Eamon Jeaves discusses current/ex CIA operatives roles in taking corporate intelligence too far ....AKA CI comes under scrutiny again

[monica nixon]

Oh boy...

AMY GOODMAN: From the CIA in the classroom, we turn now to the CIA in the boardroom. The CIA is under fire following the news it’s allowing active-duty operatives to work for private companies on the side. The previously undisclosed “moonlighting” has granted wealthy
private entities, such as financial firms, hedge funds, access to
top-level intelligence officials. It’s said to be viewed internally as
a means to prevent agency defections to the private sector. A CIA
spokesperson said “moonlighting” operatives are required to submit
detailed information on their outside employment. But few details have
been revealed, including how long the policy has been in place and how
many operatives are taking part.

At the same hearing where he confirmed the Obama administration’s assassination policy last week, the Director of National Intelligence, Dennis Blair, promised to report to Congress on the newly revealed CIA corporate espionage. Asked about the
moonlighting, Blair said, quote, “Sometimes I too am surprised about
what I read in the press about my own organization.”

Well, I’m joined now by the reporter who broke this story, Eamon Javers. The CIA’s moonlighting is only one aspect of corporate spying that he documents in his new book, Broker, Trader, Lawyer, Spy: The Secret World of Corporate Espionage. Eamon Javers is a reporter for Politico, where he covers the White House and the economy.

Welcome to Democracy Now!

EAMON JAVERS: Hey, thanks for having me.

AMY GOODMAN: It’s good to have you with us. So, first rule, you can’t speak in sound bites. We want us to—you to give us the whole meal. Talk about this corporate espionage. Start with the moonlighting.

EAMON JAVERS: Sure. What I found out as I was doing the research for this book was that the CIA has a little-known policy in which they allow their active-duty operatives to moonlight in the private sector, to take on work on nights, weekends, when they’re on
furlough, what have you.

And in one case, I found that they had been working in past years at a hedge fund consulting firm and a financial consulting firm, in which veteran CIA operatives employ what they call “deception detection techniques.” And what they’re doing is they’re taking
CIA-style interrogation techniques and applying those to a corporate
setting on the behalf of the hedge funds and the financial firms. So
what they do is they actually look at corporate earnings calls, and
they watch CEOs when they’re appearing on CNBC and elsewhere, and they
look for the telltale signs that the CEO is lying or misleading the
public about the fortunes of the company, what their earnings might
actually be.

So they’re taking these developed psychological techniques that they have from the CIA and employing those in the private sector. It’s a fascinating world that I was able to dive into here.

AMY GOODMAN: What’s the BIA?

EAMON JAVERS: BIA is a firm called Business Intelligence Advisors. They’re out of Boston. They have in the past had these CIA moonlighters on staff. They say they don’t do that anymore, but they’ve done it in past years.

AMY GOODMAN: Their name meant to sound like the CIA?

EAMON JAVERS: It is, yeah. And BIA was founded by several ex-CIA interrogators. And they sell their services now in the private sector.

AMY GOODMAN: Interrogators?

EAMON JAVERS: That’s right, and people with twenty, twenty-five years of interrogation experience inside the CIA are now taking that interrogation experience, flipping it into a corporate context, and selling it to Wall Street firms, hedge funds and other
private-sector buyers.

AMY GOODMAN: Give other examples of moonlighting operatives, where they’re doing it.

EAMON JAVERS: Well, we don’t know. I mean, there’s a lot we don’t know about this program.

The CIA was relatively forthcoming with me when I called them to ask them about this. They said, “Yes, this is our policy.” They said that in order to moonlight and work in the private sector, a CIA officer has to have approval from their boss. They have to go through a
vetting process to make sure there’s no conflict of interest, there’s
no danger to national security here.

But they wouldn’t tell me all the key details about the program. They wouldn’t tell me how many people are participating in it. And they wouldn’t tell me which companies they’re working at. So I’ve gotten some pushback from some CIA veterans who said, “Well, this is just a
policy for twenty-four-year-old CIA guys to go work at Home Depot on
the weekend and pick up a little extra spending cash.” But we don’t
know. Until the CIA offers more details about this, as the Director of
National Intelligence promised last week they would, you know, we won’t
really have a sense of exactly where these CIA people are spending
their time.

AMY GOODMAN: Talk about the technology of corporate spying.

EAMON JAVERS: Yeah, what I found in the corporate espionage world, I mean, what you tend to find are retired CIA, British MI5, even some Russian KGB guys. There’s a Russian firm in northern Virginia which is all ex-Soviet military intelligence guys who are now
working in the private sector. And what they’re doing is they’re doing
all the same sort of tools and technologies and talents that they used
in the government spying arena, they’re now using those in private
spying, working for big law firms, corporations, financial firms. And
they’re trying to gather intelligence that’s going to profit those big
companies.

One of the things that they do—I flew over to London, which is sort of the—one of the headquarters of the global corporate espionage industry, and in London I met with an ex-British Special Forces officer who does corporate surveillance. So, anytime a company is being sold,
he was telling me, the board of directors of one company will hire
these firms to go out and put the board of directors of the other
company under surveillance, so they know where they are physically, who
they’re meeting with, who they’re talking to, where the board of
directors is in the world, what cities they’re in, all of that during
the whole process of the deal, so they can keep tabs on each other.

AMY GOODMAN: Why?

EAMON JAVERS: Well, because you can tell—you know, for example, in the meltdown of 2008, one of the things that surprised me in reading a lot of the books that had been written about the great financial crash is that how much of this business is still done person
to person. A lot of these big financial executives were meeting in
apartments that the companies had rented, you know, in Manhattan, to
have face-to-face meetings to talk about whether they’re going to sell
these firms. Knowing a piece of information like that can be hugely
valuable, because you know who is really in play, what’s really for
sale, and you can get some sense of who’s talking to who.

One of the things that they do, which blew me away—I didn’t know this technology was available—they have laser microphones that they can use, whereby you can stand off about a kilometer from your target, take a laser dot, invisible laser dot, put it on the window of an office
building from a kilometer away, and when you and I are talking here in
this room, it’s making little vibrations on the glass. And the laser
can pick up those vibrations, translate that back into audible speech,
and record a conversation in a room from as much as a kilometer away. I
mean, really stealthy stuff.

AMY GOODMAN: Is any of this illegal?

EAMON JAVERS: No. I mean, a lot of it is not illegal. In fact, most of the firms that are in this business, you know, sat down with me and talked to me about it and said, you know, “We go out of our way to make sure we’re following the law. We hire the best lawyers in
the business.” You know, it is legal to stand on a public street and
record somebody. It’s legal to follow somebody who gets in a cab and
see where they go. It’s legal to take pictures. It’s legal to use
satellites. All these things are just part and parcel of what they’re
doing, but they’re using it to find corporate intelligence now, not
using it for their governments.

AMY GOODMAN: You write about an August 2005 teleconference.

EAMON JAVERS: Right.

AMY GOODMAN: Talk about what was happening.

EAMON JAVERS: Yeah, this was a conference at a company called UTStarcom. And during that call, the BIA, which is Business Intelligence Advisors, that’s the hedge fund consulting firm, had its staff listening into the conference call.

And what they were doing was they were listening for these tells that they know from their psychological training are an indicator that somebody is avoiding the truth or hedging. And so, what they’re looking for is when somebody is overly aggressive in trying to convince you
they’re telling the truth, when they say, “Honestly,” or “I swear to
God.” Those are indicators that somebody is not telling the truth. When
they shift their bodyweight, their anchor points, as they call them, so
if the person is resting his arm on the table, as I am now, and then he
leans forward and rests another arm on the table, any shift of body
anchor points they talk about as being one of the things that you look
for as you’re looking for this indications of deception. And on this
call, they were listening to find evidence of what UTStarcom’s earnings
were going to be in the next quarter. And the executives—and these
earnings calls, this is a standard sort of Wall Street ritual, that
executives—

AMY GOODMAN: And who was on the call?

EAMON JAVERS: The executives from UTStarcom, and then also you get Wall Street analysts who are all listening in, you know, maybe hundreds of people listening in, trying to get a sense of, you know, how the company did, what its problems are, what its prospects
are for the next quarter. And they’re trying to make a simple decision.
They’re trying to decide, “Am I going to buy this stock and bet that
it’s going up, or am I going to short it and bet that it’s going down?”

And in this case, the BIA team was listening, and they found enough indicators that the UTStarcom executives were hedging, they were cautious, they were uncertain. In the psychological write-up that they did on this, they said, “We think this company has some kind of problem
with its revenue recognition,” how it realizes its profits. They
predicted that in the report that I obtained on that, on that call. I
went back and checked just to see what had happened with that company.
And it turns out, later, about three or four months later, they did
have problems with revenue recognition. So this can be a very effective
technique in sort of pinning down what these executives are saying and
where they’re leaving a little wiggle room that indicates that they’re
really not certain.

AMY GOODMAN: We’re talking to Eamon Javers, who has just published Broker, Trader, Lawyer, Spy: The Secret World of Corporate Espionage. Talk about the chocolate war between Nestlé and Mars.

EAMON JAVERS: Yeah, this was one of these things where, you know, when you get into corporate espionage, you think, well, this has got to be going on in these huge high-stakes, you know, multibillion-dollar dramatic things, you know, sort of swashbuckling
CEOs and whatnot. And I found this case in the 1990s, so we’re going
back a while here. But Nestlé and Mars were duking it out over a piece
of candy. Nestlé had developed a new candy, in which they were
combining chocolate and toys. And in the candy world, this is sort of
the holy grail of the candy world. If you can combine chocolate and
toys, you could have a huge seller on your hand.

AMY GOODMAN: I don’t get it. Chocolate-covered toys?

EAMON JAVERS: Yeah, right, exactly. What they were doing was they were wrapping little Disney figurines inside a plastic shell and then coating that plastic shell with chocolate. And this was going to be a huge hit.

The Mars people realized that anytime Nestlé has a big hit, it takes market share away from Mars. It really impacts their bottom line. They were working to put a stop to this. So they deployed their lobbyists in Washington, consultants around the country, and they were
trying to do everything they could to shut down this new Nestlé
product, which was a threat to Mars.

AMY GOODMAN: Is that a threat to children’s health, as well, if they swallow the toy?

EAMON JAVERS: Well, one of the questions was, is this a threat to children’s health? And, of course, Nestlé has maintained, “No, we wouldn’t develop a toy that was a threat to kids’ health.” But Mars operatives, including a character—I love the name of this guy.
They called him Deep Chocolate, who was a mysterious figure going
around to nonprofits, liberal activist groups in Washington, consumer
groups, trying to get them to sound the alarm that this was a dangerous
product, dangerous for children. And they were going to each of the
nonprofits. They were—the lobbyists from Mars were reaching out to the
FDA. They were talking to political figures. The whole effort was
designed to shut down this new Nestlé product.

Nestlé, on the other—on the receiving end of this huge campaign, said, you know, “We have to do something here. We have to figure out what’s happening to us.” They hired a PR firm, which in turn hired a spy firm, a firm that was located in Maryland, just outside of
Washington, DC, that had been founded by a number of veterans of the US
Secret Service. And what this spy firm did is the subject of the
chapter in “Chocolate Wars.”

And basically, they put the Mars executives under surveillance. They were going through the dumpsters at Mars headquarters to look for documents, to see what kind of data they might be able to pull. They pulled the phone records of the consultants. They were desperate to
figure out the identity of this mysterious Deep Chocolate, who was
going around causing them problems in Washington. So they pulled the
home phone records of the consultants for Mars. They pulled the
corporate phone records for the lobbying firm that was working for
Mars.

And when the Mars executives went down to the eastern shore of Maryland to have a corporate retreat in a little sailing village at a hotel, the Secret Service veterans and the other corporate spies at this firm put them all under surveillance. They sat at the dinner
tables next to the Mars executives, listening to overhear their
conversations. They sat at the bar when the Mars guys went for a beer
after work. They sat at the bar next to them and listened to their
conversations. They paid the janitorial staff at that hotel for the
trash from the Mars executives’ hotel rooms and went through that,
looking for documents, receipts, anything they could get that would
tell them what this Mars effort was all about.

AMY GOODMAN: We’re talking to Eamon Javers. We only have a minute, and we’re going to bring people part two of this discussion. But very quickly, the history of corporate spying, while it has been going on in the past, with the level of technology today, talk about
why this is such a danger today.

EAMON JAVERS: Well, what amazed me in going through the history of this is, you know, I sort of think of corporate spying and government spying as totally different things. But when you look at the history, going back to the Pinkertons in the 1850s and ‘60s, on up
through the twentieth century, corporate and government spying have
really been flipped sides of the same coin for a long time. The
individual spies rotate in and out of both worlds fairly frequently,
and have for a hundred years or more. And the firms themselves work
both for the government sometimes and for the private clients
sometimes. In one case I found, there’s a spy satellite—

AMY GOODMAN: We have twenty seconds.

EAMON JAVERS: —a spy satellite that the US government uses that’s being used both by US intelligence agencies and by corporate clients. Same spy satellite.

AMY GOODMAN: Well, we’ll bring people part two soon. Broker, Trader, Lawyer, Spy: The Secret World of Corporate Espionage, Eamon Javers is the author. He writes for Politico. He’s a reporter there on the White House and the economy.

[Eric Garland]

Holy cats, they recruit MI5 operatives in DC over chocolate-covered toys? DEEP CHOCOLATE?

This is going to be a great book.

[Jafni Noor]

This is very interesting..

[Vivek Raghuvanshi]

Information Warfare is used in PPP models to deposition competitors.

I was just wondering, if any body really works for a government intel agency, how can one really find time for moonlighting.

Once a person is retired, then perhaps there is time for moonlighting.

On active service it is called treason to name drop an intel agency name if the subject is an operator.

I think this rule applies globally for all intel agencies.

Intelligence operators are well screened all over the world.

On active service, why will anybody blow away their cover.

Maybe except wannabe.

[Eric Garland]

Yeah, since we had such a tough time actually finding Osama Bin Laden, you would think that the CIA would have had more than enough work on their primary mission without extra time for chasing down the product launches of chocolate covered toys.

Another observation though: The cloak and dagger stuff is always exciting, dangerous-sounding, entertaining -- but does it really matter? Doesn't it just clean up urgent problems at the last minute which a decent strategy might have helped avoid?

Do you think Apple really has to send agents to defuse the latest Zune launch? Steve Jobs has a REAL secret weapon: his company makes well-designed, premium-priced products that take advantage of daringly innovative business models which Apple itself pioneers. All this, and they run retail stores that are beautiful and comfy with fairly smart, helpful people running them. Everybody makes money, and their market share is growing.

I don't know, maybe he has a private "dirty tricks squad" keeping Microsoft at bay with their fantastic Zunes and Vistas, jamming cell phones at critical moments, cutting brake lines, switching the shampoo and the conditioner in the executive washrooms...but...really?

[monica nixon]

Well said Eric!

[Bryan Doran]

Especially when those "chocolate covered toys" are available in Europe and have been for decades - see Kinder Surprise from Germany.

Perhaps one of us should write a book about the "real insiders guide to corporate spying" and let them in on the secrets of quality interviews and good analysis without using "dirty tricks".

[monica nixon]

Bryan,

If you are up for it, consider me your willing and experienced co-author. I've been reading Eamon's book, and believe me, some of the goings on are beyond questionable for application outside of national security / defense..ie; using sound reverberation technology to listen in on conversations from up to a km away that are transpiring in competitors boardrooms, employing satellites to spy on comings and goings at other vendors' sites, putting moles/DAs inside competitive firms, etc.

With the aforementioned in mind, and the fact we have had a few highly embarrassing and very public exposures quite recently, I think Eamon's point that we are likely about one more major boondoggle from a crackdown is probably about right........

That said, I'm with you---I've been very successful as an in-house Director of CI, Strategic CI practitioner and CI consultant without having to resort to such tactics.

[Bryan Doran]

One of my favorite stories from research was a time that I had three interviews (two hours each) with the head of a business unit at a major financial service firm. I cold called him and asked him about his "baby", i.e. the service I was interested in learning more about. He was like a proud parent that couldn't say enough, which of course gave me all the information I could possibly want. I suppose I could have gotten all that information by dumpster diving, eaves-dropping, etc.; however, I'm pretty sure my way was easier not even to mention legal, ethical, and downright fun.

[Melanie Wing]

Link to excerpt.

http://online.wsj.com/article/SB10001424052748704041504575045742290...

[Vivek Raghuvanshi]

Eric,

Check out the Nokia v/s Apple Corporate Warfare

[Nimalan]

On a related note.. do you think the attack on Google and 20 other companies (called Operation Aurora by McAfee and the general press) could be a corporate espionage attack? Looks like 20 companies were breached using social engineering techniques and could well be an agency / agencies doing this on behalf of clients!

[Eric Garland]