The Complex

U.S. Indicts Chinese Officials for Cyber-Spying

In an unprecedented move that's likely to heighten economic and political tensions between the United States and China, the Department of Justice is filing criminal charges against five Chinese military officials for stealing trade secrets and other private information from five large American companies and a labor union, according to U.S. officials and a federal indictment. It's the first criminal indictment against state actors for cyber-spying against the United States.

The alleged activities involve a years-long campaign by the Chinese military and its proxies to hack into the computer systems of American companies, trade associations, unions, and law firms and steal confidential information, including business plans, product designs, and private communications. In the current case, the Chinese hackers gave such information from the victim companies to Chinese state-owned companies, giving them an unfair advantage over their American competitors, Justice Department officials said in a press conference on Monday, May 19.

Cyber-spying has been the subject of a long-simmering dispute between Beijing and Washington. But the criminal indictment -- the first of its kind against Chinese military or government officials -- would take the matter to a new level and signals that Barack Obama's administration has decided its strategy of publicly shaming China into halting its cyber-espionage isn't working.

The Chinese hackers are accused of hacking into the computers of Westinghouse Electric, Alcoa, Allegheny Technologies, U.S. Steel, the United Steelworkers union, and SolarWorld, Attorney General Eric Holder announced. The companies are among the biggest manufacturing companies in the United States, and United Steelworkers is the largest steel labor union. The Chinese hackers stole pricing information and equipment designs in order to benefit Chinese state-owned industries, the Justice Department alleges.

The hackers are connected to a unit allegedly run by the People's Liberation Army that was identified in a public report last year by the computer security firm Mandiant. Known as Unit 61398, it's believed to be responsible for a broad campaign of spying against American organizations, not just the six mentioned in the indictment. The U.S. government was aware of the report before it was published and contributed some information to it, according to individuals who are familiar with the report.

The Chinese hackers also stole attorney-client communications and cost and productions analysis that gave the Chinese hackers an insight into the companies at a "critical time," including when they were conducting negotiations to do business in China, said David Hickton, the U.S. attorney for the Western District of Pennsylvania, where the charges were filed. "This 21st-century burglary has to stop," Hickton said, adding that the cyber-spying had "led directly to the loss of jobs" in the United States.

President Obama has privately broached the subject of China's cyber-spying in private meetings with Chinese President Xi Jinping. And last year, Obama's then national security advisor, Tom Donilon, rebuked China in a speech for cyber-spying, which he called "a growing challenge to our economic relationship with China" and a "key point of concern and discussion with China at all levels of our governments." That was the highest-level public criticism of the Chinese actions to date.

China's cyber-espionage is also of deep concern to the Pentagon, which fears Beijing is focused both on stealing plans for advanced armaments to build its own versions and on using that know-how to develop ways of countering high-tech American aircraft, drones, and other battlefield armaments. The Defense Department's annual assessment of Chinese military strength, which is expected to show an ongoing spike in China's cyber-capabilities, is set to be released.

Officials promised more indictments against foreign cyberspies. "This is the new normal. This is what you're going to see on a recurring basis," said Robert Anderson, a top FBI cybersecurity official.

"We hope that the conduct will stop by bringing criminal actions," said John Carlin, the assistant attorney general in charge of the Justice Department's National Security Division. But it was unclear whether the Chinese hackers would ever see the inside of a U.S. courtroom.

Chinese officials have consistently denied in public that their government engages in economic cyber-espionage against the United States. Officials strongly criticized the Mandiant report on Unit 61398 and called it inaccurate.

This story has been updated.

Photo by Chip Somodevilla/Getty Images

The Complex

U.S. Sends Surveillance Aircraft, Intel Support in Search for Kidnapped Nigerian Girls

The United States is using surveillance aircraft in Nigeria in the search for nearly 300 kidnapped schoolgirls in what amounts to the first real assistance Barack Obama's administration has provided since sending a small team of advisors to the country late last week.

Lt. Col. Myles Caggins, a Pentagon spokesman, confirmed Monday, May 12, that American "intelligence, surveillance, and reconnaissance support" is being used in Nigeria in the international effort to help the government of President Goodluck Jonathan find the girls.

Satellite imagery, manned jets, unmanned drones, or even ground systems can capture the kind of information the Nigerian government needs in its search for the schoolgirls, who were taken by the terrorist group Boko Haram in April. Its leader has vowed to sell the girls unless Boko Haram prisoners are released from Nigerian jails. The group is believed to have hidden the girls in dense forest areas, which could complicate U.S. efforts to locate them. But analysts said that at this point, with Nigerian forces unable to locate the captives, any extra assistance would be welcome.

Caggins declined to say what assets are being used, but drones, or unmanned aerial systems, are typically the first choice when there is a need for such intelligence collection. And the United States has a drone base at an airport in neighboring Niger, from which unmanned aircraft have taken off in pursuit of al Qaeda terrorists in Mali. CBS News reported Monday evening that a manned twin-engine turboprop aircraft -- the MC-12W Liberty -- has begun flying surveillance missions over Nigeria.

As recently as Friday, the Pentagon had said such assistance was not being provided as a team of U.S. military and civilian experts arrived to conduct a "gap analysis" and assess the needs of the Nigerian government in its search for the girls. President Jonathan had for weeks appeared to decline offers of help from the United States and other governments. But as Nigerians protested his response to the April 14 kidnappings, it appeared the government in Abuja was begrudgingly accepting whatever help it could get.

The arrival of the intelligence assets in Nigeria comes as the leader of Boko Haram, Abubakar Shekau, released a video of at least some of the captured schoolgirls early Monday that showed the girls reciting passages from the Quran, their heads covered in scarves. Shekau claimed he would trade the girls for prisoners, but it was unclear what the status of any such proposed swap would be.

"Our intelligence experts are combing through every detail of the video for clues that might help in ongoing efforts to secure the release of the girls," Jen Psaki, the State Department's chief spokesperson, said Monday.

Although it was unclear how the Nigerian government might respond, Psaki appeared to dismiss the proposal of a swap. "The United States' policy is to deny kidnappers the benefits of their criminal acts -- including ransoms or concessions," she said.

While there are some calls in Washington to send "boots on the ground" into Nigeria to help rescue the girls -- actual operational troops, rather than the roughly one dozen military advisors there now -- it's more likely the focus of U.S. assistance is on intelligence gathering.

"I think intelligence collection will probably be at the top of the list of what the Nigerians want," said Carter Ham, the former commander of U.S. Africa Command, in an interview. "Because the first requirement is to find the girls."

Ham, who traveled to Nigeria a handful of times over the years he was commander, said the country's greatest need will be to sort through all the intelligence it's gathering, from its own sources as well as others. The Nigerians generally have good "human intelligence" -- people on the ground -- but lack technical capabilities, he said. The Chinese government has already announced that it will make available to the Nigerian security services any intelligence gleaned from its spy satellites and other sources.

While the United States has provided limited counterterrorism assistance to the Nigerian government over the years, the Nigerian Army is more focused on peacekeeping, not intelligence collection or analysis. In addition, when the Nigerian military does attempt to gather information, it can do so in such a way that intimidates the population, Ham said. And that plays right into the hands of Boko Haram.

"Their approach is very, very heavy-handed," said a former Defense Department official. "They round up everybody, and they are very imprecise operations."

By law, the United States is prohibited from training or providing military equipment to any foreign military units that have been implicated in "gross human rights abuses." The so-called Leahy Law has been a significant obstacle over the years to any increased American military support and attempts to train Nigerian forces to counter Boko Haram.

Nigerian military units have been implicated in human rights abuses and mass killings as part of the country's attempts to fight Boko Haram, setting up a vicious catch-22: Many of the very forces that the United States might want to train to fight the terrorists are off-limits because of the way they've been fighting the terrorists. The law requires the Nigerian armed forces to provide the names of units that have been involved in abuses or attacks on civilians, so that the United States can vet them and put them through human rights training. But the Nigerian military hasn't provided the names, and so the training can't go forward, said Lora Lumpe, a senior policy analyst with the Open Society Foundations, a human rights advocacy group.

Lumpe said that U.S. military officials have been pressing to offer the Nigerians training sessions, but that State Department officials have determined that the training -- which consists of a few hours of PowerPoint presentations -- is insufficient.

Analysts said the law is strictly enforced and isn't a trivial concern for military and State Department officials. "From the U.S. side, there are genuine legal issues involved with working with security units that might fall foul of Leahy," said Richard Downie, the deputy director of the Africa Program at the Center for Strategic and International Studies.

"The Leahy Law is one of the most important safeguards for preventing U.S. taxpayer money or U.S. troops assisting in human rights violations," said Adotei Akwei, the managing director for government relations at Amnesty International. Akwei said that human rights allegations against Nigerian military units go back to the late 1990s, but that the government has been unwilling to investigate the claims, "which is indicative of how big the [human rights] problem in Nigeria is."

The State Department is leading a team at the U.S. Embassy in Abuja to assist Nigerian officials in finding the kidnapped girls. Sixteen military personnel from U.S. Africa Command have joined the team, but they are not acting in a training capacity. The personnel, who include experts in intelligence, military operations, communications, logistics, and civil affairs, are staff officers and personnel from the U.S. Embassy who have been trying to enhance the long-term bilateral defense relationship between the United States and Nigeria. A Pentagon spokesman said Monday that they would "assess the situation, advise, and assist the Nigerian government in their efforts to respond to this crisis situation and find the young women kidnapped by Boko Haram."

Analysts faulted President Jonathan for pursuing an exclusively military strategy in dealing with Boko Haram and predicted that the conflict between the government and the terrorist group would eventually have to be settled through some negotiated peace.

"The problem is, there doesn't seem to be a willingness on the part of the Nigerians to give greater weight to nonmilitary solutions to the Boko Haram problem," said Lesley Anne Warner, an Africa analyst at the CNA Corporation.

AP Photo