Bloomberg News

Obama Presses Xi on Cyber Attacks Amid Focus on Hacking

March 14, 2013

Obama Presses Xi on Cyber Attacks Amid U.S. Focus on Hacking

Joe Stewart, director of malware research at Dell SecureWorks, a unit of Dell Inc., speaks to a colleague in front of a pair of large wall mounted monitors in his office in Myrtle Beach, South Carolina, U.S., Friday, Jan. 18, 2013. Stewart, 42, spends his days hunting for Internet spies. Photographer: Stephen Morton/Bloomberg

President Barack Obama told Chinese President Xi Jinping that cybersecurity would be a key part of bilateral talks as the U.S. seeks to protect companies and individuals from computer attacks, a White House official said.

During a phone call yesterday, Obama and Xi committed to hold discussions on hacker threats as part of regular conversations on security and economic matters, Deputy National Security Adviser Ben Rhodes said.

The two leaders spoke the same day that Xi was named China’s president by the national legislature, replacing Hu Jintao. The issue has vaulted to the top of the U.S. agenda as the Obama administration seeks to curb attacks on corporate networks that U.S. intelligence agencies and security firms such as Mandiant Corp. trace to China.

White House officials are increasing their public efforts to hold China accountable for hacking. National Security Adviser Thomas Donilon said this week that “cyber intrusions emanating from China at a very large scale” had become a point of contention with the Chinese government and called on its leaders to take steps to halt computer espionage.

The administration is also working to build support among U.S. corporate leaders for measures that would strengthen the security of corporate and government networks.

Obama, who is pressing for cooperation between government and private industry to guard against cyber attacks, dropped by a White House session yesterday attended by information- technology and communications executives.

Executive Discussions

Attendees included Bruce Aust, executive vice president of NASDAQ OMX Group Inc (NDAQ:US); Safra Catz, co-president and chief financial officer of Oracle Corp. (ORCL:US); John Chambers, the chief executive officer of Cisco Systems Inc (CSCO:US); John Doerr, a partner, Kleiner Perkins Caufield & Byers; and Steve Case, the CEO of Revolution LLC.

Some of the company executives who met with Obama yesterday were from the trade group TechNet. The main purpose of the meeting for them was to talk about immigration reform, taxes and creating more high-skilled workers for U.S. companies.

On March 13, Obama, discussed cybersecurity with a dozen corporate executives in the White House situation room, including Exxon Mobil Corp. (XOM:US) CEO Rex Tillerson and JPMorgan Chase & Co. (JPM:US) CEO Jamie Dimon.

Obama issued an executive order Feb. 12 outlining policies for wider sharing of government data on hacking with companies, particularly operators of vital infrastructure such as power grids. The order directs the government to develop voluntary cybersecurity standards for those businesses and instructs U.S. agencies to consider adding the standards to existing rules.

Significant Disruption

The nation’s top intelligence official told U.S. lawmakers March 12 that the risk of hackers causing significant disruption to essential services ranks as the intelligence community’s top concern, ahead of terrorism, in an annual worldwide threat assessment.

While damage from such an intrusion would probably be limited, “there is a risk that unsophisticated attacks would have significant outcomes due to unexpected system configurations and mistakes,” James Clapper, the director of national intelligence, said in the assessment presented to the Senate intelligence committee.

A series of denial-of-service cyber attacks against multiple U.S. banks began March 12 and continued yesterday, said Carl Herberger, a vice president for the network security firm Radware Ltd. (RDWR:US), based in Tel-Aviv with offices in New Jersey. He declined to name the banks.

JPMorgan, the largest U.S. bank, said it experienced a denial-of-service attack March 12 that kept customers from banking online through the Chase.com website for several hours.

‘Tough Talks’

Administration officials have cited China as one source of cyber intrusions, and Obama in an ABC interview broadcast March 13 said that the U.S. will “have some pretty tough talks with them” about the issue.

China is itself a victim of hacking and firmly opposes cyber-attacks, Foreign Ministry spokeswoman Hua Chunying told a briefing in Beijing March 12. She said China will work with the international community, including the U.S., to “protect peace, safety, openness and cooperation in cyberspace.”

Donilon said in a March 11 speech in New York that the U.S. would do everything necessary to shield the nation’s computer networks from attacks on vital infrastructure, such as power grids and transportation links. The issue surged after Alexandria, Virginia-based Mandiant said in a Feb. 19 report that the Chinese army may be behind a hacking group that has hit at least 141 companies worldwide since 2006.

“There is a consistent, persistent threat here that we need to be concerned about as a country,” Honeywell Inc. CEO David M. Cote said March 13 as he left the closed-door meeting with Obama and his advisers. “Just having this meeting, I think, was huge.”

To contact the reporters on this story: Chris Strohm in Washington at cstrohm1@bloomberg.net; Hans Nichols in Washington at hnichols2@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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