SLOG SPECIAL: The blaggers who make Newscorp hackers look amateur.

Revealed: a secret world in which investors are cheated, and accomplices corrupted.

Media attention has recently concentrated on hacking  invasions by Newscorp – and cyber attacks upon the IMF. But throughout the world, and especially in London, Russian and Chinese gangs are operating on a much broader canvas – with the tacit acceptance of the authorities.

In a large, detached house in Chelsea, two very senior Russian business executives sit and gossip about the Murdoch Hackgate affair, laughing as they do so.

They are unaware that they can be heard and understood. The house and all its complex technological instrumentation is, after all, swept daily for any sign of bugs, unwarranted disk entries onto pcs, and other signs such as ‘regular’ viruses disguising something much more invasively subtle.

“What a joke,” says one, “The plebs really don’t have a clue do they?” His colleague snorts in similar vein.

“It’s the way the lies are accepted,” agrees the other. “Can you imagine the boss in such a situation?”

They both laugh. The boss isn’t here today – he’s in America, trying to buy something. Could be a Manhattan condo, could be a baseball team. You never know with the boss.

The man to whom they refer is an impressive figure. Tall, skinny and larger than life in every way, he is already quite well known in the US media. Like so many oligarchs, he has made a lot of money very quickly in the energy business. He is young, attractive, fabulously rich, and therefore a potential catch for any gold digger. Some say he’s gay, but others say he’s just more interested in power than sex.

Nobody is allowed on the premises when the boss is in town, except his two accomplices. They both have swanky titles in the energy group too, but in reality one is ex KGB, and the other a skilled technician. To stay ahead in the energy business – at this level – you need to know what the other energy businesses are planning: who they’ve bribed, what they’ve bought, who they’ve turned. A lot of the stuff they need comes through the London and Amsterdam spot market data, and that’s where the technician comes in. But the juicy stuff is on personal pcs, Blackberries and other phone devices. For that, they need spies on site: and this, of course, is the former secret policeman’s area of expertise.

——————————————–

“Most people think illegal hacking and blagging is purely a matter of technology,” says one consultant who advises companies on self-defence against cyber attack, “But the truth is, it’s easier to manipulate human weakness than password codes”.

He and several other sources involved in this little-understood area agree on two things: it is like old-style spying, in that you need to recruit traitors; and if you’re taking the sort of precautions the Russian trio referred to above are, then it’s 99% certain you’re up to no good.

“Not just the public, but also corporate bigwigs, are naive about the dangers,” says another former supplier, “but once spotted via CCTV or a simple check of unexpected things on an important pc, it’s usually clear fairly quickly who has slipped a disk quietly into that pc after hours. The problem is – as with the celebs caught by Newscorp  – it may be a while before someone suspects anything.”

Access being so much easier using human stool pigeons, it’s important for Russian, Chinese and American blaggers to be on the ground close to where the target is. And that’s why London is full of very large houses where the occupants are engaged in recruiting of local staff – plus the interpretation of what they help dig up. So too are New York, Washington, Paris, Berlin and Canberra.

“London is a hotspot, without doubt,” says a former employee of  ‘detective’ operations such as those used by Newscorp and other newspapers, “but gathering intelligence on public figures is small-fry these days. It’s what the public sees, but its the bottom-end amateurs, that’s all. And it’s a minute fraction of the more sophisticated cyber invasions.”

This source continued:

“There are two reasons why the police are just about the last thing these people need to worry about. First of all, they’re spying on people who are almost certainly breaking the law themselves. So the police don’t get involved. And secondly, the police can be bribed”.

Once a police contact has been made – often in what seem like harmless circumstances – the cyber warriors may well actually shop some people they’ve been hacking. Favour begets favour. Next time, the cop (having made a career-enhancing arrest) tells the hacker something – or supplies intelligence from a police database.

“From there, it can balloon very quickly into full-scale cooperation between the blaggers and the police,” another source assured me. “You see, the police are all over the place in this area. They need snouts. And a regular supply of good information about corporate wrongdoing can in turn be rewarded by looking the other way on something big. Or, of course, paying the officer life-changing money”.

——————————————

Several oligarchs from Russia and Asia have realised, however, that they can diversify out of energy and into hacking the financial markets. Not only can this be even more lucrative, it’s also a lot safer.

“Energy was their entry point,” says a prominent EU-based analyst, “But in Russia, that can earn you a long prison sentence or a shallow grave. Fewer and fewer big wheels in Moscow are still prepared to take Putin on. Away from Moscow, in somewhere like Madrid, they’re invisible to the Russian authorities…and have on-the-ground intelligence operatives to assist them.”

Every major UK bank and trading floor has been compromised at one time or another. So too have large multinationals, hedge funds, and even, it is alleged, the Bank of England pension fund.

“These people are making fortunes beyond imagination,” a supplier to one such consortium told me. So terrified of retribution is this person, the real identity of the source is still unknown to me. The person continued:

“They are finding out everything – planned market directions, insider trading, secret government interventions, inside information on companies coming to market, contract awards before they’re public…everything. Commodity trends and fiddles are a particular favourite. My client’s energy business is now I think largely above board. But he makes tens of millions from cyber invasion of major institutions. Why take on Moscow when you can live the highlife here?”

—————————————-

Last weekend, most public attention was focused on the cyber attack detected by the IMF. This is an entirely different area, in that any attack on such an institution would normally involve a sovereign power’s security services – or, as the Independent suggested this morning – an activist outfit like Wikileaks or Anonymous. But even here, one industry insider offered me alarming information:

“It was probably the Chinese,” the informant asserted, “And you can bet your life that the IMF’s detection systems are pretty low-grade. In the last year alone, the MoD, the legislature, the Bank of England and the LSE [Stock Exchange] systems have all been compromised to one extent or another. It is a completely separate sector to the commercial use of cyber weapons, and a fortune is being spent to upgrade our defences. But even there, it’s not uncommon for the security services to buy advice from the criminal side of it.”

There are several worrying aspects to cyber developments in general, and commercial hacking in particular. The first is that the police seem to have been easily corrupted, and unable to keep up. The second, naturally, is that this is just one more example of privacy invasion taking place routinely as part of ‘commerce’. A third and crucially important aspect, I think, is the ubiquity of it. My original source on this concluded as follows:

“The Western publics are at last, but still very slowly, catching on to how every aspect of our lives is now already known by, or at risk from, people who are getting extremely rich on the proceeds. In a way, for Government, things like Murdoch and the IMF are a useful distraction. I think if people knew, for example, just how deep in each other’s pockets the ISPs and the security services are, they’d be given something of a jolt. I think if they knew just how many bent employees work in BT’s data areas, they wouldn’t be surprised – but they would be angry. To be honest, I don’t leave anything personal behind on any site any more – and especially not on the Facebooks and LinkedIns of this world. Legally or illegally, sooner or later everyone with all kinds of intentions will get hold of that data, and use it against me. That’s not paranoia, it’s cast-iron certainty”.

The final and equally concerning element is the rise and rise of the market hacker/blagger fraternity. For most small investors – and even quite a few wealth management operations – there is already a widespread belief that the playing field is tilted heavily in favour of others: Governments, banks, Hedge Funds, Liquidity Pools, electronic speed-of-light trading, and money printing-presses. The existence of insider cyber-aided trading on such a scale across all the markets will only confirm them in that view. One City-based systems expert told me:

“It’s a can of worms nobody wants to open – yet,” he opined, “Buy you can’t tell me when some of these blips appear that nobody notices. The blag consortia aren’t always subtle about how they do it.”

As with most things of any import today, the issue of privacy invasion is nowhere to be found on the radar of senior politicians and Ministers. What’s different in 2011 is that those Establishment leaders are quite deliberately not pointing the radar at the target…..because they too would be shown to be up to their necks in it. And because the full revelation of police incompetence and overwork in this field would be political dynamite.

I believe this whole area of who’s hacking who has shown just an inch or two of leg in relation to the 2005-6 Newscorp hackings of senior ministers – and the disturbing evidence of collusion with the police at the time, plus the odd hint here and there about access to security service mobile phones. And I think this is why the current Opposition leadership in particular don’t want any further flesh to be displayed. (Those peers who preferred the previous leadership, of course, would be delighted to see Brown’s heirs in the dock).

The Slog has been working closely on the Hackgate story since mid November 2009. As time has passed and the hacking realm has become larger and larger, I’ve come to see it as above all a libertarian question of privacy: from journalists, marketing people, and ads you don’t want to see, right the way through to ISPs and online social networks asking me for more and more information – which then mysteriously ends up in the hands of third and fourth parties…despite protestations to the contrary.

Blinding glimpse of the obvious or not, our privacy is the key to our liberties. George Orwell knew this, which is why in the novel 1984, it was impossible for the hero Winston Smith to turn off the surveillance screen in his apartment. Because of this, the defeat and bringing to justice of all those involved in the Newscorp criminality is absolutely vital. Not because off its real importance in the greater scheme of things, but because of the message a wipe-out for the Murdoch Group would send to the more important privacy-invaders above them: ‘in the end, even the most mighty can fall – if the will is there to bring it about’.

Clearly at the moment, the police and political will is not there to tackle the global problem of commercial and market blagging. But the will was never there to tackle the banks or Newscorp either: that has been left to whistle-blowers, excellent journalism and otherwise seemingly braindead celebrities. The Camerlot Coalition – or the next boring set of robots to have a go – aren’t going to do anything about this, because they lacks the spine, vision or commonsense to do so. From here on, it’s up to those of us who blog, leak and otherwise scribble to do away with the incorrigibly greedy…until such time as the zeitgeist changes.

Not doing this will lead to a world controlled, run and ruined by international gangsters: a world in which Governments take a bung, the middle classes take the hit, and the underprivileged take the blame.

Related: Newscorp hacking contagion spreads.

17 thoughts on “SLOG SPECIAL: The blaggers who make Newscorp hackers look amateur.

  1. Ouch,

    And Rickky, if you are reading this, take a look at one of the emails I sent you a while ago about Mr. A

  2. JW

    Wow, a thrilling short story , as intriguing as Grahame Green or Somerset Maughan would have written, with all the trappings of skullduggery and intrigue.

    We all have an inkling of what goes on in the city, because we would be foolish to trust champagne sculling dealers with gleaming motes in their eyes, and the tell tale glazed enhanced euphoria and dilated pupils and inflated sense of ego some of these power brokers have, either the scent of a high roll, or a snort to enhance a high roll fools some of us some of the time but not all of the time.

    That’s why most of us despise the thieves that pulled the financial wool over our eyes!

  3. Anyone with experience of the capital markets knows they are corrupted and compromised beyond belief these days. Sure the authorities, especially in the US, pick on the occassional inside trader like Rajatratnam but they systematically ignore the Goldman Sachs and the like with their high frequency trading, which is a polite word for insider dealing, rat trading and front running and all their other conflicts of interest. These large investment banks own the politicians through campaign contributions and so nothing changes – in fact it gets worse. In the UK the corruption takes a different form, the politicians expect large consultancy retainers and non exec directorships after they leave office especially from US sources. Tony Blair is the prime example.

  4. Ouch indeed!
    During the Arab spring,it came to light that social networks led some demonstrations.However,to have a social network you still needed a NETWORK.The New American Foundation were kind enough to produce a Network in a small suitcase.This was new and cutting edge to them,perhaps,but here in the UK BT were also kind enough to supersede everyone else by supplying wi-fi nodes on every home and across the country.Here geek-dom,who couldn’t belive their luck,domestic and foreign,produced multiple Parallel Networks carrying what,who knows?With bit-torrent programs and P2P sharing,those accessing the wi-fi had their pcs/smartphones duplicated and mirrored multiple times to be hacked in its mirror form and if interesting data collected targeted.This long soliliquy is to show how things have moved on in months rather than years.Whole re-writes of the infrastructure of just one parallel network occurs on a monthly basis.How can a lowly paid civil servant keep up with that?
    Most scary is the ease with which geeks employ others much more savvy to carry out their tasks outside the Uk/Eu/USA.Whilst this occurs the older network of the ISPs are under constant attacks,but they think their firewalls are impenetrable!

  5. The internet is only a temporary technology that will soon be curtailed when peak oil and the accompanying energy crises start to make themselves felt.

    Back to cutting letters out of newspapers from then on.

    • I doubt it. Common Purpose IS a very odd organisation and it IS strongly Social Democrat. But its critics are, on the whole, madder still.
      Nothing I’ve ever investigated in this area checks out.

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