Information Security News: China accused of hacking into heart of Merkel administration

[InfoSec News <alerts () infosecnews org>]

http://www.timesonline.co.uk/tol/news/world/europe/article2332130.ece

By Roger Boyes in Berlin
The Times
August 27, 2007

China has hacked into the computers of Angela Merkel’s Chancellery and 
three other German ministries in an extraordinary economic espionage 
operation that threatens to blight the German leader’s already delicate 
trip to Beijing this week.

The claims, made in a detailed investigation by Der Spiegel magazine, 
were denied strenuously by the Chinese authorities yesterday, but there 
was no mistaking German anger. “If true, it is unacceptable,” Ralf 
Stegner, a senior Social Democrat, said. “China is a competitor as well 
as a trading partner. Mrs Merkel has to get to the bottom of the affair 
on her China trip.”

Mrs Merkel arrived in China last night with senior business executives 
determined to put concern about product piracy high on the agenda. “We 
are pursuing the issue of protection of intellectual property very 
strongly with China,” said Mrs Merkel, who refused to discuss the 
espionage claims.

Der Spiegel, quoting senior officials from the German equivalent of 
Special Branch, said that the hacking operation was discovered in May. 
Computers in the Chancellery, the Foreign, Economics and Research 
ministries had been targeted. The Federal Office for the Protection of 
the Constitution (BfV) conducted a comprehensive search of government IT 
installations and prevented a further 160 giga-bytes of information 
being transferred to China. Commentators described it as “the biggest 
digital defence ever mounted by the German state”.

The information was being siphoned off almost daily by hackers in 
Lanzhou, northern China, in Canton province and in Beijing. The scale 
and the nature of the data being stolen suggest, the investigators say, 
that the operation must have been steered by the State and, in 
particular, the People’s Liberation Army.

“Does this Chinese man now know all our government secrets?” an outraged 
Bild am Sonntagasked yesterday next to a large photograph of General Cao 
Gangchuan, the Chinese Defence Minister. The content of the stolen data 
has naturally not been disclosed. “It can only have been interesting for 
state institutions,” said a confidential report by the BfV leaked to Der 
Spiegel. “So we must assume that the Chinese State is involved in the 
electronic attacks.”

Investigators caution that businessmen should not leave their laptop 
computers in hotel rooms while at official functions because of the risk 
of data theft. And all information transferred from China to German 
corporate headquarters should be encoded. “I have become really worried 
about Chinese espionage in the technology area,” says Hartmut Schauerte, 
parliamentary minister in the Economics Ministry and a China specialist.

The suspicions are now so deep that the motives of Chinese researchers 
at German universities are being questioned. Yesterday the Chinese 
Embassy in Berlin described the accusation of state-steered hacking as 
“irresponsible speculation without a shred of evidence”.

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