Corporate espionage is the dirty little secret of big business in America
Corporations spy on other corporations. They spy on citizen groups. They
spy on governments.
To protect their reputations, corporations don't admit to spying. But they
Corporate spies call themselves "competitive intelligence professionals."
There is even a professional association of corporate spies -- the Society
for Competitive Intelligence Professionals (SCIP).
SCIP denies that "competitive intelligence" is espionage and denies that
"competitive intelligence professionals" are spies.
"Espionage is the use of illegal means to gather information," says the
SCIP web site (www.scip.org).
And SCIP says its members do not practice espionage.
SCIP says that its members gather their information legally from public
sources and are bound by a strict code of ethics, which requires
compliance with all laws and disclosure of "all relevant information,
including one's identity and organization, prior to all interviews."
Marc Barry is out to upend SCIP's apple cart.
Barry is a corporate spy. He's not a member of SCIP, because he says he's
not a hypocrite.
Of course corporations spy, he says.
Of course SCIP's members spy, he says.
In fact, they hire him when they don't want to get caught doing a
company's dirty work.
In the business, he's known as a kite.
"A kite is somebody who is essentially expendable, somebody who is flown
out there, and if it hits the fan, the controller can cut the string, deny
knowledge and let the kite fly off on its own," Barry told us last week.
"I provide my clients with actionable intelligence that they either don't
know how to get themselves, or they don't want to get caught collecting
themselves," Barry said. "I provide plausible deniability to my clients.
In the event that an operation is blown and there is litigation or worse
-- a criminal charge -- they can deny all responsibility by denying
With plausible deniability, Barry's corporate clients "can claim ignorance
by demonstrating in court that I am in fact a consultant, that I signed
documents saying that I would abide by all ethical rules, and that they
had no idea what I was doing," he says.
Barry runs about 40 capers a year.
"I do very well for myself," Barry said. "All of my clients are Fortune
500 companies. I deal at the executive level. I'm either dealing at the
chief executive officer, or the chief operating officer level. The very
lowest would be vice president of marketing."
Recently, a SCIP board member hired Barry to run an operation against
Kraft Foods on behalf of Schwan's Sales Enterprises.
In the winter of 1997, Kraft had developed a new "rising crust" pizza
under the brand name DiGiorno. Schwan's was moving a similar pizza under
the name Tony's.
Kraft, a unit of Phillip Morris, was planning a massive advertising
campaign to position DiGiorno's as the only frozen pizza to taste like
The SCIP member phoned Barry.
He knew Barry could quickly get information on the Kraft operation.
Posing as a reporter for the Wall Street Journal, as an environmentalist,
and as a graduate student, Barry collected the information Schwan's wanted
in less than two days. Job completed. Barry wrote about the operation in
a Spooked: Corporate Espionage in America (Perseus, 2000, co-authored by
Someone at Kraft read the book, ordered an internal investigation, and
tripped across a second espionage operation. Last month, Kraft sued
Schwan's for theft of trade secrets.
Isn't Barry concerned about the ethics of lying?
"To my knowledge, in all 50 states, it is not illegal to lie," he says.
"The only people I listen to are the United States Department of Justice
and state and local law enforcement officials."
What about dumpster diving -- going through someone's garbage?
"Dumpster diving is perfectly legal, providing there is not a sign
posted," Barry says. "The courts have held that if it is left to be
accessed by commercial carters, then it is no longer private property. It
is only private property if there is a 'no trespassing' sign and you had
to trespass to get into the dumpster."
What about using an answering machine pick -- a device used to remotely
grab someone else's message off the target's answering machine?
"That's probably a gray area," Barry says.
"Do you use picks?" we ask.
"Fine, and you?" Barry answers.
Barry wonders whether SCIP members are adhering to the organization's
"code of ethics."
"If you go to one of their functions, it looks like a sixth grade dance --
where you had all the boys on one side and all the girls on the other side
and no one would talk to each other," he says.
"At a SCIP function, on one side you have all the spooks who came out of
Defense Intelligence Agency, the Central Intelligence Agency and the
National Security Agency. And they are all backslapping and hanging with
"And on the other side you have the librarians, the Lexis-Nexis types, the
software people. So, the white hats are on one side, and the black hats
are on the other."
Barry sees a big business in corporate espionage. His Manhattan-based
company -- C3I Analytics -- is in a joint venture with Raytheon that is
dumping $12 million to build a state-of-the art corporate espionage war
room in New York City.
The new company, to be called Intelogix, will sell services to other
corporations "intent on studying the enemy's every move."
Could it be that, as you are reading this, some Fortune 500 company is
picking the telephone messages off your answering machine?
Fine, and you?
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor. They are co-authors of Corporate Predators: The
Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common
Courage Press, 1999).
(c) Russell Mokhiber and Robert Weissman