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 The Obama administration on Thursday disclosed the breach of
computer systems at the Office of Personnel Management and said the
records of up to 4 million current and former federal employees may
have been compromised.
U.S. officials have said on condition of anonymity they believe the
hackers are based in China, but Washington has not publicly blamed
Beijing at a time when tensions are high over Chinese territorial
claims in the South China Sea.
China has denied involvement.
It was the second computer break-in in less than a year at the OPM,
the federal government's personnel office.
The first breach has been linked to earlier thefts of personal data
from millions of records at Anthem Inc, the second largest U.S.
health insurer, an attack also blamed on Chinese hackers, and
Premera Blue Cross, a healthcare services provider.
Guidance Software, a cybersecurity firm, said the first signs of
data "exfiltration" were originally detected with Einstein, a U.S.
government intrusion detection system. That activity, it said, was
eventually traced back to a machine under the control of Chinese
intelligence.
 "It's a different form of Cold War at this point," said Rob
Eggebrecht, co-founder and chief executive of Denver-based
InteliSecure, a private cybersecurity firm.
Eggebrecht said his firm had seen a spike in attacks on private
company networks by Chinese actors over the past three months. The
latest was a previously undisclosed breach at a U.S. pharmaceutical
group, which cost the firm hundreds of millions of dollars in
sensitive research and development work.
Eggebrecht declined to identify the firm, which he said only learned
of the major breach within the last 72 hours.
"We've seen a huge uptick in opportunistic exfiltration of
high-value data," he said, adding that the attack on the pharma
company involved malicious software installed together with the
Chinese-language search engine Baidu.
"DIZZYING RATE"
Admiral James Winnefeld, vice chairman of the Joint Chiefs of Staff,
told a cyber conference at West Point military academy last month
that U.S. adversaries like China and Russia were rapidly increasing
their assaults on military networks.
"We're hemorrhaging information at a dizzying rate, evidenced by the
uncanny similarity of some of our potential adversaries' new
platforms to those we've been developing," said Winnefeld. China
has in recent years introduced two new stealth fighters that
analysts say bear a striking resemblance to the F-22 and F-35 built
by Lockheed Martin Corp. Lockheed redoubled security efforts focused
on suppliers after a "significant and tenacious" attack on its
computer networks in 2011 that was enabled by lax security at a
supplier.
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U.S. senators have added $200 million in funding to their proposed
fiscal 2016 budget to fund a detailed study of the cyber
vulnerabilities of major weapons systems.
The move came after the Pentagon's chief weapons tester told
Congress that nearly every major weapons program tested in 2014
showed "significant vulnerabilities" to cyber attack, including
misconfigured and unpatched software.
U.S. government officials and cyber analysts say Chinese hackers are
using high-tech tactics to build massive databases that could be
used for traditional espionage goals, such as recruiting spies, or
gaining access to secure data on other networks.
The latest incident gives hackers access to a treasure trove of
personal information, including birth dates, Social Security
numbers, previous addresses, and security clearances.
All that data could help hackers identify information about specific
targets, including potential passwords for websites that may be
portals to information about weapons systems or other research data.
"They can dig down into that data and learn more about the
individuals, what their hobbies are, what their vices are, what
skeletons they have in their closet," said Babak Pasdar, president
and chief executive of Bat Blue Network, a cybersecurity firm.
He said he was involved in a recent case in which hackers gained
access to private data of a website administrator by finding
passwords on a public website linked to the person's hobby.
"This empowers the malevolent cyber actor to target a huge number of
people with phishing and other schemes to reel in information," said
one U.S. defense official. "The more targets you have, the more
likely you are to score."
(Editing by Doina Chiacu, Mark Trevelyan & Kim Coghill)
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