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  • Huawei Faces New Charges And “Smoking Gun” Report

  • Translation: A Poem For Dr. Li Wenliang, and a Call for Free Speech

  • Chinese Military Officers Charged for 2017 Equifax Hacking

 


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Huawei Faces New Charges And “Smoking Gun” Report

Two new blows against Chinese network equipment giant Huawei landed this week, in the form of additional U.S. legal charges and reports of "smoking gun" evidence that the company’s products constitute a serious security risk. Reuters’ Karen Freifeld reported on the new indictment on Thursday:

In the indictment, which supersedes one unsealed last year in federal court in Brooklyn, New York, Huawei Technologies Co was charged with conspiring to steal trade secrets from six U.S. technology companies and to violate a racketeering law typically used to combat organized crime.

It also contains new allegations about the company’s involvement in countries subject to sanctions. Among other accusations, it says Huawei installed surveillance equipment in Iran that was used to monitor, identify, and detain protesters during the 2009 anti-government demonstrations in Tehran.

[…] There are no new charges against Meng in the superseding indictment.

[…] “The indictment paints a damning portrait of an illegitimate organization that lacks any regard for the law,” U.S. Senate Intelligence Committee chairman Richard Burr and vice chairman Mark Warner said in a joint statement.

[…] At the same time, the United States is weighing new regulations to stop more foreign shipments of products with U.S. technology to Huawei. [Source]

Defense officials are said to have argued against further restrictions on the basis that they could starve U.S. suppliers of sales revenue needed to fund R&D, but have now reportedly dropped this objection.

NPR’s Noel King and Jim Zarroli discussed the indictment news on Morning Edition:

KING: How much of the information in this indictment is stuff we haven’t seen before?

ZARROLI: Well, most of it has already come out. There is some new detail, for instance, about Huawei’s dealings with Iran and North Korea. […] It quotes emails in which the two countries are referred to by codes. This would be – now, this kind of commercial activity with Iran would be a violation of American sanctions. The indictment says that the banks did business – that the banks that did business with Huawei asked about what was going on, and Huawei officials lied. And then when Huawei found out that U.S. officials were investigating it, it allegedly arranged to transfer employees who knew about what was happening back to China.

KING: Jim, if we already knew a lot of this already, why is the Trump administration coming out with this indictment now?

ZARROLI: Well, this is part of a campaign by the administration to put the squeeze on Huawei. The company makes a lot of the telecom equipment used to provide countries with Internet service. U.S. National Security Adviser Robert O’Brien just said that Huawei has a kind of backdoor in its equipment. It lets it spy on Internet users in other countries. And the U.S. has been pressuring American allies not to buy Huawei equipment. The administration also bars American companies from selling to Huawei. So the U.S. really sees Huawei as a long-term security threat. [Source]

The Wall Street Journal’s Bojan Pancevski and Deborah Ball reported comments from both sides at a major security conference this week:

John Suffolk, a Huawei senior vice president, dismissed the charges against the company as meritless, saying they were predominantly recycled from civil disputes over the past 20 years that had been litigated and settled.

“They are hoping that if they throw enough mud, some of the mud will stick,” Mr. Suffolk said at the Munich Security Conference.

Just as Mr. Suffolk’s briefing was under way, senior U.S. officials pushed back against Huawei’s defense in a press conference of their own.

“Over the last couple of years there’s been more than enough evidence of the way the Chinese government has been using its national champions so really the onus is on Huawei now: They have to show they are a trustworthy partner, they have to separate themselves from the Chinese government,” said Robert B. Blair, U.S. special representative for international telecommunications policy. [Source]

The article also included follow-up on another report by Pancevski this week on alleged "smoking gun" evidence of Huawei illegally retaining access to law enforcement surveillance capabilities on foreign cellular networks. From the WSJ:

The U.S. kept the intelligence highly classified until late last year, when U.S. officials provided details to allies including the U.K. and Germany, according to officials from the three countries. That was a tactical turnabout by the U.S., which in the past had argued that it didn’t need to produce hard evidence of the threat it says Huawei poses to nations’ security.

When telecom-equipment makers sell hardware such as switching gear, base stations and antennas to cellphone carriers—which assemble the networks that enable mobile communication and computing—they are required by law to build in ways for authorities to tap into the networks for lawful purposes.

These companies also are required to make sure they themselves can’t gain access without the consent of the network operator. Only law-enforcement officials or authorized officials at carriers are allowed into these “lawful interception interfaces.” Such access is governed by laws and protocols in each country.

[…] Some German officials came away […] convinced by the U.S. intelligence, according to a senior official familiar with the meeting. A confidential memo written by the German Foreign Office and seen by The Wall Street Journal states that Mr. Pottinger provided “smoking gun” evidence that Huawei equipment posed a spying risk. The memo was first reported by the German newspaper Handelsblatt. Mr. Pottinger didn’t respond to requests for comment. [Source]

The evidence, on the other hand, did not dissuade Britain from announcing late last month that it would allow Huawei a limited role in its deployment of next-generation 5G networks, though it did designate the company a "high risk" vendor barred from sensitive roles and subject to market share caps elsewhere. The decision attracted widespread criticism, notably from former Australian signals intelligence chief Simeon Gilding. In a blog post for the Australian Strategic Policy Institute, Gilding wrote that the Australian Signals Directorate had concluded it was not possible to adequately mitigate the risk "that hostile intelligence services could not leverage their national vendors to gain access to our 5G networks." Although Huawei’s founder Ren Zhengfei has insisted that he would not allow Chinese authorities to use his company this way, many regard such refusal as implausible given legal requirements and, more importantly, the underlying political reality they embody.

Britain’s position also came up at the Munich Security Conference, The Guardian’s Patrick Wintour reports:

There have been reports of a highly charged phone call between Boris Johnson and Donald Trump in the wake of the UK decision. Johnson has postponed a planned visit to the US until the summer, citing the pressure of domestic work, but also reflecting the tensions between the two allies.

At a briefing in Munich, Robert Blair, the White House special representative for international telecommunications policy, said Britain needed to take a “hard look” at its decision to use equipment made by Huawei, which officials in Washington say is a security risk – charges the company denies.

Blair said Washington was looking to develop a partnership with the telecoms industry to provide alternatives to Huawei’s technology.

He said a partnership was “very different from buying shares with taxpayers’ money”. Blair stressed that the UK decision, even if not reversed, would not lead to an end to intelligence cooperation between the close allies, but added that it might require the US to rethink how it shares data. [Source]

Blair’s comments on industry partnerships follow discussion of how the U.S. might boost Huawei’s European competitors Nokia and Ericsson, if not by buying control of them (as Attorney General William Barr proposed last week), then perhaps through assistance with R&D costs or customer financing. The American campaign to dissuade or deter other Western countries from letting Huawei in on 5G has struggled partly in the face of claims that there is little alternative.

Canada, deeply entangled in the battle by its detention of Huawei’s CFO and founder’s daughter, has yet to announce a decision. Military officials are reportedly urging a ban, but one major carrier has said it plans to start building its own 5G network incorporating Huawei equipment this year.

In a statement responding to the WSJ’s "smoking gun" report, Huawei counterattacked both the newspaper and U.S. authorities:

As evidenced by the Snowden leaks, the United States has been covertly accessing telecom networks worldwide, spying on other countries for quite some time. The report by the Washington Post this week about how the CIA used an encryption company to spy on other countries for decades [link] is yet additional proof.

US allegations of Huawei using lawful interception are nothing but a smokescreen – they don’t adhere to any form of accepted logic in the cyber security domain. Huawei has never and will never covertly access telecom networks, nor do we have the capability to do so. The Wall Street Journal is clearly aware that the US government can’t provide any evidence to support their allegations, and yet it still chose to repeat the lies being spread by these US officials. This reflects The Wall Street Journal’s bias against Huawei and undermines its credibility.

[…] Huawei is only an equipment supplier. In this role, accessing customer networks without their authorization and visibility would be impossible. We do not have the ability to bypass carriers, access control, and take data from their networks without being detected by all normal firewalls or security systems. In fact, even The Wall Street Journal admits that US officials are unable to provide any concrete details concerning these so-called "backdoors." [Source]

At Lawfare, Stanford University’s Dr. Herb Lin suggested grounds for skepticism in the contrast between the claim that unauthorized access "would be impossible" and a Huawei official’s comment in the WSJ article that it was merely "extremely implausible and would be discovered immediately."


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Translation: A Poem For Dr. Li Wenliang, and a Call for Free Speech

Dr. Li Wenliang, one of the first people to sound the alarm on the novel coronavirus in Wuhan, was officially admonished by authorities for “spreading rumors” about the disease. Later his case was used by state media as a warning to other potential “rumormongers.” After his official censure, Dr. Li contracted the illness, and news of the topic was censored. While in treatment, Dr. Li spoke to foreign and domestic media, advocating that a freer flow of information is needed for a healthy society. After his February 7 death, Li became a tragic symbol of the outbreak and its cover-up by the Chinese authorities. While mourning Li, many netizens demanded freedom of speech despite censors efforts to cool the discussion. 

Poet Yu Xiuhua has now contributed to the outpouring of grief for Dr. Li Wenliang. In “Mourning Li Wenliang” (悼李文亮), translated in full below, Yu speaks to Dr. Li directly, commanding him to rest and wondering aloud what the afterlife holds for him:

Mourning Li Wenliang

By Yu Xiuhua

Now rest!
There’s no virus worse than “punishment for speech”
There’s no world uglier than one that mixes right with wrong

Now rest!
The Yangtze River’s waters carry boats and capsize boats
The Yellow River’s waves ferry people and ferry ghosts

Now rest!
Now let me live my shameful life
And let me sing my angry dirge

We are not afraid to die
We are afraid to die before our time
You died, and my time died before its time

If there are viruses in heaven
If you speak up again
Then where will you go?

I hope wherever they take you in
There are still people
Who speak Chinese [Chinese]

As the nation was mourning the death of Dr. Li Wenliang, an anonymous group of Tsinghua University alumni issued a public letter to their compatriots. The open letter opposes the government’s priority of stability maintenance and the indefinite rule that Xi Jinping has made available to himself, and demands the rights promised to all in China by the PRC Constitution. The letter has been translated below:

A Letter to All Compatriots

Doctor Li Wenliang has died. The whole nation is in mourning. 

He was a dedicated, compassionate ophthalmologist who was questioned by his work unit, reprimanded by the police, and publicly named a rumormonger by CCTV simply because he told a few truths in a WeChat group shared among his graduating class. 

In the end, he proved with his death that he was not making rumors.

He didn’t want to be a hero, yet he was forced to become one!

Without truth, lies run rampant. Killing truth is akin to killing human beings. Eight people were silenced, resulting in all of China being shut. What a terrible price to pay!

To this end, we announce the following:

First, we resolutely oppose putting political security above all else. This is the selfish goal of a small group of people! The lives of hundreds of millions must come first!

Second, we resolutely oppose blocking of accounts and chat groups. We support the effective protection of the constitutional rights of all citizens–especially freedom of speech, whether that speech is right or wrong. 

Third, we resolutely oppose the thinking and model behind stability-maintenance, and oppose hostility towards the people. Only by guaranteeing people’s livelihood and improving democracy can there be social stability and peaceful living.

Fourth, we resolutely oppose turning this disaster into a grand celebration of meritorious deeds. We must hold the officials and the system accountable, so as to avoid repeating this disaster. 

Fifth, we resolutely oppose going backwards. We must adhere to Deng Xiaoping’s abolition of a system that allows leaders to stay in power indefinitely, and resume political reform in order to save the Chinese nation from its crisis!

Fellow citizens! For the life and death of hundreds of millions of Chinese, and for the survival of our nation and our country, let us utter our final roar!

A segment of Tsinghua University alumni

2020.02.07

China Change has translated an open petition calling for free speech and equitable and adequate epidemic relief, written by intellectuals including law professor Xu Zhangran, who was suspended by Tsinghua University last year after criticizing Xi Jinping.

In the wake of Li’s death, a Supreme Court judge reposted an article on WeChat promoting expanded freedom of expression and democratic rights, though a note at the end adds that it does not represent his personal opinion:

Poem translation and introduction by Anne Henochowicz


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Chinese Military Officers Charged for 2017 Equifax Hacking

The U.S. Department of Justice announced this week that four members of the People’s Liberation Army have been charged for the 2017 hacking of consumer credit reporting agency Equifax, making the 2017 attack the latest major data breach believed to be linked to China. None of the four alleged members of the PLA are in U.S. custody, and all are believed to be living in China. The hacked data included names, birth dates, and Social Security numbers of over 145 million Americans, nearly half of the U.S. population. At The New York Times, Katie Benner reports, providing context about other recent PLA cyberattacks, and noting suspicion that the targeting of personal data on private American citizens and government officials is part of Beijing’s greater strategy to expand global influence:

The indictment suggests the hack was part of a series of major data thefts organized by the People’s Liberation Army and Chinese intelligence agencies. China can use caches of personal information and combine them with artificial intelligence to better target American intelligence officers and other officials, Attorney General William P. Barr said.

[…] “This kind of attack on American industry is of a piece with other Chinese illegal acquisitions of sensitive personal data,” Mr. Barr said at a news conference announcing the charges, citing China’s theft of records in recent years from the government’s Office of Personnel ManagementMarriott International and the insurance company Anthem.

[…] Over time, China can use the data sets to improve its artificial intelligence capabilities to the point where it can predict which Americans will be primed for future grooming and recruitment, John C. Demers, the assistant attorney general for national security at the Justice Department, said in an interview. [Source]

This becomes the second time the DOJ has indicted PLA members for hacking suspicions. In 2014, the DOJ charged five military officials for theft of sensitive trade secrets and internal communications. In February 2013 information security firm Mandiant also linked hack attacks to the PLA and described —the PLA division that the U.S. alleged the five indicted officials indicted in 2014 were part of.

At The Washington Post, Devlin Barrett and Matt Zapotosky provide further details on the specifics of the new indictment, and report on denials of the charges from China’s foreign ministry:

In a nine-count indictment filed in federal court in Atlanta, federal prosecutors alleged that four members of the People’s Liberation Army hacked into Equifax’s systems, stealing the personal data as well as company trade secrets. Attorney General William P. Barr called their efforts “a deliberate and sweeping intrusion into the private information of the American people.”

[…] In Beijing, Chinese Foreign Ministry spokesman Geng Shuang flatly denied the charges. “The Chinese government, military and relevant personnel never engage in cybertheft of trade secrets,” he said, and he accused the United States of having a “double standard” on cybersecurity.

“According to plenty of information that has been made public, U.S. agencies have been engaging in cyber intrusion, surveillance and monitoring activities on foreign governments, institutions, enterprises, universities and individuals, including on its allies,” Geng said. “China is also a victim of this. We have lodged stern representations to the U.S. and asked it to make explanations and immediately stop such activities.” [Source]

The AP provides commentary from U.S. security scholars and intelligence officials on the nature and implications of the attack on Equifax:

The data can be used by China to target U.S. government officials and ordinary citizens, including possible spies, and to find weaknesses and vulnerabilities that can be exploited — such as for purposes of blackmail. The FBI has not seen that happen yet in this case, said Deputy Director David Bowdich, though he said it “doesn’t mean it will or will not happen in the future.”

Such hacks “seem to deliberately cast a wide net” so that Chinese intelligence analysts can get deep insight into the lives of Americans, said Ben Buchanan, a Georgetown University scholar and author of the upcoming book “The Hacker and the State.”

“This could be especially useful for counterintelligence purposes, like tracking American spies posted to Beijing,” Buchanan said. [Source]

At Wired, Brian Barrett and Lily Hay Newman dig deeper into the indictment to describe the DOJ’s case on how these four accused hackers did the job:

On March 7, 2017, the Apache Software Foundation announced that some versions of its Apache Struts software had a vulnerability that could allow attackers to remotely execute code on a targeted web application. It’s a serious type of bug, because it gives hackers an opportunity to meddle with a system from anywhere in the world. As part of its disclosure, Apache also offered a patch and instructions on how to fix the issue.

Equifax, which used the Apache Struts Framework in its dispute-resolution system, ignored both. Within a few weeks, the DOJ says, Chinese hackers were inside Equifax’s systems.

The Apache Struts vulnerability had offered a foothold. From there, the four alleged hackers—Wu Zhiyong, Wang Qian, Xu Ke, and Liu Lei—conducted weeks of reconnaissance, running queries to give themselves a better sense of Equifax’s database structure and how many records it contained. On May 13, for instance, the indictment says that one of the hackers ran a Structured Query Language command to identify general details about an Equifax data table, then sampled a select number of records from the database.

Eventually, they went on to upload so-called web shells to gain access to Equifax’s web server. They used their position to collect credentials, giving them unfettered access to back-end databases. Think of breaking into a building: It’s a lot easier to do so if residents leave a first-floor window unlocked and you manage to steal employee IDs. [Source]

At The Atlantic, Robert D. Williams from Yale Law School’s Paul Tsai China Center highlights the fact that, as with the 2014 indictment, the men charged are all in China and highly unlikely to stand trial. Williams then counters theories on the U.S.’ potential strategy of deterring by public indictment by noting that it is failing to minimize the phenomenon, and argues that policies encouraging firms’ cybersecurity would be more effective:

As the Harvard law professor Jack Goldsmith and I have argued before, if deterrence is the measure of success, the United States’ Chinese-hacking indictment strategy has all the earmarks of a spectacular failure. A raft of media and government reports suggests that China’s state-sponsored cybertheft has not meaningfully diminished in response to the U.S. indictment campaign. This shouldn’t come as a surprise: The costs to China of being “named and shamed” are almost certainly dwarfed by the billions of dollars of value obtained from pilfering U.S. technologies and the untold intelligence benefits of cultivating a massive database on American citizens.

[…] Maybe indictments serve a more precise signaling function by temporally linking U.S. “disrupt and degrade” operations to the (indicted) activities they aim to counter. The United States and China are immersed in a cybersecurity dilemma in which all sides are at pains to distinguish acts of preemption and retaliation. Concepts of cyber offense and defense are blurry at best. Thus, the signaling effect of an indictment followed closely by a disruptive cyberattack could potentially help avoid misperception and mitigate escalation risks. But the opposite could also be true. If perceived by China as part of a coordinated “whole of government” effort to thwart China’s rise, indictment plus disruption could aggravate the dangers of an escalation spiral. Has the U.S. factored these considerations into its strategy?

Ultimately, efforts to discern the calculus behind the Chinese-hacking indictments are necessarily speculative and perhaps less illuminating than the simplest version of reality: that indictments are one of the few tools a vulnerable United States is willing to employ to show the public that it is “doing something” about persistent cyberthreats. It is fair to wonder whether and when the resources being devoted to this effort will be complemented by equally energetic policies to incentivize companies to adopt the basic cyber hygiene that could have prevented the Equifax breach in the first place. [Source]


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