U.S. Calls Out China and Russia for Cyber Espionage Costing Billions

Hey, China and Russia, get off of our clouds.

That's the warning from a new U.S. national intelligence director's report to Congress released Thursday that states China and Russia are the biggest perpetrators of economic espionage through the Internet.

The report, Foreign Spies Stealing U.S. Economic Secrets in Cyberspace, also warns that the efforts to calculate the cost of lost research and development is nearly impossible to calculate but could be costing up to $398 billion. As mobile devices proliferate, it's only going to get easier for spies to steal.

Analysts note that this is the first time the U.S. government report has so openly blamed countries that support cyber attacks and espionage at the national and state level.

"The computer networks of a broad array of U.S. government agencies, private companies,
universities, and other institutions -- all holding large volumes of sensitive economic information -- were targeted by cyber espionage; much of this activity appears to have originated in China," reads the report.

Drawing on data from 13 agencies, including the CIA and FBI, over the past two years, the report concludes that attacks against U.S. government networks and military contracts are on the rise. But one of the most worrying trends is the growing number of attacks on businesses that are smaller than the Fortune 500 companies.

Additionally, the report states that China's intelligence services -- as well as private companies and other entities -- are exploiting Chinese citizens or others with family ties in China who have "insider access to corporate networks to steal trade secrets using removable media devices or e-mail."

As for Russia, the report noted that the "10 Russian Foreign Intelligence Service 'illegals' arrested in June 2010 were tasked to collect economic and technology information."

House Intelligence Committee Chairman Mike Rogers said the report confirms what he's heard previously about the Chinese.

"Their continued theft of sensitive economic information is a threat to our national security, hurts American businesses and workers, and causes incalculable harm to global economy," Rogers said in a written statement. "This once again underscores the need for America's allies across Asia and Europe to join forces to pressure Beijing to end this illegal behavior."

Rogers and other lawmakers are calling on the Obama administration to confront Beijing in a public way, saying back-channel efforts have been largely ignored.

The report also warns that countries could take advantage of political or social activists who may use the tools of economic espionage against U.S. companies and agencies. It specifically called out "hactivist" groups like WikiLeaks and other "disgruntled insiders leaking information about corporate trade secrets or critical U.S. technology."