US military unaware of Chinese attacks against transport contractors

The Defense Department has been ordered to close gaps in how cyber incidents are reported

The U.S. Defense Department plans to tighten reporting of cyber incidents against transportation contractors after the military found it was mostly left in the dark about successful attacks from China, according to a Senate report.

The Senate Armed Service Committee released on Wednesday an unclassified version of a report commissioned last year to investigate cyberattacks against contractors for the U.S. Transportation Command (TRANSCOM).

TRANSCOM relies on an extensive network of civilian airline and shipping contractors to move supplies and people during a crisis.

It alleges the Chinese military successfully stole emails, documents, login credentials and more from contractors, but few of those incidents were ever reported to TRANSCOM.

During a one-year period starting in June 2012, TRANSCOM contractors endured more than 50 intrusions, 20 of which were successful in planting malware. TRANSCOM learned of only two of the incidents. The FBI, however, was aware of 10 of the attacks.

In 2010, TRANSCOM began requiring its contractors to report cyber incidents. The measure applied to 80 companies, but through August 2013 the agency received only those two reports.

In some cases, the FBI and Defense Department had identified companies that were victims of cyberattacks but were unaware the companies were TRANSCOM contractors, the report said.

"Peacetime cyber compromises of operationally critical contractors could prove valuable to foreign countries, such as China, as a source of intelligence about network operations," it said.

In one instance in 2013, the report said China's military conducted a spear-phishing campaign against commercial logistics companies. Spear-phishing involves targeting key employees of an organization via email and trying to trick them into installing malware.

One of the companies ended up with malware on their network after an attack, the report said.

As a result of the report, the Senate Armed Services Committee inserted a provision in the fiscal year 2015 defense budget requiring tighter reporting for contractors.

The Defense Department has also been ordered to establish new procedures to help contractors detect and stop cyberattacks.

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