and Federal Bureau of Investigation agent Robert Hanssen. At that time, dozens of agents and over 100 intelligence projects were compromised.

According to the report, the FBI and the CIA set up Project HONEY BADGER, a joint counterintelligence investigation into the China breach. But the results of the investigation reportedly remain inconclusive. Some argue that such a major dismantling of a network of assets could only have originated from a mole inside the US Intelligence Community. Others believe that the arrests of CIA agents resulted from a sophisticated Chinese computer hacking operation that targeted the CIA. A third theory posits that the breach was caused by the infiltration of the intelligence community of Taiwan, an important American ally in Southeast Asia.

Since 2012, the CIA has been trying to rebuild its network in China, but it will take it years to reach the level of sophistication in had achieved in 2010. The New York Times said it reached out to the CIA and FBI for comment but received no responses.

Author: Joseph Fitsanakis | Date: 22 May 2017 | Permalink

New report details one of history’s “largest ever” cyber espionage operations

GCHQ center in Cheltenham, EnglandA new report authored by a consortium of government and private organizations in Britain has revealed the existence of a computer hacking operation, allegedly based in China, that is said to be “one of the largest ever” such campaigns globally. The operation is believed to have compromised sensitive information from an inestimable number of private companies in Southeast Asia, Europe and the United States. The report was produced by a consortium of public and private organizations, including BAE systems and the London-based National Cyber Security Centre, an office of the United Kingdom’s signals intelligence agency, the Government Communications Headquarters. It details the outcome of Operation CLOUD HOPPER, which was launched to uncover the cyber espionage activities.

According to the report, the attacks were first launched several years ago against targets in Japan’s government and private sector. But after 2016, they spread to at least 14 other countries, including France, the United Kingdom and the United States. It is claimed that the attacks are “highly likely” to originate from China, given that the targets selected appear to be “closely aligned with strategic Chinese interests”. The authors of the report have named the hacker group APT10, but provide limited information about its possible links —or lack thereof— with the Chinese government.

The report claims that APT10 uses specially designed malware that is customized for most of their targets, thus constituting what experts describe as “spear fishing”. Past successful attacks have already resulted in an “unprecedented web of victims” who have had their information compromised, say the authors. The victims’ losses range from intellectual property to personal data. One of the report’s authors, Dr. Adrian Nish, who is head of threat intelligence at BAE Systems, told the BBC that it is currently impossible to estimate the number of organizations and agencies that have been impacted by APT10’s activities.

Author: Ian Allen | Date: 05 April 2017 | Permalink

FBI accuses US State Department official of contacts with Chinese spies

US Department of StateAn employee of the United States Department of State has been charged with lying to authorities about her contacts with Chinese intelligence operatives, who gave her money and gifts in return for information. Candace Claiborne, 60, joined the Department of State in 1999 as an office management specialist. She lives in Washington, DC, but has served overseas in American diplomatic facilities in Baghdad, Iraq, Khartoum, Sudan, and China, where she was stationed in Beijing and Shanghai. According to information provided by the Federal Bureau of Investigation, Claiborne had a top security clearance, which required her to report contacts with foreign nationals.

However, federal prosecutors said earlier this week that Claiborne interacted on a regular basis with Chinese intelligence personnel without informing her employer. According to court documents, her contacts with the Chinese were extensive and occurred from 2011 until earlier this year. The Chinese gave Claiborne gifts, including computers and smartphones, tuition-free studies in a Chinese technical school, and an all-expenses-paid holiday to Thailand. They also gave her a regular stipend and provided her with a furnished apartment abroad, according to prosecutors. In return, Claiborne allegedly gave the Chinese information relating to American economic policy on China, among other topics.

It appears that the FBI monitored the State Department employee for a while, after securing a Foreign Intelligence Surveillance Act court warrant. When it confronted Claiborne, she apparently denied the accusations and lied to FBI agents. She is now charged with obstruction of justice and providing false statements to the FBI. Claiborne is currently under house arrest and will remain there until April 18, when she will appear at a preliminary hearing in Washington. She is reportedly facing a maximum of 25 years in prison.

Author: Ian Allen | Date: 31 March 2017 | Permalink

China has 5,000 spies in Taiwan, says official amidst espionage arrests

China and TaiwanA Taiwanese government official has alleged that China maintains an army of more than 5,000 spies in Taiwan, many of whom have infiltrated the highest levels of government and industry. The allegation came after two sensational arrests were made in Taiwan last week, of people accused of spying for Beijing. Taiwanese counterintelligence officers reportedly arrested a bodyguard of Annette Lu, Taiwan’s former vice president. The bodyguard, who has been identified in Taiwanese media as Wang Hong-ju, has been charged with receiving payments from his Chinese intelligence handler in return for providing information about Mrs. Lu. This incident followed another arrest, made earlier in the week, this time of a Chinese man who is believed to have initially come to Taiwan as a student. Zhou Hong-xu is accused of trying to recruit officials in the Taiwanese government by offering them money.

Following reports of the arrests, Taiwanese media quoted an official, who spoke on condition of anonymity, as saying that Beijing maintains “about 5,000 individuals” who spy in Taiwan. These agents are allegedly tasked with “collecting state secrets” in the island country, over which China claims ownership. The anonymous Taiwanese official said that authorities in Taipei had uncovered no fewer than 60 espionage plots linked to China since 2002. Less than a third of those were uncovered before 2009, said the official. The year is important, because it marks the time when communications and transportation systems between the two nations were reestablished after decades of mutual isolation. The ease with which people from the two countries can travel in each other’s territory has increased exponentially since 2009. But so have instances of espionage by China, said the Taiwanese official.

Asked about the alleged targets of Chinese espionage in Taiwan, the official said that nearly 80 percent of identified cases of espionage by Beijing’s agents were aimed at military targets, with only 20 percent focusing on the civilian sector. However, the apparent disparity in numbers does not mean that China shows more interest in Taiwanese military secrets. Rather, the Taiwanese military has better counterintelligence defenses and thus a higher detection rate than the country’s civilian sector, said the anonymous source.

Author: Joseph Fitsanakis | Date: 20 March 2017 | Permalink