Parasites: China's 'brazen' data heist hit half of America

FPI / February 11, 2020

U.S. Attorney General William Barr on Monday announced the indictment of four members of China's military on charges of hacking into the credit reporting agency Equifax.

A federal grand jury in Atlanta returned a nine-count indictment last week that accused members of China’s People’s Liberation Army of conspiring to steal massive amounts of data as part of a sophisticated hacking operation, first disclosed in 2017, that exploited a major vulnerability in the software used by Equifax’s online dispute portal, the Wall Street Journal reported.

“This was a deliberate and sweeping intrusion into the private information of the American people,” Barr said.

In addition to compromising user data of some 145 million Americans, the indictment charged the four defendants — Wu Zhiyong, Wang Qian, Xu Ke and Liu Lei — with stealing trade secret information, including details about Equifax’s data compilations and database designs.

The defendants, who haven’t been arrested and are believed to be residing in China, are allegedly members of the People’s Liberation Army’s 54th Research Institute, according to the indictment.

“This was an organized and remarkably brazen criminal heist of sensitive information of nearly half of all Americans, as well as the hard work and intellectual property of an American company, by a unit of the Chinese military,” Barr said.

Meanwhile, in an address to the National Governors Association in Washington at Saturday, Secretary of State Mike Pompeo detailed the ongoing effort by the Chinese Communist Party to influence U.S. state governments.

“At the end of the Cold War, America started to engage with China heavily,” Pompeo said. “We thought that the more we interacted, the more [China] would become like a liberal democracy, like us here in the United States. It didn’t happen, and you all know this.”

Pompeo added: “Indeed, under [supreme leader] Xi Jinping, the country is moving exactly in the opposite direction — more repression, more unfair competition, more predatory economic practices; indeed, a more aggressive military posture as well.”

China has historically denied involvement in hacks on U.S. businesses.

The breach into Equifax has been viewed as one of the largest hacks on record. It led to a series of hearings in Congress that led to the resignation of the company’s former chief executive, Richard Smith.

The data that was stolen by the Chinese operatives included Social Security and driver’s license numbers, addresses, birthdays and other information. The breach began in May 2017 at the latest and continued through July 2017. The indictment alleges that the defendants used 34 servers located in nearly 20 countries to infiltrate the Equifax network.

Last year, Equifax agreed to a $700 million settlement with the Federal Trade Commission in an effort to compensate victims, though a cash payout of $125 per consumer was diminished substantially due to the volume of consumers looking to redeem the offer.

In his remarks Saturday, Pompeo said he recently was invited to attend a meeting of governors by a Chinese government front group that promised “an occasion for exclusive deal-making.”

The meeting was co-hosted by the National Governors Association and a Chinese front group called the Chinese People’s Association for Friendship With Foreign Countries.

“Sounds pretty harmless,” Pompeo said. “What the invitation did not say is that the group I just mentioned is the public face of the Chinese Communist Party’s official foreign influence agency, the United Front Work Department.”

The United Front Work Department is an intelligence agency within the Communist Party of China in charge of foreign influence operations.

Pompeo said he was familiar with the operations of the group from his time as CIA director and that the Chinese were seeking to co-opt U.S. officials and business leaders by offering Chinese investments in their states, in pension funds or in industries related to sensitive national security matters.

“These aren’t hypotheticals,” he said. “These scenarios are all too true, and they impact American foreign policy significantly.”

Chinese diplomats are also covertly attempting to coerce local governments into withholding support from rival officials from Taiwan, Pompeo said.

In one case, a Chinese consul general in New York sent a letter to a speaker of the State Assembly telling him to “avoid engaging in any official contact with Taiwan, including sending congratulatory messages to the electeds, introducing bills and proclamations for the election, sending officials and representatives to attend the inauguration ceremony, and inviting officials in Taiwan to visit the United States.”

“And this isn’t a one-off event. It’s happening all across the country,” said Pompeo, noting activities by Chinese consulates in New York, Illinois, Texas, and California.

Other programs include China’s “Thousand Talents” effort and Confucius Institutes. The first is designed to obtain sensitive technology, and the institutes use Chinese propaganda to try to influence universities and other schools.

Recent federal investigations involving U.S. educators covertly working for China led to prosecutions of professors at the University of Kansas, Virginia Tech and Harvard University.

An investigation at Texas A&M University uncovered more than 100 academics working for Chinese recruitment plans.

On Chinese investment in U.S. state pension funds, Pompeo said the Florida Retirement System was found to be invested in a Chinese company linked to surveillance gear used in the repression of more than 1 million Muslim minorities in China.

“California’s pension fund, the largest public pension fund in the country, is invested in companies that supply the People’s Liberation Army that puts our soldiers, sailors, airmen and Marines at risk,” Pompeo said.

The federal government has bolstered the review process for Chinese companies investing in states and visas have been revoked for fraudulent Chinese researchers at universities, he said.

China’s government has methodically analyzed the U.S. system and has “decided to exploit our freedoms to gain advantage over us at the federal level, the state level, and the local level,” Pompeo said.

Free Press International