Insider Espionage 1703468440

INTELLIGENCE AND COUNTERINTELLIGENCE STUDIES
INSIDER ESPIONAGE
U.S. VULNERABILITY TRENDS
AND FEDERAL STATUTES
No part of this digital document may be reproduced, stored in a retrieval system or transmitted in any form or
by any means. The publisher has taken reasonable care in the preparation of this digital document, but makes no
expressed or implied warranty of any kind and assumes no responsibility for any errors or omissions. No
liability is assumed for incidental or consequential damages in connection with or arising out of information
contained herein. This digital document is sold with the clear understanding that the publisher is not engaged in
rendering legal, medical or any other professional services.
INTELLIGENCE AND
COUNTERINTELLIGENCE STUDIES
Additional books in this series can be found on Nova‘s website

under the Series tab.
Additional e-books in this series can be found on Nova‘s website

under the e-book tab.
INTELLIGENCE AND COUNTERINTELLIGENCE STUDIES
INSIDER ESPIONAGE
U.S. VULNERABILITY TRENDS
AND FEDERAL STATUTES
HANA PARISH
EDITOR
New York
Copyright © 2014 by Nova Science Publishers, Inc.
All rights reserved. No part of this book may be reproduced, stored in a retrieval system or
transmitted in any form or by any means: electronic, electrostatic, magnetic, tape,
mechanical photocopying, recording or otherwise without the written permission of the
Publisher.
For permission to use material from this book please contact us:
Telephone 631-231-7269; Fax 631-231-8175
Web Site: http://www.novapublishers.com
NOTICE TO THE READER

The Publisher has taken reasonable care in the preparation of this book, but makes no
expressed or implied warranty of any kind and assumes no responsibility for any errors or
omissions. No liability is assumed for incidental or consequential damages in connection
with or arising out of information contained in this book. The Publisher shall not be liable
for any special, consequential, or exemplary damages resulting, in whole or in part, from
the readers‘ use of, or reliance upon, this material. Any parts of this book based on
government reports are so indicated and copyright is claimed for those parts to the extent
applicable to compilations of such works.
Independent verification should be sought for any data, advice or recommendations

contained in this book. In addition, no responsibility is assumed by the publisher for any
injury and/or damage to persons or property arising from any methods, products,
instructions, ideas or otherwise contained in this publication.
This publication is designed to provide accurate and authoritative information with regard
to the subject matter covered herein. It is sold with the clear understanding that the
Publisher is not engaged in rendering legal or any other professional services. If legal or any
other expert assistance is required, the services of a competent person should be sought.
FROM A DECLARATION OF PARTICIPANTS JOINTLY ADOPTED BY A
COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND A COMMITTEE OF
PUBLISHERS.
Additional color graphics may be available in the e-book version of this book.
Library of Congress Cataloging-in-Publication Data

ISBN:(eBook)
Published by Nova Science Publishers, Inc. † New York

CONTENTS
Preface vii
Chapter 1 Technological, Social, and Economic Trends That
Are Increasing U.S. Vulnerability to Insider
Espionage 1
Lisa A. Kramer, Richards J. Heuer, Jr.
and Kent S. Crawford
Chapter 2 Stealing Trade Secrets and Economic Espionage:
An Overview of 18 U.S.C. 1831 and 1832 45
Charles Doyle
Index 67
PREFACE
This book explores ten technological, social, and economic trends in the
United States and globally that are serving to increase opportunity and
motivation for espionage. Findings suggest that American ―insiders‖ have an
unprecedented level of access to classified and proprietary information due to
technological advances in information storage and retrieval. American
employees have greater opportunity to establish contact with foreign entities
and to transfer information to them through traveling internationally more
often and by participating in international research and business ventures more
frequently. Internet use is expanding globally and computer-users are
becoming more culturally and linguistically diverse. The Internet can now be
used to transmit massive amounts of digitized information to multiple foreign
parties simultaneously. Finally, the market for U.S. information is expanding.
American insiders can sell more types of information to a broader range of
foreign buyers than ever before. In addition to these new opportunities for
espionage, American employees are more often encountering situations that
can provide motivation for this crime. More insiders are experiencing financial
problems and gambling addiction, both of which can provide impetus for
workplace theft. Loyalty to organizations is diminishing and a greater
proportion of American workers are at risk for becoming disgruntled. A
growing number of insiders have emotional and financial ties to other
countries. Under some circumstances, insiders with loyalties to other peoples
may be less inclined to view espionage as morally wrong. It is possible that
some insiders with a global orientation to world affairs will view espionage as
morally justifiable if they feel that sharing information will benefit the ―world
community‖ or prevent armed conflict. This book discusses the United States'
vulnerability and federal statutes on insider espionage.
viii Hana Parish
Chapter 1 – This study explores ten technological, social, and economic

trends in the United States and globally that are serving to increase opportunity
and motivation for espionage. Findings suggest that American ―insiders‖ have
an unprecedented level of access to classified and proprietary information due
to technological advances in information storage and retrieval. American
employees have greater opportunity to establish contact with foreign entities
and to transfer information to them through traveling internationally more
often and by participating in international research and business ventures more
frequently. Internet use is expanding globally and computer-users are
becoming more culturally and linguistically diverse. The Internet can now be
used to transmit massive amounts of digitized information to multiple foreign
parties simultaneously. Finally, the market for U.S. information is expanding.
American insiders can sell more types of information to a broader range of
foreign buyers than ever before. In addition to these new opportunities for
espionage, American employees are more often encountering situations that
can provide motivation for this crime. More insiders are experiencing financial
problems and gambling addiction, both of which can provide impetus for
workplace theft. Loyalty to organizations is diminishing and a greater
proportion of American workers are at risk for becoming disgruntled. A
growing number of insiders have emotional and financial ties to other
countries. Under some circumstances, insiders with loyalties to other peoples
may be less inclined to view espionage as morally wrong. It is possible that
some insiders with a global orientation to world affairs will view espionage as
morally justifiable if they feel that sharing information will benefit the ―world
community‖ or prevent armed conflict.
Chapter 2 – Stealing a trade secret is a federal crime when the information
relates to a product in interstate or foreign commerce, 18 U.S.C. 1832 (theft of
trade secrets), or when the intended beneficiary is a foreign power, 18 U.S.C.
1831 (economic espionage). Section 1832 requires that the thief be aware that
the misappropriation will injure the secret‘s owner to the benefit of someone
else. Section 1831 requires only that the thief intend to benefit a foreign
government or one of its instrumentalities.
Section 1832 (theft) violations are punishable by imprisonment for not
more than 10 years, or a fine of not more than $250,000 (not more than $5
million for organizations), or both. Section 1831 (espionage) violations by
individuals are punishable by imprisonment for not more than 15 years, or a
fine of the greater of not more than $5 million, or both. Section 1831
violations by organizations are punishable by a fine of not more than the
greater of $10 million or three times the value of the stolen trade secret.
Preface ix
Maximum fines for both individuals and organizations may be higher when
the amount of the gain or loss associated with the offense is substantial. Any
attempt or conspiracy to commit either offense carries the same penalties as
the underlying crime. Offenders must also be ordered to pay restitution.
Moreover, property derived from the offense or used to facilitate its
commission is subject to confiscation. The sections reach violations occurring
overseas, if the offender is a United States national or if an act in furtherance
of the crime is committed within the United States.
Depending on the circumstances, misconduct captured in the two sections
may be prosecuted under other federal statutes as well. A defendant charged
with stealing trade secrets is often indictable under the Computer Fraud and
Abuse Act, the National Stolen Property Act, and/or the federal wire fraud
statute. One indicted on economic espionage charges may often be charged
with acting as an unregistered foreign agent and on occasion with disclosing
classified information or under the general espionage statutes.
P.L. 112-269 set the maximum fines described above. It also instructed the
United States Sentencing Commission to examine the sufficiency of federal
sentencing guidelines and policies in the area of stealing trade secrets and
economic espionage. P.L. 112-236 amended the trade secrets prohibition of 18
U.S.C. 1832 to overcome the implications of the Court of Appeals‘ Aleynikov
decision. That decision held that the section did not outlaw the theft of
computer code designed to facilitate a company‘s commercial transactions,
because the code did not relate to a product to be placed in the stream of
commerce.
In: Insider Espionage ISBN: 978-1-61728-226-3
Editor: Hana Parish © 2014 Nova Science Publishers, Inc.
Chapter 1
TECHNOLOGICAL, SOCIAL, AND ECONOMIC

TRENDS THAT ARE INCREASING U.S.
VULNERABILITY TO INSIDER ESPIONAGE*
Lisa A. Kramer, Richards J. Heuer, Jr.

and Kent S. Crawford
ABSTRACT
This study explores ten technological, social, and economic trends in the United States
and globally that are serving to increase opportunity and motivation for espionage. Findings
suggest that American ―insiders‖ have an unprecedented level of access to classified and
proprietary information due to technological advances in information storage and retrieval.
American employees have greater opportunity to establish contact with foreign entities and
to transfer information to them through traveling internationally more often and by
participating in international research and business ventures more frequently. Internet use is
expanding globally and computer-users are becoming more culturally and linguistically
diverse. The Internet can now be used to transmit massive amounts of digitized information
to multiple foreign parties simultaneously. Finally, the market for U.S. information is
expanding. American insiders can sell more types of information to a broader range of
foreign buyers than ever before. In addition to these new opportunities for espionage,
American employees are more often encountering situations that can provide motivation for
this crime. More insiders are experiencing financial problems and gambling addiction, both
of which can provide impetus for workplace theft. Loyalty to organizations is diminishing
*
This is an edited, reformatted and augmented version of Technical Report 05-10, issued by The
Defense Personnel and Security Research Center (PERSEREC), dated May 2005.
2 Lisa A. Kramer, Richards J. Heuer, Jr. and Kent S. Crawford
and a greater proportion of American workers are at risk for becoming disgruntled. A
growing number of insiders have emotional and financial ties to other countries. Under
some circumstances, insiders with loyalties to other peoples may be less inclined to view
espionage as morally wrong. It is possible that some insiders with a global orientation to
world affairs will view espionage as morally justifiable if they feel that sharing information
will benefit the ―world community‖ or prevent armed conflict.
INTRODUCTION
Most open-source literature that explores the phenomenon of insider
espionage consists of journalistic accounts, biographical works, case studies of
individual spies, and memoirs of intelligence officer defectors. As an
organization responsible for systematic research on personnel security,
PERSEREC occasionally applies social science methods to the study of
espionage. We recently published Espionage Against the United States by
American Citizens: 1947-2001, a documentation of statistical analyses
conducted with a large unclassified dataset of espionage cases. PERSEREC
researchers have published an anthology of significant studies of insider
espionage entitled Citizen Espionage: Studies in Trust and Betrayal, and a
comprehensive literature review entitled Temperament Constructs Related to
Betrayal of Trust. Soon, PERSEREC will publish Counterintelligence
Reporting Essentials, a guide to identifying behaviors in the workplace that are
of counterintelligence concern and which should be reported by coworkers and
supervisors.
Building upon findings of previous research, the current study explores
insider espionage from an especially broad perspective by examining factors
that are relevant to prevalence of espionage. Rather than analyzing
psychological factors that influence an individual‘s decision to spy, this study
examines situational factors that affect the frequency with which insider
espionage will occur. The technological, social, and economic trends explored
in this study suggest that greater numbers of American employees have
opportunity to commit espionage and are more often encountering situations
that may motivate them to commit this crime.
The factors explored in this study are relevant to espionage involving the
theft of classified as well as proprietary information, and pertain primarily to
the illicit transfer of material to foreign rather than domestic recipients.
Because this study presents data gathered from open sources, this report is
unclassified. It is our hope that this publicly available document will be of
Technological, Social, and Economic Trends … 3
value to those who are interested in U.S. vulnerability to insider espionage, but
who do not have access to classified espionage research.
James. A. Riedel
Director
EXECUTIVE SUMMARY
Permanent and temporary employees, vendors, contractors, suppliers, ex-
employees, and other types of ―insiders‖ are among those who are most
capable of exploiting organizational assets at greatest expense to U.S.
interests. Due to their knowledge of the public agencies and private companies
that employ them, their familiarity with computer systems that contain
classified and proprietary information, and their awareness of the value of
protected information in the global market, insiders constitute a significant
area of vulnerability for national security.
Using a methodology similar to that employed in epidemiological studies
where scientists explain or forecast changes in prevalence of certain diseases,
this study examines prevalence of insider espionage. The medical researcher
knows that heart disease is associated with age, weight, amount of exercise,
blood pressure, diet, stress, genetics, and other factors, and can thus predict
changes in the pervasiveness of heart disease by analyzing changes in these
variables. Similarly, because we know that opportunity and motivation come
together to create the crime of espionage, we can forecast changes in the
prevalence of insider espionage by analyzing trends that influence opportunity
and motivation for spying. As the medical researcher can identify higher risk
groups but cannot predict which specific individuals will develop heart
disease, we can make observations regarding U.S. vulnerability to insider
espionage but cannot predict exactly which insiders will engage in this crime.
Findings of this study suggest that the information revolution, global
economic competition, the evolvement of new and nontraditional intelligence
adversaries, and other changes in the domestic and international environment
have converged to create unusually fertile ground for insider espionage.
Primary findings of this research are as follows:
• Technological advances in information storage and retrieval are

dramatically improving insiders‘ ability to access and steal classified
and proprietary information.
• The global market for protected U.S. information is expanding.

American insiders can sell more types of information to a broader
range of foreign buyers than ever before.
• The internationalization of science and commerce is placing more
employees in a strategic position to establish contact with foreign
scientists, businesspersons, and intelligence collectors, and to transfer
scientific and technological material to them.
• The increasing frequency of international travel is creating new
opportunity for motivated sellers of information to establish contact
with, and transfer information to, foreign entities. Foreign buyers have
greater opportunity to contact and assess the vulnerabilities of
American personnel with access to protected information.
• Global Internet expansion is providing new opportunities for insider
espionage. The Internet allows sellers and seekers of information to
remain anonymous and provides means by which massive amounts of
digitized material can be transmitted to foreign parties in a secure
manner.
• Americans are more vulnerable to experiencing severe financial crisis
due to aggressive consumer spending habits and other factors.
Financial problems are a common source of motivation for insider
espionage.
• The increasing popularity of gambling and prevalence of gambling
disorders suggests that greater numbers of insiders will commit
workplace crimes such as espionage to pay off debts and to sustain
gambling activities.
• Because organizational loyalty is diminishing, fewer employees may
be deterred from committing espionage due to a sense of obligation to
the agencies and companies that employ them. Changing conditions in
the American workplace suggest that greater numbers of insiders may
become motivated to steal information from employers to exact
revenge for perceived mistreatment.
• More insiders now have ethnic ties to other countries, communicate
with friends and family abroad, and interact with foreign
businesspersons and governments. Foreign connections provide
insiders with opportunity to transfer information outside the United
States, and foreign ties can provide motivation for doing so.
• More Americans view human society as an evolving system of
ethnically and ideologically diverse, interdependent persons and
groups. While this is highly beneficial in innumerable respects, it is
also possible that some insiders with a global orientation to world

affairs will, under extreme circumstances, view espionage as morally
justifiable if they feel that sharing information will benefit the ―world
community.‖
While described separately for discussion purposes, the trends discussed

in this study are converging and interacting with one another to create an
insider espionage risk that can be described as greater than the sum of its parts.
The vulnerabilities created by each trend are magnified by the negative effects
of the others. The fact that these trends will interact with one another—are
interacting with one another—suggests we are at greater risk for experiencing
insider espionage than in previous decades. In this analysis we did not identify
a single countervailing trend that will make insider espionage more difficult or
less likely in the immediate future.
The trends explored in this research indicate that mitigating U.S.
vulnerability to insider espionage will increasingly require the orchestrated
efforts of personnel security, information security, and counterintelligence
professionals. Improved personnel security screening can reduce the number
of potential espionage offenders, more rigorous information security measures
can reduce the vulnerability of computer systems, and more effective
counterintelligence operations will limit the damage that insider spies can
inflict by detecting their activities sooner.
By denying access to insiders whose backgrounds suggest they are at risk
for engaging in unreliable, untrustworthy, or disloyal behavior, personnel
security measures provide an essential safeguard against the loss of classified
and proprietary information. For this reason, personnel security policies and
practices must be improved. However, even a more effective personnel
security system will not fully eliminate the insider espionage threat. Owing to
the inherent difficulty of predicting human behavior, it will never be possible
to identify all individuals who, under certain circumstances, will choose to
steal classified and proprietary information. Because we will always have
insiders in our midst who, unbeknownst to us have become sufficiently
motivated to commit espionage, we must consider the extent to which these
insiders have opportunity to do so.
It is too frequently assumed that information contained within large
databases and computer networks is secure because authorized users
(sometimes thousands of users) have security clearances. Unfortunately,
neither the clearance process nor other personnel security countermeasures can
offer this type of guarantee. People change in response to situations they
encounter in their personal and professional lives. Lessons learned from the
post-World War II history of espionage illustrate the fact that not all insiders
who are reliable and trustworthy at the time they are granted a position of
trust, will remain so. For this reason, American organizations must protect
intellectual assets by reducing opportunity for information theft. Findings of
this study suggest that American organizations within government and
industry must better control access to, and track the use of, digitized
proprietary and classified files.
INTRODUCTION
Permanent and temporary employees, vendors, contractors, suppliers, ex-
employees, and other types of ―insiders‖ are among those who are most
capable of exploiting organizational assets at greatest expense to U.S.
interests. Due to their knowledge of the public agencies and private companies
that employ them, their familiarity with computer systems that contain
classified and proprietary information, and their awareness of the value of
protected information in the global market, insiders constitute a significant
area of vulnerability for national security (Fialka, 1997; Freeh, 1996; Nockels,
2001; Shaw, Ruby, & Post, 1998; Thurman, 1999; Venzke, 2002). An
estimated 2.4 million insiders have access to classified information currently,
and while difficult to approximate, insiders with access to proprietary and
sensitive technological information are likely to number in the tens of millions
(National Security Institute, June 2002). While the deliberate compromise of
classified or proprietary information to foreign entities is a relatively rare
crime, even one case of insider espionage can cause extraordinary damage to
national security.
Because espionage is a secret activity, we cannot know how many
undiscovered spies are currently active in American organizations, or what the
future will bring in terms of discovered espionage cases. Nevertheless, we are
not entirely in the dark when assessing the magnitude of the insider espionage
threat. We can draw inferences from relevant changes in technology, society,
and the international environment that affect opportunity and motivation for
spying.
Approach
In exploring current and future prevalence of insider espionage, this study

employs an approach similar to that used in epidemiological research where
scientists explain or forecast changes in the prevalence of disease within a
population. The medical researcher knows, for example, that heart disease is
associated with age, weight, amount of exercise, blood pressure, diet, stress,
genetics, and other factors, and can thus estimate pervasiveness of heart
disease by analyzing changes in these variables. Similarly, because we know
that certain factors influence the likelihood that insider espionage will occur,
we can forecast changes in the frequency of insider espionage by analyzing
trends that influence these factors.
Opportunity for espionage consists of access to classified or proprietary
information that can be exchanged for money or other benefits, access to
foreign entities interested in obtaining this information, and means for
transferring this information to foreign recipients. Motivation, broadly defined,
is a feeling or state of mind that influences one's choices and actions. While
motivation for espionage results from a complex interaction between
personality characteristics and situational factors (Crawford & Bosshardt,
1993; Eoyang, 1994; Sarbin, 1994; Parker & Wiskoff, 1991; Shaw, Ruby &
Post, 1998; Timm, 1991), this study focuses primarily on the latter. Despite the
significance of individual characteristics in determining which insiders will
commit espionage, if more insiders are encountering situations that can
provide motivation for espionage, more insiders could become sufficiently
motivated to spy. If greater numbers of motivated insiders also have
opportunity for espionage, as the findings of this study indicate, it is logical to
conclude that U.S. vulnerability to insider espionage is increasing.
PART I. TRENDS THAT AFFECT OPPORTUNITY

FOR INSIDER ESPIONAGE
Part I of this study explores five technological, social, and economic

trends that are resulting in greater opportunity for insider espionage:
technological advancements in information storage and retrieval, increasing
global demand for protected U.S. information, the internationalization of
scientific research and commerce, the increasing frequency of international
travel, and global Internet expansion.
A. Technological Advancements in Information Storage and

Retrieval
Technological advances in information storage and retrieval are making it

increasingly difficult to control access to classified and proprietary
information. The same characteristics of information technology (IT) systems
that are improving employee productivity are serving to enhance an insider‘s
capacity to gather information for foreign entities. Two specific IT
advancements have particularly dramatic implications with respect to insider
espionage: the development of large, networked databases with automated
search functions and the miniaturization of mass data-storage devices.
Emergence of Searchable Databases

Large, networked databases are becoming more prevalent in
organizations. Because greater numbers of employees have access to
networked systems, and because these systems can be searched electronically
for very specific kinds of data, malicious insiders are now often highly
equipped to procure information that is of value to foreign entities. While the
vast majority of employees do not exploit organizational IT systems for
personal gain, those who choose to do so are now armed with technologies that
make them particularly effective in this capacity.
Aldrich Ames, a veteran employee of the CIA, obtained information for
Soviet intelligence officers by searching large digitized datasets. ―For the
KGB it was rather like subscribing to a new and highly classified database
called CIA Online,‖ writes David Wise (1995, p. 55). CIA officer Harold
Nicholson obtained U.S. intelligence information on Chechnya for Russian
operatives by surfing large organizational databases that he had no legitimate
need to access. Air Force veteran Brian Regan searched Intelink, a classified
government database of intelligence documents, to gather information
pertaining to military preparedness of China, Iran, Iraq, and Libya. Among
other information, Regan obtained the coded coordinates of Iraqi and Chinese
missile sites. Intelink is estimated to have over 50,000 users with access to
Sensitive Compartmented Information and is housed on over 200 servers at
over 100 different physical sites. Another 265,000 Intelink users have access at
the lower, Secret level (Poulson, 2001; Whitelaw & Enrich, 2001).
Miniaturization of Data Storage Devices

In addition to improving an employee‘s ability to locate specific types of
classified and proprietary information, IT advances are making it easier for
insiders to physically remove information from organizations. Data-storage

devices that once held between 100 and 200 megabytes of data per cartridge
now store 20 gigabytes or more. Hard-card storage systems no larger than
credit cards now hold up to 8 gigabytes of data—the equivalent of the hard-
drive contents of an average office desktop computer system (Kipp, 2001).
Examples of new, portable, high-memory devices include the keychain drive,
a device about the size of a key that can be popped into a USB port. The
device holds between 16 megabytes and two gigabytes of data—the equivalent
of a pickup truck filled with books (Mossberg, 2003). Another such gadget is
the USB Memory Watch, a seemingly normal timekeeping device with a USB
cable hidden in the band and the capacity to store 512 megabytes of data
(around 11,000 pages of text). The USB Memory Pen is a fully functional
refillable ink pen measuring 5.75 inches in length that can store 256
megabytes of data (about 5,500 pages of text). As the miniaturization of data
storage hardware continues, we may see the emergence of nanoscale
devices—devices with structural features in the range of 1 to 100 nanometers.
(A nanometer is one billionth of a meter.) Potential applications of nanoscale
electronics in the future include tiny mass data storage devices with capacities
that are 1,000 times greater than today (National Science Board, 2002).
The Case of Robert Hanssen
FBI officer Robert Hanssen capitalized on the vulnerability of IT

systems and his status as a trusted employee to become one of the most
damaging spies in United States history. Charged with spying against the
United States for over 20 years, Hanssen provided Soviet (and then
Russian) intelligence agents with highly classified documents concerning
U.S. intelligence sources and electronic surveillance techniques.
Hanssen‘s computer queries, which extended substantially beyond the
realm of information he had a need to know, did not arouse suspicion
among his colleagues because he was an authorized user of the databases
he exploited. Hanssen walked into Bureau units in which he had worked
long before, logged onto stand-alone data systems, and retrieved the
identities of foreign agents whom U.S. intelligence services had
compromised (Commission for the Review of FBI Security Programs,
2002). Using specialized data-storage devices, Hanssen removed at least
26 encrypted floppy-diskettes from the FBI using a technique called ―40-
track mode‖ in which text is hidden on what appears to others to be a
blank diskette (Verton, 2001).
Hanssen also made use of his counterintelligence skills and knowledge

of FBI automated record systems to confirm that his illicit activities had
gone undetected. Before leaving material for his Russian handlers,
Hanssen would search the Bureau‘s systems to determine whether the
locations had been identified as drop sites (Commission for the Review of
FBI Security Programs, 2002). Hanssen‘s espionage activities illustrate
how automated information systems ―are likely to become the spy‘s best
friend‖ in the years ahead (Herbig & Wiskoff, 2002, p. 74).
Implications for Insider Espionage

Technological advances in information storage and retrieval are making it
increasingly difficult to prevent the illicit dissemination of classified and
proprietary information. The growth of automated databases and computer
networks is expanding the amount of information that can be collected and
compromised by employees, and increases our vulnerability to every single
malicious insider. Employees can now locate, duplicate, and distribute
classified and proprietary files while sitting at a workplace computer station
engaged in what appears to coworkers and supervisors as normal work
activities. The steadily increasing capacity and decreasing size of data storage
devices makes it possible for insiders to remove large quantities of information
from organizations with little risk of being caught. The relative ease with
which digitized information can be stolen likely increases an individual‘s
confidence they will avoid detection. Recent cases of espionage involving
government and industry personnel suggest that employees will increasingly
capitalize upon information technologies to commit espionage in the years
ahead.
B. An Expanding Market for Protected U.S. Information
As a result of America's emergence as the dominant political, economic,

and military force, and the increasingly competitive global economy, foreign
demand for protected U.S. information is increasing (Freeh, 1996). American
insiders have access to more types of protected information that can be sold
for profit, and can sell information to a broader range of private and
government-sponsored entities.
More Types of Information Can Be Sold to Foreign Buyers

Insiders working within American biotechnology, aerospace,
telecommunications, computer software and hardware, advanced
transportation, manufacturing, energy research, pharmaceutical, and
semiconductor industries have access to proprietary information that foreign
businesses and intelligence collectors will pay substantial sums of money to
obtain (Freeh, 1996; Moule, 1996). Increasing demand for American proprie-
tary information supplements ongoing demand for classified information
pertaining to information systems; sensors and lasers; electronics, aeronautics,
armaments and energetic materials; marine and space systems; guidance,
navigation and vehicle systems; signature control systems; space systems;
materials, manufacturing and fabrication; information warfare; nuclear
systems technologies; power systems; chemical-biological systems; weapons
effects and countermeasures; ground systems; and directed and kinetic energy
systems (Defense Security Service, 2002; National Counterintelligence
Executive, 2000).
While the United States distinguishes information as classified,
proprietary, and dual-use (technologies with both military and commercial
applications), it is worth noting that foreign entities gathering and utilizing
American intelligence do not necessarily make such distinctions. As economic
strength becomes ―the new currency of national power,‖ the distinction
between espionage involving the theft of classified information and espionage
involving the theft of proprietary information may be lessening with respect to
national security implications (Schweizer, January/February 1996, p. 1).
More Foreign Buyers of Protected Information

The supervising agent of the FBI field office in Palo Alto, CA, recently
stated that at least 20 foreign nations have repeatedly attempted to steal U.S.
trade secrets in Silicon Valley over the past 5 years (Iwata, 2003). Former FBI
Director Louis Freeh reported to a U.S. Senate committee in 1998 that entities
from at least 23 countries were engaged in suspicious intelligence collection
activities directed at U.S. interests (Freeh, 1998). A senior FBI official who
attended a 1996 conference sponsored by PERSEREC indicated that the FBI
had 800 active espionage investigations underway, involving 23 different
countries (Geide, 1996).
In addition to foreign governments, American employees can now sell
protected information to foreign and multinational corporations, foreign
research and science institutions, freelance agents (some of whom are former
intelligence officers), terrorist organizations, revolutionary groups, extremist

ethnic or religious organizations, drug syndicates, and organized crime groups.

The expanding market for protected U.S. information is increasing our
vulnerability to espionage in several ways. More Americans have access to
information that foreign entities want and are willing to pay for, and there are
more foreign entities to which this information can be sold. The increasing
demand for protected U.S. technologies suggests that greater numbers of
foreign nationals from more countries will be striving to recruit insiders into
espionage. As the world‘s leading industrial power and leader in technology
development, the United States is a prime target of foreign economic
collection (National Counterintelligence Executive, 2001). As more allies
pursue U.S. technological information, some insiders may find it easier to
rationalize committing espionage. Some individuals who consider it
reprehensible to sell U.S. technology or military secrets to an avowed enemy
of the United States may be less reticent to sell this information to individuals
or organizations located in countries that are viewed as friendly to U.S.
interests.
C. Internationalization of Scientific Research and Commerce
International R&D and business relationships allow foreign and American

organizations to share costs, pool risks, and consolidate resources, but these
relationships can also lead to espionage against the United States. Joint
ventures, joint research, coproduction and other exchange agreements, as well
as international conventions and seminars, place foreign personnel in close
proximity to U.S. personnel. Insiders can use these venues to identify potential
foreign buyers, and foreign buyers can use the same venues to assess and
recruit American employees (National Security Agency, 1997). Scientific
conferences and international research facilities are rich targeting grounds as
specific technologies are linked with knowledgeable personnel (Defense
Investigative Service, 1996; National Counterintelligence Executive, 2000;
Overseas Security Advisory Council, 1992). International R&D alliances and
foreign trade relationships are now so diverse and flexible that the extent and
growth of such relationships is difficult to measure statistically. Available data
suggest that greater numbers of insiders routinely participate in collaborative
international scientific and commercial endeavors.
International R&D Alliances

The number of international science and technology agreements being
forged between the U.S. government and foreign counterparts is increasing
over time (Government Accounting Office, 1999). One GAO study showed
that seven government organizations established 575 international research
agreements during 1997 alone. The organizations that established these
agreements are Department of Energy, National Aeronautics and Space
Administration, National Institutes of Health, National Institutes of Standards
and Technology, the National Oceanographic and Atmospheric Administra-
tion, National Science Foundation, and Department of State. These
cooperative ventures involved 57 countries, eight international organizations,
and 10 groups of organizations or countries. Fifty-four of these agreements
were broad-based arrangements between the U.S. government and the
governments of foreign countries. The remaining 521 agreements were
between research agencies and their counterparts in foreign governments and
organizations, or agreements to conduct cooperative research, to provide
technical support, or to share data and equipment.
Scientific collaboration between the United States and other countries is
occurring more often in the private sector as well. Between 1990 and 2000,
6,477 technology alliances were established, compared with the establishment
of 3,826 such alliances between 1980 and 1989 (National Science Board,
2002). The majority of these international alliances involved companies from
the United States, Japan, and countries of Western Europe. Eighty percent of
these alliances involved at least one U.S.-owned organization (National
Science Board, 2002). The percentage of papers authored by U.S. scientists in
conjunction with foreign scientists has been increasing steadily for decades
(National Science Board, 2002).
Establishment of International Research Facilities

The increasingly multicultural nature of R&D is furthermore illustrated by
the establishment of international research facilities. In 1997 U.S. firms
established 186 research and development facilities in other countries. As of
1998 (the latest year for which data are available), 715 R&D facilities were
operated by 375 foreign-owned companies in the United States. Thirty-five
percent of these facilities were owned by Japanese parent-companies. Other
countries with a significant presence in the United States are Germany and the
United Kingdom. R&D spending by U.S. affiliates of foreign companies in the
United States increased 28 percent between 1997 and 1998—from $17 billion
to $22 billion. This is the largest single-year increase in such expenditures

since 1990 (National Science Board, 2002).
American Firms Exporting Abroad

Economic globalization is resulting in more frequent interaction between
American employees and foreign businesspersons and government
representatives. Broad measures of the level of interaction between insiders
and foreign entities are the number of American organizations involved in the
exportation of goods and services to foreign countries, and the value of these
goods and services. About 69,000 U.S. companies engaged in the exportation
of goods and services to other nations in 1987. Ten years later in 1997, over
200,000 such organizations were identified. In 1993 total U.S. exports in
goods and services were valued at around $643 billion. Eight years later in
2001, U.S. exports totaled over 1 trillion (U.S. Department of Commerce,
2003).
Reflecting the fact that new technologies more often have both military
and commercial applications, greater numbers of American personnel are in
the awkward position of selling unclassified and approved-for-export versions
of products to countries whose intelligence services are actively conducting
espionage to acquire classified technologies in the same industries. For
example, cleared defense contractor personnel employed in highly
compartmented programs to develop and launch reconnaissance satellites and
imaging systems now travel to foreign countries to sell unclassified versions of
these technologies.

By increasing the frequency with which knowledgeable insiders meet with
foreigners interested in exploiting their knowledge, the globalization of
business and scientific research is expanding opportunity for espionage.
Relationships established through participation in joint projects and attendant
activities provide opportunities for Americans to sell classified information
and make it easier for foreign entities to assess and recruit Americans with
exploitable weaknesses. The frequency and circumstances of these
relationships also makes it increasingly difficult for security and
counterintelligence personnel to distinguish normal relationships from the few
that represent a significant security risk.
Foreign business relationships create an environment that is particularly
conducive to espionage. Some feel there is a growing inclination of those
involved to regard the unauthorized transfer of information or technology as a
―business matter rather than an act of national betrayal or treason‖ (Wells,

2000). Foreign business relationships commonly involve discussions in which
sellers and buyers bargain over price, quantity, and quality— and sensitive
information or a side contract as a ―technical consultant‖ can easily enter into
these negotiations.
Collaboration on scientific or technical research projects, by its very
nature, involves the approved exchange of scientific and technical information.
Some insiders participating in these exchanges have access to protected
information that should not be shared, but the line between protected and
public information is not always clear. Some scientists believe that research
findings should always be shared rather than protected.
D. Increasing Frequency of International Travel
Persons who travel overseas are in a position to establish contact with

foreign buyers of information. An insider‘s risk of being targeted for
exploitation by foreign intelligence services increases outside the United
States where foreign operatives are less vulnerable to detection by U.S.
counterintelligence services. Foreign operatives are more aggressive in their
attempts to recruit Americans into espionage when Americans are on
unfamiliar ground and may be more easily approached (National Security
Agency, 2001). While travel from the United States declined from 2000 to
2002, and travel to the United States declined from 2000 to 2003, travel to and
from the United States regained an upward momentum in 2004 and is
projected to increase in the years ahead.
U.S. Travelers to Overseas Destinations

As shown in Figure 1, 26.9 million visits were made overseas by U.S.
residents in 2000. In 2001, Americans traveled overseas an estimated 25.2
million visits and in 2002, overseas travel dropped to 23.4 million visits. In
2003, however, overseas visits by American rose to 24.5 million. While final
figures are not yet available, based on travel occurring January-September,
outbound travel to overseas destinations is estimated to total 27.6 million in
2004 (Office of Travel and Tourism Industries, 2004a; R. Erdmann, personal
communication, January 24, 2005).
Visits to China by U.S. residents are projected to reach 437,000 in the year
2006, a 21 percent increase from the 361,000 documented visits that occurred
in 2002. Visits to Taiwan by U.S. residents are projected to reach 324,000 in
2006, a 13 percent increase from the 288,000 visits documented in 2002.

Visits to India are projected to number 320,000 in 2006, a 25 percent increase
from the 257,000 visits documented in 2002. Visits to Korea are projected to
number 759,000 in 2006, a 19 percent increase from the 639,000 documented
visits in 2002. Visits to Germany are projected to number 1.4 million in 2006,
a 17 percent increase from 1.2 million documented visits in 2002. Visits to
Israel are projected to number 331,000 in 2006, a 26 percent increase from the
263,000 documented visits in 2002. Finally, visits to Japan are projected to
number 4.3 million in 2006, a 19 percent increase from the 3.6 documented
visits of 2002 (Office of Travel and Tourism Industries & Global Insight,
2003).
Office of Travel and Tourism Industries (2004a) and R. Erdmann (personal

Figure 1. Overseas Travel by Americans 2000–2004 (in millions).
Overseas Arrivals to the United States

As shown in Figure 2, 26.0 million overseas visitors traveled to the United
States in the year 2000. Travel to the United States was documented at 21.8
million in 2001, dropping to 19.1 million in 2002. In 2003, overseas travel to
the United States dropped again, to 18 million. Based on available data for
2004, however, arrivals to the United States from overseas destinations are
expected to reach 20.3 million by the end of 2004. While not shown, arrivals
to the United States are projected to reach 20.7 million in 2005, 22.0 million in
2006, and 23.4 million in 2007 (Office of Travel and Tourism Industries,
2004a; 2004b; R. Erdmann, personal communication, January 24, 2005).
Office of Travel and Tourism Industries (2004a; 2004b) and R. Erdmann (personal
Figure 2. Overseas Arrivals to U.S. 2000–2004 (in millions).

Barring unforeseen changes related to terrorism and other domestic and
international developments, travel to and from the United States is expected to
increase in the years ahead. The greater number of Americans engaging in
international travel, and the increasing number of foreign visits to American
soil is resulting in greater opportunity for the transfer of proprietary and
classified U.S. information. Foreign travel facilitates interaction between
Americans with access to protected information and foreign nationals.
Whether this interaction occurs in the United States or abroad, insiders who
are considering espionage are more able to establish contact with foreign
buyers. Similarly, it is becoming easier for foreign nationals to establish
contact with American insiders who have access to protected information. Due
to increasing international travel, foreign nationals are in a better position to

recruit and exploit American personnel. At the same time it is becoming easier
for American employees to establish contact with foreign entities it is
becoming more difficult for counterintelligence personnel to distinguish
foreign travel that is of security concern.
E. Global Internet Expansion
The Internet‘s technological indifference to political borders and the

anonymity it affords its users make it a highly effective tool for espionage.
Insiders can use the Internet to establish contact with potential foreign buyers
and to transmit massive amounts of stolen material to them. There is virtually
no limit to the amount of information that can be transferred to foreign buyers
by a technically competent insider with access to digitized proprietary files
and the Internet.
In addition to providing advantages to those who volunteer information
for sale, increasing numbers of insiders are at risk for being recruited online.
Foreign businesspersons and intelligence collectors scrutinize commentary
posted in Internet discussion groups, newsgroup postings, online bulletin
boards, and websites to identify American government offices, companies,
research laboratories, and employees who have access to the types of
information and technologies they seek. The growing popularity of the Internet
as an espionage tool is reflected in rising U.S. defense industry reports of
computer-based collection attempts (Defense Investigative Service, 1996).
Internet use is continuing to expand domestically and abroad, in the workplace
and in the home (Internet Software Consortium, 2002; U.S. Department of
Commerce, 2002).
Internet Expansion
The annual Domain Survey, one of the longest running measurements of
the Internet‘s size, documents a rapid rise in the number of Internet hosts
worldwide. (An Internet host is a computer connected to the Internet.) In the
year 2000, this study identified 72 million Internet hosts globally. Internet
hosts numbered 110 million by 2001, 147 million in 2002, 172 million in
2003, and 233 million in 2004 (Figure 3). Some analysts project that by the
year 2010, 95 percent of the population of the industrialized world, and half
the population of the developing world, will be online (Cetron & Davies,
2001). Within the American workplace, the proportion of employees using the
Internet and/or email grew from about 18 percent in 1998 to almost 42 percent
in 2001 (U.S. Department of Commerce, 2002).
Internet Software Consortium (2002). Annual Domain Survey 2002

http://www.isc.org/ds/www. 200201/index. html.
Figure 3. Internet Hosts Worldwide 2000–2004 (in millions).
Online Language Populations

Reflecting the growing cultural diversity of computer-users, as of
September 2003, 64 percent of all Internet hosts were non-English speaking
(Global Reach, 2003). Nine and one-half percent of users were Japanese-
speaking, over 12 percent were Chinese-speaking, and over 4 percent were
Korean-speaking (Figure 4). Around seven percent of Internet users were
German-speaking and over 3 percent spoke Italian. Two and one-half percent
of Internet users were Russian-speaking. Of the 200 million Internet search
requests processed by Google daily, about two-thirds are initiated in languages
other than English (Friedman, 2003).
Geographic Regions of Greatest Internet Growth

The Asia-Pacific region is believed to be the fastest growing area of
Internet use currently, with Internet subscriptions doubling from 2000 to 2001,
to total 143 million. Internet use in C is poised to grow particularly
dramatically in the years ahead. China has a population of 1.3 billion but
currently has around 23 million Internet users. Latin American Internet use is
also experiencing high growth. Users in the region are expected to increase
from 26 million to over 30 million by 2003. Middle East Internet use is at 4.2
million—up from 1.9 million in the year 2000. Israel has about 1.3 million
Internet users; nearly 90 percent of Israeli homes have personal computers
(Internet Software Consortium, 2002).
Global Reach (January 2004). Global Internet Statistics by Language

(www.glreach.com/ glob stats/).
Figure 4. Online Language Populations 680 Million Users Estimated.

Internet use is expanding domestically and globally, and the cultural and
linguistic diversity of users is increasing. More American employees have
access to the Internet in their workplaces and in their homes. As the Internet
creates a large and efficient marketplace for exchanging a wide variety of
products and services, it also brings potential buyers and sellers together for
the purposes of espionage. It allows potential buyers and sellers of information
to learn a great deal about one other, provides means for establishing contact,
and provides an efficient and relatively secure mechanism for transmitting
unlimited quantities of information across national boundaries. Sellers and

buyers of information can interact without revealing their identities, as
illustrated by the recently convicted spy, NRO employee Brian Regan.
Research posted on the Internet allows foreign intelligence collectors to
identify government offices, businesses, and research laboratories that possess
the specific types of information they seek, and to obtain substantial amounts
of information about insiders who work for these entities. Intelligence
collectors regularly troll Internet chat rooms, bulletin boards, and newsgroup
postings to identify individuals or information of interest. Once a person is
identified as a potential target, a knowledgeable information collector may
search for and read that person‘s other newsgroup, bulletin board, or chat room
postings and will look for a means to establish direct contact. Unsolicited
email requests for information are an increasingly common method of
establishing contact with American targets (Defense Security Service, 2002).
Concluding Remarks Part I
Opportunity for espionage consists of access to classified or proprietary

information that can be exchanged for money or other material or nonmaterial
benefits, access to foreign entities interested in obtaining this information, and
means for transferring this information to these foreign recipients. Findings of
Part I of this study indicate that technological advancements in information
storage and retrieval, increasing global demand for protected U.S. information,
the internationalization of research and commerce, increasing international
travel, and global Internet expansion are converging to create unprecedented
opportunity for insiders to steal and transfer protected U.S. information to
foreign entities. Part II of this study examines the frequency with which
insiders are encountering situations that can provide motivation for spying.
PART II. SITUATIONS THAT CAN PROVIDE MOTIVATION

FOR INSIDER ESPIONAGE
Motivation, broadly defined, is a feeling or state of mind that influences

one's choices and actions. Motivation for insider espionage results from a
complex, interaction between personality characteristics and situational
variables (Crawford & Bosshardt, 1993; Eoyang, 1994; Sarbin, 1994; Parker
& Wiskoff, 1991; Timm, 1991). While most insiders possess personal qualities
that are not conducive to committing espionage (or any serious crime for that
matter), some insiders with access to classified and proprietary files become
motivated to commit espionage when they encounter the right conditions in
their personal and professional lives. Insiders commit espionage to satisfy
needs and desires and to alleviate problems. Situations that can provide
motivation for espionage include the experiencing of financial crisis or the
development of a gambling addiction.
Other factors explored here that can result in motivation for spying are
emotional and financial ties to foreign countries, perceived mistreatment by
one‘s employer, and feelings of obligation or loyalty to a foreign country or to
a global community.
A. Americans’ Vulnerability to Experiencing Financial Crisis
Employees who are financially overextended may be at risk for engaging

in illegal acts to generate funds. Of the many factors known to provide
motivation for insider espionage, the experience of personal financial
difficulties is among the more prominent. Spies believed to be partially or
primarily motivated by a desire to alleviate financial pressures include David
Barnett, William Bell, David Boone, Robert Haguewood, Robert Hanssen,
Robert Kim, Kurt Lessenthien, Richard Miller, Bruce Ott, Ronald Pelton, Earl
Pitts, Brian Regan, and others (Harris, Thompson & Ciccarello, 2002; Herbig
& Wiskoff, 2002).
Common causes of financial crisis include gambling addiction, substance
abuse, loss of job, divorce or separation, unexpected medical expenses, and
increasingly—the accumulation of consumer debt (Sullivan, Warren &
Westbrook, 2000).
Consumer Debt
Comparisons of research findings over time (findings of the Consumer
Bankruptcy Project I, the Consumer Bankruptcy Project II, and the Ohio
Bankruptcy Study) by Sullivan et al. (2000) show that credit card debt plays a
significant role in creating financial instability for Americans. Whereas in
1981 the average debtor filing for bankruptcy owed about 18 percent of his or
her yearly income in credit card loans, in 1991 the average debtor in
bankruptcy had accumulated the equivalent of nearly half a year‘s take-home
income in credit card balances. By 1997, the average debtor filing for
bankruptcy was estimated to have revolving credit card debt equivalent to $77
for every $100 of annual income (Sullivan et al., 2000, p. 124-126).
Consumer credit increased by 5 percent in May 2003, to 1.76 trillion, and
total American household credit now stands at 110 percent of annual
disposable income—up from 76 percent in 1986 (Dobbs, 2003, p. 36).
Lending to individuals with poor credit histories or who are already burdened
with debt (e.g., ―sub-prime‖ lending) has become one of the most profitable,
and hence one of the most rapidly growing segments of the consumer lending
industry (Sullivan et. al., 2000).
Personal Bankruptcy Filings in the United States

Bankruptcy law changed in 1979 making it easier to file, but this alone
does not explain the accelerating rate of filings that has occurred since the
mid-eighties (Figure 5). In 1985, 341,000 non-business bankruptcies were
filed in the United States. Ten years later in 1995, over 875,000 bankruptcies
were filed. In the year 2001, bankruptcies exceeded 1.4 million—a 500 percent
increase in filings since 1980. Americans set a new record in 2002 for going
bankrupt, with over 1.5 million people filing for personal bankruptcy. Finally,
in 2003, over 1.6 million personal bankruptcy filings occurred. ―If each family
were a business,‖ says Harvard law professor Elizabeth Warren, ―we would
describe America‘s businesses as vastly overleveraged...far too many are on
the brink of disaster.‖
Joseph Pomykala, an economics professor at Towson University states
that the bankruptcy rate in the United States is now 12 times the rate it was
during the Great Depression (Dobbs, 2003, p. 36).

Americans are increasingly living close to the financial edge. Because
greater numbers of insiders are encountering serious financial pressures, it is
logical to suspect that more insiders may turn to theft, fraud, embezzlement, or
other illegal behaviors — including espionage—in a desperate effort to
alleviate those pressures.
At the same time more families are experiencing financial stress, the
potential financial gain from espionage is increasing. In the Information Age,
typified by global competition and rapid technological change, information has
become a valuable currency. Information or material that enables a country or
company to field a new weapons system or develop a new product or
technology has tremendous monetary value.
ABI World (2002). U.S. Bankruptcy Filings 1980-2001 Business, Non-Business,

Total. (http://www.abiworld. org/stats/newstatsfront.html).
Figure 5. Non-Business U.S. Bankruptcy Filings 1985–2003 (in thousands).
B. Increasing Prevalence of Compulsive Gambling
Problems brought about by irresponsible or compulsive gambling include

indebtedness, defaults on debts, disrupted interpersonal relationships, poor
work performance, and participation in criminal activities to finance the
continuation of gambling (Ladouceur, Dube & Bujold, 1994; Meyer & Stadler,
1999). As access to funds becomes limited, some compulsive gamblers resort
to crimes to pay debts and to garner more money to sustain their addictions
(American Psychiatric Association, 1992; Bixby, 2000; Brunner, 1992;
Committee on the Social and Economic Impact of Pathological Gambling,
1999; Meyer and Stadler, 1999; Volberg, 2001). George French, Nelson
Drummond, Daniel Richardson, and James Wood are convicted spies whose
motivation for espionage appears to have evolved at least partially out of
desires to alleviate debts incurred as a result of compulsive gambling. For
most Americans gambling is simply a form of entertainment, but for an

increasing proportion of the population, gambling is becoming an
uncontrollable addiction. Problem or ―compulsive‖ gambling may become a
more prominent security issue in the days ahead.
Increasing Popularity of Gambling

The popularity of gambling has increased dramatically in the last three
decades. Gambling is currently the fastest-growing entertainment enterprise in
the United States (Thompson, 2001). Legal gambling activities in the United
States now include state lotteries, pari-mutuel betting on horses, greyhounds,
jai-alai, sports book-making, card games, keno, bingo, slot machines,
progressive slot machines, video poker machines, video keno machines, video
blackjack machines, and video roulette machines (although not all of these
forms of gaming are legal in all regions). In 1998 there were an estimated 90
casinos, 39 lotteries, eight Bingo games and 53 sports books available on the
Internet. In 1999 there were 250 casinos, 64 lotteries, 20 Bingo games, and
139 sports books available online (Rolling Good Times, 1999). Pari-mutuel
racetracks are currently the most widespread form of gambling in the United
States—now legal in over 40 states. Indian casinos now operate in every
region of the country (National Opinion Research Center, 1999).
Increasing Prevalence of Gambling Disorders

Reflecting the escalating popularity and availability of gambling, an
increasing number of Americans are developing gambling disorders (Jacobs,
2000; Potenza, 2002). The proportion of problem gamblers who are most
seriously troubled, and who are most difficult to treat, is expanding rapidly
(National Opinion Research Center, 1999; Volberg, 2001). Analyses
conducted by a Harvard research team show that pathological gaming— the
most severe form of gambling—has increased by more than 50 percent among
adults since 1977 (Shaffer, 1999). The National Gambling Impact and
Behavior Study, one of the most extensive studies of the social and economic
impacts of gambling ever conducted, shows that about 2.5 million American
adults are pathological gamblers and that another 3 million American adults
are classifiable as problem gamblers (have dysfunctional gambling habits that
are less severe than those of pathological gamblers). An additional 15 million
American adults are believed to be at risk for developing serious gambling
problems. Gambling disorders are even more prevalent among younger
Americans (Jacobs, 2000). One study estimated that 5.7 million American
adolescents have a gambling problem and that 2.2 million adolescents are
pathological gamblers (Shaffer, 1999).

Problems associated with large gambling losses often create a sense of
desperation to repay funds and hide losses from one‘s family. Research shows
that compulsive gamblers are at risk for committing workplace crimes such as
fraud and embezzlement (Meyer & Stadler, 1999). The increasing popularity
of gambling and prevalence of gambling addiction suggest that a greater
number of insiders who have access to classified and proprietary information
may become motivated to sell this information for personal profit.
C. Diminishing Organizational Loyalty
The topic of workplace revenge has received much attention in recent

years, particularly as murderous rampages by disgruntled employees have
become increasingly common. More often, however, disgruntled employees
commit crimes against their employers in the form of fraud, embezzlement,
and sabotage (Ambrose, Seabright & Schminke, 2002; Morris & Sherman,
1981; Mowday, Porter & Steers, 1982; Peak, 1995; Shaw, Ruby & Post,
1998). Several Americans convicted of espionage against the United States
were motivated by desires to exact revenge upon the organizations that
employed them (Herbig & Wiskoff, 2002). Disgruntled government insiders
who committed espionage include John Charlton, John Allen Davies, Douglas
Groat, and Edwin Earl Pitts among others. Changing conditions in the
American workplace suggest that loyalty to organizations is diminishing and
that workers are at greater risk for becoming disgruntled.
The Changing Psychological Contract

In Psychological Contracts in Organizations: Written and Unwritten
Agreements, Rousseau (1995) explores employees‘ and employers‘ changing
expectations and diminishing levels of commitment to one another. Rousseau
concludes that in the new economy, neither employers nor employees expect
long-term, mutually satisfying relationships. Instead, both parties are more
likely to conceptualize employment as the short-term exchange of benefits and
contributions.
In adapting to the rapidly changing business environment, American
organizations more often downsize, automate, transfer jobs overseas, and lay
off personnel who are no longer needed. American employers increasingly

hire part-time and temporary workers who are offered limited benefits and
minimal job security. Terminated American workers are less likely to receive
severance pay, extended health benefits, or other types of assistance than in
previous decades, and more often suffer from ―layoff survivor syndrome‖ in
which mistrust and anxiety has replaced feelings of fidelity to organizations
(Quinn, 1996; Reichheld, 1996). Many insiders with access to highly
marketable technological information are transient workers who voluntarily
move from one new employment opportunity to the next, ―cashing out their
career investments on a regular basis‖ (Tulgan, 1996, p. 2). Organizational
loyalty among computer programmers, for example, has been undermined by
high demand for their services and high rates of turnover in the profession
(Shaw, Ruby & Post, 1998, p. 11). Some feel that American workers in high-
tech fields often view themselves as owners of their own skills and
knowledge—―as investments to be parlayed into the highest possible
dividends‖ (Walker Information, Inc., 2000, p. 5).

The psychological contract between employees and employers is
changing. In striving to compete in the global marketplace, American
organizations more often engage in practices that some employees will
experience as alienating and indicative of a lack of loyalty. More employees,
lacking job security and other benefits, may become disgruntled. Individuals
who perceive that they have been treated insensitively or unfairly may seek
revenge against their employers. Disgruntlement can provide motivation for
espionage directly as well as making it easier for insiders to rationalize
espionage that is actually committed to satisfy other needs or desires.
D. Ethnic Diversification of the American Workforce
The United States has experienced a profound demographic

transformation in the last three decades resulting in a substantial increase in
the number of U.S. residents with close foreign ties. Emotional ties to a
foreign country, or to family or friends in a foreign country, can result in
conflicts of conscience concerning national loyalty. Insiders with such ties are
in a better position to transfer U.S. information to foreign contacts and are
better equipped to use information obtained through their employment in U.S.
firms to participate in joint ventures or to start their own companies abroad
(Christie, 2002; Nadel, 2002; Overseas Security Advisory Council, 1992;

Saxenian, Motoyama & Quan, 2002). Government insiders whose espionage
activities appear to have been influenced by motivation and opportunity
stemming from foreign ties, include Joseph Santos, Robert Kim, Douglas
Tsou, Charles Anzalone, Thomas Dolce, and Jonathan Pollard (Herbig &
Wiskoff, 2002).
Diversity of Cleared Personnel

Between 1970 and 2000, the total foreign-born population in the United
States grew from 9.7 million to 28.4 million (an increase of 191 percent), to
constitute over 10 percent of the U.S. population. In 2000, around 60 million
U.S. resident—about one fifth of the U.S. population—had one or more
foreign-born parents (Schmidley, 2001).
The Case of Jonathan Pollard
Jonathan Pollard is frequently cited as an example of an insider

whose loyalty to a foreign country played a substantial role in his
decision to spy. Pollard‘s allegiance to Israel and desires to become a
Zionist hero led him to pass thousands of pages of classified Navy
documents to Israel, including satellite photographs of Arab weapons
systems and Iraqi nuclear test sites (Zacharia, 2000, p. 7B).
While desires for money appeared to become an added source of
influence over time (as Pollard and his wife received tens of thousands of
dollars in cash and jewelry), Pollard‘s desire to serve Israeli interests is
the prevailing explanation for his actions. Pollard asserted that it would
have been an ―outright betrayal‖ of his heritage, his personal integrity,
―and an entire family lost in the ovens of the Holocaust‖ if he had
―closed his eyes to what had to be done‖ (Kurtz, 1987, p. B1).
The changing composition of the U.S. population is reflected in the

composition of the American workforce in general, and the cleared DoD
workforce specifically. The number of naturalized or derived citizens among
active duty military personnel, reserve, and DoD civilian employees holding
SCI, Top Secret, Secret, and Confidential clearances has increased
substantially as a percentage of total clearances. (A derived citizen is a child
who becomes a citizen when a parent becomes a naturalized U.S. citizen.) As
shown in Table 1, the total number of active clearances decreased from 2.6
million in September 1992 to about 1.9 million in March 2002 (a reduction of
about 29 percent), but the number of clearances held by naturalized or derived

citizens increased from 35,734 to 43,594 (up by 23 percent) during this period
(Heuer, 2003; Goral, 2002).
Defense contractors are not included in Table 1 as comparable data for
1992 are not available. Based on 2002 data, however, naturalized and derived
citizens within the contractor community are disproportionately employed in
the most sensitive positions. Naturalized or derived citizens compose .2
percent of the SCI contractor population for example, but compose .01 percent
of each of the other clearance categories (Table 2) (Heuer, 2003; Goral, 2002).
Table 1. Proportion of Naturalized/Derived Citizens Among DoD Active

Duty, Reserve, and Civilian Clearance Holders September 1992
and March 2002
Number Naturalized/ Percent Naturalized/

Clearance Holders
Derived Citizens Derived Citizens
Clearance September March September March September March
Holder 1992 2002 1992 2002 1992 2002
SCI 187,520 243,316 2,730 5,170 1.5 2.1
Top Secret 331,306 136,244 4,860 2,996 1.5 2.2
Secret 1,993,263 1,442,398 24,920 33,903 1.3 2.4
Confidential 87,114 35,347 3,224 1,525 3.7 4.3
Total 2,599,203 1,857,305 35,734 43,594 1.4 2.3
Table 2. Proportion of Naturalized or Derived Citizens Among DoD

Contractors March 2002
Number of Percent
Type of Clearance Clearance Naturalized Or Naturalized or
Holder Holders Derived Citizens Derived Citizens
SCI 34,642 716 .2
Top Secret 110,395 119 .01
Secret 413,982 516 .01
Confidential 25,832 35 .01
Total 584,851 1,386 .02
Changing Attitudes Regarding American Citizenship

In addition to more insiders with foreign connections holding positions of
trust, it appears that a smaller proportion of these insiders feel a strong sense
of loyalty to the United States. While many foreigners continue to seek
residence in the United States, new generations of immigrants appear to be
less interested in adopting American values and customs. More immigrants are
coming to the U.S. for economic advantages rather than for political or
ideological reasons (Yang, 1994). An increasing percentage of immigrants
choose not to become American citizens, and more of those who do obtain
U.S. citizenship, maintain citizenship elsewhere (Massey, 1995; Renshon,
2001). Between 1970 and 2000 the naturalized citizen foreign-born population
in the United States increased by 71 percent. During this same period, the
noncitizen foreign-born population in the United States increased by 401
percent (Schmidley, 2001).

The increasing proportion of insiders with foreign backgrounds and
connections suggests that more insiders will be in a position to provide
classified or other protected information abroad, and may more often become
motivated to do so due to financial and emotional ties. Foreign intelligence
organizations typically emphasize the recruitment of individuals with whom
they share common national, ethnic, racial, or religious backgrounds (National
Counterintelligence Executive, 2002; Overseas Security Advisory Council,
1992). The increasing frequency of foreign connections affords sellers and
buyers of U.S. information greater opportunity to initiate and maintain contact.
Because more insiders have foreign ties, it is becoming more difficult to
identify insiders whose foreign connections pose a security risk.
E. Growing Allegiance to a Global Community?
The growing frequency of communication between Americans and

individuals of other nationalities is resulting in a deepening global
consciousness among U.S. citizens and a greater appreciation of other cultures,
religious beliefs, and value systems (Arnett, 2002; Craige, 1996; Elgin &
LeDrew, 1997; Giddens, 1991; Robertson, 1992). While there are enormous
benefits associated with Americans' greater awareness of the needs and
interests of other peoples, and perspective of the world as an interdependent
system, under extreme circumstances it is possible that an insider who feels a
compelling sense of duty to a global society may experience a conflict of
conscience similar to that experienced by an individual with foreign emotional
ties. While it has long been recognized that a security risk can exist when an
insider is bound by affection, influence, or obligation to a foreign government
or to persons who are not citizens of the United States, the impact that
globalization will have on national allegiance is not well understood.
American Citizens in a Global Society

Given our concern that insiders with foreign preferences may be at greater
risk for sharing protected information with foreign entities, it is relevant that
increasing numbers of insiders see themselves as both American citizens and
citizens of a global society. Research indicates that growing numbers of
Americans, especially younger generations of Americans, are bicultural in that
aspects of their identity are rooted in local American traditions while other
elements are rooted in an awareness of, and sense of belonging to, the larger
global culture (Arnett, 2002; Elgin & LeDrew, 1997; Giddens, 1991).
Research suggests that growing numbers of Americans feel a sense of loyalty
to the United States and other nations simultaneously (Craige, 1996).
Comments made by recently convicted spy, Ana Montes, suggest that a strong
sense of obligation to serve the needs of a ―world homeland‖ can, under some
circumstances, provide sufficient motivation for trust betrayal.

Research suggests that greater numbers of Americans view themselves as
both citizens of the United States and citizens of the world. Increasing
numbers of Americans may be including within their community the
inhabitants of countries that are currently conducting espionage against the
United States.
While Americans‘ increasing global consciousness is obviously beneficial
in innumerable respects, it is possible that allegiance to a global community—
to all the world‘s ―nation-neighborhoods‖ to use Ana Montes‘ words—may
compel an individual to conceptualize espionage as a moral duty. The
increasing acceptance of global as well as national values may also make it
easier for a potential spy to rationalize actions that are driven by baser
motives.
The Case of Ana Montes
In a recent and very damaging case of insider espionage, Defense

Intelligence Agency analyst Ana Montes passed classified information to
Cuba. Owing to her beliefs in the moral righteousness of her actions,
Montes expressed little remorse for helping Cuba ―defend itself‖ against
what she described as unfair and oppressive U.S. foreign policies.
Montes related that it is essential to ―love one‘s neighbor as much as

oneself‖ and that this principle is ―the essential guide to harmonious
relations between all of our nation-neighborhoods.‖ Montes did not simply
feel justified to commit espionage as a result of these beliefs – she felt
―morally obligated‖ to do so (National Security Institute, November 2002,
p. 7).
Montes stated that she hoped her actions would encourage the U.S.
government to abandon its hostility towards Cuba and to work with
Havana in ―a spirit of tolerance, mutual respect and understanding.‖
Montes expressed that a more friendly U.S. policy toward Cuba would
permit the United States and Cuba ―to work together and with other
nations to promote tolerance and cooperation in our world country, in our
only world-homeland‖ (Golden, 2002, p. 1).
PART III. CONCLUSION

The world is in the midst of an information revolution that many
prominent thinkers believe will have as far reaching an impact on politics,
economics, and culture as that of the Industrial Revolution (Toffler, 1987;
Drucker, 1999; Hundley et al., 2000). Globalization is affecting the manner in
which nation states and other international actors compete politically,
economically and militarily. It is likely that globalization will expand the role
of espionage in international competition and conflict.
In evaluating the implications of the technological, social, and economic
trends discussed in this study, it is important to recognize that the
vulnerabilities created by these trends are compounding one another to create
an insider espionage risk that can be described as greater than the sum of its
parts. That is to say, the vulnerabilities created by each trend are magnified by
the presence of vulnerabilities created by other trends.
While it is true that greater numbers of insiders have access to large
networked databases containing classified or proprietary files, for example,
our increasing vulnerability to insider espionage stems from the fact that
greater numbers of insiders with access to these databases also have access to
technologies that allow them to download massive amounts of information,
also have means for secreting this information out of organizations, also have
access to the Internet, also have foreign contacts, and also have financial
problems that may provide motivation for espionage. It is not just that
American insiders are traveling internationally more frequently and are
participating in international scientific and commercial ventures more often, it

is that these insiders more frequently have loyalties to other countries or
cultures as well, and are more consistently targeted for recruitment by foreign
intelligence collectors.
a
There are other factors that provide opportunity and motivation for insider espionage
that are not explored in this study or included in this diagram.
Figure 6. Technological, Social, and Economic Trends that are Increasing U.S.
Vulnerability to Insider Espionagea.
In summary, greater numbers of American insiders...
...are better able to access and steal classified and proprietary

information due to technological advances in information storage and
retrieval, AND...
...can sell more types of information to a broader range of
foreign buyers than ever before, AND...
...have greater opportunity to establish contact with, and transfer
information to foreign entities due to increasing international travel
and global Internet expansion, AND...
...are more vulnerable to experiencing severe financial crisis due
to aggressive consumer spending habits and gambling addiction,
AND...
...are more vulnerable to becoming disgruntled and are less
likely to feel an obligation to the organizations that employ them,
AND...
...have ethnic ties to other countries, communicate with friends
and family abroad, and interact with foreign businesspersons and
governments, AND...
...have a holistic view of world affairs that under some
circumstances may result in their conceptualizing espionage as
morally justifiable.
It is not possible to describe all the ways the factors outlined in this study
(Figure 6) may converge with one other, and other variables not discussed
here, to create opportunity and motivation for spying. The fact that the
vulnerabilities created by these trends are compounding one another does
suggest, however, that we are at greater risk for experiencing insider espionage
than in previous decades. Throughout our research we did not identify a single
countervailing trend that will make insider espionage more difficult or less
likely in the immediate future.
PART IV. DISCUSSION

Results of this study show that mitigating U.S. vulnerability to insider
espionage will increasingly require the orchestrated efforts of personnel
security, information security, and counterintelligence organizations. An
improved personnel security system is needed to reduce the number of
potential espionage offenders, more rigorous information security measures
are needed to reduce the vulnerability of IT systems that contain classified and
proprietary files, and more effective counterintelligence operations are needed

to detect insider spies sooner to limit the damage they can inflict.
The goal of the personnel security system, as expressed in Executive
Order 12968, is to ensure that access to classified information is granted only
to employees whose personal and professional history affirmatively indicates
loyalty to the United States, strength of character, trustworthiness, honesty,
reliability, freedom from conflicting allegiances and potential for coercion,
and willingness and ability to abide by regulations governing the use,
handling, and protection of classified information. To the extent that personnel
security screening satisfies this objective, fewer unprincipled, irresponsible,
troubled, or disloyal employees will gain and retain access to classified
information. By denying access to individuals whose backgrounds or current
behavior signifies they might be unreliable, untrustworthy, or disloyal,
personnel security measures reduce the likelihood that insider espionage will
occur.
In addition to achieving these more general objectives, however, the
findings of this study indicate that it is becoming increasingly important that
the personnel security system be improved with respect to identifying
personnel of counterintelligence concern. It is essential that individuals who
abuse substances or who have demonstrated financial irresponsibility are
denied access to classified information, but it is also very important that the
background investigation lend greater insight into potential foreign influence
and outside activities issues.
Even the most effective personnel security program will never fully
eliminate the insider espionage threat, however. Owing to the inherent
difficulty of predicting human behavior, it will never be possible to identify all
individuals who, under some combination of circumstances, will choose to
steal classified and proprietary information. Because we will always have
insiders in our midst who will become sufficiently motivated to spy, we must
also consider the extent to which such insiders have opportunity to access and
steal classified information. One of the areas of greatest concern identified by
our research is the increased risk resulting from technological advancements in
information storage and retrieval.
While improving employee productivity, information technologies are
making it increasingly difficult for organizations to control access to and
distribution of protected information. The growth of automated databases and
computer networks is rapidly expanding the amount of information that can be
collected and compromised by every insider spy. The steadily increasing
capacity and diminishing physical size of data-storage devices is making it
easier for insiders to remove large quantities of information with less risk of
being caught. The relative ease with which information can now be stolen may
serve to increase an individual‘s confidence that they will be able to commit
espionage without being detected.
Policies have recently been enacted to encourage increased sharing of
national security information within agencies and among agencies, and
between federal, state and local government agencies for homeland security
purposes (U.S. Senate, S. 1025, Sec. 334, 2003). While there are many
benefits to the increased availability of information, with this increased
availability comes greater risk of compromise. Congress rightly recognizes
that increased information sharing will succeed only with revised security
policies and the employment of technologies to reduce the insider threat to
classified computer networks (U.S. Senate 108–44, 2003). Results of this
study support the need for security policies that will result in improved control
of digitized files and more effective monitoring and tracking of insiders‘ use of
digitized information.
Information security policies and practices must reflect a risk-management
paradigm in which the benefits of information availability and sharing are
weighed against the risks. The advantages associated with granting thousands
of insiders access to databases that are foreign espionage targets must be
weighed against the potential costs to national security if information
contained within these databases is compromised. Because personnel security
measures will never be capable of guaranteeing the continued reliability and
trustworthiness of all cleared personnel, employees‘ ability to exploit multiple
databases—especially those they do not need access to perform their work—
must be curtailed.
REFERENCES
Ambrose, M.L., Seabright, M.A., & Schminke, M. (2002). Sabotage in the
workplace: The role of organizational justice. Organizational Behavior
and Human Decision Processes, 89, 947–965.
American Bankruptcy Institute. (2002). U.S. bankruptcy filings 1980-2001
business, non-business, total. Retrieved August 12, 2002, from
http://www.abiworld. org/stats/newstatsfront.html
American Psychiatric Association. (1992). Diagnostic and statistical manual
of mental disorders, Fourth Ed. Washington, DC: Author.
Arnett, J.J. (2002). The psychology of globalization. American Psychologist,

57, 774– 783.
Bixby, L. (2000, August 23). Thefts feed a casino habit. The Hartford
Courant, A8.
Brunner, T. (1992). Casino gambling in Chicago: Better Government
Association staff white paper. Chicago, IL: Better Government
Association.
Cetron, M.J., & Davies, O. (2001). Fifty trends now changing the world.
Bethesda, MD: World Future Society.
Christie, S. (2002). New indictment expands charges against former Lucent
scientists accused of passing trade secrets to Chinese Company. U.S.
Department of Justice. Retrieved April 4, 2003, from
http://www.cybercrime.gov/lucent SupIndict.htm
Commission for the Review of FBI Security Programs. (2002). A review of
FBI security programs. Washington, DC: Department of Justice.
Committee on the Social and Economic Impact of Pathological Gambling.
(1999). Pathological gambling: A critical review. Washington, DC:
National Academy Press.
Craige, B.J. (1996). American patriotism in a global society. Albany, NY:
State University of New York Press.
Crawford, K.S., & Bosshardt, M.J. (1993). Assessment of position factors that
increase vulnerability to espionage. Monterey, CA: Defense Personnel
Security Research Center.
Defense Investigative Service. (1996). Computer espionage. American
Reporter, 288. Retrieved August 8, 2003, from http://www.kimsoft.com
/korea/edispy.htm
Defense Security Service. (2002). Technology collection trends in the U.S.
defense industry. Alexandria, VA: Defense Security Service.
Defense Security Service. (2002, August). Foreign collection activities
directed against the U.S. defense industry: Methods, indicators, and
security countermeasures. Alexandria, VA: Defense Security Service.
Dobbs, L. (2003, July 21). In hock to the hilt. U.S. News and World Report,
36.
Drucker, P.F. (1999). Beyond the information revolution. The Atlantic
Monthly. Retrieved September 9, 2003, from http://www.theatlantic.com
/issues 99oct/9910drucker.htm
Elgin, D., & LeDrew, C. (1997). Global consciousness change: Indicators of
an emerging paradigm. San Anselmo, CA: Millennium Project.
Eoyang, C. (1994). Models of espionage. In T.R. Sarbin, R.M. Carney, & C.

Eoyang (Eds.), Citizen espionage: Studies in trust and betrayal (pp. 69–
91). Westport, CT: Praeger.
Fialka, J.J. (1997). War by other means: Economic espionage in America.
New York: W.W. Norton.
Freeh, L.J. (1996). Statement of Louis J. Freeh, Director, Federal Bureau of
Investigation, before the House judiciary Committee Subcommittee on
Crime. Retrieved December 4, 2002, from http://www.fas.org/irp/congress
/1996_hr/ h/h960509f.htm
Freeh, L.J. (1998, January 28). Threats to U.S. national security. Statement for
the record before the Senate Select Committee on Intelligence.
Friedman, T.L. (2003, June 30). Is Google God? Retrieved June 29, 2003 from
http:// www.nytimes.com/2003/06/29/opinion/29FRIE.html
Geide, K.M. (1996). Economic espionage: Looking head. In T.R. Sarbin (Ed.),
Vision 2021: Security issues for the next quarter century. (Proceedings of
a conference sponsored by PERSEREC and the Security Policy Board
Staff, June 25–25, 1996.) Monterey, CA: Defense Personnel Security
Research Center.
Giddens, A. (1991). Modernity and self-identity: Self and society in the late
modern age. Cambridge, England: Polity Press.
Global Reach. (2003, March). Global Internet statistics by language.
Retrieved January 8, 2003, from http://www.glreach.com/glob stats
Golden, T. (2002, October 16). Ex-U.S. aide sentenced to 25 years for spying
for Cuba. The New York Times, D-7.
Goral, J. (2002). Data provided by John Goral. Monterey, CA: Defense
Manpower Data Center.
Government Accounting Office. (1999). Federal research: Information on
international science and technology agreements (GAO/RCED-99-108).
Washington, DC: Author.
Harris, G., Thompson, T., & Ciccarello, N. (2002). Anger and espionage:
Report of an interview with Earl Edwin Pitts, 28-29 August, 2002. Vienna,
VA: Personnel Security Managers‘ Research Program.
Herbig, K.L., & Wiskoff, M.F. (2002). Espionage against the United States by
American citizens: 1947-2001. Monterey, CA: Defense Personnel Security
Research Center.
Heuer, R.J. (2003). Investigation and adjudication of foreign influence issues.
Monterey, CA: Defense Personnel Security Research Center.
Hundley, R.O., Anderson, R.H., Bikson, T.K., Dewar, J.A., Green, J., Libicki,
M., & Neu, D.R. (2000). The global course of the information revolution:
Political, economic, and social consequences. Santa Monica, CA: Rand.
Internet Software Consortium. (2002) The domain survey. Retrieved June 15,
2002, from http://www.isc.org
Iwata, E. (2003, February 13). More U.S. trade secrets walk out the door with
foreign spies. USA Today, 18.
Jacobs, D. (2000). Juvenile gambling in North America: An analysis of long-
term trends and future prospects. Journal of Gambling Studies, 16, 119–-
151.
Kipp, S. (2001). Espionage and the insider. San Francisco, CA: SANS
Institute.
Kurtz, H. (1987, February 11). Pollard letter asserts ―obligation‖ to spy:
Abandonment by Israel is lamented. The Washington Post, B6.
Ladouceur, R., Dube, D., & Bujold, A. (1994). Prevalence of pathological
gambling and related problems among college students in the Quebec
Metropolitan Area. Canadian Journal of Psychiatry, 39, 289–293.
Massey, D. (1995). The new immigration and ethnicity in the United States.
Population and Development Review, 21, 631–652.
Meyer, G., & Stadler, M. (1999). Criminal behavior associated with
pathological gambling. Journal of Gambling Studies, 15, 29–43.
Morris, J., & Sherman, J. (1981). Generalizability of an attitudinal
commitment model. Academy of Management Journal, 24, 512–526.
Moule, G. (1996). A study of security countermeasures to reduce economic
espionage in the United States from 1975 to 1996. Retrieved August 8,
2002, from http://www. spybusters.com
Mossberg, W.S. (2003, November 12). A road test of ‗keychain‘ drives. The
Wall Street Journal, D4.
Mowday, R., Porter, L., & Steers, R. (1982). Employee-organizational
linkages: The psychology of commitment, absenteeism, and turnover. New
York: Academic Press.
Nadel, R. (2002). Pair from Cupertino and San Jose, California, indicted for
economic espionage and theft of trade secrets from Silicon Valley
companies. Retrieved June 12, 2002, from http://www.cybercrime.gov
/yeIndict.htm
National Opinion Research Center. (1999). Gambling impact and behavior
study. Report to the National Gambling Impact Study Commission.
Washington, DC: Author.
National Science Board. (2000). Science and engineering indicators – 2000

(NSB-00-1). Arlington, VA: National Science Foundation.
National Science Board. (2002). Science and engineering indicators – 2002
(NSB-02-1). Arlington, VA: National Science Foundation, 2002.
National Security Agency. (1997). Foreign intelligence recruitment
approaches. Washington, DC: Author.
National Security Agency. (2001). Espionage: The threat is real. Washington,
DC: National Security Agency.
National Security Institute. (2002, June). U.S. security managers warned to
brace for more terrorism, espionage. National Security Institute Advisory,
17-11, 7.
National Security Institute. (2002, November). Survey: U.S. firms lost up to
$59 billion in proprietary information. National Security Institute
Advisory, 18-4, 6.
National Counterintelligence Executive. (2000). Annual report to Congress on
foreign economic collection and industrial espionage. Washington, DC:
Author. Retrieved September 9, 2001, from http://www.ncix.gov/
pubs/pubs.html.
National Counterintelligence Executive. (2001). Annual report to Congress on
foreign economic collection and industrial espionage. Washington, DC:
National Counterintelligence Center. Retrieved October 28, 2001 from
http://www. ncix.gov/ pubs/pubs.html
National Counterintelligence Executive. (2002, January 29). China: Journals
urge use of overseas scientists for technology transfer. News and
Developments. Retrieved October 28, 2001, from http://www.
ncix.gov/news
Nockels, J. (2001). Changing security issues for government. Retrieved on
December 12, 2001, from http://www.law.gov.au/SIG/papers
/nockels.html
Office of Travel and Tourism Industries. (2004a). International travelers to
and from the U.S. 1993r-2003r. Retrieved January 25, 2005, from
http://www.tinet.ita.doc.gov/ view/f- 2003-05-001/index.html
Office of Travel and Tourism Industries. (2004b). Forecast of international
travel to the United States. Retrieved January 25, 2005, from
http://www.tinet.ita.doc. gov/view/f-2004-99-001/intlforecast.html
Office of Travel and Tourism Industries & Global Insight. (2003). Forecast of
top overseas travel markets to the United States. Retrieved July 2, 2002,
from http://tinet.ita.doc.gov/view/f-2000-99-001/forcastpage1.html
Overseas Security Advisory Council. (1992). Guidelines for protecting U.S.

business information overseas. Washington, DC: Department of State.
Parker, J.P., & Wiskoff, M.F. (1991). Temperament constructs related to
betrayal of trust. Monterey, CA: Defense Personnel Security Research
Center.
Peak, M. (1995). Employees are our greatest asset and our worst headache!
Academy of Management Review, 84, 47-51.
Potenza, M.N. (2002). A perspective on future directions in the prevention,
treatment, and research of pathological gambling. Psychiatric Annals, 32,
203-207.
Poulson, K. (2001). Digital trail led to accused spy. Security Focus News.
Retrieved September 9, 2003, from http://www.securityfocus.com/news
/245
Quinn, J.B. (1996, February). A paycheck revolt in '96? Newsweek, 6, 52.
Reichheld, F. (1996). The loyalty effect: The hidden force behind growth,
profits, and lasting value. Boston: Harvard Business School Press.
Renshon, S. (2001). Dual citizenship and American national identity.
Washington, DC: Center for Immigration Studies.
Robertson, R. (1992). Globalization: Social theory and global culture.
London: Sage.
Rolling Good Times. (1999). RGT: The premiere gaming E-Zine on the web.
Retrieved June 4, 2000, from http://www.rgtonline.com
Rousseau, D. (1995). Psychological contracts in organizations:
Understanding written and unwritten agreements. New York: Sage.
Sarbin, T.R. (1994). A criminological approach to security violations. In T.R.
Sarbin, R.M. Carney, & C. Eoyang (Eds.), Citizen espionage: Studies in
trust and betrayal. Westport, CT: Praeger.
Sarbin, T.R. Carney, R.M., & Eoyang, C. (Eds.) (1994). Citizen espionage:
Studies in trust and betrayal. Westport, CT: Praeger.
Saxenian, A., Motoyama, Y., & Quan, X. (2002). Local and global networks
of immigrant professionals in Silicon Valley. San Francisco, CA: Public
Policy Institute.
Schmidley, A. (2001). Profile of the foreign-born population in the U.S.:
2000. U.S. Census Bureau Current Population Reports, Series P23-206.
Washington, DC: U.S. Government Printing Office.
Schweizer, P. (1996, January/February). The growth of economic espionage:
America is target number one. Foreign Affairs. Retrieved July 4, 2003,
from http://www. foreignaffairs.org
Shaffer, H. (1999). Strange bedfellows: A critical view of pathological

gambling and addiction. Addiction, 94, 1445-1448.
Shaw, E.D., Ruby, K.G., & Post, J.M. (1998). The insider threat to information
systems. Security Awareness Bulletin, (2-98). Washington, DC:
Department of Defense Security Institute.
Sullivan, T.A., Warren, E., & Westbrook, J.L. (2000). The fragile middle
class: Americans in debt. New Haven: Yale University Press.
Thompson, W.N. (2001). Gambling in America: An encyclopedia of history,
issues, and society. Santa Barbara, CA: ABC-Clio.
Thurman, J.N. (1999). Spying on America: It‘s a growth industry. Christian
Science Monitor, 80, p. 1.
Timm, H.W. (1991). Who will spy? Five conditions must be met before an
employee commits espionage. Here they are. Forewarned is forearmed.
Security Management, 49-53.
Toffler, A. (1987). The third wave. New York: Random House.
Tulgan, B. (1996). Managing Generation X: How to bring out the best in
young talent. New York: Capstone Publishing.
U.S. Department of Commerce. (2002, February). A nation online: How
Americans are expanding their use of the Internet. Washington, DC:
Author.
U.S. Department of Commerce. (2003). U.S. international trade in goods and
services. Retrieved July 8, 2003, from http://www.census.gov/foreign-
trade/ 2002/#goods
U.S. Senate, 108th Congress. (2003). Senate Bill 1025, Intelligence
Authorization Act for FY2004. Section 334.
U.S. Senate, 108th Congress. (2003) Senate Report 108-44, Authorizing
Appropriations for Fiscal year 2004 for Intelligence and Intelligence-
Related Activities of the United States Government.
Venzke, B. (2002). Economic/ industrial espionage. Retrieved June, 19, 2002,
from http://www.infowar.com/class
Verton, D. (2001). Spy case demos insider threat. Computerworld, 35, 1-2.
Volberg, R. (2001). When the chips are down: Problem gambling in America.
New York: Century Foundation Press.
Walker Information, Inc. (2000). Halfway out the door: The Walker
Information and Hudson Institute National Employee Relationship Report.
Indianapolis, IN: Author.
Wells, L. (2000). The changing nature of information security in the
Department of Defense. Retrieved July 18, 2002, from
http://www.cisp.org/imp/February_ 2000/02_00wells.htm
Whitelaw, K., & Enrich, D. (2001). Surfing for secrets. U.S. News and World
Report, 131, 20.
Wise, D. (1995). The Ames spy hunt. Time, 145, 54-60.
Yang, P.Q. (1994). Explaining immigrant naturalization. Immigrant
Naturalization Review, 28, 449-477.
Zacharia, J. (2000, December). A time to forgive? The Jerusalem Post, 7B.
In: Insider Espionage ISBN: 978-1-61728-226-3
Editor: Hana Parish © 2014 Nova Science Publishers, Inc.
Chapter 2
STEALING TRADE SECRETS

AND ECONOMIC ESPIONAGE:
AN OVERVIEW OF 18 U.S.C. 1831
AND 1832 
Charles Doyle
SUMMARY
Stealing a trade secret is a federal crime when the information relates
to a product in interstate or foreign commerce, 18 U.S.C. 1832 (theft of
trade secrets), or when the intended beneficiary is a foreign power, 18
U.S.C. 1831 (economic espionage). Section 1832 requires that the thief
be aware that the misappropriation will injure the secret‘s owner to the
benefit of someone else. Section 1831 requires only that the thief intend
to benefit a foreign government or one of its instrumentalities.
Section 1832 (theft) violations are punishable by imprisonment for
not more than 10 years, or a fine of not more than $250,000 (not more
than $5 million for organizations), or both. Section 1831 (espionage)
violations by individuals are punishable by imprisonment for not more
than 15 years, or a fine of the greater of not more than $5 million, or both.
Section 1831 violations by organizations are punishable by a fine of not
more than the greater of $10 million or three times the value of the stolen

This is an edited, reformatted and augmented version of a Congressional Research Service
publication, CRS Report for Congress R42681, from www.crs.gov, prepared for Members
and Committees of Congress, dated January 28, 2013.
46 Charles Doyle
trade secret. Maximum fines for both individuals and organizations may
be higher when the amount of the gain or loss associated with the offense
is substantial. Any attempt or conspiracy to commit either offense carries
the same penalties as the underlying crime. Offenders must also be
ordered to pay restitution. Moreover, property derived from the offense or
used to facilitate its commission is subject to confiscation. The sections
reach violations occurring overseas, if the offender is a United States
national or if an act in furtherance of the crime is committed within the
United States.
Depending on the circumstances, misconduct captured in the two
sections may be prosecuted under other federal statutes as well. A
defendant charged with stealing trade secrets is often indictable under the
Computer Fraud and Abuse Act, the National Stolen Property Act, and/or
the federal wire fraud statute. One indicted on economic espionage
charges may often be charged with acting as an unregistered foreign
agent and on occasion with disclosing classified information or under the
general espionage statutes.
P.L. 112-269 set the maximum fines described above. It also
instructed the United States Sentencing Commission to examine the
sufficiency of federal sentencing guidelines and policies in the area of
stealing trade secrets and economic espionage. P.L. 112-236 amended the
trade secrets prohibition of 18 U.S.C. 1832 to overcome the implications
of the Court of Appeals‘ Aleynikov decision. That decision held that the
section did not outlaw the theft of computer code designed to facilitate a
company‘s commercial transactions, because the code did not relate to a
product to be placed in the stream of commerce.
INTRODUCTION
The Economic Espionage Act (EEA) outlaws two forms of trade secret
theft: theft for the benefit of a foreign entity (economic espionage) and theft
for pecuniary gain (theft of trade secrets).1 Under either proscription, its reach
extends to theft from electronic storage.2 Offenders face imprisonment for not
more than 10 years in the case of trade secret theft and not more than 15 years
in the case of economic espionage.3 Individuals may incur fines of not more
than the greater of $250,000 or twice the loss or gain associated with the
offense for trade secret theft and for economic espionage not more than the
greater of $5 million or twice the loss or gain.4 Organizations are fined more
severely, up to the greater of $5 million or twice the gain or loss for trade
secret theft, and for economic espionage up to a fine of the greater of $10
Stealing Trade Secrets and Economic Espionage 47
million, three times the value of the trade secret, or twice the gain or loss
associated with the offense.5
A court may assess the same sanctions for attempt or conspiracy to
commit either offense.6 A sentencing court must order the defendants to pay
victim restitution, and the government may confiscate any property that is
derived from or used to facilitate either offense.7 The government may seek to
enjoin violations, but the EEA creates no explicit private cause of action.8
Conduct that violates the EEA‘s proscriptions may also violate other federal
prohibitions, however. Some, like the Computer Fraud and Abuse Act, in
addition to imposing criminal penalties, do authorize victims to sue for
damages and other forms of relief under some circumstances.9
STEALING TRADE SECRETS

Elements
The trade secrets prohibition is the more complicated of the EAA‘s two
criminal offenses. It condemns:
I.
(1) Whoever
(2) with intent to convert
(3) a trade secret
(4) related to
(5) a product or service
(6) (a) used in or
(b) intended for use in
(7) (a) interstate commerce or
(b) foreign commerce
(8) to the economic benefit of anyone other than the owner thereof
(9) (a) intending or
(b) knowing
(10)that the offense will injure the owner of that trade secret
(11)knowingly
(12) (a) steals, without authorization appropriates, takes, carries away,
conceals, or by fraud, artifice, or deception obtains such information,
(b)without authorization copies, duplicates, sketches, draws,
photographs, downloads, uploads, alters, destroys, photocopies, replicates,
48 Charles Doyle
transmits, delivers, sends, mails, communicates, or conveys such information;

[or]
(c) (i) receives, buys, or possesses such information,
(ii) knowing the same to have been stolen or appropriated, obtained,
or converted without authorization;
or
II.
(1)Whoever
(2)attempts [to do so];
or
III.
(1)Whoever
(2)conspires with one or more other persons to [do so], and
(3)one or more of such persons do any act to effect the object of the
conspiracy.10
Substantive Offense
Whoever
The term ―whoever‖ encompasses both individuals and organizations.
Thus, individuals and organizations may be guilty of the theft of trade secrets.
Subsection 1832(b) confirms this intent by establishing a special fine for
―organizations‖ who commit the offense. For purposes of the federal criminal
code, an ―organization‖ is any ―person other than an individual.‖11 The
Dictionary Act supplies examples of the type of entities that may qualify as
―persons‖—―the words ‗person‘ and ‗whoever‘ include corporations,
companies, associations, firms, partnerships, societies, and joint stock
companies, as well as individuals.‖12
With Intent to Convert

Conversion is a common law concept which is defined as ―[t]he wrongful
possession or disposition of another‘s property as if it were one‘s own; an act
or series of acts of willful interference, without lawful justification, with any
chattel in a manner inconsistent with another‘s right, whereby that other
person is deprived of the use and possession of the chattel.‖13 This ―intent to
steal‖ element, coupled with the subsequent knowledge and ―intent to injure‖
elements, would seem to ensure that a person will not be convicted of theft for
the merely inadvertent or otherwise innocent acquisition of a trade secret.
Trade Secret
An EEA trade secret is any information that ―(A) the owner thereof has
taken reasonable measures to keep such information secret; and (B) ... derives
independent economic value, actual or potential, from not being generally
known to, and not being readily ascertainable through proper means by, the
public.‖14 An owner for these purposes is one ―in whom or in which rightful
legal or equitable title to, or license in, the trade secret is reposed.‖15
Whether an owner has taken reasonable measures to ensure the secrecy of
his trade information will depend upon the circumstances of the case. Such
measures would ordinarily include limiting access to the information and
notifying employees of its confidential nature.16 Inclusion within the definition
of ―trade secret‖ of the instruction that the owner take ―reasonable measures‖
to secure the confidentiality of the information does not render the statute
unconstitutionally vague as applied to a defendant whose conduct clearly falls
with the statute‘s proscription.17
Construction of the ―known or readily ascertainable‖ element of the
secrecy definition is more perplexing. On its face, the EEA suggests that
information is secret if it unknown or undiscoverable by the general public,
even if it might be known or discoverable within the industry in which the
information is relevant. Congress, however, may have intended a more narrow
interpretation of ―secret,‖ that is, the information is secret only if it is not
known to or reasonably ascertainable either by the general public or within the
industry in which the information has value.
The EEA‘s definition of ―trade secret‖ is ―based largely on the definition
of that term in the Uniform Trade Secrets Act.‖18 The EEA definition refers to
information known to or readily ascertainable by the ―public.‖19 The Uniform
Trade Secrets Act (UTSA) definition, however, refers not to the public but to
information known to or readily ascertainable by ―other persons who can
obtain economic value from its disclosure or use.‖20 Speaking in the context of
an owner‘s protective measures, the legislative history indicates that ―[s]ecrecy
in this context means that the information was not generally known to the
public or to the business, scientific, or educational community in which the
owner might seek to use the information.‖21 The question thus far appears to
have divided the lower federal appellate courts.22
Related to a Product or Service in Commerce

The trade secret must have an interstate or foreign commerce nexus. More
specifically, it must be one ―that is related to a product or service used in or
intended for use in‖ such commerce.23 Congress settled upon this phrase after
50 Charles Doyle
an appellate court held that earlier language covered only theft of a trade secret
related to a product that was, or was intended to be, sold or otherwise placed in
the stream of commerce.24
Economic Benefit of Another

Someone other than the trade secret‘s owner must be the intended
beneficiary of the theft or destruction.25 The thief may be, but need not be, the
intended beneficiary.26 Moreover, a close reading of the statute argues for the
proposition that no economic benefit need actually accrue; economic benefit
need only be intended. Yet if no economic benefit is intended, there is no
violation.27
Intent to Injure
The government must prove that the defendant intended to injure the trade
secret‘s owner or that he knew the owner would be injured.28 However, it need
not show actual injury. The section ―does not require the government to prove
malice or evil intent, but merely that the actor knew or was aware to a practical
certainty that his conduct would cause some disadvantage to the rightful
owner.‖29 Again, the element addresses the defendant‘s state of mind, not
reality. Nothing in the statute‘s language demands that the government prove
actual injury.
Knowingly
The last of the section‘s three mens rea requirements demands that the
defendant be aware that he is stealing, downloading, or receiving a stolen trade
secret. There is some dispute over whether this requires the prosecution to
prove that the defendant knew that he was stealing, downloading, or receiving
proprietary information or that he knew that he was stealing, downloading, or
receiving a trade secret. The Justice Department has used the section‘s
legislative history to reinforce its understanding of this feature of the section:
―A knowing state of mind with respect to an element of the

offense is (1) an awareness of the nature of one‘s conduct, and (2) an
awareness of or a firm belief in or knowledge to a substantial
certainty of the existence of a relevant circumstance, such as whether
the information is proprietary economic information as defined by
this statute.‖ S. Rep. No. 104- 359, at 16 (1996). Because criminal
statutes covering the theft of tangible property generally require the
government to prove that the defendant ―[knew] that the object he
[stole was] indeed a piece of property that he [had] no lawful right to
convert for his personal use,‖ the government generally must show
that the defendant knew or had a firm belief that the information he
or she was taking was a trade secret in an EEA case as well. 142
Cong. Rec. 27,117 (1996).
Ignorance of the law is no defense. The government need not
prove that the defendant himself had concluded that the information
he took fit the legal definition of a ―trade secret‖ set forth in 18
U.S.C. §1839(3). If the government had to prove this, EEA violations
would be nearly impossible to prosecute and Congress‘s intent would
be contravened:
This [knowledge] requirement should not prove to be a great
barrier to legitimate and warranted prosecutions. Most companies go
to considerable pains to protect their trade secrets. Documents are
marked proprietary; security measures put in place; and employees
often sign confidentiality agreements. 142 Cong. Rec. 27,117 (1996).
Based on this legislative history, the government should be able
to establish that the defendant knew that the information was a trade
secret by proving that he was aware that the information was
protected by proprietary markings, security measures, and
confidentiality agreements. Id. More generally, the government could
simply prove that the defendant knew or had a firm belief that the
information was valuable to its owner because it was not generally
known to the public, and that its owner had taken measures to protect
it, that is, the information had the attributes of a trade secret
described in 18 U.S.C. §1839(3). On the other hand, a person cannot
be prosecuted under the EEA if ―he [took] a trade secret because of
ignorance, mistake, or accident.‖ 142 Cong. Rec. 27,117 (1996). Nor
could he be prosecuted if ―he actually believed that the information
was not proprietary after [he took] reasonable steps to warrant such
belief.‖ Id.30
The courts have not always agreed. Some insist that the prosecution show
that the defendant knew the information ―had the general attributes of a trade
secret.‖31
Stealing and the Like

A person may be guilty of the theft of a trade secret only if he
―knowingly‖ steals a trade secret, replicates a trade secret, destroys or alters a
trade secret, or receives a stolen trade secret. Each of the alternative means of
deprivation is cast in a separate subsection. The first subsection covers not
only stealing a trade secret, but also concealing it or acquiring it by fraud.32
Trade secrets are information and thus can be simultaneously held by an
owner and a thief. As a result, the second subsection covers situations where
52 Charles Doyle
the owner is not necessarily deprived of the information, but is denied control
over access to it. It proscribes unauthorized copying, downloading, uploading,
or otherwise conveying the information. It also outlaws alteration or
destruction of a trade secret.33 The Justice Department has argued that this
second means of misappropriation includes instances where a faithless
employee, former employee, or cyber intruder commits the trade secret to
memory and subsequently acts in manner necessary to satisfy the other
elements of the offense.34 It makes the point with some trepidation, however:
This is not to say, however, that any piece of business

information that can be memorized is a trade secret. As noted, the
EEA does not apply to individuals who seek to capitalize on their
lawfully developed knowledge, skill, or abilities. When the actions of
a former employee are unclear and evidence of theft has not been
discovered, it may be advisable for a company to pursue its civil
remedies and make another criminal referral if additional evidence of
theft is developed. Where available, tangible evidence of theft or
copying is helpful in all cases to overcome the potential problem of
prosecuting the defendant‘s ―mental recollections‖ and a defense that
―great minds think alike.‖35
The third subsection outlaws the knowing receipt of stolen trade secret
information.36 Conviction requires proof that a trade secret was stolen or
converted in violation of one of the other subsections and that the defendant
knew it.37
Attempt
Defendants who attempt to steal a trade secret face the same penalties as
those who succeed.38 Attempt consists of intent to commit the offense and a
substantial step towards the attainment of that goal.39 This would indicate that
the information which the defendant seeks to steal need not be a trade secret,
as long as he believes it is.40
Conspiracy
Defendants who conspire to steal a trade secret also face the same
penalties as those who commit the substantive offense.41 ―In order to find a
defendant guilty of conspiracy, the prosecution must prove.... that the
defendant possessed both the intent to agree and the intent to commit the
substantive offense. In addition, the government must prove that at least one
conspirator committed an overt act, that is, took an affirmative step toward
achieving the conspiracy‘s purpose.‖42 It is no defense that circumstances,

unbeknownst to conspirators, render success of the scheme unattainable, as for
example when the defendants plotted to steal information that was not in fact a
trade secret.43
Consequences
Individual offenders face imprisonment for up to 10 years and fines of up

to $250,000.44 The court may fine an organization up to $5 million upon
conviction.45 Both individuals and organizations face a higher maximum fine
if twice the gain or loss associated with the offense exceeds the statutory
maximum (i.e., $250,000/$5 million).46 A sentencing court must also order the
defendant to pay restitution to the victims of the offense.47 Property derived
from, or used to facilitate, commission of the offense may be subject to
confiscation under either civil or criminal forfeiture procedures.48 The
Attorney General may sue for injunctive relief, but there is no explicit private
cause of action.49
ECONOMIC ESPIONAGE
The EEA‘s economic espionage and theft of trade secret offenses share
many of the same elements.50 There are four principal differences. The theft of
a trade secret must involve the intent to benefit someone other than the
owner.51 It must involve an intent to injure the owner.52 And, it must involve a
trade secret ―that is related to or included in a product that is produced for or
placed in interstate or foreign commerce.‖53 Economic espionage, on the other
hand, must involve an intent to benefit a foreign entity or at least involve the
knowledge that the offense will have that result.54 It does not require an intent
to injure the owner.55 And, it applies to any trade secret, notwithstanding the
absence of any connection to interstate or foreign commerce.56 Finally,
economic espionage is punished more severely. The maximum term of
imprisonment is 15 years rather than 10 years, and the maximum fine for
individuals is $5 million rather than $250,000.57 For organizations the
maximum fine is the greater of $10 million or three times the value of trade
secret rather than $5 million.58 As in the case of stealing trade secrets, the
maximum permissible fine may be higher if twice of the amount of the gain or
54 Charles Doyle
loss associated with the offense exceeds the otherwise applicable statutory
maximum.59
Section 1831 condemns:
I.
(1) Whoever
(2) intending or knowing the offense will benefit
(3) (a) a foreign government,
(b)a foreign instrumentality, or
(c)a foreign agent
(4) knowingly
(5) (a) steals, without authorization appropriates, takes, carries away,
conceals, or by fraud, artifice, or deception obtains a trade secret,
(b)without authorization copies, duplicates, sketches, draws,
photographs, downloads, uploads, alters, destroys, photocopies, replicates,
transmits, delivers, sends, mails, communicates, or conveys a trade secret; [or]
(c) (i) receives, buys, or possesses a trade secret,
(ii) knowing the same to have been stolen or appropriated, obtained,
or converted without authorization;
or
II.
(1)Whoever
(2)attempts [to do so];
or
III.
(1)Whoever
(2)conspires with one or more other persons to [do so], and
(3)one or more of such persons do any act to effect the object of the
conspiracy.60
Foreign Beneficiary
A casual reader might conclude that any foreign entity would satisfy
Section 1831‘s foreign beneficiary element.61 Section 1839‘s definition of
foreign agent and foreign instrumentality, however, makes it clear that an
entity can only qualify if it has a substantial connection to a foreign
government. The definition of foreign instrumentality refers to foreign
governmental control or domination.62 The description of a foreign agent
leaves no doubt that the individual or entity must be the agent of a foreign
government.63
The theft of a trade secret demands an intent to confer an economic
benefit.64 Economic espionage is not so confined. Here, ―benefit means not
only economic benefit but also reputational, strategic, or tactical benefit.‖65
Moreover, unlike the theft offense, economic espionage may occur whether
the defendant intends the benefit or is merely aware that it will follow as a
consequence of his action.66 As in the case of trade secret theft, however, the
benefit need not be realized; it is enough that defendant intended to confer it.67
COMMON PROCEDURAL MATTERS

Protective Orders
It would be self-defeating to disclose a victim‘s trade secrets in course of

the prosecution of a thief. Consequently, the EEA authorizes the trial court to
issue orders to protect the confidentiality of trade secrets during the course of a
prosecution and permits the government to appeal its failure to do so.68 The
government may not appeal an order to reveal information it has already
disclosed to the defendant.69 Nevertheless, in such instances, appellate review
of a district court‘s disclosure order may be available through a writ of
mandamus.70
Extraterritoriality
The Supreme Court has said on a number of occasions that ―[i]t is a

longstanding principle of American law ‗that legislation of Congress, unless a
contrary intent appears, is meant to apply only within the territorial jurisdiction
of the United States‘‖71 With this in mind, Congress specifically identified the
circumstances under which it intended the economic espionage and theft of
trade secrets provisions to apply overseas.72 Either offense may be prosecuted
as long as the offender is a U.S. national or an act in furtherance of the offense
is committed within this country.73
The legislative history indicates that these are the only circumstances
under which violations abroad may be prosecuted.74 This may mean that
foreign conspirators may not be charged unless some overt act in furtherance
of the scheme occurs in the United States.75 It may also preclude prosecution
56 Charles Doyle
when trial would have been possible in the absence of an express provision.
For example, in the absence of the limiting provision, the courts would likely
conclude that Congress intended to allow prosecution of overseas offenses of
foreign nationals that have an impact within the United States.76
Prosecutorial Discretion
For five years after passage of the Economic Espionage Act, neither
economic espionage nor trade secret violations of its provisions could be
prosecuted without the approval of senior Justice Department officials.
Prosecutors must still secure approval before bringing charges of economic
espionage, but approval is no longer necessary for the prosecution of theft of
trade secret charges.77
RELATED OFFENSES
Conduct that violates the Economic Espionage Act may violate other
federal criminal provisions as well. In the case of trade secret offenses,
potentially corresponding offenses include violations of the Computer Fraud
and Abuse Act, the National Stolen Property Act, and the federal wire fraud
statute.
The Computer Fraud and Abuse Act outlaws accessing certain computers
or computer systems without authorization or in excess of authorization, with
the intent to defraud.78 The National Stolen Property Act outlaws the interstate
transportation of tangible stolen property or the knowing receipt of such
property.79 The federal wire fraud statute outlaws the use of wire
communications in execution of a scheme to defraud.80
In addition in the case of economic espionage violations, a defendant may
be subject to prosecution under the general espionage statutes or with failure to
register as the agent of a foreign power. Foreign agents, other than diplomatic
personnel, must register with the Attorney General; failure to do so is
generally a felony.81
The general espionage laws are only likely to be triggered if the trade
secret information is also classified information or is national defense
information.82
LEGISLATION IN THE 112TH CONGRESS

Congress amended the EEA twice during the 112th Congress. The Theft of
Trade Secrets Clarification Act of 2012 clarified the trade secrets jurisdiction
element.83 The Foreign and Economic Espionage Act of 2012 increased the
maximum fine levels for economic espionage.84 It also directed the United
States Sentencing Commission to reexamine its treatment of economic
espionage and the overseas transmission of stolen trade secrets.85
Stealing Trade Secrets
On November 27, 2012, Senator Leahy introduced, and the Senate passed
by unanimous consent, the Theft of Trade Secrets Clarification Act (S.
3642).86 The proposal reworded the jurisdictional element of the trade secret
provision to cover secrets relating to products or services used or intended for
use in interstate or foreign commerce. Senator Leahy explained that:
A recent decision of the Second Circuit in United States v.

Aleynikov casts doubt on the reach of the statute. A jury in that case
found the defendant guilty of stealing computer code from his
employer. The court overturned the conviction, holding among other
thing that the trade secret did not meet the interstate commerce prong
of the statute, even though the defendant had copied the stolen code
from his office in New York to a server in Germany; downloaded the
code to his home computer in New Jersey; then flew to his new job
in Illinois with the stolen source code in his possession; and the code
was used in interstate commerce.
The court held that the Economic Espionage Act provision
applies only to trade secrets that are part of a product that is produced
to be placed in interstate commerce. Because the company‘s
proprietary software was neither placed in interstate commerce nor
produced to be placed in interstate commerce, the law did not apply –
even though the stolen source code was part of the financial trading
system that was used in interstate commerce every day.87
The House passed the measure shortly thereafter under suspension of the
rules,88 and the President signed it into law on December 28, 2012.89
58 Charles Doyle
Economic Espionage
On August 1, 2012, the House passed the Foreign and Economic

Espionage Penalty Enhancement Act of 2012 (H.R. 6029), under suspension
of the rules.90 The Senate Judiciary Committee had previously reported
favorably a similar proposal as the Economic Espionage Penalty Enhancement
Act (S. 678).91 Unlike the Senate bill, the House legislation would have
increased the penalties for violations of 18 U.S.C. 1831 (economic espionage).
Under the House-passed proposal the maximum term of imprisonment would
have increased from not more than 15 years to not more than 20 years.92
Section 1831 previously punished individual defendants with a fine of not
more than the greater of $500,000 or twice the loss or gain associated with the
offense and punished organizational defendants with a fine of not more than
the greater of $10 million or twice the loss or gain.93 The House bill would
have amended it to permit a fine for an offending individual of not more than
the greater of $5 million or twice the loss or gain and to permit a fine for an
offending organization of not more than the greater of $10 million, three times
the value of the stolen trade secret, or twice the gain or loss associated with the
offense.94
Neither proposal would have changed the maximum terms of
imprisonment (not more than 10 years) or the maximum fines for trade secret
violations ($250,000 for individuals; $5 million for organizations).95 Both
would have instructed the United States Sentencing Commission to reexamine
the treatment of economic espionage and overseas transmission of stolen trade
secrets under the Commission‘s sentencing guidelines.
The legislation is a reaction to reports of increased foreign predatory
action and of ―sensitive US economic information and technology ... targeted
by the intelligence services, private sector companies, academic and research
institutions, and citizens of dozens of countries.‖96
The Senate agreed to the House-passed proposal, but not before removing
the provision that would have increased the length of the maximum prison
term.97 The House agreed to the Senate amendment under suspension of the
rules.98 The President signed the proposal on January 14, 2013.99
End Notes
1
18 U.S.C. 1831 and 18 U.S.C. 1832, respectively.
2
―Whoever ... without authorization ... downloads, uploads ... transmits ... or conveys‖ such
[trade secret] information.... ‖ 18 U.S.C. 1831(a)(2), 1832(a)(2).
3
18 U.S.C. 1832(a), 1831(a).
4
18 U.S.C. 1832(a), 3571(b), 1831(a). Here and elsewhere, 18 U.S.C. 3571(c) provides as
general matter that the maximum for a criminal fine of any federal criminal offense is the
greater of the standard amount set for the particular offense (e.g., $250,000 for individuals
convicted of a felony) or twice the gain or loss resulting from the offense. For purposes of
brevity in most instances, this report omits reference to this alternative maximum fine level
in most instances. Prior to the passage of P.L. 112-269, Section 1831 punished individuals
with a fine of not more than $500,000 and individuals with a fine of not more than the
greater of $10 million or twice the amount of the gain or loss associated with the offense;
see 18 U.S.C. 1831 (2006 ed.).
5
18 U.S.C. 1832(b), 1831(b).
6
18 U.S.C. 1831(a)(4), (5), 1832(a)(4), (5).
7
18 U.S.C. 1834, 2323(c)(restitution), 2323(a)(civil forfeiture), 2323(b)(criminal forfeiture).
8
18 U.S.C. 1836.
9
E.g., 18 U.S.C. 1030(g)(computer fraud and abuse), 2520(interception of electronic
communications), 2707 (unauthorized access to an electronic communications facility).
10
18 U.S.C. 1832; see also, U.S. Department of Justice, Criminal Resource Manual §1129 (May,
1999)(language in italics substituted to reflect P.L. 112-235‘s amendments) (―In order to
establish a violation of 18 U.S.C. §1832, the government must prove: (1) the defendant
stole, or without authorization of the owner, obtained, destroyed, or conveyed information;
(2) the defendant knew this information was proprietary; (3) the information was in fact a
trade secret; (4) the defendant intended to convert the trade secret to the economic benefit of
anyone other than the owner; (5) the defendant knew or intended that the owner of the trade
secret would be injured; and (6) the trade secret was related to [a product or service used in
or intended for use in] interstate or foreign commerce‖).
11
18 U.S.C. 1832.
12
1 U.S.C. 1 (emphasis added).
13
BLACK‘S LAW DICTIONARY 381 (9th ed. 2009).
14
18 U.S.C. 1839(3)(―[T]the term ‗trade secret‘ means all forms and types of financial, business,
scientific, technical, economic, or engineering information, including patterns, plans,
compilations, program devices, formulas, designs, prototypes, methods, techniques,
processes, procedures, programs, or codes, whether tangible or intangible, and whether or
how stored, compiled, or memorialized physically, electronically, graphically,
photographically, or in writing if - (A) the owner thereof has taken reasonable measures to
keep such information secret; and (B) the information derives independent economic value,
actual or potential, from not being generally known to, and not being readily ascertainable
through proper means by, the public‖).
15
18 U.S.C. 1839(4).
16
United States v. Chung, 659 F.3d 815, 825-29 (9th Cir. 2011)(citations omitted)(―[R]easonable
measures for maintaining secrecy have been held to include advising employees of the
existence of a trade secret, limiting access to a trade secret on a ‗need to know basis‘, and
controlling plant access. Security measures, such as locked rooms, security guards, and
document destruction methods, in addition to confidentiality procedures, such as
confidentiality agreements and document labeling, are often considered reasonable
measures‖).
60 Charles Doyle
17
United States v. Krumrei, 258 F.3d 535, 539 (6th Cir. 2001); see also, United States v.
Genovese, 409 F.Supp.2d 253, 257 (S.D.N.Y. 2005)(rejecting the contention that the ―not ...
generally known ... to the public‖ element of the definition of a trade secret was
unconstitutionally vague as applied when the evidence showed that he clearly understood
that the information he downloaded was not generally known).
18
H.Rept. 104-788, at 12 (1996); United States v. Chung, 659 F.3d 815, 825 (9th Cir. 2011).
19
18 U.S.C. 1839(3)(B).
20
UNIF. TRADE SECRETS ACT §1(4), 14 U.L.A. 538 (2005). The Uniform Trade Secrets Act
definition of trade secrets reads in its entirety: ―‗Trade Secret‘ means information, including
a formula, pattern, compilation, program, device, method, technique, or process that: (i)
derives independent economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.‖
21
H.Rept. 104-788, at 12 (1996).
22
United States v. Chung, 659 F.3d 815, 825 (9th Cir. 2011)(―There is some conflict between
circuits as to whether that deviation alters the ‗readily ascertainable‘ analysis. Compare
United States v. Lange, 312 F.3d 263, 267 (7th Cir. 2002)(interpreting ‗the public‘ as not
necessarily meaning the ‗general public,‘ but potentially ‗the economically relevant public‘
(emphasis in original), with United States v. Hsu, 155 F.3d 189, 196 (3d Cir. 1998)
(observing that ‗the EEA alters the relevant party from whom proprietary information must
be kept confidential‘). Because Defendant does not contest that the secret information in
this case was readily ascertainable, we need not weigh in on this issue‖).
23
18 U.S.C. 1832(a)(language added by P.L. 112-236 in italics)(―Whoever, with intent to convert
a trade secret that is related to a product or service used in or intended for use in interstate
or foreign commerce ... ‖).
24
United States v. Aleynikov, 676 F.3d 71, 80-2 (2d Cir. 2012)(construing 18 U.S.C. 1832(a)
which at the time read: ―Whoever, with intent to convert a trade secret that is related to or
included in a product that is produced for or placed in interstate or foreign commerce ...
‖)(P.L. 112-236 struck the language in italics in favor of that quoted in italics in the
previous footnote in order to overcome the implications of Aleynikov, 158 Cong. Rec.
S6978 (daily ed. Nov. 27, 2012)(introductory remarks of Sen. Leahy)).
25
18 U.S.C. 1832(a); United States v. Hsu, 155 F.3d 189, 195-96 (3d Cir. 1998); United States v.
Jin, 833 F.Supp.2d 977, 1016 (N.D. Ill. 2012).
26
U.S. Department of Justice, Executive Office for United States Attorneys, Prosecuting
Intellectual Property Crimes (Justice Report) 159 (3d ed. September 2006)(―The recipient of
the intended benefit can be the defendant, a competitor of the victim, or some other person
or entity‖), available at http://www.justice.gov/criminal/cybercrime/docs/ ipma2006.pdf.
27
Id. (―One who misappropriates a trade secret but who does not intend for anyone to gain
economically from the theft cannot be prosecuted under [the section]‖).
28
18 U.S.C. 1832(a); United States v. Jin, 833 F.Supp.2d 977, 1018 (N.D. Ill. 2012).
29
H. Rep. No. 104-788, at 11-12 (1996), quoted in Justice Report at 159.
30
Justice Report at 156-57 (some citations omitted); see also, United States v. Chung, 633
F.Supp.2d 1134, 1143 (C.D.Cal. 2009), aff‘d, 659 F.3d 815 (9th Cir. 2011)(―It is not
explicitly clear from the language of section 1831(a)(3)[which corresponds to section
1832(a)(3)] whether the word ‗knowingly‘ modifies the ‗trade secret‘ element of the
offense. The Government argues that it does not, and therefore it does not have to prove that
Mr. Chung knew that the information he possessed was a trade secret. Mr. Chung contends
that the Government must prove that he had such knowledge. The Court agrees with Mr.
Chung‖).
31
United States v. Jin, 833 F.Supp.2d 977, 1011-14 (N.D. Ill. 2012); United States v. Chung, 633
F.Supp.2d 1134, 1145 (C.D.Cal. 2009), aff‘d on other grounds, 659 F.3d 815 (9th Cir.
2011); but see, United States v. Krumrei, 258 F.3d 535, 539 (6th Cir. 2001)(indicating that
the government must show that the defendant knew the information was proprietary and
thus by implication indicating that the government need not meet the higher standard of
showing that he knew the information constituted a trade secret).
32
18 U.S.C. 1832(a)(1)(― ... [K]nowingly – (1) steals, or without authorization appropriates,
takes, carries away, or conceals, or by fraud, artifice, or deception obtains such
information‖).
33
18 U.S.C. 1832(a)(2)(―[K]nowingly ... (2) without authorization copies, duplicates, sketches,
draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits,
delivers, sends, mails, communicates, or conveys such information‖).
34
Justice Report at 155 (―The statute also prohibits not only actions taken against a trade secret‘s
physical form, such as ‗steal[ing], ...tak[ing], [and] carr[ying] away‘, 18 U.S.C.
§§1831(a)(1), 1832(a)(1), but also actions that can be taken against a trade secret in a
memorized, intangible form, such as ‗sketch[ing], draw[ing], ... download[ing], upload[ing],
..., transmit[ting], ... communicat[ing], [and] convey[ing],‘ 18 U.S.C. §§1831(a)(2),
1832(a)(2). See James H.A. Pooley et al., Understanding the Economic Espionage Act of
1996, 5 Tex. Intell. Prop. L.J. 177 (1997). In this respect, as in others, the EEA echoes civil
law and some pre-EEA case law. See, e.g. , 4 Roger M. Milgrim, Milgrim on Trade Secrets
§15.01[e]; Stampede Tool Warehouse v. May, 651 N.E.2d 209, 217 (Ill. App. Ct. 1995) (‗A
trade secret can be misappropriated by physical copying or by memorization.‘) (citations
omitted). Trade secret cases to the contrary that do not involve the EEA are thus not
persuasive authority on this point‖). See also, Twenty-Sixth Annual Survey of White Collar
Crime: Intellectual Property Crimes, 49 AMERICAN CRIMINAL LAW REVIEW 929,
934 (2012).
35
Justice Report at 155.
36
18 U.S.C. 1832(a)(3)(― ... [K]nowingly ... (3) receives, buys, or possesses such information,
knowing the same to have been stolen or appropriated, obtained, or converted without
authorization‖).
37
18 U.S.C. 1832(a)(3); United States v. Jin, 833 F.Supp.2d 977, 1015 (N.D.Ill. 2012).
38
18 U.S.C. 1832(a).
39
United States v. Hsu, 155 F.3d 189, 202-203 (3d Cir. 1998); United States v. Lange, 312 F.3d
263, 268 (7th Cir. 2002); United States v. Yang, 281 F.3d 534, 543 (6th Cir. 2002).
40
United States v. Hsu, 155 F.3d at 203 (―It naturally follows that the government need not prove
that an actual trade secret was used during the EEA investigation, because the defendant‘s
culpability for a charge of attempt depends only on the ‗circumstances as he believes them
to be,‘ not as they really are‖); United States v. Yang, 281 F.3d at 543-44 (―The Yangs
believed that the information Lee was providing was trade secrets belonging to Avery. They
attempted to steal that information. The fact that they actually did not receive a trade secret
is irrelevant‖); but see United States v. Lange, 312 F.3d at 269 (―But it is far less clear that
[the] sale of information already known to the public could be deemed a substantial step
toward the offense, just because the defendant is deluded and does not understand what a
trade secret is.... We need not pursue the subject beyond noting the plausibility of the claim
and its sensitivity to the facts – what kind of data did the employee think he stole, and so on.
For it is not necessary to announce a definitive rule about how dangerous the completed acts
62 Charles Doyle
must be in trade secret cases: the judge was entitled to (and did) find that Lange had real
trade secrets in his possession‖).
41
18 U.S.C. 1832(a).
42
United States v. Martin, 228 F.3d 1, 10-11 (1st Cir. 2000); cf., United States v. Chung, 659
F.3d 815, 828-29 (9th Cir. 2011).
43
United States v. Hsu, 155 F.3d at 203-204; United States v. Yang, 281 F.3d at 544.
44
18 U.S.C. 1832(a), 3571.
45
18 U.S.C. 1832(b).
46
18 U.S.C. 3571(d).
47
18 U.S.C. 1834, 2323(c), 3663A(a), (c). See generally, CRS Report RL34138, Restitution in
Federal Criminal Cases.
48
18 U.S.C. 1834, 2332(a), (b). See generally, CRS Report 97-139, Crime and Forfeiture.
49
18 U.S.C. 1836.
50
18 U.S.C. 1831, 1832.
51
18 U.S.C. 1832(a).
52
Id.
53
Id.
54
18 U.S.C. 1831(a)(―Whoever, intending or knowing that the offense will benefit any foreign
government, foreign instrumentality, or foreign agent ... ‖); United States v. Jin, 833
F.Supp.2d 977, 1019 (N.D.Ill. 2012).
55
Id.
56
Id.; United States v. Aleynikov, 676 F.3d 71, 79 (2d Cir. 2012)(―Thus there is a limitation – [a
nexus to] interstate or foreign commerce – in the statute Aleynikov is charged with
violating, a limitation that does not appear in the otherwise parallel foreign espionage
statute‖).
57
18 U.S.C. 1831(a), 1832(a).
58
18 U.S.C. 1831(b), 1832(b).
59
18 U.S.C. 3571(d).
60
18 U.S.C. 1831; see also United States v. Chung, 633 F.Supp.2d 1134, 1146 (C.D.Cal. 2009),
aff‘d, 659 F.3d 815 (9th Cir. 2011)(―Accordingly, under section 1831(a)(3), the
Government must prove five elements: (1) Mr. Chung intended to benefit a foreign
government; (2) Mr. Chung knowingly possessed trade secret information; (3) Mr. Chung
knew the information was obtained without authorization; (4) the information Mr. Chung
possessed was, in fact, a trade secret; and (5) Mr. Chung knew the information was a trade
secret‖); U.S. Department of Justice, Criminal Resource Manual §1124 (―In order to
establish a violation of 18 U.S.C. §1831, the government must prove: (1) the defendant stole
or, without authorization of the owner, obtained, destroyed, or conveyed information; (2)
the defendant knew this information was proprietary; (3) the information was in fact a trade
secret; and (4) the defendant knew the offense would benefit or was intended to benefit a
foreign government, foreign instrumentality, or foreign agent‖).
61
18 U.S.C. 1831(a)(― ... [I]ntending or knowing the offense will benefit (3) (a) a foreign
government, (b) a foreign instrumentality, or (c) a foreign agent ... ‖).
62
18 U.S.C. 1839(1)(―As used in this chapter – (1) the term ‗foreign instrumentality‘ means any
agency, bureau, ministry, component, institution, association, or any legal, commercial, or
business organization, corporation, firm, or entity that is substantially owned, controlled,
sponsored, commanded, managed, or dominated by a foreign government‖).
63
18 U.S.C. 1839(1)(―As used in this chapter ... (2) the term ‗foreign agent‘ means any officer,
employee, proxy, servant, delegate, or representative of a foreign government‖).
64
18 U.S.C. 1832(a)(―Whoever, with the intent to convert a trade secret ... to the economic
benefit of anyone other than the owner ... ‖).
65
H.Rept. 104-788, at 11 (1996).
66
18 U.S.C. 1832(a)(―Whoever, with the intent to convert a trade secret ... to the economic
benefit of anyone other than the owner ... ‖); 1831(a)(―Whoever, intending or knowing that
the offense will benefit ... ‖).
67
Id.
68
18 U.S.C. 1835; United States v. Hsu, 155 F.3d 189, 193-94 (3d Cir. 1998).
69
United States v. Ye, 436 F.3d 1117, 1120-121 (9th Cir. 2006)(―The plain language of the EEA
indicates that the government can file an interlocutory appeal pursuant to §1835 only where
a district court‘s order actually directs or authorizes the disclosure of a trade secret.... Here,
the district court‘s order did not provide for the disclosure of any trade secret materials. In
its opening brief in this court, the government acknowledges that it had already turned over
all relevant trade secret materials and documents.... Because the purpose of the district
court‘s order was only to clarify exactly which materials the government contends
constitute the protected trade secrets, and all relevant materials had already been turned
over, the district court‘s order does not direct or authorize the ‗disclosure‘ of trade secrets as
required by the plain language of §1835‖).
70
Id. at 1121-124. Mandamus relief is a discretionary remedy ordinarily only available when the
petitioner can show: the absence of any other form of relief, a clear right to issuance of the
writ, and that recourse to this extraordinary form of relief is appropriate under the
circumstances, Cheney v. United States District Court, 542 U.S. 367, 380-81 (2004). The
lower federal appellate courts sometimes describe these requirements in greater detail, see
e.g., Lewis v. Ayers, 681 F.3d 992, 998 (9th Cir. 2012)(―In Bauman, we established five
guidelines to determine whether mandamus is appropriate in a given case:(1) whether the
petitioner has no other means, such as a direct appeal to obtain the desired relief; (2)
whether the petitioner will be damaged or prejudiced in any way not correctable on appeal;
(3) whether the district court‘s order is clearly erroneous as a matter of law; (4) whether the
district court‘s order is an oft repeated error or manifests a persistent disregard of the federal
rules; and (5) whether the district court‘s order raises new and important problems or issues
of first impression‖); In re Jones, 680 F.3d 640, 642 (6th Cir. 2012)(essentially the same).
71
Morrison v. National Australia Bank Ltd., 130 S.Ct. 2869, 2877 (2010), quoting EEOC v.
Arabian American Oil Co., 449 U.S. 244, 248 (1991) and Foley Bros., Inc. v. Filardo, 336
U.S. 281 (1949). See generally, CRS Report 94-166, Extraterritorial Application of
American Criminal Law.
72
H.Rept. 104-788, at 14 (1996).
73
18 U.S.C. 1837 (―This chapter also applies to conduct occurring outside the United States if -
(1) the offender is a natural person who is a citizen or permanent resident alien of the
United States, or an organization organized under the laws of the United States or a State or
political subdivision thereof; or (2) an act in furtherance of the offense was committed in
the United States‖).
74
H.Rept. 104-788, at 14 (emphasis added)(―To ensure that there is some nexus between the
ascertaining of such jurisdiction and the offense, however, extraterritorial jurisdiction exists
only if [an overt act occurs within the United States or the offender is a U.S. national]‖).
75
18 U.S.C. 1837 (emphasis added)(―This chapter also applies to conduct occurring outside the
United States if - (1) the offender is a natural person who is a citizen or permanent resident
alien of the United States, or an organization organized under the laws of the United States
64 Charles Doyle
or a State or political subdivision thereof; or (2) an act in furtherance of the offense was
committed in the United States‖).
76
Ford v. United States, 273 U.S. 593, 623 (1927)(―A man who outside of a country willfully
puts in motion a force to take effect in it is answerable at the place where the evil is done‖);
United States v. Yousef, 327 F.3d 56, 96-7 (2d Cir. 2003)(―Moreover, assertion of
jurisdiction is appropriate under the ‗objective territorial principle,‘ because the purpose of
the attack was to influence United States foreign policy and the defendant intended their
actions to have an effect – in this case a devastating effect – on and within the United
States‖); United States v. Felix-Guiterrez, 940 F.2d 1200, 1205 (9th Cir. 1991)(Felix‘s
actions created a significant detrimental effect in the United States ... ‖). See also The
Extraterritorial Application of the Economic Espionage Act of 1996, 23 HASTINGS
INTERNATIONAL AND COMPARATIVE LAW REVIEW, 527, 553-54 (2000)(―If a
foreign company possesses no operations in the U.S. and engages in trade secret theft
against a U.S. entity entirely outside the U.S., Then EEA cannot apply. In that respect, the
extraterritorial jurisdiction under the EEA may fall short of the jurisdictional reach applied
under a ‗pure‘ effects test in antitrust law – where the Sherman Act can reach conduct
entirely extraterritorial in nature‖).
77
U.S. Department of Justice, Criminal Resource Manual §1122 (―Prior to passage of the EEA,
the Attorney General assured Congress in writing that for a period of five years, the
Department of Justice would require that all prosecutions brought under the EEA must first
be approved by the Attorney General, the Deputy Attorney General, or the Assistant
Attorney General to the Criminal Division. (See October 1, 1996 letter from Attorney
General Janet Reno to Chairman Orrin Hatch, Criminal Resource Manual at 1123). This
requirement expired on October 11, 2001. Subsequently, the Attorney General renewed the
prior requirement for initiating prosecutions under 18 U.S.C. §1831.... The requirement was
not extended for cases under 18 U.S.C. §1832 ... ‖).
78
18 U.S.C. 1030(a)(4), (e)(2)(―(a) Whoever ... (4) knowingly and with intent to defraud,
accesses a protected computer without authorization, or exceeds authorized access, and by
means of such conduct furthers the intended fraud and obtains anything of value, unless the
object of the fraud and the thing obtained consists only of the use of the computer and the
value of such use is not more than $5,000 in any 1-year period ... shall be punished as
provided in subsection (c) of this section.... (e) As used in this section ... (2) the term
‗protected computer‘ means a computer - (A) exclusively for the use of a financial
institution or the United States Government, or, in the case of a computer not exclusively
for such use, used by or for a financial institution or the United States Government and the
conduct constituting the offense affects that use by or for the financial institution or the
Government; or (B) which is used in or affecting interstate or foreign commerce or
communication, including a computer located outside the United States that is used in a
manner that affects interstate or foreign commerce or communication of the United States‖);
e.g., United States v. Koo, 770 F.Supp.2d 1115, 1118 (D.Ore. 2011)(defendant indicted for
computer fraud and abuse and for trade secrets violations); see generally, CRS Report 97-
1025, Cybercrime: An Overview of the Federal Computer Fraud and Abuse Statute and
Related Federal Criminal Laws.
79
18 U.S.C. 2314 (―Whoever transports, transmits, or transfers in interstate or foreign commerce
any goods, wares, merchandise, securities or money, of the value of $5,000 or more,
knowing the same to have been stolen, converted, or taken by fraud.... shall be fined under
this title or imprisoned not more than ten years or both ... ‖); 18 U.S.C. 2315(―Whoever
receives, possesses, conceals, stores, barters, sells, or dispose of any goods, ware, or
merchandise, securities, or money of the value of $5,000 or more ... which have crossed a
State of United States boundary after being stolen ... knowing the same to have been stolen
... shall be fined under this title or imprisoned not more than ten years, or both‖); see also,
United States v. Aleynikov, 676 F.3d 71, 76-9 (2d Cir. 2012)(stolen, intangible computer
source code is neither a good, ware, nor merchandise for purposes of the National Stolen
Property Act).
80
18 U.S.C. 1343 (―Whoever, having devised or intending to devise any scheme or artifice to
defraud, or for obtaining money or property by means of false or fraudulent pretenses,
representations, or promises, transmits or causes to be transmitted by means of wire ... any
writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or
artifice, shall be fined under this title or imprisoned not more than 20 years, or both ... ‖);
e.g., United States v. Hsu, 155 F.3d 189, 193 (3d Cir. 1998)(defendant indicted for wire
fraud and trade secrets violations); United States v. Koo, 770 F.Supp.2d 1115, 1118 (D.Ore.
2011)(same); see generally, CRS Report R41930, Mail and Wire Fraud: A Brief Overview
of Federal Criminal Law.
81
18 U.S.C. 951(a)(―Whoever, other than a diplomatic or consular officer or attaché, acts in the
United States as an agent of a foreign government without prior notification to the Attorney
General if required in subsection (b), shall be fined under this title or imprisoned not more
than ten years, or both‖); e.g., United States v. Chung, 659 F.3d 815, 819 (9th Cir.
2011)(defendant indicted for economic espionage and unregistered foreign agent
violations).
82
18 U.S.C. 798, outlaws the unauthorized disclosure of classified information relating to
communications intelligence; 18 U.S.C. 1924 outlaws the unauthorized retention of
classified information; and 18 U.S.C. 793, 794 outlaw the unauthorized gathering or
transmitting national defense information; see generally CRS Report RS21900, The
Protection of Classified Information: The Legal Framework.
83
P.L. 112-236 (S. 3642), 126 Stat. 1627 (2012), amending, 18 U.S.C. 1832(a).
84
Section 2, P.L. 112-269 (H.R. 6029), 126 Stat. 2442 (2013), amending, 18 U.S.C. 1831(a), (b).
85
Section 3, P.L. 112-269 (H.R. 6029), 126 Stat. 2442-443 (2013).
86
158 Cong. Rec. S6979 (daily ed. Nov. 27, 2012).
87
158 Cong. Rec. S6968 (daily ed. Nov. 27, 2012).
88
158 Cong. Rec. H6849 (daily ed. Dec. 18, 2012).
89
P.L. 112-236, 126 Stat. 1627 (2012).
90
158 Cong. Rec. H5619 (daily ed. August 1, 2012); see also, H.Rept. 112-610.
91
Reported favorably without printed report and placed on the calendar, 157 Cong. Rec. S8460
(daily ed. December 8, 2011).
92
H.R. 6029, §2(a)(1), proposed 18 U.S.C. 1831(a).
93
18 U.S.C. 1831(a), (b).
94
H.R. 6029, §§2(a)(2), 2(b), proposed 18 U.S.C. 1831(a), (b).
95
18 U.S.C. 1832(a), (b), 3571(b). Under existing law, a defendant, individual or organizational,
may be fined up to twice the loss or gain association with the offense when that amount
exceeds the statutory maximum, 18 U.S.C. 3571(c).
96
H.Rept. 112-610, at 2 (2012), quoting Office of the National Counterintelligence Executive,
Foreign Spies, Stealing US Economic Secrets in Cyberspace, Report to Congress on
Foreign Economic Collection and Industrial Espionage, 2009-2011, at i (Oct. 2011).
97
158 Cong. Rec. S8230 (daily ed. Dec. 19, 2012).
98
158 Cong. Rec. H7455 (daily ed. Dec. 30, 2012).
99
P.L. 112-269, 126 Stat. 2442 (2013).
INDEX
bankruptcy, 22, 23, 36

A behaviors, 2, 23
benefits, 7, 21, 26, 27, 30, 36
abuse, 35, 59, 64
biological systems, 11
access, vii, viii, 1, 3, 4, 5, 6, 7, 8, 10, 11, 12,
biotechnology, 11
15, 17, 18, 20, 21, 22, 24, 26, 27, 32, 34,
blood, 3, 7
35, 36, 49, 52, 59, 64
blood pressure, 3, 7
adolescents, 26
business environment, 26
adults, 25
business ventures, vii, viii, 1
advancements, 8
businesses, 11, 21, 23
aerospace, 11
buyers, vii, viii, 1, 4, 12, 15, 17, 18, 20, 30,
age, 3, 7, 38
34
agencies, 3, 4, 6, 13, 36
Air Force, 8
alters, 47, 51, 54, 60, 61 C
American insiders, vii, viii, 1, 4, 10, 17, 32,
34 case law, 61
American Psychiatric Association, 24, 36 case studies, 2
antitrust, 64 cash, 28
anxiety, 27 casinos, 25
armed conflict, vii, viii, 2 Census, 41
Asia, 19 chat rooms, 21
assets, 3, 6 chemical, 11
Attorney General, 53, 56, 64, 65 Chicago, 37
authority, 61 China, 8, 15, 19, 40
automate, 26 CIA, 8
awareness, 3, 6, 30, 31, 50 citizens, 28, 29, 30, 31, 58
citizenship, 30, 41
civil law, 61
B coercion, 35
collaboration, 13
bankruptcies, 23
68 Index
college students, 39 destruction, 50, 52, 59

commerce, viii, ix, 4, 7, 21, 45, 46, 47, 49, detection, 10, 15
53, 57, 59, 60, 62, 64 deviation, 60
commercial, ix, 11, 12, 14, 33, 46, 62 diet, 3, 7
common law, 48 digitized information, vii, viii, 1, 10, 36
communication, 30, 64 disaster, 23
community, vii, viii, 2, 5, 22, 29, 31, 49 disclosure, 49, 55, 60, 63, 65
competition, 3 discussion groups, 18
compilation, 60 diseases, 3
composition, 28 disposable income, 23
computer, vii, viii, ix, 1, 3, 5, 6, 9, 10, 11, disposition, 48
18, 19, 27, 35, 36, 46, 56, 57, 59, 64, 65 distribution, 35
computer fraud, 59, 64 diversity, 19, 20
computer software, 11
computer systems, 3, 5, 6, 56
conference, 11, 38 E
confidentiality, 49, 51, 55, 59
economic espionage, viii, ix, 39, 41, 45, 46,
conflict, 30, 32, 60
53, 55, 56, 57, 58, 65
congress, 36, 38, 40, 42, 45, 49, 51, 55, 56,
economic trends, vii, viii, 1, 2, 7, 32
57, 64, 65
economics, 23, 32
consciousness, 30, 31, 37
EEA, 46, 47, 49, 51, 52, 53, 55, 57, 60, 61,
consent, 57
63, 64
conspiracy, ix, 46, 47, 48, 52, 54
EEOC, 63
conviction, 53, 57
electronic communications, 59
cooperation, 31
electronic surveillance, 9
coproduction, 12
employees, vii, viii, 1, 2, 3, 4, 6, 8, 10, 11,
Court of Appeals, ix, 46
12, 14, 18, 20, 26, 27, 28, 35, 36, 49, 51,
covering, 50
59
crimes, 4, 24, 26
employers, 4, 26, 27
criminal statutes, 50
employment, 26, 27, 36
CT, 38, 41
energetic materials, 11
Cuba, 31, 38
energy, 11
culture, 31, 32, 41
engineering, 40, 59
currency, 11, 23
England, 38
environment, 3, 6, 14
D equipment, 13
espionage, vii, viii, ix, 1, 2, 3, 4, 5, 6, 7, 8,
damages, 47 9, 10, 11, 12, 14, 15, 17, 18, 20, 21, 22,
database, 8 23, 24, 26, 27, 28, 31, 32, 33, 34, 35, 36,
debts, 4, 24 37, 38, 39, 40, 41, 42, 45, 46, 53, 55, 56,
defendants, 47, 53, 58 57, 58, 62, 65
Department of Defense, 42 ethnicity, 39
Department of Energy, 13 evidence, 52, 60
Department of Justice, 37, 59, 60, 62, 64 evil, 50, 64
deprivation, 51 execution, 56
Index 69
Executive Order, 35 Germany, 13, 16, 57

exercise, 3, 7 global competition, 23
expenditures, 14 global demand, 7, 21
exploitation, 15 global economy, 10
exports, 14 global orientation, vii, viii, 2, 5
globalization, 14, 31, 32, 37
God, 38
F goods and services, 14, 42
governments, 4, 11, 13, 34
fabrication, 11
Great Depression, 23
families, 23
growth, 10, 12, 20, 35, 41, 42
FBI, 9, 11, 37
guidance, 11
Federal Bureau of Investigation, 38
guidelines, ix, 46, 58, 63
federal crime, viii, 45
guilty, 48, 51, 52, 57
feelings, 22, 27
fidelity, 27
financial, vii, viii, 1, 4, 22, 23, 30, 32, 34, H
35, 57, 59, 64
financial crisis, 4, 22, 34 headache, 41
financial instability, 22 health, 27
force, 10, 41, 64 heart disease, 3, 7
Ford, 64 history, 6, 9, 35, 42, 49, 50, 51, 55
foreign buyers, vii, viii, 1, 4, 12, 15, 17, 18, homeland security, 36
34 homes, 20
foreign companies, 13 honesty, 35
foreign entities, vii, viii, 1, 4, 6, 7, 8, 11, 12, horses, 25
14, 18, 21, 31, 34 host, 18
foreign intelligence, 15, 21, 33 hostility, 31
foreign nationals, 12, 17, 56 House, 38, 42, 57, 58
foreign parties, vii, viii, 1, 4 human, 4, 5, 35
foreign person, 12 human behavior, 5, 35
foreign policy, 64
foreign power, viii, 45, 56
foreign-born population, 28, 30, 41 I
formula, 60
identity, 31
fraud, 23, 26, 47, 51, 54, 61, 64
imaging systems, 14
freedom, 35
immigrants, 29
funds, 22, 24, 26
immigration, 39
imprisonment, viii, 45, 46, 53, 58
G income, 22
India, 16
gambling, vii, viii, 1, 4, 22, 24, 25, 26, 34, individual character, 7
37, 39, 41, 42 individual characteristics, 7
GAO, 13, 38 individuals, viii, 3, 5, 12, 21, 23, 30, 35, 45,
genetics, 3, 7 48, 52, 53, 58, 59
70 Index
industries, 11, 14 Latin America, 20

industry, 6, 10, 18, 23, 37, 42, 49 laws, 56, 63
inferences, 6 lead, 12
information sharing, 36 Leahy, 57, 60
information storage, vii, viii, 1, 3, 7, 8, 10, legislation, 55, 58
21, 34, 35 lending, 23
information technology, 8 loans, 22
injure, viii, 45, 47, 48, 50, 53 local government, 36
injury, 50 love, 31
institutions, 11 loyalty, 4, 22, 26, 27, 28, 29, 31, 35, 41
integrity, 28
intelligence, 2, 3, 4, 8, 9, 11, 12, 14, 18, 30,
40, 58, 65 M
interference, 48
magnitude, 6
international competition, 32
majority, 8, 13
international research, vii, viii, 1, 12, 13
man, 64
international trade, 42
management, 36
internationalization, 4, 7, 21
manufacturing, 11
interpersonal relations, 24
marketplace, 20, 27
interpersonal relationships, 24
mass, 8, 9
investments, 27
materials, 11, 63
Iran, 8
matter, 15, 22, 59, 63
Iraq, 8
measurements, 18
Israel, 16, 20, 28, 39
medical, 3, 7, 22
issues, 35, 37, 38, 40, 42, 63
memory, 9, 52
mental disorder, 36
J merchandise, 64
meter, 9
Japan, 13, 16 methodology, 3
joint ventures, 27 middle class, 42
judiciary, 38 Middle East, 20
Judiciary Committee, 58 military, 8, 10, 11, 12, 14, 28
jurisdiction, 55, 57, 63, 64 miniaturization, 8, 9
justification, 48 momentum, 15
motivation, vii, viii, 1, 3, 4, 6, 7, 21, 22, 24,
27, 28, 31, 32, 33, 34
K multinational corporations, 11
mutual respect, 31
Korea, 16
N
L
nanometer(s), 9
labeling, 59
nation states, 32
languages, 19
lasers, 11
Index 71
National Aeronautics and Space proprietary information, vii, viii, 1, 2, 3, 5,

Administration, 13 6, 7, 8, 10, 11, 21, 26, 34, 35, 40, 50, 60
national identity, 41 protection, 35
National Institutes of Health, 13 prototypes, 59
national security, 3, 6, 11, 36, 38 psychology, 37, 39
National Security Agency, 12, 15, 40
negative effects, 5
newsgroup, 18, 21 R
North America, 39
reading, 50
reality, 50
O regulations, 35
reliability, 35, 36
offenders, 5, 34, 53 relief, 47, 53, 63
officials, 56 religious beliefs, 30
operations, 5, 35, 64 remorse, 31
opportunities, vii, viii, 1, 4, 14 repo, 49
organizational justice, 36 requirements, 50, 63
research facilities, 12, 13
research institutions, 58
P researchers, 2
resources, 12
Pacific, 19
response, 5
parallel, 62
restitution, ix, 46, 47, 53, 59
parents, 28
risk(s), vii, viii, 2, 3, 5, 10, 12, 14, 15, 18,
patriotism, 37
22, 25, 26, 30, 31, 32, 34, 35, 36
penalties, ix, 46, 47, 52, 58
rules, 57, 58, 63
permit, 31, 58
personal communication, 15, 16, 17
personal computers, 20 S
personal qualities, 22
personality, 7, 21 sabotage, 26
personality characteristics, 7, 21 sanctions, 47
pharmaceutical, 11 SANS, 39
photographs, 28, 47, 54, 61 science, 2, 4, 11, 13, 38
plausibility, 61 securities, 64
politics, 32 security, 2, 5, 6, 14, 18, 25, 27, 30, 34, 35,
population, 7, 18, 19, 25, 28, 29, 30 36, 37, 39, 40, 41, 42, 51, 59
preparedness, 8 security guard, 59
President, 57, 58 self-identity, 38
prevention, 41 sellers, 4, 15, 20, 30
private sector, 13, 58 semiconductor, 11
professionals, 5, 41 seminars, 12
profit, 10, 26 Senate, 11, 36, 38, 42, 57, 58
project, 18 sensitivity, 61
proposition, 50 sensors, 11
72 Index
sentencing, ix, 46, 47, 53, 58 theft, vii, viii, ix, 1, 2, 6, 11, 23, 39, 45, 46,
servers, 8 48, 50, 51, 52, 53, 55, 56, 60, 64
services, 9, 14, 15, 20, 27, 57, 58 trade, viii, ix, 11, 12, 37, 39, 42, 45, 46, 47,
Sherman Act, 64 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58,
showing, 61 59, 60, 61, 62, 63, 64, 65
signals, 65 trade secret(s), viii, ix, 11, 37, 39, 45, 46,
signs, 65 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57,
Silicon Valley, 11, 39, 41 58, 59, 60, 61, 62, 63, 64, 65
social consequences, 39 traditions, 31
society, 4, 6, 30, 31, 37, 38, 42 transactions, ix, 46
software, 57 transformation, 27
spending, 4, 13, 34 transmission, 57, 58
state(s), 7, 21, 23, 25, 36, 50 transportation, 11, 56
statistics, 38 treatment, 41, 57, 58
statutes, vii, ix, 46, 56 trial, 55, 56
stock, 48 trustworthiness, 35, 36
storage, vii, viii, 1, 3, 7, 8, 9, 10, 21, 34, 35, turnover, 27, 39
46
strategic position, 4
stress, 3, 7, 23 U
substance abuse, 22
U.S. Department of Commerce, 14, 18, 19,
supervisors, 2, 10
42
suppliers, 3, 6
U.S. information, vii, viii, 1, 4, 7, 10, 12,
Supreme Court, 55
17, 21, 27, 30
syndrome, 27
U.S. policy, 31
United, vii, viii, ix, 1, 2, 4, 9, 11, 12, 13, 15,
T 16, 17, 23, 25, 26, 27, 28, 29, 31, 35, 38,
39, 40, 42, 46, 55, 57, 58, 59, 60, 61, 62,
Taiwan, 15 63, 64, 65
talent, 42 United Kingdom, 13
target, 12, 21, 41 United States, vii, viii, ix, 1, 2, 4, 9, 11, 12,
target number, 41 13, 15, 16, 17, 23, 25, 26, 27, 28, 29, 31,
technical support, 13 35, 38, 39, 40, 42, 46, 55, 57, 58, 59, 60,
techniques, 9, 59 61, 62, 63, 64, 65
technological advancement, 7, 21, 35 USA, 39
technological advances, vii, viii, 1, 34
technological change, 23
technologies, 8, 10, 11, 12, 14, 18, 32, 35, V
36
variables, 3, 7, 21, 34
technology, 6, 12, 13, 14, 23, 38, 40, 58
victims, 47, 53
technology transfer, 40
vulnerability, vii, 3, 5, 6, 7, 9, 10, 12, 32,
telecommunications, 11
34, 37
territorial, 55, 64
terrorism, 17, 40
terrorist organization, 12
Index 73
workers, vii, viii, 2, 26, 27

W workforce, 28
workplace, vii, viii, 1, 2, 4, 10, 18, 26, 36
Washington, 36, 37, 38, 39, 40, 41, 42
World War I, 6
weapons, 11, 23, 28
worldwide, 18
web, 41
websites, 18
Western Europe, 13 Y
wire fraud, ix, 46, 56, 65
work activities, 10 Yale University, 42

Insider Espionage 1703468440

Uploaded by

Copyright:

Available Formats

Insider Espionage 1703468440

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Insider Espionage 1703468440

Uploaded by

Copyright:

Available Formats

INTELLIGENCE AND COUNTERINTELLIGENCE STUDIES

Additional books in this series can be found on Nova‘s website

Additional e-books in this series can be found on Nova‘s website

NOTICE TO THE READER

Independent verification should be sought for any data, advice or recommendations

Library of Congress Cataloging-in-Publication Data

Published by Nova Science Publishers, Inc. † New York

Chapter 1 – This study explores ten technological, social, and economic

TECHNOLOGICAL, SOCIAL, AND ECONOMIC

Lisa A. Kramer, Richards J. Heuer, Jr.

• Technological advances in information storage and retrieval are

• The global market for protected U.S. information is expanding.

also possible that some insiders with a global orientation to world

While described separately for discussion purposes, the trends discussed

In exploring current and future prevalence of insider espionage, this study

PART I. TRENDS THAT AFFECT OPPORTUNITY

Part I of this study explores five technological, social, and economic

A. Technological Advancements in Information Storage and

Technological advances in information storage and retrieval are making it

Emergence of Searchable Databases

Miniaturization of Data Storage Devices

insiders to physically remove information from organizations. Data-storage

The Case of Robert Hanssen

FBI officer Robert Hanssen capitalized on the vulnerability of IT

Hanssen also made use of his counterintelligence skills and knowledge

Implications for Insider Espionage

B. An Expanding Market for Protected U.S. Information

As a result of America's emergence as the dominant political, economic,

More Types of Information Can Be Sold to Foreign Buyers

More Foreign Buyers of Protected Information

intelligence officers), terrorist organizations, revolutionary groups, extremist

Implications for Insider Espionage

C. Internationalization of Scientific Research and Commerce

International R&D and business relationships allow foreign and American

International R&D Alliances

Establishment of International Research Facilities

to $22 billion. This is the largest single-year increase in such expenditures

American Firms Exporting Abroad

Implications for Insider Espionage

―business matter rather than an act of national betrayal or treason‖ (Wells,

D. Increasing Frequency of International Travel

Persons who travel overseas are in a position to establish contact with

U.S. Travelers to Overseas Destinations

2006, a 13 percent increase from the 288,000 visits documented in 2002.

Office of Travel and Tourism Industries (2004a) and R. Erdmann (personal

Figure 1. Overseas Travel by Americans 2000–2004 (in millions).

Overseas Arrivals to the United States

Figure 2. Overseas Arrivals to U.S. 2000–2004 (in millions).

Implications for Insider Espionage

to increasing international travel, foreign nationals are in a better position to

E. Global Internet Expansion

The Internet‘s technological indifference to political borders and the

Internet Software Consortium (2002). Annual Domain Survey 2002

Figure 3. Internet Hosts Worldwide 2000–2004 (in millions).

Online Language Populations

Geographic Regions of Greatest Internet Growth

Global Reach (January 2004). Global Internet Statistics by Language

Figure 4. Online Language Populations 680 Million Users Estimated.

Implications for Insider Espionage

unlimited quantities of information across national boundaries. Sellers and