Huge Cyber Spying Effort Revealed, China Suspected

WASHINGTON - The United States, United Nations, defense contractors and the International Olympic Committee were targets of a massive global cyber spying campaign, a computer security firm said on Aug. 3, with China seen as the likely culprit.

McAfee vice president for threat research Dmitri Alperovitch described it as a "five-year targeted operation by one specific actor" but declined to identify the country responsible.

California-based McAfee said in a report it had identified 72 victims in 14 countries of a sophisticated hacking effort dubbed "Operation Shady RAT," which it traced back to at least 2006.

The "compromised parties" included the governments of Canada, India, South Korea, Taiwan, the United States and Vietnam, McAfee said, as well as a U.S. Department of Energy research laboratory and around a dozen U.S. defense contractors.

Others included computer networks of the United Nations, the Association of Southeast Asian Nations, the International Olympic Committee, Asian and Western national Olympic committees and the Montreal-based World Anti-Doping Agency.

In a conference call with reporters, Alperovitch, the lead author of the report, said the intrusions into the systems of defense contractors targeted "sensitive military technologies."

He said McAfee had notified law enforcement about the cyber espionage campaign, briefed the White House and members of the U.S. Congress and was working with some of the targeted companies on remediation efforts.

"We believe based on the targeting and the scale and the impact of these operations, and the fact that they didn't just have an economic gain in mind but also political and military, that that this is clearly a nation-state but we're not pointing the finger at anyone," Alperovitch said.

James Lewis, a cybersecurity expert at the Center for Strategic and International Studies, said the evidence may not be "conclusive in a legal sense," but suspicion points towards China.

"You can think of at least three other large programs attributed to China that look very similar," Lewis told AFP. "It's a pattern of activity that we've seen before."

Google said in June that a cyber spying campaign originating in China had targeted Gmail accounts of senior U.S. officials, military personnel, journalists and Chinese political activists.

In January of last year, Google announced it was halting censorship of its Internet search engine in China after coming under attack along with 20 other companies from hackers based there.

In February, McAfee said in another report that hackers in China have penetrated computer networks of global oil companies, stealing financial documents on bidding plans and other confidential information.

McAfee said it had discovered the "Shady RAT" series of cyber attacks by gaining access to a command and control server in a Western country used by the intruders and examining its logs.

"After painstaking analysis of the logs, even we were surprised by the enormous diversity of the victim organizations and were taken aback by the audacity of the perpetrators," McAfee said.

McAfee said attacks on Asian and Western national Olympic committees, the International Olympic Committee and the World Anti-Doping Agency occurred in the lead-up and immediate follow-up to the 2008 Beijing Olympics.

It described this as "particularly intriguing and potentially pointed a finger at a state actor behind the intrusions, because there is likely no commercial benefit to be earned from such hacks."

Other targets included a private Western organization focused on promoting democracy, two U.S. national security think tanks, South Korean steel and construction firms, a Danish satellite communications company, a Singapore electronics company, a Taiwanese electronics firm, Vietnam's government-owned technology company and U.S. state and county governments, McAfee said.

It said a major U.S. news organization - identified as the Associated Press by The Washington Post - was "compromised at its New York headquarters and Hong Kong bureau for more than 21 months."

McAfee said the attacks involved sending infected emails to employees of the targeted companies. When opened, the emails implanted malware and established a backdoor communication channel to the command and control server.

Data theft appeared to be the chief objective of the attackers but Alperovitch warned the "potential exists for even more insidious activity."

"These intruders are in our systems, in the systems of all these companies, in all these government systems," he said. "The likelihood that they'll escalate the activity from just stealing data to modifying data or destroying data or destroying systems is also there."

China Officially Offers Pakistan J-10 Variant

ISLAMABAD - China for the first time officially offered Pakistan a variant of its most advanced frontline fighter, the Chengdu J-10 Vigorous Dragon/F-10 Vanguard.

Official Pakistani interest in the fighter dates back to February 2006, when then-Pakistani President Pervez Musharraf toured the J-10 production facilities on a trip to China. Pakistani government approval for the purchase of 36 FC-20s, a Pakistani-specific variant, was given in April 2006. Service entry was slated for the middle of the decade.

Citing defense sources, the offer was reported in the Urdu press here over the weekend. The offer was made during the recent visit to China by Lt. Gen. Waheed Arshad, the Pakistani Army chief of General Staff.

Precise details of the deal are not yet known. However, Usman Shabbir of the Pakistan Military Consortium think tank, said "the initial deal will be for at least two squadrons [at least 32 aircraft] and will be financed by China via a soft, long-term loan."

Analyst Kaiser Tufail said the J-10's operational autonomy would be far greater than that provided by the U.S.-built F-16C.

"It has to be remembered that India refused to consider the F-16C/D and F-18E/F, as they wanted a freer hand in operability aspects as well as technology transfer, which the U.S. was unwilling to provide," Tufail said.

With the J-10, Pakistan would "be able to operate it in an environment not constrained by security restrictions," and could base the aircraft wherever desired, Tufail said. He also said the lack of technology-transfer restrictions from the original equipment manufacturer is a factor.

"The J-10 will provide F-16-class capabilities for Pakistan but without the cost and political encumbrances of U.S.-sourced aircraft," Carlo Kopp of the Air Power Australia think tank said.

"What a J-10 would provide is quantity over any U.S.- or EU-sourced product," Kopp said, though he is still uncertain whether China will supply "pre-loved J-10A…or new-build J-10A or J-10B airframes."

Shabbir said the broader Sino-Pakistani combat aircraft relationship has eroded Western influence over Pakistan, though he remains concerned about the implications Pakistan's fragile economy has for its defense capabilities.

"The availability of J-10 and JF-17 from the Chinese means that Pakistan is now not that reliant on the U.S. and Europe for its aircraft requirements, and this of course will erode U.S influence over Pakistan in the long term," he said.

The Pakistani Air Force is the largest operator of U.S supplied weapons in South Asia and therefore most vulnerable to sanctions

Carter Nominated as Next U.S. Deputy SecDef

Pentagon acquisition chief Ashton Carter has been nominated by the president to become the next deputy defense secretary, replacing William Lynn, according to the White House.

Ashton Carter currently serves as the undersecretary of defense for acquisition, technology and logistics. (Rob Curtis / Staff)

Lynn is expected to step down as the Pentagon's No. 2 civilian this fall after more than two and a half years in the post.
Carter currently serves as the undersecretary of defense for acquisition, technology and logistics.
Before taking his Pentagon job in 2009, Carter was chair of the International and Global Affairs faculty at Harvard's Kennedy School of Government. From 2006 to 2008, he served as a member of Secretary of State Condoleezza Rice's International Security Advisory Board, according to the White House announcement.
During the Clinton administration from 1993 to 1996, Carter served as assistant secretary of defense for international security policy.
"During that time, he directed military planning during the 1994 crisis over North Korea's nuclear weapons program and was instrumental in removing all nuclear weapons from the territories of Ukraine, Kazakhstan and Belarus," the White House announcement said.
Carter holds a bachelor's degree from Yale University and a doctorate from Oxford University, where he was a Rhodes Scholar.
Lynn told Defense Secretary Leon Panetta on July 1 of his plans to resign, saying the new secretary would be best served by a deputy who could stay through President Barack Obama's first term. He said he would not be able to make that kind of commitment because he'd like to spend more time with his children.
Obama has yet to announce who will replace Carter as Pentagon acquisition chief, but Navy acquisition chief Sean Stackley is rumored to be a frontrunner for the job. Before taking the Navy job, Stackley served as a professional staff member on the Senate Armed Services Committee.
Carter's nomination now goes to the Senate for review.

NATO Asks More Troops for Kosovo

PRISTINA, Kosovo - NATO has asked for troop reinforcements for Kosovo, a spokesman said Aug. 2, while denying the demand was linked to the recent unrest in the volatile north.
"We can control the situation [in the north], we have enough troops. It is not because of our inability to control the situation. Our soldiers deployed on the ground will need some relief ... and we need [new troops] to back up the soldiers," as reserves, Kosovo Force (KFOR) spokesman Hans Dieter Wichter told Agence France-Presse.

NATO's KFOR mission currently has more than 5,900 soldiers on the ground and Wichter said they asked for a reinforcement of a battalion, usually around 500 troops.
A NATO official in Brussels confirmed to AFP that it had issued "the activation order for the KFOR operational reserve" of a battalion-size unit of several hundred soldiers.
"The deployment will take place over the course of the coming days," the official said. The source would not say where the additional troops were coming from.
Unrest flared in Kosovo last week when the ethnic Albanian Kosovo government ordered police to seize control of two border crossings in northern Kosovo.
Kosovo officials said this was needed to enforce a ban on imports from Serbia that was not being respected by ethnic Serb members of Kosovo's border police on the border with Serbia. In the resulting clashes one ethnic Albanian police officer was killed.
NATO troops stepped in when a border post in Kosovo was set on fire and bulldozed, apparently by ethnic Serbs.
Angry Kosovo Serbs have been blocking the roads leading to the crossing for several days and vowed to remain at the barricades until a solution was found.
Kosovo banned imports from Serbia in response to the same move by Belgrade in 2008, the date the ethnic Albanian majority unilaterally proclaimed its independence from Serbia.
European Union U envoy Robert Cooper met with Kosovo Prime Minister Hashim Thaci in Pristina on Aug. 2, diplomatic sources told AFP. Cooper was sent from Brussels to mediate between the Kosovo and Serbian authorities following the recent unrest.
On Aug. 1, Cooper met Serbia's top negotiator Borko Stefanovic and minister for Kosovo Goran Bogdanovic.
Stefanovic said the Aug. 1 with Cooper were "difficult and complicated" adding that the Serbian side "expressed the legitimate demands of [Serb] citizens to restore things back to the situation before the crisis," Beta news agency reported.
"We want to enable free movement of people and get back to dialogue ... but the crisis has to be solved in the way we demanded," Beta quoted Stefanovic as saying while addressing Serbs on a barricade in northern Kosovo.
The disputed border crossings are seen as vital by many Kosovo Serbs as they provide a link with Serbia on which northern Kosovo almost exclusively relies for supplies of food and medicine. Over the weekend the first reports emerged of food shortages in some northern Kosovo towns.

Japan Warns of China's Growing Naval Muscle

TOKYO - Japan voiced concern Tuesday over China's growing assertiveness and widening naval reach in nearby waters and the Pacific and over what it called the "opaqueness" of Beijing's military budget.
In its annual defense report, Tokyo also pointed to threats from North Korea's series of nuclear tests and development of a new midrange ballistic missile, and at a lingering island dispute with Russia.

China has been embroiled in separate spats over islands - with Japan as well as with several Southeast Asian nations including Vietnam and the Philippines - which have flared up again over the past year.
The report, approved by Prime Minister Naoto Kan's cabinet, used a Japanese word that can be translated as "overbearing" or "assertive" for China's stance in the disputes with its neighbors, including Japan.
The report, released by the defense ministry, said that in this context, China's "future direction can be a source of concern".
Defense Minister Toshimi Kitazawa later told reporters that the intended English translation was "assertive", Jiji Press reported.
"We used the expression, thinking the entire international community probably perceives it that way," he said. "This is one way of expressing our hope that China will address these issues through friendly relations."
The paper also said China's defense spending was not transparent, saying that the defense budget publicly announced by China "is widely seen as only part of what Beijing actually spends for military purposes."
"Opaqueness in its defense policies and military movements are concerns for the region, including Japan, and for the international community, and we need to carefully analyze them," it said.
The paper said China is expected to expand its routine activities in the South China Sea, East China Sea and the Pacific Ocean.
"Considering the recent modernization of China's maritime and air forces, the areas affected by the capabilities will likely expand beyond its nearby waters," the defense paper said.
Japan's defense outlook has moved away from a perceived Cold War threat of a Soviet invasion, while Japan has boosted ground, air and naval forces on the far-southern Nansei islands near disputed islands in the East China Sea.
The paper for the first time also mentioned "risks to the stable use of the 'global commons' such as maritime, cyber and outer space as an emerging security issue in recent years."
The report also labeled North Korea's atomic bomb tests "a significant threat to Japan's security when the North is boosting capabilities of ballistic missiles that could carry weapons of mass destruction".
Japan also reiterated its claim of sovereignty over various islands that are in dispute with its neighbors China, Russia and South Korea.
A row over islands called Dokdo by Seoul and Takeshima by Tokyo flared again this week when three Japanese conservative opposition lawmakers were denied entry to South Korea as they planned to visit a nearby island.
South Korea's defense ministry launched a protest over the claim in the defense paper and urged Japan "to realize they can never expect progress in bilateral military relations without giving up a claim to Dokdo."

First Boxer MRAVs Sent to Afghanistan

BONN, Germany - The new German-Dutch Boxer multirole armored vehicle (MRAV) has been sent on its first operational deployment. Germany has flown five armored personnel carrier variants to the country's training and protection battalion operating around Mazar-e-Sharif in Afghanistan.
The vehicles have been upgraded to the A1 level, which includes additional mine protection.

The remotely controlled light-weapon station also has been elevated by 30 centimeters to enhance its effective range. The station can be armed with the heavy 12.7mm by 99mm machine gun or the 40 mm grenade machine weapon.
Germany currently plans to deploy more armored personnel carriers and a command vehicle variant of the Boxer to Afghanistan during the first quarter of 2012.
As an armored personnel carrier, the Boxer can be used to transport and support an infantry group and its equipment. The binational project of the German and the Dutch militaries aims to fully or partially replace current vehicles, such as the armored personnel carriers M 113 and Fuchs.
The Boxer, which weighs 33 tons before the additional armor fit, is built by ARTEC, a joint-venture of German defense companies Krauss-Maffei Wegmann and Rheinmetall Defence.
Britain was originally a partner in the program but dropped out in 2003 when it decided the vehicle didn't suit the then operational requirements for a rapidly deployable expeditionary platform.
The British have since changed their minds but have been unable to field a suitable vehicle due to indecision and a lack of cash. A Boxer-type vehicle is not expected to be fielded until the next decade.
The all-wheel drive 8 by 8 vehicle is built on a modular design that encompasses driving and mission modules. Besides the armored personnel carriers designed for the infantryman of the future (IdZ) system requirements, Germany wants to field a command vehicle, an ambulance vehicle and a driver-training variant of the Boxer.
In total, the first batch ordered contains 472 vehicles in nine different variants: 272 for Germany in four variants and 200 for the Netherlands in five variants. The Boxer is built on assembly lines in Germany and the Netherlands.
Andrew Chuter in London contributed to this story.

U.S., Iraq to Discuss Fighter Jet Deal: Pentagon

WASHINGTON - An Iraqi delegation will visit the United States this month to discuss the purchase of 18 fighter jets, a Pentagon spokesman said Aug. 1.
"Iraq has requested 36 F-16s, (and) a delegation is coming here this month to discuss moving forward on 18 of the jets," Col. David Lapan told reporters.

He added that the two sides were in "just the initial stage" of the purchase and that if a formal agreement were to be reached it would take time to provide the aircraft and train pilots.
"It's a long process. It could be years," he said.
Iraqi Prime Minister Nuri al-Maliki said July 30 he had revived talks to purchase 36 U.S. F-16 fighter jets, rather than the originally mooted 18, in a multibillion-dollar deal that has been on the works for several months.
U.S. officials in Iraq - where 47,000 U.S. troops are still stationed - have said Baghdad can provide for its own internal security but does not have the necessary arms to police its air space, territorial waters and borders.
U.S. Adm. Mike Mullen, the outgoing chairman of the Joint Chiefs of Staff, said Aug. 1 that Iraq must make a decision quickly over whether it wants any U.S. troops to remain in the country past the end of this year.
A 2008 military pact requires the withdrawal of all U.S. forces by the end of 2011 but could be amended by mutual consent, and proposals for some U.S. trainers to remain have been gaining traction among Iraqi leaders.
The F-16, manufactured by Lockheed Martin, is one of the most widely used fighter jets in the world and has been exported to over 20 countries.