Murdoch's Pirates - The book with the truth to all to know !

Murdoch's Pirates

News of the World is not the first Murdoch company to be accused of skullduggery. Murdochs Pirates is about the dark deeds of a secret division of News Corp, based in Jerusalem, operating in a combustible world of ambitious ex Scotland Yard men and former French and Israeli secret service agents, who have one thing in common - they have all left their previous employment under controversial circumstances. *** produces smart cards for use by pay TV operators; this is a fiercely competitive field and one of the ways you get business is to demonstrate that the smart cards produced by your rivals can be easily pirated. Unless you are very careful, sometimes those pirated versions make their way out into the real world, where they can really damage your competitors businesses. Murdochs Pirates reads like a thriller, set in the arcane world of hackers and pirates. There are mysterious deaths, break-ins and wild chases. Some of the individuals involved may well be amongst the brightest minds on the planet, but sometimes their rivalry can get out of hand and their impulsive behaviour can defy logic. Chenoweth recounts this clandestine war with his customary lucidity, drollery and brio.

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This is NOT SPAM - If you want to find more about it search with google, it's for PUBLIC KNOWLEGE and if you want to test a forum to see if they are funded or supported by a big CAS company quoted on that book, just post this post and if they remove it, ban the user, it would definitely mean that the forum is owned by that large CAS.

For FREEDOM of information and for uncensored internet, to let us know all us the truth and not to be manipulated by large medias organisations and their spy/army arm !

TS or Hannibal ;o)

First 30 pages of the book possible to read on Amazon

[ame="http://www.amazon.com/dp/B009VA1NVU/ref=cm_sw_r_fa_dp_uPUKqb19E3G7W"]Murdoch's Pirates: Before the phone hacking, there was Rupert's pay-TV skullduggery: Neil Chenoweth: Amazon.com: Kindle Store[/ame]

TS

The US Customs undercover op that came unstuck: NewsCorp/***’s discreet silence
Posted on November 4, 2012 by neilchenoweth
Reply

The 1998-99 undercover operation that followed NewsCorp/***’s success with Operation Johnny Walker in North America remains shrouded in mystery.

It’s almost as if there were two separate undercover operations. One was a huge success, a coup for US Custom and the FBI that triggered headlines across the United States. The other operation, as described in *** internal emails, careered out of control.

John Norris’s email of August 24 1999 reads like a classic example of an operational stuff-up, the carefully controlled phrases covering what must be close to panic and despair: “The skills of the hackers in the field continue to impress me unfortunately . . . The Eurocard must somehow die and stay dead….”

Norris’s great rival, Ray Adams in London, could hardly restrain his satisfaction at Norris’s plight. “This is what you said all along,” he wrote to Oliver Koemmerling.

The public and private descriptions of what happened are very different. And yet they seem to refer to the same operation. There are three sets of accounts of what happened. The first is what Chris Tarnovsky, the hacker who worked as an undercover agent for *** Operational Security out of California, and his boss John Norris, testified in the 2008 EchoStar trial.

Tarnovsky was asked about Operation Smartcard.

“I worked with U.S. Customs out of Blaine, Washington, on an operation where they were selling counterfeit DirecTV.”

It was a sting where Customs officers actually sold pirate cards for DirecTV, which were based closely on the pirate cards developed by Ron Ereiser’s dealer group.

“So the same ECM [Electronic Counter Measure] that I already designed would knock both Ron out and the Customs operation out when this was finished, when it was determined to pull the plug on the operation.,”

John Norris, the US head of *** Operational Security, also testified about Operaton Smartcard:

“It was approximately a year-long operation headed by United States Customs out of Washington State. At the time I read a Customs document, it was the largest fraud investigation in United States Customs not related to drugs . . . Operation Smart Card was focused on identifying and prosecuting large distributors of pirated DirecTV, *** technology within the borders of the United States. *** provided intelligence and assistance on this operation in addition to technology that we provided to U.S. Customs.

Norris was asked how *** handled concerns that pirates would be able to keep using the pirate cards after the operation finished. He said,

“An effort was made to write software that could be downloaded from the satellite to the footprint on — in the United States that would deactivate or disable those specific Smart Cards….

Q Do you believe that Operation Smart Card was a success?

A Yes.

Version 2 of Operation Smartcard is the string of media reports about it on August 9 2000. Martin Crutsinger of Associated Press described Operation Smartcard as a 22-month undercover sting that kicked off in September 1998, in which

“undercover agents sold counterfeit access cards they called ‘Eurocards’ through an Internet business created by Customs agents. By the time the Customs Service terminated the undercover portion of the operation in June 1999, agents had sold 3,195 illegal cards to dealers and 382 cards to individuals, generating more than $516,000, which was turned over to the U.S. Treasury, officials said.

“In July 1999, DirecTV used electronic countermeasures to shut down all of the pirated cards sold through the governments Web site.”

Four people had pleaded guilty to felony charges and another seven people had been charged, Crutsinger reported.

It was a joint Customs and Treasury anti-counterfeiting operation. The key term is counterfeiting, which puts it in the province of the US Secret Service out of Treasury.

A DirecTV spokesman was quoted in the new reports as praising the investigation.

Version 3 of Operation Smartcard emerges from *** internal emails which were on the hard drive of Ray Adams, European chief for *** Operational Security.

Tarnovsky had designed the Electronic Counter Measure (ECM) broadcast by DirecTV on July 6 1998 that killed the Eurocards sold by Customs. Four days later with all of the pirate cards out of commission, Tarnovsky was gloating over an email from Ron Ereiser to Bulgarian hacker Plamen Donev, in which Ereiser suggested the ECM offered a theory of what had gone wrong with the cards.

Negative houston! They just don’t have a clue… The jumps were just a bluff actually and they bought if and totally missed the real reason the kill is not revivable! Heheheheheheh I love it when a plan comes together!

But six weeks later on August 23, *** online researcher Ted Rose reported that several Canadian sites claimed that they could repair the Eurocards.

Norris replied the following day confirming that this was correct. He summarised the position. *** had prepared two versions of a pirate software called Montana for the Customs operation. But there had been a second piece of pirate programming called Van, prepared for an undercover operative called Myron.

Within six months Tarnovsky had discovered that the Van pirate cards had been ripped off by another pirate, who then began reselling his own version of the Van program called Ring of Steel. At this point then, which would have been around March 1999, the Van program had escaped *** control and was in the wild.

*** had believed that hackers would not be able to crack their pirate products but neither the Van nor the two Montana cards turned out to be safe:

“The hackers were eventually able to dump the technology and sell it as their own…. It took 6-7 weeks after the July 6 ecm but now, the hackers have discovered how to repair the Eurocards :-( This is confirmed – not rumors.

Norris said the RCMP was moving slowly but would eventually ask *** for an ECM to kill the pirate cards off, this time for good.

We must remember however, that when they tell us to shut off the Eurocards, we must be able to respond accordingly (there will be no problem with DTV assuming the moratorium is over explained that there were two parts to the operation.

Whatever this countermeasure is going to be, I hope and trust it will be the mother of all countermeasures. The Eurocard must somehow die and stay dead…

In short, Norris was saying, *** had to find a way to kill these cards, but six weesk down the track he knew of no way to do so; and he thought DirecTV would not “assuming the moratorium” is over.

That was the moratorium under which *** had promised not to run any undercover operations in North America without DirecTV’s approval. Norris seems to be saying DirecTV had not been consulted.

*** appears to have taken the view that if they were assisting law enforcement, there was no need for DirecTV approval. In fact, Norris did not seem to know when the moratorium would expire.

At that point then, US Customs had been involved in selling pirate cards which were still functioning, without DirecTV’s knowledge. It appeared many more had been pirated from the cards sold by Customs. Court cases at that time had put the cost to DirecTV of piracy at $10,000 for every card sold. The 3,577 cards sold by US Customs would have cost DirecTV $35.77 million, and millions more from the re-pirated cards.

All apparently without DirecTV’s knowledge.

What was the outcome? At some *** must have found a way to kill its pirate cards though the Ray Adams emails shed no further light on this. A year after Norris’s email, US Customs went public, reporting the 11 people charged. The announcement was paired with new of another series of piracy arrests organised by DirecTV. It was common cause that it was all a major coup.

Ray Adams’ spy network at Cambridge University: NewsCorp/*** has its sources
Posted on November 6, 2012 by neilchenoweth
Reply

One of the lesser known features of the ring of agents that former Scotland Yard Commander Ray Adams ran for NewsCorp/*** was that he had an informant placed at Cambridge University to spy on its cryptology work.

It’s become something of a cliché, the relationship between Cambridge and various spy agencies. But corporations getting involved in spying at university—or rather a media company having spies at a university—seems to me to take it all to a whole different level,

Ray Adams, European head of Operational Security for ***, was concerned to keep tabs on Markus Kuhn, who was finishing his Ph D at Cambridge in the late 1990s, and Professor Ross Anderson.

*** had a codename—Castor—for Kuhn. When I told him about it earlier this year he said he found it quite amusing—“sounds all a bit like childish spy games”.

The *** email correspondence makes it clear they watched Markus very closely, in part because of concern over his friendship with Oliver Koemmerling, which they feared might lead to disclosure of ***’s operations.

Yossi Tsuria wrote to Oliver at some length about this danger. Markus was no long working on smartcards. However in the email exchange below it’s clear that there were grounds for concern over Markus’s acuity. But Adams correctly concluded it wasn’t a danger.

In any case, he said, “Also bear in mind that I have a source at his workplace.”

In Adams’ world, a source was not a casual association. It was a paid informant, if not an active agent.

Adams gave no further indications of who his informant was. “I have a total of 17 agents,” he had told John Norris, US head of *** Op Sec, three months before.

The payroll for all these informants and the rest of *** Operational Security in Britain came to more than £1 million for a six-month period. And that was only one part of the worldwide *** OpSec operation. Agents or informants appeared on the *** budget under “Consultancy”. Contacts was a highly elastic term. The largest expense was ADSR, Oliver Koemmerling’s company.
Security Information £44,856.83
Contacts £711,083.19
Informants £4,000.00
Consultancy £290,067.00
Total £1,050,007.02

ADSR 671,490.00
Non-ADSR £378,517.02



The email exchange that mentions Adams’ Cambridge “source” is below. The email chain reads from the bottom. Reuven Hasak is the head of Operational Security. Marc (Cyberdine) is Oliver Koemmerling. RA is Professor Ross Anderson. Yossi is Yossi Tsuria, *** chief technology officer. Adi is Adi Shamir, the Israeli academic whose Fiat-Shamir algorithm was the basis for *** encryption.

From: Adams, Ray [SMTP:[email protected]]

Sent: Friday, January 22, 1999 4:01 AM

To: Hasak, Reuven; [email protected]

Cc: Adams, Ray

Subject: RE: fishers fritz fishes fresh fish



Marc and I discussed.

It is our belief that MK knows enough to be certain. He is a very intelligent man. Anyway we are also convinced that he does not pose a threat and will not repeat outside. Also bear in mind that I have a source at his workplace.

So we will just let it die. I do not think it will be raised again.

Thanks Ray.



—–Original Message—–

From: Hasak, Reuven

Sent: 21 January 1999 15:58

To: [email protected]

Cc: [email protected]

Subject: RE: fishers fritz fishes fresh fish

Importance: High

Friends

My initial approach is NOT to disclose the fact to MK (and naturely it goes from MK to RA).etc.

We have to bear in mind that now when *** does have open contacts with the two, will cause that in case they know of Alex it will become a common knowledge and we’ll lose control on it.

The response to MK should be vague and leave him UNCONFIRMED. Alex answer should be ” Yes, *** tried to be a friend/customer—-let them try…..” The same respose should come from Yossi, in case he’ll be asked.

BTW—-Yossi SHOULD take part in this decision because he is the one to have contacts with all the three: Alex/Mk/Ra. I’ll communicate with Yossi .

If we leave it like this, it will be just one more rumor about Alex (though I am aware to the fact that MK is closer to alex than others).The maximum will be that MK will ask others.

I find out it is too early to take a disclosure approach, we do not have to hurry disclosing the fact. Let us exchange opinions and get together to a smart decision.

Reuven Hasak

—–Original Message—–

From: Marc [mailto:[email protected]]

Sent: Thursday, January 21, 1999 11:21 AM

To: [email protected]

Cc: [email protected]

Subject: fishers fritz fishes fresh fish

At 21:13 20.01.99 +0200, you wrote:

>A

> Is there possibility that MK is aware that you are one of us?

> Reuven Hasak

id like to know what happened to make you suspecting this cause MK asked me the same thing tonight.

i think he knows already and looking for acknowledge. i told Yossi after ross came to me that he got the 1 needle trick from adi and also adi told ross that he has an NDA and can not talk about it. but what he say’ed was enough for ross to figure out the trick. when i had the argument with Marcus to remove that from the paper he told me that they know it from adi since this technique is very unlikely and unique they must wonder on which way the information is floating. even ross told me in the face when he was here either you told *** or you told somebody who told ***.in this statement ross is not talking about adi anymore he talks about *** so i assume that adi told him that he has an nda with *** when he discussed the trick with ross, otherwise ross would not have mentioned *** instead of adi in his statement.

so the answer to your question is yes their is a very big chance that he knows unless MK is superstitious and belive that Adi Shamir is a= fortuneteller.

As i know Marcus i don’t see a big problem but i think it would be more safe to tell him about it cause i think he will handle the information more

carefully If he is trusted by us.

———–here my translation of his message=

——————————–

Hi oli

yesterday we had visited *** in heathrow. i belive more and more that they belong to your customers. as a test i mentioned your name to Yossi several times and observed his reaction carefully.

if he would know you just passively then i would expect to get his interest but instead he looked aside for a moment and his face showed an expression as you name embarrasses him somehow. many people are as easy to read out as smart cards. so no more excuses.

—————- here the German message from markus —————–

Hi, Oli!

Gestern haben wir *** in Heathrow besucht. Ich glaube immer mehr,dass die irgendwie zu deinen Kunden geh=F6ren. Ich habe zum Test mehrfach deinen Namen genannt, so getan als ob die dich kennen m=FCssten, und dabei Yossi’s Reaktion genau beobachtet. Wenn er dich nur passiv kennen und beobachten w=FCrde, dann h=E4tte ich eigentlich erwartet, dass sein Blick sehr aufmehrsam und interessiert auf mich gerichtet bleibt. Statt dessen hat er aber sofort seitlich weggesehen und hatte einen Gesichtsausdruck als ob ihm dein Name peinlich w=E4re und er eigentlich nichts davon h=F6ren will. Viele Leute sind fast so einfach auszulesen wie Chipkarten. A

30 first pages free to read, on Amazon not possible to buy the ekindle, so it's for information only, not commercial.

[ame="http://www.amazon.com/Murdochs-Pirates-hacking-skullduggery-ebook/dp/B009VA1NVU"]Murdoch's Pirates: Before the phone hacking, there was Rupert's pay-TV skullduggery: Neil Chenoweth: Amazon.com: Kindle Store[/ame]

TS

More here, last interview,

http://podcast.3cr.org.au/pod/3CRCast-2012-11-20-93996.MP3

TS

Spying on a grand scale - Media
Review by Daniel Herborn - MURDOCH'S PIRATES
Neil Chenoweth - Allen & Unwin, 432pp

When Neil Chenoweth, a journalist for the Australian Financial Review and author of a biography of Rupert Murdoch, stumbled across the details of possible corporate espionage carried out by a little-known organisation called News Datacom (***), his first response was one of disbelief.
An Israeli start-up company founded by scientists and cryptographers, *** had been acquired by News Corporation, its biggest customer, and existed in relative obscurity until a series of billion-dollar lawsuits, with satellite service provider EchoStar suing it for piracy and French pay TV channel Canal Plus taking legal action, which they later abandoned, alleging *** leaked valuable code on the internet.
To come to terms with why hacking may become a hugely valuable tactic and disruptive force for content providers, it's important to understand that the revenue-raising potential of pay television rests largely on the security of pay walls. If people can easily access the content without paying the subscription fee then the value of the product plummets.
This makes enabling pay-TV smartcards with security measures a hugely lucrative business. But how does a firm producing these cards show the superiority of its cards over others? One way is by demonstrating that competitors' cards can be hacked. If you can hack into your competitors' systems, potentially you can trash the commercial value of their product.
In a series of articles for the AFR, Chenoweth drew on a massive cache of emails to allege *** hacked its rivals for commercial gain as News Corporation was moving into the Australian pay TV market. Given the sheer commercial scale involved, Chenoweth has called the alleged hacking "arguably the biggest industrial espionage case in history".
Billed as a story "about what happens when an international corporation hires its own spy force", the focus is often narrower than that, with the narrative taking in a wealth of technical detail and the minutiae of the politics and rivalries between hackers, and the hacks and counter-hacks between covert groups.
Chenoweth has secured remarkable levels of access to the hackers, and the overriding impression is of technically gifted savants in way over their heads. Even after the controversies and the mysterious death of talented hacker Boris Floricic, ruled a suicide, they often come across as naive.
Inevitably, though, the key figure in this story is Murdoch, detached as he is from much of the action. Constants in the story are his seemingly inexhaustible reserves of energy and bullishness, his cunning and unexpected capacity for charm. Although a Luddite at heart, he couldn't resist the riches on offer in this high-tech field.
While his motivations for dabbling in data encryption in the first place remain clouded, his end game of accumulating wealth, media influence and power, or some amalgam of all three, is clear.
Murdoch's Pirates is a staggering feat of research, but at times suffers from a lack of accessibility.
It is to be hoped this factual account lays the path for further work that looks beyond the crosses, double crosses, aliases and the farcical confusion to the complex questions of how law enforcement agencies should deal with this new and high-stakes world of corporate spying.

Wednesday, 13 February 2013 12:21
Murdoch’s Pirates
Written by Janet Mawdesley



There is absolutely no doubt what-so-ever that anything to do with Rupert Murdoch can almost be considered the thing novels are written about: fascinating but a figment of someone’s imagination. The defining difference is the world of Rupert Murdoch is all too real: he is dealing with real people, world politics and real skulduggery while remaining, to a large degree, at arm’s length.

One has to ask the question how can one man, in the course of one lifetime create so much power and influence, behave in such a ruthless manner, redefine the meaning and intent of world politics and law and still manage to walk away, not always unscathed, but certainly able to live another day.
Chenoweth has presented a masterful expose on the early days of one Rupert Murdoch, Newspaper mogul: a man who would be king all-be -it not just in his ivory tower but that of everyone else’s ivory tower as well, spreading his particular brand of achieve, or should one perhaps say succeed at all or any costs, worldwide.

The opening segments of the book paint a picture of a man out to succeed, ruthless, influential and prepared to go to any lengths to achieve his aims.

The world of hacking, along with much more, can be placed firmly at his doorstep, with his early attempts at launching his Pay TV networks in the United States and then Europe, allowing nothing to stand in his way.

Confronting the probable demise of his empire in the early days of pay TV he promptly went about seeking differing ways to improve his business. In those days, the relatively clean, if somewhat murky, world of hacking was being utilised throughout Europe to allow citizens of several countries access to the Star Trek series, which at that time could only be accessed throughout Europe on pay TV, free.

This entrepreneurial hacking was having a detrimental effect on Murdoch’s fledging entry into Pay TV and so he set out to both utilise and eliminate hackers, to undermine his competitors and stay one step ahead of the competition.

In doing so he placed his network of peoples slightly outside the law and on occasion definitely outside the law, recruiting some of the best, most ruthless, definitely geniuses in their field to work with him.

In more recent times a very small segment of the underbelly relating to the Murdoch Empire was exposed to public scrutiny with the phone hacking scandals in Britain in 2007 and beyond.

Scary, down-right frightening in parts and almost unbelievable, Chenoweth has thankfully added his own quirky sense of the ridiculous to help lighten a truly terrifying look into the world of Rupert Murdoch and company.

Where will the road lead for Murdoch and his men in the future? That is yet to be discovered but wherever it goes you can almost count on the fact there will be hidden depths to the process.


hxxp://www.bluewolf-reviews.com/index.php?option=com_k2&view=item&id=383:murdoch%E2%80%99s-pirates&Itemid=286#

With Rupert Murdoch's News Corporation still reeling from the phone hacking scandal in Britain, the last thing the embattled media giant needs is yet more scandal but last week the BBC's Panorama program aired a story claiming the company had been involved in another hacking enterprise that resulted in the collapse of a corporate rival in the pay TV business. News Corp has strenuously denied the allegations accusing the BBC of gross miss representation and Rupert Murdoch himself has used his Twitter account to defend his company against what he calls lies and libels. The claims and counterclaims are flying fast and it.s likely there will be more debates to come. Tonight we bring you in full the documentary that has sparked the controversy.





REPORTER: Vivian White





The phone hacking scandal which started at the 'News of the World' has already humiliated Rupert Murdoch.



RUPERT MURDOCH: This is the most humble day of my life.



And his son, James Murdoch, has been forced to give up the chairmanship of News International. But their whole British newspaper business is a small island in the Murdoch Empire. The commercial heart of News Corp is Pay TV worldwide. In the UK that means the hugely profitable Sky TV.



Sky is vital to the Murdochs - James Murdoch still chair it is - News Corporation owns 39% of BSkyB, the company that runs it. Sky dominates British pay TV. But it did once face a serious commercial challenger, ITV's On Digital.



STEVE HEWLETT, MEDIA ANALYST: Potentially it could have been quite revolutionary, had ITV Digital On Digital as it was called at the time, had that managed to establish itself as an effective pay TV platform, which is what the ITV company was attempting to launch it as, you would have had potentially another major player in pay TV in the UK.



Hundreds of millions of pounds were invested in ITV's On Digital but from the out set the company knew that this was the key. The smart card that subscribers put into their set top boxes - Its security so that only paying customers could get their channels was vital.



SIMON DORE, FORMER CHIEF TECHNICAL OFFICER, ITV DIGITAL: Without it there is no business. You can't charge for the programs you're selling to the public. You can't turn people off when they don't pay. You can't give them additional subscriptions when they do. It's absolutely central to any pay TV business.



So pay TV piracy, hacking into cards and then offering pirated copies that would work for free can spell financial disaster. At about the same time as ITV's On Digital was preparing to launch its business the business of TV piracy was growing too. Lee Gibling was a leading light in this world.



LEE GIBLING, COMPUTER HACKER: We were looking very much at how to get certain aspects of entertainment for free. Late night adult, nothing too risqué, but something a bit better than just the boring channels that we had in the UK.



Lee Gibling moved his base into remote house in Cornwall. He set up a very successful website for hackers with a very clever title, The House of Ill Compute - THOIC for short.



LEE GIBLING: This is the master key that opens up the whole card.



He has been involved in hacking into sky TV and come to the attention of a security unit working inside the company making their smart cards. The unit tracked Lee Gibling down but they didn't prosecute him. Instead they secretly hired him.



LEE GIBLING: They were offering me a way of taking the House of Ill Compute to a much wider community. I started to wonder why they had this motive for a site that had principally evolved as a hacking site to become part of their portfolio.



The security unit was part of a Murdoch company called ***. Sky jointly funded the unit but say they didn't run it. In charge in the UK was a former senior policeman, Ray Adams, formerly the Met's head of criminal intelligence. His number 2, Len Withall had been a chief inspector in Surrey, they would not give interviews but did agree to met us. We secretly recorded them talking about their work with the THOIC website.



LEN WITHALL: THOIC was a forum when we, when the investigations are looked at there were quite a lot of good pirates on there.



REPORTER: Yeah?



LEN WITHALL: So it was decided let's see whether or not this could be a good source of information.



REPORTER: How did you go about that?



LEN WITHALL: I didn't do it at all. It was nothing to do with me. It was set up by Ray Adams.



According to Len Withall it was Ray Adam's work but according to Ray Adams it was Len's.



RAY ADAMS: Len on a day-to-day basis was running THOIC. He was meeting and discussing with him. I was in charge of the unit so I technically was running THOIC, but on a day-to-day basis absolutely not.



*** was founded in Israel and its global security HQ was there. *** made the smart cards for Sky and all Rupert Murdoch's companies worldwide. Both Murdoch sons, Lachlan and James have served as non-executive directors of ***. James is still on the board.



*** began to expand the House of Ill Compute. They invested in tens of thousands of pounds worth of computer power with secure server notice US. Lee Gibling was paid up to 60,000 pounds a year as a consultant.



LEE GIBLING: Money was not a problem. It was merely a question of ringing up Mr Ray Adams saying we needed more and the money was always there.



Ray Adams says it was Lee Gibling's initiative.



RAY ADAMS: Gibling developed it and developed it himself. They were told that he didn't develop it himself, that *** put thousands of pound into financing it and equipping it and making it secure, into paying for him. Paying for him came out of my budget. He was a money grubber and kept on saying he needed new servers and computers, he needed this and he needed that. We were involved on a bit of a treadmill so you keep going.



The House of Ill Compute, THOIC, grew into the biggest website in the world for pirates, who used it to exchange information about how to defraud pay TV. THOIC got hundreds of thousands of hits a day.



REPORTER: Did *** know everything going on in the site?



LEE GIBLING: Absolutely. Everything in the closed area of THOIC was totally accessed by any of the *** representatives.

Internal emails that we have seen show that *** knew the THOIC website could present a legal risk. One to Ray Adams from Avigail in the security unit in Israel says: . ..if he Lee ever gets exposed (god forbid, knock on wood) . does it put *** in any legal bind.?.



REPORTER: So to all intents and purposes even though it was registered in your name still, whose was the House of Ill Compute?



LEE GIBLING: It was ***. It was their baby. It started to become more their baby as they fashioned it to their own design.



The *** security unit jointly funded by Sky now controlled the biggest pirate.s website in the world. And that wasn't all. *** had recruited one of the best, perhaps the best, hacker in the world. Someone who had shown that he could crack open the secrets of pay TV smart cards.



He was a young German called Oliver Kommerling, who taught himself how to unlock smart cards in his garage at home. Pay TV piracy made him very rich very quickly. We found him living in the tax haven of Monaco. Back in 1996 he had hacked into Sky's latest card and Ray Adams from *** security went to see him.



OLIVER KOMMERLING, HACKER: Adams made me a proposition. He looked at me and said, "Could you imagine working for us?" This was really after half an hour and I said to him, "In principle, yes, but what do you really want? What do I have to do?"



Oliver Kommerling was secretly hired as a consultant to head up a team in ***'s own laboratory in Haifa, Israel, a facility financed by News Corporation. But first he worked on testing the security of ***'s own smart cards to improve their product. Then he was set of task of unlocking the secrets of their competitors' cards.



OLIVER KOMMERLING: There was some requests from the marketing department, because that kind of looking into the competitors' product.



REPORTER: So you attacked or analysed the secrets, the encryption systems, the security systems of your competitors' products now, of ***.s competitors, correct?



OLIVER KOMMERLING: Of ***'s competitors, yes.



And ITV's On Digital had picked one of those competitor systems. It was made by a French company called Canal Plus, their smart cards had never been hacked.



SIMON DORE: Canal Plus Technologies were so confident in their ability to supply us a secure system that they stated openly that it was unhackable.



FRANCOIS CARAYOL, FORMER CHIEF EXECUTIVE, CANAL PLUS TECHNOLOGIES: The people were selling us the micro processor in which we embedded our software, were telling us and talking about the largest companies in the world, that it cannot be broken. Your software cannot be extracted.



But it could. And *** had the resources to do it. Oliver Kommerling did crack open the Canal Plus Technologies card. *** now possessed their competitor's greatest commercial secret.



REPORTER: Did people from the team in Haifa, your team, reverse engineer, get a read-out, understand the secrets of the Canal Plus Technologies encryption system?



OLIVER KOMMERLING: Yes.



Finding out how a competitor's system works is perfectly legal. But then these codes cracked by *** in their high security facility in Israel somehow got out onto the internet. Canal Plus Technologies's most secret information was published on a Canadian pirate's website.



REPORTER: This was the secret code from Haifa? There wasn't any question about that?



OLIVER KOMMERLING: Yes. The time stamp is like a fingerprint. It's not really physical proof but by statistics you can say it's so small that it is not coming from us.



REPORTER: So you had no doubt that it was yours? It was ***'s? No doubt at all?



OLIVER KOMMERLING: No.



*** declined to be interviewed but in a statement they told us they never authorised or condoned the posting of any code belonging to any competitor on any website. ITV's On Digital had been launched only months before, but their future was now at risk. The security of the Canal Plus Technologies smart card, critical to their business, had been compromised.



FRANCOIS CARAYOL: We were informed by our own surveillance of internet sites that that software was existing. But the software in itself doesn't give you anything. It just gives you a vision of how the system works. It's like the plans of the safe. But it doesn't give you the key to the safe. But in fact what it did, it gave the hackers a very precise idea of where to drill to open the safe.



The secret of the Opposition's security system had been cracked open. The next crucial step was to turn that hack into full-scale piracy and to make counterfeit cards freely available. And that was launched from here, at The House of Ill Compute.



LEE GIBLING: There was a meeting that took place at a hotel. Mr Adams, myself and other *** representatives were there and it became very clear that there was a hack being worked on, which I was quite surprised at, at the time. This came from conversations from Mr Adams.



REPORTER: So he Ray Adams told you he had knowledge that a hack against the system that On Digital were using was being prepared?



LEE GIBLING: Yes.



REPORTER: He told you that before it ever happened?



LEE GIBLING: Oh, yes.



What happened next helped to seal the fate of On Digital. Ray Adams, the head of ***'s security unit, sent him the codes, the keys that would enable pirates to manufacture counterfeit smart cards.



LEE GIBLING: They delivered the actual software to be able to do this, with instructions that it should go to the widest possible community. Software to be able activate On Digital cards giving a full channel line-up without payment.


*** say they have never been in possession of any codes for the purpose of promoting hacking or piracy. They say it's simply not true that *** used the THOIC website to sabotage the commercial interests of On digital/ITV digital or any rival. Both Ray Adams and Len Withall denied to us that anything of the kind took place.



LEN WITHALL: Absolute rubbish. I can't speak for anybody else but it was run correctly. There is no way that something that's associated with ***, that we would allow anything like that to go on THOIC that has a connection with us.



RAY ADAMS: I never, ever had the ON digital codes. I.ve never touched an ON digital card, ever once. I have never seen them on a ON digital pirate card. I.ve never ever had any codes.



REPORTER: If you had become aware that material damaging to On Digital was being published on THOIC, your website, what would you have done?



RAY ADAMS: I would have arrested him.



But Ray Adams and others in the *** security unit did have the codes. An internal email shows that. A technical expert writes to Ray Adams and Len withal about ON digital stuff. .I.m sure you must have had the July key as it was posted ages ago on Usenet but just in case you don.t it is. : And it includes the codes.



In another email Lee Gibling keeps Ray Adams up to date with the spread of the hack on the internet. This is better: a UK link for the On Digi software."



We have spoken to former pirates who used THOIC, who confirm the codes were there. Carl Davison was one. Later on he was convicted and jailed for running the pirate website of his own. We have agreed not show his face.



CARL DAVISON: How they described my website was a one stop shop for pay TV hacking. This place wasn't a shop, it was a supermarket, it was the biggest website of it.s kind.



We showed him some material that was downloaded from the THOIC website at the time of the hack.



CARL DAVISON: This was the original gold card file which was for On Digital. You add the keys to it. Program it on to a card and you basically opened up the encryption system. Those codes, that file, basically opened it all up. There were people openly selling cards, offering cards for sale for On Digital. You're talking about thousands of cards if not tens of thousands of cards. It was a big thing. Everybody was doing it.



NEWS BROADCAST: Seven people have been arrested as part of an investigation into an alleged multi-million pound conspiracy to defraud ITV digital.

Fraud is now costing TV companies millions of pounds a year.



SIMON DORE: It grew and grew and grew until cards were freely available everywhere, in marketplaces all over the country, you could pick up ITV digital smart cards.



REPORTER: And there you were trying to staunch the flow?



SIMON DORE: Yes, it's like a bad dream, it.s one of those dreams where everything keeps going wrong.



ITV's On Digital tried electronic counter measures, changing the codes to try to defeat the hack but THOIC was ready for that as well. Lee Gibling was promptly supplied with new codes to pass on to the pirates.



LEE GIBLING: We sent them out update codes. We wanted people to be able to update cards themselves. We didn't want them buying a single card and then finding they couldn't get the channels. We wanted to stay on to it flogging it until it broke.



REPORTER: Flogging it until it broke?



LEE GIBLING: Yeah.



By the summer of 2001 On Digital's business was draining away. The company spent millions more relaunching itself with a new name, ITV Digital and a monkey was hired in to help. By then the House of Ill Compute faced a crisis. Some pirates discovered that Lee Gibling had been running THOIC for ***. They published his betrayal on the internet, including an internal email about his expenses from ***'s Len Withall



LEN WITHALL: Somebody got into THOIC.s site and found emails that they published.



REPORTER: What did you do?



LEN WITHALL: Nothing at all.



REPORTER: What did *** do?



LEN WITHALL: Nothing at all. It just folded up.



REPORTER: What happened to THOIC? The House of Ill Compute?


LEE GIBLING: THOIC was dismembered. Mr Len Withall, who was number 2, came to my house and we sledge hammered all of the hard drives and everything else, all of the computers.



REPORTER: You physically sledge hammered the hard drives?



LEE GIBLING: Yes.



REPORTER: And the software evidence, the evidence in terms of codes on the internet and emails on the internet and stuff like that, what happened to that?



LEE GIBLING: That had been totally wiped.



The House of Ill Compute where the hack had been launched from was shut down in a hurry. Lee Gibling did a runner and left the country. But the dramatic end of the House of Ill Compute had come too late for ITV Digital.



NEWS BROADCAST: The future of digital television is in turmoil tonight with one of the industry's key players on the verge of collapse. ITV digital today applied .



ITV Digital went under in 2002. The collapse cost its shareholders more than a billion pounds. 1,500 employees lost their jobs. The football league lost 180 million too. The company had made its own mistakes but the hack was different.



SIMON DORE: The business had its issues aside from the piracy - no question. But those issues I believe would have been solvable by careful and good management. The real killer, the hole beneath the water line was the piracy. We couldn't recover from that.



*** told us that they are a global leader in the fight against TV piracy. They say they never used the THOIC webs for any illegal purpose and they paid Lee Gibling for his expertise so information from THOIC could be used to track and catch hackers and pirates. The man who headed up the *** security unit retired just as ITV Digital collapsed. Ray Adams now lives in Windsor. We met him there and afterwards I openly challenged him about his dealings with the world's biggest pirate website.



REPORTER: Mr Ray Adams I'm Vivian White from BBC Panorama.



RAY ADAMS: I have spoken to your journalist in there and I have given him my responses and I am not giving you any.



REPORTER: You have repeatedly misled us haven.t you? You have repeatedly miosled us about THOIC, the THOIC website and your involvement in it.



RAY ADAMS: I have never spoken to you before and I'm not going to speak to you now. Thank you.



Lee Gibling might have faced awkward questions, too, but he disappeared.



REPORTER: What has happened to Lee Gibling?



LEN WITHALL: He went on the run.



REPORTER: Have you any idea at all where he is?



LEN WITHALL: Yes.



REPORTER: Where is he?



LEN WITHALL: I am not telling, it has nothing to do with you.



REPORTER: When did you last see him?



LEN WITHALL: Don't know.



Lee Gibling had made himself scarce abroad and kept his secret for 10 years until after a long search we tracked him down. He then took several days before he agreed to talk to us



REPORTER: Did they say to you - you must go abroad. Is that why you are here?



LEE GIBLING: Yes, it was the easy option out for both parties, for my self and *** at the time, when if I can be frank, the shit hit the fan.



After Lee Gibling went abroad Len Withall became ***'s head of security



REPORTER: Would you have paid him and looked after him or anything like that?



LEN WITHALL: No.



REPORTER: Why not if he got himself into trouble



LEN WITHALL: You need something back for it. Why would you pay somebody if you're not getting anything back for it?



But what Len Withall told us wasn't correct.



REPORTER: So you cleared out. Did the cheques keep on coming?



LEE GIBLING: Yeah.



REPORTER: For how long?



LEE GIBLING: They were paid direct into my bank account from *** up till the end of 2008.



After paying him for several years, in 2008 *** made a sever reference payment to Lee Gibling of 15,000 pounds with a confidentiality clause attached to it. ***, a News Corporation company, has faced a series of allegations of involvement in hacking and piracy, all of which it has denied. In 2002 Canal Plus Technologies sued *** in a US court. Immediately the top lawyers from News Corporation itself took over the case.



FRANCOIS CARAYOL: We discovered there was a company which was one of our competitors behind the hack, *** and we launched a litigation against them. The matter was clearly handled by News Corp in New York. The fact it is a large and powerful company makes it more difficult to fight against it.



The action never came to court. Rupert Murdoch did a deal with Canal Plus Technologies's parent company to purchase assets from them. Canal Plus Technologiess what was broken up and the legal case was halted.



Allegations of widespread hack are also the subject of a criminal trial now takes place in Sicily. The alleged pirates are charged with hacking into smart card systems including ***'s. But what led to the trial in the first place was a complaint to the Italian police by another commercial rival to *** - a Swiss company.



REPORTER: Did you think this was piracy that could be carried out by amateurs just by ordinary hackers and enthusiasts?



PASCAL METRAL, KUDELSKI GROUP: No. State of the art technology requires high skills, professional tools and access to very sensitive data to perform a hack. So we believed back then already that some kind of organisation was behind the hack. But we were not thinking of any competitors back then.



But the police investigation has pointed to a competitor. One of the defendants in the Sicily trial is a Milan lawyer David Rossi who was working as a consultant for ***. He is charged with paying and supplying material to an alleged hacker, which he strenuously denies. The case against him has echos of what we revealed in the UK. He insists all he was doing was gathering intelligence on piracy for Len Withall, the man he was working for at ***.



*** have told us they wholly refute the allegation that Mr Rossi acted illegally on behalf of ***. The case continues. Back in Britain, the phone hacking scandal has already led to serious questions being asked about the corporate culture of the Murdoch Empire.



TOM WATSON, MP, MEDIA SELECT COMMITTEE: Mr Murdoch, let me just ask you again, did you miss lead this committee in your original testimony?



JAMES MURDOCH: No, I did not.



TOM WATSON: So if you didn't, who did?



James Murdoch was a non-executive director of *** when ITV Digital was hacked, although there is no evidence that he knew about the events we have reported. He is now the Chairman of BSkyB. The television regulator is currently examining whether he and News Corporation are fit and proper persons to be in control of the company.



TOM WATSON: Clearly allegations of TV hacking are far more serious than phone hacking. Off come are now applying the fit and proper person toast Rupert and James Murdoch. It seems inconceivable that they wouldn't want to look at these new allegations. It also seems inconceivable that if these allegations are true that Rupert and James Murdoch would pass that test.



The judgment of those whose businesses were hacked down is clear.



FRANCOIS CARAYOL: It's outrageous. It's piracy. There are jobs at stake. There are huge amounts of money at stake. Obviously this practice has to be put to an end.



The man who was the king of the pirates has never told his story until tonight. What happened to the company that might have been Murdoch's major British pay TV rival is now exposed.







MARK DAVIS: There has been a very public response from the former News Corp subsidiary *** to that story. They have taken out a full page ad in the financial review rejecting the program's allegations, claiming that the company's legitimate activities and emails have been miss construed and taken out of context. News Corp has made similar denials. For their part BBC's Panorama are sticking by their story. Although it should be noted that Panorama presents no evidence that any of the Murdochs knew of the alleged illegal activity. We asked representatives of News Corp and News Limited as well as *** on to the program tonight to discuss the allegations. They all declined. All of their responses to the program as well as their background to the story can be found in full on our website.





Reporter

VIVIAN WHITE



Camera

NIK PORTER

JON HILLYER

PAUL COX



Sound

ANDY BOAG



Film Research

STUART ROBERTSON



Producers

ALISTAIR JACKSON

STEPHEN SCOTT



Panorama Editor

TOM GILES



A BBC Panorama Production