Deep computer-spying network touched 103 countries

The 53-page report, released on Sunday, provides some of the most compelling evidence and detail of the efforts of politically-motivated hackers while raising questions about their ties with government-sanctioned cyberspying operations.

It describes a network which researchers have called GhostNet, which primarily uses a malicious software program called gh0st RAT (Remote Access Tool) to steal sensitive documents, control Web cams and completely control infected computers.

"GhostNet represents a network of compromised computers resident in high-value political, economic and media locations spread across numerous countries worldwide," said the report, written by analysts with the Information Warfare Monitor, a research project of the SecDev Group, a think tank, and the Munk Center for International Studies at the University of Toronto. "At the time of writing, these organizations are almost certainly oblivious to the compromised situation in which they find themselves."

The analysts did say, however, they have no confirmation if the information obtained has ended up being valuable to the hackers or whether it has been commercially sold or passed on as intelligence.

The operation probably started around 2004, the time security researchers noticed that many of these institutions were being sent bogus e-mail messages with executable files attached to them, according to Mikko Hypponen, director of antivirus research at F-Secure. Hypponen, who has been tracking the attacks for years, says that GhostNet's tactics have evolved considerably from those early days. "For the past three-and-a-half years or so it's been fairly advanced and fairly technical."

"It's really good to see a spotlight on this while thing right now, because it's been going on for so long and nobody's been paying attention," he added.

Although evidence shows that servers in China were collecting some of the sensitive data, the analysts were cautious about linking the spying to the Chinese government. Rather, China has a fifth of the world's Internet users, which may include hackers that have goals aligning with official Chinese political positions.

"Attributing all Chinese malware to deliberate or targeted intelligence gathering operations by the Chinese state is wrong and misleading," the report said.

However, China has made a concerted effort since the 1990s to use cyberspace for military advantage "The Chinese focus on cyber capabilities as part of its strategy of national asymmetric warfare involves deliberately developing capabilities that circumvent U.S. superiority in command-and-control warfare," it said.

A second report, written by University of Cambridge researchers and published in conjunction with the University of Toronto paper, was less circumspect, saying that the attacks against the Office of His Holiness the Dalai Lama (OHHDL) were launched by "agents of the Chinese government." The Cambridge team titled their report, "The Snooping Dragon."

The analysts' research started after they were granted access to computers belonging to Tibet's government in exile, Tibetan nongovernmental organizations and the private office of the Dalai Lama, which was concerned about the leak of confidential information, according to the report.

They found computers infected with malicious software that allowed remote hackers to steal information. The computers became infected after users opened malicious attachments or clicked on linked leading to harmful Web sites.

The Web sites or malicious attachments would then try to exploit software vulnerabilities in order to take control of the machine. In one example, a malicious e-mail was sent to a Tibet-affiliated organization with a return address of "campaign@freetibet.org" with an infected Microsoft Word attachment.

As the analysts probed the network, they found that the servers collecting the data were not secured. They gained access to control panels used to monitor the hacked computers on four servers.

Those control panels revealed lists of infected computers, which went far beyond the Tibet government and NGOs. Three of the four control servers were located in China, including Hainan, Guangdong and Sichuan. One was in the U.S., the report said. Five of the six command servers were in China, with the remaining one in Hong Kong.

The University of Toronto report classified close to 30 percent of the infected computers as being "high-value" targets. Those machines belong to the ministry of foreign affairs of Bangladesh, Barbados, Bhutan, Brunei, Indonesia, Iran, Latvia and the Philippines. Also infected were computers belonging to the embassies of Cyprus, Germany, India, Indonesia, Malta, Pakistan, Portugal, Romania, South Korea, Taiwan and Thailand.

International groups infected included the ASEAN (Association of Southeast Asian Nations) secretariat, SAARC (South Asian Association for Regional Cooperation) and the Asian Development Bank; some news organizations such as the U.K. affiliate of the Associated Press; and an unclassified NATO computer.

GhostNet's existence highlights a need for urgent attention to information security, the analysts wrote. "We can safely hypothesize that it [GhostNet] is neither the first nor the only one of its kind."

The Cambridge researchers predict that these highly targeted attacks bundled with sophisticated malware -- they call them "social malware" -- will become more prevalent in the future. "Social malware is unlikely to remain a tool of governments," they write. "What Chinese spooks did in 2008, Russian crooks will do in 2010."

While F-Secure has seen only a few thousand of these attacks so far, they are already a problem for corporate users in the defense sector, Hypponen said. "We're only seeing this right now on a minuscule scale," he said. "If you could take techniques like this and do it on a massive scale, of course that would change the game."