I am not sure I would classify this as warfare, but it is an interesting read anyway.

TECH NOTES:Computer security
Who won the Balkans cyberwar?
by Craig Mellow

Source: Institutional Investor Magazine

On the visible battlefield, the war for Kosovo was one of history’s most lopsided. NATO forces shattered Serbia’s economy and national illusions without sacrificing a single soldier. But the conflict had its cyberfront as well — experiments by both sides in damaging or planning to tamper with important enemy systems through computer hacking.

The U.S. government reportedly ordered its intelligence services to, as one operative told Newsweek magazine, “diddle with Milosevic’s [foreign] bank accounts.” Experts say the Americans could probably have pulled off this financial incursion had Slobodan Milosevic not surrendered under more conventional pressure. But pro-Serbian hackers — some from loosely organized cybermilitias in Serbia itself, others thought to be in Russia — struck back, mucking up politically sensitive Web sites from the White House’s to NATO’s. Electronic mischief makers with no Serbian connection also joined the fray, experts say, “defacing” Federal Bureau of Investigation and U.S. Department of Defense sites.

“The series of attacks on U.S. government Web sites during the war was surprisingly successful,” says John Pike, a technology analyst at the American Federation of Scientists in Washington. “This is the sort of thing we will likely have to face on a much broader scale in the future.”

Indeed, the cyberattacks serve as a reminder of the potential threats to the West’s corporate and financial Web sites and thriving e-commerce from enemies of capitalism, future crooks or playful hackers.

The Kosovo-related attacks were more a nuisance than a threat to the NATO war effort. “Defacing and jamming Web sites is like spraying graffiti in cyberspace,” says Frank Cilluffo, information warfare expert at the Center for Strategic and International Studies in Washington. All the same, the attacks pointed up the burgeoning achievements of “hacktivism,” the potent blend of high-tech skill with political animus. “A lot of systems are not up to dealing with persistent malice,” notes an analyst at the International Institute for Strategic Studies in London.

All too aware of that risk, the Clinton administration National Security Council has developed a plan overseen by the FBI to keep intruders out of the nation’s computer networks, according to The New York Times late last month.

If ragtag forces in Belgrade or Moscow could tamper with the White House and the National Aeronautics and Space Administration, infowar experts wonder what havoc the Russian or Chinese governments might wreak in a future conflict with the West. They warn that hacktivism also opens a new world of tactics to domestic pressure groups formerly content with hugging trees or blocking trucks carrying sheep to slaughter.

The Internet, they warn, has all but erased the barrier between destructive intentions and capabilities. “You’ve got 30,000 hacker Web sites out there, and it’s safe to assume that 10 percent of them are giving away code for cracking third-party systems,” says Drew Williams, marketing manager at Alexandria, Virginia–based Axent Technologies.

The anti-NATO forces’ top achievement, Pike says, was knocking the whitehouse.gov public information site off the air for a day and leaving it “completely screwed up and unable to send any documents” for a week. The White House made no public comment on the outage but later said that intrusions into its computers would be referred to the Secret Service. A Russian group called the Chaos Hackers Crew injected images of Hitler and animated antiheroes Beavis and Butt-head onto a NASA Web site, according to Matthew Devost, director of intelligence analysis at Virginia-based Infrastructure Defense. A NASA spokesman says that “any inappropriate use of NASA’s computer systems or hacking will be dealt with accordingly.”

Hacker attacks can be difficult to trace, and the raided agencies have kept their investigations secret. Pike and Devost attribute some wartime sabotage to apolitical Western vandals, who, as Pike says, “were waiting to have a shot at something like this.” But Devost says whitehouse.gov fell prey to a technologically elementary “denial of service” attack. This tactic, which Serbian cyberirregulars were known to deploy elsewhere, involves overloading a server with massive simultaneous requests to log on.

Belgrade sources say the local cyberpartisans were at most informally connected to Milosevic’s conventional war machine. The best-known attack squad took the name “Black Hand,” after the Serbian nationalist movement that started World War I by assassinating Austria’s Archduke Franz Ferdinand. Their weapons were the cyberequivalent of Bronze Age arrowheads. Aside from denial-of-service attacks, their forte was “spamming” target systems with a deluge of junk e-mail. The Chaos Hackers Crew is an underground fringe group in Moscow, Devost says.

Meanwhile, the U.S. assault on Milosevic’s finances — thought to be concentrated in Cyprus, Switzerland and Lebanon — matched state-of-the-art cyberstrength against old-fashioned secrecy and autocracy. The Yugoslav leader has become expert over the years at keeping his money, and much of his country’s money, to himself.

Milosevic was president of Yugoslavia’s dominant bank, Beogradska Banka, before turning to politics as communism crumbled. The state-owned bank retains 75 percent of rump Yugoslavia’s banking assets. The regime grabbed much of the population’s savings through officially sponsored pyramid schemes in the mid-1990s. Private banks were shut during the Kosovo war, to keep still-extant funds from escaping.

Milosevic tries to keep management of state revenues within a tight circle of family and friends, blurring the distinction between government funds and his own. His wife, Mira Markovic, is the regime’s informal treasurer, sources say, and uses the Yugoslav Left Party she chairs as a money laundering machine. A second key figure is Beogradska Banka chairwoman Borka Vucic. She plucked Milosevic from an obscure post in Belgrade city government the late ’70s and eventually put him in charge of the Communist regime’s foreign accounts.

These days Vucic does the offshore banking herself, experts say. Her most famous exploit, according to Dejan Jovic, a lecturer on Yugoslavian politics at the London School of Economics, was transferring funds from Cyprus to Lebanon last year. Milosevic decided to diversify his accounts for fear that Cyprus’ campaign for European Union membership would erode its commitment to bank secrecy. The redoubtable Vucic flew to Cyprus in a Falcon jet packed with bodyguards, loaded it with the boss’s cash and redeposited it in Beirut.

Students of cyberwar note that this style of money management, while not highly efficient, is safer from attack by modem than the West’s free and thriving electronic marketplace. “There’s an asymmetry of threat because our side is much more reliant on the technologies that can be hit,” says CSIS’s Cilluffo.

The Central Intelligence Agency and Pentagon could have gotten at Milosevic’s piggy bank anyway, specialists say. “There is no doubt that the government has capability along those lines,” says Mark Chen, chief technology officer of the Kroll-O’Gara information security group in California. But they may not have had time, as President Bill Clinton ordered the account-cracking operation only a few weeks before the Kosovo war ended.

A less formidable attacker would find the job daunting. “Not many organizations can match the U.S. government on these variables,” says Axent’s Williams. Like other students of infowar, he finds everyday electronic financial transactions acceptably secure.

Still, financial institutions have come to accept a steady dribble of cybercrime as a cost of doing business. “To imagine that the Vladimir Levin case is unique is somewhat foolish,” says Cilluffo, referring to the Russian hacker who stole an estimated $12 million from Citibank in 1995. Yet, as with conventional theft, one’s own employees are a more serious threat than any Bonnie and Clyde of the information superhighway. Experts say more than 80 percent of cyberheists are inside jobs. Milosevic, in any case, may have had little money left to juggle. GML International, a London-based investment company that owns 11 percent of Belgrade’s Trust Banka, estimates that even before the war Yugoslavia’s government was running a monthly budget deficit of $150 million to $200 million. At that rate, it quickly ran through the $1 billion it netted by privatizing the state telecommunications monopoly in late 1997.

Milosevic watchers say his mania is for power, not wealth. Under current circumstances, he is likely running down his personal reserves to pay the army and police.

In any event, Kosovo-related hacktivist achievements should help focus Western managers’ minds on how costly and tiresome it might be to scrape persistent graffiti off their emerging electronic faces. Beavis and Butt-head blurting obscenities might not embezzle any funds. But few companies would choose them as their signature for greeting the public.

And next time around, the weapons will be far more powerful. Technophiles see the Balkan cyberattacks as the millennium’s version of the zeppelins that dropped hand-heaved explosives on World War I trenches. They hope that defensive technology can keep pace as offensive systems inevitably, and rapidly, improve.

“Nuclear weapons were at least limited to a small club of nations,” the CSIS’s Cilluffo concludes. “Anyone can get on the Internet.”