U.S. Indicts 5 Chinese Officers, Alleging Economic Espionage

By Timothy M. Phelps and Julie Makinen, Tribune Washington Bureau

WASHINGTON — The Justice Department Monday filed unprecedented criminal charges against five members of the Chinese military, accusing them of economic espionage for hacking into the computers of U.S. companies involved in nuclear energy, steel manufacturing and solar energy.

The indictment for economic espionage marked the first such case brought against foreign government officials and was seen by some analysts as important symbolically.

U.S. Attorney General Eric H. Holder Jr. said at a news conference that the hacked American companies and organizations included U.S. Steel, Westinghouse, Alcoa, Allegheny Technologies, the United Steel Workers Union and U.S. subsidiaries of SolarWorld, a German company.

Holder said that in some cases the five Chinese officers stole trade secrets and in other cases they stole “sensitive, internal communications” that provided Chinese companies with valuable information on the strategies or vulnerabilities of U.S. competitors that the Chinese were negotiating with.

Kathleen Walsh, an associate professor at the Naval War College, said the indictment underscored key differences in the viewpoints of the two influential nations.

The U.S. has historically considered it a crime to spy on private firms in order to provide commercial advantage, she said. In contrast, China’s technology development strategy embraces all forms of technology transfer, including espionage and cyber-espionage.

“Therefore, this indictment is unlikely to fundamentally change China’s long-standing technology development strategy and cyber-espionage activities,” said Walsh, who stressed that her analysis did not represent the official views of the U.S. government or the military. “It does, nonetheless, raise the costs somewhat, if mainly in diplomatic terms and as a loss of global face.”

The indictment included the five officers’ names, their unit, their photographs and the building in Shanghai where they worked. But there was little prospect of them ever being brought to justice in the U.S., officials said.

Instead, the indictment appeared to be intended to send a message to Chinese leaders, who have denied that the People’s Liberation Army is engaged in economic espionage and have challenged the U.S. to provide proof.

“Well today, we are” providing proof, said Assistant Attorney General for National Security John Carlin. “For the first time, we are exposing the faces and names behind the keyboards in Shanghai used to steal from American businesses.”

“This indictment describes, with particularity, specific actions on specific days by specific actors to use their computers to steal information from across our economy,” Carlin said.

“This administration will not tolerate actions by any nation that seeks to illegally sabotage American companies and undermine the integrity of fair competition in the operation of the free market,” Holder said at the news conference in Washington. “This case should serve as a wake-up call to the seriousness of the ongoing cyber threat,” he said.

The officers — identified as Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui — were officers in Unit 61398 of the Third Department of the Chinese People’s Liberation Army.

In another case, prosecutors in New York were expected to announce Monday some arrests abroad and other enforcement actions involving “malicious” compromising of computer software, according to a law enforcement official familiar with the case.

The charges are certain to heighten tensions between the U.S. and China. Each side has accused the other of cyber-spying.

In 2013, the U.S. information security firm Mandiant said that a unit of the People’s Liberation Army had been linked to cyber-intrusions of 141 U.S. and foreign companies and entities, mostly in English-speaking countries.

Chinese officials have accused the U.S. of hypocrisy, noting that disclosures by former NSA contractor Edward Snowden suggested the U.S. had monitored and hacked into Chinese phone and Internet companies.

Holder said the U.S. only engages in surveillance for national security purposes, not to give American companies a competitive advantage.

AFP Photo/Al Seib