Chinese Military Officials Charged With Stealing US Data As Tensions Escalate!

Attorney General Eric Holder

WASHINGTON —The U.S. accused Chinese military officials of hacking into several U.S. enterprises, including Westinghouse and U.S. Steel, to steal volumes of trade secrets and intellectual property in an indictment made public Monday. It is the first time the U.S. has charged a state actor in a criminal cyber espionage case.

The Chinese hackers, using military and intelligence resources, downloaded massive amounts of industrial information, including strategic plans, from U.S. businesses, the indictment said. In addition to Westinghouse Electric and U.S. Steel, victims included SolarWorld, United Steel Workers Union, Allegheny Technologies Inc.and Alcoa. The indictment, out of western Pennsylvania, charges five military "hackers," officers in the Chinese People's Liberation Army, with directing a conspiracy to steal information from six American companies in critical industries, including nuclear power, solar power and metals.

Federal authorities allegedly traced hackers to a single building in Shanghai. The hacking began in 2006 and continued until last month, federal authorities said. Assistant Attorney General for National Security John Carlin identified the hackers as unit 61398 of the Chinese military. Attorney General Eric Holder called it a case of "economic espionage." The case "represents the first ever charges against a state actor for this type of hacking," Holder said. "The range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response."


Holder said the Chinese hackers stole information that would give insight into "the strategy and vulnerabilities" of the American companies and give Chinese companies a competitive advantage. In one instance, Carlin said hackers stole cost, pricing and strategy information from SolarWorld's computers, allowing Chinese competitors to price exports well below cost and take market share from SolarWorld. In another instance, hackers stole design plans from Westinghouse computers as the company was negotiating with a Chinese state-owned company to construct a nuclear power plant, he said. "In the past, when we brought concerns such as these to Chinese government officials, they responded by publicly challenging us to provide hard evidence of their hacking that could stand up in court," Carlin said. "Well today, we are. For the first time, we are exposing the faces and names behind the keyboards in Shanghai used to steal from American businesses."

Alleged victims in the court documents made public Monday offered little comment. "Obviously we find the situation very troubling. We take it seriously, " says Wayne Ranick, a spokesman for the United Steel Workers Union. He said the union would not comment further. "We have no comment," says Dan Greenfield of Pittsburgh-based Allegheny Technology, noting his company generally does not discuss pending litigation. Alcoa spokeswoman Monica Orbe said no "material information'' was compromised in an incident that "occurred several years ago.''

According to court documents, however, thousands of e-mail messages and attachments from Alcoa's computers, including internal communications about a February 2008 transaction with a state-owned Chinese enterprise, were stolen. "Safeguarding our data is a top priority for Alcoa and we continue to invest resources to protect our systems,'' she said.