US charges China with cyber-spying on American firms

Pete Williams
Cybersecurity, the new economic warfare?
Cybersecurity, the new economic warfare?

The Justice Department filed criminal charges against five hackers in the Chinese military Monday, accusing them of stealing American trade secrets through cyber-espionage, according to U.S. officials familiar with the case.

The efforts were directed at six American victim companies in the nuclear power, metals and solar products industries. Among the victims were Westinghouse Electric, U.S. subsidiaries of SolarWorld AG, U.S. Steel, Allegheny Technologies and Alcoa.

"This is a case alleging economic espionage by members of the Chinese military and represent the first-ever charges against a state actor for this type of hacking," Attorney General Eric Holder said. More details of the charges are to be announced Holder in a morning news conference.

FBI Director James Comey told NBC News, "For too long, the Chinese government has blatantly sought to use cyber-espionage to obtain economic advantage for its state-owned industries."

Attorney General Eric Holder (2nd L), U.S. Attorney for Western District of Pennsylvania David Hickton (L), and Assistant Attorney General for National Security John Carlin (R) take questions from members of the media during an announcement on indictments against Chinese military hackers on cyber-espionage May 19, 2014 at the Department of Justice in Washington, DC.
Getty Images

The charges will name several individuals who are Chinese government employees, according to a U.S. official. "They used military and intelligence facilities to commit cyber-espionage against U.S. companies," the official said.

China's Foreign Ministry issued a strongly-worded statement on Monday, saying the accusation were "made up'' and it plans to suspend activities of the Sino-U.S. Internet working group.

"China is a staunch defender of network security, and the Chinese government, military and associated personnel have never engaged in online theft of trade secrets,'' the statement said.

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The names of the targeted companies could not immediately be determined, but they were said to be in the energy and manufacturing sectors.

The Obama administration has long considered China the most aggressive nation in obtaining industrial secrets through spying.

How will hacking charges impact US-China ties?
How will hacking charges impact US-China ties?

"Chinese actors are the world's most active and persistent perpetrators of economic espionage," said the Office of the National Counterintelligence Executive, a U.S. government agency, in a 2011 report.

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A year ago, several U.S. newspapers, including The New York Times and The Wall Street Journal, said hackers traced to China attacked their newsroom computer systems.

A spokesman for China's foreign ministry called any suggestion that the Chinese were involved in those intrusions "irresponsible," though U.S. security experts said China targeted news organizations in the U.S. and overseas to try to identify the sources of news leaks within the Chinese government.

Those disclosures prompted a computer security expert and former Justice Department lawyer, Marc Zwillinger to say, "the only computers these days that are safe from Chinese government hackers are computers that are turned off, unplugged, and thrown in the back seat of your car."

By Pete Williams of NBC News. Reuters contributed to this story.