Yesterday I talked about how hackers most likely working for the Chinese had gotten their hands on the crown jewels of federal personnel files, damaging US intelligence operations badly. Now the other shoe has dropped, with our British allies across the pond saying that Chinese and Russian hackers have decrypted the treasure trove of NSA files stolen by Edward Snowden two years ago and that the damage is so bad that ongoing British and US intelligence operations have been compromised and agents put in danger.
RUSSIA and China have cracked the top-secret cache of files stolen by the fugitive US whistleblower Edward Snowden, forcing MI6 to pull agents out of live operations in hostile countries, according to senior officials in Downing Street, the Home Office and the security services.
Western intelligence agencies say they have been forced into the rescue operations after Moscow gained access to more than 1m classified files held by the former American security contractor, who fled to seek protection from Vladimir Putin, the Russian president, after mounting one of the largest leaks in US history.
Senior government sources confirmed that China had also cracked the encrypted documents, which contain details of secret intelligence techniques and information that could allow British and American spies to be identified.
Indeed, the story suggests that Snowden's info compromised methods and sources as well.
The government source said the information obtained by Russia and China meant that "knowledge of how we operate" had stopped the UK getting "vital information".
BBC political correspondent Chris Mason said the problem for UK authorities was not only the direct consequence that agents had been moved, but also the opportunity cost of those agents no longer being in locations where they were doing useful work.
Intelligence officials have long warned of what they see as the dangers of the information leaked by Mr Snowden and its potential impact on keeping people in the UK safe - a concern Prime Minister David Cameron has said he shares.
According to the Sunday Times, Western intelligence agencies have been forced to pull agents out of "hostile countries" after "Moscow gained access to more than one million classified files" held by Mr Snowden.
"Senior government sources confirmed that China had also cracked the encrypted documents, which contain details of secret intelligence techniques and information that could allow British and American spies to be identified," the newspaper added.
Needless to say, the pushback from privacy advocates has been immediate.
Privacy campaigners questioned the timing of the report, coming days after a 373-page report by the independent reviewer of terrorism legislation, David Anderson QC, which was commissioned by David Cameron. Anderson was highly critical of the existing system of oversight of the surveillance agencies and set out a series of recommendations for reform.
A new surveillance bill, scheduled for the autumn, is expected to be the subject of fierce debate.
Responding to the Sunday Times, David Davis, the Conservative MP who is one of the leading campaigners for privacy, said: “We have to treat all of these things with a pinch of salt.” He said the use of an anonymous source to create scare stories was a typical tactic and the timing was comfortable for the government.
“You can see they have been made nervous by Anderson. We have not been given any facts, just assertions,” he said.
Anderson recommended that approval of surveillance warrants be shifted from the home and foreign secretaries to a new judicial body made up of serving and retired judges, which Davis supports but towards which the government appears to be lukewarm.
That British surveillance bill is a nasty piece of work from what I understand, making the Patriot Act look tame in comparison, so if this is a hair on fire scare attack by our friends across the pond, I wouldn't be surprised.
On the other hand for this kind of news to leak out, a major intelligence player to admit they have been compromised and have changed operations as a result, that's a very serious charge.
We'll see where this goes, but as I have said time and time again, if your chief goalis to damage western intelligence as badly as possible, Edward Snowden's playbook is the route you would use.