Category Archives: National Security Issues

National Security topics to include espionage and counterespionage

Prevendra - Otto Warmbier

Murder in Pyongyang

The world collectively learned of the passing of Otto Warmbier, the U.S. student who was held in North Korea.

Let me correct this, Otto Warmbier who was murdered by the Kim Jung Un regime.

Warmbier had the audacity to lift a poster off a wall (think souvenir) and was arrested for taking the wall poster. Warmbier was then tried by the regime and sentenced to 15 years of hard labor.

He never got the chance to serve his sentence as he suffered a traumatic event which caused neurologic failure and placed him in a coma.

The North Korean regime not only caused the death of Warmbier, they demonstrated their full measure of callousness by keeping his medical condition a secret from Warmbier’s parents and the United States government, who had repeatedly inquired and requested access to Warmbier by the Swedish diplomats who handle US interests in North Korea. 

Warmbier’s family released the following statement the afternoon of 19 January.

“It is our sad duty to report that our son, Otto Warmbier, has completed his journey home.  Surrounded by his loving family, Otto died today at 2:20 p.m.

It would be easy at a moment like this to focus on all that we lost – future time that won’t be spent with a warm, engaging, brilliant young man whose curiosity and enthusiasm for life knew no bounds. But we choose to focus on the time we were given to be with this remarkable person.

You can tell from the outpouring of emotion from the communities that he touched – Wyoming, Ohio and the University of Virginia to name just two – that the love for Otto went well beyond his immediate family.

We would like to thank the wonderful professionals at the University of Cincinnati Medical Center who did everything they could for Otto. Unfortunately, the awful torturous mistreatment our son received at the hands of the North Koreans ensured that no other outcome was possible beyond the sad one we experienced today.

When Otto returned to Cincinnati late on June 13th he was unable to speak, unable to see and unable to react to verbal commands. He looked very uncomfortable – almost anguished.  Although we would never hear his voice again, within a day the countenance of his face changed – he was at peace.  He was home and we believe he could sense that.

We thank everyone around the world who has kept him and our family in their thoughts and prayers. We are at peace and at home too.”

 

A tragedy by any measure.

Senator John McCain (R-AZ) issued a statement today, which I stand behind 100%,  “Let us state the facts plainly: Otto Warmbier, an American citizen, was murdered by the Kim Jong-un regime. In the final year of his life, he lived the nightmare in which the North Korean people have been trapped for 70 years: forced labor, mass starvation, systematic cruelty, torture, and murder.”

Secretary of State, Rex Tillerson commented, “Today we received with deep sadness the news that Otto Warmbier has passed away.” Tillerson continued, “On behalf of the entire State Department and the United States government, I extend my condolences to the Warmbier family, and offer my prayers as they enter a time of grief no parent should ever know.” He concluded, “We hold North Korea accountable for Otto Warmbier’s unjust imprisonment, and demand the release of three other Americans who have been illegally detained.”

Separately Tillerson commented that putting a travel ban on US citizen travel to North Korea may be in order. Again, I agree 100%, with the continued illegal detention of US citizens, it is totally appropriate to put in place a travel ban to North Korea.

Our thoughts and prayers go out to the Warmbier family at this time of sorrow.

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China - Shanghai

JPMorgan runs afoul of the FCPA: $264 million settlement

This past week we learned that the Foreign Corrupt Practices Act (FCPA) has teeth. JP Morgan Chase (JPMorgan) essentially, used the hiring of the children of Chinese leaders as a bribe in exchange for US$100,000,000 in deals in China a violation of the FCPA. In addition the bank violated the anti-bribery, books and records, and internal controls provisions of the Securities Exchange Act of 1934. JPMorgan has agreed to a  pay US$264 million settlement with the Security and Exchange Commission over charges they violated the FCPA and the Securities Exchange Act of 1934.

The Fine

The SEC notes in their announcement of 17 November 2016, the bank has agreed to pay

  • more than $130 million to settle SEC charges that it won business from clients and corruptly influenced government officials in the Asia-Pacific region by giving jobs and internships to their relatives and friends in violation of the Foreign Corrupt Practices Act (FCPA)
  • $72 million to the Justice Department
  • $61.9 million to the Federal Reserve Board of Governors
  •  $105,507,668 in disgorgement plus $25,083,737 in interest to settle the SEC’s case.

JP Morgan violates #FCPA w/bribes in #China - SEC collects US$264,000,000 penalty payment Click To Tweet

The FCPA Crime

The statement continues, “… investment bankers at JPMorgan’s subsidiary in Asia created a client referral hiring program that bypassed the firm’s normal hiring process and rewarded job candidates referred by client executives and influential government officials with well-paying, career-building JPMorgan employment. During a seven-year period, JPMorgan hired approximately 100 interns and full-time employees at the request of foreign government officials, enabling the firm to win or retain business resulting in more than $100 million in revenues to JPMorgan.”

The 17 November New York Times reports, “JPMorgan … formalized the hiring into what it called the Sons and Daughters program. The bank even went so far as to create spreadsheets that tracked its hires to specific clients — and the bank’s ability to convert these hires into business deals.”

Interestingly, a former JPMorgan executive who apparently spearheaded the Sons and Daughters program, banker Fang Fang, was arrested in 2014 in Hong Kong by the territory’s anti-corruption agency. The arrest may have been as a direct result of this multiyear SEC/DOJ investigation into JPMorgan’s violation of the FCPA. It is believed, one of Fang’s emails contained the necessary confirmation that a violation of the FCPA had occurred which directly related to the capture of business. The New York Times provides a Fang quote, “You all know I have always been a big believer of the Sons and Daughters program — it almost has a linear relationship.”

CNBC on Fang Fang’s 2014 arrest

Separately, the Department of Justice announced that the JPMorgan Hong Kong subsidiary has agreed to pay a fine of US$72 million. The DOJ announcement, stated, “PMorgan Securities (Asia Pacific) Limited (JPMorgan APAC), a Hong Kong-based subsidiary of multinational bank JPMorgan Chase & Co. (JPMC), agreed to pay a $72 million penalty for its role in a scheme to corruptly gain advantages in winning banking deals by awarding prestigious jobs to relatives and friends of Chinese government officials.”

In 2016, 23 companies violated the Foreign Corrupt Practices Act #FCPA all w/SEC fines Click To Tweet

The takeaway for US businesses

The business customs and practices in a given country may not be in accordance with the laws and regulations which encumber US businesses in the United States. The FCPA exists, to prevent US businesses from engaging in corrupt business practice when engaged in international commerce, and send a clear message, that bribery is an unacceptable practice, regardless of its acceptability in a given country or culture.

Prevendra -SEC List of FCPA 2016 settlements

Click to read: 23 FCPA 2016 Settlements

In 2016 the SEC has reached settlement in 23 separate cases of FCPA violation (including the JPMorgan violation) . The description of these securities-exchange-commission-list-of-fcpa-settlements-in-2016 includes Brazilian aircraft manufacturer Embraer agreed to pay $205 million to settle charges that it violated the FCPA to win business in the Dominican Republic, Saudi Arabia, Mozambique, and India; U.K. biopharmaceutical AstraZeneca agreed to pay more than $5 million to settle FCPA violations resulting from improper payments made by subsidiaries in China and Russia to foreign officials; and in a very similar case, US Qualcomm agreed to pay $7.5 million to settle charges that it violated the FCPA when it hired relatives of Chinese officials deciding whether to select company’s products.

What is clear. Having internal controls and discovering violations of the FCPA and self-reporting, is what is expected by the SEC, and as a review of the 2016 settlements demonstrate, the settlement addresses the ill gotten gains, and normally does not include a criminal aspect.

Bottom line

All businesses which are engaged or contemplating international business, should arrange for their executives and business development staff to be well schooled in the nuances of FCPA, before they embark on business abroad.


Updated 11/21/2016 12:50 for DOJ fine of JPMorgan Hong Kong subsidiary
Prevendra - Putin's gambit fails

Kremlin’s Clinton Gambit Fails With Trump’s Election

A little over a month ago I wrote of the Russian gambit to influence the US national elections by seemingly backing the Republican party candidate Donald J. Trump in hopes that the US electorate would swing in mass to back Democratic party candidate Hillary R. Clinton. In my piece, US Presidential Election 2016: The Kremlin Prefers??? I made the argument that the Kremlin’s book on Clinton far exceed the quality of the information on Trump, and how they very much looked forward to another four years of being able to act with a great deal of prescience, given the treasure trove of materials in their possession.  Like any chess match, sometimes the gambit ensnares the opponent and sometimes the opponent doesn’t rise to the bait and the gambit failes. Putin’s gambit, his big gamble failed.

[x_pullquote cite=”Office of the President of the Russian Republic, Vladimir Putin” type=”left”] Mr Putin said he hopes to work together to lift Russian-US relations out of the current crisis, resolve issues on the international agenda, look for effective responses to global security challenges. The President said he is confident that Moscow and Washington can establish a constructive dialogue based on the principles of equality, mutual respect, and genuine consideration for each other’s positions. This would be in the interests of both peoples and of the entire international community. Mr Putin wished Mr Trump success in his important work as head of state.[/x_pullquote]This outreach was viewed with much speculation and ridicule by the media, the same media that grabbed hold of the Kremlin’s gambit.

With the failure of the Kremlin’s Clinton gambit, the Kremlin’s Foreign Ministry, Intelligence and Security Services are scrambling. On 09 November, like much of the world, it was an eye-opening, “OMG” moment. No doubt new directives and requirements were being created. The Trump transition team, squirreled away in Washington DC was and is a primary target.

We see Vladimir Putin, President of Russia, among the first to offer his congratulations, reaching out and playing to Trump’s significant ego, buying time.

This is quickly followed, five days later, with a one-on-one Putin-Trump phone conversation. Which the Kremlin described the Putin-Trump call as follows: “During the conversation Mr Putin and Mr Trump not only agreed on the absolutely unsatisfactory state of bilateral relations but also expressed support for active joint efforts to normalise relations and pursue constructive cooperation on the broadest possible range of issues. They emphasised the importance of establishing a reliable foundation for bilateral ties by developing the trade and economic component.” The Kremlin went on to say the two agreed to stay in touch and to arrange a face-to-face meeting to be arranged by their staffs (that’s diplomatic speak for, let’s see how this dance goes, before we commit).

The New York Times reports how Dmitry Kiselyov, anchor on Russia’s state run television said, “the American government would finally drop what the Russian anchor called its annoying slogans about human rights and democracy.”

Prevendra - Is Trump the Mule from Asimov's Foundation and the Empire?

Is Trump the Mule?

The Kremlin must be channeling Asimov right now, and opening the dog-eared copies to soak up all they can about the “Mule.”

The Mule has been described as, “one of the greatest conquerors the galaxy has ever seen, he is a mentalic who has the ability to reach into the minds of others and “adjust” their emotions, individually or en masse, using this capability to conscript individuals to his cause. Not direct mind-control per se, it is a subtle influence of the subconscious; individuals under the Mule’s influence behave otherwise normally – logic, memories, and personality intact.” (Source: Wikipedia)

Trump is a wildcard. The Trump transition team may have been fully engaged and targeted, but that target just blew up, as the new leader of the team, Vice President-elect Pence took over the transition and threw out the lobbyists and reshuffled the deck. The RNC, just like the DNC was warned back in January 2016, that they were being targeted, so they had ample time to harden their infrastructure. Just imagine the shredding of the files going on in the Kremlin as they, like all of us, try to keep up with the Trump transition team’s movements.

Let there be no doubt, there are going to be interesting times, ahead. What we can be guaranteed, the Kremlin may have lost this chess match, but they are back at the board immediately.

Their choice, Clinton did not win the general election of the United States. They are now in double-down mode working overtime to try and replace the treasure trove Prevendra - Donald Trump dossier from DNCof materials they had in acquired in anticipation of a Clinton transition.  Trump’s son-in-law, Jared Kushner currently occupies the position at the tip of the needle, and thus all who surround him have moved in the targeteers sights. A request to provide Kushner with a security clearance, has been made, and as an integral part of his Trump’s transition team, one should be expected it to be granted, albeit in an interim clearance status. 

Meanwhile, the Kremlin may wish to start their efforts, to understand the United State’s wildcard President-Elect Trump, by reviewing the piece they stole back in June 2016, and already have in their possession: The dossier on Donald J. Trump prepared by the Democratic National Committee … you can read it here:   Trump DNC Dossier (200+ pages pdf)


Additional reading:

President Putin’s congratulatory telegram to President-elect Trump

President Putin’s version of the telephone conversation with President-elect Trump

 

 

Prevendra - blu phone's phone home

Chinese Cyber Espionage: What’s leaving your smartphone?

This week we saw, possible evidence of, yet another form of the Chinese cyber espionage. Smartphones calling “home” to China with user data. This is every government’s worst counterintelligence and cyber security nightmare. We are warned, repeatedly about the threat of Chinese cyber espionage, especially those in the national security arena. For those in the private sector, having the data from a smartphone being surreptitiously sent to servers in China, should make every company’s information security team skin crawl, as they watch their intellectual property fly out the window.

What’s a backdoor?

A backdoor is a means by which user information is provided without the user’s knowledge via device, software or other technical capabilities to a third party.

Smartphones forwarding user information to China?

Users of Android smartphones from BLU Products may be surprised to learn that security firm Kryptowire uncovered a backdoor in the firmware installed on their phones by their “firmware over the air” service provider. A quick online check shows their phones available via Google, Best Buy, and other retailers.  A deeper review shows that the company which handled the firmware updating, Shanghai ADUPS Technology Co., Ltd, has both ZTE and Huawei smartphones in their client list. Furthermore, ADUPS claims their service counts over 700 million active users.

Chinese Cyber Espionage: Are the backdoors in smartphones sending your data to China? Click To Tweet

What was compromised?

In this instance, per Kryptowire, the firmware provided the following to identified servers located in Shanghai, China.

  • Actively transmitted user and device information
  • The full-body of text messages,
  • Contact lists,
  • Call history with full telephone numbers,
  • Unique device identifiers including the International Mobile Subscriber Identity (IMSI) and the International Mobile Equipment Identity (IMEI).
  • The firmware could target specific users and text messages matching remotely defined keywords.
  • The firmware also collected and transmitted information about the use of applications installed on the monitored device
  • Firmware bypassed the Android permission model,
  • Executed remote commands with escalated (system) privileges, and
  • Remotely reprogram the devices

The real kicker is, because the backdoor is located within the firmware, the activity bypasses the anti-virus security protocols of the device as it is considered safe, white-listed. User’s didn’t stand a chance, their only defense, to upgrade the firmware to a “clean version” or junk the phone.

What does Adups Technologies have to say about their firmware?

Adups Technology has issued a statement, explaining, without explicitly using the words, “China cyber espionage,” that this version of firmware was designed for use in the local, China only market, and was mistakenly placed on smart devices in other markets. The statement continues that the data collected was deleted and the firmware updated on all devices to have this feature removed. In other words, a private company, providing services to their client company made a mistake.

Something to keep in mind should you be traveling to China or Hong Kong and wish to use a burner phone for your local telephone calls, this capability is likely to exist on any device you may purchase in China and therefore, your device may be easily compromised in a difficult to detect manner.

China Cyber Espionage: Thinking of using a phone purchased in China? Click To Tweet

What should you do?

You have two options.

Carry-on:  If you are using a BLU phone, and take Adups Tehcnology at their word, make sure your firmware has indeed been updated. The Adups Technology link above, provides an email address for contacting the company, who no doubt can identify which firmware version does not send your data to China.

Junk the device:  If you are using a BLU phone, and don’t believe Adups Technology, short of taking your devices to a lab for confirmation (not something many would have the ability to do) there is little you as an individual user can do to confirm the backdoor in their provided firmware isn’t still there.  Therefore, you may wish to junk the BLU phone or the phone from any other manufacturer which uses the Adups Technology services to update the smart devices.

Additional reading:

Chinese company installed secret backdoor on hundreds of thousands of phones (ARS Technica, 15 November 2016)

Firmware Secretly Sent Text, Call Data On Android Users To China (Dark Reading, 15 November 2016)

Prevendra - Gregory Allen Justice - arrest

Selling secrets to Russia? It’s a bad idea

The headline read:  Selling Secrets to the Russians? Jason Bourne Fan arrested in spy drama of his own.  Thus implying the motivation for Gregory Allen Justice was his sick wife, a job at which he felt unappreciated and a fascination with cinematic secret operatives such as Jason Bourne and James Bond. There’s more to the story.

When he was arrested for what the Federal Bureau of Investigation called in their filed criminal complaint: probable cause of Economic Espionage, violation of the Arms Export Control Act, and violation of the International Trafficking in Arms Regulations (ITAR),  Justice found out just how adroit the FBI, working with the Air Force Office of Special Investigations (AFOSI), can be when working an espionage case.

BREAKING TRUST

Justice allegedly broke trust with his employer, a cleared defense contractor (who, according to his father is Boeing Satellite Systems). He is alleged to have reached out to the Russian Embassy in Washington, DC to volunteer his services in late 2015.

His first attempt at contact involved sending a letter, followed by a brief phone call to the Russian Naval Attaché within the Russian Embassy (Military attaches in embassies, are on occasion associated with military intelligence). This letter, according to the criminal complaint filed in the United States District Court, Central District of California, contained a “technical schematic.”

On February 10, 2016, Justice again called the Russian Naval Attache’s office at the Russian Embassy and asked if there was interest in maintaining contact and obtaining similar things. At that point, the FBI does what the FBI does … then stepped in and provided Justice with all the rope he needed to hang himself.

FBI COVERTLY ENGAGES  GREGORY ALLEN JUSTICE

Justice was contacted two days later by an undercover FBI special agent (S/A) who posed as a member of the Russian external intelligence service, the SVR. The S/A picked up the conversation and arranged to meet with Justice.  Over the course of the next few months (February – May 2016), Justice would meet the S/A face-to-face on five occasions. On each of the last four occasions, Justice brought information which was either proprietary or in violation of US export regulations, signed a receipt for cash received from the S/A and volunteer to expand his collection efforts in support of what he believed to the Russian SVR.  (NB: It is not revealed if the Russian intelligence apparatus acted upon Justice’s attempt to volunteer, or if they took a pass.)

Justice explained how all of the information he was providing was “ITAR.” And went on to compare his collaboration with the S/A as just like the “spy movies” of Jason Bourne, James Bond and “The Americans.”  Furthermore, Justice claimed to need money to fund his wife’s medical bills. Readers of the entire criminal complaint will see, while his motivation was financial, it was to fund his relationship with a woman other than his wife, and narcotics distribution. Furthermore, he provided information to the S/A on 16-gigabyte USB thumb drives.

INSIDER THREAT PROGRAM

The cleared defense contractor had in place a robust insider threat program. The program detected in November 2015, Justice coping a number of files to an external device, and then provided confirmatory information to the FBI/AFOSI on the information which Justice would purloin prior to each meeting with the S/A.

WHAT WAS AT RISK

While Justice did not have access to classified programs, he did have access to the following satellite system programs:

  • Wideband Global Satellite Communication (WGS)
  • Global Positioning System (GPS)
  • Geostationary Operational Environmental Satellites (GOES)
  • Tracking and Data Relay Satellite (TDRS)
  • Milstar Communications Satellite (MILSTAR)
  • Tangential access to additional programs
    • INMARSAT
    • MEXSAT
    • GPS IIF

INFOSEC TRAINING

Furthermore, as a cleared defense contractor, one would expect there to be a comprehensive cyber and counterintelligence briefing and training program, and there was.  Justice’s training folio showed he had taken a variety of courses.

  • Information Security 2015 (July 10, 2015)
  • Intellectual Property for Engineers and Technologists (July 10, 2015)
  • Threat Management Training for Employees (July 9, 2015)
  • Trade Secrets and Proprietary Information (July 9, 2015)
  • Enterprise US Export Awareness Overview (July 9, 2015)
  • Information Security 2014 (June 25, 2014)
  • 2014 Ethics Recommitment Training (May 6, 2014)
  • Enterprise US Export Awareness Overview (November 27, 2013)

CONTROLS TO PREVENT A LEAK

The cleared defense contractor had in place a data loss prevention (DLP) monitoring program and as noted above, found Justice downloading data to a USB device. In addition, the resident DLP monitoring program captures screenshots of Justice’s computer, at a cadence of approximately every six seconds. In addition, when an external medium, such as an USB drive is inserted into a laptop/desktop, the system prompts to encrypt the data.

Physical access procedures were also in place at the cleared defense contractor’s facility.  To enter the building, Justice is required to display a badge to a guard or enter through a badge-controlled gate. In addition, access controls exist at Justice’s specific work area, via a badge swipe.  In order to access his work station, Justice was required to insert his badge and enter a pin (description fits that of a Common Access Card functionality). Access controls on specific data sets required a re-authentication by Justice in order to garner access. Furthermore, within the contractor’s IT system, when entering the collaborative data sets environment, all data is clearly marked and delineated as proprietary and/or requiring compliance with export controls.

SUMMATION – TRUST BUT VERIFY

Justice broke trust. The contractor’s DLP system identified his accessing and copying files to external devices. It is unclear from the criminal complaint if this actionable information was of sufficient caliber to warrant action or if the action occurred only after the FBI/AFOSI arrived on the scene post-Justice’s volunteering his services to the Russian intelligence apparatus.

Entities with insider threat programs are challenged with both the potential for a mountain of false-positives, as well as determination of what level of activity warrants action.  Each program will be different, but having access to the data, for archival review should be mandatory. The rationale, today’s actions may appear mundane and low-risk, but when added to additional pieces of data, which may also appear to be innocuous and of low-risk, creates a more complete picture of the mosaic of the risk being presented by the employee breaking trust.

 

 


A version of the above, written by Christopher Burgess, was original posted in Clearance Jobs in July 2016: Profile in Espionage – Curtailing a Satellite Spy with an Insider Threat Program

Prevendra

Fake LinkedIn profiles engaged in global espionage targeting

Example of a fake LinkedIn profile

Via Symantec

The BBC reports that hackers are using fake LinkedIn profiles to befriend professionals and use their information in future attacks.

Source: Fake LinkedIn profiles used by hackers – BBC News

The BBC article pulls from a Symantec Threat Report “Fake LinkedIn accounts want to add you to their professional network” this report comes on the heels of the piece crafted by Prevendra’s CEO – Christopher Burgess on this very topic in August 2015. At that time he wrote, for years the counterintelligence efforts of the Federal Bureau of Investigation (FBI), Defense Security Services (DSS) and other U.S. Government entities have been sharing “stranger danger” type briefings for travel, conferences and elicitation over telephone calls. Every individual with a government security clearance has received their annual counterintelligence training, with emphasis on reporting contact with foreign nationals.  Most of these briefings and instructions focus on the in person solicitation or email query.

Now with the ubiquitous nature of social networks, it should come as no surprise that foreign intelligence services hostile to the interests of the U.S. have put another collection of arrows into their operational quiver so as to achieve their goals, collecting U.S. secrets (and those of the allies of the U.S.).

Governments warn us of fake LinkedIn Profiles

In fact the United Kingdom’s MI-5 (internal security service) sent a memo to government departments warning according to the UK’s Daily Mail: Foreign spies on LinkedIn trying to recruit civil servants by ‘Befriending’ them before stealing British secrets.”  The Daily Mail notes that the memo (not provided) warns government workers that Russia and China are both utilizing the LinkedIn social network to target government employees, are creating fake profiles within the site, and are trying to “find-connect-cultivate” government employees.  Those of us who do not suffer event amnesia will remember the well orchestrated “Robin Sage” sting of 2010, where a total persona was created by Thomas Ryan of Provide Security and over the course of several months engaged, befriended and elicited information from cleared government employees. The results of the sting were shared at the 2010 Black Hat conference in a talk, “Getting in bed with Robin Sage.”

The DSS and FBI have also issued their own counterintelligence brochures dealing with the broader cyber threat.  The rather robust FBI brochure on elicitation is especially apropos when it comes to social networks, as the techniques used in face-to-face personal engagement are applicable to social network engagement. Elicitation is an art form, and when exercised by the intelligence professional, it is difficult not to engage. The FBI suggests:

Deflecting Elicitation Attempts

Know what information should not be shared, and be suspicious of people who seek such information. Do not tell people any information they are not authorized to know, to include personal information about you, your family, or your colleagues.

You can politely discourage conversation topics and deflect possible elicitations by:

  • Referring them to public sources (websites, press releases)
  • Ignoring any question or statement you think is improper and changing the topic
  • Deflecting a question with one of your own
  • Responding with “Why do you ask?”
  • Giving a nondescript answer
  • Stating that you do not know
  • Stating that you would have to clear such discussions with your security office
  • Stating that you cannot discuss the matter

The DSS notes in their cyber threats brochure the myriad of reasons and methods used to target cleared personnel.  The DSS suggests:

Why Do They Target

  • Company unclassified networks (internal and extranets), partner and community portals, and commonly accessed website
  • Proprietary information (business strategy, financial, human resource, email, and product data)
  • Export controlled technology • Administrative and user credentials (usernames, passwords, tokens, etc.)
  • Foreign intelligence entities seek the aggregate of unclassified or proprietary documents that could paint a classified picture

Why should I care?

OPM breach + Health Care breach + IRS breach + Ashley Madison breach = Targeting bonanza 

While we have in the past admonished to be judicious on what you post as it can be culled, with the OPM data breach, many who have security clearances have had their information compromised. Knowing that it is probable the contents of their SF-86 are in the hands of hostile intelligence services can be disquieting. Couple this with the most recent compromise of the various medical provider data sets and the salacious Ashley Madison breach and it becomes clear there is no shortage of our information available to the targeteers of the foreign intelligence services. You do NOT get to decide if you will be targeted, you do however, have control over how you react to an approach.

Your responsibilities include understanding how individuals may use the various pieces of data public and private (compromised data sets) to approach you. Fictional LinkedIn profiles can be used to appeal to your professional interests. Facebook and Google+ groups and communities can be stepping stones to personal virtual relationships. As President Reagan is often quoted, “Trust, but verify.”

How can I spot a fake LinkedIn profile?

Back to the Symantec report, they advise there are a couple of easy ways to identify a “fake profile” (we don’t know why LinkedIn doesn’t self-police, but you can highlight and report a LinkedIn profile as bogus and they will take action).

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Symantec says most of these fake accounts follow a specific pattern:

  1. They bill themselves as recruiters for fake firms or are supposedly self employed
  2. They primarily use photos of women pulled from stock image sites or of real professionals
  3. They copy text from profiles of real professionals and paste it into their own
  4. They keyword-stuff their profile for visibility in search results

There are a few ways users can identify these types of accounts:

  1. Do a reverse-image search (e.g., tineye.com offers a browser plugin)
  2. Copy and paste profile information into a search engine to locate real profiles

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Portions of the above article were originally written by Christopher Burgess and published within DICE’s ClearanceJobs: 

Beware Where You Share: British Intelligence Cautions Employees Against LinkedIn

Prevendra - China

Espionage in the Heartland: Rice to China

Prevendra: Espionage in the Homeland: Rice to ChinaOn 12 December 2013, a criminal complaint was filed by the United States Attorney in the Kansas District, petitioning for the arrest of two individuals, with ties to China, for the theft of  trade secrets from Ventria Bioscience and other companies. Subsequently, these same two individuals were indicted for “conspiracy to steal trade secrets” by a federal grand jury on 18 December. The two individuals, Wieqiang Zhang and Wengui Yan, accused of stealing the intellectual property of Ventria Bioscience and other entities for the past 3+ years, October 2010 through December 2013, when they duo were arrested.  The pair, specifically targeted Ventria’s methods of “developing, propagating, growing, cultivating, harvesting, cleaning, and storing particular agriculture seeds for cost-effectively producing recombinant proteins from such seeds.”  The genetic work conducted by Ventria specifically, “develops and produces particular agricultural seeds, which have been designed to express proteins used in the medical and pharmaceutical fields.” According to the CEO of Ventria, as detailed in the criminal complaint, the current level of investment made by his company is approximately $75 million, and the research investment in the specific seeds stolen by the pair was between $3 and $18 million, with lost of profits in the event of commercialization by another entity to be substantially larger.

Unique rice seeds harvested

The criminal complaint details the unique nature of the seeds which were stolen by Zhang and Yan.  One of the seeds, “make a recombinant protein that is being developed for use as a therapeutic excipient.” The other seed, “makes a different recombinant protein that is being developed to treat or prevent gastrointestinal disease, antibiotic, associated diarrhea, hepatic disease, osteoporosis,and inflammatory bowel disease.”  While it may appear on the surface to be a case of two individuals stealing genetically modified seeds in a case of corporate espionage, similar to that which occurred over the past four years by a separate group conducting industrial espionage and operating in the upper-midwest (Espionage in the Heartland: Corn to China) of the United States, the activities of Zhang and Yan specifically targeted long term agricultural pharmaceutical research. In this instance, the Chinese nation state hand is less obtuse.

Nation State sponsorship

According to the data contained within the criminal complaint, a Chinese delegation’s checked and unchecked luggage was searched on 07 August 2013 as the delegation was preparing to depart to China (PRC). The search revealed seeds which were believed to be taken from Ventria Bioscience and/or the USDA Dale Bumpers National Rice Research Center, and varieties protected under “Plant Variety Protection Act” certificates owned by Louisiana State University or Ventria. The four PRC visitors had visited an unidentified US agricultural facilities in Chesterfield, MO and Creve Coeur, MO (Prevendra’s analysis identifies Monsanto as having facilities in both Chesterfield and Creve Coeur, MO).  The delegation in fact had visited the facilities on 18 July 2013 in the company of Zhang.  The delegation also traveled to the Dale Bumpers Center in Stuttgart, AR on 22 July 2013.  Yan had access to the seed varieties which were found during the 07 August 2013 search by US Customs and Border Patrol personnel.

Yan’s correspondence with the China Crops Research Institute (CCRI) indicates Yan used his position within the USDA to create invitation letters for the delegation to visit the US. The CCRI delegation organizer in China corresponded with Zhang and Yan jointly. Zhang and Yan used their work email as well as web-based emails (Yahoo!, Hotmail and Gmail). Indicative of one attempting to shield the content from one’s employer, be it private sector (Ventria) or government (USDA).

Zhang: One of the emails obtained from Zhang’s hotmail account detailed the modalities of housing allowances and stipends within the Hexi District of China. Zhang’s emails also showed a letter to the Crops Research Institute asking for a housing subsidy be provided to him and his intent to continue to obtain Ventria’s research so as to enable similar research and development in biology in Tainjin, China (see copy of the criminal complaint below for full test).

Yan: Similarly, in November 2012, Yan wrote “2012 YAN Wengui’s Activities in Serving the Nation” (Note: Yan became a US citizen in November 2000). The criminal complaint notes how Yan lists:

– Provide rice research breeds accelerating China’s science research;
– Recommend the US science technology to accelerate Chinese agriculture science research and faster development in modernizing production
– Returning to the country [China] to proceed science and technology exchange, research cooperation and assist Chinese professors advising research students;
– Train talents for the Chinese agricultural science and technology.[/custom_blockquote]

While Zhang, a PRC citizen engaged in corporate espionage / industrial espionage, one could explain his activities as one supporting the PRC given the benefactor was the Crop Research Institute of China, which is a part of the Chinese Academy of Agricultural Science (CAAS) and a PRC State Key Lab. It would be difficult, if impossible, for Zhang to have said no when the PRC state requested his assistance.

Yan on the other hand is not a PRC citizen. His actions warrant review of his activities starting when he arrived in the United States at the University of California (Davis) in 1987 through the date of his arrest in Stuttgart, AR, as his “report” of 2012 clearly demonstrates his serving his birth nation (China).

The two accused of intellectual property theft:

Prevendra - Espionage in the Homeland - Rice to China - Zhang

Wieqiang Zhang (張偉強), 47, is a citizen of the PRC and lawful permanent resident in the United states, residing in Manhattan, Kansas. He is an employee of Ventria Bioscience at their Junction City, KS facility.  Zhang was employed by Ventria since 2008 (five plus years). He received his Ph.D, in Rice Genetics, breeding and molecular biology from Louisiana State University (2001-2005), his masters degree in agriculture in China (1992). While in China he worked at a Crop Research Institute in the development and production of rice. His LinkedIn profile shows him to be a member of the “Plant Breeding Jobs” LinkedIn network. An internet search shows his residence to be a six bedroom single family house (>$350,000), located in Manhattan, KS. According to Riley County, KS records, the house was built in 2010, with Zhang being the original owner the house with a Qi Honglei.

 

Prevendra - Espionage in the Heartland - Rice to China - Yan

Wengui Yan (嚴文貴), 63, a naturalized US citizen (November 2000), having immigrated from the PRC in 1987, resides in Stuttgart, Arkansas. He received his masters and undergraduate degrees from Sichuan Agricultural University in China. In approximately 1992 he received his PHD in Plant Genetics and Breeding from the University of Arkansas. Since 1996, he has been an employee of the USDA Dale Bumpers National Rice Research Center, also located in Stuttgart, AR. An internet search shows he resides in a single-family residence located in Stuttgart, AR. According to the Arkansas County, AR records, the 2300+ sq ft home was purchased by Yan for $100,000 in 1997 and is currently valued at approximately $160,000. His Linkedin profile shows him to be a plant geneticist. Further research shows Yan holds patents associated with rice genomics. One patent identifies Yan as the owner, while the second has Yan as being a part of a team of researchers.

 

“USA vs ZHANG & YAN”– PDF of the 


“The World Press”

Two Agricultural Scientists from China Charged with Stealing Trade Secrets (FBI – 12 Dec)

US Charges Chinese Nationals in Trade Secrets Cases (Wall Street Journal – 13 Dec)

Judge in Kansas orders scientist from China detained (Businessweek – 18 Dec)

Grand Jury in Kansas indicts Chinese scientists (San Jose Mercury News – 20 Dec)

Jury in Kansas indicts Chinese scientists (Taipei Times – 22 Dec)


 

“Espionage in the Heartland: Corn to China” Prevendra: Espionage in the Heartland of the United States Espionage in the heartland of the United States?

For two-plus years, perhaps for as many as four, a different type of harvesting has been occurring throughout the heartland of the United States. According to the criminal complaint (see below), filed by the United States Attorney, Nicholas A. Klinefeldt, a Chinese company, Kings Nower Seed,and their personnel have been harvesting more than $30 million worth of intellectual property from multiple US conglomerates.  The criminal complaint requests an … <read complete analysis>

 


 

“Secrets Stolen, Fortunes Lost”:  As detailed in Secrets Stolen, Fortunes Lost, the intellectual property of companies in the United States, regardless of locale, are of interest to those who have no problem extracting the research and development investment to avoid making their own. The introduction to Secrets Stolen, Fortunes Lost admonishes:

Intellectual property is your enterprise’s lifeblood; is it safe or are you in danger of being put out of business because a predator has shed that lifeblood? We have found two profound but common misconceptions about intellectual property theft and economic espionage.

One of the great misconceptions is that the threat of economic espionage or trade secret theft is a limited concern—that it is an issue only if you are holding on to some- thing like the formula for Coca-Cola or the design of the next Intel microprocessor. The many real-world stories included in this book illustrate the fallacy of thinking that this threat is someone else’s problem.

The other great misconception, held by many business leaders who do acknowledge the danger to their trade secrets and other intellectual property, is that the nature of this threat is sufficiently understood and adequately addressed. Often, on closer inspection, the information-protection programs these business leaders rely on are mired in Industrial Age thinking; they have not been adapted to the dynamic and dangerous new environment forged by globalization

Secrets Stolen, Fortunes Lost

Secrets Stolen, Fortunes Lost, Preventing Intellectual Property Theft and Economic Espionage in the 21st Century (Syngress 2008 – by Christopher Burgess and Richard Power)

Prevendra - China Intellectual Property

Espionage in the Heartland: Corn to China

Prevendra: Espionage in the Heartland of the United States Espionage in the heartland of the United States?

For two-plus years, perhaps for as many as four, a different type of harvesting has been occurring throughout the heartland of the United States. According to the criminal complaint (see below), filed by the United States Attorney, Nicholas A. Klinefeldt, a Chinese company, Kings Nower Seed, and their personnel have been harvesting more than $30 million worth of intellectual property from multiple US conglomerates.  The criminal complaint requests an arrest warrant for MO Hailong, aka Robert MO, who is alleged to have led the concerted effort to steal and ship to China the the next generation of “inbred” or “parent” corn seeds, market value at approximately $30-40 million and 5-8 years of research from Pioneer, Monsanto and LG Seeds (perhaps others as well).

Seed corn harvested

A review of the criminal compliant outlines a sophisticated apparatus pulled together and executed by MO. The group, apparently working with help of insiders within Pioneer and Monsanto, were able to travel to the exact geo-coordinates of the fields growing the sensitive test seeds.  Reading the complaint closely, it is clear that Mo was the linchpin of the effort.

Mo traveled, often to the midwest from his Boca Raton residence, which he shares with a LI Ping aka (Carolyn Li Ping), to Chicago and Kansas City in 2011-2012. The interviews of those from whom Mo purchased seeds in Iowa and Missouri noted he was a customer since 2009, buying multiple bags of seed and always paying cash.  Mo was observed shipping seeds which he purchased and stole from the fields to his Boca Raton residence via UPS. Our analysis of Mo and his status in the United States, noted Mo and Li Ping purchased the 2000 square foot house in Boca Raton in 2009 for $300,000. It would appear the purchase of the house coincided with his initiation of his heartland activities.

It would be one thing to steal or inappropriately obtain licensed technology, but Mo and company went one step further. They set up an operation in Monee, IL to grow the commercially acquired seeds in anticipation of being able to identify the one-half of one percent of the inbred seed which is in each bag and then harvest the inbred seed which is distinguishable from the hybrid seeds.  Kings Nower Seeds purchased the Monee, IL farm for more than half a million dollars, $600,000 to be exact in late-March 2012. Which coincides with the beginning of the spring land preparation; and put the property back on the market in September 2012 for $300,000.  Perhaps after having harvested the inbred-seed?

Nation State sponsored?  

We view the sophistication of the operation which commenced with the arrival of Mo in 2009, the frequency and expense of the travel to/from the midwest, the 750+ mile driving days, the use of an alias persona of a real person within the official delegation of the Vice President of China; the co-conspirator Wang Hongwei who not only operated from Canada, but had in his possession the geo-coordinates of locations in the US of interest; the level of clandestinity used; the multinational aspect of the caper (Hong Kong, Canada, China and the US); the deep pockets of those engaged; all to indicate PRC knowledge of, if not directly involved.

The case is more than just low level activity.  Interestingly, in this instance, the Pioneer Seed company has been in China since 1997 and their China business is valued in excess of one billion dollars. Apparently, not all in China were party to the joint venture and the desire to create a homegrown entity to compete with the multi-nationals is high.

It is not surprising that counterfeit seeds is a problem in China, which is exacerbated when the theft of genuine seeds is also occurring. In October 2011, Pioneer’s China lead, William Niebur, vice president and general manager of Pioneer China, told “China Real-Time Report that Pioneer regards counterfeit seeds as a serious issue in China, as the counterfeits undermine seed companies’ intellectual property and the market’s confidence in seed quality. Pioneer is working with Chinese authorities to enforce the law, he said. He estimated there were as many counterfeit seeds on the market as Pioneer’s sales volume, though demand for Pioneer products remains strong. As for China’s efforts to grow an agrotechnology giant, Niebur cited joint ventures Pioneer has with Chinese firms as examples of such efforts. “Pioneer considers itself a partner to the China seed industry,” that has assisted Chinese firms with manufacturing, planting technology, packaging and delivery systems, he said in e-mailed comments [to China Real-Time Report].”

Perhaps the VP identified in the complaint is Niebur, regardless, what is interesting is the comment attributed to the VP, “DBN best-selling corn seed products in China utilize a male parent (inbred) line of seed that Pioneer determined their company developed. The Pioneer VP confronted the DBN [unidentified] official on the success of the product since it utilized Pioneer-developed genetic trait, and the DBN official smiled and nodded, implicating acknowledging to the Pioneer VP the truth of the accusation.

Analysis:

The compromise of MO Hailong did not happen due to superior analytic work by the FBI or any law enforcement entity. The MO operation was in place and operating for some time, perhaps as early as 2009. It was two farmers in Iowa who saw something and reported it as suspicious to the Pioneer field rep, who mentioned it to the Pioneer security personnel. Kudos go to Pioneer for sensitizing their field reps to report that which does not fall into the realm of normal activity. Better had the Pioneer Security team picked up their phone and contacted their liaison with the FBI in Des Moines.

Many questions remain unanswered. Where else did MO travel from his Boca Raton base. What role does Carolyn Li Ping play in this activity, if any, as she is a Kansas State University graduate. The Canadian angle, how much Chinese activity is taking place in Canada by this same crew or others targeting Canadian agriculture? If Kings Nower Seeds were so easily able to step over the line of appropriate business conduct and engage in espionage, where else has LI Shaoming allowed this type of investment. What is the role of the US persons who assisted with the real estate and logistics. And to a core issue, who are the insiders in Pioneer and Monsanto who are providing the identities of the test fields to the Kings Nower Seed crew. What part, if any, did Pioneer and Monsanto’s foot print in China make them a target for espionage in the United States. What role did their Chinese employees in China or the US play?

The take away for all companies – have a security plan, educate your employees and contractors. Operate from a position of trust, have in place the capabilities to verify the trust if suspicion arises. Conduct strategic competitive analysis so you may be aware of what areas of research your competition is engaged?  Reward employees for reporting anomalies. When implementing protections, explain to your employees, contractors and vendors the why behind your intellectual property protection regimes, and never allow convenience to trump security.

The cast of characters

Mo Hailong “Robert” – a lawful permanent resident (H-1-B visa holder) in the United States – Director of International Business of Beijing Dabeinong Technology Group Company (DBN).
Hougang Wu – Chairman of Dalian Zhangzidao Fishery Group – an alias used by Mo Haiilong as part of the official Chinese delegation accompanying the Vice President of China during his visit to Des Moines, IA on 15/16 February 2012. [Note: WU Hougang is a legitimate person and he is the Chairman of the Zhangzidao Fishery Group. It is unknown if he signed up as a member of the delegation and provided his registration and identity documents for Mo’s use – a witting participant, or if he was unwitting of the use of his name and that of us company in the activities]
Wang Lei – Vice Chairman of Kings Nower Seed – accompanied MO on his visit to the fields in Iowa, and was part of the VP of China delegation in Des Moines 15/16 February 2012
LI Shaoming –  CEO of Kings Nower Seed – Phd Scientist – directing and participating in the collection of US intellectual property
Xaoming Bao – Chinese national, former Pioneer employee – met with  Wang and Mo during VP China visit at a bar in Urbandale, IA.  (Bao’s spouse is a current Pioneer employee).  [Note: Xaoming Bao – has 18 patents in the plant genetics field, many of which are assigned to Pioneer]
YE Jian – PRC National and employee of Kings Nower Seed (per visa application) – involved over the course of the summer of 2012 in the collection of seed from farms located in the Northern Indiana, Illinois, Iowa farmland – In a conversation which the FBI surveillance obtained (pages 13-15 of the complaint) it is clear YE and LIN are knowledgable as to the illegality of their efforts.
LIN Young – PRC National and employee of Kings Nower Seed (per visa application) – involved over the course of the summer of 2012 in the collection of seed from farms located in the Northern Indiana, Illinois, Iowa farmland – in a conversation which the FBI surveillance obtained (pages 13-15 of the complaint) it is clear YE and LIN are knowledgable as to the illegality of their efforts.
Eugene Yu – Chinese-American realtor in the Chicago area (research shows a realtor associated with Charles Rutenberg Real Estate of Naperville, IL, by the name of Eugene Yu. No other realtors in the Chicago metro with this name were found) – Yu served as middle-person on the lease of a storage facility in New Lenox, IL, provided transport to YE, and spent a good deal of time on the Kings Nower Seed farm in Monee, IL.  [NOTE: It is unknown if YU was witting of the espionage taking place, or if he was unwittingly duped into providing support to the activity, viewing Kings Nower Seed as a lucrative client given their purchase of the Monee, IL farm.]
Wang Hongwei  A dual Chinese/Canadian citizen – On 28 September 2012, Wang HONGWEI entered the US via land-border between the US/Canada in Vermont. Drove to Burlington and then flew to Chicago, obtained a rental car and traveled to the farm in Monee, IL.  On 30 September 2013, gave FBI Surveillance in Burlington, Vermont the slip using aggressive counter-surveillance driving methods. At the US/Canada border crossing he was identified and subjected to a USCBP border inspection. He lied to officers and then recanted when evidence was shown that his story of visiting Burlington was compromised by his United Airline ticket in his possession. 44 bags of corn were found hidden in his luggage and in the vehicle. each of the bags was identical as those which were earlier confiscated at O’hare Airport. In addition, he had a notebook with GPS coordinates of farm plots and pictures of Monsanto and Pioneer fields and facilities. He claimed to have purchased the corn from Mo Hailong.

The companies

Kings Nower Seeds – Formed in 2001
The Kings Nower Seeds website notes their research in inbred seeds in a January 2013 post:
“Precise Research and Development

Following the strategy of Precise Research and Development, we built up one transgenic research lab, five inbred line test stations, seven breeding centers and 123 experiment stations. Annual investment on R&D is kept more than 10% of annual sales. Based on our proprietary T+2 model, aided by inbred line test, variety design, DH, molecular, information technology and large-scale variety testing, a fast, effective and accurate breeding system is established. Such a system speeds up breeding and makes the breeding output predictable. In 2008, our technology center was recognized as “Beijing Enterprise Technology Center” and “Science and Technology Research and Development Institution of Beijing Municipal Science and Technology Commission”.  Now we hold leading breeding capabilities on hybrid maize and hybrid rice in China.”

Dabeinong Technology Group Company – Formed in 1994
Zhangzidao Fishery Group – founded 1958
“Mapping Mo Hailong’s Espionage” 

Prevendra - Mapping the espionage of Mo HailongMapping Mo Hailong and the co-conspirators.

Including the May 1, 2012 – 750 mile trip by Mo when he traveled from Des Moines, IA to  Pattonsburg, MO to Adel, IA, to Monee, IL – over 8.5 hours in his vehicle, buy and acquiring corn

Detailed Map

“Espionage in the Heartland: Rice to China” OPrevendra: Espionage in the Homeland: Rice to Chinan 12 December 2013, a criminal complaint was filed by the United States Attorney in the Kansas District, petitioning for the arrest of two individuals, with ties to China, for the theft of  trade secrets from Ventria Bioscience and other companies. Subsequently, these same two individuals were indicted … <read complete analysis>

 

 

 


 

“US v Mo Hailong”

PDF of the 

PDF of the 

 

PDF of the 

Wanted posters issued by the FBI:

LI - Shaoming Li YE - Jian Ye WANG - Lei Wang WANG - Hongwei Wang Prevendra - China Espionage in the Heartland

 

 

 

 

 


“The world press”

Designer seeds thought to be latest target by Chinese

Chinese National Arrested for Conspiring to Steal Trade Secrets

Corporate espionage strikes Iowa’s agricultural technology

Call the FBI! China is trying to steal America’s seeds!

Chinese man arrested for stealing seed technology

Chinese company worker accused of steeling seed

Secrets Stolen, Fortunes Lost: As detailed in Secrets Stolen, Fortunes Lost, the intellectual property of companies in the United States, regardless of locale, are of interest to those who have no problem extracting the research and development investment to avoid making their own. The introduction to Secrets Stolen, Fortunes Lost admonishes:

Intellectual property is your enterprise’s lifeblood; is it safe or are you in danger of being put out of business because a predator has shed that lifeblood? We have found two profound but common misconceptions about intellectual property theft and economic espionage.

One of the great misconceptions is that the threat of economic espionage or trade secret theft is a limited concern—that it is an issue only if you are holding on to some- thing like the formula for Coca-Cola or the design of the next Intel microprocessor. The many real-world stories included in this book illustrate the fallacy of thinking that this threat is someone else’s problem.

The other great misconception, held by many business leaders who do acknowledge the danger to their trade secrets and other intellectual property, is that the nature of this threat is sufficiently understood and adequately addressed. Often, on closer inspection, the information-protection programs these business leaders rely on are mired in Industrial Age thinking; they have not been adapted to the dynamic and dangerous new environment forged by globalization

Secrets Stolen, Fortunes Lost

Secrets Stolen, Fortunes Lost, Preventing Intellectual Property Theft and Economic Espionage in the 21st Century (Syngress 2008 –  by Christopher Burgess and Richard Power)

Transparency International measures global corruption

Prevendra: Transparency International measures global corruptionTransparency International issued its 2013 version of the Corruption Perceptions Index (CPI) on December 2, 2013. The CPI contained a few surprises, like Australia (#9) being named one of the biggest decliners, along with Syria (#181), but overall the CPI contained few surprises. Denmark (#1) and New Zealand (#1) are tied as being perceived as the least corrupt countries, while China (#80) remains in the middle of the pack and Russia (#127) is down near the bottom, with, North Korea(#175), Afghanistan(#175) and Somalia(#175) all tied for the title of most corrupt countries in the world.  Well perceived to be the most corrupt, per the CPI.

The Guardian article, “Is Transparency International’s measure of corruption still valid“, provided in full below, contains the entire list and appropriately calls into question whether the CPI remains a valid measure today in 2013, as it was some 20 years ago when it was first issued. We at Prevendra view the CPI as one data set which must be included in any assessment by any entity thinking of engaging in business outside of their own country, especially if the company is a U.S. company or a company doing business in the U.S.  Companies falling into this described demographic will find themselves subject to the Foreign Corrupt Practice Act (FCPA). The FCPA purpose of “purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.” Quite the mouthful, but one with significant teeth.

One needs only review the DOJ list of 2013 FCPA and related law enforcement actions, to understand following the advice of “When in Rome, do as the Romans” may land one’s company in hot water, as the “business norm” may well be a violation of the FCPA.

The take away for every U.S. company contemplating doing business abroad, if the country is not in the top 50 of the CPI, then one should institute even more stringent internal checks and balances to ensure any business is conducted in a pristine manner.

[divider style=”solid”][/divider]

Prevendra: Transparency International measures global corruption

[divider style=”solid”][/divider]

Prevendra: CPI  2013 Map

Corruption Perceptions Index 2013


Powered by Guardian.co.ukThis article titled “Is Transparency International’s measure of corruption still valid?” was written by Claire Provost, for theguardian.com on Tuesday 3rd December 2013 12.44 UTC

How can you measure the level of corruption in a country? If the abuse of public office for private gain is typically done in secret, under the table or behind closed doors, how can you systematically – and credibly – capture its scale and depth?

For nearly 20 years, campaigning NGO Transparency International has scored and ranked countries according to how corrupt their public sectors are perceived to be. The 2013 edition of its Corruption Perceptions Index (CPI) was published on Tuesday.

Drawing on 13 data sources, and based on the perceptions of businesspeople and country experts, the 2013 CPI gives 177 countries a score from zero to 100, where zero is a perception that the country’s public sector is “highly corrupt” and 100 is “very clean”.

Denmark and New Zealand top the list as the countries with the lowest perceived levels of public sector corruption; Afghanistan, North Korea and Somalia are the bottom three. More than two-thirds of the 177 countries examined scored below 50, a proportion similar to previous years.

Australia is labelled one of “the biggest decliners”, alongside countries such as Syria, Libya, Mali, Spain, Mauritius, Iceland and Guatemala. The biggest improvers include Burma, Senegal, Nepal, Greece, and Lesotho.

Transparency International trumpets the CPI as “the most widely used indicator of corruption worldwide”. The high-profile and widely reported index has, however, amassed its fair share of critics over the last two decades.

Some have attacked the CPI’s reliance on the opinions of a small group of experts and businesspeople. This, says Alex Cobham, fellow at the Centre for Global Development, “embeds a powerful and misleading elite bias in popular perceptions of corruption” and can lead to inappropriate policy responses.

In an article for Foreign Policy, entitled Corrupting Perceptions, Cobham suggested earlier this year that Transparency International should drop the CPI and said it would be more useful to collect better evidence of actual corruption or information about how corruption is or isn’t affecting citizens. “The index corrupts perceptions to the extent that it’s hard to see a justification for its continuing publication,” he said.

Others argue it is simply impossible to relay in a single number the scale and depth of a complex issue like corruption, and compare countries accordingly. “The index gets much-needed attention, but it overshadows [Transparency International’s] other activities and exposes it to criticism,” said the Economist in a 2010 article that dubbed the CPI the “murk meter”.

Transparency International has defended its approach, arguing that capturing experts’ perceptions is the most reliable method of comparing relative corruption levels across countries.

“Corruption generally comprises illegal activities, which are deliberately hidden and only come to light through scandals, investigations or prosecutions,” says the NGO. “There is no meaningful way to assess absolute levels of corruption in countries or territories on the basis of hard empirical data. Possible attempts to do so, such as by comparing bribes reported, the number of prosecutions brought or studying court cases directly linked to corruption, cannot be taken as definitive indicators of corruption levels. Instead, they show how effective prosecutors, the courts or the media are in investigating and exposing corruption.”

While the CPI may be Transparency International’s most famous product, the NGO acknowledges it cannot tell the full story and now produces a range of other measures, including the Global Corruption Barometer, which looks at citizens’ perceptions and experiences of corruption, and the Bribe Payers Index, which ranks exporting countries according to the perceived likelihood that their firms will bribe abroad.

The data from the 2013 CPI is below. What can you do with it?

Corruption perceptions index 2013
Country / Territory CPI 2013 Score Country Rank
Denmark 1 91
New Zealand 1 91
Finland 3 89
Sweden 3 89
Norway 5 86
Singapore 5 86
Switzerland 7 85
Netherlands 8 83
Australia 9 81
Canada 9 81
Luxembourg 11 80
Germany 12 78
Iceland 12 78
United Kingdom 14 76
Barbados 15 75
Belgium 15 75
Hong Kong 15 75
Japan 18 74
Uruguay 19 73
United States 19 73
Ireland 21 72
Bahamas 22 71
Chile 22 71
France 22 71
Saint Lucia 22 71
Austria 26 69
United Arab Emirates 26 69
Estonia 28 68
Qatar 28 68
Botswana 30 64
Bhutan 31 63
Cyprus 31 63
Portugal 33 62
Puerto Rico 33 62
Saint Vincent and the Grenadines 33 62
Israel 36 61
Taiwan 36 61
Brunei 38 60
Poland 38 60
Spain 40 59
Cape Verde 41 58
Dominica 41 58
Lithuania 43 57
Slovenia 43 57
Malta 45 56
Korea (South) 46 55
Hungary 47 54
Seychelles 47 54
Costa Rica 49 53
Latvia 49 53
Rwanda 49 53
Mauritius 52 52
Malaysia 53 50
Turkey 53 50
Georgia 55 49
Lesotho 55 49
Bahrain 57 48
Croatia 57 48
Czech Republic 57 48
Namibia 57 48
Oman 61 47
Slovakia 61 47
Cuba 63 46
Ghana 63 46
Saudi Arabia 63 46
Jordan 66 45
Macedonia 67 44
Montenegro 67 44
Italy 69 43
Kuwait 69 43
Romania 69 43
Bosnia and Herzegovina 72 42
Brazil 72 42
Sao Tome and Principe 72 42
Serbia 72 42
South Africa 72 42
Bulgaria 77 41
Senegal 77 41
Tunisia 77 41
China 80 40
Greece 80 40
Swaziland 82 39
Burkina Faso 83 38
El Salvador 83 38
Jamaica 83 38
Liberia 83 38
Mongolia 83 38
Peru 83 38
Trinidad and Tobago 83 38
Zambia 83 38
Malawi 91 37
Morocco 91 37
Sri Lanka 91 37
Algeria 94 36
Armenia 94 36
Benin 94 36
Colombia 94 36
Djibouti 94 36
India 94 36
Philippines 94 36
Suriname 94 36
Ecuador 102 35
Moldova 102 35
Panama 102 35
Thailand 102 35
Argentina 106 34
Bolivia 106 34
Gabon 106 34
Mexico 106 34
Niger 106 34
Ethiopia 111 33
Kosovo 111 33
Tanzania 111 33
Egypt 114 32
Indonesia 114 32
Albania 116 31
Nepal 116 31
Vietnam 116 31
Mauritania 119 30
Mozambique 119 30
Sierra Leone 119 30
Timor-Leste 119 30
Belarus 123 29
Dominican Republic 123 29
Guatemala 123 29
Togo 123 29
Azerbaijan 127 28
Comoros 127 28
Gambia 127 28
Lebanon 127 28
Madagascar 127 28
Mali 127 28
Nicaragua 127 28
Pakistan 127 28
Russia 127 28
Bangladesh 136 27
Côte d´Ivoire 136 27
Guyana 136 27
Kenya 136 27
Honduras 140 26
Kazakhstan 140 26
Laos 140 26
Uganda 140 26
Cameroon 144 25
Central African Republic 144 25
Iran 144 25
Nigeria 144 25
Papua New Guinea 144 25
Ukraine 144 25
Guinea 150 24
Kyrgyzstan 150 24
Paraguay 150 24
Angola 153 23
Congo Republic 154 22
Democratic Republic of the Congo 154 22
Tajikistan 154 22
Burundi 157 21
Myanmar 157 21
Zimbabwe 157 21
Cambodia 160 20
Eritrea 160 20
Venezuela 160 20
Chad 163 19
Equatorial Guinea 163 19
Guinea-Bissau 163 19
Haiti 163 19
Yemen 167 18
Syria 168 17
Turkmenistan 168 17
Uzbekistan 168 17
Iraq 171 16
Libya 172 15
South Sudan 173 14
Sudan 174 11
Afghanistan 175 8
Korea (North) 175 8
Somalia 175 8

Download the data

The full data: corruption perceptions index 2013

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Prevendra - Iranian Nuclear Power Plants

Iranian nuclear accord deserving of skepticism or buying diplomatic space?

PDF of the full text of the

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Prevendra - Iranian Nuclear Power PlantsThe Sunday news of an Iranian nuclear accord having been signed in which Iran had agreed to allow its nuclear program to be rolled back was exceptionally good news, a historic agreement indeed. An agreement which immediately brought to the forefront speculation of  the union of two strange bedfellows – Israel and Saudi Arabia – as both had been projecting how neither was happy with the agreement. But such was not the case, the Kingdom of Saudi Arabia came forward with a tepid endorsement, according Aljezzera , “The kingdom said it hoped that this agreement would be followed by further steps that would guarantee the rights of all states in the region to peaceful nuclear energy.” Which left Israel as the lone disapproving voice, with the Israeli prime minister, Binyamin Netanyahu, calling it a “historic mistake” and warning that his country would not allow Iran to develop nuclear weapons.

Given Iran’s track record when it comes to use of chemical weapons (Iran-Iraq war) and the manner in which it has extended its foreign policy in Lebanon (Iranian Revolutionary Guard Forces) and the sponsorship of terrorism (Ministry of Intelligence and National Security), Israel has every right to be skeptical.

Perhaps we should all be skeptical. Fully justified when one reviews the verbiage of the four page agreement (full document provided above) and understand how the Iranian nuclear accord lacks specifics. The determined efforts of the permanent members of the UN Security Council along with Germany and Iran have collectively come up with an agreement which in the grand scheme of things is both obtuse and lacking in specifics. Perhaps we should read this as a letter of intent. And thus the devil will literally be in the details. So why this historic pact, written with such ambiguity?

Prevendra - Hassan RouhaniIran

The answer, I believe, lays in Iran. I’ve been following Iran and Iranian affairs for quite a few years, since the 1979-81 “Hostage crisis” to be specific. I believe this loosely worded pact allow Iranian President  Hassan Rouhani sufficient latitude to appeal to the populace in Iran. The reactions seen throughout Iran of euphoria, should signal to the Iranian leadership that their citizens want such an accord. The euphoria should also signal to the leadership of Iran, we voted you into power to bring Iran back into the mainstream of international commerce and trade.

In the international game of nuclear chess, the move is Iran’s.

The following piece from the Guardian – speaks to Israel’s skepticism.

 


Powered by Guardian.co.ukThis article titled “Obama admits Israel has good reason for scepticism over Iran nuclear deal” was written by Dan Roberts in Washington, for The Guardian on Monday 25th November 2013 11.00 UTC

Barack Obama sought to cement a rare policy breakthrough over Iran this weekend with a flurry of phone calls designed to shore up support in Congress and reassure sceptical foreign allies.

After months of domestic policy setbacks, the agreement in Geneva of a deal to place strict restraints on Iran’s nuclear programme, in return for an easing of sanctions and with the aim of preventing the country developing a nuclear weapons capacity, promises to mark a turning point in the president’s troubled second term. But the White House must first convince critics in Washington that negotiators have not conceded sanctions relief too readily, and Obama is anxious to deter efforts in the Senate to impose fresh economic sanctions.

Efforts to win over key lawmakers began within hours of the deal being struck in Geneva on Saturday night and continued on Sunday with a phone call to Israeli prime minister Binyamin Netanyahu, an arch-critic of the agreement.

The White House said “the two leaders reaffirmed their shared goal of preventing Iran from obtaining a nuclear weapon” during the phone call, and said that Obama “told the prime minister that he wants the United States and Israel to begin consultations immediately regarding our efforts to negotiate a comprehensive solution”.

The White House added that Obama “underscored that the United States will remain firm in our commitment to Israel, which has good reason to be skeptical about Iran’s intentions. The president and prime minister agreed to stay in close contact on this issue as the P5+1 [the US, China, Russia, France, Great Britain and Germany] and Iran negotiate a long-term solution over the next six months”.

Early reaction in Washington suggested that the six-month deal’s package of more intrusive inspections and enrichment restrictions, while not enough to persuade all Republicans, may prove sufficiently robust to avoid an embarrassing rebellion on Capitol Hill.

“Well, the deal’s been made,” said Bob Corker, the ranking Republican on the Senate foreign relations committee. He argued that the pact must not “become the norm” for a longer-term agreement with Iran.

“I think it’s now time for Congress to weigh in,” Corker told Fox News Sunday, “because I think people are very concerned that the interim deal becomes the norm, and that’s why I’ve crafted legislation to hold the administration and the international community’s feet to the fire over the next six months to ensure that this interim deal is not the norm.

“I think you will see a bipartisan effort that this will not be the final agreement.”

Senior Democrats in the Senate were more supportive, suggesting that Obama will have sufficient political backing to prevent the deal from being undermined in Washington. “By any standard, this agreement is a giant step forward and should not be undermined by additional sanctions at this time,” said Senator Dianne Feinstein, who had previously voiced suspicion of Iranian motives.

More hawkish Republicans expressed their scepticism. Saxby Chambliss, the vice-chair of the Senate intelligence committee, told ABC’s This Week: “Nothing in the details [of the deal] moves us in the direction of preventing Iran from developing a nuclear weapon.” On CNN’s State of the Union, Ed Royce, the chair of the House foreign affairs committee, said: “They [Iran] are a state sponsor of terrorism, trying to get a bomb.”

For Obama to successfully trumpet the diplomatic breakthrough as a personal achievement will require days of careful political messaging. A similar White House success, in removing chemical weapons from Syria, was undermined domestically by a widespread perception that Obama had stumbled upon a solution thanks to help from Russia rather than deserving praise as the primary architect of the deal.

Within minutes of the Iran deal being struck, Obama made a surprise late-night appearance before cameras in the White House, to insist that his brand of compromise was the key to progress this time around.

“Ultimately, only diplomacy can bring about a durable solution to the challenge posed by Iran’s nuclear program,” he said. “As president and commander-in-chief, I will do what is necessary to prevent Iran from obtaining a nuclear weapon. But I have a profound responsibility to try to resolve our differences peacefully, rather than rush towards conflict.”

He also paid tribute to Congress for creating an environment for the deal to happen.

“Over the last few years, Congress has been a key partner in imposing sanctions on the Iranian government, and that bipartisan effort made possible the progress that was achieved today,” Obama said. “Going forward, we will continue to work closely with Congress. However, now is not the time to move forward on new sanctions – because doing so would derail this promising first step, alienate us from our allies and risk unraveling the coalition that enabled our sanctions to be enforced in the first place.”

White House officials were also keen to stress that the public talks in Geneva were only the tip of a wider diplomatic effort to reach out to Iran’s new president, Hasan Rouhani, that had been underway for months in private.

“Over the course of the last several months of very intensive diplomacy in September, October and November of this year, we had some limited bilateral discussions with the Iranians,” said a senior administration official on Saturday night. “[It is] important to understand that this builds on a several-year effort, one of the leading priorities for President Obama”.

The White House also sought to counter arguments that it was naive in its dealings with Rouhani, insisting that a staged approach to containing the Iranian nuclear threat was the only practical way to proceed.

“We, frankly, just believe that you weren’t going to get to an end state from a standing start, so we needed to put this in place to halt the progress of the Iranians while we negotiate that final step,” said another official.

Sceptics in Washington will demand further signs of progress before crediting Obama with the lasting diplomatic achievement he craves, but for the first time since his re-election last year the president is on the verge of a major public success.

guardian.co.uk © Guardian News & Media Limited 2010

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Nation States, Espionage and Counterespionage

Nation States’ Espionage and Counterespionage – An overview of the Economic Espionage landscape of 2007

 

Prevendra - Insider TheftThough we are mid-way through 2013, I refer to a study I wrote in 2008 as it contains many data points applicable today.  In 2008 I published via CSO Online a study on the Economic Espionage landscape of 2007, detailing how the many countries which share this world are both complaining at having been targeted or victimized, while others complain about the audacity of a nation state to engage in espionage activities against their nation and constituents.  This is far from being an US, China, Russia issue, while China may have earned the leadership position in the espionage engagement, they were not the only player at the global table.  I provide a copy of the study here.

The study was reviewed by the CIA’s publication review board prior to publication for the express purpose of ensuring sources and methods were not revealed and the review in no way implies an endorsement or speaks to the accuracy of my research.

Prevendra - China Intellectual Property

China’s intellectual property advance

Prevendra - China's Military:  Here we are!

Steve Webel via Compfight

Prevendra’s Christopher Burgess posted a piece on China in the Huffington Post – China’s Military – Here we are!, which noted how the People’s Republic of China (PRC) has been eating the West’s intellectual property lunch for the past 25+ years in accordance with the PRC”s published doctrine.

Especially worthy of note for those following the national security and geopolitical dynamic is the speed at which the PRC operates when voicing their denial as to the China government’s participation in any cyber shenanigans. Plausible denial is a wonderful thing, but we really should accept the doctrine published in Unrestricted Warfare (1999) which calls out the explicit use of technologically astute citizens to do the heavy lifting within the cyber arena.  This begs the question: “If China is not engaged, officially, why aren’t they engaged in cleaning up the cyber-nuisance factor emanating from their shores?

For now, our advice for companies doing business in China – caveat emptor – you want to lock down your intellectual property exposure within the PRC.  Furthermore, ensure your technology does not fall under the rubric of the International Trafficking in Arms Regulations (ITAR) or Export Administration Regulations (EAR).  The US Department of Commerce and Department of State have very clear guidance published with respect to what is and isn’t considered advanced technologies. Compliance is non-negotiable for a US company. Review these regulations and assume if your product/technology falls within any of the identified areas, then it may also fall within the scope of the type of information for which there exists an interested party in the PRC.