A strange event informs our cleared discussion today. The Japanese invasion of China in 1931 was largely possible due to their use of American oil and American steel. Without that oil and hardware, the Imperial Japanese Army could not function well enough for a prolonged invasion. Pratt and Whitney engines helped power early versions of the Japanese Zero, said by some experts to be the best plane in the world until 1943. How did all this happen?

One truism clearance holders learn is that all classified projects are not equal. That is to say some classified projects find components in other, quite unclassified parts and components. What does this mean? Could such a truism be an entrée for a spy to exploit?

If I’m building an aircraft motor, which will be used in commercial flights someday in the future, might it not also be used in military design? The Germans built large airplanes for ‘mail delivery’ during the 1930s. These Henkel aircraft had huge openings underneath the fuselage. Did no one really discern these were in reality bomb bays? Indeed they were. They were ready to be later employed as such in Spain when the Germans bombed Guernica, or shortly thereafter when the Nazis bombed Warsaw, Rotterdam, Brussels, and London. European powers commissioned to enforce the Versailles Treaty overlooked such practices, to their painful realization later. Often these practices of buying military components, while pretending they were for civilian use, were ignored by Allied enforcement officials. Sometimes they were missed, or simply overlooked due to lack of personnel, or lack of interest in enforcement. Or sometimes, it has been established, those who should have been aware of this underhanded rearmament lacked even that modicum of professionalism and concluded, ‘I don’t really care’. Nevertheless, the damage was done, and it was too late to do anything about stopping these bombers when war broke out and the bombs were falling.

Assessing Threats from Investors and Other Interested Parties

When your company is commissioned to write up a defense plan for those classified elements in your inventory, what should you do? We’ve discussed getting a good threat assessment. In such an assessment you will find all the ways adversaries have to collect (spy upon) your information or product. Yet, in this day and age, spies have become so much more clever, using means few thought of before.

For instance, spies are known to approach start-up companies. We Americans pride ourselves on our start-up possibilities. We apply new ideas and know-how, and get the project underway. But what is one shortfall of most start-ups? Cash flow. They are new, so they need money in most cases. Enter the spy. He could come in the disguise of the intrigued investor, a devilishly clever pose. He could want to invest a large sum of money, provided the origin of his contribution is hidden. And yes, he’s a foreign company, or apparently American, but you aren’t looking too closely at the golden goose’s egg. (At this point, you might truly have no idea this company is directed by a foreign government.) All you know is that his company wants a part of your action. All you know is that now you will be able to reward your stockholders with piles of cash at the quarterly report. And all you have to do is not tell your security advisors the source of your recent largesse of capital. You are helping your company not only survive but flourish, are you not?

Today, intelligence officials from the military and FBI reach out to companies with formal programs to establish ongoing liaison contacts. This is because threat assessments are living documents. Few of the threat assessments for classified programs from even 15 years ago even mentioned the cyber threat. But what about such a threat as we’ve discussed here? What about this strange corporate investment scheme? Espionage agents today try to approach companies in ways they’ve not tried before. If your engine will help make a tractor go, what’s the harm in protecting the source of the buyer from abroad? Surely he wouldn’t see the value of this tractor engine in a fighter aircraft. What’s wrong with not checking very hard about the real owner of a supposedly American company? What’s wrong with rewarding the investors in your stocks, but not necessarily reporting who’s bankrolling you? A lot. You could set you company up for failure, and your classified programs for compromise. You could harm your country.

Just don’t fall for the kindly offer not to tell your security managers, particularly your government advisors, about any approaches. Even the most benign offer can carry a subtle threat. What if one day, that kindly spy comes back to say, “Oh, you’ve agreed to work for our espionage service. You don’t want anyone to know that, do you?”

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John William Davis was commissioned an artillery officer and served as a counterintelligence officer and linguist. Thereafter he was counterintelligence officer for Space and Missile Defense Command, instructing the threat portion of the Department of the Army's Operations Security Course. Upon retirement, he wrote of his experiences in Rainy Street Stories.