NEW YORK – Bugging by Rupert Murdoch’s News of the World tabloid even reached a former deputy prime minister. Clive Irving on how Scotland Yard investigators messed up—and the wider ethical concerns.
In London the firestorm over telephones being bugged by reporters from Rupert Murdoch’s saucy tabloid, the News of the World, just escalated. This is becoming one of those scandals where the more the perpetrators want to bottle it up the more it won’t stay bottled.
The News of the World hacking raises wider concerns than just the ethics of tabloid journalism and the complicity of executives at Murdoch’s papers.
Two previous inquiries by the Yard were suspiciously casual, and in view of what has since emerged were more like white washes than investigations.
The latest investigation is led by a feisty woman, deputy assistant commissioner Sue Akers, who seems determined to clear up the mess left by her male predecessors—no matter who gets embarrassed in the process.
Wednesday night she sent out an email to people whom she now suspects had been targets—as many as 20 of them. (Previously the Yard had put the number at 10 or 12). She even said that some public figures had been misled by the Yard when seeking assurance they had not been bugged.
The case of John Prescott is particularly poignant.
This larger-than-life rumbustious politician was Tony Blair’s essential lifeline to the working class roots of the New Labour party. Blair himself had a famously tin ear for the old-time grass roots faction. Prescott flaunted the perks of office, being dubbed “Two Jags Prescott” because he owned two Jaguar luxury sedans. And in 2006 he admitted to having an affair with one of his secretaries.
The new evidence turned up by the Yard apparently shows that Prescott’s phone was hacked in the month that he confessed to this affair.
Politicians I have spoken to here in London now believe that the News of the World hacking raises wider concerns than just the ethics of tabloid journalism and the complicity of executives at Murdoch’s papers.
First, there is the issue of Scotland Yard’s serial bungling—or, worse, of its self-restraint for fear of annoying a powerful media baron. And second there is the issue of how secure the phone conversations of senior ministers are. Tabloid reporters are not particularly regarded as masters of technology. If they can bug the mighty so easily, what about the real pros working for foreign governments or terrorist groups?
NEW YORK (TheStreet) — As intellectual property becomes an ever-sharper point of contention in U.S.-Chinese relations, federal authorities are ramping up their efforts to combat economic espionage and trade-secret theft by Chinese nationals.
From General Motors(GM) to Ford(F), from Dow Chemical(DOW) to DuPont(DD), from Motorola(MOT) to Sun Microsystems, from Boeing(BA) to Northrop Grumman(NOC), dozens of U.S. companies have become embroiled in cases where employees have allegedy purloined top-secret business data — either by insiders or cyber-attack — and provided it to Chinese competitors.
Perhaps more than other Western nations, the U.S. has aggressively prosecuted cases of Chinese industrial espionage. In recent years, athorities here have been intensifying their efforts. “There’s been a lot of pressure from business and from the defense communities, both in the government and at contractors, that this is a problem,” says Sean Noonan, an analyst at Stratfor, a firm that provides research and analysis on geopolitical issues.
U.S. attorneys have filed at least eight trade-secret or industrial espionage cases related to China since 2008, more than the previous seven years combined. Those cases include both charges against individuals for intellectual property theft, as well as the more serious “economic espionage,” which the law describes as industrial spying for the “benefit of a foreign government.”
According to a report released by the Obama administration Monday, don’t expect the flurry of investigations to slow down.
In the 92-page text, which detailed the federal government’s intellectual property enforcement efforts in 2010, China loomed large.
“Over the last six months, we have heard repeated concerns about enforcement of patents and trade secrets, particularly in China,” the report read. “This year, DOJ and the Federal Bureau of Investigation (FBI) have increased their investigations and prosecutions of corporate and state-sponsored trade secret theft.”
Prepared by President Obama’s “intellectual-property czar,” a post he created just after he took office, the report said that the FBI will send a specialist agent to China later this year, charged with smoking out the illicit appropriation of intellectual property. Since September, the Department of Homeland Security’s investigative arm has had a designated agent stationed in Guangzhou working on trade-secret issues. And, in October, Attorney General Eric Holder made his visit to Beijing, specifically to hammer home U.S. worries about misappropriated intellectual property.
BHP Billiton chief executive Marius Kloppers was willing to trade secrets with the United States and feared espionage from the Chinese, Rio Tinto Ltd and the Australian government, according to an American secret diplomatic cable released by WikiLeaks and reported on by Fairfax Media.
Beginning in a June 4, 2009 meeting between Mr Kloppers and US consul-general Michael Thurston and in subsequent discussions, Mr Kloppers asked US diplomats for insights on China’s intentions and said he would be willing to trade secrets in order to obtain information on China, according to Fairfax reports on the secret US cable.
In addition, Mr Kloppers reportedly took credit for derailing the controversial plan by Chinese state-owned Chinalco to invest $23.9 billion in Rio Tinto. His claim of having personally quashed the investment came a day before the deal collapsed, the report said.
Mr Kloppers, who described himself as only nominally Australian, also reportedly complained about surveillance and even espionage by the Chinese, Rio Tinto and the Australian government, describing doing business in Melbourne as being similar to playing poker when everyone can see your cards, Fairfax reported.
The cables describe Mr Kloppers as saying the Australian government was wary of too much Chinese investment and would prevent Chinese state-owned firms from owning Australia’s largest mining companies such as BHP, Rio Tinto and Woodside Petroleum Ltd, according to Fairfax.
“Clearly frustrated, Mr Kloppers noted that doing business in Melbourne (BHP’s Australian headquarters) is like ‘playing poker when everyone can see your cards’,” it quoted a US envoy to Australia, Michael Thurston, as saying in a cable.
“(Mr Kloppers) complained that Chinese and industrial surveillance is abundant and went so far as to ask consul-general (Thurston) several times about his insights into Chinese intentions, offering to trade confidences,” the cable said.
BHP Billiton declined to comment.
BHP Billiton and Rio Tinto each count China as their biggest markets but relations with China have sometimes been tense, especially in the iron ore market which Rio Tinto and BHP Billiton dominate along with Brazil’s Vale .
Tensions peaked in 2009 when Chinese steel producers failed to clinch an annual pricing deal and a Shanghai court jailed four Rio Tinto employees, including Australian citizen Stern Hu, for stealing commercial secrets and taking bribes.
Their arrest at the height of fraught 2009 iron ore price negotiations strained ties between Australia and China, and shocked the Chinese steel industry.
BHP Billiton had already riled Chinese steel mills with its 2008 bid to take over Rio Tinto, though BHP Billiton later dropped its offer in the face of stiff global opposition among competition regulators. BHP Billiton upset the mills again in 2009 with a proposed iron ore joint venture with Rio Tinto, a deal that also floundered over anti-competition concerns.
Between those two failed attempts to forge a BHP Billiton-Rio Tinto alliance, Chinese state-owned metals conglomerate Chinalco proposed a $US23.9 billion partnership with Rio Tinto, which Rio Tinto initially accepted, but later rejected.
Mr Kloppers took personal credit for quashing that deal, according to Wikileaks, Fairfax reported.
“Australia does not want to become an open pit in the southern-most province of China,” Mr Kloppers said at the time, according to the report.
Global miner BHP Billiton Ltd’s boss, Marius Kloppers, confirmed he had harboured concerns about Chinese and competitor espionage on his business, citing it as a reason behind his push for market pricing of key commodities.
Mr Kloppers, who runs the world’s biggest miner, once offered to trade intelligence on China with Washington after telling a US diplomat about the extent of Chinese surveillance of his firm, reports claimed said this week.
The Sydney Morning Herald, citing diplomatic cables obtained from WikiLeaks, said Mr Kloppers had confessed his concerns to the Australia-based envoy in 2009, at a time when he was pushing Chinese customers to switch from closed-door annual price negotiations to more market-based pricing.
Asked on Wednesday to confirm whether he was concerned about espionage from China and from competitors such as rival miner Rio Tinto , Kloppers told an earnings briefing: “I would rather like to put that in a positive.”
“One of the reasons we have pushed so hard for market-clearing prices is so that these sorts of things are not a concern, because if you sell your product at the market-clearing price, that everybody can read off screens, it minimises any impact of differential information that the one party or the other may hold,” he said.
“So you produce at full capacity and you sell at the market price and you should, from those comments, really understand why we have pushed so hard to get the market-clearing price.”
Mr Kloppers led a successful battle over the past two years to move pricing of iron ore sales away from annual negotiations, despite resistance from Chinese steel mills which buy more than $US25 billion ($A24.9 billion) of the raw material a year from Australia alone.
Negotiators involved in the annual talks – a system now replace by quarterly market-based pricing – relied heavily on good industry intelligence to strike the best annual bargain, and the negotiations were often tense and full of intrigue.
Tensions peaked in 2009 when Chinese steel producers failed to clinch an annual pricing deal and a Shanghai court jailed four Rio Tinto Ltd employees, including Australian citizen Stern Hu, for stealing commercial secrets and taking bribes.
The arrest of Mr Hu and three Chinese colleagues at the height of fraught iron ore price negotiations strained ties between Australia and China, and shocked the Chinese steel industry.
Experts say the absence of dividing lines between the state and corporations in countries such as China, coupled with digital technology that can make it easy to steal huge volumes of information, increases the risks companies face.
Last month, French President Nicolas Sarkozy’s office asked French intelligence to probe suspected industrial espionage at car giant Renault with a possible Chinese link, a government source told Reuters. China denies involvement .
Renault is far from the only suspected case. US cables released by WikiLeaks show diplomats blaming China for hacking into Google systems that prompted the Internet giant to pull back from mainland China.
Some analysts also suspect information theft may be helping China close the gap faster than expected as it builds a “stealth fighter” to rival Lockheed Martin’s F-22.
E-mail is still the top attack method for targeted and espionage attacks, says Mikko Hypponen, chief research officer at security firm F-Secure.
Chat, instant messaging and web-based attacks are still in the minority, he told delegates at the RSA Conference 2011 in San Francisco.
The reason espionage is increasingly moving online, he said, is simply that most information is now stored digitally, and it is possible to steal information without necessarily gaining access to the target organisations.
Typically these are targeted attacks, where an individual within an organisation will receive an e-mail that appears to come from someone they know.
The e-mails also typically have a document attached that makes sense and is relevant to the recipient that is often a copy of actual documents used by the supposed sender’s organisation.
The recipient views the document, but is totally unaware that malware is being installed in the background that creates a backdoor, said Hypponen.
“This backdoor not only gives the attacker access to the victim’s system, but also to everything on the network that they are authorised to access,” he said.
Even though Word and other document types are used, PDF is the most common document used for targeted attacks.
“Attackers exploit vulnerabilities in Adobe Reader to install the malicious code on the victim’s machine,” said Hypponen.
In the face of these types of targeted espionage attacks, businesses should make employees aware of the tell-tale signs.
If documents take longer than usual to appear, it could be that a backdoor is being installed before a fake document is displayed, said Hypponen.
A difference in the name of the attached file and the file that is eventually displayed, is also an indicator of a potential targeted attack.
Anyone who suspects that e-mail may be illegitimate should check with the supposed sender to see if they did indeed send the e-mail in question, preferably before they open the attachment, he said.
Businesses can also better detect targeted attacks by monitoring the sites to which employee computers are connecting, said Hypponen.
In addition to several well-known malicious sites, businesses can monitor for sites that use variations on the spelling of legitimate sites.
“If an employee’s computer is connecting to a site like www.kabspersky.com, it is likely to be a malicious site,” said Hypponen.
It is important for businesses to ensure security patching is always up to date and they are monitoring all connections made from corporate computers, he said.
Hypponen also recommends businesses use an alternative PDF reader than the product from Adobe. His reasoning is that other readers do not have the same install base and are therefore less targeted.
Bugging by Rupert Murdoch’s News of the World tabloid even reached a former deputy prime minister. Clive Irving on how Scotland Yard investigators messed up—and the wider ethical concerns.
