The Obama administration is drawing a line between stealing the secrets of companies and nations.
- By Shane Harris
Shane Harris is a senior staff writer at Foreign Policy, covering intelligence and cyber security. He is the author of The Watchers: The Rise of America's Surveillance State, which chronicles the creation of a vast national security apparatus and the rise of surveillance in America. The Watchers won the New York Public Library’s Helen Bernstein Book Award for Excellence in Journalism, and the Economist named it one of the best books of 2010. Shane is the winner of the Gerald R. Ford Prize for Distinguished Reporting on National Defense. He has four times been named a finalist for the Livingston Awards for Young Journalists, which honor the best journalists in America under the age of 35. Prior to joining Foreign Policy, he was the senior writer for The Washingtonian and a staff correspondent at National Journal.
As the old saying goes, there is no honor among thieves. And the same can be said for spying. But in the year since former National Security Agency contractor Edward Snowden revealed the vastness of U.S. spying — on its friends and enemies alike — the Obama administration has been at pains to explain why its style of espionage is more ethical or even moral than its adversaries.
On Thursday, the Justice Department’s top national security official launched a new front in that rhetorical campaign and sought to draw a bright line between the kind of spying the United States does on foreign corporations and the spying that foreign countries do on U.S. firms.
John Carlin, the assistant attorney general for the department’s National Security Division, said alleged espionage by five Chinese military officials against American companies and a labor union is an act of criminal "theft" meant to give Chinese companies an unfair advantage over their American competitors. And unlike nations spying on each other for strategic or national security purposes, which Carlin defended, economic espionage meant to benefit one company or industry over another is something that governments know to be so far over that line that none are willing to defend it, he argued.
Carlin’s remarks, delivered in a speech at the Brookings Institution in Washington, D.C., constituted a new push by the Obama administration to deflect Chinese and other foreign criticism against spying by the NSA, which routinely hacks into the computers of foreign corporations, and to define U.S. espionage as fundamentally distinct from the economic spying that China and other countries do.
"We are aware of no nation in the world that publicly states that theft of information for commercial gain is acceptable," Carlin said. "Even in this case, China has not attempted to justify the allegations. Instead, they deny them."
Earlier this week, the Justice Department unveiled indictments against the five Chinese military hackers for stealing pricing information, equipment designs, attorney-client communications, and other proprietary information from some of the biggest U.S. raw materials manufacturers and the country’s largest steel workers union. Prosecutors allege that the Chinese officials stole the information in order to assist Chinese state-controlled enterprises, with whom the American companies and their workers directly compete.
The Obama administration has sought to defend U.S. spying on foreign companies by saying it’s meant only to gain insights about foreign governments, particularly in countries where state-owned enterprises are heavily influenced or controlled by foreign leaders. Under the U.S. system, hacking the computers of a Chinese oil company to determine China’s national energy strategy is fair game. But passing along that information to ExxonMobil, so that it has a leg up on a Chinese competitor, is forbidden.
Carlin sought to characterize purely economic spying as something outside the acceptable norms of foreign policy, calling it a criminal act that undermines the principles of free markets, entrepreneurship, and private ownership. In effect, the Obama administration is now arguing that economic spying is so ethically unacceptable that even those who do it won’t admit it.
"We believe one’s work should not simply be taken from you and given to others," Carlin said. The Justice Department routinely prosecutes intellectual property by domestic and foreign individuals, and it shouldn’t give a "free pass" to a thief who happens to be wearing a uniform, Carlin said. "[That] is not a distinction I think the American people would want us to make."
China is hardly alone in stealing foreign secrets to enrich its country’s economy or favored corporations. Current and former intelligence officials say that the French intelligence services routinely steal foreign companies’ manufacturing designs and other trade secrets and give them to French companies. And the Israeli government allegedly steals foreign military plans in order to bolster its own defense industry and, by extension, its national security. Neither of those countries admits to the economic espionage, but they likely wouldn’t regard it as out-of-bounds or not in their national interests.
Classified documents leaked by Snowden show that the U.S. has spied on Brazilian energy company Petrobras, the Chinese telecom giant Huawei, as well as other foreign companies and foreign governments’ trade officials. But, U.S. officials insist, the fruits of that spying aren’t shared with individual companies — a distinction without much of a difference in the eyes of the Chinese government, which this week accused the Obama administration of blatant hypocrisy by indicting the five Chinese military officials.
Carlin promised that more indictments against foreign officials would be coming, without naming any country in particular. "We will continue to bring these types of cases," Carlin said, adding that the administration hopes criminal charges will have a deterrent effect on foreign hackers. "We must continue until our adversaries realize that the cost of stealing from our companies exceeds the benefits," he said. Carlin also called on companies to increase their cyber defenses and take more precautions to deter hacking in the first place.