The Joint Strike Fighter, also known as the F-35 Lightning II Fighter, is the most costly project in Pentagon history, so it's a little bit problematic that some spies scampered in and nicked an unknown, but undoubtedly large, quantity of data without getting anywhere near caught. The cyber-spies encrypted the data on its way out, so nobody's really sure where they came from or where the data went, but some IP addresses have been tracked to China, prompting a little bit of back-and-forth between the DoD and the Chinese government.

A Pentagon report issued last month said that the Chinese military has made "steady progress" in developing online-warfare techniques. China hopes its computer skills can help it compensate for an underdeveloped military, the report said.

The Chinese Embassy said in a statement that China "opposes and forbids all forms of cyber crimes." It called the Pentagon's report "a product of the Cold War mentality" and said the allegations of cyber espionage are "intentionally fabricated to fan up China threat sensations."

Though the most valuable information, including data on the F-35's flight control and sensors, is inaccessible (stored on non-networked computers), nobody's really sure exactly what happened, and nobody, from the manufacturers to the researchers to the Pentagon's press team, wants to talk about it. It's a pretty alarming read, check it out. Wall Street Journal, image also via WSJ

The audit also uncovered that the most significant of these lapses involved the DoD's handling of London-based weapons maker BAE Systems. According to the report, DSS failed to collect the company's internal audits—information that is crucial to determining potential weaknesses at the plant. The DSS responded saying that they have "a thorough and fundamentally sound facility inspection process which was only marginally diminished by the failure to systematically collect, analyze, and retain BAE's required reports" and that they have "taken action to resolve this shortcoming." However, a recent House Armed Services Committee hearing revealed that the DSS has been significantly understaffed for some time. Currently, around 750 people work for DSS and a rep claimed to be short staffed by "well over a hundred" persons.

So rest easy folks. Once again, you can be secure in the knowledge that our government has everything under control. UPDATE: BAE systems has responded to claims that their facility is not secure stating that "there is no basis whatsoever for that conclusion." [Wired]