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The Age of 'Spy-Tech'

The Art of Counterintelligence

Advanced electronics have left corporate snoops and countersnoops to their own devices

by Catherine Seipp


A Century City, California, attorney involved in a copyright-infringement suit couldn't figure out how the other side always knew exactly what points he was going to bring up. Finally, he had his office "swept" (checked for electronic bugs), and a tiny transmitter was discovered right under the attorney's nose - in the base of his desktop stapler. It had been kept in working order by the cleaning lady, who spoke no English but was told by the night crew boss, who had been paid off, that the "electric stapler" needed its batteries charged once a week.

Welcome to business as usual in the information age. It's cold out there in the corporate world, and a lot of competitors would like to come in, through various means of eavesdropping, to your cozy office. Industrial espionage is not new: 50 years ago the director of a noted New York book publisher noticed a wire strung through a tiny hole in the wall during a board meeting; a rival publisher was discovered listening in an adjoining room. But espionage in recent years has become more sophisticated - and often frighteningly ordinary. Indeed, today's snoop-for-hire isn't likely to be recognized by his trenchcoat and cloak-and-dagger ways. He's become the spy in the gray-flannel suit.


Never have businesses been as worried about tapped phones, bugged rooms or insecure computer systems as they are today, and with good reason. "Out of 10 qualified sweeps, we're finding one or two bugs," says Tom Salway, who heads the West Coast office of Communications Control Consultants, which generally goes by the discreet initials CCS. "A few years ago, it was one out of 50." Some executives don't care if they seem paranoid. A real estate developer in downtown Los Angeles has had his office swept for bugs half a dozen times, just to make sure plans for expansion weren't being leaked. Even though nothing turned up, he considered it money well spent.

For a price, you can do the sweeping yourself. The unassuming Beverly Hills, California, office of CCS, for

"Here in Los Angeles, there were two newpapers bugging each other. All they needed was a TV and $15 worth of parts from Radio Shack. What's funny is they fed each other fake stories once they knew. Then they finally debugged the place."
example, sells such security measures as: pocket bug alerts ($1,100 and up), which vibrate madly if there's a bug in the room; a bug detector ($5,800), which looks like a red Walkman and tells just where the bug is; a scrambler for FAX machines and computer codes ($2,800); and - just in case you're kidnapped - a system that helps police to track you down ($23,000).

But even in this age of advanced technology, some of the easiest and most common snooping methods remain "low-tech" - a fact often overlooked even by careful executives. Roger Tolces, a private investigator whose Electronic Security Co. reflects his specialty in its name, occasionally does things the old-fashioned way. Once, he was paid $2,000 a week to dress up as a night janitor and collect garbage from a financial corporation's competitor. He remembered this while checking the security of an oil company's Century City offices: As he searched the cleaning crew's trash barrel to be sure none of his client's privileged documents had been discarded, he found reams of revealing computer printouts from a financial corporation down the hall.

The next afternoon, after finishing for the day at the oil company, Tolces took the printouts to the chief executive's office at the financial firm, but couldn't get past the secretary. "I said, 'OK, it's a security matter. Show him these and I'll be back again next week,'" he recalls. "I didn't get as far as the elevator. The guy came running down the hall after me. He was livid."
And probably in a big hurry to buy a shredder.

There are plenty of other low-tech ways of getting information the competition would rather keep to itself. Sometimes rival executives go on plant tours and pretend they're just interested members of the public. Sometimes they call in the other company's employees for phony job interviews, hoping to learn some trade secrets in the process. Sometimes they pose as customers at trade shows and ask a lot of questions. And sometimes they simply make a few phone calls: When one company wanted to find out if another was planning to open a plant in a certain town, its officials called the local country clubs, figuring that executives would have applied for memberships in advance. It worked.

Companies are most concerned about espionage in businesses where cutthroat competition is the name of the game. "The garment industry is very security conscious," says private investigator John T. Lynch, an attorney and ex-FBI agent whose Los Angeles-based business, John T. Lynch Inc., has five branches throughout the county. "And there's been a big change in the industry. They used to work out a sketch that would take four hours. Now a lot of designers use computers." Which, of course, makes them vulnerable to hackers.

Toy manufacturers and cookie makers, whose success also depends on product originality, are equally concerned about snoops. Mattel, for example, is especially protective of the developmental secrets behind all its new interactive toys. Like wise, Proctor & Gamble, which has a patent for crispy-outside, chewy-inside cookies, jealously guards its recipes. Only a few years ago, the food firm accused three rivals of spying.


A favorite spy tactic these days is electronic eavesdropping, which is surprisingly simple to arrange. Bugs are illegal in the United States, but they can be bought over the counter at almost any foreign airport's gift shop and sold for huge profits here. They also can be easily made from components available at neighborhood electronics shops. Once acquired, listening devices take just moments to install. "Here in Los Angeles, there were two newspapers bugging each other," says security expert William Alderman. "All they needed was a TV set and $15 worth of parts from Radio Shack, and they could pick up the frequency when the keys hit on the word processor. What's funny is they fed each other fake stories once they knew. Then they finally debugged the place."

CCS has found so many bugs in Southern California offices that it has arranged them into a selling display titled "Conversations Compromised." On exhibit are a Havana cigar tube presented as a gift to an oil-company executive, a pencil sharpener from major semiconductor corporation, and a telephone mouthpiece from a brokerage firm - all buggier than a roach motel. A bug even was found under the shag rug in a toy manufacturer's office - "amazing," according to one CCS exec, because "toy companies usually have tougher security than Fort Knox."

No detail, it seems, is too obscure for firms that are into snooping. "The big guys don't play those kinds of crappy games," says Lynch, whose clients include two-thirds of the Fortune 500 companies. "But I've had a lot of small businesses ask me to violate the law. One expected to make a killing if it could figure out how a large company formulates the printing on containers and keeps it legible until it gets to the shelves." (Keeping ink from running at high temperatures in transport, Lynch explains, is harder than it sounds.)

It might be difficult to picture the processing of container labels as classified information. But if labels are

A few years ago, even such a guileless group as the Osmonds came to CCS when plans for their new TV game show seemed to be leaking. Spying on the Osmonds - it boggles the mind.
your game and you make them well, you'd be naive not to suspect that your competitors would love to know your secret. "I know very few naive businessmen," says Lynch. "Most of them are extremely sharp, and most don't have to steal from anyone. But there's always a competitor who will."

CCS clients include: Jordache, First National Bank, Air India, Pan Am, Toyota, Fiat, Michelin, Gulf, Mobil, Texaco, the Consulate of Morocco in Los Angeles, the Armed Forces of Jordan, about 500 police departments nationwide, advertising agencies, the producers of Miami Vice (who hired CCS as a consultant), Disney and dozens of other Hollywood studios and producers.

A few years ago, even such a guileless group as the Osmonds came to CCS when plans for their new TV game show seemed to be leaking. Spying on the Osmonds - it boggles the mind. "A sweep was done [of the Osmonds' office], and it was cleaned, let's put it that way," says CCS manager Salway.

"The Constitution guarantees you your right to privacy. But unless you've got $35,000 of high-tech equipment, you won't have it."

CCS, which is based in Port Chester, New York, has branches across the country and in Paris and London. The firm was founded in 1975 by Brooklyn, New York-born Ben Jamil, who got his start rewiring antique French telephones in the 1950s. That may seem like a mundane beginning for a business that now conjures up images of James Bond - or at least of Maxwell Smart and his shoe phone. But in today's world of corporate spies, a background in technology is more important than bravado. And those involved tend to be more like Q, who was always providing Bond with new gizmos while seething with exasperation at 007's recklessness.

Tom Salway is full of boyish enthusiasm for his company's state-of-the-art gadgetry. But he has little patience with people who think espionage is glamorous. "I hope I never have a need for this stuff," he says. "I have kids at home, you know what I mean?" Salway doesn't even like spy novels, although CCS is thanked for its technical advice in License Renewed, John Gardner's continuation of Ian Fleming's 007 stories. "I'm into it because of the electronics," Salway says. "That's what excites me."

Roger Tolces, who has offices in Hollywood, Palm Springs and Pasadena but is easiest to reach via his mobile phone, has been in business since 1972 and "into electronics since age 12." He says his clients include "movie stars, attorneys, runs the gamut." Tolces has a movie detective-like terseness ("Tolces here. You've got 30 seconds to tell me what you want.") and also is fond of Bruce Willisisms like "Holy Moly!" But he has the technician's penchant for deadpan statements. "The Constitution guarantees you your right to privacy," he says. "But believe me, unless you've got $35,000 of high-tech equipment, you won't have it."

In the Los Angeles area, where terrorism has become a concern in recent years, security firms often are asked not only to guard their clients' privacy, but also to protect them from physical harm. The latter used to be a request exclusive to foreign customers, but not anymore. Besides its anti-snoop equipment, CCS does a brisk trade in things like letter-bomb detectors and bullet-proof cars. "Since the freeway shootings [in 1987]," says a company official, "we've sold 12 cars [at $40,000 each]. Before it was four or five a year."

Other CCS merchandise includes: a starlight scope that can make even the darkest recesses of the yard clearly visible at night (starting at $1,100); a flashlight-like gadget with magnesium flare bulbs that can temporarily blind an intruder ($210); and briefcases ranging from one that can zap a would-be thief with an electronic shock ($1,500) to another fitted with a discreet video camera that records through a pinhole lens ($6,000). A video camera also can be custom-installed into an office clock or stereo system.

A particularly big seller has been the Voice Stress Analyzer ($3,900 and up). According to the CCS catalog, the VSA is much more accurate than a polygraph lie detector because it records "subaudible microtremors that indicate stress and deception." A new mini-VSA machine comes in pocket size so you'll always have the truth at your fingertips. Voice Stress Analyzers primarily are used by insurance companies and businesses

No laws prohibit individuals from surreptitiously hooking up the Voice Stress Analyzer to the telephone to see if someone's telling the truth. You'll be committing a felony, however, if you tap a telephone or bug an office anywhere in the United States.
where employees have easy access to cash. But recently a real estate broker ordered six.

"He'd originally bought one so he could weed out the looky-loos," says a CCA executive. "A week went by and he wanted five more [for his agents]. When he'd see an ad saying '$200,000, Must Sell,' he'd call up and say 'Would you take $150,000?' " If the seller said no, but the machine said yes...well, now you know why some bargain-hunting real estate agents never give up.

A word about the legality of all this. Though it is against the law to secretly tape-record a conversation in California, some other states - such as Arizona, Colorado, Nevada and New York - have the lenient "one-party consent" rule, which means it's OK as long as the person recording consents. No laws prohibit individuals from surreptitiously hooking up the Voice Stress Analyzer to the telephone to see if someone's telling the truth. You'll be committing a felony, however, if you tap a telephone or bug an office anywhere in the United States. And you need the consent of those present if you want to record a board meeting, although you don't have to tell if you later plan to check each board member's truthfulness with a VSA.

As for all those crazies who see spies under every footstool, if they've got money, they're not always laughed off. "I've got lots of people with weird stories," says Tolces. "One woman said she was being attacked with a 'Sex-Ray.' But it's not all psychotic stuff." A couple living in a condominium complex hired Tolces because they were seeing sparks and colored auras come out of their ceiling and walls every night around midnight. It turned out that their neighbors, who had a son studying physics at UCLA, wanted to scare them out of their unit so they could buy it. "I went there," says Tolces, "and found the son had a generator that was shooting a couple of million volts of electricity into the common wall."

Another time, Tolces got a call from an elderly man who lived in a huge mansion in the posh LA suburb of Bel Air, where he had only five servants for company. He complained UFOs had been bothering him by flying over the house daily around 10 p.m. "In this business, you can't write things off," says Tolces. " was a nice night, the stars were out, but the UFOs never came. The next day, I got a call from this guy's psychiatrist. He said, 'Listen, as far as I'm concerned, he feels a lot better now. So consider it a prescription from me. If he calls you again, go over there. "

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