BONITA SPRINGS —
When trade secrets are stolen, it often throws executives into a panicked frenzy as they attempt to minimize damage. How can corporations protect their intellectual properties, and what should they do if espionage occurs?
These issues are central to the Federal Bureau of Investigation’s Economic Espionage Unit, which has taken on a much larger role in recent years. Although such white-collar crimes don’t usually threaten national security, they do threaten Americans’ livelihood and quality of life.
Peter J. Lapp, FBI Unit Chief for Economic Espionage, spoke to a crowd of about 265 at the Hyatt Regency Coconut Point December 3 as the featured guest for the Southwest Florida Speakers Assembly, which brings high profile speakers to Estero each month.
Lapp, who has been a special agent with the FBI since 1998, highlighted several high-profile cases in an attempt to help business professionals minimize their risk of trade secret theft.
“My goal is to create awareness about this problem and try to get companies to start thinking about how you’re going to be reacting to this and how you’re going to be proactive,” Lapp said. “Hopefully, if they’re proactive, they can prevent a loss before it happens.”
Lapp also aims to show corporations how to “be a good victim” if trade secrets are leaked. He urges business management to form a written plan for investigating alleged crimes, calculating losses and communicating with the FBI.
Lapp and his unit have investigated cases involving dozens of corporate giants, including Coca Cola, DuPont, Motorola and even Home Depot. “Who would’ve thunk that Home Depot had trade secrets?” Lapp joked. “I thought they sold hammers and nails.”
The most recent economic espionage case involves Indianapolis-based Dow Chemical, while another case heading to trial charges Jin Hanjuan of stealing $600 million in trade secrets from Motorola.
Lapp personally led the investigation of Gary Yonggang Min, who was convicted in 2007 of stealing more than $400 million of proprietary technology from DuPont. It’s estimated Min downloaded nearly 100 percent of DuPont’s trade secrets regarding Kevlar technology, Lapp said.
The biggest case the unit has investigated was against Dongfan “Greg” Chung, a naturalized citizen from China who handed over 250,000 confidential documents to the Chinese government during his 30-year stint at Boeing. He was convicted to 16 years in prison in 2009, the strongest sentence ever handed down for economic espionage.
Many in Friday’s crowd expressed dismay that most individuals convicted of selling trade secrets receive sentences of just 18 to 24 months in prison.
“I would like to see some heavier sentences,” Lapp noted, at one point joking, “I like to put people in jail.”
Although many of the convicted spies have been Chinese nationals, Lapp identified “smart people” with PhDs and MBAs as the group most likely to possess the skill set necessary for using trade secrets for personal gain.
Many attendees asked questions about the current WikiLeaks scandal, which is being handled by another unit of the FBI’s Counterespionage Section. While Lapp remained tightlipped, he commented, “It’s a high priority investigation. Now that the information is out there, I’m not sure what can be done to retrieve it. The damage is done.”
He insisted government and private industry need to do a better job of limiting employees’ access or ability to download sensitive information. “Once you give information to people, you’re exposing it to risk. Having good security awareness is huge.”
As always, several outstanding local students were invited to join the Speakers Assembly. Jordan Roth, a senior at Fort Myers High School, was especially eager to hear from an FBI agent, since he aims to work in the CIA one day.
“It was a really great opportunity,” said Roth, who participated in a small group meeting with Lapp before the luncheon. “He helped me out with possible career paths and college study.”
The lecture, sponsored by The Daily News and The Banner, was part of the Speakers Assembly’s 15th anniversary season. Last month, more than 400 members gathered to hear from Forbes President Steve Forbes. Next month will bring Louis E. Lataif, dean of School Management at Boston University.
Membership in the Speakers Assembly is open to those who “seek to be enlightened, educated and entertained” and is comprised of 71 percent retired executives and business owners. Jackie Hauserman, a Realtor serving as this season’s president, sums it up this way: “The thing I love about this is the intellectual stimulation you get.”
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This week, Senators Joe Lieberman and Dianne Feinstein engaged in acts of serious aggression against their own constituents, and the American people in general. They bothinvoked the 1917 Espionage Act and urged its use in going after Julian Assange. For good measure, Lieberman extended his invocation of the Espionage Act to include a call to use it to investigate the New York Times, which published WikiLeaks’ diplomatic cables. Reports yesterday suggest that U.S. Attorney General Eric Holder may seek to invoke the Espionage Act against Assange.
These two Senators, and the rest of the Congressional and White House leadership who are coming forward in support of this appalling development, are cynically counting on Americans’ ignorance of their own history — an ignorance that is stoked and manipulated by those who wish to strip rights and freedoms from the American people. They are manipulatively counting on Americans to have no knowledge or memory of the dark history of the Espionage Act — a history that should alert us all at once to the fact that this Act has only ever been used — was designed deliberately to be used — specifically and viciously to silence people like you and me.
The Espionage Act was crafted in 1917 — because President Woodrow Wilson wanted a war and, faced with the troublesome First Amendment, wished to criminalize speech critical of his war. In the run-up to World War One, there were many ordinary citizens — educators, journalists, publishers, civil rights leaders, union activists — who were speaking out against US involvement in the war. The Espionage Act was used to round these citizens by the thousands for the newly minted ‘crime’ of their exercising their First Amendment Rights. A movie producer who showed British cruelty in a film about the Revolutionary War (since the British were our allies in World War I) got a ten-year sentence under the Espionage act in 1917, and the film was seized; poet E.E. Cummings spent three and a half months in a military detention camp under the Espionage Act for the ‘crime’ of saying that he did not hate Germans. Esteemed Judge Learned Hand wrote that the wording of the Espionage Act was so vague that it would threaten the American tradition of freedom itself. Many were held in prison for weeks in brutal conditions without due process; some, in Connecticut — Lieberman’s home state — were severely beaten while they were held in prison. The arrests and beatings were widely publicized and had a profound effect, terrorizing those who would otherwise speak out.
Presidential candidate Eugene Debs received a ten-year prison sentence in 1918 under the Espionage Act for daring to read the First Amendment in public. The roundup of ordinary citizens — charged with the Espionage Act — who were jailed for daring to criticize the government was so effective in deterring others from speaking up that the Act silenced dissent in this country for a decade. In the wake of this traumatic history, it was left untouched — until those who wish the same outcome began to try to reanimate it again starting five years ago, and once again, now. Seeing the Espionage Act rise up again is, for anyone who knows a thing about it, like seeing the end of a horror movie in which the zombie that has enslaved the village just won’t die.
Let me explain clearly why activating — rather than abolishing — the Espionage Act is an act of profound aggression against the American people. We are all Julian Assange. Serious reporters discuss classified information every day — go to any Washington or New York dinner party where real journalists are present, and you will hear discussion of leaked or classified information. That is journalists’ job in a free society. The White House, too, is continually classifying and declassifying information.
As I noted in The End of America, if you prosecute journalists — and Assange, let us remember, is the New York Times in the parallel case of the Pentagon Papers, not Daniel Ellsberg; he is the publisher, not the one who revealed the classified information — then any outlet, any citizen, who discusses or addresses ‘classified’ information can be arrested on ‘national security’ grounds. If Assange can be prosecuted under the Espionage Act, then so can the New York Times; and the producers of Parker Spitzer, who discussed the WikiLeaks material two nights ago; and the people who posted a mirror WikiLeaks site on my Facebook ‘fan’ page; and Fox News producers, who addressed the leak and summarized the content of the classified information; and every one of you who may have downloaded information about it; and so on. That is why prosecution via the Espionage Act is so dangerous — not for Assange alone, but for every one of us, regardless of our political views.
This is far from a feverish projection: if you study the history of closing societies, as I have, you see that every closing society creates a kind of ‘third rail’ of material, with legislation that proliferates around it. The goal of the legislation is to call those who criticize the government ‘spies’, ‘traitors’, enemies of the state’ and so on. Always the issue of national security is invoked as the reason for this proliferating legislation. The outcome? A hydra that breeds fear. Under similar laws in Germany in the early thirties, it became a form of ‘espionage’ and ‘treason’ to criticize the Nazi party, to listen to British radio programs, to joke about the fuhrer, or to read cartoons that mocked the government. Communist Russia in the 30’s, East Germany in the 50’s, and China today all use parallel legislation to call criticism of the government — or whistleblowing — ‘espionage’ and ‘treason’, and ‘legally’ imprison or even execute journalists, editors, and human rights activists accordingly.
I call on all American citizens to rise up and insist on repeal of the Espionage Act immediately. We have little time to waste. The Assange assault is theater of a particularly deadly kind, and America will not recover from the use of the Espionage Act as a cudgel to threaten journalists, editors and news outlets with. I call on major funders of Feinstein’s and Lieberman;s campaigns to put their donations in escrow accounts and notify the staffers of those Senators that the funds willonly be released if they drop their traitorous invocation of the Espionage Act. I call on all Americans to understand once for all: this is not about Julian Assange. This, my fellow citizens, is about you.
Those calling for Julian Assange’s criminalization include:
1. Rep. Candice Miller
2. Jonah Goldberg, Journalist
3. Christian Whiton, Journalist
4. Bill O’Reilly, Fox News Journalist
5. Sarah Palin, Member of the Republican Party, former candidate
6. Mike Huckabee, Politician
8. Prof. Tom Flanagan
9. Rep. Peter King
10. Tony Shaffer
11. Rick Santorum
12. Rep. Dan Lugren
13. Jeffrey T. Kuhner, Journalist The Washington Times
14. Rep. Virginia Foxx
15. Sen. Kit Bond, Vice Chairman of the Senate Intelligence Committee
16. Sen. Joe Liberman
17. Sen. Charles Schumer
18. Marc Thiessen, Columnist
UNDER FIRE: Former ALP senator Stephen Loosely says Senator Arbib is no spy. Picture: AFP Source: The Australian
MARK Arbib was not a spy and was in fact acting in Australia’s interests when he told US diplomats what was going on inside the ALP.
Anyone who says otherwise is anti-American, insists former ALP senator Stephen Loosely.
Mr Loosley said Senator Arbib was doing nothing more than politicians from the Labor and Liberal parties had been doing for decades when it came to frank, private political discussions with envoys from Australia’s closest ally.
Senator Arbib, the Sports Minister, was portrayed as a spy in the Fairfax press yesterday after he was named in WikiLeaks cables as one of several politicians who discussed with US envoys the inner workings of the Labor Party, including leadership issues, just before Kevin Rudd was deposed as prime minister.
Mr Loosley admitted that he was one of several Labor Party members who tipped off US diplomats in Sydney in late 1991 about the probability that Paul Keating would depose Bob Hawke as prime minister.
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“A lot of people, including myself, were involved in those conversations with the Americans, because it was very much in our national interest that the Americans were clear about what was happening inside the government,” Mr Loosley told The Australian yesterday.
“The notion that Mark Arbib is somehow a spy is truly absurd and offensive. The Australia-US relationship is based firmly on trust, and the reason we have such a relationship is because both sides are constantly working the patch as far as politics and policy is concerned.”
Mr Loosley, a member of the Australian-American Leadership Dialogue, attacked Senator Arbib’s critics as anti-American.
“For some elements of the political class, the closeness in our relationship with the Americans is always equated to subservience, but that is simply not true,” he said. “It is a two-way process, and this sort of discussion also helps Australia form views about our allies.”
Former politicians and diplomats said yesterday the unique nature of the Australia-US relationship meant there was broader and more open dialogue between diplomats, politicians and decision-makers than occurred between other countries.
Senator Arbib is one of many Australian politicians who attend the leadership dialogue, an annual bipartisan forum of leaders from government, business and the media from both countries who engage in frank discussions on the bilateral relationship under Chatham House rules.
The leaked US cables said Senator Arbib was “an influential factional operator” who “has met with us repeatedly throughout his political rise”.
Strategic analyst Hugh White said Senator Arbib had not done anything wrong in speaking frankly to the Americans about Labor Party issues.
“The standard we should apply here is whether he has said anything which damages Australia’s national interests,” Mr White said. “I don’t think it does any harm for the private machinations of the Labor Party to be shared. Lots of politicians have been doing the same thing for years. These are not matters of national security.”
Left-wing journalist and author John Bilker said the revelations about Senator Arbib’s links with the Americans raised questions about whether the US government played a role in the deposing of Mr Rudd as prime minister, given that Senator Arbib was an architect of Mr Rudd’s demise.
He said the US might have been unhappy with Mr Rudd because he appeared ambivalent about Australia’s continued military involvement in Afghanistan.
One senior Labor figure, who asked not to be named, said that although Senator Arbib had not broken any rules in talking about party affairs with US diplomats, he would be ostracised by many within the Labor movement because of his activities.
A former Australian Secret Intelligence Service agent, Warren Reed, said the nature of Senator Arbib’s links with the US embassy and its staff should be explored more closely.
“If the Americans are referring to Mr Arbib as a ‘protected source’ then they clearly believe he is of value to them,” Mr Reed said.
Greens leader Bob Brown said he would not be surprised if conversations he had had with US officials were the subject of secret embassy cables.
“I regularly . . . get asked to meet the US ambassador and indeed a few other ambassadors from countries around the world,” Senator Brown said. “I’m always very careful about that, because you know the information is going back to the home capital, whether it is Beijing or Washington or Wellington, or wherever.
“I think it’s good that this (the Arbib cables) has seen the light of day. We all have to answer as elected members of parliament for any information we’re giving to foreign embassies.”
A researcher at the University of Luxembourg has demonstrated a new type of attack against mobile phones at the security conference DeepSec in Vienna.
Using a base transceiver station – widely available for around $1,000 – he showed how common programming errors in cellphones’ communication stack can be exploited to gain control over the devices.
Ralf-Philipp Weinmann says he found ‘devastating’ flaws in a large percentage of cellular communication stacks. He says anyone sufficiently motivated would be able to exploit these to make an attacks – which would be almost undetectable.
The exploit would allow hackers to take over control of mobile phones anywhere within the range of the rogue transceiver – which Weinmann points out could mean hundreds of phones at a time in crowded urban areas.
They could then start racking up the cash by either dialling premium numbers or sending text messages to premium services.
Hackers could also use the technique to monitor the user’s complete communications, and could even eavesdrop on the owner by instructing the cellphone to pick up incoming calls automatically – without the user noticing.
The attacking transceiver needs to be online for just a couple of seconds to perform the attack.
Weinmann says he is working with a number of unnamed vendors of both cellular communication chips and cellphones to fix the security flaws and prevent similar problems in future.
The likelihood of the founder of WikiLeaks facing possible extradition to the US has strengthened with a number of senior American politicians declaring that he has breached the Espionage Act.
Supporters of Julian Assange say they fear that his extradition to Sweden for alleged sex crimes will pave the way for a future appearance in an American court.
Joe Lieberman, the head of the Senate’s Homeland Security Committee, claimed yesterday that the leaks organised by Julian Assange and his associates were “serious violations of the Espionage Act”. US State Department spokesman Philip Crowley added: “What WikiLeaks has done is a crime under US law.”
The US Justice Department is under intense political pressure, especially from the Republicans, to pursue Mr Assange, with leading figures of the right, such as Sarah Palin, using the leaks to attack the Obama administration.
“They have got to do something, otherwise they will face pretty savage criticism,” said a European diplomat. “I suppose the best hope for the Americans is that he gets convicted in Sweden and serves a jail sentence there.”
Although the US authorities have as yet made no official request for his extradition, informal discussions have been held between American and Swedish officials to that end. Mr Assange’s London solicitor Mark Stephens said that being sent to Sweden from the UK would make his client extremely vulnerable. “His Swedish lawyer has said that it would be quite unsafe for Julian in Sweden at this time,” Mr Stephens said. “Not in terms of he would be harmed in Sweden, but that Sweden is not the end game.”
Eric Holder, the US Attorney General, has said that Justice Department lawyers are examining how Mr Assange could be indicted over the leak of the diplomatic cables. “This is not just sabre-rattling on our part,” he said. “We are talking about one of the most serious violations of the Espionage Act in our history. To the extent that we can find anybody who was involved in the breaking of American law… they will be held responsible; they will be held accountable.”
However, diplomatic sources say that it is not clear whether the US authorities will be able to prosecute Mr Assange under the Espionage Act. They point out that whereas it is illegal for government officials with security clearance to leak classified documents to WikiLeaks, it is not clear whether it is illegal for the website to make it public.
There is yet to be a successful prosecution of a third-party recipient of a leak and the possible acquittal of Mr Assange on such a charge would be doubly embarrassing for the US administration.
The Justice Department is, therefore, also considering bringing possible charges of Mr Assange receiving stolen government property. But that too could pose difficulties as journalists have in the past used leaked government documents in the US without being prosecuted.
Meanwhile it was announced yesterday that Mr Assange’s legal team will be led by the prominent Australian-born barrister Geoffrey Robertson QC, who has flown back from Sydney to take on the case. Mr Robertson, who has been involved in a number of high-profile human rights cases, could take the appeal against the granting of extradition to Sweden all the way to the Supreme Court, with legal proceedings stretching into months.
