U.S. Targets Weapons Technology Theft

"Subtle" threat jeopardizing national security, says U.S. official.

Oct. 11, 2007 — -- It's a threat even greater than the increasingly common recalls of Chinese products, U.S. officials say, and now branches of the U.S. government are teaming up to counteract the growing economic and military powers' appetites for technology secrets.

Although the cloak-and-dagger battles of Cold War espionage passed with the demise of the Soviet Union, the stakes are higher now as many powers seek to gain advanced technology from the world's military and nuclear powers, especially the United States.

"The threat of technology theft and proliferation is a subtle, but it's an extremely insidious threat to our national security," said Ken Wainstein, assistant attorney general for the National Security Division, at a Thursday news conference.

"It's a threat that's carried out in the shadows and does not raise the same level of alarm as the violence of a terrorist attack or the sword-rattling of a belligerent rogue state. But it is a very serious threat nonetheless. It is dangerous and it is just as potentially deadly."

Some of the technology might even seem benign, but it often has more than one application. The same device used by hospitals to smash kidney stones can also be used to detonate a nuclear bomb — and officials point out that a recent shipment of such equipment intended for a hospital in South Africa was actually on its way to Pakistan.

"These technologies are basically the reason the United States is a super power," weapons proliferation specialist John Pike told ABC News. "These are the technologies that give America's military a quarter of a century's lead over that of Russia and China."

To counter the threat, the Justice Department, along with Immigration Customs Enforcement, the FBI and the Defense Criminal Investigative Service, launched a counter-proliferation initiative to curb the transfer of sensitive technologies being sent overseas — especially to China, Iran and possibly terrorist networks.

"It goes without saying that keeping this technology from falling into the wrong hands has never been more important than it is now in this post-9/11 world," Wainstein said. "We know that al Qaeda has been trying to acquire or make weapons of mass destruction for more than a decade."

"We know that Osama bin Laden issued a fatwa declaring it an obligation of his followers to develop and use such dangerous weapons," he continued. "And we know that foreign states are actively and aggressively seeking out our technology to advance their own military systems and technical capacity."

Julie Myers, homeland security undersecretary for immigration and customs enforcement, said Thursday, "The threat is real and the consequences dire. The number of attempts to illegally smuggle weapons and strategic technology out of the United States remains a persistent challenge."

While the immediate threat of terrorism has been the top national security concern after 9/11, the proliferation of sensitive technologies is a looming threat.

Michael McConnell, the director of national intelligence, recently noted, "China and Russia's foreign intelligence services are among the most aggressive in collecting against sensitive and protected U.S. systems, facilities and developmental projects."

"Their efforts are reaching Cold War levels," McConnell continued.

In recent years, the FBI has become more concerned about China penetrating U.S. companies, universities and research institutes, seeking to gain access to dual-use technologies to boost China's computer systems and military programs.

"We know that several countries have established full-fledged procurement networks, networks that work through front companies, joint ventures, trade delegations and other mechanisms to methodically target our government, our private industries and our universities as sources for this material," Wainstein said.

Pike said nations such as Russia and China devote intelligence resources to stealing U.S. technology.

"They're over here to try to steal American military technology, our civil technology, dual-use technology," Pike said. "You've got Russian and Chinese spies that have got nothing better to do than try to steal everything that isn't nailed down at both ends and they're trying to pry up the stuff that is nailed down at both ends."

A 2006 Pentagon assessment found a 43 percent increase in the number of suspicious foreign contacts with defense firms and found that 108 countries were actively seeking to obtain sensitive technologies from the United States. According to the report, in 1997 only 37 countries were involved in attempting to collect sensitive data.

To counter this spike, the FBI has established Field Intelligence Groups in each FBI field office and set up partnerships with the nation's top research universities to look for warning signs of sensitive technologies being stolen.

"We know that foreign states and terrorist organizations are actively seeking the knowledge and technology required to develop weapons of mass destruction," said Tim Bereznay, the FBI's assistant director for counterintelligence. "Effective export controls remain critical in preventing the proliferation of nuclear weapons, their delivery systems and related technology."

In March, military contracting firm ITT agreed to pay $100 million to settle charges it allegedly transferred night vision technology to China. The government said the company sent classified information to companies and firms in China, Singapore, the United Kingdom and other countries, tasking them with research and development duties for the night vision technology it was developing.

A defense security service report from June 2006 warned cases like ITT's would become more frequent.

"DSS foresees a continuing of increased suspicious contact reports from cleared defense contractors," the report said. "The globalization of defense business will increase the threat from strategic competitors who will use legitimate business activities as a venue to illegally transfer U.S. technology."

A recent report of the U.S.-China Economic Security Review Commission highlighted recent advances China has made, noting in a recent report, "If China launches 10 of its new nuclear-powered Shang-class submarines by the end of 2008 … this would reflect a new emphasis on blue water naval capabilities on the part of Chinese strategists. In fact, so substantial have been Chinese advancements in naval modernization that they are leading some to begin to consider China as a partner, along with the U.S. Navy, in protecting freedom of navigation and maritime security on the high seas."

The Justice Department, along with the FBI, ICE and the Commerce Department, have pursued a wide array of cases. In May, Chinese-born Chi Mak was convicted by a California jury for stealing documents and computer disks from defense contractor Power Paragon.

Mak had been an engineer at the firm and collected data on U.S. warship propulsion systems and research related to nuclear submarines.

In August, Xiaodong Sheldon Meng pleaded guilty of giving valuable trade secrets of California based Quantum3D to members of the Malaysian and Thai air forces and China. According to the indictment, Meng stole numerous Quantum3D products which were solely used for military applications designed for training military fighter pilots in night vision scenarios.

In April, Mohammad Alavi, a former engineer at an Arizona nuclear plant, was charged with taking computer access codes and training software to Iran. Alavi was charged with illegally exporting the software for not obtaining the proper U.S. licenses.

ICE and the Justice Department have also pursued numerous cases involving the illegal export of U.S. fighter jet components to Iran. Iran has operated a fleet of F-4 and F-14 fighters since the 1970s, now the country is desperately seeking parts for its aging air force.

On Oct. 5, Abraham Trujillo and David Wayne were charged with attempting to export components for the jets.

"That case is really, I think, an example of how globalization has yet again shown it knows no bounds," Myers told reporters at the Wednesday news conference. "The type of illicit behavior that we are seeing from individuals who engage in this criminal activity has grown from the traditional cloak-and-dagger of countries seeking critical technology to a new world of opportunity for the entrepreneur."

The growing concern has spurred action in Congress. Late Thursday, two members of the House Judiciary Committee proposed legislation to increase penalties for violations of the Arms Export Control Act and the Export Administration Act.

"It has been estimated that there are between 2,000 and 3,000 Chinese front companies operating in the United States to gather secret or proprietary information," the Committee's ranking member, Rep. Lamar Smith, R-Texas, said in a statement.

Smith and his colleague Rep. Randy Forbes, R-Va., announced the proposed legislation, "Supporting Prosecutions of International Espionage Schemes [SPIES] Act of 2007," Thursday.