Industrial espionage, Part 1: Methods

NETWORK WORLD NEWSLETTER: M. E. KABAY ON SECURITY
09/22/05
Today's focus: Industrial espionage, Part 1: Methods

Dear security.world@gmail.com,

In this issue:

* Methods of conducting industrial espionage
* Links related to Security
* Featured reader resource
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Today's focus: Industrial espionage, Part 1: Methods

By M. E. Kabay

One of the problems we face in our field of information
assurance is the paucity of credible data about threats to our
systems. I've often said we suffer from problems of
ascertainment and problems of data collection. Without going
into details here, there is plenty of reason to believe that we
do not notice many of the system intrusions that take place and
that many of those that are noticed are not reported in a way
that allows development of a statistical base.

You can read a paper about this on my Web site as an HTML file
<http://tinyurl.com/b6zzh> or as a PDF file
<http://tinyurl.com/96u2n>.

The National Counterintelligence Center, which later became the
Office of the National Counterintelligence Executive, has been
reporting annually to Congress since 1995 about foreign economic
collection and industrial espionage. Its reports are freely
available as PDF files <http://tinyurl.com/cu34l>.

I think there are some valuable findings and trends in
industrial espionage that will interest readers of this column
and help them interfere with industrial spies.

Section 809 of the Intelligence Authorization Act for Fiscal
Year 1995 defined foreign industrial espionage as "industrial
espionage conducted by a foreign government or by a foreign
company with direct assistance of a foreign government against a
private United States company and aimed at obtaining commercial
secrets." (Page 1 of 1995 report.)

Throughout the decade of reporting, there has been little change
in the list of targeted technologies; the 2004 report lists the
following: Information systems are a key target, with more than
40% of the PhDs employed in the field in 2001 (the most recent
year of available data) being foreign-born (compared with 10% of
all PhD scientists and engineers overall in the U.S.). Sensors,
aeronautics, electronics, armaments and energetic materials are
other industrial targets for espionage. The 1996 report notably
added biotechnology, information warfare, manufacturing
processes, nuclear systems, space systems, telecommunications
and weapons effects and countermeasures to the list of targets.

Industrial espionage is carried out in many ways. The 1995
report lists the following:

* Traditional methods of espionage include classic agent
recruitment, U.S. volunteers (see the "One Evil" awareness
poster in the free collection here <http://tinyurl.com/dzw9u> ),
surveillance, surreptitious entry (including bribery at hotels
to allow access to guest and luggage rooms), specialized
technical operations (e.g., communications intelligence and
signals intelligence) and economic disinformation (and
psychological operations).

* Additional methods include using foreign students studying in
the U.S., foreign employees of U.S. firms and agencies,
debriefing foreign visitors to the U.S. on their return to their
home country, recruitment of émigrés, ethnic targeting
(suborning or threatening Americans with foreign family ties),
and elicitation during international conferences and trade
fairs. Agents have also exploited private-sector firms, joint
ventures, mergers or acquisitions and non-profit organizations
as opportunities and fronts for espionage. Hiring competitors'
employees, signing corporate technology agreements, sponsoring
research projects in the U.S. and assigning foreign liaison
officers to government-to-government research and development
projects are additional valuable methods for covert data
gathering.

* Open source intelligence (OSINT) methods include open or
covert use of public databases, hiring information brokers and
assigning consultants to gather information for confidential
research reports. In some cases foreign interests have paid
lobbyists to influence lawmakers and to facilitate extended
contacts with high-placed officials with access to valuable
information. Other OSINT channels listed in the 1996 report
include bid proposals, energy policies, marketing plans, price
structuring, proposed legislation, tax and monetary policies,
and control regulations for technology transfer and munitions.

The top 5: Today's most-read stories

1. McAfee, Omniquad top anti-spyware test
<http://www.networkworld.com/nlsecuritynewsal6949>

2. The rise of the IT architect
<http://www.networkworld.com/nlsecuritynewsal7052>

3. Users discuss big VoIP rollout risks and rewards
<http://www.networkworld.com/nlsecuritynewsal7480>

4. Cisco targets SMBs with convergence
<http://www.networkworld.com/nlsec7410nlsecuritynewsal7442>

5. DemoFall preview
<http://www.networkworld.com/nlsecuritynewsal7298>

_______________________________________________________________
To contact: M. E. Kabay

M. E. Kabay, Ph.D., CISSP, is Associate Professor in the
Division of Business and Management at Norwich University in
Northfield, Vt. Mich can be reached by e-mail
<mailto:mkabay@norwich.edu> and his Web site
<http://www2.norwich.edu/mkabay/index.htm>.

New information assurance journal - Norwich University Journal
of Information Assurance (NUJIA). See
<http://nujia.norwich.edu/>
_______________________________________________________________
This newsletter is sponsored by Cisco Systems
NETWORK SECURITY POLICY: BEST PRACTICES WHITE PAPER

Without a security policy, the availability of your network can
be compromised. Best practices toward a solid policy include:
preparation, prevention and response. This paper reviews each
area in detail and gives recommendations for assessing the risk,
implementing management practice, monitoring the network, and
reviewing and adapting lesson learned.
http://www.fattail.com/redir/redirect.asp?CID=114611
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