Tag Archives: corporations

Global cyber-espionage operation uncovered

Global cyber-espionage operation uncovered | InSecurity Complex – CNET News.

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Shady RAT intrusions in 2008

Shady RAT intrusions were rampant in 2008, the year of the Beijing Olympics. (Click image for a large, readable version.)

(Credit: McAfee)

A widespread cyber-espionage campaign stole government secrets, sensitive corporate documents, and other intellectual property for five years from more than 70 public and private organizations in 14 countries, according to the McAfee researcher who uncovered the effort.

The campaign, dubbed “Operation Shady RAT” (RAT stands for “remote access tool”) was discovered by Dmitri Alperovitch, vice president of threat research at the cyber-security firm McAfee. Vanity Fair‘s Michael Joseph Gross was first to write about the findings. The targets cut across industries, including government, defense, energy, electronics, media, real estate, agriculture, and construction. The governments hit include the U.S., Canada, South Korea, Vietnam, Taiwan, and India.

While most of the targets have removed the malware, the operation continues, according to McAfee. The company learned of the campaign in March while investigating a command-and-control operation it had discovered in 2009, but traced the activity back to 2006, Alperovitch said in a conference call. McAfee was able to gain control of the command-and-control server and monitor the activity.

Alperovitch said he had briefed senior White House officials, government agencies in the U.S. and other countries, and U.S. congressional staff. He also has notified the victims and is working with U.S. law enforcement agencies on the investigation, including shutting down the command-and-control server.

“We actually know of hundreds if not thousands of these servers also used by this actor,” he said in the conference call. “The entire economy is impacted by these intrusions. Every sector of the economy is effectively owned persistently and intellectual property is going out the door…It will have an impact on our jobs, the competitiveness of our industries, and on our overall economy.”

 

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Typically, a target would get compromised when an employee with necessary access to information received a targeted spear-phishing e-mail containing an exploit that would trigger a download of the implant malware when opened on an unpatched system. The malware would execute and initiate a backdoor communication channel to the command-and-control server, Alperovitch wrote in the report, which was posted to the McAfee blog.

“This would be followed by live intruders jumping on to the infected machine and proceeding to quickly escalate privileges and move laterally within the organization to establish new persistent footholds via additional compromised machines running implant malware, as well as targeting for quick exfiltration the key data they came for,” Alperovitch wrote.

“Having investigated intrusions such as Operation Aurora [which targeted Google and others] and Night Dragon (systemic long-term compromise of Western oil and gas industry), as well as numerous others that have not been disclosed publicly, I am convinced that every company in every conceivable industry with significant size and valuable intellectual property and trade secrets has been compromised (or will be shortly), with the great majority of the victims rarely discovering the intrusion or its impact,” Alperovitch wrote. “In fact, I divide the entire set of Fortune Global 2000 firms into two categories: those that know they’ve been compromised and those that don’t yet know.”

Unlike recent denial-of-service attacks and data breaches from groups like Anonymous and LulzSec (see chart of recent attacks), these espionage cases are more persistent, insidious, and threatening, and they cause much more harm, revealing important research and development information that can help countries better compete in markets, according to Alperovitch.

 

“I divide the entire set of Fortune Global 2000 firms into two categories: those that know they’ve been compromised and those that don’t yet know.”

–Dmitri Alperovitch, VP, McAfee

“What we have witnessed over the past five to six years has been nothing short of a historically unprecedented transfer of wealth — closely guarded national secrets (including from classified government networks), source code, bug databases, email archives, negotiation plans and exploration details for new oil and gas field auctions, document stores, legal contracts, SCADA configurations, design schematics and much more has ‘fallen off the truck’ of numerous, mostly Western companies and disappeared in the ever-growing electronic archives of dogged adversaries,” he wrote.

“What is happening to all this data — by now reaching petabytes as a whole — is still largely an open question,” he continued. “However, if even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team’s playbook), the loss represents a massive economic threat not just to individual companies and industries but to entire countries that face the prospect of decreased economic growth in a suddenly more competitive landscape and the loss of jobs in industries that lose out to unscrupulous competitors in another part of the world, not to mention the national security impact of the loss of sensitive intelligence or defense information.”

It’s unclear exactly who is behind the operation, but Alperovitch believes it is state-sponsored, although he declined to speculate which country might be responsible.

An educated guess might be China, given the targets. They include organizations in the U.S., most countries in Southeast Asia, but none in China, and many defense contractors. Also attacked were the United Nations, the World Anti-doping Agency, and the International Olympic Committee and Olympic committees in three countries, which were targeted right before and after the 2008 Olympic Games in Beijing, according to the report. China has disputed allegations that it has engaged in cyber espionage or attacks in the past.

“The presence of political non-profits, such as the private western organization focused on promotion of democracy around the globe or U.S. national security think tank is also quite illuminating,” Alperovitch wrote.

The report has a chart that lists all 72 targets; most are not named but are listed by type and country or location, along with country of origin, start date of the initial compromise, and duration of the intrusions. There is also a fascinating timeline that shows each intrusion and its duration by year.

Espionage goes on all the time, but it’s not often that details surface publicly. Several weeks ago security firm Invincea disclosed information about a spear-phishing campaign that was targeting the U.S. defense industry. In that case the e-mail purported to come from the U.S. Intelligence Advanced Research Projects Activity (IARPA) and used an Excel spreadsheet with defense contacts as bait, Invincea Chief Executive Anup Ghosh said in an interview today. More details are on the Invincea blog..

Researchers have to be careful in disclosing information about foreign cyber-espionage campaigns so they don’t compromise surveillance and investigations the U.S. government might be conducting related to those operations, Ghosh said.

“We couldn’t tie the operation to a nation-state, like McAfee did,” he said.

Updated August 3 at 6:30 a.m. PT with details from the McAfee report, at 9:58 a.m. PT with details from a conference call, and at 11:56 a.m. PT to clarify timing of McAfee investigation and include Invincea disclosing espionage campaign.

Why Is The Federal Government Running Ads Secretly Created & Owned By NBC Universal?

Why Is The Federal Government Running Ads Secretly Created & Owned By NBC Universal? | Techdirt.

from the so-that’s-how-it-works… dept

We certainly suspected this when New York City first announced that it was running a series of silly and misleading videos as part of a media campaign to “Stop Piracy in NYC,” but now it’s been confirmed that these videos were not, in fact, New York City’s, but are purely NBC Universal’s. At the time, NYC had “thanked” NBC Universal (among others), but had not admitted that NBC Universal “owned” and had created the videos themselves. However, in response to one of the Freedom of Information requests that I filed with New York City, the city noted that the videos are property of NBC Universal. I had asked for any licensing info between NYC and Homeland Security/ICE because ICE was using the same videos. Since NYC had clearly suggested that those videos were the creation of the NYC government, I assumed that ICE must have licensed the videos from NYC. However, NYC responded to my request by saying that there was no such info to hand over, because it did not license the videos to Homeland Security. And the reason was that NYC did not own the videos:

The Mayor’s Office of Media and Entertainment has no records responsive to your request. Please note that NBC Universal owns the material, not the City of New York.

That’s fascinating information. Of course, I had also filed a separate FOI request for any info on the licensing agreement between NYC and NBC Universal. As of this writing there has been no response from NYC, in violation of New York State’s Freedom of Information Law, which requires a response within 5 business days (we’re way beyond that).

Still, at least give NYC credit for making it clear that NBC Universal had a hand in the creation of the videos, even if it left out the rather pertinent information that it created and owned the videos. While I find it immensely troubling that a municipal government would run PSAs created by corporate interests (without making that clear), I’m extremely troubled by the news that the federal government would run those same videos with absolutely no mention of the fact that the videos were created and owned by a private corporation with a tremendous stake in the issue.

Could you imagine how the press would react if, say, the FDA ran PSAs that were created and owned by McDonald’s without making that clear to the public? How about if the Treasury Department ran a PSA created and owned by Goldman Sachs? So, shouldn’t we be asking serious questions about why Homeland Security and ICE are running a one-sided, misleading corporate propaganda video, created and owned by a private company, without mentioning the rather pertinent information of who made it?

Does Homeland Security work for the US public… or for NBC Universal? 11 Comments

ForeclosureGate Could Force Bank Nationalization

t r u t h o u t | ForeclosureGate Could Force Bank Nationalization.

by: Ellen Brown, t r u t h o u t | News Analysis

photo
(Photo: Joey Parsons / Flickr)

For two years, politicians have danced around the nationalization issue, but ForeclosureGate may be the last straw. The megabanks are too big to fail, but they aren’t too big to reorganize as federal institutions serving the public interest.

In January 2009, only a week into Obama’s presidency, David Sanger reported in The New York Times that nationalizing the banks was being discussed. Privately, the Obama economic team was conceding that more taxpayer money was going to be needed to shore up the banks. When asked whether nationalization was a good idea, House Speaker Nancy Pelosi replied:

“Well, whatever you want to call it…. If we are strengthening them, then the American people should get some of the upside of that strengthening. Some people call that nationalization.

“I’m not talking about total ownership,” she quickly cautioned – stopping herself by posing a question: “Would we have ever thought we would see the day when we’d be using that terminology? ‘Nationalization of the banks?'”

Noted Matthew Rothschild in a March 2009 editorial:

[T]hat’s the problem today. The word “nationalization” shuts off the debate. Never mind that Britain, facing the same crisis we are, just nationalized the Bank of Scotland. Never mind that Ronald Reagan himself considered such an option during a global banking crisis in the early 1980s.

Although nationalization sounds like socialism, it is actually what is supposed to happen under our capitalist system when a major bank goes bankrupt. The bank is put into receivership under the FDIC, which takes it over.

What fits the socialist label more, in fact, is the TARP bank bailout, sometimes called “welfare for the rich.” The banks’ losses and risks have been socialized, but the profits have not. The bankers have been feasting on our dime without sharing the spread.

And that was before ForeclosureGate – the uncovering of massive fraud in the foreclosure process. Investors are now suing to put defective loans back on bank balance sheets. If they win, the banks will be hopelessly under water.

“The unraveling of the ‘foreclosure-gate‘ could mean banking crisis 2.0,” warned economist Dian Chu on October 21, 2010.

Banking Crisis 2.0 Means TARP II

The significance of ForeclosureGate is being downplayed in the media, but independent analysts warn that it could be the tsunami that takes the big players down.

John Lekas, senior portfolio manager of the Leader Short Term Bond Fund, said on “The Street” on November 2, 2010, that the banks will prevail in the lawsuits brought by investors. The paperwork issues, he said, are just “technical mumbo jumbo”; there is no way to unwind years of complex paperwork and securitizations.

But Yves Smith, writing in The New York Times on October 30, says it’s not that easy:

“The banks and other players in the securitization industry now seem to be looking to Congress to snap its fingers to make the whole problem go away, preferably with a law that relieves them of liability for their bad behavior. But any such legislative fiat would bulldoze regions of state laws on real estate and trusts, not to mention the Uniform Commercial Code. A challenge on constitutional grounds would be inevitable.

“Asking for Congress’s help would also require the banks to tacitly admit that they routinely broke their own contracts and made misrepresentations to investors in their Securities and Exchange Commission filings. Would Congress dare shield them from well-deserved litigation when the banks themselves use every minor customer deviation from incomprehensible contracts as an excuse to charge a fee?”

Chris Whalen of Institutional Risk Analytics told Fox Business News on October 1 that the government needs to restructure the largest banks. “Restructuring” in this context means bankruptcy receivership. “You can’t prevent it,” said Whalen. “We’ve wasted two years, and haven’t restructured the top banks, but for Citi. Bank of America will need to be restructured; this isn’t about the documentation problem, this is because [of the high] cost of servicing the property.”

Profs. William Black and Randall Wray are calling for receivership for another reason – the industry has engaged in flagrant, widespread fraud. “There was fraud at every step in the home finance food chain,” they wrote in The Huffington Post on October 25:

“[T]he appraisers were paid to overvalue real estate; mortgage brokers were paid to induce borrowers to accept loan terms they could not possibly afford; loan applications overstated the borrowers’ incomes; speculators lied when they claimed that six different homes were their principal dwelling; mortgage securitizers made false reps and warranties about the quality of the packaged loans; credit ratings agencies were overpaid to overrate the securities sold on to investors; and investment banks stuffed collateralized debt obligations with toxic securities that were handpicked by hedge fund managers to ensure they would self destruct.”

Players all down the line were able to game the system, suggesting there is something radically wrong not just with the players, but with the system itself. Would it be sufficient just to throw the culprits in jail? And which culprits? One reason there have been so few arrests to date is that “everyone was doing it.” Virtually the whole securitized mortgage industry might have to be put behind bars.

The Need for Permanent Reform

The Kanjorski amendment to the Banking Reform Bill passed in July allows federal regulators to preemptively break up large financial institutions that pose a threat to US financial or economic stability. In the financial crises of the 1930s and 1980s, the banks were purged of their toxic miscreations and delivered back to private owners, who proceeded to engage in the same sorts of chicanery all over again. It could be time to take the next logical step and nationalize not just the losses, but the banks themselves, and not just temporarily, but permanently.

The logic of that sort of reform was addressed by Willem Buiter, chief economist of Citigroup and formerly a member of the Bank of England’s Monetary Policy Committee, in The Financial Times following the bailout of AIG in September 2008. He wrote:

If financial behemoths like AIG are too large and/or too interconnected to fail but not too smart to get themselves into situations where they need to be bailed out, then what is the case for letting private firms engage in such kinds of activities in the first place?

Is the reality of the modern, transactions-oriented model of financial capitalism indeed that large private firms make enormous private profits when the going is good and get bailed out and taken into temporary public ownership when the going gets bad, with the tax payer taking the risk and the losses?

If so, then why not keep these activities in permanent public ownership? There is a long-standing argument that there is no real case for private ownership of deposit-taking banking institutions, because these cannot exist safely without a deposit guarantee and/or lender of last resort facilities, that are ultimately underwritten by the taxpayer.

Even where private deposit insurance exists, this is only sufficient to handle bank runs on a subset of the banks in the system. Private banks collectively cannot self-insure against a generalised run on the banks. Once the state underwrites the deposits or makes alternative funding available as lender of last resort, deposit-based banking is a license to print money. [Emphasis added.]

All money today except coins originates as a debt to a bank, and debts are just legal agreements to pay in the future. Legal agreements are properly overseen by the judiciary, a branch of government. Perhaps it is time to make banking a fourth branch of government.

That probably won’t happen any time soon, but in the meantime we can try a few experiments in public banking, beginning with the Bank of America, predicted to be the first of the behemoths to be put into receivership.

Leo Panitch, Canada Research Chair in comparative political economy at York University, wrote in The Globe and Mail in December 2009 that “there has long been a strong case for turning the banks into a public utility, given that they can’t exist in complex modern society without states guaranteeing their deposits and central banks constantly acting as lenders of last resort.”

Nationalization Is Looking Better

David Sanger wrote in The New York Times in January 2009:

Mr. Obama’s advisers say they are acutely aware that if the government is perceived as running the banks, the administration would come under enormous political pressure to halt foreclosures or lend money to ailing projects in cities or states with powerful constituencies, which could imperil the effort to steer the banks away from the cliff. “The nightmare scenarios are endless,” one of the administration’s senior officials said.

Today, that scenario is looking less like a nightmare and more like relief. Calls have been made for a national moratorium on foreclosures. If the banks were nationalized, the government could move to restructure the mortgages, perhaps at subsidized rates.

Lending money to ailing projects in cities and states is also sounding rather promising. Despite massive bailouts by the taxpayers and the Fed, the banks are still not lending to local governments, local businesses or consumers. Matthew Rothschild, writing in March 2009, quoted Robert Pollin, professor of economics at the University of Massachusetts at Amherst:

“Relative to a year ago, lending in the US economy is down an astonishing 90 percent. The government needs to take over the banks now, and force them to start lending.”

When the private sector fails, the public sector needs to step in. Under public ownership, wrote Nobel Prize winner Joseph Stiglitz in January 2009, “the incentives of the banks can be aligned better with those of the country. And it is in the national interest that prudent lending be restarted.”

For a model, Congress can look to the nation’s only state-owned bank, the Bank of North Dakota (BND). The 91-year-old BND has served its community well. As of March 2010, North Dakota was the only state boasting a budget surplus; it had the lowest default rate in the country; it had the lowest unemployment rate in the country; and it had received a 2009 dividend from the BND of $58.1 million, quite a large sum for a sparsely populated state.

For our newly-elected Congress, the only alternative may be to start budgeting for TARP II.

GOP Opposes Federal Fracking Regs Regardless of Whether EPA Finds Poisoning

http://www.huffingtonpost.com/david-sirota/gop-opposes-federal-frack_b_663850.html

As natural gas exploration expands throughout our energy-starved nation — from the West and now into the South and Northeast — many folks living in drilling country are rightfully expressing concern that their groundwater may be susceptible to pollution from the fracking fluids that are central to drilling operations. These are very legitimate fears, as HBO’s critically acclaimed documentary Gasland so graphically shows. And yet, to date, the Republican Party has expressed a rather callous “drill first, never ask questions later” attitude — callous, even for the GOP.

Continue reading GOP Opposes Federal Fracking Regs Regardless of Whether EPA Finds Poisoning