FBI Busts Russian Spies

Moscow’s agents wanted economic data

FBI Busts Russian Spies FBI Busts Russian Spies

Uncategorized January 31, 2015 0

Once again, the FBI has busted a Russian spy hiding in the United States. But this time, the story is a bit out of... FBI Busts Russian Spies

Once again, the FBI has busted a Russian spy hiding in the United States. But this time, the story is a bit out of the ordinary.

Instead of chasing after nuclear secrets or political secrets, the spy in question was allegedly trying to steal … economic data.

On Jan. 26, the FBI arrested Evgeny Buryakov, an official at Vnesheconombank, and charged him with passing information to Russia’s Foreign Intelligence Service.

Buryakov allegedly conspired with a pair of spies—Igor Sporyshev and Victor Podobnyy—hiding within the Russian trade mission to the U.S.

Burakov’s mission was to gather economic intelligence, including information on American sanctions against Russia in the wake of Moscow’s invasion and annexation of parts of Ukraine beginning in early 2014.

Americans are more accustomed to hearing about Chinese economic espionage these days. Beijing’s industrial snooping—especially on the Internet—has become a top concern both for the U.S. intelligence services and for companies with intellectual property of interest to the People’s Republic.

But this week’s arrest is a reminder that America’s economic espionage problem isn’t exclusively a China or even a “cyber” issue. Plenty of countries view their economies through the lens of national security—and are willing to use their intelligence services in order to gain a financial advantage.

Historically, Russia is an enthusiastic practitioner of economic espionage. In the 1930s, many a Soviet spy used Amtorg, the Soviet-U.S. trading corporation, as cover to collect information on American industry and technology.

Amtorg officials duped U.S. companies by demanding site inspections as a precondition for contracts with the Soviet Union, giving their spooks an opportunity to collect information and technology at the invitation of unwitting businessmen.

But the U.S. didn’t fully comprehend the vast extent of Russian economic spying until the early 1980s. Vladimir Vetrov, a disgruntled KGB official in the agency’s “Directorate T”—which was dedicated to the theft of foreign science and technology—handed over the “Farewell” dossier to French intelligence, which the French later passed on to their American counterparts.

The dossier revealed that the Soviets had carried out a massive campaign of spying aimed at Western technology. The U.S.-Soviet diplomatic thaw of the ’70s had cleared the path for Soviet spies, often under the guise of trade delegations, to collect the kind of technological information that the backward Soviet economy was failing to produce.

Russian espionage took a hit in the early 1990s when the Soviet Union fell. But it wasn’t long before the spies regained their footing.

By the mid-’90s, Russia’s intelligence services were back with a vengeance. The chaos that Russia’s transition from communism to capitalism unleashed on the country’s economy also placed a renewed emphasis on spying for national economic gain.

In 1996, Russia adopted a new law for its intelligence services that mandated they “assist the country’s economic development and scientific and technical progress.”

Russia’s political leadership demanded more economic intelligence from its spies. Then-president Boris Yetsin was caught on camera in February of 1996 indiscreetly urging the intelligence services to close the technology gap with the West by improving its foreign collection.

Later that summer, Alexander Lebed, chief of the Russian security council, reiterated the requirement, stating that the country needed to do a better job of “exploit[ing] the potential of the foreign intelligence service to realize certain programs in the field of economic, information and ecological security.”

By that time, Russia increasingly had the personnel in place to meet this new requirements. In 1996, The Washington Post reported that the number of Russian intelligence officers in the United States had actually surpassed Cold War levels.

At top—Russian president Vladimir Putin visits a wood processing plant in 2014. AP photo/RIA Novosti, Alexei Druzhinin, Presidential Press Service. Above—Russian spy Anna Chapman, caught in the U.S. and deported in 2010. AP photo/Alexander Zemlianichenko, Jr.

The renewed fondness for economic espionage may also have been influenced by the success of Russia’s spy elite—the “Siloviki”—in dominating the ranks of government and industry.

The criminal complaint against Buryakov, the alleged spy FBI officials arrested in late January, may provide an example. The FBI claimed Buryakov, using his cover as an official at Vnesheconombank, tried to spy on an aircraft manufacturing company in a third country as it sought a deal with a Russian state-owned company.

The Moscow Times reported that the unnamed company in question bears a strong resemblance to Canada’s Bombardier, Inc., which recently tried to sell planes to Russia’s state-owned Rostec.

Sergei Chemezov, a former KGB official and friend of Pres. Vladimir Putin, runs Rostec.

But Russia’s economic spying isn’t just limited to the artisanal, in-person variety. A recent National Intelligence Estimate reportedly named Russia as one of the biggest proponents of Internet hacking for economic intelligence.

When the U.S. indicted officers from China’s People’s Liberation Army and charged them with hacking American companies, there were clues that prosecutors may also have had Russian hackers in their sights. The Wall Street Journal reported in May 2014 that “alleged hackers in Russia are likely to be charged soon.”

Though Russia may share China’s—and many other countries’—fondness for economic spying, it’s unlikely that it will the same success the People’s Republic has had. Russian’s Cold War spy history proves that economic espionage can’t save a backward economy. And Russia’s economy is still very backward.

Much of the anxiety policymakers feel about China’s theft of American intellectual property reflects a wider anxiety about the success of China’s economy relative to America’s.

But for Russia, the story is different. The Russians may be able to gain the occasional tactical advantage in trade or contract negotiations—and even save millions of dollars on research and development thanks to the work of their intelligence services.

But no haul of foreign intelligence will be able to undo the damage that corruption and an over-reliance on oil exports have wrought on Russia.

Moscow’s spies are shoveling secrets into an increasingly malfunctioning economic engine.