Chinese Hackers Reportedly Snooped On Nortel For Years

Nortel Networks Ltd., a one-time telecommunications giant currently nearing dissolution, had its computer systems infiltrated by Chinese hackers whose spying software remained deeply embedded for nearly a decade, a newspaper reported Tuesday.

The breach, which occurred at least as far back as 2000, gave the hackers "access to everything" within Nortel's IT systems, according to The Wall Street Journal. Information downloaded from Nortel's computers included technical papers, research and development reports, business plans and employee e-mails.

Nortel filed for bankruptcy in 2009 and is in the process of selling itself off in pieces. Companies that have purchased parts of the Canadian company include Avaya, Ciena, Telefon AB LM Ericsson and Genband. Nortel did not disclose the hack to prospective buyers, according to Brian Shields, a former 19-year veteran of Nortel who led the internal investigation of the security breach. Shields is a key source in the Journal report.

The hack started with the theft of seven passwords from top Nortel executives, including a chief executive. The hackers appeared to be working in China, the Journal said.

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Chinese hackers affiliated with either the government or the private sector are among the most active in industrial espionage, according to U.S. intelligence officials. Google fingered China last year as the source of a sophisticated phishing attack against many high-profile Gmail account holders.

Asked about the Nortel breach, the Chinese embassy in Washington issued a statement to the Journal that said cyberattacks are "transnational and anonymous" and shouldn't be assumed to come from China without "thorough investigation and hard evidence."

Several former employees told the Journal that Nortel did not try to determine whether its products had been compromised by hackers. The company also did not fix the breach before selling its assets. Nortel did not respond to the Journal's requests for comment.

Nortel was a multibillion-dollar manufacturer of computerized switches and telecom equipment found in most of the world's telephone and Internet networks. The importance of the company's technology was reflected in last year's bidding war over more than 6,000 patents. A consortium made up of Apple, Microsoft, EMC, Research In Motion, Sony and Ericsson bought the intellectual property for $4.5 billion in cash.