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Candy Crowley sat down with Mike McConnell, former Director of National Intelligence, over the recent report from cyber security company McAfee on cyber-terrorism. McAfee made the somewhat startlingly under-reported claim that it could identify at least 72 victims — including the governments and agencies of several countries — of ” Operation Shady Rat ” pointing to a single state actor as the perpetuator: On August 3rd, Reuters reported that McAfee was set to reveal that the company has uncovered an extensive, far-reaching case of espionage. When the report came, foreign states were implicated in general, but China was not specifically blamed. Vice President of threat research for McAfee, Dmitri Alperovitch, told Reuters that “Operation Shady RAT” – the term used for a massive loss of information due to recent hacking efforts – poses a significant threat to the United States. He wrote the following statement in a blog post on the threat: “What is happening to all this data — by now reaching petabytes as a whole — is still largely an open question. However, if even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team’s playbook), the loss represents a massive economic threat.” According to The Washington Post, many analysts are blaming China for hacking up to 72 networks across the world, including 49 intrusions in the U.S. alone. Oddly enough, what most media outlets leave out is the rest of the story – the fact that most of the security experts do not see this as a significant “new” threat – only an change in where the particular threat is coming from. Yet, that is not stopping major news networks and government officials from claiming that this is some sort of sign of massive increase of international cyber-terrorism. The truth is that the threat has been around as far back as 2006. What’s more notable to me is that not only was McAfee reticent to name names and point at China, but that we’re seeing a national moratorium against speaking out against these kind of terrorism attacks specifically by China . The long list of victims in the extended campaign include the governments of the United States, Taiwan, India, South Korea, Vietnam and Canada; the Association of Southeast Asian Nations (ASEAN); the International Olympic Committee (IOC); the World Anti-Doping Agency; and an array of companies, from defense contractors to high-tech enterprises. In the case of the United Nations, the hackers broke into the computer system of its secretariat in Geneva in 2008, hid there for nearly two years, and quietly combed through reams of secret data, according to McAfee. “Even we were surprised by the enormous diversity of the victim organizations and were taken aback by the audacity of the perpetrators,” McAfee’s vice president of threat research, Dmitri Alperovitch, wrote in a 14-page report released on Wednesday. “What is happening to all this data … is still largely an open question. However, if even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team’s playbook), the loss represents a massive economic threat.” As McConnell tells Crowley, the McAfee report could easily be the tip of the iceberg. And while the Obama administration has taken some measures, there’s a real danger of some fairly disastrous consequences: MCCONNELL: Now this administration has done many good things. They have an international policy, they’ve sent legislation to the congress for consideration. But it’s not nearly enough. It has to be significantly more enhanced than it is because as a nation, we are vulnerable. Let me give you two examples. A terrorist group that had cyber skills could attack the critical infrastructure of this country, particularly in the heat of summer or the cold of winter and cause chaos. It could disrupt banking, electric power. CROWLEY: It could shut down power grids. MCCONNELL: Indeed. And remember there was a blackout in about 2003 in the northeast. We were without power for several days. And it put us on the brink of chaos. It’s possible for a relatively small group to be able to do that to the country today. Now, if you go to cyber war where we were mad at someone, we were exchanging hostilities in some way, some of these nation states have penetrated our systems, not only to gain information advantage, but to leave capability that can be used… CROWLEY: Later on. MCCONNELL: Later on when there’s a crisis of some sort. So at one level we’re losing our economic advantage of our innovation engine. And at another level, we haven’t adequately addressed the potential for a terrorist group, someone that would not be deterred from inflicting major damage on what I call the soft underbelly of the country. Scary. So when will we be able to be honest and name names? When will we start calling out China for their IP espionage? What will we do to fight this kind of terrorism?