The Invasion of the Chinese Cyberspies

If so, the implications for U.S. security are disturbing. In recent years, the counterintelligence community has grown increasingly anxious that Chinese spies are poking into all sorts of American technology to compete with the U.S. But tracking virtual enemies presents a different kind of challenge to U.S. spy hunters. Foreign hackers invade a secure network with a flick of a wrist, but if the feds want to track them back and shut them down, they have to go through a cumbersome authorization process that can be as tough as sending covert agents into foreign lands. Adding in extreme sensitivity to anything involving possible Chinese espionage--remember the debacle over alleged Los Alamos spy Wen Ho Lee?--and the fear of igniting an international incident, it's not surprising the U.S. has found it difficult and delicate to crack these cases.

In Washington, officials are tight-lipped about Titan Rain, insisting all details of the case are classified. But high-level officials at three agencies told TIME the penetration is considered serious. A federal law-enforcement official familiar with the investigation says the FBI is "aggressively" pursuing the possibility that the Chinese government is behind the attacks. Yet they all caution that they don't yet know whether the spying is official, a private-sector job or the work of many independent, unrelated hands. The law-enforcement source says China has not been cooperating with U.S. investigations of Titan Rain. China's State Council Information Office, speaking for the government, told TIME the charges about cyberspying and Titan Rain are "totally groundless, irresponsible and unworthy of refute."

Despite the official U.S. silence, several government analysts who protect the networks at military, nuclear-lab and defense- contractor facilities tell TIME that Titan Rain is thought to rank among the most pervasive cyberespionage threats that U.S. computer networks have ever faced. TIME has obtained documents showing that since 2003, the hackers, eager to access American know-how, have compromised secure networks ranging from the Redstone Arsenal military base to NASA to the World Bank. In one case, the hackers stole flight-planning software from the Army. So far, the files they have vacuumed up are not classified secrets, but many are sensitive and subject to strict export-control laws, which means they are strategically important enough to require U.S. government licenses for foreign use.

Beyond worries about the sheer quantity of stolen data, a Department of Defense (DOD) alert obtained by TIME raises the concern that Titan Rain could be a point patrol for more serious assaults that could shut down or even take over a number of U.S. military networks. Although he would not comment on Titan Rain specifically, Pentagon spokesman Bryan Whitman says any attacks on military computers are a concern. "When we have breaches of our networks, it puts lives at stake," he says. "We take it very seriously."