Chinese hackers infiltrated U.S. companies, Attorney General Holder says

Attorney General Eric Holder

U.S. Attorney General Eric Holder.

WASHINGTON — Attorney General Eric Holder announced Monday that members of the Chinese military have engaged in the hacking of American businesses and entities, including U.S. Steel Corp., Westinghouse, Alcoa, Allegheny Technologies, the United Steel Workers Union and SolarWorld.

The victims operate in Pennsylvania, and a grand jury there returned an indictment against members of the Chinese military, accusing them of hacking to spy and steal secrets, Holder said.

The indictment alleges that People’s Liberation Army officers “maintained unauthorized access to victim computers to steal information from these entities that would be useful” to the victims’ competitors in China, the attorney general said.

In some instances, the hackers stole trade secrets that would have been “particularly beneficial to Chinese companies at the time that they were stolen,” Holder said.

In other cases, the hackers swiped sensitive internal communications that could provide a competitor or a litigation adversary with insight into the strategy and the vulnerabilities of the victimized companies and entities, he said.

The attorney general said that he hopes the Chinese government will work with American officials to bring the offenders to justice and that the United States intends to prosecute.

Efforts to reach officials at the Chinese Embassy in Washington through phone calls and e-mails were not immediately returned.

In a statement on China’s Foreign Ministry site, spokesman Qin Gang called the charges “extremely absurd.”

He said the United States “has fabricated facts” and that China is a “staunch defender of cyber security.”

The statement said the Chinese government, its military and “associated personnel never engage in any theft of trade secrets.”

The indictment “severely violates basic norms of international relations, and harms cooperation and mutual trust between China and the United States,” the statement said.

China protested the U.S. action, the Foreign Ministry statement said, and wants it to “correct its mistake” and withdraw the charge.

China is a “victim of U.S. cyber surveillance and theft,” he asserted, saying that “certain U.S. agencies have been consistently tapping into China’s government agencies, corporates, universities, and private networks for surveillance purposes.”

Joining Holder, David Hickton, U.S. Attorney for the Western District of Pennsylvania, told reporters that the alleged hacking has caused the victimized U.S. companies to lose capital investments in research and technology.

He added that the “important message” is that cyber espionage “impacts real people in real and painful ways,” he said.

“The lifeblood of any organization is the people who work, strive and sweat for it. When these cyberintrusions occur, production slows, plants close, workers get laid off and lose their homes,” Hickton said.

“Hacking, spying and cybertheft for commercial advantage can and will be prosecuted criminally even when the defendants are state actors,” he said.

These are the first charges against Chinese state officials for what the U.S. says is a widespread problem, U.S. officials said before Holder’s remarks.