Marriott breach traced to Chinese hackers, US plans response

[NEW YORK] The cyberattack on the Marriott hotel chain that collected passport information or other personal details of roughly 500 million guests was part of a Chinese intelligence-gathering effort that hacked health insurers, other hotels and the security clearance files of millions more Americans, according to two people briefed on the preliminary results of the investigation.

The hackers are suspected of working on behalf of the Ministry of State Security. The discovery comes as the Trump administration plans a series of actions targeting China's trade, cyber and economic policies.

The Justice Department is preparing to announce new indictments against Chinese hackers working for the intelligence and military services, according to four government officials who spoke on condition of anonymity. The Trump administration also plans to declassify intelligence to reveal concerted efforts by Chinese agents, dating to 2014 or earlier, to build a database containing names of executives and US government officials with security clearances.

And the administration is considering an executive order intended to make it harder for Chinese companies to obtain critical telecommunications equipment, a senior US official with knowledge of the plans said.

The coordinated moves could be announced within days. They stem from a growing concern within the administration that the 90-day trade truce negotiated between President Donald Trump and President Xi Jinping in Buenos Aires, Argentina, two weeks ago may do little to change China's behaviour - including coercing American companies to hand over valuable technology if they seek to enter the Chinese market, as well as the theft of industrial secrets on behalf of state-owned companies.

The hack of Marriott's Starwood chain, which was only discovered in September and revealed late last month, is not expected to be part of the coming indictments. But two of the government officials said it has added urgency to the administration's crackdown, given that Marriott is the top hotel provider for US government and military personnel.

It also is a prime example of what has vexed the Trump administration as China reverted over the past 18 months to the kind of cyber intrusions into American companies and government agencies that former President Barack Obama thought he had ended with a 2015 agreement with Mr Xi.

Geng Shuang, a spokesman for the Chinese Ministry of Foreign Affairs, denied any knowledge of the Marriott hack. "China firmly opposes all forms of cyberattack and cracks down on it in accordance with the law," he said. "If offered evidence, the relevant Chinese departments will carry out investigations according to the law."

"China is one of the major victims of threats to cybersecurity including cyberhacking," he said.

A Marriott spokeswoman, Connie Kim, said the company was focused on "how we can best help our guests" and said the firm "had no information about the cause of this incident and we have not speculated about the identity of the attacker."

Trade negotiators on both sides of the Pacific Ocean have been working on an agreement that would involve a commitment by China to increase purchases of US goods and services by US$1.2 trillion over the next several years, along with addressing some intellectual property concerns.

On Tuesday, Mr Trump said that the United States and China were having "very productive conversations" as top American and Chinese officials held their first talks via telephone since the two countries agreed to the trade truce on Dec 1.

But while top administration officials insist the trade talks are proceeding on a separate track, the broader crackdown on China could undermine Mr Trump's ability to reach an agreement with Mr Xi.

US charges against senior members of China's intelligence services - in tandem with the targeting of high-profile technology executives, like Meng Wanzhou, chief financial officer of the communications giant Huawei and daughter of its founder - risk hardening opposition in Beijing to negotiating with Mr Trump.

China has been angered by the arrest of Meng, who has been detained in Canada on suspicion of fraud involving violations of US sanctions in Iran. She was granted bail of 10 million Canadian dollars, or US$7.5 million, while awaiting extradition to the United States, a Canadian judge ruled on Tuesday.

American business leaders have been bracing for retaliation from China, which has demanded the immediate release of Meng and accused both the United States and Canada of violating her human rights.

On Tuesday, the International Crisis Group said one of its employees, a former Canadian diplomat, had been detained in China. The disappearance of the former diplomat, Michael Kovrig, could further inflame tensions between China and Canada. "We are doing everything possible to secure additional information on Michael's whereabouts as well as his prompt and safe release," the group said in a statement on its website.

From the first revelation that the Marriott chain's computer systems had been breached, there was widespread suspicion in both Washington and among cybersecurity firms that the hack was not a matter of commercial espionage, but part of a much broader spy campaign to amass Americans' personal data.

While US intelligence agencies have not reached a final assessment of who performed the hack - called "attribution" in the world of cybersecurity - a range of firms brought in to assess the damage quickly saw computer code and patterns familiar to operations by Chinese actors.

The Marriott database contains not only credit card information but passport data. Lisa Monaco, the former White House homeland security adviser, noted at a conference last week that passport information would be particularly valuable in tracking who is crossing borders, what they look like, and other key data.

But officials on Tuesday said it was only part of an aggressive operation whose centerpiece was the 2014 hack into the Office of Personnel Management. At the time, the government bureau loosely guarded the detailed forms that Americans fill out to get security clearances - forms that contain detailed financial data, information about spouses, children, past romantic relationships, and any meetings with foreigners.

Such information is exactly what the Chinese use to root out spies, recruit intelligence agents and build a rich repository of Americans' personal data for future targeting. With those details and more that were stolen from insurers like Anthem, the Marriott data adds another critical element to the intelligence profile: Travel habits.

James A Lewis, a cybersecurity expert at the Center for Strategic Studies in Washington, said the Chinese have collected "huge pots of data" to feed a Ministry of State Security database seeking to identify American spies - and the Chinese people talking to them.

"Big data is the new wave for counterintelligence," Mr Lewis said.

NYTIMES