Spies have been much in the news lately. The government has indicted Katrina Leung, a suspected Chinese-American double agent, and her FBI case officer, who also was her lover for nearly two decades. Brian P. Regan, a retired Air Force sergeant, was recently convicted of espionage and barely escaped the death penalty. More details about convicted Cuban spy Ana Montes are coming to light. Insiders are comparing her role as an agent of influence on behalf of Cuba to the service Alger Hiss gave to the Soviet Union.
All of these recent cases involve the deep and long-term penetration of our intelligence agencies. The salacious aspects of the Chinese case have generated considerable media coverage. Meanwhile, there is a growing espionage threat to the nation’s critical technologies and trade secrets that has been ignored by the nation’s media. That’s surprising given the huge annual costs to the U.S. economy of this espionage.
The government recently released its annual report to Congress on foreign economic and industrial espionage, the eighth in a series that began in 1995. This year the report concluded that nearly 75 countries, including some “close friends,” targeted U.S. technologies in 2001, the last year for which data were available. One notable omission from this year’s report is any reference to the specific countries doing the spying. The 2000 report was the last time that such a list was included. The most active countries named in that report were, in order: China, Japan, Israel, France, Korea, Taiwan, and India. Nearly all of these countries are supposed to be our friends.
The report notes that the openness of American society increases the likelihood of successful economic and industrial espionage. For example, over half a million foreign students are currently enrolled at U.S. academic institutions. Many of them have excellent access to sensitive technologies and technical reports, through assignments to U.S. corporations and national laboratories. The government suspects that many of them routinely transmit sensitive information back to their native countries.
All of the technologies on the Pentagon’s critical military list remained among the most sought after targets during this reporting period. Information systems, sensors, lasers, and enhanced conventional munitions were highest on the list; nearly forty different countries went after technologies associated with these three categories. The government also reported that scientists and businessmen traveling abroad continued to be a rich target for foreign intelligence collectors. Customs detentions, electronic surveillance, and searches of laptop computers were among the techniques favored by these collectors.
What is the cost of all this to the U.S. economy? The report estimates that the combined cost of foreign and domestic economic espionage in 2001 was $300 billion and rising. That’s more than a $100 billion over the estimated cost the previous year, but even the 50% jump failed to attract any media attention.