Obtaining Information
Under False Pretenses

When foreign intelligence services or business competitors can't obtain information openly, they may devise some more or less elaborate scenario to get it under false pretenses. Among the gambits used are the marketing survey, the phony headhunter, and phony competitive bidding.

Marketing Survey Ploy

Foreign consultants, or a consortium of foreign companies ostensibly looking for business relationships in the U.S., often fax or mail or e-mail various kinds of market surveys to U.S. companies. Sometimes, the survey sponsors state they are working on behalf of their country's armed forces. In any case, the final recipient often remains unknown.1

These surveys sometimes exceed generally accepted procedures for soliciting marketing information. For example, they may solicit proprietary information concerning corporate affiliations, market projections, pricing policies, program or technology directors' names, purchasing practices, and dollar amounts of U.S. Government contracts. Customers and suppliers of a company may also be surveyed.

This is a standard ploy for collecting competitive intelligence. In one case, the foreign consultant was identified as working on behalf of a foreign company that was the primary competitor of the U.S. defense contractor and was preparing a competitive bid on a multi-national program. The surveys were sent to individual engineers, not the marketing department. Other surveys were sent to the company's suppliers asking about the company's prices and supply line.

One foreign defense organization sent out a survey requesting detailed information to include number of employees, areas of activities, products, foreign collaboration, joint ventures, and infrastructure. The marketing survey clearly exceeded generally accepted terms of marketing information. The stated goal was to develop an international aerospace directory. A more likely goal was to develop a targeting guide for collection of information on specific aerospace technologies.2

The following indicators suggest that an ostensible market survey may be an effort to collect intelligence for a competing firm or another government.

  • Marketing surveys are faxed or mailed to an individual instead of the company marketing office.
  • You are unable to find independent sources of information about the sender.
  • The Internet address is in a foreign country. Note: A foreign web site usually has a two-letter country designator after the .com or .org. For e-mail, however, there is no visible indicator of the country from which it was sent. An e-mail from an aol.com address, for example, could be sent from almost anywhere in the world.
  • Technology inquired about is classified, International Traffic in Arms Regulation (ITAR) controlled, is on the Militarily Critical Technologies List, or has both commercial and military applications.
  • The requestor identifies his/her status as a student or consultant or says the work is being done for a foreign government.
  • The requestor insinuates that the third party he/she works for is "classified."
  • The requestor says not to worry about security concerns or assures the recipient that export licenses are not required or are not a problem.
  • The requestor says to disregard the request if it causes a security problem or if it is for information the recipient cannot provide due to security classification, export controls, etc.
  • The requestor admits he/she could not get the information elsewhere because it was classified or controlled.

The following measures are appropriate when you receive any survey request that may not be legitimate.

  • Follow your company or organization's policy in responding to requests for information. It there is no company or organization policy, check with your security officer before responding to any unusual request.

  • Unsolicited contacts with defense contractors should be viewed as suspicious and reported to the local supporting counterintelligence activity. The purpose of reporting unsolicited contacts is to develop a database of information about possible foreign technology or intelligence collection requirements. This information can then be used to support future analysis or investigations. It can also be consolidated and returned to other U.S. companies to help them protect their classified or proprietary information

False Headhunter Ploy

If you have knowledge and experience in some specialized field, you may be contacted, usually by telephone, by a headhunter who identifies himself or herself as representing a company that seeks applicants for a job position. This is a legitimate, common practice, but not all headhunters are legitimate.

During the interview, a phony headhunter may use skilled elicitation techniques to obtain information from you. In your zeal to impress the headhunter and obtain a better job, you may, without even realizing it, provide sensitive information sought by a foreign organization employing the headhunter. If you are not interested in the job, the headhunter may elicit information on other experts in the field. These individuals can then be targeted by the headhunter, or by the foreign organization in other ways.

A variation of the headhunter ploy is the repatriation of émigré and foreign ethnic scientists. One country, in particular, claims to have repatriated thousands of ethnic scientific and technical personnel back to their home country from the United States. Skilled scientific and technical personnel are asked to return to aid the economic development of their native country. These are frequently naturalized U.S. citizens, some of whom have a security clearances. This is an effective means of transferring technology. Contacting and screening scientific and technical personnel for repatriation also offers excellent opportunities for assessing and recruiting persons as agents who remain in this country. Frequently, foreign intelligence operatives appeal to a person's patriotism and ethnic loyalty. Some countries' intelligence services resort to threatening family members that continue to reside in their home country.

Request for Competitive Bids Ploy

A request for competitive bids is a standard business practice, but it can also be used as a means of collecting information when there is no intention to let a contract.3

Officials of a U.S. defense contractor reported an incident in which their company was invited to prepare a proposal for an electronic control system and bid on a defense contract for a West European government. The company prepared what it believed was the best, most detailed proposal of all other bidders for the foreign government contact, and also the lowest bidder. Despite this, after all the bids were in, the foreign government decided to build the control system itself.

The U.S. company believes in retrospect that the foreign government never had any intention of awarding the contract to a U.S. company, but was only interested in obtaining technical information. Later, while attending an international trade show, the U.S. contractor saw a foreign-built control system from the same country that rejected its bid, and the foreign country's control system looked identical to the U.S. company's own system.

By deceiving the company, the foreign government acquired preliminary concepts and designs from proven systems and saved money and time in the R&D process. While the U.S. firm may have anticipated some risk in providing technical proprietary information to the foreign government, it also expected an honest competitive process.

It is not unusual for foreign organizations to demand that U.S. companies divulge large amounts of information about their processes and products, at times much more than is justified by the project being negotiated. U.S. contractors can reduce the risk of losing such information by conducting research on their prospective foreign partners and by factoring the potential for being the victim of industrial espionage into their cost benefit analysis. If a particular country or foreign government has a documented history of economic or industrial espionage, companies may decide that it is not in their best interest to conduct business with that country or company. At a minimum, companies may elect to provide the absolutely minimum amount of information necessary to compete for the contract.

Front Companies

A number of governments use front companies to gather intelligence and provide cover for intelligence operations. They are often used to purchase high technology products legally and then export them illegally to an unauthorized recipient.

Front companies are also used by countries and corporations that do not wish to show their hand when conducting competitive intelligence activities such as market surveys, collection of information at conferences and seminars, or purchasing reports from the Defense Technical Information Center. Countries that do not have diplomatic relations with the United States commonly use front companies as cover for placing their intelligence officers in this country.

References
1. Defense Investigative Service brochure, Technology Collection Trends in the U.S. Defense Industry, March 1997.
2. James Norvell, "Assessing Foreign Collection Trends," Security Awareness Bulletin, No. 1-98 (Richmond, VA: Department of Defense Security Institute, 1998).
3. Information obtained by Defense Investigative Service as reported in National Counterintelligence Center publication, Counterintelligence News and Developments, August 1996

 

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This page was last updated on: November 28, 2001