Corporate Spying - Spies are Among Us
Brought to you by the Covert
There are spies among us.
A new book shines a light on the surprisingly unexciting world of corporate secret stealing.
By Janelle Brown
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December 14, 2000 | Perhaps that seemingly benign salesman sitting in the next cubicle over is one of them. Or maybe it's the executive you saw breezing through the airport, briefcase in hand. According to Adam Penenberg and Marc Barry's new book, "Spooked: Espionage in Corporate America," almost all giant corporations worth their salt are using spies these days. It's just one of the costs of doing business.
Every once in a while, corporate spying stories slip into the mainstream media. Oracle, for example, recently got caught with its fingers in the trash of the Association for Competitive Technology, where it was pilfering information about the Microsoft-backed trade group.
And then there was the Time Warner broadband debacle, when the company eavesdropped on Southwestern Bell's customer representatives by paying its own employees to order and then cancel broadband service from the company.
Most of the time, corporate spying is cloaked in euphemisms. Your average corporate conglomerate may have a million-dollar budget for secret information gathering, but as the authors of "Spooked" tell us, "internal competitive intelligence departments [are] hidden from public and shareholder scrutiny, many with seemingly innocuous titles -- External Development, Market Research, and Strategic Marketing."
"Spooked" authors Penenberg, who made his name reporting on the world of hackers for Forbes, and Barry, himself a corporate spy, promise an inside look at this corporate underworld. Unfortunately, what's actually going on there isn't nearly as fascinating as the word "spying" might suggest.
"Competitive intelligence" is a growing industry, and its corporate spies are in high demand. The Society of Competitive Intelligence Professionals (basically, corporate spy central) has 7,000 members, and the U.S. Chamber of Commerce reports that $25 billion in shareholder money is lost every year in intellectual property theft. In the information age, intellectual property is money -- so is it any wonder that greedy multinationals are trying to get the dirt on what their competitors are up to?
For most of these companies, the target is data: business plans, patents, pricing lists and product details -- all readily available to the seasoned sleuth. "Spooked" describes a recent crop of former CIA agents who are now moving into corporate America to set up intelligence-gathering divisions. They're equipped with a new generation of high-tech spy tools like the answering machine pick, which steals messages off a target's machine; Raytheon's Silent Runner, which can access your enemy's e-mail; or the
GPS digital tracking
systems, which will track your target's location (for a mere $5,995.95).
But despite the CIA operatives and their nifty gadgets, corporate spy departments rely mainly on good old-fashioned, though stealthy, research. A Motorola spook spying on Toshiba (with which the company is considering a partnership) simply makes a lot of phone calls to analysts and suppliers who have worked with the company. The sneakiest thing he does is hire a foreign contact to have a friendly dinner with Toshiba executives and then report back on the conversation.
A corporate spy for PictureTel spied on its biggest competitor, Polycom, by going to a trade show with a fake name tag, striking up conversations with Polycom booth attendants and eavesdropping on conversations in trade-show cafeterias and airports. And then there are the "librarians," who basically do the same job as an analyst or journalist -- lots of Web research, telephone calls and reading -- but with the goal of feeding information back to executives.
The stories in "Spooked" just aren't sexy enough. Corporate theft -- at least as described here -- appears to lack any of the intrigue or drama that you would normally associate with spying. There are no miniature cameras, no disguises, midnight break-ins or Bondian gadgetry. And while it's interesting to learn exactly how companies do their surreptitious research (one particularly fun passage describes how a frozen pizza company called Schwan's dug up information about Kraft's rising-dough crust factory), most corporate intelligence gathering doesn't make for scintillating reading.
Barry and Penenberg seem to realize this, so they structure the book around one of the more sensational episodes in the history of corporate spying: Avery Dennison's lengthy lawsuit against Four Pillars Enterprises, a Taiwanese company that stole trade secrets -- patent applications, formulas for adhesives and business plans -- from America's largest label corporation.
For nearly 10 years, an Avery Dennison scientist named Victor Lee quietly shipped top-secret information to his company's Asian competitor, Four Pillars. Eventually, he was snitched on by an angry Avery employee and forced to help catch Four Pillars CEO P.Y. Yang in the act of receiving the pirated documents. The result was one of the first lawsuits to be tried under the Economic Espionage Act, a 1996 law that made it illegal for foreign companies to steal intellectual property from American corporations.
Unfortunately, even this supposedly juicy story makes for pretty dry reading. Although the authors try to turn it into a courtroom drama with blow-by-blow accounts of cross-examinations and lengthy profiles of the lawyers involved, the simple fact is that this was a lawsuit about a guy who stole some glue recipes and passed them on to competitors. Perhaps the authors found the trial nail-bitingly exciting, but I didn't. At one point, after 10 pages describing some exceedingly dull courtroom banter, the authors note that "not all of the trial was filled with such 'High Noon' drama." If this is the dramatic pinnacle in "Spooked," you can imagine what the rest of the book is like.
The one place where "Spooked" really shines is a chapter on hacking espionage, in which Penenberg draws on his expertise about that underworld. There's a terrific passage describing how a 15-year-old kid named t3k-9 hacked into the server of the Bhabha Atomic Research Center in India -- a country he couldn't even locate on the map -- using a free, downloadable hacking utility. Another section looks at the release of Back Orifice, the Cult of the Dead Cow program that lets you spy on your target's network simply by sending an innocuous e-mail attachment.
But there just aren't enough of those stories. According to Penenberg and Barry, businesses don't use hackers to dig up corporate secrets: "Don't expect corporations to turn to hackers to find out what rivals are up to any time soon ... Corporate suits don't trust computer culture kids ... and have even less desire to work with them. Usually the only time corporate IT departments interface with his kind is when the company's home page has been graffitied by some script kiddie."
And so the book's last chance for some real spy drama vanishes in a poof. This isn't so much the authors' fault -- Penenberg is a great investigative journalist, even if his prose is a little flat. The problem is that the material they dug up is dull. Alas, there just isn't much spookiness in the spook industry these days. Where's James Bond when you need him?
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About the writer
Janelle Brown is a senior writer for Salon Technology.
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