GlobalSecurity.org In the News

The Kansas City Star

September 1, 2001

By SCOTT CANON

They're a tad smaller than a Tom Clancy hardback. Each can scramble messages like eggs in a blender and unravel codes at cyber-age speed. They are sold by the thousands each year to professional secret-keepers in government and the U.S. military. The KIV-7HS encoding devices -- the gadgets that a Blue Springs man is accused of trying to smuggle to China -- are also typical of the booty foreign spies ache for.

"The United States is a very big country with a lot of very neat toys," said John Pike, director of the Globalsecurity.org defense policy group. "Other countries that don't have as many toys would like to have ours."

And experts say the easiest way for China -- or France, or Russia, or Israel, or North Korea, or Taiwan, or Pakistan ... -- to get those toys is to steal them. They want the technology for their armies, for their navies, for their space programs, for their outdated businesses. Today's spies mostly want know-how, pirating American advancements as shortcuts to crafting their own tools of modern warfare.

And Mykotronx's message scramblers represent the kind of loot that is hot on today's cloak-and-dagger market. The nondescript boxes require advanced technology to design and to build. They play a role key to the future of war -- allowing precise and quick communications behind a cloak of nearly impenetrable privacy. And there is a reason they are made in the U.S.A.

"Other countries don't have an economy like ours that has so many different sectors coming up with so many new advances," Pike said. Modern espionage is less about understanding American capabilities -- where nuclear warheads are stored, how fast U.S. submarines can travel. Experts said those things most interest a true rival, something that went the way of the Soviet Union. Instead, today's spies want to swipe something off the shelf. And in recent years they have tried plenty.

Chinese businessman Yao Yi was sentenced in April to 21/2 years in prison for a scheme to sneak fiberoptic gyroscopes from Massachusetts to China. The devices are often used in missile and aircraft guidance systems.

In May a Chinese company agreed to pay $2.3 million in fines for a deal that delivered aerospace gear bought from the former McDonnell Douglas Corp. to a Silkworm missile factory in Nanchang. The sale took place in 1994, and McDonnell Douglas has said it learned a year later that the equipment had been exported.

The Clinton administration, under fire from conservatives who said it had effectively swapped technology for illegal campaign contributions, stopped Hughes Aircraft Co. from exporting $450 million in communications satellite technology to China in February 1999.

A year earlier Boeing Co. was fined $10 million by the Commerce Department for passing unauthorized satellite technology to Russian and Ukrainian engineers.

The list runs on. Several civilian and defense agencies -- from the National Security Agency to the Central Intelligence Agency to the Bureau of Export Administration -- weigh in on things whose sale is closely monitored to stop them from leaving the country. The Defense Department publishes a partly classified Militarily Critical Technologies List -- items for domestic use only.

Eugene You Tsai Hsu of Blue Springs is accused of conspiring with David Tzu Wvi Yang of Temple City, Calif., to buy a few models of the Mykotronx KIV-7HS and ship them to China. Federal agents said that Yang told an undercover investigator he had been slipping things into China for decades and that Hsu said the contraptions might be disguised as tape recorders. The boxes attach to bulk telecommunications lines, coding and decoding messages sent between two points.

And although the company sells about 10,000 of the devices a year for $4,000 to $5,000 each, its customers are still a select crowd. They all work for government contractors or agencies or branches of the military. They all have security clearances. "For every sale," said Mykotronx Vice President John Droge, "we have to go back to the government and double-check on the buyer."

The equipment falls into the most fought-over category of classified gear -- encryption technology. Much of the computer industry would like to sell that capability overseas, because it has such practical civilian occupations. It is invaluable, for instance, for protecting Internet credit-card use.

It is also among the items most lusted after by other countries, says the National Counterintelligence Center. That agency's list of other sought-after technologies includes thermal-imaging cameras, night-vision products, underwater listening devices, radar jammers, satellite communications systems, military radios and almost anything used by military jets or missiles.

Evan Medeiros, a senior researcher at the Monterey Institute of International Studies, in Monterey, Calif., said it was a list that was especially appealing to the Chinese. When it comes to missiles, satellites and electronics, China trails the United States badly. "The Chinese defense industrial base is very outdated and dilapidated, especially in these areas where warfare is headed," Medeiros said. "They don't have the high technology to compete at all."

China's ships and planes -- at least those not acquired from Russia -- are outfitted with technology equal to what American forces had in the late 1960s or early 1970s. For example, China lacks so-called over-the-horizon targeting, meaning its forces can hit only those targets they can see.

"So if they ever got in a battle with the United States, we could destroy their forces before they ever saw us," Medeiros said. China's problem, he said, is that even if it steals American know-how, it might not have the economic and industrial might to convert it to military hardware.

In early 1999 a U.S. House committee led by California Republican Christopher Cox concluded that the Chinese had stolen a vast amount of weapons information capable of fast-forwarding its nuclear capabilities by several decades. Cox and the committee's ranking Democrat, Norman Dicks of Washington, said it answered the question of whether the Chinese stole intelligence valuables. "They did," the congressmen wrote The Washington Post.

Since then, however, academics have largely dismissed the report as short on specifics and long on errors.

"Despite our discussions of the Chinese as if they were all 10 feet tall, they're still as militarily backward as you can get," said Robert Ross, a China specialist at Boston University. And their theft of American military secrets is far more retail, he said, than wholesale. "It plays to their strengths," he said. "It takes advantage of Chinese nationals working in this country ... picking up a piece at a time, rather than one supermole who can tell them everything. There's too much for one mole to tell."

So how closely does America need to guard its technology? A report in August from the General Accounting Office, the investigative arm of Congress, criticized the Department of Energy for what it saw as lax efforts to protect the country's nuclear secrets.

America, of course, is not above a little snooping of its own. The thrust of U.S. espionage consists of eavesdropping on the conversations -- electronic and otherwise -- of foreign leaders and schemers. It aims much less on pilfering inventions. Experts said the American job, then, tends to be easier. Much of it is accomplished with satellites, spy planes and various forms of wiretapping.

Civil libertarians at home and politicians abroad have complained in recent years about American listening posts in Europe that snatch telephone calls, fax messages and e-mail. The Europeans gripe that Uncle Sam can use that work to feed industrial secrets to U.S. businesses.

But experts said there was little to suggest that the United States handed over its clandestine bounty to the private sector. Other governments -- the chief secret thieves are often thought to be Russia, China, Israel and France -- are all tied more closely with private businesses. And it is those businesses that can best put the secrets to use.

"They make great cheese and wine in France, but they don't have many other advantages over us," Pike of Globalsecurity.org said. "Even if we did steal the secret for French cheese, what, we're going to give it to Kraft?"