If you work for any company that has products or services that are of value to a foreign or domestic spy, you are a target. While some of the techniques discussed here relate to collection of information in a foreign setting, the same techniques can also be used in this country. A spy is “anyone” who wants to steal protected information you have.
If you work in a highly valued target company, there is a very good chance that when you go to your favorite bar for happy hour or your favorite coffee shop that you can be compromised a variety of ways discussed in this report. If you establish a pattern and expose any type of vulnerability, you can be profiled and that can very effectively be used against you, your company and your country.
Personnel engaged in foreign travel for business or pleasure and those assigned to field activities in foreign countries should be aware that they are possible targets of espionage. Espionage is a favorite method of intelligence gathering by hostile intelligence services. The prime targets of these agencies include all individuals with knowledge of or access to, sensitive technical data on items such as lasers, missiles, computers, and microelectronics equipment, as well as other classified or unclassified government information.
Any foreign country is a prime area for hostile intelligence services. Many Americans mistakenly believe that just because they are in a country “friendly” to the U.S. that they are immune from intelligence gathering just because they are Americans. The operatives of a foreign intelligence service need not be foreigners, nor does an encounter with a foreign intelligence agent need to be extraordinary in any way. A casual acquaintance, for example, could be an ordinary citizen, a diplomat, or an American who has been recruited as a foreign agent.
Some of the techniques employed by hostile intelligence networks to obtain valuable information include:
• attendance at technical and scientific meetings
• personal surveillance
• electronic surveillance
• mail compromise
• exploitation of human weaknesses
Conventions, seminars, conferences, and symposia are key sources of technical and scientific information for foreign intelligence agents. They are generally open to representatives from all nations, including hostile countries. Foreign agents are extremely proficient in obtaining the information at these meetings without disclosing anything of significant value in return. All participants should exercise great care in preparing formal papers to be presented at international conferences and submit them for security review well in advance of their presentation or publication. If participating in panel discussions, each individual must be especially alert to the possibility of inadvertently disclosing vital defense information during spontaneous discussions or in answering questions.
I recall, on one occasion, attending a “closed” conference of international security professionals. I noted the great care taken to assure that only authorized personnel had access to the building and after entering the building how everyone was registered and screened. I also noted how we were carefully escorted to a “secure” auditorium for the presentations by some of the world’s best authorities on international security. It was later noted that all of the presenters had used a “wireless” microphone for the auditorium sound system which meant that anyone in the surrounding community with a readily available radio scanner could monitor and record the conference. Obviously, that didn’t happen again, at that conference. The real lesson learned at this conference was, that no matter how secure the environment and how experienced you may be there will always be vulnerabilities to recognize and overcome.
Police like controls placed on traveler's movements in foreign countries provide an excellent means of maintaining personal surveillance. In fact, a visitor may be "targeted" upon application for a visa. Guides and interpreters are frequently members of, or cooperate with, secret police agencies. Waiters, cab drivers, hotel personnel, and other such inconspicuous individuals are also known to be major contributors to the intelligence effort. A considerable amount of information is divulged when the visa application is completed. This information may easily single a person out for special attention during an entire stay in a foreign country.
Some foreign travel agencies invariably "arrange" for American travelers to stay at the better class hotels. In many cases, Americans of special interest are often assigned to rooms in which listening devices or other special means of surveillance have been permanently installed. Travelers should assume that the hotel room is equipped with devices to overhear or record conversations. Devices also may be installed through which a person can be physically observed, even while the room is dark. In addition to such devices as microphones, telephone taps, and miniature recorders, intelligence operatives today use infrared and night vision cameras, closed circuit TV, and other highly advanced equipment.
Do not search for such devices, and do not make an issue of it if one is found. The presence of such equipment may not necessarily be personally significant. The device(s) may or may not be monitored during the visit, or they may be monitored only on a random basis. Do not try to neutralize the devices by methods such as running tap water and playing a radio, because some modern devices are so sophisticated they cannot be neutralized. The best defense is to engage only in light, uninformative conversation. Outside the hotel room, other areas such as vehicles, train compartments, restaurants, conference rooms, and other public places, may also be monitored. Miniature microphones with transmitters or recorders can easily be secreted on an individual in a group. It is even technically possible to record conversations in open, outdoor areas; however, these areas are normally more secure than indoor locations.
Another source of information is the personal mail of the traveler. Some foreign countries routinely examine the mail of American travelers for counterintelligence and positive intelligence. When utilizing foreign mail services, avoid revealing personal or family problems of a confidential nature or any information that is self incriminating, or of a positive value to foreign intelligence gatherers. Be extremely careful of the content and to whom it is directed, as matters discussed can be used as pressure points against the individuals concerned.
Avoid revealing anything that might be of possible value to the foreign intelligence collection agency. Be temperate in the use of alcoholic beverages. Aside from creating embarrassing or even scandalous scenes, overindulgence may place a person in a position of possible compromise.
In some cases, inebriated persons were maneuvered into compromising situations and photographed. Such entrapment was later used as a basis for blackmailing the victim into espionage activities. This technique is one of the oldest and most favored methods of compromising a targeted individual.
When seeking to subvert, compromise, blackmail, or recruit Americans for espionage purposes, foreign intelligence agents fully exploit inherent human frailties. Agents are alert to detect any indiscreet or immoral behavior. They scrutinize personal habits, character, behavioral traits, and mannerisms to determine irregularities in such matters as sex, liquor, smuggling, black market activities, illegal currency exchange, and contacts with dissidents. In addition to arranging situations in which Americans are involved in illicit sex affairs, they have also deliberately planted compromising material in their possession or played on their sympathies in an effort to involve them in illegal or discreditable acts.
Countering The Espionage Threat
Foreign Travel Precautions
The following suggestions should be considered to avoid potential risk:
• When applying for passports or visas, always list current or past military affiliations. In one instance, a representative of a tour agency was reported to have advised military personnel to list a civilian occupation in place of their true military status on visa applications because visa applications were occasionally turned down if a military affiliation was listed. Such evasion of facts could lead to a charge of espionage.
• Adhere to all conditions of the visa; violations can lead to lengthy detentions.
• Do not make any oral or written reference to your involvement with intelligence, military or other related activities within the United States.
• Do not make drastic or unplanned variations in itinerary. Record the address and telephone number of the U.S. Embassy or Consulate in each host or major city in which a visit is planned. Keep your passport on your person at all times and memorize the identification number.
• Do not engage in black marketing or other illegal activities.
• Learn the applicable laws and rules of the country.
• Be careful about accepting invitations and do not drink too much or engage in promiscuous acts.
• Be aware that audio (listening) devices and hidden cameras are sometimes planted in rooms.
• Do not take overt action if the room is "bugged" or under any other type of surveillance. Continue normal conversation or activity, giving no indication that the surveillance has been detected. Report the details to the U.S. Embassy or Consulate, and to the company security officer upon return.
• Avoid irregularities in personal behavior because they constitute the most profitable area of exploitation by intelligence agencies.
• Do not accept letters, personal messages, photographs, packages, or other material to be carried openly or smuggled in or out of the country for any reason.
• Make an accurate and complete declaration of money (including traveler’s checks) and all valuables (including cameras and jewelry whether worn or carried). Retain a copy of this declaration until departure.
• Never pick up discarded souvenirs, statues, or artifacts under any circumstances. Purchase such items in approved shops only, making certain that a receipt is provided for each purchase. Do not sign any receipts for money or services unless assured of, and furnished, an on the spot copy that clearly identifies and itemizes the nature of the transaction.
• Do not make any oral or written statements that might be exploited for propaganda purposes.
• Do not sign petitions while traveling or attending conferences, however innocent they may appear.
• Do not photograph military personnel, equipment, installations, defense plants, or other military or restricted areas.
• Refrain from photographing slum areas, ghettos, or underprivileged persons in the host country.
• It is good policy to refrain from photographing airports and train yards. Taking photographs in some countries always involves potential problems. Formal permission should be obtained well in advance as to "where and when" a camera can be used.
• Be aware that clothing can be tagged with invisible dyes and/or radioactive materials. This can be done at a dry cleaning establishment or in the room. If a letter were placed in the tagged pocket and later mailed, it could be retrieved and traced. Be careful about what you write and to whom.
• Use personal stationery and not that from a local hotel when writing letters. Also, purchase stamps at a post office or Embassy outlet. Stationary and stamps obtained at a hotel or other source can be tagged with invisible inks or radioactive tracers. Assume that letters will be opened and read.
• Do not reveal personal opinions in correspondence, or write about controversial issues that might prove embarrassing to the United States government, the writer, or the addressee.
• Be alert to overly friendly tourist guides, interpreters, maids, and other foreign nationals who show an undue interest in your welfare. Be particularly wary of guide personnel who "Just happen" to know your specialty field or weakness. Do not trust interpreters with matters of confidence.
• Obtain medical or dental service only from a U.S. Government facility or from persons or institutions approved by U.S. Consular officials.
• Report to the nearest U.S. Embassy if an approach has been made, or if involved or entrapped in a conspiracy to commit espionage. If indiscreet or otherwise compromised, discuss the situation in confidence with any of these U.S. officials. Above all, do not attempt to get out of an embarrassing situation alone or assume the role of a self appointed counteragent.
• Report any incident involving detention, harassment, and or provocation to the company security officer within 24 hours after returning from travel.
• Report any dealings with representatives from hostile countries or other designated countries as soon as possible to the company security officer. This action allows the security officer to effect proper reporting, protect the employee's record, allow the proper authority to monitor the contacts, and detect recruitment operations as they develop.
• Recognize when an association evolves from one of strictly business to one of a more personal nature.
• Be aware that a key first step taken in recruitment scenarios by intelligence officers is the cultivation of a personal rapport and social relationship with targeted individuals.
• Avoid meetings away from the office.
• Do not solicit or accept gifts or special favors.
• Avoid one on one meetings.
• In dealings with foreign nationals, remember that when someone begins to aggressively solicit classified or sensitive information, consider whether the inquiry is normal or innocent curiosity. It may be an attempt to exploit you. Such inquiries should be immediately reported to the U.S. Embassy or company security officer.
• Do not take any classified documents or information out of the United States. In fact, do not take anything along on your trip unless absolutely needed. Do not take your company identification badge when traveling in foreign countries. A passport and drivers license are sufficient identification for foreign travel.
Economic Espionage Act of 1996
The development of proprietary economic information, commonly called trade secrets, is an integral part of virtually every aspect of U.S. trade, commerce, and business. Protecting trade secrets is essential to maintaining the health and competitiveness of critical segments of the U.S. economy.
The ever-increasing value of proprietary economic information in the global marketplace and the corresponding spread of technology have combined to significantly increase both the opportunities and motives for conducting economic espionage and trade secret theft. As a consequence, foreign governments, organized criminal enterprises, and rogue thieves use a variety of means to target individuals and industries to gain illicit access to valuable information, data, and technologies.
This report discusses new federal legislation that will assist federal, state, and local law enforcement officers in recognizing and investigating trade secret theft. New laws became necessary because prior state and federal legislation had not kept pace with the rapidly changing technological environment. For example, if an individual downloads a computer program code onto a disk without the permission of the code owner, has a theft occurred, even though the true owner never lost possession of the original code? If a theft occurred, is the value of the material taken determined by the value of the disk on which the code is now recorded or the value of the code itself? Although Congress had enacted patent and copyright protection laws, computer crime statutes, and laws designed to prevent government employees from wrongfully disclosing proprietary information obtained by virtue of their official duties,1 no federal law protected, in a systematic, principled manner, trade secrets from theft and misappropriation. Legislation in the states varies but, in general, offers inadequate protection to victims of trade secret theft.2
Broadening Protection of Trade Secrets
In passing the Economic Espionage Act of 1996 (the Act),3 Congress moved to remedy these problems by making the theft and misappropriation of trade secrets federal crimes. The Act adds a new Chapter 90 to Title 18 of the United States Code and employs a two-tiered approach designed specifically to combat both economic espionage and more conventional forms of trade secret theft and misappropriation. The chapter defines key terms, prescribes stiff maximum punishments, includes forfeiture provisions, provides for extraterritorial jurisdiction under certain circumstances, preserves existing state law on the subject, and protects the confidentiality of trade secrets during enforcement proceedings. Relevant sections of the Act are discussed below.
Section 1831 Economic Espionage
Economic espionage, as described in Section 1831, refers to foreign power-sponsored or -coordinated intelligence activity, directed at the U.S. government or corporations, entities, or other individuals operating in the United States, for the purpose of unlawfully obtaining trade secrets. Section 1831 punishes the theft, misappropriation, wrongful alteration, and delivery of trade secrets when accused parties intended to, or knew that their misconduct would, benefit a foreign government, instrumentality, or agent. This section also makes punishable attempts and conspiracies to commit such offenses. The prescribed maximum punishment for an individual offender is 15 years imprisonment, a $500,000 fine, or both; for an organization,4 a fine of $10 million.
The principal purpose of this section is to prevent economic espionage, not to punish conventional commercial theft and misappropriation of trade secrets, which is the function of Section 1832. Investigators should administer Section 1831 with its principal purpose in mind and should not, therefore, attempt to apply it to misconduct by foreign corporations when there is no evidence of government-sponsored or -coordinated intelligence activity. Rather, such misconduct should be pursued under Section 1832.
To prosecute an offense under Section 1831, the prosecution must show that perpetrators acted with the intent to, or had knowledge that their actions would, aid a foreign government, instrumentality, or agent. This specific-intent requirement separates conduct that is criminal from that which is innocent.
For example, the section does not proscribe legitimate economic reporting activities conducted by diplomatic, consular, and mission personnel in the United States and abroad. Thus, an economics officer assigned to a mission in the United States may gather unclassified labor statistics, gross domestic product data, import and export figures, agricultural output measurements, and similar publicly available material, without violating the Act. On the other hand, the theft of a secret formula for a newly developed pharmaceutical would be a crime under the Act whether committed by an economics officer or a common thief.
Section 1832 Theft of Trade Secrets
Section 1832 punishes the theft, misappropriation, wrongful conversion, duplication, alteration, destruction, etc., of a trade secret. The section also punishes attempts and conspiracies. The intangible nature of trade secrets required that the section be written broadly enough to cover both conventional theft, where the physical object of the crime is removed from the rightful owner's control and possession, as well as nontraditional methods of misappropriation and destruction involving electronic duplication or alteration in which the original property never leaves the dominion or control of the rightful owner.
The section does not require an intent to aid a foreign government, agent, or instrumentality; rather, it is aimed at conventional commercial trade secret theft, misappropriation, criminal conversion, and so forth. Thus, it covers purely "domestic" offenses or crimes committed on behalf of foreign corporations and individuals not affiliated with a foreign government. Because this offense is considered less serious than economic espionage, it warrants less severe maximum punishments: For individuals, 10 years' imprisonment, a fine, or both; for organizations, a fine of $5 million.
Congress did not intend for the law to apply to innocent innovators or to individuals who seek to capitalize on their lawfully developed knowledge, skills, or abilities. Thus, this section incorporates a high-threshold specific-intent element. To successfully pursue a case under this section, prosecutors must show both that the accused specifically intended to convert a trade secret to the economic benefit of someone other than the rightful owner and intended to or knew that the offense would harm or injure the rightful owner. Prosecutors also must show that the accused knowingly engaged in the misconduct charged. This high threshold of proof clearly separates conduct that is criminal from that which is innocent or simply careless.
Section 1834 Criminal Forfeiture
Section 1834 is designed to permit recapture of both the proceeds and implements of the offenses specified in the chapter. This section may prove especially telling because the proceeds of trade secret theft may be staggering in certain cases. The forfeiture provisions are meant to supplement, not replace, the authorized punishments in appropriate cases. The section provides for an action against the offender, rather than one against the property itself, and preserves the rights of innocent third parties. The section incorporates, through reference, existing law to provide procedures for the detention, seizure, forfeiture, and ultimate disposition of property forfeited under the section.
Section 1835-Orders to Preserve Confidentiality.
Section 1835 requires that a court preserve the confidentiality of an alleged trade secret during legal proceedings under the Act consistent with existing rules of criminal and civil procedure and evidence and other applicable laws. This preserves the trade secret's confidential nature and, hence, its value. Without such a provision, owners may be reluctant to cooperate in cases for fear of exposing their trade secrets to public view, thereby destroying the law's value.
Section 1836 Civil Proceedings to Enjoin Violations
Section 1836 authorizes the U.S. attorney general to seek appropriate civil remedies, such as injunctions, to prevent and restrain violations of the Act. This provision is analogous to Section 1964(a) of Title 18 (part of the Racketeer Influenced and Corrupt Organizations Act). Under it, the district courts may prevent and restrain violations of the new chapter by taking such actions as 1) ordering individuals to divest themselves of any interest, direct or indirect, in any enterprise; 2) imposing reasonable restrictions on the future activities or investments of a person, including, but not limited to, prohibiting any person from engaging in the same type of endeavor as the enterprise used to perpetrate the offense; and 3) dissolving or reorganizing any organization. Thus, this section provides powerful weapons to enforcement and prosecutorial arsenals.
Section 1837 Extraterritorial Investigations
To rebut the general presumption against the extraterritorial effect of U.S. criminal laws, Section 1837 states that the Act applies to certain conduct occurring beyond U.S. borders. To ensure some nexus between the assertion of such jurisdiction and the offense, extraterritoriality is provided for 1) if the offender is a citizen, permanent resident alien, or an organization incorporated under the laws of the United States; or 2) an act in furtherance of the offense is committed in the United States.
Section 1838 State Laws
Section 1838 states that the Act does not preempt nonfederal remedies, whether civil or criminal, for dealing with the theft, misappropriation, or wrongful conversion of trade secrets. As noted above, several states have criminalized the theft of intellectual property and many have provided civil remedies as well. The Act does not supplant them.
IMPACT ON STATE AND LOCAL LAW ENFORCEMENT
Although the Economic Espionage Act defines federal offenses, its significance is not limited to federal law enforcement agencies alone. State and local law enforcement agencies can play important roles in administering the Act and protecting the proprietary information of business interests in their jurisdictions.
Identifying Offenses
All law enforcement personnel must learn to recognize the offenses defined by the Act. Some offenses seem obvious, but dealing with intangibles may require officers to expand their perceptions of property, value, theft, and espionage.
For example, if someone takes a computer with the intent to permanently deprive the rightful owner of its use and benefit, a larceny obviously has been committed. If, however, the same individual merely copies the formula for a newly developed chemical compound stored on that computer with an intent to use the formula for personal gain, would officers recognize that a crime has been committed? Similarly, if an exchange student at a local university is caught copying a professor's research notes on the use of ceramics in high-combustion engines, is it a matter for the dean or the police?
Recognizing Proprietary Thefts
Officers who respond to seemingly innocuous complaints involving commercial enterprises must be alert to trade secret theft possibilities because even owners may not realize the true gravity of an offense. What appears to be a simple breaking and entering with no apparent larceny may actually be a disguised or bungled trade secret theft.
Consider this case: A firm reports what appears to be a simple breaking and entering into a particular office but notes that nothing apparently had been taken. The evening before the break-in, however, a computer in that office had been used to prepare an important bid proposal on a multimillion dollar project. Once the significance of that fact is grasped, the responding officers will realize that they may not be dealing with a petty misdemeanor but, rather, with a serious felony.
Processing Crime Scenes
Officers responding to potential proprietary thefts must ensure that their preliminary investigation and preservation of the crime "scene" is not limited by traditional crime concepts. In the above scenario, for example, preservation of the computer keyboard for possible fingerprint analysis would be just as critical as securing the passageway through which the apparent thief gained entry. Similarly, ascertaining the identities of personnel who knew the computer in question was being used for preparation of the bid proposal would be vital to the investigation.
Tracking Patterns
State and local agencies should analyze trade secret crime reports and statistics to identify patterns in order to determine whether organized or systematic trade secret offenses are being committed in their jurisdictions. Seemingly random break-ins of high-tech firms in an industrial park, for example, may be the work of sophisticated trade secret thieves. Sharing information concerning such trends with the FBI may prove beneficial.
Reporting Foreign-Sponsored Proprietary Theft
Investigators who uncover any trade secret theft or misappropriation potentially concerning an agent or instrumentality of a foreign government must immediately notify the FBI, due to the possibility that economic espionage may be involved. Of course, liaison with the FBI is appropriate in any trade secret theft case but becomes absolutely essential in economic espionage cases.
Ensuring Secrecy
State and local agencies should educate all of their personnel on the proprietary nature of trade secrets and take measures to ensure that trade secrets entrusted to their personnel by victimized owners for investigative purposes be kept secret. Innocent disclosure of such information may destroy its value as surely as would purposeful destruction.
Advising Businesses
Given the growth in technology and the increasing focus on proprietary information, businesses may be expected to ask for guidance on how to keep their trade secrets safe. While large corporations often have their own security experts to provide this type of assistance, smaller businesses, particularly sole proprietorships and partnerships, may ask for tips or training on preventing trade secret theft and economic espionage.
Detailed responses to such questions are beyond the scope of this article, but an excellent place to start is to emphasize that an aspect of trade secret law requires that owners exercise objectively reasonable steps to keep the secret in question secret. Owners who are careless or negligent in safeguarding their secrets will not be able to meet this requirement. Owners must take affirmative steps to mark clearly information or materials that they regard as proprietary, protect the physical property in which trade secrets are stored, limit employees' access to trade secrets to only those who truly have a need to know in connection with the performance of their duties, train all employees on the nature and value of the firm's trade secrets, and so on.
Common Terms
In reading these terms, you can see how they apply to warnings presented earlier in this report.
• NOC “Nonofficial cover”: A covert agent is working in a company or orgnization not associated with their countries government. An example might be where a person poses as a journalist or aid worker in a charitable organization as opposed to “Official Cover” where they work as a staff worker in an embassy.
• Cut Out: A method of collecting and passing on information as in the case of a dummy company with agents posing as employees. A Cut Out can be an individual with limited knowledge of the operation or full knowledge of the operation. It could be a ‘front” company for operating in a foreign country.
• False Flag: A method where an agent poses as being an agent for one country while in fact working for another country. A person may be sympethetic to the cause of one country and want to help them while actually helping an enemy country.
• Honey Trap: A method of exploiting a persons weakness which is then used to extort cooperation. An example might be a traveling business man that has an encounter with a seemingly innocent woman that leads to a compromised situation that can be exploited.
• Dead Drop: A method in which one agent hides information in a secret location so it can be retrieved by another agent without the meeting of either agent.
• Black Bag Operation: A method where a government agent illegally enters a home or office without court authorization and collects information from the files. Typically, this type activity is done in the guise of “National Defense” although courts have held it to be illegal and unconstitutional without a warrant.
• SIGINT (Signals Intelligence): A method of collecting a full range of communicaiton signals such as radio, telephone, computer etc. The ECHELON program used ground based antena to collect signals and now NSA uses a full range of technical devices to collect transmitted information via telephone or computer.
