Pentagon Hit by Unprecedented Cyber Attack

As a result of the cyber attack, the Defense Department has banned the use of external hardware devices throughout a vast network of military computers.

FOXNews.com

Thursday, November 20, 2008

The attack came in the form of a global virus or worm that is spreading rapidly throughout a number of military networks.

"We have detected a global virus for which there has been alerts, and we have seen some of this on our networks," a Pentagon official told FOX News. "We are now taking steps to mitigate the virus."

The official could not reveal the source of the attack because that information remains classified.

"Daily there are millions of scans of the GIG, but for security reasons we don't discuss the number of actual intrusions or attempts, or discuss specific measures commanders in the field may be taking to protect and defend our networks," the department said in an official statement. 

Military computers are often referred to as part of the Global Information Grid, or GIG, a system composed of 17 million computers, many of which house classified or sensitive information.

FOX News obtained a copy of one memo sent out last week to an Army division within the Pentagon warning of the cyber attack.

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EXCLUSIVE: Cyber-Hackers Break Into IMF Computer System

Friday , November 14, 2008

By Richard Behar

Another major international financial institution has had its computer system attacked by unknown cyber-hackers, FOX News has learned.

The discovery of the assault last week threw into crisis the Washington, D.C. based International Monetary Fund (IMF), which offers emergency financial aid to countries faced with balance-of-payments problems, and provoked a shutdown of IMF computers that lasted for several days.

In October, FOX News reported that the computer system at the World Bank had also been hacked over a period of months.

FOX News has been unable to determine what, if any, information may have been obtained by the hackers. The IMF denies any critical intrusion took place.

The spyware discoveries came at a particularly sensitive time for the international bailout institution, which along with the World Bank is expected to play a central role in trying to combat global financial turmoil. The pair of institutions are described on the IMF's website as the "twin intergovernmental pillars supporting the structure of the world's economic and financial order."

Both will be intensively discussed at this weekend's meeting of G-20 nations in Washington, hosted by President Bush, in the effort to put global finance back on a stable basis.

Europe in particular is promoting an expanded role for the IMF, which traditionally has a European CEO, in that future architecture. IMF computers contain highly sensitive information not only on distressed nations, but also on currency payments and central bank balances around the world, all of which could be invaluable to outsiders.

What the IMF intrusion also shows is that the physical wiring of the world's financial systems is increasingly vulnerable — and getting worse.

"Electronic safety in the financial sector is in dire jeopardy," says Tom Kellermann, a former head of computer security at the World Bank's ultra-sensitive treasury unit — which FOX News reported last month had been penetrated by illicit spyware. "What people don't realize is that the financial sector is the most heavily targeted sector of all critical infrastructures."

Click here to read FOX News' World Bank story.

Kellermann today is the commissioner of the Commission on Cyber Security for the 44th Presidency, a unit of the Center for Strategic and Internal Studies — a Washington-based security think tank — that is preparing to issue recommendations in early December to President-elect Barack Obama on how to keep the country's computer systems from being penetrated.

IMF officials clamped down on their computer systems on November 7, after they discovered spyware that was quickly spreading through the institution's high-security computer system. Spyware is software that is secretly installed on a computer to intercept information or take control of the system.

The IMF's network link to the World Bank, the world's largest anti-poverty agency, was also temporarily severed, a move that IMF spokesman Bill Murray described as a "precaution."

But IMF officials strenuously deny that any lockdown of its computers took place, and insist that no important or sensitive financial information had been affected.

"There was no lockdown as far as I'm aware" says Murray. "I'm not aware of any major breaches, but enhanced security measures have been taken."

Prodded further as to the discovery of spyware, Murray responded: "As part of our ongoing [security] regime, we've had a scan of Fund personal computers and laptops and we found some workstations that did have malicious software, but absolutely no evidence that any sensitive information or systems were breached."

That is not, however, the version given by other IMF insiders and World Bank security officials, who requested anonymity.

According to them, the November 7 lockdown came only days after the World Bank moved more than 100 of its employees into an empty floor of one of the IMF's two buildings on Washington's Nineteenth Street, N.W., just across from the World Bank headquarters.

As FOX News reported on October 10, the World Bank itself suffered a series of cyber-attacks starting in the summer of 2007, both at headquarters and at other offices around the world. The World Bank strenuously denies that the intrusions took place, and none of the bank's 24 board members contacted by FOX News would discuss the matter. But sources told FOX News that at least one of those breaches also involved spyware, penetrating the World Bank's ultra-sensitive Treasury unit, which manages a $75 billion portfolio for itself and for several nations

The World Bank, however, did not take the dramatic step of shutting down all its computer systems to eliminate any spyware. Security experts say it is possible that the bank may have inadvertently infected the IMF — simply by sharing some wires in the IMF's sublet building. Moreover, as FOX News reported last month, hundreds of workers previously employed by an Indian contractor that is barred from Bank contracting work on security grounds still work at the institution, either as regular staffers or as employees of other contractors.

Shortly before the spyware was discovered, the World Bank's Independent Evaluation Group — a unit responsible for critiquing the quality of bank projects—was moved into the IMF's headquarters building, where it is now taking up an entire floor.

"Before the move, there was a single point of access — a server that acted as a firewall between the IMF and the bank," explains a technology expert at the bank. "The IMF was allowed into the World Bank's network, but not vice-versa. After the move, World Bank data, or packets, intermixed with the IMF data because they were all on the same wires."

Belatedly, it seems, the World Bank is attempting at least a partial cleaning of its systems. A bank insider tells FOX News that, in the wake of the FOX articles about its security penetrations, "all of the computer systems are being 'changed out' and overhauled in the Dept of Institutional Integrity [the bank's internal investigative arm]."

In fact, the computer assaults on the World Bank and the IMF are only part of a rash of sensitive cyber-burglaries that even reached into the U.S. presidential campaign. Both London's Financial Times and Newsweek recently reported that the computer network of the White House, and the Obama and McCain campaigns, were seriously breached.

The Pentagon claims the Chinese army has established units to develop viruses to attack enemy computer systems. Chinese hackers penetrated the Pentagon last year, in an attack that obtained e-mails from the system serving Defense Secretary Robert Gates.

Despite vigorous Chinese denials, "everyone in the intelligence community knows that China is the biggest player in cyber espionage," says John Tkacik, a former head of China intelligence for the U.S. State Department. Tkacik told FOX News that later this month, President-elect Obama will be presented with a new top-secret National Intelligence Estimate (NIE) report that "will cause the scales to drop from his eyes" regarding Chinese cyber-espionage.

"What the Chinese are particularly interested in at the IMF is what loans the IMF is likely to give to other countries," says Nick Day, a former British intelligence officer who runs Diligence, a private investigative firm that does extensive work for many international corporations and institutions.

"The geopolitics of this is that essentially you've got a few countries in the world that are stacked on huge foreign capital reserves — Russia, China, Japan, the Middle East — and the rest of us are pretty much borrowers to those lenders.

"And what the Chinese are looking to do is to get influence over a number of third world countries where there are assets in particular, where there's minerals, oil, etc. — where there's wealth that would be strategically useful. And if the IMF is not going to bail them out, or is going to bail them out at a rate which is fairly punitive, then the Chinese can go into those countries and say, "Don't go to the IMF. Come to us. We'll bail you out and we want exclusive deals over the next 20 years to all your mining concessions in your country, access to mineral wealth, access to oil'— all the raw materials that China is going to need to keep carrying its economy forward."

At the World Bank, water-cooler speculation about Chinese intelligence-gathering has taken another turn. FOX News has learned that the bank's internal watchdogs have recommended sanctions against five major Chinese government-owned companies for corruption on roads-building projects in the Philippines.

"People in the bank are wondering about the coincidental nature of all this," a well-placed bank security expert told FOX News. "The cyber-attacks ramp up just as these guys are heading right into the Sanctions Board."

Asked to comment on the impending possibility of sanctions, a World Bank spokesman instead offered FOX News an exclusive on the "full and complete story" if FOX would delay publication of the news well beyond this weekend — when world leaders would be discussing the institution. FOX News declined.    Excerpted from: http://www.foxnews.com/story/0,2933,452348,00.html