WASHINGTON—China stealthily integrated itself into America’s telecommunications market over the past several years and is taking advantage of the United States’ superior name brand to further its goals, alleges a U.S. China Economic and Security Review Commission (USCC) report this month.
China is “able to affiliate their products with the excellent reputation of U.S. brands in global markets. China’s technology industry now appears to be a de facto part of the American communications industry landscape,” states the USCC report in its introduction.
A major issue is that China aggressively bulldozes its way into every conceivable market, most importantly the technology sector, crushing its competitors with cheaper subsidized products (often filching the technology from foreign companies doing business in China), forced technology transfer, cyber attacks, corporate spying, or acquisition of foreign companies.
The Commission sent out a warning signal stating, “Investments would increase China’s leverage in the U.S. marketplace and beyond (even if indirectly through joint ventures and third parties) and could eventually provide China access to or control of vital U.S. and allied information, networks, or segments of critical supply chains.”
Espionage in High Gear
“Lurking in the cybershadows is a far more insidious and sophisticated form of computer espionage. … Such attackers represent the elite—a dark army of cyberspies targeting the heart of corporations around the world where trade secrets, proprietary data, and cutting-edge technologies lie locked away in digital fortresses,” according to an investigation on Chinese cyber attacks by The Christian Science Monitor (CSMonitor) last year.
Experts suggest that one tool of the espionage trade is cyber espionage, a highly effective tool that has been employed a number of times and was more often than not found to originate in China.
“The China threat is constant. If there’s valuable intellectual property out there, there are people in China and elsewhere who want to take it. It’s the new battlefield—low risk and low investment with high gain,” said Shawn Carpenter, forensics analyst for cybersecurity company NetWitness, in the CSMonitor article.
In 2010, Canadian cyber attack experts discovered spyware nicknamed “GhostNet.” The spyware was found to originate from Hainan Island Internet accounts, where the Chinese army intelligence is located.
The USCC report also sees China as the main culprit in stealing trade secrets via cyber attacks. “There is growing public concern over the impacts of cyber espionage incidents that appear to originate in China.”
Congressional and industrial sources said that computer attacks on companies, including Google, Yahoo, and defense contractor Northrop Grumman have increased, although these companies, outside of Google, have remained quiet about it.
“Online attacks that appear to come from China have been an ongoing problem for years, but big companies haven’t said much about this, eager to remain in the good graces of [China],” according to an article on Computerworld’s website.
According to expert opinion, these companies downplay incidents for fear of losing access to the so-called lucrative Chinese market.
Next: Chinese students are trained in the U.S.
Paola Totaro reports on the scandal that rocked Fleet Street, spread to Downing Street – and threatens Rupert Murdoch’s TV expansion plans.
Four years ago, almost to the day, a jowly Fleet Street veteran and an angular, young-gun private investigator stood in the dock at the Old Bailey. Eyes downcast, they apologised to the princes, William and Harry, for ”gross invasion of privacy” and then braced as the judge sentenced them to several months in jail.
The two men, News of the World royals reporter Clive Goodman and investigator Glenn Mulcaire, then quietly disappeared behind bars. Their boss, editor Andy Coulson, fell on his sword – denying all knowledge of his reporter’s use of the ”dark arts” but taking “ultimate responsibility” for the illegal hacking of royal aides’ voicemail.
A spate of ugly headlines and a public brouhaha ensued but that, the protagonists and their News International bosses hoped, would be the end of the affair.
This week, however, the scandal re-exploded with unexpected force, spreading the potential for collateral damage far beyond the newsroom of the controversial tabloid, Britain’s best-read paper.
Scotland Yard has been forced to launch a new investigation. The Prime Minister, David Cameron, lost Andy Coulson, his communications director and a key adviser at No. 10 Downing Street and the paper’s news editor, Ian Edmondson, was sacked as court documents revealed the paper’s hacking may have continued well into last year.
As the Crown Prosecution Service begins to sift through existing – and new – evidence, a long list of high-profile personalities, from actors and sports stars to MPs and former cabinet ministers, are furiously lining up in the civil courts to test whether they have been phone hacking victims, too.
The consensus in London is that by the time the scandal is laid properly bare, few newspapers will emerge untainted.
Alastair Campbell, Tony Blair’s communications director – himself dubbed the master of the dark arts of political spin – told the Herald this week that the affair has the potential to tip ”the whole newspaper industry” into its own version of the MPs’ expenses scandal. News of the World, he warned, should not be the only paper to fear that ”squeaky bum time is looming”.
The Guardian, Campbell said, has been an almost solitary voice pursuing the hacking allegations while other newspapers have been ”itching to will it away”. He cited a thundering editorial in the Daily Mail this week, which suggested that Coulson’s departure from Downing Street should represent the ”end of the matter”.
”I wonder why?” Campbell said. ”Could it be, as one or two of the papers finally seem to be suggesting, that far from this being a story of one rogue reporter at one Sunday newspaper, it is a story of a newspaper industry out of control, and losing sight of the importance of the law.
”Coulson’s departure from No. 10 is just one rather dramatic chapter. But the real issues go far wider and deeper than one job in Downing Street … they’re about the conduct of newspapers, the conduct of the police, and the implications for News Corp’s attempted buy-out of BSkyB.”
In the House of Lords on Thursday, Lord Fowler, a former journalist and minister in the Thatcher government, demanded a full-scale, independent investigation: ”Do you remember the Watergate scandal when one brave newspaper protected the public interest?” he said. ”Has not exactly the opposite happened in the phone hacking scandal where you have one newspaper, and possibly others, not exposing injustice but instead directly conspiring against the public?”
The affair resurfaced due to tenacious investigative work, principally by The Guardian and its investigations editor, Nick Davies, and last year, across the Atlantic, a powerful magazine piece by an investigative team on The New York Times.
These, of course, are media rivals of Rupert Murdoch’s most influential and important titles, Britain’s The Times among them. This has been a mantra, frequently repeated in off-the-record comments attributed to News Corporation or its allies.
In public, News’s defence, at least until now, has been consistent and focused on the corporate belief that phone hacking of message banks had been the work of just one rogue reporter, done without the knowledge of superiors and executives.
But behind the scenes, it has become apparent that the full force of News International has been unleashed to defend the media giant as it moves into the final negotiations of a plan to buy the remaining 61 per cent of the satellite broadcaster, BSkyB in a ÂŁ7.5 billion ($11.9 billion) deal. Murdoch has been reported to have expressed his fury that an internal clean-up of the mess was not instituted sooner.
Opposition to the BskyB plan was well known: when news of the proposed takeover broke last year, rival media outlets, including the BBC and The Guardian reacted vocally, arguing News International would dominate Britain’s media landscape even further – it already controls one-third of national newspaper circulation and its broadcasting arm has a turnover of ÂŁ5.9 billion, compared with the BBC’s ÂŁ4.8 billion.
This makes Coulson’s shock departure from Downing Street all the more significant. It happened just days before Murdoch was due in London for key discussions before jetting off to the World Economic Forum in Davos – a plan he jettisoned at the 11th hour, fuelling further conjecture that Coulson’s immolation formed part of the damage control strategy.
In an intriguing blog midweek, Robert Peston, the BBC’s high-profile and well-connected business editor, anticipated the launch of what is shaping up to be a ferocious, behind-the-scenes PR strategy in which News Corporation aims quickly to clean out its own Augean stables but is unlikely to hold back from sharing the pain of being the only one caught out.
Peston likened it to the BP oil spill strategy, one in which ”company suffers a disaster; company offers comprehensive financial settlement to victims of the disaster; company admits to its own shortcomings, but implies that an entire industry has also engaged in similar flawed practices”.
News Limited executives, he said, had told him they are now hell-bent on ”finding out everything they can about who was hacked by the News of the World … and who at News International knew about the hacking”.
Once the details are known, News is poised to offer ”settlements to those celebs, politicians and others whose privacy may have been invaded – to cut out the requirement for huge lawyers’ fees. Any culpable News International executives will be sacked.
”They tell me all of this could happen in a matter of weeks. And, not too subtly, the message will be sent out that if News International’s Augean Stables have been cleaned, what about the stench from other media groups? Because, as I’ve mentioned before … there was a period at the start of this century when questionable techniques to obtain stories were employed by a number of newspapers.”
On Thursday, The Times, reticent until now in its coverage of the affair, ran a big story that News International ”will take swift and decisive action when we have proof of wrongdoing”.
Under the headline ”Newspaper phone hacking widespread”, News turned its sights on the rest of Fleet Street. Quoting the lawyer Mark Lewis, who is acting for celebrities who also claim to be phone hacking victims (among them Sienna Miller), the practice was described as widespread ”almost kids’ playtime”. ”It was such a widespread practice. I am absolutely positive – and I am not an advocate for the News of the World – that this wasn’t a practice for one newspaper or even one newspaper group,” Lewis told The Times.
It may seem surprising but there has long been official concern that Fleet Street has practised questionable – and often illegal – ”dark arts” to break news. The extent of such practices has been the cause of anxiety for, and the focus of forensic investigative work by, Britain’s Information Commissioner. In 2006, the commissioner’s office released a report, What Price Privacy, which even recommended a new penalty regime, including increasing terms of imprisonment for infringements to two years.
More extraordinary is that at the time the News of the World man and his private investigator were awaiting sentencing four years ago, the commissioner released a second report that further investigated the organised trade in confidential data – naming 31 publications that dealt with a firm of private investigators in Hampshire.
The top offender, with 952 transactions, was the Daily Mail.
But the list included titles as diverse and serious as The Observer and The Sunday Times along with myriad London tabloids, smaller regional papers including the Irish edition of the Daily Mail and magazines Marie Claire and Woman’s Own.
The dark affair began in the most banal way in 2005. Odd stories began appearing in the News of the World about Prince William, snippets as silly as his visit to a knee surgeon for a damaged tendon. At the same time, royal staff started noticing that mobile phone messages appeared to have been listened to – when the individuals concerned knew they had not retrieved them.
Scotland Yard began investigating Buckingham Palace aides’ suspicions and it did not take too long for the trail to lead to Mulcaire, a former footballer turned investigator, and Goodman, his royals reporter partner-in-crime. As Scotland Yard turned its surveillance to the suspects’ own phones, a rival paper, The Sun, scooped News of the World with the tale of Prince Harry visiting a strip club. (The unforgettable headline: ”Harry buried face in Margo’s mega boobs, Stripper Jiggled, Prince Giggled”.)
Clearly oblivious to the police investigation, Goodman followed up with an article of his own which not only reported Prince Harry’s girlfriend’s distress about the incident but also quoted verbatim a voicemail that Prince Harry had received from his brother, teasing him about the story.
By then, however – and this really only become known in July 2009 when The Guardian delved back into the story – Scotland Yard’s own investigations had found that it was not just the royal family whose privacy had been invaded. Actors, government ministers and their aides, MPs, football stars and even some News of the World staff had been hacked, too.
According to The Guardian’s investigation, the cache seized by police from Mulcaire included 4332 names or partial names, nearly 3000 mobile phone numbers, 30 audio tapes and 91 PIN codes of the type needed to get into the voicemails of the minority of targets who took the trouble to change the factory settings on their mobile phones.
Britain’s legendary police force – whether by choice or circumstance – chose to focus solely on the royal case, using the jailing of Goodman and Mulcaire as a lesson and dumping the rest.
This was despite the possibility of literally thousands of potential hacking victims – and a tape on which Mulcaire is allegedly heard walking a journalist through how to hack into the voicemail of a football official. Scotland Yard, a growing chorus of critics says, simply did not bother to pursue the myriad leads that have now shown that the country’s most popular newspaper was spying on its citizens.
On Thursday, when things apparently could not get any worse, High Court documents revealed that the hacking may have continued as late as last year and that Sienna Miller’s former stepmother, a London interior designer, is also suing the News of the World and one of its journalists for hacking into her messages between June 2009 and March 2010. The reporter involved was suspended last year but, until now, the details of the case had been concealed by court orders.
News International has robustly denied the claim, insisting it knows of no such evidence. The reporter himself apparently said he dialled the number normally but gained accidental access to the voicemail when his fingers got stuck on the keys.
For Scotland Yard, the latest revelations represent an additional, serious political problem as both sides of politics unite in outrage. The former deputy prime minister, Labour’s John Prescott, has demanded a judicial review of the police handling of the case, warning Labour does not ”trust the Metropolitan Police to conduct a proper inquiry”.
Tory MP John Whittingdale, the chairman of the parliamentary select committee on culture, echoed his sentiments, warning the police they have ”serious questions” to answer and accusing them of accepting News International’s excuse of just one rogue reporter.
”This has all come about on the basis of information which was available to police five years ago,” he said, demanding to know why they did nothing with the information. ”I would say this raises very serious questions about thoroughness and attitudes of the Met police at the time.”
And now, solicitor Mark Lewis, – who obtained a whopping settlement from the News of the World over the hacking of the phone of Gordon Taylor, the chief executive of the Professional Footballers’ Association – is lining up to present cases for numerous clients who all allege an unlawful breach of privacy, many of them against media groups other than News International.
The publicist Max Clifford – who also had received a million-pound pay-out to buy his silence – this week stated categorically and in public that the practice was widespread.
Lewis has apparently described the claims made by his clients as ”pretty hair-raising”, opening another Pandora’s Box that suggests it might be timely for all media groups – and in the end, everyone knows who they are – to muck out their own stables, quick smart.
Nick Brown, the former chief whip and key political ally of former prime minister Gordon Brown, became the latest public figure yesterday to say that he believes his private calls and messages were eavesdropped.
The Newcastle MP revealed that he believes his landline was the subject of an “amateurish” bugging operation around the time his homosexuality was made public in 1998.
Five years later, he was also approached by police investigating voicemail hacking claims and warned that his mobile phone may have been illegally accessed. The former Cabinet minister is the latest senior Labour figure to come forward with claims that his phone calls and messages were hacked. Tessa Jowell, the former culture secretary, revealed that her phone may have been accessed as recently as this week and she has hired lawyers to discover who hacked into her messages on 29 separate occasions in 2006.
Although it is not known in both cases who was responsible for the hacking, the claims will further fuel the phone hacking scandal engulfing the News of the World (NOTW), which is now the subject of a new police investigation following the decision of the Sunday paper to sack its head of news, Ian Edmondson.
Mr Brown, who was chief whip in the Commons for Tony Blair when he first came to power in 1997, said that his suspicions were raised following a conversation from a landline with an “important” person while his sexuality was still unknown. The MP said: “I picked up a landline telephone very quickly to make another call straight away. And the line clicked and then I heard my last conversation played back to me, which was quite eerie.
“I got on to British Telecom straight away. They said the line showed every sign of having been intercepted manually, not through scanners. It was an amateurish attempt involving the physical intervention of the line with a recording device.”
He added: “The engineer thought a recording device had been set to record calls automatically. I have no idea who did it but it was clearly not the intelligence services. I assume it was someone acting for a newspaper.”
Mr Brown, who also served as agriculture secretary, revealed he was gay after a former lover approached the NOTW offering to sell his story. In a speech to farmers the day after he confirmed his sexuality, the then minister put on a brave face, saying: “The sun is out – and so am I.” There is no evidence that the NOTW was responsible for the bugging operation.
Mr Brown added that he was then approached by an unnamed police force in the west of England in 2003 who told him that they were pursuing a phone-tapping prosecution and he was one of those who may have been targeted. The case collapsed when it reached court and full details of the allegations were never disclosed.
The MP said: “Given that it was near [Prince Charles’ home] Highgrove, my assumption was that this might involve the Royal Family. But I was never explicitly told that.”
Mr Brown, regarded as a staunch supporter of Gordon Brown, who has made public his own concerns that his phone was hacked while he was chancellor, called on Scotland Yard to make a greater effort to ensure such crimes did not take place again. He said: “The only people who can properly inquire into this are the police and they are right to review everything.”
A growing number of public figures have come forward recently claiming they were targeted by Glenn Mulcaire, the private detective who was jailed in 2007 along with the NOTW’s then royal editor, Clive Goodman, for illegally accessing the voicemails of member of the royal household.
The television actress Leslie Ash and her husband, Lee Chapman, the former footballer, said they were planning to sue after records of phone numbers belonging to the couple and their children were found on notebooks seized at the home of Mr Mulcaire.
