Chinese hacking industry linked to the state through connections, alcohol, and sex, leak reveals

BEIJING–China’s hackers-for-hire take government officials out for lavish banquets, binge drinking and late-night karaoke with young women in a bid to win favor and business, as revealed in a highly unusual leak last month of internal documents from a private contractor linked to Chinese police.

China’s hacking industry is vast in size and scope but also suffers from shady business practices, disgruntlement over pay and work quality, and poor security protocols, the documents show.

Private hacking contractors are companies that steal data from other countries to sell to the Chinese authorities. Over the past two decades, Chinese state security’s demand for overseas intelligence has soared, giving rise to a vast network of these private hackers-for-hire companies that have infiltrated hundreds of systems outside China.

Though the existence of these hacking contractors is an open secret in China, little was known about how they operate. But the leaked documents from a firm called I-Soon have pulled back the curtain, revealing a seedy, sprawling industry where corners are cut and rules are murky and poorly enforced in the quest to make money.

Leaked chat records show I-Soon executives colluding with competitors to rig bidding for government contracts. They pay thousands of dollars in “introduction fees” to contacts who bring them lucrative projects. I-Soon has not commented on the documents.

Mei Danowski, a cybersecurity analyst who wrote about I-Soon on her blog, Natto Thoughts, said the documents show that China’s hackers for hire work much like any other industry in China.

“It is profit driven,” Danowski said. “It is subject to China’s business culture — who you know, who you dine and wine with, and who you are friends with.”

Though I-Soon boasted about its hacking prowess in slick marketing PowerPoint presentations, the real business took place at hotpot parties, late night drinking sessions and poaching wars with competitors, leaked records show. A picture emerges of a company enmeshed in a seedy, sprawling industry that relies heavily on connections to get things done.

I-Soon’s founder and CEO, Wu…