"The global supply chain for telecommunications items introduces another vulnerability to U.S. computers and networks," the report says. "Components in these computers and networks are manufactured overseas -- many of them in China. At least in theory, this equipment is vulnerable to tampering by Chinese security services, such as implanting malicious code that could be remotely activated on command and place U.S. systems or the data they contain at risk of destruction or manipulation. In a recent incident, hundreds of counterfeit routers made in China were discovered being used throughout the Department of Defense. This suggests that at least in part, Defense Department computer systems and networks may be vulnerable to malicious action that could destroy or manipulate information they contain."
Such concerns have been circulating for years in government security circles. But action may be at hand. On Tuesday, civilian and defense procurement groups published a notice in the Federal Register seeking comment on whether federal acquisition rules should be revised to require that "contractors selling information technology (IT) products (including computer hardware and software) represent that such products are authentic."
In February, the FBI announced that its ongoing anti-counterfeiting campaign had resulted in more than 400 seizures of fake Cisco equipment worth more than $76 million. A five-page FBI PowerPoint presentation dated Jan. 11, 2008, summarizes some of the agency's findings in its investigation of fake Cisco gear. It notes that fake hardware is vulnerable to supply chain subversion and attack, and could allow others to access to systems meant to be secure.
For more security insights, InformationWeek has published its 2008 Strategic Security Survey. Download the report here (registration required).