U.S. Markets closed

Obama, a Critic of Chinese Spying, Defends America’s

Rick Newman
The Exchange

As President Obama meets with his Chinese counterpart in Palm Springs, California, he’s likely to press Xi Jinping to curb China’s aggressive hacking into U.S. government and corporate computer systems. But Obama suddenly finds himself in the awkward position of having to defend similar activity by his own government.


Obama and many other officials in Washington have clearly been caught by surprise in a mushrooming controversy over U.S. government surveillance of phone logs, Internet activity and credit card transactions that may involve nearly every U.S. citizen. It has been widely assumed that the government conducts targeted electronic surveillance to detect and monitor potential terrorists. But new leaks reveal that such top-secret programs are far broader than previously known and may touch anybody who uses email, a phone or a credit card.

Washington and Beijing are obviously very different, yet they both have immense technological power at their disposal. “Technology now permits the complete surveillance of all activities, all statements, all friendships, all purchases, all aspects of one’s visible life,” says Reed Hundt, who sits on several corporate boards and was chairman of the Federal Communications Commission from 1993 to 1997. “The question is: Will any government decline to use these capabilities?”

China, for one, relies on electronic surveillance as an overt lever of government power. The nation’s communist government monitors vast amounts of Internet traffic and shuts down web sites it deems harmful to national priorities. It tracks personal phone and email accounts not just to enforce laws, the way local police or the FBI might in the United States, but to intimidate and prosecute political dissidents whose only crime may be speaking out against the government.

Beijing has taken its muscular cyber capabilities on the road, becoming a brash practitioner of geopolitical and corporate espionage, and targeting the United States in particular. A White House report from earlier this year stated that "the pace of economic espionage and trade secret theft against U.S. corporations is accelerating,” while fingering China for most of the attacks. In addition to intrusions into military and other government computer systems, attacks emanating from China have reportedly infiltrated computer networks at Ford (F), DuPont (DD), General Motors (GM), Dow Chemical (DOW), Cargill, Motorola and other big companies. The Chinese have even hacked the Wall Street Journal and New York Times (NYT).

American officials routinely criticize China’s Orwellian tactics and urge Beijing to become, well, more like America. Yet Washington is clearly entranced by the same types of surveillance capabilities China uses to keep its own citizens in line. Under programs that originated after the 9-11 terrorist attacks, the super-secret National Security Agency apparently monitors the logs of all calls placed with providers such as Verizon (VZ) and AT&T (T), along with email and other traffic carried by firms such as Google (GOOG), Yahoo! (YHOO), Facebook (FB) and Apple (AAPL).

U.S. officials stress the government isn’t spying on Americans but relying on computers to ferret out patterns that might indicate terrorist activity. “Nobody is listening to your telephone calls,” Obama said in a press conference, explaining the program. “They’re not looking at names and they’re not looking at content.” In theory, once individual suspects are identified, government agents would have to get warrants from a special court to monitor personal accounts in more detail.

Still, everything about the program is secret, so aside from members of Congress with security clearances, it’s impossible for ordinary members of the public to know just how far government surveillance might go. James Clapper, director of national intelligence, plans to declassify — and perhaps demystify — some details of the program, but many Americans deeply distrust the government, making cheery reassurance unlikely.

Persuading the Chinese to ease off their own cyber spying may be even tougher. “We’re supposed to be different than Beijing,” says Hundt. “We’re supposed to be distinctive in terms of our respect for individual rights. Unfortunately, Obama can’t go to the Chinese and say, you’re doing something we’re not.”

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.