Strong ties bind spy agencies and Silicon Valley

Silicon Valley has tried to distance itself from the controversial US surveillance programmes exposed by Edward Snowden, but there is a long history of close cooperation between technology companies and the intelligence community.

Former US officials and intelligence sources say the collaboration between the tech industry and spy agencies is both broader and deeper than most people realise, dating back to the formative years of Silicon Valley itself.

As US intelligence agencies accelerate efforts to acquire new technology and fund research on cybersecurity, they have invested in start-up companies, encouraged firms to put more military and intelligence veterans on company boards, and nurtured a broad network of personal relationships with top technology executives.

And they are using those connections to carry out specific espionage missions, current and former officials say, even as they work with the tech industry to avoid overt cooperation that might raise the hackles of foreign customers.

Joel Harding, an intelligence officer for the Joint Chiefs of Staff in the 1990s who went on to work at big defence contractors Computer Sciences Corp and SAIC, said spy agencies have at times persuaded companies to alter their hardware and software products to enable monitoring of foreign targets.

In one instance several years ago, an intelligence agency paid a tech company supervisor $50,000 to instal tampered computer chips in machines bound for a customer in a foreign country so that they could be used for espionage, Harding said, declining to provide specifics. "They looked exactly the same, but they changed the chips," he said.

A current US intelligence operative, who spoke on condition of anonymity, said the government often works through third parties, in part to shield the big tech companies from fallout if the operations are discovered.

He cited a case more than a decade ago in which the government secretly created a computer reselling company to sell laptops to Asian governments. The reseller bought laptops from a company called Tadpole Computer, which made machines based on Sun Microsystems processors. The reseller added secret software that allowed intelligence analysts to access the machines remotely.

Tadpole was later bought by defence contractor General Dynamics Corp in 2005. General Dynamics declined to comment. Sun's new owner, Oracle Corp, did not respond to an inquiry.

Despite these secret collaborations, former intelligence officials and company executives say the great fear of overseas customers - that widely used US technology products contain a "back door" accessible only to the National Security Agency or Central Intelligence Agency - is exaggerated. They said computers and communications overseas are captured by other means, including third parties such as the laptop reseller and special software developed by the agencies.

Defence contractors offer the government the means to break in to the products of virtually every major software vendor, according to a product catalogue reviewed by Reuters that was described as typical for the industry. The NSA did not respond to a request for comment.

More massive cooperation is rare because big tech companies sell to many countries and have too much business at stake in markets like China to risk installing a back door that could be discovered, said one intelligence veteran who had worked for Microsoft Corp.Silicon Valley has tried to distance itself from the controversial US surveillance programmes exposed by Edward Snowden, but there is a long history of close cooperation between technology companies and the intelligence community.

Former US officials and intelligence sources say the collaboration between the tech industry and spy agencies is both broader and deeper than most people realise, dating back to the formative years of Silicon Valley itself.

As US intelligence agencies accelerate efforts to acquire new technology and fund research on cybersecurity, they have invested in start-up companies, encouraged firms to put more military and intelligence veterans on company boards, and nurtured a broad network of personal relationships with top technology executives.

And they are using those connections to carry out specific espionage missions, current and former officials say, even as they work with the tech industry to avoid overt cooperation that might raise the hackles of foreign customers.

Joel Harding, an intelligence officer for the Joint Chiefs of Staff in the 1990s who went on to work at big defence contractors Computer Sciences Corp and SAIC, said spy agencies have at times persuaded companies to alter their hardware and software products to enable monitoring of foreign targets.

In one instance several years ago, an intelligence agency paid a tech company supervisor $50,000 to instal tampered computer chips in machines bound for a customer in a foreign country so that they could be used for espionage, Harding said, declining to provide specifics. "They looked exactly the same, but they changed the chips," he said.

A current US intelligence operative, who spoke on condition of anonymity, said the government often works through third parties, in part to shield the big tech companies from fallout if the operations are discovered.

He cited a case more than a decade ago in which the government secretly created a computer reselling company to sell laptops to Asian governments. The reseller bought laptops from a company called Tadpole Computer, which made machines based on Sun Microsystems processors. The reseller added secret software that allowed intelligence analysts to access the machines remotely.

Tadpole was later bought by defence contractor General Dynamics Corp in 2005. General Dynamics declined to comment. Sun's new owner, Oracle Corp, did not respond to an inquiry.

Despite these secret collaborations, former intelligence officials and company executives say the great fear of overseas customers - that widely used US technology products contain a "back door" accessible only to the National Security Agency or Central Intelligence Agency - is exaggerated. They said computers and communications overseas are captured by other means, including third parties such as the laptop reseller and special software developed by the agencies.

Defence contractors offer the government the means to break in to the products of virtually every major software vendor, according to a product catalogue reviewed by Reuters that was described as typical for the industry. The NSA did not respond to a request for comment.

More massive cooperation is rare because big tech companies sell to many countries and have too much business at stake in markets like China to risk installing a back door that could be discovered, said one intelligence veteran who had worked for Microsoft Corp.