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Saturday, November 15, 2008

EXCLUSIVE: China has been hacking White House, Obama & McCain e-mails!

In the last few weeks, the media have been filled with reports of Chinese cyber spies penetrating the computer networks of both presidential campaigns and even the White House, reading unclassified, but clearly privileged, e-mails.

Unfortunately, that’s only the beginning of it.

No surprise that the Chinese would be interested in what’s being said in the White House, even the non-secret stuff. White House staffers have access to plenty of information that would be of interest to the chaps in Zhongnanhai (the Chinese leadership compound). For instance, Beijing would be especially keen to read the chitchat about the financial crisis and how Washington planned to act on it. In fact, such information could’ve led to China’s decision to prime its own pump with nearly $600 billion in stimulus this week. They’d probably also be interested in even idle White House gossip about the new president-elect, Barack Obama, who hasn’t yet met with senior Chinese leaders.

Snooping on the political campaigns makes perfect sense, too. Intruding into both John McCain’s and Obama’s computer networks might give Beijing a sense of where the incoming president might go on issues important to China. Beijing would love to know the inside skinny on how the candidates really feel about trade policies, human and religious rights and, of course, support for Taiwan, especially U.S. weapons sales.

China’s hacker army is also targeting American industry for espionage, especially the defense industry, where new weapons systems and top-of-the-line defense technology are at the center of the bull’s eye. Hey, why spend billions of dollars and years to develop a sophisticated weapons system when you can steal data on it? The same is true with the civilian side of private industry. Beijing is pilfering the technology of U.S. and other foreign firms that set up shop on Chinese soil. In fact, some firms resist putting cutting-edge research and development there for exactly that reason. Since traditional espionage can be tough in a foreign country, the Chinese have turned to cyberspace. This makes it difficult, if not impossible, to determine who’s picked your pocket, providing plausible deniability to the cyber spook.

Not surprisingly, the amount of industrial cyber espionage is grossly underreported, as firms fret over acknowledging that their intellectual property - the crown jewels of their efforts - has been “exfiltrated.” That’s probably not something they want to announce to their stockholders or Wall Street.

In the end, the Chinese aren’t only stealing industrial and defense secrets, but something more important: America's ability to compete globally. America’s great strength has been its ability to innovate - to develop new ideas and concepts.

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