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Shotgiant: Snowden Docs Show Real Worry With Huawei Tech Is NSA Backdoors Not China Spying

In ANT, Archive, China, Hacking, Huawei, NSA, NSA Files, Surveillance, TAO, Technology on March 23, 2014 at 10:17 PM
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03/23/2014

SPIEGEL/NYTimes:

According to documents viewed by SPIEGEL, America’a NSA intelligence agency put considerable efforts into spying on Chinese politicians and firms. One major target was Huawei, a company that is fast becoming a major Internet player.

The American government conducted a major intelligence offensive against China, with targets including the Chinese government and networking company Huawei, according to documents from former NSA worker Edward Snowden that have been viewed by SPIEGEL and the New York Times. Among the American intelligence service’s targets were former Chinese President Hu Jintao, the Chinese Trade Ministry, banks, as well as telecommunications companies.

But the NSA made a special effort to target Huawei. With 150,000 employees and €28 billion ($38.6 billion) in annual revenues, the company is the world’s second largest network equipment supplier connecting a third of the world’s population. At the beginning of 2009, the NSA began an extensive operation, referred to internally as “Shotgiant,” against the company, which is considered a major competitor to US-based Cisco. The company produces smartphones and tablets, but also mobile phone infrastructure, WLAN routers and fiber optic cable — the kind of technology that is decisive in the NSA’s battle for data supremacy.

American officials have long considered Huawei, the Chinese telecommunications giant, a security threat, blocking it from business deals in the United States for fear that the company would create “back doors” in its equipment that could allow the Chinese military or Beijing-backed hackers to steal corporate and government secrets.

But even as the United States made a public case about the dangers of buying from Huawei, classified documents show that the National Security Agency was creating its own back doors — directly into Huawei’s networks.

As long ago as 2007, the N.S.A. began a covert program against Huawei, the documents show. By 2010, the agency’s Tailored Access Operations unit — which breaks into hard-to-access networks — found a way into Huawei’s headquarters.

TAO succeeded in infiltrating Huwaei’s network and copied a list of 1,400 customers as well as internal documents providing training to engineers on the use of Huwaei products, among other things.

According to a top secret NSA presentation, NSA workers not only succeeded in accessing the email archive, but also the secret source code of individual Huwaei products. Software source code is the holy grail of computer companies. Because Huawei directed all mail traffic from its employees through a central office in Shenzhen, where the NSA had infiltrated the network, the Americans were able to read a large share of the email sent by company workers beginning in January 2009, including messages from company CEO Ren Zhengfei and Chairwoman Sun Yafang.

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Image via Koen Rouwhorst

“We currently have good access and so much data that we don’t know what to do with it,” states one internal document.

One of the goals of the operation, code-named “Shotgiant,” was to find any links between Huawei and the People’s Liberation Army, one 2010 document made clear.

“If we can determine the company’s plans and intentions,” an analyst wrote, “we hope that this will lead us back to the plans and intentions of the PRC,” referring to the People’s Republic of China.

As Huawei invested in new technology and laid undersea cables to connect its $40 billion-a-year networking empire, the agency was interested in tunneling into key Chinese customers, including “high priority targets — Iran, Afghanistan, Pakistan, Kenya, Cuba.”

NSA wanted to exploit Huawei’s technology so that when the company sold equipment to other countries — including both allies and nations that avoid buying American products — the N.S.A. could roam through their computer and telephone networks to conduct surveillance and, if ordered by the president, offensive cyberoperations.

“Many of our targets communicate over Huawei produced products, we want to make sure that we know how to exploit these products,” says an analyst in one NSA document.

The agency also states concern that “Huawei’s widespread infrastructure will provide the PRC (People’s Republic of China) with SIGINT capabilities.” SIGINT is agency jargon for signals intelligence. The documents do not state whether the agency found information indicating that to be the case.

The operation was conducted with the involvement of the White House intelligence coordinator and the FBI. One document states that the threat posed by Huawei is “unique”.

The agency also stated in a document that “the intelligence community structures are not suited for handling issues that combine economic, counterintelligence, military influence and telecommunications infrastructure from one entity.”

The agency notes that understanding how the firm operates will pay dividends in the future. In the past, the network infrastructure business has been dominated by Western firms, but the Chinese are working to make American and Western firms “less relevant”. That Chinese push is beginning to open up technology standards that were long determined by US companies, and China is controlling an increasing amount of the flow of information on the net.

nsa-china-military-tech

Image via Koen Rouwhorst

Washington’s concerns about Huawei date back nearly a decade, since the RAND Corporation, the research organization, evaluated the potential threat of China for the American military. RAND concluded that “private Chinese companies such as Huawei” were part of a new “digital triangle” of companies, institutes and government agencies that worked together secretly.

Huawei is a global giant: it manufactures equipment that makes up the backbone of the Internet, lays submarine cables from Asia to Africa and has become the world’s third largest smartphone maker after Samsung and Apple.

The man behind its strategy is Ren Zhengfei, the company’s elusive founder, who was a P.L.A. engineer in the 1970s. To the Chinese, he is something akin to Steve Jobs — an entrepreneur who started a digital empire with little more than $3,000 in the mid-1980s, and took on both state-owned companies and foreign competitors. But to American officials, he is a link to the People’s Liberation Army.

They have blocked his company at every turn: pressing Sprint to kill a $3 billion deal to buy Huawei’s fourth generation, or 4G, network technology; scuttling a planned purchase of 3Com for fear that Huawei would alter computer code sold to the United States military; and pushing allies, like Australia, to back off from major projects.

Two years after Shotgiant became a major program, the House Intelligence Committee delivered an unclassified report on Huawei and another Chinese company, ZTE, that cited no evidence confirming the suspicions about Chinese government ties. Still, the October 2012 report concluded that the companies must be blocked from “acquisitions, takeover or mergers” in the United States, and “cannot be trusted to be free of foreign state influence.”

Huawei, which has all but given up its hopes of entering the American market, complains that it is the victim of protectionism, swathed in trumped-up national security concerns. Company officials insist that it has no connection to the People’s Liberation Army.

The documents offer no answer to that central question: Is Huawei an independent company, as its leaders contend, or a front for the People’s Liberation Army, as American officials suggest but have never publicly proved?

In a statement, Huawei spokesman Bill Plummer criticized the spying measures. “If it is true, the irony is that exactly what they are doing to us is what they have always charged that the Chinese are doing through us,” he said. “If such espionage has been truly conducted, then it is known that the company is independent and has no unusual ties to any government and that knowledge should be relayed publicly to put an end to an era of mis- and disinformation.”

The N.S.A.’s operations against China do not stop at Huawei. Last year, the agency cracked two of China’s biggest cellphone networks, allowing it to track strategically important Chinese military units, according to an April 2013 document leaked by Mr. Snowden. Other major targets, the document said, are the locations where the Chinese leadership works. The country’s leaders, like everyone else, are constantly upgrading to better, faster Wi-Fi — and the N.S.A. is constantly finding new ways in.

Responding to the allegations, NSA spokeswoman Caitlin Hayden said she should could not comment on specific collection activities or on the intelligence operations of specific foreign countries, “but I can tell you that our intelligence activities are focused on the national security needs of our country.” She also said, “We do not give intelligence we collect to US companies to enhance their international competitiveness or increase their bottom line.”

TAO ANT Division Huawei Exploits HALLUXWATER & HEADWATER

UPDATE 03/24/2014 China Demands Explanation from U.S. on Huawei Spying

Reuters:

China wants a clear explanation from Washington over reports that the U.S. National Security Agency infiltrated servers at the headquarters of telecoms giant Huawei Technologies Co, a Chinese foreign ministry spokesman said on Monday.

Chinese President Xi Jinping raised the reports in a meeting with U.S. President Barack Obama on the sidelines of a nuclear summit in The Hague and was told that the United States did not spy to gain commercial advantage, White House deputy national security adviser Ben Rhodes said.

“We don’t share information with our companies,” Rhodes told reporters in Washington.

Chinese Foreign Ministry spokesman Hong Lei said China was “extremely concerned” about the spying allegations.

“Recently, the international media has put out a lot of reports about the eavesdropping, surveillance and stealing of secrets by the United States of other countries, including China,” he told a regular briefing.

“China has already lodged many complaints with the United States about this. We demand that the United States makes a clear explanation and stop such acts.”

  1. […] Huawei Technologies Co. Ltd. appears in the presentation as well, and the NSA appears to have had a keen interest in isolating the corporation’s data channels. “These links are likely to carry Huawei […]

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