Cases of economic espionage are famous. Some changed entire industries, others irreparably altered relations between states.
From the theft of China's silk secret (6th century), when two Byzantine monks hid silkworm eggs in bamboo sticks and took them to the Byzantine Empire on the orders of Emperor Justinian I, to the “recipe” of Chinese porcelain stolen by Europeans or the theft of rubber seeds, history is full of such acts of espionage
The new global economy of espionage.
But today we will talk about a more recent type of corporate espionage.
One morning in April 2008, a dozen lawyers and investment bankers gathered over muffins and coffee in a conference room on the third floor of the Princeton Club in Manhattan. They weren't there for Wall Street. They were there for North Korea, writes Eamon Javers in the book “Broker, Trader, Lawyer, Spy”
The event was hosted by Veracity Worldwide, a corporate intelligence firm with close ties to the CIA. The main attraction of the morning was Art Brown, former head of the Asia Division of the CIA's clandestine service, who for twenty-five years had lived more in Asia than in America. Now he was offering the insights he had once offered to US presidents and senators to bankers at Morgan Stanley and Credit Suisse—for a fee.
“There are no FORMER KGB members.” – Vladimir Putin, 2005
The bankers wanted to know only one thing: If Kim Jong Il's regime collapsed, if a nuclear bomb went off, or if a massive famine destabilized the peninsula, how quickly would they have to get their money out of the Tokyo and Seoul stock markets? And a savvy banker with the right information could even bet that the stock market will go down—and profit from the disaster.
This is the global economy of espionage. Former officers of the world's most powerful secret services – CIA, MI6, KGB – have built a discreet, profitable and almost completely invisible industry to the general public. They no longer serve nations. I serve anyone who can pay.
Six companies, one industry
Today's corporate information industry operates in almost every country on the globe. Her clients include investment banks, hedge funds, oil companies, law firms and hereditary billionaires. Its methods are the same as those of state espionage: human sources, infiltration, surveillance, intelligence analysis.
What all these firms have in common is that they operate under the shadow of attorney-client privilege, confidentiality agreements and elaborate sub-contracting structures – which make it almost impossible to trace the flow of money and orders.
The sheikh's spy
In 2006, Dubai Ports World attempted to buy the operation of six US ports. The political scandal that followed mobilized Congress: how to give access to American infrastructure to a company from the United Arab Emirates, a country with which several of the 9/11 terrorists had connections? The proposal failed.
Few noticed, however, that at the same time Sheikh Mohammed Bin Rashid Al Maktoum – the ruler of Dubai, with an estimated fortune of $18 billion – had quietly hired an American spy firm to handle another sensitive file. Lobbying documents filed with the Justice Department reveal a discreet chain: Dubai Holding → law firm DLA Piper → PR firm Levick Strategic Communications → TD International, the private intelligence firm with former CIA officers.
The goal? Handling a class-action lawsuit brought by parents in South Asia and Africa who claimed their sons, some as young as two, had been kidnapped and forced to work as jockeys in the sheikh's camel races. The mission of the corporate spies was to build a PR and legal defense system for one of the richest people on the planet – for $25,000 a month.
Hall of Mirrors: When the Spy Works for Everyone
The most revealing case in the entire industry is that of Manfred Schlickenrieder – a German with shoulder-length hair, impeccable left-wing credentials and a documentary film company in Munich. He had once been a member of the Communist Party. He had written pro-Marxist articles. He was known in European activist circles.
He was also a spy for Hakluyt – the London firm founded by two MI6 veterans. And he was being paid by Shell and BP to infiltrate Greenpeace. For years, he filmed, interviewed activists, attended internal meetings. Greenpeace Germany's communications director later admitted: “It was very good. BP knew everything about our campaigns. They were not taken by surprise.”
But Schlickenrieder was hiding something else. All the while, he was also on the payroll of the BND – the German intelligence service, the equivalent of the CIA. He was receiving the equivalent of over £3,000 a month from the German government, while billing Hakluyt for “Greenpeace research”.
A corporate spy who was simultaneously a government spy. Paid by both parties. This isn't John le Carré fiction – it's the real global information economy.
Friends, enemies, business partners
Jack Platt spent the Cold War as a CIA officer trying to recruit KGB officers. Gennady Vasilenko was his Soviet counterpart, stationed in Washington, who was trying to recruit him. Neither made it, but along the way they became friends—they went shooting, fishing, saw a Harlem Globetrotters game together.
When the Cold War ended, they founded the Hamilton Trading Group together. Former mortal enemies, now business partners – providing Western companies with information about the Russian business environment.
The partnership worked well – until Vasilenko ran afoul of the circle of ex-KGB officers who rule Russia today. He was arrested. Platt says it's a misunderstanding again, that his former Soviet partner never betrayed anything. But in Putin's Russia, these things don't really matter.
The question that remains
Yuri Koshkin, a former Soviet military intelligence officer who now runs Trident Group in Virginia, bought a house from a former AOL executive and an apartment on Manhattan's Upper East Side. From his office in Arlington, he can see across the Potomac River to the Russian Embassy in Georgetown.
“Sometimes I relax, contemplate and wonder about the oddities of life,” he says. “We've been trained to believe that the United States is enemy number one.”
Now the former enemy is the number one customer.
The global corporate intelligence industry has no headquarters, no common ethical charter, and almost no public oversight. Former patriots—Americans, British, Russians, Germans—work for each other, against some of them, and sometimes for all of them at the same time. Loyalty is no longer to a flag. It is against the payer's bank account.
