CNN reporter explains how Chinese hackers infiltrated US government office

(CNN) — Chinese hackers breached the US government office that reviews foreign investments for national security risks, three US officials familiar with the matter told CNN.

The theft, which has not previously been reported, underscores Beijing’s keen interest in spying on a US government office that has broad powers to block Chinese investment in the US as tensions between the world’s two superpowers remain high.

The breach was part of a broader incursion by the hackers into the Treasury Department’s unclassified system. The office targeted by the hackers, the Committee on Foreign Investment in the US (CFIUS), in December gained greater authority to scrutinize real estate sales near US military bases. US lawmakers and national security officials have grown increasingly worried that the Chinese government or its proxies could use land acquisitions to spy on those bases.

It’s just one in a string of alleged Chinese cyber-espionage campaigns that have rattled the US government in the last year and that will challenge the incoming Trump administration. A separate Chinese hacking group burrowed deep into US telecom networks to spy on the phone communications of senior US political figures, including President-elect Donald Trump, CNN previously reported.

US officials are scrambling to assess any fallout to national security from the hack of unclassified information, which Treasury disclosed to lawmakers last week.

The hackers also targeted Treasury’s sanctions office, which just last week sanctioned a Chinese company for its alleged role in cyberattacks, two of the US officials told CNN. The Washington Post first reported the sanctions office was targeted. It was not immediately clear what information the hackers stole from Treasury computers.

US officials are reviewing the individual documents that the hackers accessed and will do an analysis assessing the overall national security impact of the stolen information, one of the US officials said. While there is no evidence that classified information was accessed, there is a concern that, pieced together, the unclassified information could provide useful intelligence to the Chinese.

A Treasury spokesperson did not respond to questions about the hackers targeting of CFIUS and instead shared a previous statement from the department.

The hackers compromised a “third-party service provider” last month and were “able to remotely access several Treasury user workstations and certain unclassified documents maintained by those users,” the Treasury spokesperson said.

The department has worked “with law enforcement partners across the government to ascertain the impact of this incident” and there is no evidence the hackers have continued access to Treasury systems or information, the statement continued.

“Treasury takes very seriously all threats against our systems, and the data it holds,” the spokesperson said. “Over the last four years, Treasury has significantly bolstered its cyber defense, and we will continue to work with both private and public sector partners to protect our financial system from threat actors.”

Liu Pengyu, spokesperson for the Chinese Embassy in Washington, DC, reiterated China’s longstanding denials that it engages in hacking operations.

“During his meeting with President Biden in Lima [last] year, President Xi Jinping said that there is no evidence that supports the irrational claim of the so-called ‘cyberattacks from China,’” Liu said in an email.

Treasury Secretary Janet Yellen told CNBC the hack is “not something that builds confidence in our relationship [with China]” and that she raised the issue with her Chinese counterpart in a call this week.

Yellen leads CFIUS, which includes other Cabinet heads such as the secretaries of defense and homeland security. Once an obscure office, CFIUS has grown in stature as US-China competition has grown more complicated and extended to business transactions in remote parts of the US.

CNN first reported on a CFIUS review in 2023 of a company that bought up hundreds of millions of dollars of land in a county near a key Air Force base in California.

The incoming Trump administration is set to include multiple Cabinet members or other senior staff who have called for tougher measures on China over national security concerns, including incoming national security adviser Rep. Mike Waltz and Sen. Marco Rubio, Trump’s choice for secretary of state.

US military and spy agencies already engage in offensive cyber operations against China, but Waltz says he wants more action to be taken.

“America can’t afford to just play defense on cyber anymore,” Waltz posted on X last month. “We’ve got to go on the offensive and impose COSTS on those who are stealing our technology and attacking our infrastructure.”

The-CNN-Wire
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