Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

Has the United States already suffered its cyberwar Pearl Harbor?

By | August 3, 2011, 9:09am PDT

Summary: McAfee claims to have uncovered a long-term cyber-espionage campaign against the U.S. and almost 80 other countries and major companies.

Cyber-warfare sounds like something from a science fiction novel. It’s not. It’s reality. Cyber-security firm McAfee claims to have uncovered a cyber-espionage campaign that’s been going on for five years against more than 70 public and private organizations in 14 countries.

The campaign, called “Operation Shady RAT” (remote access tool), was described by Dmitri Alperovitch, McAfee’s VP of threat research in a recent blog post: Revealed: Operation Shady RAT. According to Alperovitch, these attacks are major assaults against both countries and corporations.

He writes, “Having investigated intrusions such as Operation Aurora [China's attack on Google) and Night Dragon (systemic long-term compromise of Western oil and gas industry), as well as numerous others that have not been disclosed publicly, I am convinced that every company in every conceivable industry with significant size and valuable intellectual property and trade secrets has been compromised (or will be shortly), with the great majority of the victims rarely discovering the intrusion or its impact. In fact, I divide the entire set of Fortune Global 2000 firms into two categories: those that know they've been compromised and those that don't yet know. "

Alperovitch also declares that these government-sponsored attacks are on an entirely different scale than those of the kiddie attacks made by such groups as Anonymous and Lulzsec. The McAfee executive wrote, "The targeted compromises--known as 'Advanced Persistent Threats (APTs) … we are focused on are much more insidious and occur largely without public disclosures. They present a far greater threat to companies and governments, as the adversary is tenaciously persistent in achieving their objectives. The key to these intrusions is that the adversary is motivated by a massive hunger for secrets and intellectual property; this is different from the immediate financial gratification that drives much of cybercrime, another serious but more manageable threat."

Furthermore, "What we have witnessed over the past five to six years has been nothing short of a historically unprecedented transfer of wealth - closely guarded national secrets (including from classified government networks), source code, bug databases, email archives, negotiation plans and exploration details for new oil and gas field auctions, document stores, legal contracts, SCADA [supervisory control and data acquisition] configurations, design schematics and much more has ‘fallen off the truck’ of numerous, mostly Western companies and disappeared in the ever-growing electronic archives of dogged adversaries.”

McAfee claims to have uncovered this by gaining “access to one specific Command & Control server used by the intruders. We have collected logs that reveal the full extent of the victim population since mid-2006 when the log collection began.”

The actual attack method is familiar to anyone in computer security. “The compromises themselves were standard procedure for these types of targeted intrusions: a spear-phishing email containing an exploit is sent to an individual with the right level of access at the company, and the exploit when opened on an unpatched system will trigger a download of the implant malware. That malware will execute and initiate a backdoor communication channel to the Command & Control web server and interpret the instructions encoded in the hidden comments embedded in the webpage code. This will be quickly followed by live intruders jumping on to the infected machine and proceeding to quickly escalate privileges and move laterally within the organization to establish new persistent footholds via additional compromised machines running implant malware, as well as targeting for quick exfiltration the key data they came for.”

A recent spear-phishing study–an e-mail based attack that tries to trick you into clicking on what appears to be a safe Web link but actually tries to steal data or delivers malware–found that “23% of people worldwide are vulnerable to targeted/spear phishing attack” and that “on an average 60% of corporate employees that were found susceptible to targeted spear phishing responded to the phishing emails within three hours of receiving them.” With odds like that, it’s easy to see why corporate and government spear-phishing could work so well.

McAfee’s study shows that numerous U.S. government agencies were successfully attacked. In addition, Canada, South Korea, Vietnam, the United Nations, and India were hacked. Numerous electronics and defense companies have also fallen victim.

ShadyRAT's targets by category

What’s the point of these attacks? Alperovitch isn’t sure but he believes, “If even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team’s playbook), the loss represents a massive economic threat not just to individual companies and industries but to entire countries that face the prospect of decreased economic growth in a suddenly more competitive landscape and the loss of jobs in industries that lose out to unscrupulous competitors in another part of the world, not to mention the national security impact of the loss of sensitive intelligence or defense information.”

The first shots appear to have been fired in the first major cyber-war. The next question is: “Who’s behind them?” Alperovitch isn’t saying, but some observers  suggest that China is behind what might be called a technology Pearl Harbor.

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Steven J. Vaughan-Nichols, aka sjvn, has been writing about technology and the business of technology since CP/M-80 was the cutting edge, PC operating system. Elsewhere on ZDNet, SJVN covers Networking and Open Source.

Disclosure

Steven J. Vaughan-Nichols

Steven J. Vaughan-Nichols is a freelance writer. He does not own stocks or other investments in any technology company.

Biography

Steven J. Vaughan-Nichols

Steven J. Vaughan-Nichols, aka sjvn, has been writing about technology and the business of technology since CP/M-80 was the cutting edge, PC operating system; 300bps was a fast Internet connection; WordStar was the state of the art word processor; and we liked it.

His work has been published in everything from highly technical publications (IEEE Computer, ACM NetWorker, Byte) to business publications (eWEEK, InformationWeek, ZDNet) to popular technology (Computer Shopper, PC Magazine, PC World) to the mainstream press (Washington Post, San Francisco Chronicle, BusinessWeek).

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RE: Has the United States already suffered its cyberwar Pearl Harbor?
opcom 15th Aug
I have nothing good to say about Red China.
Short answer: no. It has the potential to get worse. A lot worse.
@David Gewirtz The US need an interconnected smart grid and I need a bag of popcorn.
@Tommy S.
Better not get microwave popcorn.
@David Gewirtz
China is the world leader when it comes to cyberwar. They are the ones attacking the USA Government Offices and USA Companies, yet our politician continue to treat China favorably.

The Chinese Government continually ignores and violates free trade agreements, they require USA Companies to partner with Chinese companies and share our trade secrets. They pin their currency to the US Dollar so that Chinese goods remain cheap so Americans will continue to buy Chinese made goods at Walmart. And what do they do with all that money they make from us? They turnaround and loan it back to our Government who has no fiscal discipline.

On top of all that, the Chinese block us in the UN whenever we try to pass sanctions against countries (like Iran or North Vietnam) because they do business with them.

Americans are so effing stupid!
@Masari.Jones - It's pretty obvious that it's China. Just take a look at the *.jpg above showing where the attacks have occurred. It's so blatantly obvious, yet, you are right, the US is too distracted by political nonsense at home for the people in Congress or in the White House to actually do their jobs.
@Masari.Jones The Gov. won't say a thing to China. Since we owe them so much money. It would be like telling your mortgage lender he's an a.....hole
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Simple solution
Shadeburst 4th Aug
@Masari.Jones nobody said that Americans, or any other nation, HAS to buy Chinese goods which were often produced in flagrant contempt of workers' rights and the ecology. Yeah it'll cost more initially but soon you'll see jobs and value returning to the US.
@Masari.Jones Yes the US needs a new enemy the old ones are getting so tired. A country that can out compete the US even in its' nefarious deeds is the perfect candidate.
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China
stevek@... 7th Aug
@Masari.Jones for once I agree with Obama
1) The US should consider this an act of war.
2) We should deduct the factors of stolen intellectual property and currency manipulation from the 14 trillion we owe them
@Masari.Jones
Not only is the US owned by China. It's now pwned by China.
wink
@David Gewirtz Spreading fear did wonders For G. Bush and Im sure it helps your consultant business as well David.
@Bodazapha Obama certainly seems to think so. It has only escalated under this President.
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partisan b**lsh*t
stevek@... 7th Aug
@Bodazapha given the high price this country has paid in the past for ignoring the obvious,,, a little fear would serve us well - rather than ignoring the threats of totalitarian butchers.
0 Votes
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Or maybe...
cosuna Updated - 3rd Aug
@David Gewirtz : just like that 9/11 and Pearl Harbor, which some people believe (me included), were carried out by insiders rather than outsiders to "justify" a "preemptive" response. (Think Hitler and the Bundestag fire)

Thus this threats might have been self inflicting, or the targets were actually honey pots setup to attract known offenders and once the bait was eaten, the offended would have an excuse to "counter-attack".

Not far fetched, if you have read about the Iraq war and saw the Fahrenheit 911 movie.

BTW. These are my two cents, and not implying that I have proof that either 9/11, nor Pearl Harbor fall in this case.
@cosuna petty point, but it was the Reichstag fire - not Bundestag. The burning of the Reichstag building ultimately led to the Bundestag (the lower house of parliament) effectively handing power to Hitler.

I do get your point though... wink
@cosuna At the time, it was called the Reichstag. The federal structure of Germany is a post-war US inspired thing. Maybe you should upgrade your facts ...
@cosuna Wow...
@David Gewirtz - I just want someone to explain what the really sensitive stuff is doing connected to anything but a private and secure network. Sure, sensitive stuff might get e mailed, or exposed in small part some other way, but why do the real goodies reside on a network attached in any way (firewalls, and all that secure networking mumbo jumbo notwithstanding) to the internet? It makes sense for usability, but the risk is just too great.
@David Gewirtz. I agree we have been attacked and we should blitz everything operational in China. What drives me crazy is that this is nothing new. They were stealing secrets well befor cyber. All on has to do is look at their aircraft program where they copied down to patches to aircraft that had been hit in combat and repaired.
Also we never remember our history. For example I commanded the first cyber team in the US military in 1979. We didn't call it cyber but rather the Red team and we actually attacked every computer, satellite, ground, and air traffic control system in use within SAC. No one reads these reports as they don't know about them or they will not understand how relivent to todays events.
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McAfee, R U kidding?
jhevener@... 3rd Aug
I have used McAfee ASAP for years. And McAfee Enterprise products as well. I just wish they'd find the things that other products have found. MalWare by the boatload.
I guess they are too busy looking after our national interests.

Even so, no one wants to give up anything in order to be more secure - it is a shame. Shame on us all.
@jhevener@... They might not provide real anti-virus protection but Ill just be grateful if they dont brick our XP machines with a definition update...
@Tommy S. Yeah Mcrappee has, I.M.H.O, become more of a threat than some foreign country. Sounds more like a media stunt to me to try gain some confidence back from the abused users... Seriously, china is making a fortune out of lazy westerners who want everything, and cheap.. Why would they want to sabotage that ? And with the amount of technology they already have developed there, as well as the higher levels of education of the average asian compared to that of the average westerner, if they wanted to do that, they would have a long time ago, without much hassle .... Has anyone stopped to think that not everyone is out to get America, most countries have moved on already, and are laughing at the antics of the government and corporates to milk every extra dollar out of the citizens, with bizarre claims. aaaand... everyone falls for it, hook line and sinker ...
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I would be inclined to agree
LiquidLearner 3rd Aug
@Tommy S.

If I hadn't just come across such an attack recently. A PDF flyer for an upcoming event was modified with a trojan. The firewall stopped the traffic from exiting once he was infected so there wasn't any loss fortunately. Still, pretty nasty little attack. No AV would find it either, only knew about it because of the odd traffic coming out of it and a search on the IPs it was trying to contact. Replaced the drive and reloaded the system.
@Tommy S.

My experience is that McAffee doesn't brick you machine, it just slows it down to the point where paper and pencil is faster.
@jhevener@...

"Even so, no one wants to give up anything in order to be more secure - it is a shame. Shame on us all."

Actually, quite the contrary... To quote Benjamin Franklin:
"He who gives up freedom for safety deserves neither."

We should not have to compromise anything for security. Especially not our freedoms, whether they be to walk down the street and be unmolested in the middle of the night, to peruse the sites we are want to peruse, or to purchase something on the net, without our identities being compromised, or... To be able to live securely in the knowledge that our power is stable, that we have our energy situation under control and our borders are secure, as well as our economy. None of this requires us to sacrifice anything but the time to make it so.

The only shame is that we are too blind to see what's happening under our noses and our government (the US government specifically) is so wrapped up in foreign affairs they are completely ignorant to the decaying situation with our infrastructure.
@jhevener@... AMEN!
The graphic tells the whole story. Attacks on governments, defense and satellites. Can you say China and Russia? In China, it's government sponsored. In Russia, it's a national sport against the US.
It's not all-ways China ...

WikiLeaks: France Leads Russia, China in Industrial Spying in Europe

http://www.cbsnews.com/8301-503543_162-20027157-503543.html
@Oli74 A long, long time ago (1990-92) I was a bit player in uncovering some covert think tank documents produced for the CIA. The real scandal wasn't that covert activities were taking place at an open U.S. learning institution without most of the administration knowing about it, but rather the incredibly poor scholarship our tax dollars were paying for. Among other things, Japan was labeled the number one emerging threat to America. happy Anyway, one document was about how to preserve/expand the need for the CIA now that the Cold War was ending. As was wisely written in the book Systemantics, regardless of original purpose, once created the number one goal of any organization becomes its own self-perpetuation. Yes, the CIA used obscene amounts of your tax money to pay third-rate academics to think of justifications it could present to politicians to prevent its budget from being cut when the Cold War ended, and essentially every major news outlet in America refused to cover the story. sad A few did cover the Japan-bashing document though.

One of the suggestions for the CIA was this: to switch heavily into corporate espionage and then sell the information gained to U.S. corporations. Given that accusations came out a few years later that Echelon (the world-wide eavesdropping network that officially doesn't exist) was being used to spy on multinational contract negotiations for aircraft production makes me think that some of these ideas may have been implemented to a limited degree.

While I think there are suggestions the U.S. may do this too (I know it thought about it), the list of targeted countries for this operation consists of traditional enemies of China: the U.S., Vietnam (in dispute with China over South China Sea economic zones, etc.), India (ditto and shares border), South Korea (enemy of Chinese ally North Korea). Canada? Other than having North America's third largest Chinatown in Vancouver, I have no idea. happy
@jgm@... RE: Canada
China is in competition against us for Canadian oil.
They do not need to do a Perl Harbor. Between the US treasury and its politicians destroying the US currency and credit ratings, US companies sending all manufacturing and service jobs to India and China, our education system failing to prepare our kids to compete in a global economy, and our financial institutions dying of self-inflicted wounds, all the hackers need to do is sit back and watch the empire burn.
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@sharkboyjohn

But everyone knows this, so that's why they cyber-attack.
@William Farrell Denial will not help.
@William Farrell
1+
It's this pompous attitude that is exactly why it will burn...Start selling off chunks of your land and lots of apple pie because 3/4 of your nuclear fleet needs to be replaced soon....where will the money come from ...China......
@William Farrell Every empire collapses eventually.
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Nuclear fleet
Shadeburst 4th Aug
@priort, 3/4 of the nuclear fleet is obsolete. Correct. But they're building new vessels to replace them. They? Who is this They that's going to build the new vessels? Why China of course.
@sharkboyjohn

TRUE.
@sharkboyjohn

In Atlanta, GA we're doing something about preparing our kids to compete in the global economy! We're doctoring test scores so they will have a fighting chance of graduating high school!
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@sharkboyjohn The carcass of the now brain-dead empire still has some jing in the pockets to pick. But otherwise, dead on. The US is collapsing from within just like 100% of all empires do.

Jefferson, Lincoln, McKinley and JFK all told us the banks would do us in.

Burke and others point out that empire dies with a whimper, by it's own hand.

It's been well said that once people in a "democracy" realize they can vote themselves money out of the public treasury the end is inevitable.

History repeats. There is hope this time, given the internet and TRUE and untainted information being available to the masses for the first time in history.

But I wouldn't hold my breath. From the time of Christ on down history shows 80+% of the population never knows what it was that hit 'em, let alone ever saw anything coming. Looks like a fairly accurate statistic from where I sit.
@sharkboyjohn...I agree and I believe we are assistsing them with the help of cloud technology.
This article is funny. McAfee uncover something? McAfee is a horrible product. While it's busy ignoring viruses, it eats up all your resources.
@ibeapunker

Agree. A crappy and resource hungry software that mess with all aspects of your PC.
@ibeapunker I believe they uncovered this by using their own product as a RAT.

It's always amazed me that McAfee (and Symantec) have brilliant researchers but such horrible products. Their AV software is still easily disabled by 2 year old malware. Wish their researchers would take over for the developers.
Want to stop China, ban their students from the USA and fine them the $1.16 Trillion we owe them.
If they are so superior, why do they need to steal?
@ltcastro well let me see...it saves investment and time to catch up and overcome...same reason stealing intellectual property has always been a target....why would they not if they can?
@ltcastro They are superior... at stealing. And it's working. They even produced a clone of the U.S. AEGIS ship-based anti-missile system, presumably from stolen plans.

If only they'd swipe designs to clone our Congress, the booby trap will be complete.... wink
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clone Congress
Shadeburst 4th Aug
@jgm@... brilliant!
@ltcastro

Seriously, many if not all the larger corporations in the U.S. are handing them IP anyway. They need it in order to build our hi-tech toys such as TVs, computers, idevices, microprocessors, etc. Why would they need to steal IP? Texas Instruments gave Japan it's technological kick in the kiester when they handed them the prints to build the first integrated circuits. It's all about money. It's what makes the world go round. Question is what are we Americans going to do about it besides talk?
@ltcastro
Don't know about the US but the UK owes China money big time and yet still pay them aid money.

How silly is that. It's like everyone being in debt to the bank and then donating them extra, because you feel bad for them. Oh **** that's exactly what happened.

I hope a simple email isn't what let them into defense companies. If it's that easy then boy we have problems. Of course the companies governments in the UK employ can build amasing Aircraft carriers for a few billion but can't even get a database working for 11 billion (NHS), though they were probably just happy raking the money in like happens seemingly so often. Where's the pride over an easy life? (applies to Windows too)
I have nothing good to say about Red China.

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