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Spies often use businesses as cover

by Ace Damon
Spies often use businesses as cover

February 22, 2020

SPYING AND BUSINESS have long been entangled. In "Live and Let Die", Ian Fleming's second novel, James Bond disguises himself as a businessman for Universal Export, a fragile MI6 front company that occupies a "large gray building near Regent's Park". In Her Majesty's secret service, published almost a decade later, the game is over. "As a cover, a solid cover, Universal was" brûlé "with professionals," says Bond. “It has been in use for a long time. All the secret services in the world had already penetrated it. Obviously Blofeld knew all about it.

Ernst Blofeld, head of Specter, a global criminal syndicate – a man in need of secret communications – would undoubtedly also be wise to Crypto AG, a Swiss company that rose to dominate the global market for coding machines after World War II. In the 1990s, it was evident that the company was lying with the National Security Agency (NSA), America's eavesdroppers. The truth, it seems, was even more remarkable. From 1970 to 2000 at least, Crypto AG was wholly owned by the CIA and, until 1993, by BND, Germany's spy agency, according to the Washington Post. "It was the intelligence coup of the century," sang a CIA report. "Foreign governments were paying good money … for the privilege of having their most secret communications read."

The history of intelligence is full of front companies, used to collect information or carry out secret jobs. "Active measures: the secret history of disinformation and political war," a book by Thomas Rid, describes how the CIA financed and controlled a printing company in Berlin in the 1950s to spread propaganda throughout the Soviet bloc. He published political pamphlets and news magazines, forged and real, as well as a newsletter about lonely hearts, a women's magazine and even publications dedicated to astrology and jazz. It was one of many publishers and publications around the world that were secretly subsidized by the CIA and the KGB to spread the influence.

Some fake companies are devilishly astute. In the 1970s, at the height of the problems, the British army established a brothel and laundry in Belfast. The soldiers could not only use laundry vans to move around discreetly, but the clothes of the IRA suspects could be tested for explosive waste (both operations were exposed and fired). MI6 also operated a fake travel agency that would attract Republicans to Spain on vacation, where they could be recruited as double agents. In the 1980s, Mossad, Israel's spy agency, operated a Sudanese beach resort used to smuggle thousands of Jews from neighboring Ethiopia.

In addition to creating fraudulent companies, spies have also cultivated a welcoming relationship with the real corporate world. MI6 and the CIA were reputed to have close relationships with oil companies and the press. Kim Philby, a Soviet double agent on MI6, briefly served as a correspondent for this newspaper in the Middle East, shortly before his defection. More recently, American telecommunications companies have received hundreds of millions of dollars a year to cooperate with the government, often going beyond the legal obligations to do so; the NSA praised AT&T for its "extreme willingness to help". American spies are also reported to have paid RSA, a security firm, $ 10 million to use a defective technique that made it easier to break a widely used form of encryption (the company denies this).

This clandestine bribery is even simpler for dictators. Occasionally, the KGB diverted flights from Aeroflot, the Soviet national airline, to collect information from the air. Today, the United States fears that Huawei, a Chinese telecommunications giant that wants to build Western 5G networks, could help China's spying efforts.

In some ways, the private sector is more important to ghosts than ever. Technology companies keep more personal data than state-owned telecommunications companies. And as the use of biometric border controls makes it more difficult for spies to travel under a pseudonym – fingerprints are more difficult to fake than passports – the CIA and others have increasingly taken over the recruitment and placement of employees in legitimate companies so they can travel under their real names with commercial coverage.

What's for the suits? Money, for starters. Before being bought, Crypto AG received large sums of money, both to buy its loyalty and to ensure that its back door cipher machines had an advantage over competitors. Companies can also have access to secrets. MI6 would channel useful snacks to national champions like BP and British Airways, according to a former intelligence officer. Today, the CIA provides flexible corporate partners with "special, personalized briefings," according to a recent report by Jenna McLaughlin and Zach Dorfman to Yahoo News.

Live and Let Die

However, the mantle and dagger arrangements can go very wrong. Companies that collaborate with ghosts can put employees – often unconscious – at risk abroad. In 1992, Hans Buehler, a seller of Crypto AG, was detained in Iran for nine months and released only after a $ 1 million ransom payment (he claimed he knew nothing about the company's rear doors). Then there are reputation costs. A sad Mr. Buehler went to the press, and the company's secret was revealed, prompting German spies to withdraw from the deal (with a five-fold return on the original investment). Crypto AG was closed in 2018; its once illustrious brand is now destroyed.

A worse fate happened with Ferranti, a British engineering company that bought International Signal and Control (ISC), an American arms contractor that turned out to be a CIA front in rampant arms races. Ferranti went bankrupt in a short time. When James Guerin, ISC's CEO, was convicted of fraud and illicit arms trafficking, Bobby Ray Inman, former deputy director of the CIA, wrote to the judge with a character reference: “Mr. Guerin showed patriotism towards our country … even if it could have risked unfavorable publicity for your company. "Unfortunately, the ghosts' gratitude is little for the disadvantaged shareholders.

This article appeared in the Business section of the print edition, under the title "The CEO who loved me"

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