[Infowarrior] - Vast Spy System Loots Computers in 103 Countries

[Richard Forno]

Vast Spy System Loots Computers in 103 Countries
By JOHN MARKOFF
http://www.nytimes.com/2009/03/29/technology/29spy.html?pagewanted=print

TORONTO — A vast electronic spying operation has infiltrated computers  
and has stolen documents from hundreds of government and private  
offices around the world, including those of the Dalai Lama, Canadian  
researchers have concluded.

In a report to be issued this weekend, the researchers said that the  
system was being controlled from computers based almost exclusively in  
China, but that they could not say conclusively that the Chinese  
government was involved.

The researchers, who are based at the Munk Center for International  
Studies at the University of Toronto, had been asked by the office of  
the Dalai Lama, the exiled Tibetan leader whom China regularly  
denounces, to examine its computers for signs of malicious software,  
or malware.

Their sleuthing opened a window into a broader operation that, in less  
than two years, has infiltrated at least 1,295 computers in 103  
countries, including many belonging to embassies, foreign ministries  
and other government offices, as well as the Dalai Lama’s Tibetan  
exile centers in India, Brussels, London and New York.

The researchers, who have a record of detecting computer espionage,  
said they believed that in addition to the spying on the Dalai Lama,  
the system, which they called GhostNet, was focused on the governments  
of South Asian and Southeast Asian countries.

Intelligence analysts say many governments, including those of China,  
Russia and the United States, and other parties use sophisticated  
computer programs to covertly gather information.

The newly reported spying operation is by far the largest to come to  
light in terms of countries affected.

This is also believed to be the first time researchers have been able  
to expose the workings of a computer system used in an intrusion of  
this magnitude.

Still going strong, the operation continues to invade and monitor more  
than a dozen new computers a week, the researchers said in their  
report, “Tracking ‘GhostNet’: Investigating a Cyber Espionage  
Network.” They said they had found no evidence that United States  
government offices had been infiltrated, although a NATO computer was  
monitored by the spies for half a day and computers of the Indian  
Embassy in Washington were infiltrated.

The malware is remarkable both for its sweep — in computer jargon, it  
has not been merely “phishing” for random consumers’ information, but  
“whaling” for particular important targets — and for its Big Brother- 
style capacities. It can, for example, turn on the camera and audio- 
recording functions of an infected computer, enabling monitors to see  
and hear what goes on in a room. The investigators say they do not  
know if this facet has been employed.

The researchers were able to monitor the commands given to infected  
computers and to see the names of documents retrieved by the spies,  
but in most cases the contents of the stolen files have not been  
determined. Working with the Tibetans, however, the researchers found  
that specific correspondence had been stolen and that the intruders  
had gained control of the electronic mail server computers of the  
Dalai Lama’s organization.

The electronic spy game has had at least some real-world impact, they  
said. For example, they said, after an e-mail invitation was sent by  
the Dalai Lama’s office to a foreign diplomat, the Chinese government  
made a call to the diplomat discouraging a visit. And a woman working  
for a group making Internet contacts between Tibetan exiles and  
Chinese citizens was stopped by Chinese intelligence officers on her  
way back to Tibet, shown transcripts of her online conversations and  
warned to stop her political activities.

The Toronto researchers said they had notified international law  
enforcement agencies of the spying operation, which in their view  
exposed basic shortcomings in the legal structure of cyberspace. The  
F.B.I. declined to comment on the operation.

Although the Canadian researchers said that most of the computers  
behind the spying were in China, they cautioned against concluding  
that China’s government was involved. The spying could be a nonstate,  
for-profit operation, for example, or one run by private citizens in  
China known as “patriotic hackers.”

“We’re a bit more careful about it, knowing the nuance of what happens  
in the subterranean realms,” said Ronald J. Deibert, a member of the  
research group and an associate professor of political science at  
Munk. “This could well be the C.I.A. or the Russians. It’s a murky  
realm that we’re lifting the lid on.”

A spokesman for the Chinese Consulate in New York dismissed the idea  
that China was involved. “These are old stories and they are  
nonsense,” the spokesman, Wenqi Gao, said. “The Chinese government is  
opposed to and strictly forbids any cybercrime.”

The Toronto researchers, who allowed a reporter for The New York Times  
to review the spies’ digital tracks, are publishing their findings in  
Information Warfare Monitor, an online publication associated with the  
Munk Center.

At the same time, two computer researchers at Cambridge University in  
Britain who worked on the part of the investigation related to the  
Tibetans, are releasing an independent report. They do fault China,  
and they warned that other hackers could adopt the tactics used in the  
malware operation.

“What Chinese spooks did in 2008, Russian crooks will do in 2010 and  
even low-budget criminals from less developed countries will follow in  
due course,” the Cambridge researchers, Shishir Nagaraja and Ross  
Anderson, wrote in their report, “The Snooping Dragon: Social Malware  
Surveillance of the Tibetan Movement.”

In any case, it was suspicions of Chinese interference that led to the  
discovery of the spy operation. Last summer, the office of the Dalai  
Lama invited two specialists to India to audit computers used by the  
Dalai Lama’s organization. The specialists, Greg Walton, the editor of  
Information Warfare Monitor, and Mr. Nagaraja, a network security  
expert, found that the computers had indeed been infected and that  
intruders had stolen files from personal computers serving several  
Tibetan exile groups.

Back in Toronto, Mr. Walton shared data with colleagues at the Munk  
Center’s computer lab.

One of them was Nart Villeneuve, 34, a graduate student and self- 
taught “white hat” hacker with dazzling technical skills. Last year,  
Mr. Villeneuve linked the Chinese version of the Skype communications  
service to a Chinese government operation that was systematically  
eavesdropping on users’ instant-messaging sessions.

Early this month, Mr. Villeneuve noticed an odd string of 22  
characters embedded in files created by the malicious software and  
searched for it with Google. It led him to a group of computers on  
Hainan Island, off China, and to a Web site that would prove to be  
critically important.

In a puzzling security lapse, the Web page that Mr. Villeneuve found  
was not protected by a password, while much of the rest of the system  
uses encryption.

Mr. Villeneuve and his colleagues figured out how the operation worked  
by commanding it to infect a system in their computer lab in Toronto.  
On March 12, the spies took their own bait. Mr. Villeneuve watched a  
brief series of commands flicker on his computer screen as someone —  
presumably in China — rummaged through the files. Finding nothing of  
interest, the intruder soon disappeared.

Through trial and error, the researchers learned to use the system’s  
Chinese-language “dashboard” — a control panel reachable with a  
standard Web browser — by which one could manipulate the more than  
1,200 computers worldwide that had by then been infected.

Infection happens two ways. In one method, a user’s clicking on a  
document attached to an e-mail message lets the system covertly  
install software deep in the target operating system. Alternatively, a  
user clicks on a Web link in an e-mail message and is taken directly  
to a “poisoned” Web site.

The researchers said they avoided breaking any laws during three weeks  
of monitoring and extensively experimenting with the system’s  
unprotected software control panel. They provided, among other  
information, a log of compromised computers dating to May 22, 2007.

They found that three of the four control servers were in different  
provinces in China — Hainan, Guangdong and Sichuan — while the fourth  
was discovered to be at a Web-hosting company based in Southern  
California.

Beyond that, said Rafal A. Rohozinski, one of the investigators,  
“attribution is difficult because there is no agreed upon  
international legal framework for being able to pursue investigations  
down to their logical conclusion, which is highly local.”