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Prosecutors: Chinese Targeted Pennsylvania Firms

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(Photo Credit: KDKA)

(Photo Credit: KDKA)

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PITTSBURGH (KDKA/AP) – Four major manufacturing firms that are based or do much of their work in western Pennsylvania, plus the United Steelworkers of America, were hacked by five Chinese army officials who allegedly stole trade secrets and other proprietary or sensitive information, federal authorities said Monday.

Westinghouse, U.S. Steel, Alcoa, and specialty steelmaker Allegheny Technologies Inc., or ATI, were targeted in the scheme that allegedly began in 2006, according to an indictment.

“This 21st-century burglary has to stop,” U.S. Attorney David Hickton, who’s based in Pittsburgh and will handle the case, said at a news conference in Washington.

Also targeted was SolarWorld AG, a German company with operations in Oregon.

Justice Department officials contended the companies competed with Chinese firms or were involved in litigation and were targeted by a Chinese military intelligence unit.

The five Chinese officers were accused of accessing the companies’ computers to steal information and trade secrets that could help Chinese competitors, some of which were state-owned.

The hackers also allegedly stole e-mails and other communications that could have helped Chinese firms learn the strategies and weaknesses of American companies involved in litigation with the Chinese government or Chinese firms.

Despite the ominous-sounding allegations, at least one of the firms downplayed the hacking.

“To our knowledge, no material information was compromised during this incident, which occurred several years ago,” said Monica Orbe, Alcoa’s director of corporate affairs. “Safeguarding our data is a top priority for Alcoa, and we continue to invest resources to protect our systems.”

United Steelworkers spokesman Wayne Ranick declined to comment because the investigation was ongoing.

Sen. Bob Casey issued a statement Monday afternoon:

“I am outraged by today’s announcement that members of China’s People’s Liberation Army hacked into companies in Pennsylvania and stole significant trade secrets to advantage Chinese state-owned companies. I urge the Administration to take aggressive action. As Attorney General Holder said, success of American business is based on fair play and hard work.  For too long, China’s unfair trade practices and economic policies have cost jobs in Pennsylvania and across the U.S.  The U.S. trade deficit with China set a new record for the fourth straight year in 2013, reaching $318.4 billion. This move is further evidence of China’s anticompetitive trade practices, which have taken a dramatic toll on Pennsylvania businesses and pose a threat to our national security. “

Officials from Westinghouse, U.S. Steel and ATI didn’t immediately respond to questions.

However, the indictment also became a large focus at a Steel workers rally Monday.

“We can not compete with foreign governments that circumvent the laws and break the rules to benefit themselves at the expense of American manufacturing, American jobs and the American economy,” said US Steel President and CEO Mario Longhi.

Westinghouse says it has yet to see the indictment, ATI said it does not comment on active legislation, Alcoa doesn’t believe any trad secrets were lost an the United Steel Workers Union said there should be sanctions.

“We can and ought to have some sort of sanctions against them,” said USW International Vice President Tom Conway.

Hickton was also on the KDKA Afternoon News to talk about the security breach. Hickton talks about why he thinks Pittsburgh was targeted so heavily.

Cyber Spying

NewsRadio 1020 KDKA

“As you can see the people we have charged have taken on some of the biggest companies in Pittsburgh, some of our regional, national and international access to the largest steel company in US steel, largest aluminum company ALCOA, our leading producers of nuclear power Westinghouse ATI and of course we are the home of organized labor,” Hickton said.

Some speculate that being able to get these people here to the US to prosecute them with this crime could prove to be difficult if not impossible but Attorney Hickton is hopeful.

“I look at it this way, if you did this or I did this, we would be prosecuted and it is no different that the people who are doing this are not in western Pennsylvania, not in the country and may be hard to get but, we certainly aren’t going to get them if we don’t try. I’m committed to bringing them here this is not about symbolism for me it is a criminal indictment,” Hickton said.

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(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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