Industrial Espionage – John Malcolm

Flame: The Skype-Sniffing, Bluetooth-Enabled Super Spy Tool Is A Harbinger

By Neal Ungerleider | May 29, 2012 | Fast Company

Flame can listen in on Skype conversations, record keystrokes, steal files, and hack a smartphone’s call records. Here’s how it works–and how Flame evaded detection for years.

The news from cybersecurity researchers this Memorial Day sounded like a plot device from a science fiction movie. A hyper-secret surveillance program laid dormant on computers around the world for years, secretly turning on microphones, taking screenshots, copying files, recording keystrokes, fiddling with Bluetooth, and sending all the information off to unknown parties. Following an investigation request by the United Nations’ International Telecommunications Union, the discovery of Flame–the world’s most sophisticated known weapon of cyberwar–was made public. Many of the infected computers belonged to deliberately targeted home users; the exquisitely crafted software escaped evasion by the world’s best antivirus software suites for years.

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US and China engage in cyber war games

By Nick Hopkins | April 16, 2012 | The Guardian

Exclusive: US and Chinese officials take part in war games in bid to prevent military escalation from cyber attacks

Personnel work at the Air Force Space Command Network Operations in Colorado Springs

The Air Force Space Command Network Operations and Security Centre in Colorado. Photograph: Rick Wilking/Reuters

The US and China have been discreetly engaging in “war games” amid rising anger in Washington over the scale and audacity of Beijing-co-ordinated cyber attacks on western governments and big business, the Guardian has learned.

State department and Pentagon officials, along with their Chinese counterparts, were involved in two war games last year that were designed to help prevent a sudden military escalation between the sides if either felt they were being targeted. Another session is planned for May.

Though the exercises have given the US a chance to vent its frustration at what appears to be state-sponsored espionage and theft on an industrial scale, China has been belligerent.

“China has come to the conclusion that the power relationship has changed, and it has changed in a way that favours them,” said Jim Lewis, a senior fellow and director at the Centre for Strategic and International Studies (CSIS) thinktank in Washington.

“The PLA [People’s Liberation Army] is very hostile. They see the US as a target. They feel they have justification for their actions. They think the US is in decline.”

The war games have been organised through the CSIS and a Beijing think tank, the China Institute of Contemporary International Relations. This has allowed government officials, and those from the US intelligence agencies, to have contact in a less formal environment.

Known as “Track 1.5” diplomacy, it is the closest governments can get in conflict management without full-blown talks.

“We co-ordinate the war games with the state department and department of defence,” said Lewis, who brokered the meetings, which took place in Beijing last June, and in Washington in December.

“The officials start out as observers and become participants … it is very much the same on the Chinese side. Because it is organised between two think tanks they can speak more freely.”

During the first exercise, both sides had to describe what they would do if they were attacked by a sophisticated computer virus, such as Stuxnet, which disabled centrifuges in Iran’s nuclear programme. In the second, they had to describe their reaction if the attack was known to have been launched from the other side.

“The two war games have been quite amazing,” said Lewis. “The first one went well, the second one not so well.

“The Chinese are very astute. They send knowledgeable people. We want to find ways to change their behaviour … [but] they can justify what they are doing. Their attitude is, they have experienced imperialism and they had a century of humiliation.”

Lewis said the Chinese have a “sense that they have been treated unfairly”.

“The Chinese have a deep distrust of the US. They are concerned about US military capabilities. They tend to think we have a grand strategy to preserve US hegemony and they see a direct challenge.

“The [Chinese officials] who favour co-operation are not as strong as the people who favour conflict.”

The need for the meetings has been underlined in recent months as the US and the UK have tried to increase pressure on China, which they regard as chiefly responsible for the theft of billions of dollars of plans and intellectual property from defence manufacturers, government departments, and private companies at the heart of America’s national infrastructure.

Analysts say this amounts to “preparation of the battlefield”, and both the UK and the US have warned Beijing to expect retaliation if it continues.

In recent months, the US has made clear it is turning its military focus away from Europe towards the Pacific to protect American interests in the region.

“Of the countries actively involved in cyber espionage, China is the only one likely to be a military competitor to the US,” Lewis said.

“US and Chinese forces are in close proximity and there are hostile incidents … The odds of miscalculation are high, so we are trying to get a clear understanding of each side’s position.”

Lewis believes the US is preparing to become more aggressive towards China, saying President Barack Obama has already tasked internal working groups in the White House to consider tougher sanctions.

Without naming China, a senior executive in the FBI told the Guardian the threats posed from cyber attacks were alarming.

“We know that the capabilities of foreign states are substantial and we know the type of information that they are targeting,” said Shawn Henry, executive assistant director of the FBI’s cyber unit.

Read the full article here.