184 lines
11 KiB
Plaintext
184 lines
11 KiB
Plaintext
==Phrack Inc.==
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Volume Four, Issue Thirty-Nine, File 9 of 13
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THE OPEN BARN DOOR
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U.S. Firms Face A Wave Of Foreign Espionage
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By Douglas Waller
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Newsweek, May 4, 1992, Page 58
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It's tough enough these days for American companies to compete with their
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Pacific Rim rivals, even when the playing field is level. It's a lot tougher
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when your trade secrets are peddled by competitors. One Dallas computer
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maker, for example, recently spotted its sensitive pricing information in the
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bids of a South Korean rival. The firm hired a detective agency, Phoenix
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Investigations, which found an innocent-looking plastic box in a closet at its
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headquarters. Inside was a radio transmitter wired to a cable connected to a
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company fax machine. The bug had been secretly installed by a new worker -- a
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mole planted by the Korean company. "American companies don't believe this
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kind of stuff can happen," says Phoenix president Richard Aznaran. "By the
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time they come to us the barn door is wide open."
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Welcome to a world order where profits have replaced missiles as the
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currency of power. Industrial espionage isn't new, and it isn't always
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illegal, but as firms develop global reach, they are acquiring new
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vulnerability to economic espionage. In a survey by the American Society for
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Industrial Security last year, 37 percent of the 165 U.S. firms responding said
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they had been targets of spying. The increase has been so alarming that both
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the CIA and the FBI have beefed up their economic counterintelligence programs.
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The companies are mounting more aggressive safeguards, too. Kellog Company has
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halted public tours at its Battle Creek, Michigan, facility because spies were
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slipping in to photograph equipment. Eastman Kodak Company classifies
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documents, just like the government. Lotus Development Corporation screens
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cleaning crews that work at night. "As our computers become smaller, it's
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easier for someone to walk off with one," says Lotus spokesperson Rebecca Seel.
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To be sure, some U.S. firms have been guilty of espionage themselves --
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though they tend not to practice it overseas, because foreign companies have a
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tighter hold on their secrets. And American companies now face an additional
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hazard: The professional spy services of foreign nations. "We're finding
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intelligence organizations from countries we've never looked at before who are
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active in the U.S.," says the FBI's R. Patrick Watson. Foreign intelligence
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agencies traditionally thought friendly to the United States "are trying to
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plant moles in American high-tech companies [and] search the briefcases of
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American business men traveling overseas," warns CIA Director Robert Gates.
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Adds Noell Matchett, a former National Security Agency official: "What we've
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got is this big black hole of espionage going on all over the world and a naive
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set of American business people being raped."
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No one knows quite how much money U.S. businesses lost to this black hole.
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Foreign governments refuse to comment on business intelligence they collect.
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The victims rarely publicize the espionage or report it to authorities for fear
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of exposing vulnerabilities to stockholders. But more than 30 companies and
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security experts NEWSWEEK contacted claimed billions of dollars are lost
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annually from stolen trade secrets and technology. This week a House Judiciary
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subcommittee is holding hearings to assess the damage. IBM, which has been
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targeted by French and Japanese intelligence operations, estimates $1 billion
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lost from economic espionage and software piracy. IBM won't offer specifics,
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but says that the espionage "runs the gamut from items missing off loading
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docks to people looking over other people's shoulders in airplanes."
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Most brazen: France's intelligence service, the Direction Generale de la
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Securite Exterieure (DGSE), has been the most brazen about economic espionage,
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bugging seats of businessmen flying on airliners and ransacking their hotel
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rooms for documents, say intelligence sources. Three years ago the FBI
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delivered private protests to Paris after it discovered DGSE agents trying to
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infiltrate European branch offices of IBM and Texas Instruments to pass secrets
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to a French competitor. The complaint fell on deaf ears. The French
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intelligence budget was increased 9 percent this year, to enable the hiring of
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1,000 new employees. A secret CIA report recently warned of French agents
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roaming the United States looking for business secrets. Intelligence sources
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say the French Embassy in Washington has helped French engineers spy on the
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stealth technology used by American warplane manufacturers. "American
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businessmen who stay in Paris hotels should still assume that the contents of
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their briefcases will be photocopied," says security consultant Paul Joyal.
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DGSE officials won't comment.
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The French are hardly alone in business spying. NSA officials suspect
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British intelligence of monitoring the overseas phone calls of American firms.
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Investigators who just broke up a kidnap ring run by former Argentine
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intelligence and police officials suspect the ring planted some 500 wiretaps on
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foreign businesses in Buenos Aires and fed the information to local firms. The
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Ackerman Group Inc., a Miami consulting firm that tracks espionage, recently
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warned clients about Egyptian intelligence agents who break into the hotel
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rooms of visiting execs with "distressing frequency."
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How do the spies do it? Bugs and bribes are popular tools. During a
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security review of a U.S. manufacturer in Hong Kong, consultant Richard
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Hefferman discovered that someone had tampered with the firm's phone-switching
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equipment in a closet. He suspects that agents posing as maintenance men
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sneaked into the closet and reprogrammed the computer routing phone calls so
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someone outside the building -- Heffernan never determined who -- could listen
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in simply by punching access codes into his phone. Another example: After
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being outbid at the last minute by a Japanese competitor, a Midwestern heavy
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manufacturer hired Parvus Company, a Maryland security firm made up mostly of
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former CIA and NSA operatives. Parvus investigators found that the Japanese
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firm had recruited one of the manufacturer's midlevel managers with a drug
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habit to pass along confidential bidding information.
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Actually, many foreign intelligence operations are legal. "The science
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and technology in this country is theirs for the taking so they don't even have
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to steal it," says Michael Sekora of Technology Strategic Planning, Inc. Take
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company newsletters, which are a good source of quota data. With such
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information in hand, a top agent can piece together production rates.
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American universities are wide open, too: Japanese engineers posing as students
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feed back to their home offices information on school research projects.
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"Watch a Japanese tour team coming through a plant or convention," says Robert
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Burke with Monsanto Company. "They video everything and pick up every sheet of
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paper."
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Computer power: In the old days a business spy visited a bar near a plant
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to find loose-lipped employees. Now all he needs is a computer, modem and
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phone. There are some 10,000 computer bulletin boards in the United States --
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informal electronic networks that hackers, engineers, scientists and
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government bureaucrats set up with their PCs to share business gossip, the
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latest research on aircraft engines, even private White House phone numbers.
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An agent compiles a list of key words for the technology he wants, which
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trigger responses from bulletin boards. Then, posing as a student wanting
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information, he dials from his computer the bulletin boards in a city where
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the business is located and "finds a Ph.D. who wants to show off," says Thomas
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Sobczak of Application Configured Computers, Inc. Sobczak once discovered a
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European agent using a fake name who posed questions about submarine engines to
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a bulletin board near Groton, Connecticut. The same questions, asked under a
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different hacker's name, appeared on bulletin boards in Charleston, South
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Carolina, and Bremerton, Washington. Navy submarines are built or based at all
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three cities.
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Using information from phone intercepts, the NSA occasionally tips off
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U.S. firms hit by foreign spying. In fact, Director Gates has promised he'll
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do more to protect firms from agents abroad by warning them of hostile
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penetrations. The FBI has expanded its economic counterintelligence program.
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The State Department also has begun a pilot program with 50 Fortune 500
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companies to allow their execs traveling abroad to carry the same portable
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secure phones that U.S. officials use.
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But U.S. agencies are still groping for a way to join the business spy
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war. The FBI doesn't want companies to have top-of-the-line encryption devices
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for fear the bureau won't be able to break their codes to tap phone calls in
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criminal investigations. And the CIA is moving cautiously because many of the
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foreign intelligence services "against whom you're going to need the most
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protection tend to be its closest friends," says former CIA official George
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Carver. Even American firms are leery of becoming too cozy with their
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government's agents. But with more foreign spies coming in for the cash,
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American companies must do more to protect their secrets.
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How the Spies Do It
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MONEY TALKS
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Corporate predators haven't exactly been shy about greasing a few palms.
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In some cases they glean information simply by bribing American employees. In
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others, they lure workers on the pretense of hiring them for an important job,
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only to spend the interview pumping them for information. If all else fails,
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the spies simply hire the employees away to get at their secrets, and chalk it
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all up to the cost of doing business.
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STOP, LOOK, LISTEN
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A wealth of intelligence is hidden in plain sight -- right inside public
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records such as stockholder reports, newsletters, zoning applications and
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regulatory filings. Eavesdropping helps, too. Agents can listen to execs'
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airplane conversations from six seats away. Some sponsor conferences and
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invite engineers to present papers. Japanese businessmen are famous for
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vacuuming up handouts at conventions and snapping photos on plant tours.
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BUGS
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Electronic transmitters concealed inside ballpoint pens, pocket
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calculators and even wall paneling can broadcast conversations in sensitive
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meetings. Spies can have American firms' phone calls rerouted from the
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switching stations to agents listening in. Sometimes, they tap cables attached
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to fax machines.
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HEARTBREAK HOTEL
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Planning to leave your briefcase back at the hotel? The spooks will love
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you. One of their ploys is to sneak into an room, copy documents and pilfer
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computer disks. Left your password sitting around? Now they have entry to
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your company's entire computer system.
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_______________________________________________________________________________
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