Cyber War: Sabotaging the System

60 Minutes: Former Chief of National Intelligence Says U.S. Unprepared for Cyber Attacks

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But since then, there has been an even more serious breach of computer security, which Lewis called the most significant incident ever publically acknowledged by the Pentagon.

Last November, someone was able to get past the firewalls and encryption devices of one of the most sensitive U.S. military computer systems and stay inside for several days.

"This was the CENTCOM network," Lewis explained. "The command that's fighting our two wars. And some foreign power was able to get into their networks. And sit there and see everything they did. That was a major problem. And that's really had a big effect on D.O.D."

Asked what he meant by "sit there," Lewis said, "They could see what the traffic was. They could read documents. They could interfere with things. It was like they were part of the American military command."

Lewis believes it was done by foreign spies who left corrupted thumbnail drives or memory sticks lying around in places where U.S. military personnel were likely to pick them up. As soon as someone inserted one into a CENTCOM computer, a malicious code opened a backdoor for the foreign power to get into the system.

Lewis said the Pentagon has now banned thumbnail drives.

"My impression is most people understand that there is a threat out there. I don't think most people understand that there are incidents that are happening," Kroft remarked.

"You know, I've been trying to figure out why that is. And some of it is the previous administration didn't want to admit that they had been rolled in 2007. There's a disincentive to tell people, 'Hey, things are going badly.' But it doesn't seem to be sinking in. And some of us call it 'the death of a thousand cuts.' Every day a little bit more of our intellectual property, our innovative skills, our military technology is stolen by somebody. And it's like little drops. Eventually we'll drown. But every day we don't notice," Lewis said.

Congress has noticed, allocating $17 billion for a top secret national cyber security initiative, and the Department of Defense has nominated Lieutenant General Keith Alexander, head of the NSA, to run a new military command devoted to offensive and defensive cyber war.

"How much of this are we doing? We, meaning the United States," Kroft asked Lewis.

"We're in the top of the league, you know? We're as good as any," Lewis said.

"So, whatever foreign countries are doing to the United States, the United States is doing to them?" Kroft asked.

"We're in the top of the league. We are really good. And if you talk to the Russians or the Chinese, they say, 'How can you complain about us, when you do exactly the same thing?' It's a fair point with one exception: we have more to steal. We have more to lose. We're the place that depends on the Internet. We've done the most to take advantage of it. We're the ones who've woven it into our economy, into our national security, in ways that they haven't. So, we are more vulnerable," Lewis said.

Even the country's most powerful weapons are targets. So technicians at the Sandia National Laboratories make their own microchips for nuclear weapons and other sophisticated systems. Jim Gosler - one of the fathers of cyber war - says most commercial chips are now made abroad and there are concerns that someone could tamper with them.

"So you're worried about somebody being able to get in and reprogram a nuclear weapon, or get inside and put something in there that would make it…," Kroft asked.

"Well, certainly alter its functionality," Gosler said.

Asked what he means by "alter its functionality," Gosler said, "Such that when the weapon needed to be to go operational, it wouldn't work."

"Have you found microchips that have been altered?" Kroft asked.

"We have found microelectronics and electronics embedded in applications that they shouldn't be there. And it's very clear that a foreign intelligence service put them there," Gosler said.