Time to acknowledge the facts on US-China cyber security
- By Dan Steinbock
0 Comment(s)
Print
E-mail China.org.cn, July 11, 2014
The “new model of major power relations” between the United States and China can only be based on real cooperation and acknowledging the facts.
After the disclosures of the whistleblower Edward Snowden, that’s what progress requires in the U.S.-China Strategic Security Dialogue as well.
|
|
|
[By Jiao Haiyang/China.org.cn] |
The new moral hazards
“A foreign national could impact and destroy a major portion of our financial system” by placing a virus in our computer systems “and literally take down the U.S. economy,” said Keith Alexander, then chief of the National Security Agency and U.S. Cyber Command, on CBS’s 60 Minutes last December.
"We don't have the defenses, we don't have government and industry working together, yet,” Alexander added at the Gartner Security and Risk Management Summit last month.
In the first case, the four-star general warned the financial industry. In the second case, he was speaking to the giant banks as the head of his new startup, for the asking price of $1 million a month. Reportedly, the ex-NSA chief leased office space from Promontory Financial Group, which itself faced scrutiny in the Congress in 2013, amid growing unease over its influence and close ties to federal authorities.
It is this public-private double bind of the nation’s vital military leaders and leading regulators that illustrates the new moral hazards in the intelligence activities as well. On the one hand, Alexander’s IronNet Cybersecurity Inc. is just another example of a new generation of private-sector cyber-security startups.
On the other hand, it reflects the massive private outsourcing of the U.S. public-sector cyber-intelligence community.
CIA-backed venture capital
Like James Bond, then-chief George Tenet of the CIA concluded in the 1990s that the nation’s intelligence community could no longer take on its enemies alone. Bond’s secret gun was a fictional MI6 agent who was responsible for his latest technology wizardry. Agent Q also inspired the name of In-Q-Tel (IQT), a CIA-backed technology incubator that was created in 1999 as an independent, not-for-profit organization.
Through the Cold War, strategic general-purpose technologies were still created in the public sector. But times were changing. In the Reagan era, despite the massive rearmament, the focus was on liberalization, privatization, and deregulation. In the Clinton-Gore era, the new mantra became commercial globalization.
As Tenet put it in his memoirs, At the Center of the Storm (2007), the CIA created IQT hoping to use its limited dollars “to leverage technology developed elsewhere. The CIA identifies pressing problems, and In-Q-Tel provides the technology to address them. The In-Q-Tel alliance has put the Agency back at the leading edge of technology.”
Initially, IQT catered mainly to the needs of the CIA. Today it supports many of the 17 agencies within the U.S. intelligence community. Unlike traditional venture capital firms that focus on making money, its objectives are strategic. It likes to recruit other top-tier venture capital firms or hedge funds to co-invest in start-ups. It is interested in new enterprises that have developed commercially focused technologies, which can deliver “near-term advantages” within three months.
Recently, the U.S. Justice Department launched a case against Chinese military hackers for allegedly stealing U.S. trade secrets through cyber-espionage. The case relies critically on data by Mandiant, a private-sector firm led by former intelligence executives. Along with numerous other cyber-security startups and more aggressive “cyber Blackwaters,” IQT financed Mandiant only a few years before.
Indeed, IQT has backed startups later acquired by Google, Oracle, IBM, Lockheed, and other leading U.S. technology giants and defense contractors. In late 2005, for instance, IQT sold its shares of Google. These stocks were a result of Google’s acquisition of Keyhole, the CIA funded satellite-mapping software today known as Google Earth. Only weeks later, Google launched its Chinese subsidiary.
According to the IRS filings, IQT has received some $50 million to $64 million per year in the past half a decade. Its listed total assets were estimated at $220 million in spring 2012. Over the years, IQT has invested in over 180 portfolio companies and claims to have leveraged more than $3.9 billion in private-sector funds.
Go to Forum >>0 Comment(s)