7/23/2019 Chinese Hack Sensitive CIA, Defence and Intelligence Data Business Standard June 15, 2015

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REUTERSHengdong (China), 13 June

Unless they have been accusedof a crime, few foreigners eversee the inside of a courtroom inChina. But on Friday a court inHengdong, a rural town in cen-tral China, gave Reuters a rareinsight into the Chinese justicesystem, allowing a reporter toobserve the trial of a local facto-ry accused of pollution thatallegedly exposed 13 children liv-ing nearby to excessive levels oflead.

The first day of MelodyChemicals trial was a windowinto how one local governmentis interpreting Chinese presidentXi Jinpings call for a stronger

rule of law and tougher environ-mental enforcement.

The Melody plant, located inDapu village about a half hours

drive from the court, madeheadlines last year after Chinesestate broadcaster CCTV ran anexpose that said more than 300local children had high levels oflead in their blood.

The government subse-quently ordered an investigationand Melody was shut down.

Even before the trial, envi-ronmental lawyers hailedHengdong courts acceptanceof the case as progress. In thepast, Chinese courts haverefused to hear controversialpollution cases.

Foreign news organisationsare usually refused access whenthey apply or show up to covertrials in China.

In recent years though, in

hopes of raising public confi-dence in the law, Beijing hasbeen trying to make its judicialsystem more transparent.

Judgments are increasinglyposted online and some courtshave started to stream proceed-ings live and post on socialmedia.

In 2013, a Chinese court usedWeibo, Chinas equiv-alent of Twitter, tobroadcast the pro-ceedings of the trial offallen politician BoXilai.

The southern cityof Shenzhen, wherethe government oftenfield tests new poli-cies, has made seats available tothe press in some court casessince 2012, according to Chinesemedia reports.

The new openness has limits

though. On Thursday, despitepromises of an open trial, aChinese court announced that ithad tried former domestic secu-

rity chief Zhou Yongkang insecret on May 22, and sentencedhim to life in prison.

In Hengdong,Reuters wasapparently the only media, for-eign or domestic, in the court-

room, despite eightplaces being reservedfor the press. Thethree judges hearingthe trial appearedimpartial.

On at least twooccasions, they askedMelodys more the-atrical, long-winded

legal team to keep their com-ments brief and asked the plain-tiff's team to do so at least once.

When a Melody lawyer wascross-examining the only wit-

ness, an expert on childhoodlead exposure from ShanghaiJiaotong University School ofMedicine, a judge intervened to

say the lawyers line of ques-tioning was inappropriate.

Court police called for quietwhen some observers burst intolaughter at a lawyer for Melodysaying that living close to the fac-tory was safer than living faraway.

Many of the plaintiffs,though, seemed more enragedby Melodys lawyers defencethan impressed with the judicialprocess.

At the end of proceedings,families yelled at Melodyslawyers, and in the ensuing scuf-fle, a disabled family memberfell to the floor. Of the more than50 families who originallyagreed to participate in the law-suit, only 13 remained by the tri-

al. Some of these dropped outunder government pressure,according to Hu Shaobo, one ofthe plaintiffs lawyers.

Pollution trial offers rare glimpse into a Chinese courtroom

REUTERSWashington, 13 June

China-linked hackers

appear to have gainedaccess to sensitive back-

ground information submittedby US intelligence and militarypersonnel for security clear-ances that could potentiallyexpose them to blackmail, the

Associated Press reported onFriday.

In a report citing several USofficials, the news agency saiddata on nearly all of the mil-lions of US security-clearanceholders, including the CentralIntelligence Agency, NationalSecurity Agency and militaryspecial operations personnel,were potentially exposed in theattack on the Office ofPersonnel Management (OPM).

It said more than 2.9 millionpeople had been investigatedfor a security clearance as ofOctober 2014.

The OPM did not immedi-ately respond to requests forcomment, but a senior US offi-cial confirmed that US investi-gators had discovered a sepa-rate attack on the OPM thattargeted sensitive informationabout government employeessimilar to a hacking incidentrevealed last week.

The official, who spoke oncondition of anonymity, couldnot confirm that the informa-tion obtained was from USintelligence and military per-sonnel but did say it was a dif-ferent set of OPM systems anddata to that of the hack dis-closed last week and did involvebackground data and securityclearances. A source familiarwith the investigation said USinvestigators suspected a simi-lar Chinese link to the otherhacking incident.

Earlier on Friday, the WhiteHouse said it could not confirm

anotherAPreport that as many

as 14 million current and formerUS government employees hadtheir personal informationexposed to hackers in the otherOPM breach.

The government said last

week that the records of up to 4

million people had been com-promised, making it one of thebiggest known attacks on USfederal networks. White Housespokesman Josh Earnest saidthe investigation was continu-

ing into this breach.

The AP report said a formauthorities believed to havebeen accessed in the breachinvolving the intelligence andmilitary personnel, StandardForm 86, required applicantsto fill out deeply personalinformation about mental ill-nesses, drug and alcohol use,past arrests and bankruptcies.

The form required the listingof contacts and relatives, poten-tially exposing any foreign rela-tives of US intelligence employ-ees to coercion, the report said.The form also required the appli-cants Social Security numberand that of their cohabitant.

Later on Friday, withoutreferring to the AP report, theObama administration said ithad ordered federal agencies totake extra steps to protect USgovernment computer systems.

Recent events underscore

the need to accelerate the

Administrations cyber strate-gy and confront aggressive,persistent malicious actorsthat continue to target ournations cyber infrastructure,the White House said in astatement outlining its securi-ty measures.

Fridays reports came asPresident Barack Obamas topnational security adviser, SusanRice, met with a top Chinesemilitary officer, General FanChanglong, at the White Houseand stressed the need for theUnited States and China to nar-row disagreements, includingon cyber security.

China, which is also at oddswith the United States overBeijings increasingly assertivepursuit of territorial claims inthe South China Sea, hasrejected as irresponsible anyallegations that it was behind

the hacking.

China-linked hackers get sensitiveCIA, defence and intelligence data

REUTERSParis, 13 June

After years of big-ticket planeorders, next weeks ParisAirshow will see rather fewermulti-billion-dollar deals andrather more nervous expres-sions as planemakers face thedaunting task of producing $1.8trillion of jets already sold.

The worlds biggest aero-space gathering will still haveits fair share of announce-ments, including a potential100-plane leasing order forBoeing, as well as the show-manship that goes with anypublic contest with Europeanarch-rival Airbus. But withalmost a decades worth ofproduction on their books,any new business is likely tobe couched in tougher thanever warnings that factoriesmust execute towin long term. Andmany analystsbelieve the orderparty is windingdown.

Given the factthat order bookshave swelled solarge, it is unlikely that theheadlines will be about largeblocks of orders at this showand much more about the pro-

duction process and viabilityof the supply chain, said aero-space consultant JerroldLundquist, managing directorof The Lundquist Group.

Although the battle formarket share in orders willalways be there, the contest fordelivery share is growing, aseach player strives to ramp uptheir production output. Lowinterest rates and high oilprices created a stampede oforders for new planes and fuel-saving spin-offs of existingones in recent years, leavingsome 12,000 jetliners left toproduce and lifting sharesacross the aerospace sector.

We are getting to volumeswhere you need to build a sin-gle aisle aircraft every 6.5 hours.It is a drumbeat and intensitythat is very demanding,Airbus Chief Operating OfficerTom Williams told reporters

ahead of the air show.But French engine maker

Safran injected a note of cau-tion this week by saying itspriority would be to meet itsalready record commit-ments, before thinking aboutfurther production increasesbeing explored by someplanemakers.

A profit warning ahead ofthe show from French seatsmaker Zodiac Aerospace high-lighted concerns about ten-sions in the supply chain,though some suppliers fear jet-makers are raising productiontoo quickly to fuel their ownmarket battles.

You have to balance mar-ket share with execution. A lotof suppliers are worried about

making that big investmentand watching it all fall down,said aerospace analyst RichardAboulafia, vice-president atVirginia-based Teal Group.

Asked on the eve of theshow whether solid produc-tion lines were more impor-tant than chasing new orders,Airbus CEO Fabrice Bregiertold Reuters, I hope we cando both.

Boeing raised its forecastfor jet demand on Thursdayand Airbus is expected to fol-low suit when it outlines itslatest market forecastson Monday.

But barring last-minutedeals, several industry sourcessaid the two plane giants maystruggle to announce 500orders between them, com-pared with 697 at theFarnborough event last year.

Some analysts havepredicted higherorders, especiallyfrom Airbus.

But unlike pre-vious years, indus-try sources saidthere was less rushto complete orders

in time for this year's show, asign that the recent order waveappears to be maturing.

A keenly-awaited final

order for 250 Airbus planesfrom Indias IndiGo is notexpected to be finalised atthe event.

The show is also seenunlikely to bring Airbusimmediate respite from slowsales of the A380 superjumbo,with all eyes instead on a pos-sible relaunch at the DubaiAirshow in November.

Airbus Group ChiefExecutive Tom Enders wasquoted on Friday as saying adecision on whether toupgrade the double-deckerwith new engines, using aformula that has worked forthe companys smallestplanes, would be taken byyear-end.

In the skies, the show willmark the first head to head fly-ing demonstration betweenBoeing's 787-9 and the A350-900, two new carbon-fibre jets

winning sales in the wide-bodymarket.

It will also be a victory lapfor France's Rafale fighterwhich stunned the defenceindustry by winning a trio ofexport orders in recentmonths after years of frus-trating losses.

It is an opportunity too forsome recently developed air-craft to restore their imageafter a spate of problems.Canadas Bombardier will bebringing both its new CSeriesplane and a new manage-ment team as it attempts tokickstart a project designedto challenge the duopoly ofAirbus and Boeing, aftermissing its Farnboroughdebut last year.

Focus at Parisair show shiftsto order backlog

Data containing personal information on nearly all of the millions of US security-clearance holders has been exposed

NEW THREAT Form 86, which is believed to have been hacked, required applicants to fill out deeply personal information

China reaffirms2030 climatecommitments

REUTERSShanghai, 13 June

Chinas Premier Li Keqiangreaffirmed the governmentscommitment to achieve peakcarbon emissions by around2030, the State Council saidin a statement issued late onFriday.

The statement containedno new commitments aheadof crucial climate talks sched-uled to take place in Paris atthe end of the year.

Li, at a meeting of theState Councils NationalLeading Group on ClimateChange, also said it wouldimpose a tough limit on theexpansion of heavily pollut-ing and energy-intensiveindustries.

Chinas coal consumptiondecreased for the first timein years in 2014, leadingsome to speculate that its car-bon emissions could peaksooner than many hadexpected.

As the countrys energy-intensive heavy industrialsector has suffered over thepast two years, electricityproduction responsible forthe bulk of coal consumptionin China has also lagged.

US-Cuba deal expected in early Julyto restore ties, reopen embassiesREUTERSWashington, 13June

The Obama administration isexpected to announce anagreement with Cuba in earlyJuly to reopen embassies andrestore diplomatic relationssevered more than five decadesago, US sources familiar withthe matter said on Friday.

The two sides hope to con-clude the deal by the first weekof next month, clearing the wayfor Secretary of State John

Kerry to visit Havana soonafterwards for a flag-raisingceremony to upgrade the USInterests Section to a full-scaleembassy, the sources said.

Since a breakthroughbetween the two former ColdWar rivals announced inDecember, negotiators havesettled all but a few differencesand were confident they wouldsoon be resolved, severalsources toldReuters.

They said the exacttimetable for the formalembassy opening was unclearbecause of Kerrys recoveryfrom a broken leg suffered in aMay 31 biking accident inFrance, as well as the loomingJune 30 deadline for a finalnuclear deal with Iran, which

would dominate Kerrys sched-ule over the next weeks.

Restoration of relationswould be the latest phase in anormalisation process, which isexpected to move slowlybecause of lingering problemsover issues such as Cubashuman rights record. A USembargo will remain in place,and only Congress can lift it.

The sources said the admin-istration hoped to formally noti-

fy Congress within the next twoweeks of its intention to reopenthe Havana embassy. The StateDepartment is required by lawto give Congress at least 15 daysnotice of such an action.

Cubas Communist govern-ment is likely to act in syncwith the United States onreopening of the embassies,issuing its own announcementon restoring ties, one sourcesaid. But it was unclear how

fast the two sides would act innaming ambassadors.

As part of its preparations toturn its interests section inWashington into a full-fledgedembassy, Cuba erected a largeflagpole on the front lawn of thebuilding on Wednesday. Theflag itself will await theformal announcement ofrelations.

Obama and Cuban PresidentRaul Castro pledged full restora-

tion of ties on December 17. Thetwo leaders met in Panama inmid-April.

Cuba was formally removedfrom the US list of state sponsorsof terrorism late last month, acritical step toward rapproche-ment 54 years after Washingtoncut off relations at the height ofthe Cold War and imposed aneconomic embargo.

US and Cuban negotiatorshave resolved all but a fewminor differences since the lastround of high-level talks in

May in Washington, thesources said.

The main obstacles hadbeen US demands for relativefreedom of movement for theirdiplomats on the island, com-parable to that in Russia andVietnam, while the Cubans hadobjected to US training coursesin journalism and informationtechnology given at the USinterests section in Havana.

Negotiators are now settlingissues such as how many ship-ping containers will be allowedinto Havana for renovating theUS mission there.

US officials say there is little,if any, chance that hardlineanti-Castro lawmakers inCongress would be able toblock the restoration of ties.

WARMING UP People wait to apply for visas outside the US Interests Section (background), inHavana. US is set to upgrade the Interest Section to a a full-scale embassy soon

Plane makersface thedaunting taskof producing$1.8 trillion of jetsalready sold butnot delivered

In hopes ofraising publicconfidence inthe law, Beijinghas been tryingto make its

judicial systemmore transparent

IN TANDEM A flying display during the Paris air show in 2013

MICHAELD SHEAR &SCOTT SHANEWashington, 13 June

The White House said thatPresident Obama wasconsidering financialsanctions against theattackers who gainedaccess to the files ofmillions of federal workers.Investigators had alreadysaid that Chinese hackersappeared to have obtainedpersonal data from morethan four million currentand former federalemployees in one of theboldest invasions into agovernment network.At the White House,officials said that Obamawas weighing the use of anexecutive order he signedin April that allows theTreasury secretary toimpose sanctions onindividuals or groups thatengage in maliciouscyberattacks.This newly availableoption is one that is on thetable, said Josh Earnest,the White House presssecretary.Obama signed the orderafter the attack on SonyPictures computernetwork, an intrusion thatAmerican officials believewas carried out by thegovernment of NorthKorea.2005 The New York TimesNews Service

White Housecontemplatessanctions aftersecond breach

Passport, visa systems hitby technical problemsREUTERSJune 13

The US State Department saidon Friday it was havingtechnical problems with itsoverseas passport and visasystems, and wasinvestigating the root causeof the issue.Asked what caused theproblems and whether it was

a malicious action or hack,the State Department said:We are working urgently tocorrect the problem andexpect the system to be fullyoperational again soon.Passport applicationsaccepted overseas on orafter May 26 were affected, itsaid, adding that passportsfor emergency travel couldbe issued.

OPEN CHAMBERS: CCTV footage of a judge reading out the sentence in a case in China