DOD Reports 'Stunning' Spike In Espionage Targeting U.S. Military Technology, Trade Secrets

October 25, 2011 - via

A new Pentagon report finds "a stunning increase" in espionage targeting sensitive U.S. military technology and defense industry trade secrets over the last year, including newly concerted efforts -- particularly from East Asia and the Pacific -- to acquire autonomous underwater vehicle technology.

In fiscal year 2010, private firms that build the Pentagon's arsenal reported to the Defense Security Service a 140-percent increase over FY-09 in "suspicious contact reports determined to be of intelligence value" from "both friends and foes," according to the new DOD accounting.

“The technology base of the United States is under constant attack,” states the previously unreported 78-page assessment, "Targeting U.S. Technologies: A Trend Analysis Of Reporting From Defense Industry." The report was published by the Defense Security Service, an arm of the Pentagon acquisition executive's directorate, on Oct. 19.

"The number of suspicious contact reports resulting from foreign attempts to obtain illegal or unauthorized access to sensitive or classified information and technology resident in the U.S. cleared industrial base more than doubled from FY-09 to FY-10," states the report. "The large scope and diversity of collection efforts targeting U.S. technologies meant that foreign entities simultaneously directed considerable efforts at many technologies using variations of methods and collectors."

The majority of collection attempts over the last year originated from East Asia and the Pacific region, according to the report, and commercial firms “were the most active collector” for a second consecutive year.

The DSS report highlights "the increasing foreign threat" to autonomous underwater vehicle technology. More than 70 percent of the efforts to gain information about this area have come from the Pacific Rim, according to the report.

"The U.S. Navy’s ability to establish and maintain underwater battlespace dominance is of special importance in this region," the report states. "Successful development of AUVs for East Asian and Pacific military purposes would likely pose a threat to that dominance by increasing foreign understanding [of] U.S. AUV technologies, potentially enabling them to develop effective countermeasures."

DOD suppliers reported to the Pentagon efforts by foreigners to obtain information and access to technologies across all of the Military Critical Technology List's 20 categories, according to the report. Two technology areas of greatest interest, according to the DSS, were information systems and lasers, optics and sensors. Aeronautics and electronics technologies ranked third and fourth, according to the report.

"FY-10 witnessed a persistent stream of collection attempts targeting U.S. technologies," the report states. "Entities from all regions of the globe sought U.S. technologies to obtain an advantage against regional adversaries, replicate U.S. capabilities, develop countermeasures to U.S. systems, or simply profit commercially. Both friends and foes targeted U.S. technologies."

The DSS report, prepared annually based on information provided by cleared contractors, is the unclassified version of an assessment that details suspicious contacts. The goal is to identify attempts to obtain illegal access to sensitive or classified information or technologies.

"The stakes are high in the battle against foreign collection and espionage targeting U.S. technology, trade secrets, and proprietary information," Stanley Sims, the Defense Security Service director, states in the report's preface. "Not only is our national security at risk but also our technological edge, which is closely tied to the health of our economy and the economic success of the cleared contractor community. Most importantly, every time our adversaries gain access to restricted information it jeopardizes the lives of our warfighters, since those adversaries can use the information to develop more lethal weapons or countermeasures to our systems."

Foreign commercial companies whose business includes supplying militaries account for 35 percent of the "suspicious" contacts, according to DSS, a decrease from nearly 50 percent in FY-09. Suspicious contacts reported from "government" collectors, ministries of defense, branches of the military, foreign military attaches and foreign liaison officers fell to 11 percent. Three other categories saw corresponding increases in FY-10: "government affiliated" individuals representing research institutes, laboratories and universities; "individuals" seeking financial gain or ostensibly conducting academic or otherwise "research" work; and individuals whose affiliation is "unknown."

READ: Defense Security Service Report on Targeting U.S. Technologies (PDF)

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Author:Jason Sherman