Chinese Hackers Blamed for Intrusion at Energy Industry Giant Telvent

A company whose software and services are used to remotely administer and monitor large sections of the energy industry began warning customers last week that it is investigating a sophisticated hacker attack spanning its operations in the United States, Canada and Spain. Experts say digital fingerprints left behind by attackers point to a Chinese hacking group tied to repeated cyber-espionage campaigns against key Western interests.

The attack comes as U.S. policymakers remain gridlocked over legislation designed to beef up the cybersecurity posture of energy companies and other industries that maintain some of the world’s most vital information networks.

In letters sent to customers last week, Telvent Canada Ltd. said that on Sept. 10, 2012 it learned of a breach of its internal firewall and security systems. Telvent said the attacker(s) installed malicious software and stole project files related to one of its core offerings — OASyS SCADA — a product that helps energy firms mesh older IT assets with more advanced “smart grid” technologies.

The firm said it was still investigating the incident, but that as a precautionary measure, it had disconnected the usual data links between clients and affected portions of its internal networks.

“In order to be able to continue to provide remote support services to our customers in a secure manner, we have established new procedures to be followed until such time as we are sure that there are not further intrusions into the Telvent network and that all virus or malware files have been eliminated,” the company said in a letter mailed to customers this week, a copy of which was obtained by “Although we do not have any reason to believe that the intruder(s) acquired any information that would enable them to gain access to a customer system or that any of the compromised computers have been connected to a customer system, as a further precautionary measure, we indefinitely terminated any customer system access by Telvent.”

The incident is the latest reminder of problems that can occur when corporate computer systems at critical networks are connected to sensitive control systems that were never designed with security in mind. Security experts have long worried about vulnerabilities being introduced into the systems that regulate the electrical grid as power companies transferred control of generation and distribution equipment from internal networks to so-called “supervisory control and data acquisition,” or SCADA, systems that can be accessed through the Internet or by phone lines. The move to SCADA systems boosts efficiency at utilities because it allows workers to operate equipment remotely, but experts say it also exposes these once-closed systems to cyber attacks.

Telvent did not respond to several requests for comment. But in a series of written communications to clients, the company detailed ongoing efforts to ascertain the scope and duration of the breach. In those communications, Telvent said it was working with law enforcement and a task force of representatives from its parent firm, Schneider Electric, a French energy conglomerate that employs 130,000 and has operations across the Americas, Western Europe and Asia. Telvent reportedly employs about 6,000 people in at least 19 countries around the world.

The disclosure comes just days after Telvent announced it was partnering with Foxborough, Mass. based Industrial Defender to expand its cybersecurity capabilities within Telvent’s key utility and critical infrastructure solutions. A spokesperson for Industrial Defender said the company does not comment about existing customers.

A page from an alert Telvent sent to customers about the malware left behind by the intruders.

In its most recent dispatch to customers impacted by the breach, dated Sept. 25, 2012, Telvent executives provided details about the malicious software used in the attack. Those malware and network components, listed in the photocopied Telvent communication shown here strongly suggest the involvement of Chinese hacker groups tied to other high-profile attacks against Fortune 500 companies over the past several years.

Joe Stewart, director of malware research at Dell SecureWorks and an expert on targeted attacks, said the Web site and malware names cited in the Telvent report map back to a Chinese hacking team known as the “Comment Group.”

In July, Bloomberg News published an in-depth look at the Comment Group and its many years of suspected involvement in deploying sophisticated attacks to harvest intellectual property and trade secrets from energy companies, patent law firms and investment banks.

That investigation looked at data gathered by a loose-knit group of 30 security researchers, who tracked the Comment Group’s activity over less than two months last year and uncovered evidence that it had infiltrated at least 20 organizations — “many of them organizations with secrets that could give China an edge as it strives to become the world’s largest economy. The targets included lawyers pursuing trade claims against the country’s exporters and an energy company preparing to drill in waters China claims as its own.”

Politicians in Congress and the Obama administration are becoming more vocal about accusing China and Russia of hacking U.S. computer networks for economic gain, espionage and other motives. But those accusations tend to ring hollow abroad, as Reuters recently observed: “U.S. standing to complain about other nations’ cyber attacks has been undermined, however, by disclosures that Washington, along with Israel, launched sophisticated offensive cyber operations of its own against Iran to try to slow that nation’s suspected quest for a nuclear weapon.” The malware alluded to in that Reuters piece — Stuxnet — was designed to attack specific vulnerabilities in SCADA systems known to be used in Iran’s uranium enrichment facilities.

Nevertheless, a mounting body of evidence suggests the involvement of one or two Chinese hacking groups in a host of high-profile corporate cyber break-ins over the past several years. Symantec Corp. reported earlier this month that a Chinese hacker group responsible for breaking into Google Inc in 2009 – an operation later dubbed Operation Aurora – had since launched hundreds of other cyber assaults, focusing on defense companies and human rights groups. Earlier this week, I detailed additional research on this front which showed espionage attackers often succeed in a roundabout way — by planting malware at “watering hole” sites deemed most likely to be visited by the targets of interest.

Domains connected to different cyber-espionage botnets typically trace back to one of two destinations in China, according to Dell SecureWorks.

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