The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies

[dennishoddy]

From the article (emphasis added):

Over the decades, the security of the supply chain became an article of faith despite repeated warnings by Western officials. A belief formed that China was unlikely to jeopardize its position as workshop to the world by letting its spies meddle in its factories. That left the decision about where to build commercial systems resting largely on where capacity was greatest and cheapest. “You end up with a classic Satan’s bargain,” one former U.S. official says. “You can have less supply than you want and guarantee it’s secure, or you can have the supply you need, but there will be risk. Every organization has accepted the second proposition.”​

So...yes, people suspected. Senior management just decided the profits were worth the risk.

Now, it's time for the market to speak to such management. Or not, depending upon its priorities.

(Also, anybody who thinks other intelligence agencies, including the NSA, aren't doing similar things is an idiot. But that's another thread, another time, unlikely to make mainstream US press.)

Years ago I worked for the Pelton Company in the late 70's, that built the electronics for vibrasize oil exploration trucks. The trucks were built across the street at the Mertz company. We built the circuit boards from scratch doing all the soldering for each unit that went out the door.
When China bought 90 trucks, we had to build 90 sets of the vibrator control units plus spares. China sent their "technicians" and "truck drivers" to do a final runout of the trucks and get training on how to use the electronics.
When they came in to the assembly lab on a tour, we had old model 1 design failure modules scattered about on tables and were soldering in components, to make it look like we were working.
Every one of them produced a camera and started taking snapshots non stop.
What they didn't know is that the circuit boards after assemble were required to be "potted" with black epoxy and encapsulated in metal containers.
A team of us spent weeks trying to dig the epoxy out the containers and get to the components on the circuit boards. Used chemicals, knives, whatever, and were never able to deconstruct one of the modules without destroying it in the process.
China's intellectual thievery has been going on for a long time.

 

[SoonerP226]

More on this topic. Apparently, (some of) the companies involved have given very direct, very specific refutals and denials, with Apple even stating that they are not being bound by a gag order.

DTNS covered this in the first segment of Friday's show:

 

[SlugSlinger]

The Chinese are everywhere! So are the Democrats just complacent or intentional? Think of Hilary’s server.


A Chinese Spy Worked In Senator Dianne Feinstein's Office For Twenty Years
We can only imagine the twenty-four hour media blitz that would be unleashed if this had happened with the Trump campaign, or on anyone's staff even remotely associated with President Trump past or present.

But when the story first broke in the middle of this week of a mole working on behalf of the Russian Chinese government on a powerful Democrat Senate Intelligence Committee member's staff, it passed in the mainstream media with a yawn, and though slowly gaining visibility still hasn't been covered by some of the large cable networks or newspapers.

Senator Dianne Feinstein (D-Calif.) was "mortified" upon learning that a Chinese spy had worked in her office for nearly 20 years.

According to new details initially unveiled in a Politico report on Russian and Chinese spies in Silicon Valley, a staffer who was fired five years ago had managed to stay on her team for nearly two decades likely out of motivation to collect information related to her long tenure on the Senate Intelligence Committee, for which she maintains top-secret security clearance.

Sen. Feinstein reportedly made the staffer retire upon being alerted by the FBI. He worked as her personal driver and clerk for her Bay Area office, as CBS San Francisco relates:

On Wednesday, the San Francisco Chronicle uncovered additional details in a column written by reporters Phil Matier and Andy Ross. The column revealed that the Chinese spy was Feinstein’s driver who also served as a gofer in her Bay Area office and was a liaison to the Asian-American community.

He even attended Chinese consulate functions for the senator.

Feinstein — who was Chair of the Senate Intelligence Committee at the time — was reportedly mortified when the FBI told her she’d be infiltrated. Investigators reportedly concluded the driver hadn’t leaked anything of substance and Feinstein forced him to retire.

Perhaps the most stunning part of the story is that he remained in her office for nearly two decades, reportedly having contact with China's Ministry of State Security for an unknown number of years during that lengthy period.

Though it's unclear when his contact with the Chinese state began, follow-up reports by local San Francisco sources claim he may have been an unwitting asset.

The San Francisco Chronicle in a follow-up investigation reports:

According to our source, the intrigue started years earlier when the staffer took a trip to Asia to visit relatives and was befriended by someone who continued to stay in touch with him on subsequent visits.

That someone was connected with the People’s Republic of China’s Ministry of State Security.

“He didn’t even know what was happening — that he was being recruited,” says our source. “He just thought it was some friend.”

Neither the FBI nor Chinese embassy has issued official comment in response to the bombshell story; however, various reports cite investigators close to the matter who say the mole was able to obtain little or nothing of substance.

It's believed that the advantage of Chinese intelligence placing a driver with the Chair of the Senate Intelligence Committee is that he may have picked up on tidbits of sensitive conversations at moments the senator thought she could comfortably speak to colleagues and staff.

One former counter-espionage FBI agent in the Bay Area, Jeff Harp, told CBS San Francisco he believes someone like Sen. Feinstein would constitute a key, high value target for foreign intelligence and eavesdropping:

Harp pointed out politicians with access to classified information are generally trained on what not to say and when not to say it. But he also noted when you have a driver behind the wheel day in and day out for 20 years, there are more opportunities to slip up.

“Think about Diane Feinstein and what she had access to,” Harp explained. “One, she had access to the Chinese community here in San Francisco; great amount of political influence. Two, correct me if I’m wrong, Dianne Feinstein still has very close ties to the intelligence committees there in Washington, D.C.”

And of Silicon Valley being a hotbed of Chinese espionage, Harp continued, “They also have an interest in the economy here. How to get political influence here. What’s being developed in Silicon Valley that has dual-use technology. All of that is tied to the Bay Area.”

 

[Pearl Cruz]

I used to work for a chip design company. They started this miniature surface mount technology about 30 years ago. It’s been snuck into home products pretty much since. But now we’re supposed to be scared? I know I know I know....

 

[John6185]

Just goes to show how important it is that America’s manufacturing industry be strong and state side

True, it's a matter of national security, sometime in the not too distant past, we were using Chinese microchips in our defense systems. That to me is a foolish and dangerous act, buying computer chips fro a nation that is not to friendly with us. While we're on the subject, why are our defense computers so easy to hack into? Don't we have the technology and American computer knowledge to erect a firewall against hacking or are we going to continue letting anyone with a little knowledge hack into our computers?
11-Year-Old Hacks Into Replica Voting Website in 10 Minutes | Time

time.com/5366171/11-year-old-hacked-into-us-voting-system-10-minutes/
An 11-year-old changed election results on a replica Florida state - PBS
[URL='https://www.independent.co.uk/news/world/americas/us-politics/us-election-hacking-russia-russian-hackers-cyberattack-donald-trump-voting-machines-def-con-a7868536.html']Hackers breached defences of US voting machines in less than 90 ...[/URL]
etc, etc.....

 

[-Pjackso]

Vice President Mike Pence's Remarks on the Administration's Policy Towards China




It's a bit long, but there's some interesting info in there.....
(Not specific about the malicious chip)

 

[Seadog]

True, it's a matter of national security, sometime in the not too distant past, we were using Chinese microchips in our defense systems. That to me is a foolish and dangerous act, buying computer chips fro a nation that is not to friendly with us. While we're on the subject, why are our defense computers so easy to hack into? Don't we have the technology and American computer knowledge to erect a firewall against hacking or are we going to continue letting anyone with a little knowledge hack into our computers?
11-Year-Old Hacks Into Replica Voting Website in 10 Minutes | Time

time.com/5366171/11-year-old-hacked-into-us-voting-system-10-minutes/
An 11-year-old changed election results on a replica Florida state - PBS
Hackers breached defences of US voting machines in less than 90 ...
etc, etc.....

It’s not that we dont have the technology to make this stuff. It’s about corporations making huge profits using slave labor in China. Just like when they move to Mexico for the dirt cheep labor. The results of cheep foreign produced goods decimated America state side businesses. We have Clinton and NAFTA to thank for that. BUT it looks like things are turning around

 

[filbert]

America couldn't afford tv's, cell phone's, computer's, car's, stereos, even steel, plastics, construction material, etc, if we didn't have China, Mexico, India, and all the rest of the third world countries. And Americans only care about there pleasures, they don't care about there freedoms. Can you imagine our standard of living if we didn't have cheap imports? You can't. Just my opinion.

 

[MacFromOK]

Can you imagine our standard of living if we didn't have cheap imports? You can't. Just my opinion.

Hey, we don' need no steenkin' technology. I can start a fire by rubbing two sticks together...

 

[John6185]

America couldn't afford tv's, cell phone's, computer's, car's, stereos, even steel, plastics, construction material, etc, if we didn't have China, Mexico, India, and all the rest of the third world countries. And Americans only care about there pleasures, they don't care about there freedoms. Can you imagine our standard of living if we didn't have cheap imports? You can't. Just my opinion.

True story, Americans these days don't read the news or care about the world situations but it can and will affect them some day. Instant gratification is their MOI.