The extent of cyberhacking uncovered dwarfs the phone hacking scandal currently embroiling Rupert Murdoch’s shuttered News of the World paper.

Dmitri Alperovitch, McAfee’s vice president of threat research and lead author of the report, writes that:

…every company in every conceivable industry with significant size and valuable intellectual property and trade secrets has been compromised (or will be shortly), with the great majority of the victims rarely discovering the intrusion or its impact.

What we have witnessed over the past five to six years has been nothing short of a historically unprecedented transfer of wealth—closely guarded national secrets (including from classified government networks), source code, bug databases, email archives, negotiation plans and exploration details for new oil and gas field auctions, document stores, legal contracts, SCADA configurations, design schematics and much more has “fallen off the truck” of numerous, mostly Western companies and disappeared in the ever-growing electronic archives of dogged adversaries.

What’s more, Alperovitch notes that most victims of “intrusion activity” refuse to come forward and publicly state that their computing systems have been breached. The McAfee report aims to spread public awareness about what is clearly an ongoing security threat not only to the US and US-based companies, but to governments and corporations around the world who are all in danger of losing trade secrets and other valuable data, with economic and other losses.

In  Vanity Fair, Michael Joseph Gross describes how McAfee discovered the massive cyberhacking:

Alperovitch first picked up the trail of Shady rat in early 2009, when a McAfee client, a U.S. defense contractor, identified suspicious programs running on its network. Forensic investigation revealed that the defense contractor had been hit by a species of malware that had never been seen before: a spear-phishing e-mail containing a link to a Web page that, when clicked, automatically loaded a malicious program — a remote-access tool, or rat — onto the victim’s computer. The rat opened the door for a live intruder to get on the network, escalate user privileges, and begin exfiltrating data. After identifying the command-and-control server, located in a Western country, that operated this piece of malware, McAfee blocked its own clients from connecting to that server. Only this March, however, did Alperovitch finally discover the logs stored on the attackers’ servers. This allowed McAfee to identify the victims by name (using their Internet Protocol [I.P.] addresses) and to track the pattern of infections in detail.

The evolution of Shady rat’s activity provides more circumstantial evidence of Chinese involvement in the hacks. The operation targeted a broad range of public- and private-sector organizations in almost every country in Southeast Asia — but none in China. And most of Shady rat’s targets are known to be of interest to the People’s Republic. In 2006, or perhaps earlier, the intrusions began by targeting eight organizations, including South Korean steel and construction companies, a South Korean government agency, a U.S. Department of Energy laboratory, a U.S. real-estate company, international-trade organizations of Western and Asian nations, and the ASEAN Secretariat.

ASEAN is the Association of Southeast Asian Nations; its members are Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Burma [Myanmar], Cambodia, Laos, and Vietnam).  Vanity Fair notes that, “strikingly,” Olympics organizations were targeted in the months leading up to the 2008 Olympic Games in Beijing.

The United Nations was infiltrated in 2008 and, the next year, the World Anti-doping Agency (WADA). One Asian country’s Olympics committee was compromised on and off for 28 months, one South Korean government agency for 27 months and one US state government agency for 25 months. The specific countries and agencies are not noted for security purposes.

A total of 49 US entities were compromised: six in the federal government, eight at other levels of government and the United Nations and two news media outlets. The Hong Kong and New York offices of the Associated Press were among the targets, as well as a Taiwanese electronics company, a Vietnamese technology computer, the government of a county in Nevada, a US insurance company, a Canadian IT company and a German accounting firm.

The Washington Post gives a sense of the economic losses of cyberhacking in reporting that EMC Corp. recently took a $66 million charge to cover remediation costs connected to a March intrusion of its RSA division:

That intrusion, which industry experts say appeared to have originated in China, resulted in the compromise of RSA’s SecurID computer tokens that companies and governments worldwide use to log on remotely to workplace systems.

As a result of the compromise, at least a dozen major financial institutions are switching to other vendors, said Gary McGraw, chief technology officer at Cigital, a security firm that works with banks. Stina Ehrensvard, chief executive of YubiKey in Palo Alto, Calif., said at least 25 firms have switched to YubiKey or are testing its token as a result of the RSA breach.

The  New York Times quotes Hong Lei, a spokesman for China’s foreign ministry at a regularly scheduled news conference last month:

“The Chinese government opposes hacking in all its manifestations.”

“Hacking is an international issue, with which China also falls victim. China is willing to conduct international cooperation in this regard. We are dissatisfied with some people’s irresponsible remarks that link hacker attacks with the Chinese government.”

You can read the 14-page report online. Page 4 has a breakdown of the 72 compromised parties and page 7 shows a list of precisely who was attacked, when and the duration of the intrusion.

Recently, we’ve heard many reports about Sony, Fox, the British National Health Service and the websites of PBS, the U.S. Senate, and the C.I.A. being hacked into. These attacks have mostly involved the defacing of websites and “denial-of-service” attacks — all of which, McAfee’s Alperovitch points out, are really just a “nuisance” as compared to the epic scale of the cyberhacking that’s been going on from that one country in Asia.

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