Germany's Chaos Computer Club published the sourcecode for a piece of malware used by the German government to spy on citizens. The software was discovered in the wild and reverse engineered. It can be used to spy on or control remote PCs. Because of flaws in the software, anyone who was infected with this by German police was vulnerable to spying by "anyone on the street." The German supreme court banned the use of trojans to spy on German citizens in 2008.
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The analysis also revealed serious security holes that the trojan is tearing into infected systems. The screenshots and audio files it sends out are encrypted in an incompetent way, the commands from the control software to the trojan are even completely unencrypted. Neither the commands to the trojan nor its replies are authenticated or have their integrity protected. Not only can unauthorized third parties assume control of the infected system, but even attackers of mediocre skill level can connect to the authorities, claim to be a specific instance of the trojan, and upload fake data. It is even conceivable that the law enforcement agencies's IT infrastructure could be attacked through this channel. The CCC has not yet performed a penetration test on the server side of the trojan infrastructure.
"We were surprised and shocked by the lack of even elementary security in the code. Any attacker could assume control of a computer infiltrated by the German law enforcement authorities", commented a speaker of the CCC. "The security level this trojan leaves the infected systems in is comparable to it setting all passwords to '1234'".
To avoid revealing the location of the command and control server, all data is redirected through a rented dedicated server in a data center in the USA. The control of this malware is only partially within the borders of its jurisdiction. The instrument could therefore violate the fundamental principle of national sovereignty. Considering the incompetent encryption and the missing digital signatures on the command channel, this poses an unacceptable and incalculable risk. It also poses the question how a citizen is supposed to get their right of legal redress in the case the wiretapping data get lost outside Germany, or the command channel is misused.
Electronic Surveillance Scandal Hits Germany [spiegel.de]