If you’re not the type to fret over conspiracies about black helicopters and shadowy figures in trench coats, you might want to inject a little paranoia into your life. Industrial espionage is a serious threat, warn security experts, but the perpetrators probably are not who you’d expect. Rather than companies themselves engaging in this sort of clandestine activity, more often it is government intelligence agencies playing a super-secret game of cat and mouse to assist companies and key industries in their own countries.
It is almost impossible to quantify just how prevalent the practice of industrial espionage is throughout the business world. The FBI has uncovered stories of spies from foreign Coca-Cola bottlers secretly taping the conversations of Pepsi bottling executives, and of rival computer software firms hacking into each others’ networks to gain secret information. But such cases, it would appear, are few and far between.
Far more common, experts say, is the type of spying done by government intelligence agencies, the information from which can often end up directly helping companies in the countries doing the spying. The U.S. government, for example, denies engaging in any type of industrial espionage, but it admits that the intelligence it collects has in the past helped U.S. companies. Probably the most well known example of such activity took place in early 1994, when France’s Prime Minister flew to Riyadh, Saudi Arabia, to put the finishing touches on what he and his government thought was a blockbuster deal for Airbus airliners. Instead, the official was rebuffed by the Saudi government, which turned around and announced it was awarding the coveted contract to Boeing instead.
The reason? At the time the Airbus deal was being pieced together, the U.S. National Security Agency, using its high-tech communication spy network, allegedly had been intercepting faxes and telephone calls among the Saudi government, the Saudi national airline and Airbus. In the course of these “routine” espionage activities, NSA agents are alleged to have discovered that Airbus officials were offering bribes to a Saudi government official. The NSA reportedly passed the information to U.S. officials, who intervened with the Saudi government, which in turn arrested the Saudi government official and broke off negotiations with Airbus. The New York Times and NBC News jumped on the story, which the NSA, rather than trying to cover up, admitted was all true, calling it a “win” for the U.S. aerospace industry.
Based on what is already known about government-espionage activities, billions of dollars’ worth of commerce has in effect been siphoned from bidders in certain countries and handed to those in other nations. In addition, government spies allegedly pilfer vast amounts of technology-related data each year and hand it over to companies in their own countries. The New York Times, for example, reported that between 1987 and 1989 French intelligence planted moles at a number of high-tech companies in the U.S., including IBM, whose alleged job it was to steal technology to aid France’s computer industry. In fall 1991, according to the paper, a French intelligence team also allegedly attempted to steal stealth aircraft technology from Lockheed, an effort that was successfully thwarted only after the FBI learned of the plot.
Lest anyone be led to believe it is only French intelligence that is involved in this type of activity, consider the case last year in which Chinese intelligence officers reportedly discovered nearly 30 tiny listening devices aboard a new Boeing 767 that had been purchased by China in June 2000 to be President Jiang Zemin’s official jet. The bugs (said to be highly sophisticated and satellite operated) were allegedly found everywhere from the presidential bathroom to the headboard of Jiang’s bed.
The CIA declined to comment on the report when the story broke, but Chinese officials were reportedly furious at the discovery. Still, even if the report proved to be true, it would constitute only a “minor incident” that would not distract China from pursuing stronger economic ties with the U.S., a Chinese government official was quoted as saying at the time.
The 767-300 in question was sold to Delta Air Lines in 2000 as part of a larger order and then sold by Delta to China Aviation Supplies Import and Export Corp. Once the deal was concluded the airplane was flown to Texas for paint, interior and modifications by “several aircraft maintenance firms.” Chinese officials reportedly oversaw the entire completion process, which took about a year, after which the airplane was flown to China. After the discovery of the bugs, several Chinese officials were reprimanded and the airplane was assigned to China United, a state-owned airline.
The Anatomy of a Bug Sweep
James Atkinson, president of Technical Surveillance Counter Measures, a Massachusetts firm that performs bug sweeps and other security checks for corporate clients, said listening devices can be hidden just about anywhere. In airplanes they are most often found in upholstery and headliners, where the bugs are placed by maintenance workers and cleaning crews who are paid for their services or by the spies themselves, who circumvent security to gain access to aircraft.
“The advice I give clients is to make sure their aircraft is kept under lock and key, with security procedures in place that include guards, camera systems and secure hangars,” said Atkinson, whose company performs about a dozen checks of business aircraft each year.
The price for a complete check of a corporate jet starts at about $20,000. The process involves bringing in sophisticated lab equipment and performing a thorough check of the entire aircraft, including avionics bays and baggage compartments. Atkinson estimated that only about one in 100 airplanes might be found with audio- or video-recording equipment onboard, but for clients with trade secrets to protect the cost of the sweep is money well spent.
“Usually it’s diplomatic and government aircraft that will be found to have bugs or miniature cameras on board,” he said. But Atkinson added that since 9/11 improved security procedures and a general reluctance on the part of airport workers to place anything aboard airplanes have led to a decline in such activity.
It is illegal in the U.S. to own or use listening devices such as bugs and wire taps unless you are a law-enforcement official. It is also illegal to produce clandestine listening devices unless you are an approved maker of such equipment. Still, the manufacture of illegal surveillance equipment is a multibillion-dollar underground industry, based mainly overseas. The U.S. State Department estimates that at least $800 million worth of illegal bugging and eavesdropping equipment is imported into the U.S. each year, the majority of it coming from France, Germany, Lebanon, Italy and Canada.
But as Atkinson pointed out, anyone with a soldering iron and a basic understanding of electronics can build a simple eavesdropping device. The raw materials can be obtained at any electronics specialty store or salvaged from consumer electronic devices such as cordless telephones, intercom systems and televisions.
According to some estimates, more than $6 million worth of surveillance equipment is sold in the U.S. every day, most of it from storefront “spy shops” or over the Internet. (This figure does not include the billions of dollars spent each year for legitimate eavesdropping devices purchased by law-enforcement, military and intelligence agencies.) Most of these bugging devices, said Atkinson, are rudimentary in design and cost only a few dollars, but some sophisticated devices can cost as much as $1,000.
In New York City alone there are said to be dozens of firms that will not only sell eavesdropping devices but will also offer to break into the target’s offices to install them and, for an additional fee, will provide monitoring and transcription services.
“Federal law-enforcement agencies have basically turned a blind eye to this sort of activity,” said Atkinson. “The FBI has repeatedly indicated that it lacks the resources and training to enforce or properly investigate the technical security threat within the U.S., and that keeps people like me in business.”
A bug is a device placed in an area for the purpose of intercepting communications and transmitting what is picked up out of the area to a listening post. The eavesdropper can be just a few feet away from the target or miles away, depending on the kind of bug used.
There are five primary categories of bug: RF, acoustic, ultrasonic, optical and hybrid. An RF (radio frequency) bug, the best known type of listening device, uses a miniature radio transmitter to pick up and send audible communications to a listening post. RF bugs are extremely easy to detect, but they are also cheap, disposable and difficult to trace back to the person or organization that planted them.
An acoustic bug, meanwhile, is the simplest type of listening device. It can include anything from a water glass, stethoscope or rubber tube used for direct intercept of communications with the naked ear (no use of electronics). Ultrasonic bugs convert sound into an audio signal above the range of human hearing. These ultrasonic signals are then intercepted and converted back to conventional audio. An optical bug converts sound (or even data) into an optical pulse or beam of light. Optical bugs, such as laser transmitters, are rarely used because they are expensive and easy to detect. Any of the above techniques and devices can be combined to make a hybrid eavesdropping device.