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The Industrious Spies
Russian Roulette - The Security Apparatus
On November 11, 2002, Sweden expelled two Russian
diplomats for spying on radar and missile guidance
technologies for the JAS 39 British-Swedish Gripen
fighter jet developed by Telefon AB LM Ericsson, the
telecommunications multinational. The Russians
threatened to reciprocate. Five current and former
employees of the corporate giant are being investigated.
Ironically, the first foreign buyer of the aircraft may well
be Poland, a former Soviet satellite state and a current
European Union candidate.
Sweden arrested in February 2001 a worker of the Swiss-
Swedish engineering group, ABB, on suspicion of spying
for Russia. The man was released after two days for lack
of evidence and reinstated. But the weighty Swedish
daily, Dagens Nyheter, speculated that the recent Russian
indiscretion was in deliberate retaliation for Swedish
espionage in Russia. Sweden is rumored to have been in
the market for Russian air radar designs and the JAS radar
system is said by some observers to uncannily resemble
its eastern counterparts.
The same day, a Russian military intelligence (GRU)
colonel, Aleksander Sipachev, was sentenced in Moscow
to eight years in prison and stripped of his rank.
According to Russian news agencies, he was convicted of
attempting to sell secret documents to the CIA. Russian
secret service personnel, idled by the withering of Russia's
global presence, resort to private business or are re-
deployed by the state to spy on industrial and economic
secrets in order to aid budding Russian multinationals.
According to the FBI and the National White-collar Crime
Center, Russian former secret agents have teamed with
computer hackers to break into corporate networks to steal
vital information about product development and
marketing strategies. Microsoft has admitted to such a
compromising intrusion.
In a December 1999 interview to Segodnya, a Russia
paper, Eyer Winkler, a former high-ranking staffer with
the National Security Agency (NSA) confirmed that
"corruption in the Russian Government, the Foreign
Intelligence Service, and the Main Intelligence
Department allows Russian organized criminal groups to
use these departments in their own interests. Criminals
receive the major part of information collected by the
Russian special services by means of breaking into
American computer networks".
When the KGB was dismantled and replaced by a host of
new acronyms, Russian industrial espionage was still in
diapers. as a result, it is a bureaucratic no-man's land
roamed by agents of the GRU, the Foreign Intelligence
Service (SVR), and smaller outfits, such as the Federal
Agency on Government Communications and Information
(FAPSI).
According to Stratfor, the strategic forecasting
consultancy, "the SVR and GRU both handle manned
intelligence on U.S. territory, with the Russian Federal
Security Service (FSB) doing counterintelligence in
America. Also, both the SVR and GRU have internal
counterintelligence units created for finding foreign
intelligence moles." This, to some extent, is the division
of labor in Europe as well.
Germany's Federal Prosecutor has consistently warned
against $5 billion worth of secrets pilfered annually from
German industrial firms by foreign intelligence services,
especially from east Europe and Russia. The
Counterintelligence News and Developments newsletter
pegs the damage at $13 billion in 1996 alone:
"Modus operandi included placing agents in
international organizations, setting up joint-ventures
with German companies, and setting up bogus
companies. The (Federal Prosecutor's) report also
warned business leaders to be particularly wary of
former diplomats or people who used to work for foreign
secret services because they often had the language
skills and knowledge of Germany that made them
excellent agents".
Russian spy rings now operate from Canada to Japan.
Many of the spies have been dormant for decades and
recalled to service following the implosion of the USSR.
According to Asian media, Russians have become
increasingly active in the Far East, mainly in Japan, South
Korea, Taiwan, and mainland China.
Russia is worried about losing its edge in avionics,
electronics, information technology and some emerging
defense industries such as laser shields, positronics,
unmanned vehicles, wearable computing, and real time
triple C (communication, command and control)
computerized battlefield management. The main targets
are, surprisingly, Israel and France. According to media
reports, the substantive clients of Russia's defense
industry - such as India - insist on hollowing out Russian
craft and installing Israeli and west European systems
instead.
Russia's paranoid state of mind extends to its interior.
Uralinformbureau reported earlier in 2002 that the Yamal-
Nenets autonomous okrug (district) restricted access to
foreigners citing concerns about industrial espionage and
potential sabotage of oil and gas companies. The Kremlin
maintains an ever-expanding list of regions and territories
with limited - or outright - forbidden - access to
foreigners.
The FSB, the KGB's main successor, is busy arresting
spies all over the vast country. To select a random events
of the dozens reported every year - and many are not - the
Russian daily Kommersant recounted in February 2002
how when the Trunov works at the Novolipetsk
metallurgical combine concluded an agreement with a
Chinese company to supply it with slabs, its chief
negotiator was nabbed as a spy working for "circles in
China". His crime? He was in possession of certain
documents which contained "intellectual property" of the
crumbling and antiquated mill pertaining to a slab quality
enhancement process.
Foreigners are also being arrested, though rarely. An
American businessman, Edmund Pope, was detained in
April 2000 for attempting to purchase the blueprints of an
advanced torpedo from a Russian scientist. There have
been a few other isolated apprehensions, mainly for
"proper", military, espionage. But Russians bear the brunt
of the campaign against foreign economic intelligence
gathering.
Strana.ru reported in December 2001 that, speaking on the
occasion of Security Services Day, Putin - himself a KGB
alumnus - warned veterans that the most crucial task
facing the services today is "protecting the country's
economy against industrial espionage".
This is nothing new. According to History of Espionage
Web site, long before they established diplomatic
relations with the USA in 1933, the Soviets had Amtorg
Trading Company. Ostensibly its purpose was to
encourage joint ventures between Russian and American
firms. Really it was a hub of industrial undercover
activities. Dozens of Soviet intelligence officers
supervised, at its peak during the Depression, 800
American communists. The Soviet Union's European
operations in Berlin (Handelsvertretung) and in London
(Arcos, Ltd.) were even more successful.