Cyber ​​attack related to China stimulates the chief of the development bank

MIAMI (AP) – The cyber attack happened just as financial officials from all over Latin America came to Washington to commemorate the 60th anniversary of the Inter-American Development Bank.

On September 24, 2019, requests from more than 15,000 internet addresses across China flooded the bank’s website, causing some of it to go offline intermittently. To unclog the network, the bank took the drastic step of blocking all traffic from China.

But the attackers persisted, and as officials gathered for a day of conferences with athletes, academics and celebrity chefs, the bombardment intensified.

Details of the attack, not previously reported, are contained in an internal IDB document reviewed by The Associated Press.

News of the attack is surfacing as the bank’s new president, Mauricio Claver-Carone, is trying to use his aggressive views on China from his time in the Trump administration to outsmart the people in Washington and beyond. are still outraged by his politically charged election last year.

Claver-Carone, the former chief director of the National Security Council for Western Hemisphere affairs, chaired his first annual meeting of the IDB in Colombia last week since he was elected last fall over objections from Democrats and some regional governments who complained he the long-standing tradition of a Latin American being at the helm.

As a geopolitical ideologue, Claver-Carone seems in no hurry to give up his disdain for Beijing’s growing influence in Washington’s backyard. In stark contrast to his predecessor, Luis Alberto Moreno of Colombia, who eagerly promoted Chinese investment in the region, Claver-Carone recently raised the possibility of inviting Taiwan, the island democracy claimed by the communist government in Beijing as part of its territory.

By curtailing China’s influence, Claver-Carone is seeking to gain favor with Democrats who question his leadership but share his distrust of Beijing. If he succeeds, they can help him keep the most important promise of his unorthodox candidacy: US support for a capital increase so the bank can help the region save itself from a pandemic-induced recession that will be the worst in more than a century is.

There are early signs that he may be making some progress. This month, a bipartisan group of five lawmakers led by Senator Bob Menendez, head of the Senate Foreign Relations Committee, proposed legislation allowing an $ 80 billion capital increase that would increase lending to the Washington-based bank by 60%.

“People have to accept that he won,” said Dan Runde, a former official with the United States Agency for International Development in the George W. Bush administration and an expert on multilateral institutions at the Center for Strategic and International Studies. “Those who are not happy have not yet gone through the five stages of grief. They are stuck somewhere between denial and anger. “

But Senator Patrick Leahy, the powerful chair of the Senate Appropriations Committee, has yet to sign after warning last year that the choice of Claver-Carone, a “ polarizing American, ” to lead the IDB would hurt the case – not helping. . for a funding incentive. There is also an expectation that some in the region who supported Claver-Carone while Trump was in office – such as Brazil and Colombia – would change their allegiances to appeal to the new sheriff in town: President Joe Biden.

“The argument that an underfunded bank is an opportunity for China is very compelling,” said Dan Restrepo, who served in the same role in the National Security Council as Claver-Carone during the Obama administration. “But it does not answer how you finance the bank sufficiently and with what leadership.”

In terms of cyber disruptions, the attack on the IDB was too small to raise concerns outside the bank. Last year, more than 10 million similar DDoS (Distributed Denial of Service) attacks were detected worldwide, according to the digital security company NETSCOUT.

But during the IDB’s gala celebration, it was fraught with symbolism.

The Washington bash was hastily organized after the Trump administration convened allies six months earlier to force the cancellation of the IDB rally in the Chinese city of Chengdu, which would become some sort of eruption party for China a decade after it joined. the bank had joined. .

While the US had been trying to derail the meeting for months, China’s denial of a visa gave a representative of Venezuelan opposition leader Juan Guaidó an opportunity to act decisively. While the IDB and most of the countries in Latin America recognize Guaidó as Venezuela’s legitimate leader, China is a staunch ally of President Nicolás Maduro.

Claver-Carone was the US official who led the diplomatic standoff with China at the IDB. As a top White House official for Latin America, he was also the architect of America Rising, a program that sought to curb China’s advance in Latin America, where it has ousted the US as the main trading partner in countries. such as Argentina, Brazil and Chile.

According to the IDB document, traffic to the IDB website increased to more than four times the normal level on September 19, 2019, taking the main website and publishing page offline. Initially, the bank defended itself by blocking individual IP addresses.

But then “the attackers changed tactics and began throwing requests from more than 15,000 IP addresses across China,” the internal document said. “On Tuesday the 24th evening, all revenue traffic from China was blocked, allowing us to get back online.”

The attackers were unharmed and turned again, this time relying on 180,000 IP addresses from countries such as Singapore and Japan. In all, the attack lasted for months, but was effectively kept under control after three weeks when the bank turned to Amazon to build a more robust firewall.

While there is no indication that the site has been breached, “the downtime impacted our digital presence and negatively impacted several communication efforts,” the document says. “It also made our vulnerabilities explicit to third parties, which could potentially make us the target of new attacks and affect the reputation of the IDB brand.”

Still, it is impossible to know who was behind the attack.

While China has some of the world’s most skilled hackers, security experts say it doesn’t necessarily mean it’s behind the attacks. Poorly protected computers can be hijacked and marched all over the world and turned into botnets to unleash DDoS attacks.

“A targeted attack for so long has a clear financial or political motive – you don’t drag around for the next three weeks,” said Tord Lundstrom, a digital security expert at Qurium, a Swedish nonprofit. “But determining whether China was behind it, or whether someone is just trying to make it look like it was, is very difficult to determine without additional digital forensic information.”

China’s Foreign Ministry did not immediately respond to inquiries as to whether the government was aware of the incident at the IDB or was involved in it, but said in a statement that it strongly opposes cyber attacks

“Linking cyber-attacks directly to a government is a very sensitive political issue,” the ministry said. “All parties must jointly solve the hacking problem through dialogue and cooperation, and avoid politicizing the problem.”

Claver-Carone declined to be interviewed, while the IDB said it would not comment on internal cybersecurity issues. Nonetheless, three people at the bank told the AP that they remember China was openly blamed for the attack in 2019 briefings to discuss the fallout. The people spoke to the AP on condition of anonymity to discuss internal deliberations.

On paper, China holds a miniscule 0.004% of the IDB’s voting shares, the smallest share of all 48 members of the bank. But membership has been a cheap way for China to expand its reach in Latin America. Chinese companies are able to bid on IDB-funded projects, interact with political leaders, and gather valuable economic information that would be more difficult to acquire on its own.

China is also the second largest shareholder of IDB Invest, the bank’s private credit arm, with nearly 6% of the shares, thanks to a reorganization in 2015 when the Obama administration refused to raise additional funds and the US stake. saw. diluted to 13%.

The IDB also manages a $ 2 billion fund made up entirely of contributions from China. Over the years, the IDB also hosted more than a dozen business meetings connecting Latin American entrepreneurs with Chinese investors.

“The IDB has been too friendly with the Chinese Communist Party for too long,” said Runde. “The Bank and its shareholders did not hold China to account when it ruined the 60th anniversary for the IDB. This overly cozy relationship must change. “

China has made no secret of its tense relationship with Claver-Carone. In a symbolic rebuke, Yi Gang, the head of China’s central bank, saw voting at last year’s special meeting when Claver-Carone was elected, according to a person who attended the meeting on condition of anonymity to discuss the closed-door discussion .

Rebecca Ray, a Boston University economist who tracks China’s investment in the region, said China’s sensitive politics could be a double-edged sword. While Claver-Carone’s attempts to isolate Beijing could play well in the U.S. Congress and help him secure additional funding, it could ultimately undermine the IDB’s mission at a time of great need for funding to build infrastructure. , improving healthcare and reducing poverty in the US. region.

She noted that as the IDB is lagging behind other multilateral institutions in securing more funding, three Latin American countries – Brazil, Ecuador and Uruguay – have joined the Asian Infrastructure Investment Bank, China’s response to the World Bank and a country that the US is against.

“Sidelining China may ultimately limit China’s willingness to continue to play an active role that would not be popular in the region,” Ray said. “As long as the need for financing remains high, countries will continue to turn to China, because that’s where the money is.”

Beijing Associated Press writer Joe McDonald contributed to this report.

Joshua Goodman on Twitter: @APJoshGoodman

Contact AP’s global research team at [email protected]

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