Corporate espionage silently rampant in Canada, says former CSIS officer
GATINEAU, Que. ” Corporate espionage ” ranging from Dumpster diving for industrial secrets to plying vulnerable employees of competitors with booze, drugs and sex in exchange for information — is a common tactic in Canada for companies to get ahead, says a former CSIS spy and private investigator.
Tuesday, at the Canadian Industrial Security Conference, Ron Myles said that Canadian companies often perceive corporate spying and infiltration as something out of Hollywood and insists the amount of cases that are exposed is but a mere fraction of the problem in this country.
“As Canadians, we undervalue our abilities in research and development, we’re a little bit naive in the sense that the rest of the world is doing this (but not in Canada),” Myles said in an interview after presenting to a packed room on the opening day of the two-day conference. “We carry that attitude into our business and I think it costs Canadian businesses quite a bit.
“I don’t think even the tip of the iceberg is showing. (Corporate espionage) is more prevalent in small- and medium- sized companies because they’re often just starting up and don’t have massive (security) budgets.”
Myles, who was a CSIS officer for 13 years before working another 13 years as a private investigator, said a number of methods are used by competing interests in terms of stealing ideas and other intellectual property — noting the technology sector is targeted most.
In addition to rummaging through another company’s trash with the hope of acquiring secrets, he said other, more involved techniques are employed.
Long-term infiltration, by which a person that is compensated by a competing company, lands a job with the target group and feeds information back as trust is gained.
A number of “social engineering” tactics also are used to acquire information about the trade secrets of a competitor, including the exploitation of vices or addictions to get the necessary details.
If an employee of a target company, for example, is addicted to alcohol or gambling, that knowledge may be used by competitors to sweeten the pot for a person to divulge information about their employer.
“Those cases have happened . . . and I believe they are still happening because human nature is human nature,” Myles said. “They probably even happen more today . . . because the stress on people working now is higher than it was five or 10 years ago. You have to produce, so you’ll end up with more disgruntled employees, people will burn out and (many employees) aren’t concerned about the bottom line (of their employer).”
One of the most high-profile corporate espionage cases in Canada — between the country’s two largest air carriers — was settled in 2006 when WestJet Airlines Ltd., apologized to Air Canada and paid $15.5 million in response to a lawsuit that accused WestJet of hacking into an Air Canada employee website to obtain confidential information.
WestJet admitted that its campaign of online snooping “was both unethical and unacceptable.”
In addition to paying $5.5 million to Air Canada for litigation and investigation costs, which included hiring private investigators to steal the trash of a former WestJet executive, WestJet agreed to donate $10 million to children’s charities in the names of both airlines. That is in exchange for having the legal proceedings against it dropped and Air Canada’s claim of $220 million in damages withdrawn.
Myles said competitive intelligence also occurs, but he said any advantages gained that way are typically legal in nature. He describes competitive intelligence as using public knowledge about a competitor — through annual reports and other public documents — to make decisions.
He said companies on both sides of the espionage fence often are quick to maintain tight lips if an incident occurs, but for very different reasons.
“It’s so economically viable — you can go and steal somebody’s research and development, where they might have dropped $10 million or $15 million, and you can have that for $100,000 or $200,000,” Myles said.
“It happens more than we want to know, but the people who get attacked don’t want to advertise that they’re vulnerable and the people who do the attacking aren’t going to say ‘yeah, we just stole your secrets.’ It doesn’t work that way.”
The Canadian Industrial Security Conference, which is being touted as Canada’s first conference on corporate espionage, has displays and demonstrations from dozens of security firms, showing off the latest and most high-tech options in corporate security — from infrared cameras and other surveillance devices to more advanced security checkpoints for the workplace.
Myles said he hopes the conference will open the eyes of many companies to make them realize that measures are often necessary, depending on their line of work, to protect themselves from attack.
“Hopefully, this will start to sensitize people that we are vulnerable to these things and that there are defences against it,” he said. “It’s money well spent. At the end of the day, you’ll be thankful that you did put up these barriers so that people can’t steal your secrets and your company will be that much more profitable.”
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