Counterintelligence News for the week of:

September 24-30, 2006

Wayne Arthur Frankenfield, 84, a former agent and official with the FBI, died Sept. 23…(Washington Post, 30 Sep 06)

Mildred Hayes; Helped NSA in Spying on Soviets

Mildred Louise Hayes, 78, a retired Russian cryptologist with the National Security Agency, died of respiratory failure Sept. 23…At the NSA, Mrs. Hayes was involved with Venona, a computer-created code name for a small, very secret program set up to examine Soviet diplomatic communications. Established in 1943, Venona soon expanded its message traffic to include espionage efforts…(Washington Post, 29 Sep 06)

Experts finger China as biggest espionage threat to U.S.
One day last June, FBI agents swooped into two affluent Silicon Valley homes and arrested two engineers. Lan Lee and Yuefei Ge stand accused of stealing proprietary chip designs and software from their employer, NetLogic Microsystems of Mountain View, and Taiwan Semiconductor Manufacturing Company in San Jose. Now investigators are asking the Department of Justice to charge Lee, an American citizen, and Ge, a Chinese national, with a more serious crime: economic espionage to benefit China….(Mercury News, 29 Sep 06)

Phone companies shield may be added to security bill

A provision that would shield telephone companies from liability for providing call records to help the U.S. government track terrorists may be added to a port security bill, U.S. Senate sources told Reuters on Friday….(Reuters, 29 Sep 06)

Gonzales Cautions Judges on Interfering

Attorney General Alberto Gonzales, who is defending President Bush's anti-terrorism tactics in multiple court battles, said Friday that federal judges should not substitute their personal views for the president's judgments in wartime….(AP, 29 Sep 06)

Belgians Say Banking Group Broke European Rules in Giving Data to U.S.

The Belgian banking consortium Swift breached European privacy rules when it aided a United States antiterrorism program by providing confidential information about money transfers, Belgium’s privacy protection commission concluded Thursday….(International Herald Tribune, 29 Sep 06)

Belgium Rules Sifting of Bank Data Illegal

A secret U.S. program to monitor millions of international financial transactions for terrorist links violated Belgian and European law and will have to be changed, the Belgian government said Thursday….(Washington Post, 29 Sep 06)

President dubs alleged Pearl killer MI6 spy

Pakistan President General Pervez Musharraf has disclosed that Omar Sheikh, who kidnapped and murdered American journalist Daniel Pearl and is now facing death penalty, was actually the British secret Agency MI6’s agent and had executed certain missions on their behest before coming to Pakistan and visiting Afghanistan to meet Osama and Mullah Omar….(Gulf-Times, 29 Sep 06)

Russian Officers Accused of Espionage Confess Their Guilt: Georgia’s Interior Minister

Georgia’s Interior Minister Vano Merabishvili announced that the arrested Russian militaries, who are accused of espionage in favor of Russia, have confessed their guilt before the court today…(Focus, 29 Sep 06)

Russia-Georgia media war escalates

As the crisis mounts between Russia and Georgia over spying charges, both countries' media are playing a role in stoking tensions. Georgia has arrested four Russian army officers and 11 Georgians, accusing them of spying for Russia's GRU military intelligence….(BBC, 29 Sep 06)

MIA Arrested Two More Employees Of Russian Intelligence Service

Prime-News was informed at the Ministry of Internal Affair that the law enforcement bodies arrested Aziz Aslanian, the citizen of Georgia in Batumi and Ruslan Skrilnikov in Tbilisi….(Georgian Times, 29 Sep 06)

Russian Officials Pull Out of Georgia in Spy Row

Russia began pulling out some of its diplomats and their families from Georgia on Friday as the small ex-Soviet state pressed spying charges against a group of Russian army officers….(Reuters, 29 Sep 06)

Georgia Charges 4 Russians With Spying

…Georgian police surrounding the Russian military headquarters in Tbilisi pressed for the surrender of another Russian officer accused of spying. Russia said it would not give up the officer….(New York Times, 29 Sep 06)

Iva Toguri, American

…There was no “Tokyo Rose,” which was a label servicemen used for the dozen or so women who broadcast propaganda and popular music on Radio Tokyo, to the troops’ annoyance or amusement….(New York Times, 29 Sep 06)

Promisgate: World's longest spy scandal still glossed overPart III

… In September 2005, the FBI arrested one of its own intelligence analysts for computer-based espionage. The arrest of Leandro Aragoncillo, an FBI intelligence analyst, has rekindled concerns about computer security at the F.B.I. that were first raised in the wake of the February 2001 arrest of FBI Agent Robert Hanssen for computer-based spying for the Soviet Union and the Russians….(Oracle Syndicate, 29 Sep 06)

In a Reversal, Taiwan Officials Seek To Block U.S. Spy Investigation

…Last month, Taiwan's mission in Washington, known as the Taipei Economic and Cultural Representative Office, asked a federal judge to order the return of documents that one of the office's intelligence officers, Isabelle Cheng, turned over to the FBI in 2004. Ms. Cheng surrendered the records as American investigators explored her relationship with a senior State Department official, Donald Keyser….(New York Sun, 28 Sep 06)

UK told to pay damages to Soviet spy

George Blake, who spied for the Soviet Union, won a human rights claim against the British government on Tuesday, 40 years after he escaped from prison in London and fled to Moscow. Britain was ordered by judges in Strasbourg to pay 84-year-old Blake £3,350 (Dh23,365) in damages and £1,340 (Dh9,346) for breaching his right to a fair hearing within a reasonable time….(Gulf News, 28 Sep 06)

Fumbled China spy probe an intelligence failure

Enemies: How America's Foes Steal Our Vital Secrets -- And How We Let It Happen, by Bill Getz (Three part excerpt)

UK spy wins £5,000 over book case

The UK government has been told to pay a former spy £5,000 for breaching his human rights after a case that stopped him receiving book royalties. George Blake was a British secret agent from 1944 until 1961, when he was jailed for 42 years after being caught spying for the former Soviet Union. …(BBC, 28 Sep 06)

Saddam Hussein's US Spy Arrested In L.A.

…William Shaoul Benjamin, 64, was arrested by agents from the Federal Bureau of Investigation and Immigration and Customs Enforcement. The agents took him into custody last week on charges that he conspired with others to act as an agent of the Iraqi government without notifying the Attorney General of the United States, as required by law…(Post Chronicle, 28 Sep 06)

Judge allows NSA wiretaps for another week

The federal judge who ordered a halt to the Bush administration's program of domestic wiretapping on Thursday allowed the surveillance to continue for a week to allow an appeals court to weigh in on an issue expected to end up with the U.S. Supreme Court….(Reuters, 28 Sep 06)

Belgian PM: Data Transfer Broke Rules

The transfer of confidential banking records by a Belgium-based company to U.S. authorities for use in anti-terrorism investigations breached Belgian and likely European Union data privacy rules…(AP, 28 Sep 06)

Judge Urged Not to Release Intel Reports

… Vice President Dick Cheney's former chief of staff, I. Lewis "Scooter" Libby, wants to use President Bush's daily terrorism briefings as evidence at his obstruction and perjury trial in January.…(AP, 28 Sep 06)

Coca-Cola espionage case to go to trial

A federal magistrate judge has declared a case involving three people charged with conspiring to steal trade secrets from The Coca-Cola Co. ready for trial. No date was immediately set…. Former Coca-Cola employee Joya Williams along with Ibrahim Dimson and Edmund Duhaney were indicted July 11 on a federal conspiracy charge that accuses them of stealing new product samples and confidential documents from Coke and trying to sell them to PepsiCo Inc. …(AP, 28 Sep 06)

Between the Lines Of HP's Spy Scandal
Hewlett-Packard Co.'s media-leak investigation went forward despite warnings from HP security personnel that the tactics used were "probably illegal" and should be stopped….(Washington Post, 28 Sep 06)

Government's role often hard to prove
A string of cases investigated by the FBI and Commerce Department highlight the growing focus on Chinese espionage in Silicon Valley….(Mercury News, 28 Sep 06)

How to Stop Industrial Espionage

What do AOL, Time Warner, Corning, Avery Dennison and SigmaTel have in common? They're just a few of the many companies hit in recent years by trade secret, intellectual property and customer data theft….(CSO, 28 Sep 06)

Spy's Victory in European Court Shows Why Britain Distrusts E.U.

If an American were ever to wonder why the British are so lukewarm about getting any closer to the continental Europeans and their creeping political union, he should consider the case of George Blake. Mr. Blake is a convicted Russian double agent who is currently evading British justice from the comfort of a state-funded apartment in Moscow….(New York Times, 28 Sep 06)

Promisgate: World's longest spy scandal still glossed over / Part I

… As far back as 1985, when the late British media tycoon and top [Israeli] Mossad spy, Robert Maxwell, revealed the software’s "trap door" secret to Chinese Military Intelligence (PLA-2), while selling them a copy of PROMIS for $ 9 million, the powerful software was turned against the United States….(Oracle Syndicate, 27 Sep 06)

Promisgate: World's longest spy scandal still glossed over /Part II

There were also two reported connections between the U.S. intelligence failure relating to the terrorist attacks on 9-11 and unauthorized derivatives of the PROMIS software. First, unnamed government sources familiar with the debriefing of Hanssen in 2001 reportedly told the Washington Times, Fox News, and the washingtonpost.com that year that someone in Russia had sold copies of PROMIS-derivative software source codes, which Hanssen had stolen from the FBI and U.S. intelligence agencies for the Russians, to Osama bin Laden for $2 million….Oracle Syndicate, 28 Sep 06)

Belarus to Strengthen Spy Agency

Authoritarian President Alexander Lukashenko accused the United States and other Western countries Thursday of trying to undermine the ex-Soviet nation and promised to strengthen the Belarusian spy agency….(AP, 28 Sep 06)

Afghan "US spy" shot dead in Pakistan's Waziristan

Unidentified gunmen shot dead an Afghan man in Pakistan's North Waziristan tribal region, and left a note on the body saying he was an American spy…(Reuters, 28 Sep 06)

Russia Caught in Web of Espionage

Georgian Interior Minister Vano Merabishvili announced yesterday that Georgian special services have uncovered a spy network in Georgia coordinated by Russian intelligence agents. Four officers of the Russian Defense Ministry's Main Intelligence Department and 11 Georgian citizens allegedly working for them were arrested yesterday in the second half of the day….(Kommersant, 28 Sep 06)

Georgia Arrests Russians, Charging Them With Spying

Georgian police on Wednesday arrested four Russian military officers and 12 Georgian citizens in Tbilisi, accusing them of engaging in espionage. The newspaper called the action a massive provocation that may signal the end of Russia’s already unfriendly relations with Georgia. The head of Georgia’s interior ministry said that the arrests of suspected spies will continue….(New York Times, 28 Sep 06)

Russia demands release of Russian officers

Russia intends to reach the agreement on the release of four Russian officers serving on the Headquarters of Russian armed forces in the South Caucasus with Georgian party by all possible means. Sergey Lavrov has said regarding the detention of the four Russian officers in suspicion of espionage, demanding their immediate release….(Civil-Georgia, 28 Sep 06)

An HID Espionage Network Discovered & Detained in Georgia – Georgian Interior Minister

….(Trend, 28 Sep 06)

Russia Recalls Ambassador from Georgia

Russia has recalled its Ambassador Viacheslav Kovalenko from Georgia and has launched “partial evacuation” of its citizens from Georgia, the Russian Foreign Ministry said on September 28….(Civil-Georgia, 28 Sep 06)

Russia in 'spy' row with Georgia

….(BBC, 28 Sep 06)

Georgia Says Russian Officers Are Spies

….(AP, 27 Sep 06)

Okruashvili: Russian Headquarters will Remain Sealed Off

Georgia will not lift its security cordon around the Headquarters of the Russian Troops in Trans-Caucasus (GRVZ) in Tbilisi, unless Russia extradites its officer suspected of espionage, Georgian Defense Minister Irakli Okruashvili said on September 27….(Civil-Georgia, 27 Sep 06)

Ex-'Tokyo Rose' Suspect Dies in Chicago

Iva Toguri D'Aquino, who was convicted and later pardoned of being World War II propagandist "Tokyo Rose," died Tuesday of natural causes… Tokyo Rose was the name given by soldiers to a female radio broadcaster responsible for anti-American transmissions intended to demoralize soldiers fighting in the Pacific theater….(AP, 27 Sep 06)

Joan Oden Barton CIA Secretary, Homemaker

Joan Oden Barton, 70, a retired secretary with the CIA, died Sept. 10 …(Washington Post, 27 Sep 06)

Ernest Leroy Burdge Jr. Defense Intelligence Analyst

Ernest Leroy Burdge Jr., 90, an Air Force pilot and Defense Department intelligence analyst, died of complications of prostate cancer Aug. 31…(Washington Post, 27 Sep 06)

CIA Leak Probe Relatively Inexpensive

Special Counsel Patrick J. Fitzgerald, who investigated whether senior Bush administration officials illegally leaked the name of a CIA operative for political payback, has spent $1.4 million in his probe over the past three years, his office reported yesterday -- a figure that establishes him as remarkably frugal in the ranks of recent special investigators….(Washington Post, 27 Sep 06)

‘Hotbed’ of economic espionage -- Silicon Valley
One day in June, FBI agents swooped into two affluent Silicon Valley homes and arrested two engineers. Lan Lee and Yuefei Ge stand accused of stealing proprietary chip designs and software from their employer, NetLogic Microsystems of Mountain View, and Taiwan Semiconductor Manufacturing Co. in San Jose….(Mercury News, 27 Sep 06)

FBI beefing up counter-intelligence staffs

…Training in the counterintelligence field has been overhauled as well, he said. The number of trainees has doubled, the field academy at Quantico, Va., has instituted new courses, and FBI executives and field managers are required to complete counterintelligence training….(Federal Times, 27 Sep 06)

Part of Iraq Intelligence Report Is Released
The Bush administration yesterday released portions of a classified intelligence estimate that says the global jihadist movement is growing and being fueled by the war in Iraq even as it becomes more decentralized, making it harder to identify potential terrorists and prevent attacks….(Washington Post, 27 Sep 06)

Key Declassified Intelligence Judgments (pdf)

Backing Policy, President Issues Terror Estimate

Portions of a National Intelligence Estimate on terrorism that the White House released under pressure on Tuesday said that Muslim jihadists were “increasing in both number and geographic dispersion” and that current trends could lead to increasing attacks around the globe….(New York Times, 27 Sep 06)

Declassified Key Judgments of the National Intelligence Estimate on Global Terrorism

Following are the portions of the National Intelligence Estimate dealing with the key judgments, dated April 2006, that were released Tuesday by the Bush administration….(New York Times, 27 Sep 06)

No Compromise On Wiretap Bill
A high-profile Republican effort to clarify the legality of President Bush's warrantless wiretapping program will almost certainly not pass before Congress recesses at week's end for the fall campaign, leaving the legislation in deep trouble, congressional leaders conceded yesterday…..(Washington Post, 27 Sep 06)

Europe Panel Faults Sifting of Bank Data

A European Union panel has serious doubts about the legality of a Bush administration program that monitors international financial transactions, the group’s leader said Monday, and plans to recommend tighter controls to prevent privacy abuses….(New York Times, 26 Sep 06)

VA installs encryption software on thousands of laptops

The Veterans Affairs Department installed encryption software on nearly 15,000 laptop computers during the past two weeks in an attempt to better protect sensitive information against misuse…(Gov Exec, 26 Sep 06)

HP Officials, Contractor Ordered to Testify for House Panel

Congressional investigators have subpoenaed two Hewlett-Packard Co. employees and one contractor to testify before a House investigative subcommittee Thursday as part of the panel's probe of an HP spying scandal that has spawned two criminal investigations. The scandal grew out of a series of media-leak investigations at the Silicon Valley computer giant…..(Washington Post, 26 Sep 06)

Navy donates secret ship

The Navy is giving away some of its Cold War secrets - for free. The Sea Shadow, an experimental stealth ship, and the Hughes Mining Barge, built for the CIA in a failed super-secret scheme to raise a sunken Soviet missile sub, could become a tourist attraction near you….(Media General, 26 Sep 06)

Ruth Marriner Szopa CIA Employee, Homemaker

Ruth Marriner Szopa, 79, a homemaker and former employee of the Central Intelligence Agency, died Aug. 26…(Washington Post, 26 Sep 06)

Censored Affidavit Issued in National Security Case

…The affidavit, which has been heavily censored, provides vivid details of an upside-down life. The plaintiff, identified only as John Doe, is a businessman who filed a lawsuit in 2004 challenging the constitutionality of federal demands for Internet and telephone records….(New York Times, 26 Sep 06)

Wiretap, Tribunal Bills Get Senatorial Shuffle

… A surveillance bill introduced Friday by Senate GOP leaders, refining an earlier proposal, would make it clear that the president, in some cases, had the authority under the Constitution to unilaterally order surveillance without a judge's approval….(LA Times, 26 Sep 06)

Wiretap Bill Moves Closer to Passage
Last-minute changes to legislation authorizing the National Security Agency's warrantless wiretapping program have won the support of three balking Senate Republicans, improving the chances that a bill expanding the Bush administration's surveillance authority will pass Congress this week….(Washington Post, 26 Sep 06)

Negroponte Says U.S. Not at Higher Risk

National Intelligence Director John Negroponte said Monday the jihad in Iraq is shaping a new generation of terrorist operatives, but rejected assertions, stemming from a leaked intelligence estimate, that the United States is at a greater risk of attack than it was in 2001….(AP, 26 Sep 06)

W.House considers declassifying intelligence report
The Bush administration said on Tuesday it may declassify an intelligence report in order to respond to Democrats who say the document shows the Iraq war has been a distraction from the war on terrorism….(Reuters, 26 Sep 06)

Senators Call for Release of Intelligence Estimate on Terrorism

…American officials who have read the document said its conclusions included a judgment that the American invasion and occupation of Iraq had helped fuel the global jihad movement and that Islamic radicalism had spread since the Sept. 11, 2001, attacks…..(New York Times, 26 Sep 06)

Four arrested in separate illicit wiretap probe

Milan, September 26 - An illegal wiretapping scandal in Italy widened on Tuesday with the arrest of four suspects in Milan in another case of illicit eavesdropping ….(ANSA, 26 Sep 06)

Negroponte Highlights U.S. Successes
The conclusion of U.S. intelligence analysts that the Iraq war has increased the threat from terrorism is only "a fraction of judgments" in a newly disclosed National Intelligence Estimate, Director of National Intelligence John D. Negroponte said yesterday….(Washington Post, 25 Sep 06)

CIA stand on harsh interrogations reflects agency's unique culture
For an agency that ordinarily steers clear of major policy debates, the CIA played an unusually prominent role in the showdown between the White House and dissident Republicans over the treatment of detainees….(LA Times, 25 Sep 06)

China has tried to blind US spy satellites: report

…Sources told the US-based Defense News that China had "fired high-powered lasers at US spy satellites flying over its territory," but were unable to confirm when and how many times such attacks had taken place, or whether they had been successful. …(Taipei Times, 25 Sep 06)

Foreign spies make Prague an espionage hub

...The importance of Prague and the rest of the Czech Republic for the spy world were stressed in a recent report by the country's military counter-intelligence service (VZ) and by an official at a government agency that probes crimes of the former communist regime…..(Deutsche Presse-Agentur, 25 Sep 06)

Defense spies warning

Australian’s defense industry could be seen as a soft espionage target for foreign governments trying to steal national secrets, the nation's top spy has warned…..(Australian, 25 Sep 06)

Technology for Spying Lures More Than Military

In the world of security sleuths and private investigators, it’s billed as one of the biggest events of the year. Some 20,000 experts in the business are gathering this week in San Diego to check out the latest in high-tech surveillance gadgets and sit in on seminars discussing undercover investigations, background checks and interrogation techniques…..(New York Times, 25 Sep 06)

93,754,333 Examples of Data Nonchalance

...Taking a wider view of things, though, one might say the volume of lost consumer data remains almost comically epidemic. Hackers and sophisticated data thieves are one thing. But in the battle to stop the great hemorrhaging of personal data, the enemy is us. …(New York Times, 25 Sep 06)

Encryption Expert Teaches Security

It must say something about our times that Bruce Schneier, a geeky computer encryption expert turned all-purpose security guru, occasionally gets recognized in public….(AP, 24 Sep 06)

HP Looked for Spies; Panel Looks for Answers

Mark V. Hurd will have some explaining to do Thursday. That's when Hewlett-Packard Co.'s new chairman gets grilled by the House Energy and Commerce investigative subcommittee about the company's elaborate probe into boardroom leaks, which involved spying on its directors and employees as well as on reporters covering the company….(Washington Post, 24 Sep 06)

Briton denies being a spy, describes plot to rig upcoming elections in Bahrain

A British citizen of Sudanese origin who was expelled from Bahrain last week denied being a spy and said in remarks published Sunday that he was punished for exposing a government plot to rig upcoming elections….(AP, 24 Sep 06)

In a High-Tech World, I Spy, You Spy, We Spy

HP is not the only one snooping on others, but people are offended only when it happens to them, experts say. Google anyone lately?...(LA Times, 24 Sep 06)

Spy Agencies Say Iraq War Hurting U.S. Terror Fight

…A 30-page National Intelligence Estimate completed in April cites the "centrality" of the U.S. invasion of Iraq, and the insurgency that has followed, as the leading inspiration for new Islamic extremist networks and cells that are united by little more than an anti-Western agenda…..(Washington Post, 24 Sep 06)

Spy Agencies Say Iraq War Worsens Terrorism Threat

A stark assessment of terrorism trends by American intelligence agencies has found that the American invasion and occupation of Iraq has helped spawn a new generation of Islamic radicalism and that the overall terrorist threat has grown since the Sept. 11 attacks….(New York Times, 24 Sep 06)

Spy Agencies Say Iraq War Fuels Terror

The classified document, which represents a consensus view of all 16 U.S. intelligence agencies, paints a considerably bleaker picture of the impact of the Iraq war than Bush administration or U.S. intelligence officials have acknowledged publicly, according to officials familiar with the assessment….(LA Times, 24 Sep 06)