Seeing Spies Behind the Boardrooms

[William Knowles <wk () C4I ORG>]

http://www.nytimes.com/2000/12/10/business/10SHEL.html

By ALISON LEIGH COWAN
December 10, 2000

ADAM L. PENENBERG was just another young, obscure reporter at an
online magazine in May 1988, when an article in The New Republic
crossed his desk. It was about hackers, a subject he knew something
about, and even though it was by Stephen Glass, a journalistic
prodigy, it didn't smell right. The more that Mr. Penenberg looked
into it, the more he realized that nearly everything about it was, as
he put it, "unverifiable."

In fact, the article was a sham, and on such shambles, careers are
lost and found. Mr. Glass was soon in literary exile, and Mr.
Penenberg was soon writing for Forbes magazine.

Now, Mr. Penenberg seems hellbent on leaping from tales of wayward
hackers joy-riding on the Web to tales of industrial espionage and
cross-border double-crosses, and he has done so in a way that makes
one wonder what happened to the reporter who once had a better
built-in nonsense detector.

The co-writer of the book was Marc Barry, a self-styled corporate spy
whom Mr. Penenberg profiled two years ago in Forbes and who has the
unfortunate habit of calling his co-author "Slick." The book is meant
to be a series of vignettes about the little-known world in which
companies think nothing about spying on one another for advantage. "It
is often the difference," the authors intone, "between a fat, happy
hundred- million-dollar company and bankruptcy."

With the end of the cold war, they explain, all those "hard-core
spooks" had to find jobs. Corporate America, they report, was all too
happy to put them to work building trussed-up war rooms, trawling
trade shows and otherwise turning intelligence-gathering into "one of
America's fastest- growing industries."

It would make for nice reading, but, unfortunately, the sprawling,
overheated mess that Mr. Penenberg and Mr. Barry have delivered,
"Spooked: Espionage in Corporate America" (Perseus Publishing, $26),
is full of the kind of unsupported allegations and unnamed riffraff
that make verification out of the question.

It is, however, unintentionally hilarious in several places.

"Israeli and Chinese spies are notorious for setting up front
companies," the authors tell us. But, they add, as far as spying on
allies goes, "Israel doesn't hold a candle to France, which has no
peers." Only one page later, this news flash: "Although the French
have been the most aggressive, Japan has turned business intelligence
into a fine art."

Today's spies, we're told, are nothing like their hokey Hollywood
image. "They are often likeable guys, with a contagious laugh and
disarming wit, great storytellers with anecdotes to spare," the book
reports.

We learn that Victor Lee, a scientist who was with Avery Dennison, a
maker of adhesives, and who passed trade secrets to a Taiwanese rival,
did so because he feared reliving the poverty of his youth. Readers
who do not remember earlier accounts of the scandal have no clue how
the authors may know Mr. Lee's state of mind.

Journalists can be bought, too, apparently. "Barry says some spooks
maintain a stable of trade journalists they pay on the sly," the
authors report, invoking the third person. Natch, no names.

Maybe it's all in Mr. Penenberg's notes, and he simply cannot reveal
his sources. Real reporters do not reveal their sources, after all.
But real spies do not talk this way, either not if they want to eat.

It doesn't help that Mr. Penenberg and his co-author come off as such
true believers in the power of competitive intelligence, the preferred
term of those in the "spy community" to describe everything from
faking identities to hitting the library. In the chapter about Jan
Herring, the former C.I.A. agent who jump-started Motorola's
intelligence unit, the authors write as if Motorola's stock rose in
proportion to its devotion to competitive intelligence.

To even call much of what transpires at Motorola "spying" is a
stretch. Yet Mr. Herring, apparently heroic for working with a
"paltry" $1 million annual budget, gets credit for mining his
underlings' sources so he can furnish biographies of the people
sitting across from Motorola's "ferrous willed" chief executive,
Robert W. Galvin, during a negotiation. Motorola's executives "were
able to make breezy conversation," the authors report, snag the deal
and accomplish "what no other U.S. company had been able to do
previously: crack the Japanese market."

It is also hard to take the book seriously, given its way of torturing
the English language. Israel is called "the plucky desert nation."
Beer drinkers are "fans of the amber nectar." Lucent is spun off from
"telecommunications papa AT&T." A hired gun seeking a key Toyota
supplier hits pay dirt when, the book says, he "pried open" a New York
phone book. Let's hope he didn't exert himself.

Likewise, there are far too few instances when the authors seek
comment from the companies behind all the mischief. They write as if
they already know how pointless it would be. In one of many chapters
about Avery Dennison, a defense lawyer hired by Four Pillars, the
Taiwanese adhesive maker that paid Mr. Lee to moonlight, argues that
Four Pillars was actually victimized by Avery Dennison in the seven
years, 1987 to 1994, that the two companies explored joint ventures,
an allegation also lodged in a countersuit against Avery Dennison.

"Predictably, Avery took umbrage," the authors write. They quote
Steven Fink, a company spokesman, as saying, "The lawsuit can best be
characterized as a blatant attempt to distract attention from Four
Pillars' own criminal conduct," and "the notion that Avery Dennison
would be involved in joint venture discussions with Four Pillars or
any company for a period of seven years is incredible."

But the authors' own reporting earlier in the book suggests that the
joint venture talks only lasted two years, from 1993 to 1995. So why
mock?

Surely, the omissions and skimpy attribution cannot be chalked up to
space constraints. Though footnotes are nowhere to be found, the
authors do devote space to other helpful matters like the history of
pizza, in a chapter about skulduggery in the pizza business. "Although
it is most certainly an Italian invention," the authors write of
pizza, "many of the ingredients, ironically, also emigrated from
elsewhere." Best to leave the discussion about the tomatoes, "at first
an ornamental plant thought to be poisonous," for another time.

Perhaps the biggest unsolved mystery that the authors might know
something about is what happened this past summer. That is when, in
what his editor at Forbes called a publicity stunt to promote this
book, Mr. Penenberg quit abruptly, complaining publicly that the
magazine was not defending the First Amendment. Prosecutors had wanted
him to testify about an article he wrote concerning the hackers who
hijacked the Web site of The New York Times in late 1998. Forbes's
lawyers had arranged it so that all Mr. Penenberg had to do was swear
that his reporting was true and accurate. Instead, he declined. Just
as we are with his book, we are left with Mr. Penenberg's standard:
Just take his word for it.



*==============================================================*
"Communications without intelligence is noise;  Intelligence
without communications is irrelevant." Gen Alfred. M. Gray, USMC
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