“Spooky Business: Corporate Espionage Against Nonprofit Organizations” is the title of a report by Gary Ruskin of Essential Information on a topic that he says we know little about because the “entire subject is veiled in secrecy.” The report is available as a 53-page PDF; below is the introduction:
In the United States, corporations have hired private investigators since the colorful and enterprising Allan Pinkerton set up a detective agency in 1850. It was a benign start. Pinkerton enforced a strict code of ethics on his “private eyes,” and he focused much of their work on solving crimes and catching criminals. But when Pinkerton died in 1884, his business was taken over by his sons, who had ideas of their own. They undertook controversial work, such as anti-union and strike-breaking operations. Thus began the long rise of the corporate spy-for-hire, and the effort to counteract those who dared to impair the profits of corporate America.
Today, most large corporations possess their own internal intelligence capabilities. There is an institutionalized security and intelligence function within every major company – a chief security officer of some sort. They perform “threat assessments” of all kinds, including the potential impact of nonprofit organizations.
Some of their staff or contractors are former employees of the National Security Agency, Central Intelligence Agency, Secret Service and other intelligence or law enforcement agencies, the military, or local police. Some of them have spent decades in intelligence work. A few giant corporations, such as Walmart, have essentially replicated in miniature an entire CIA directorate of intelligence – for their own private use.
Corporate espionage is now commonplace. Here’s how the SANS Institute, a large cybersecurity education provider, explains it: “The increasing high stakes game of corporate espionage is being played by individuals, corporations and countries worldwide. These players will use any ethical, and in most cases, any unethical, means to acquire data that will give them a competitive or financial advantage over their competition.”2 Veteran reporter Eamon Javers makes a similar point. “There is so much money at stake,” Javers says, “that everyone is spying on everybody else. We live in an information age where data is money. If you get more data than the next guy, you have the edge.”3
Since the end of the Cold War, there has also been a large increase in the number of private investigative and intelligence firms – staffed with former government employees – doing espionage work largely unchecked by law enforcement. As Annie Machon, a former UK security agency MI5 agent, told the New Statesman “The big change in recent years has been the huge growth in these [security] companies….Where before it was a handful of private detective agencies, now there are hundreds of multinational security organizations, which operate with less regulation than the spooks themselves.”4
Eamon Javers has reported on the shady ethics of the corporate espionage industry. “As one experienced industry operative told me, ‘We’re just one scandal away from a government crackdown.” With so much unsavory conduct taking place, the industry seems likely to explode into public view.
Former CIA division chief Melvin Goodman has similar concerns about these private intelligence firms. “Everything is being attracted to these private companies in terms of individuals and expertise and functions that were normally done by the intelligence community,” he says. “My major concern is the lack of accountability, the lack of responsibility. The entire industry is essentially out of control. It’s outrageous.”5
Some of this lack of accountability and relative impunity may derive from cohesive “old boy networks” within former intelligence, law enforcement and military circles. Such camaraderie is not surprising. The CIA’s “old boy network” is legendary. Regarding the FBI, Eamon Javers describes a little-known publication, the Trapline, which “lists every retired FBI agent in the country who works in the private investigations business.” Javers describes the Trapline as “a bit like an institutionalized old-boy network for retired G- men.”6
The rise of corporate espionage against nonprofit organizations
Throughout the twenty-first century, nonprofit organizations and activists have been targets of corporate espionage. But we don’t know exactly how many. Little is publicly known about such espionage, because the perpetrators strive mightily to keep their operations secret. As one security journal observes, “most corporate espionage cases never come to light.”7 The entire subject remains murky at best.8
This report is an effort to document what we do know, even though the details in each case are far from complete. Much of what we know has been uncovered via improbable strokes of good fortune, such as whistleblowers within private investigations firms, leaked documents or bizarre coincidences. That suggests that what we do know is merely the proverbial tip of the iceberg.
Many factors have contributed to the rise of corporate espionage against nonprofits and whistleblowers, such as the rising availability of former CIA, NSA and other military,
intelligence and law enforcement officials; the outsourcing of government intelligence operations to private intelligence firms; the spread of surveillance techniques generally; the rising power and sophistication of electronic surveillance; the continued growth of corporate power in the United States; the paucity of law enforcement resources spent on protecting nonprofits; and the failure to punish corporations and their private intelligence firms for unethical or illegal espionage.
For many companies, the intangible value of their brand is a precious asset. For this reason, many companies may view nonprofits and whistleblowers as potent and unpredictable adversaries, and want to know everything they can about them. Companies take “brand risk” seriously, which also leads them to outsource their efforts to target nonprofit organizations, thus reducing the brand risk of such activities and hiding behind shields of plausible deniability.
Corporations have used a great variety of human, physical and electronic espionage tactics. According to Jack Devine, a 32-year veteran of the CIA, and former acting director of its foreign operations, “The private sector has virtually all the same techniques as the government.”9 Many of these techniques, at least when used by private corporations, are unethical or illegal, and have undeniably been used against nonprofit organizations.
A diverse array of nonprofits have been targeted by espionage, including environmental, anti-war, public interest, consumer, food safety, pesticide reform, nursing home reform, gun control, social justice, animal rights and arms control groups.
Many of the world’s largest corporations and their trade associations — including the U.S. Chamber of Commerce, Walmart, Monsanto, Bank of America, Dow Chemical, Kraft, Coca- Cola, Chevron, Burger King, McDonald’s, Shell, BP, BAE, Sasol, Brown & Williamson and E.ON — have been linked to espionage or planned espionage against nonprofit organizations, activists and whistleblowers.
Today, corporations can hire talented and experienced former intelligence, military and law enforcement officials to conduct espionage against nonprofit organizations. Former agents of the CIA, NSA, Secret Service, FBI, U.S. military and current and former police have all been linked to spying on nonprofits. The revolving door keeps spinning. Six years ago, the investigative reporter Douglas Frantz suggested, “The best estimate is that several hundred former intelligence agents now work in corporate espionage….These ex-spies apply a higher level of expertise, honed by government service, to the cruder tactics already practiced by private investigators.”10
In recent years, there has been a large transfer of government intelligence operations from government staff to private firms. “The CIA, NSA and other agencies once renowned for their analysis of intelligence and for their technical prowess in covert operations, electronic surveillance and overhead reconnaissance have outsourced many of their core tasks to
private intelligence armies,” writes Tim Shorrock. “As a result, spying has blossomed into a domestic market worth nearly $50 billion a year.”11 In 2010, the Washington Post was able to identify 1,931 private companies that “work on top-secret contracts.” The Post also estimated that “out of 854,000 people with top-secret clearances, 265,000 are contractors.”12
While such outsourcing is outside the scope of this report, it speaks to the immense capacity of intelligence gathering for hire, which corporations may employ to target nonprofit organizations.
In this report, we define corporate espionage as corporations’ use of unethical or illegal investigative or surveillance techniques to obtain information about the activities of other corporations, whistleblowers, activists, and nonprofit organizations.
This report presents narratives of corporate espionage, most of them during the past seventeen years. We will also discuss some recent FBI investigations of nonprofit organizations, as well as a corporate-FBI partnership on intelligence matters.
2 Shane W. Robinson, “Corporate Espionage 201.” SANS Institute, 2007.
3 Judith Woods, “Spies, Lies – and a Poisonous Divorce Battle.” The Daily Telegraph, June 7, 2011.
4 Stephen Armstrong, “The New Spies.” New Statesman, August 11, 2008.
5 Jeremy Scahill, “Blackwater’s Private Spies.” The Nation, June 23, 2008.
6 Eamon Javers, Broker, Trader, Lawyer, Spy. (New York: HarperCollins, 2010), pp. 112-3.
7 “How Real Is the Risk of Corporate Espionage Today?” Security Director’s Report, Institute of Management & Administration, April 2009.
8 Two recent books are illuminating: Eveline Lubbers, Secret Manoeuvres in the Dark: Corporate and Police Spying on Activists. (London: Pluto Press, 2012); and Heidi Boghosian, Spying on Democracy: Government Surveillance, Corporate Power and Public Resistance. (San Francisco: City Lights Books, 2013).
9 Douglas Frantz, “Spy. Vs. Spy.” Portfolio, December 17, 2007.
10 Douglas Frantz, “Spy. Vs. Spy.” Portfolio, December 17, 2007.
11 Tim Shorrock, Spies for Hire: The Secret World of Intelligence Outsourcing. (New York: Simon & Schuster, 2008), pp. 11-2.
12 Dana Priest and William M. Arkin, “National Security Inc.” Washington Post, July 20, 2010.
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