'James Bond' Tactics Help Companies Spy on Each Other

Retired CIA agents are in hot demand by the private sector, for their high-tech intelligence gathering skills.

James Bond, meet Fred Rustmann. A former CIA agent, Rustmann now runs a "corporate intelligence" firm that helps companies spy on each other. Like many veterans of the Central Intelligence Agency, Rustmann's spying tricks are in high demand by the private sector.

When one of Rustmann's clients wants to find out about, say, its competitors' upcoming product line-ups, it pays him to conduct undercover interviews with unsuspecting employees and dig through their garbage.

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"You can find out all kinds of good stuff in the trash," says Rustmann, founder of CTC International, who spent 24 years in the CIA's clandestine service breaking into embassies and wiretapping foreign government officials.

Because it's illegal in the United States to trespass in order to retrieve trash, Rustmann says he often gets cleaning crews to sell him the garbage they collect. While the practice raises eyebrows among some in the rapidly growing "competitive intelligence" industry, Rustmann says he never breaks the law.

"Sometimes you have to go the extra yard for your client, without stepping over the line," he says.

Rustmann says his phone started ringing with job offers almost immediately after he retired from the CIA, where he served clandestinely in many countries, including Vietnam, Cambodia, France and Ethiopia. Companies are keen to tap CIA veterans' expertise with psychological analysis, undercover research and high-tech eavesdropping.

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"Nobody is better at collecting information than the CIA," says Rustmann.

One of his favorite tactics is calling unsuspecting employees at a target company, indentifying CTC as a "research firm" -- which it is -- and then asking all kinds of juicy questions. As long as CTC doesn't lie about its identity and doesn't ask for trade secrets protected by the Economic Espionage Act of 1996, the practice is perfectly legal.

It's not just former CIA agents who do this type of work. Current operatives sometimes moonlight for private companies in order to earn some extra cash.

CIA OK's Moonlighters

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News of this "moonlighting" has been making headlines after Politico reporter Eamon Javers broke it in a new book, "Broker, Trader, Lawyer Spy: The Secret World of Corporate Espionage," which details cases in which CIA employees helped hedge funds vet the companies they invested in.

The CIA has been open about its policy, and a CIA spokeswoman says that the agency allows employees to take second jobs in certain cases. She points out that all such requests for outside employment are vetted carefully for legality, propriety and security.

"There's a rigorous process to all this -- one that's been in place for decades," says CIA spokesperson Marie Harf. "The fact that people have the energy and creativity to run a business outside of work hours shouldn't be held against them. This is America, after all."

News reports about the policy were enough to anger some members of Congress. During an unrelated Congressional hearing two weeks ago, a congresswoman demanded an explanation from Dennis Blair, who as director of national intelligence oversees the CIA.

"I think there is a real potential of conflict," said Rep. Anna Eshoo, D-Calif., referring to reports she had seen about instances of moonlighting at hedge funds. "I was stunned to read about it."

Rustmann, who left the CIA in 1990 and says he never knew any moonlighters, was equally dismayed.

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