The U.S. military carries major technological advantages onto nearly every battlefield where it engages. But many of those technologies, from radar-cloaking tools to devices that guide missiles, are ending up in the hands of those looking to do harm to American forces. Kojo chats with investigative reporter John Shiffman, who unearthed the story of an elaborate sting operation designed to combat the illegal theft of American military secrets.

Guests

  • John Shiffman Author, "Operation Shakespeare: The True Story of an Elite International Sting" (Simon and Shuster, 2014); Investigative Reporter, Reuters

Transcript

  • 13:26:08

    MR. KOJO NNAMDIWelcome back. The greatest technological threats American troops face on the battlefield are often posed by technologies developed inside the United States itself. Triggers capable of detonating IED's, tiny devices designed to guide missiles, night vision goggles, radar cloaking tools.

  • 13:26:24

    MR. KOJO NNAMDIA decade ago American officials launched an ambitious sting operation to catch smugglers in the act as they attempted to steal American military secrets and make them available to countries like China, Iran and Pakistan. They called the plan Operation Shakespeare, an elaborate scheme that began in a nondescript storefront where they set up a fake company in Pennsylvania and culminated years later in the arrest of an Iranian arms dealer that shed light on just who it's trying -- who it is that's trying to steal American military technology and who profits from that theft.

  • 13:26:58

    MR. KOJO NNAMDIJoining us in studio is John Shiffman. He's a journalist and author. His new book is titled "Operation Shakespeare: The True Story of an International Sting." He's an investigative reporter for Reuters. John Shiffman, thank you for joining us.

  • 13:27:11

    MR. JOHN SHIFFMANThanks for having me.

  • 13:27:12

    NNAMDIYou too can join the conversation. Give us a call, 800-433-8850. Before we talk about the stink launch to combat those who are stealing these military secrets, I guess it's worth exploring the consequences of them being stolen to begin with. You begin your book recounting the death of Seth Dvorin, an Army lieutenant who was killed by an IED while serving in Iraq in 2004. What exactly happened to Seth Dvorin and why did you find his story to be so instructive?

  • 13:27:42

    SHIFFMANWell, I think when we talk about the dangers of American technology getting overseas, what we can forget is that we're talking about the troops. That's ultimately what we're trying to do is to protect our troops and give them an advantage. So I wanted to focus on one soldier who probably was killed as a result of an IED trigger that was sent overseas from the United States. And Seth Dvorin was just a typical officer. He had just graduated from Rutgers. He was 23 years old.

  • 13:28:12

    SHIFFMANHe was leading his group of soldiers in the Army in a place called Iskandariya, which is just south of Baghdad, in 2004. He saw a suspicious package in the road and he turned around to warn the rest of his platoon and the package detonated and it killed him instantly. And later in the area they were -- the Army was able to trace IED triggers, the remote control triggers that can set off these IEDs to a company in Arizona.

  • 13:28:41

    SHIFFMANAnd they found hundreds of these and later found that thousands of them had been shipped from Arizona and Minnesota to Iran. And that Iran had been supplying these to insurgents in Iraq and Afghanistan.

  • 13:28:55

    NNAMDIAt what point did it become clear that the technology had come from the United States and how did it become clear?

  • 13:29:01

    SHIFFMANIt became clear in 2005 when soldiers discovered a cache of unexploded IEDs in Iraq. And the lot numbers and serial numbers were able to be traced back to a company that was in Arizona. And what investigators did was they started pulling records from that company in Arizona and they started tracing email shipping records and noticed that these IED triggers were being ordered by companies allegedly in Dubai. But when they looked a lot closer they found out those were just mailstops, that these companies were actually in Iran. And I should say that last week was the most recent indictment. A Syrian was indicted for -- in Arizona for two detonations that killed four U.S. soldiers.

  • 13:29:49

    NNAMDIIn case you're just joining us, we're talking with John Shiffman. He's a journalist and author whose new book is titled "Operation Shakespeare: The True Story of an Elite International Sting." John Shiffman is an investigative reporter for Reuters. If you have comments or questions, call us at 800-433-8850.

  • 13:30:07

    NNAMDIThere's a very Hollywood stereotype of the rogue arms dealer, the shady character who's funneling bombs, rockets and guns to those who can't acquire them by legal means. But you've reported that the modern battlefield is shaped by many military technologies that are so small they can fit in a backpack or even a wallet. And some of the most disturbing thefts of American military secrets are about technologies the size of a pack of chewing gum. What kind of technologies are we talking about here?

  • 13:30:38

    SHIFFMANRight. We're not just talking about what we think of when we think of arms dealers. We think of guns. We think of missiles. We think of rockets.

  • 13:30:46

    NNAMDIBig things.

  • 13:30:46

    SHIFFMANRight. Big things that go boom. This here what we're talking about is the technology that guides the missile. We're talking about gyroscopes the size of a quarter. We're talking about radar chips that are smaller than a fingernail, microchips for radar. And it's the kind of radar that can help direct a shoulder-launched missile to down, say, a civilian airplane or military -- any airplane.

  • 13:31:12

    SHIFFMANAnd so we're talking about very, very small things, things that you or I, if we looked at them, we wouldn't think that they're dangerous. They don't look like a gun. They don't look like a bomb. And this is the kind of thing that helps our army see at night much, much better than anybody that they're facing. It guides drones over -- in the air, drones under water. People don't realize that there's a huge class of drones that really help the U.S. dominate the seas underneath the seas. And we're talking about bulletproof vests, all sorts of...

  • 13:31:48

    NNAMDIWe're talking about critical parts of military technology here.

  • 13:31:51

    SHIFFMANAbsolutely. Absolutely. And whoever has the best technology generally has a tremendous, tremendous advantage on the battlefield. And, you know, when it's our sons or daughters being sent out there to fight, you sure want them to have the advantage. Nobody wants to go to war but, you know, the last thing you want is American technology being used to kill American troops.

  • 13:32:11

    NNAMDIWhat do we know about who's in the illegal market for these stolen technologies and who's doing the stealing?

  • 13:32:19

    SHIFFMANWell, for the most part, the people -- the groups that -- ultimately the end users, the groups that want the equipment are state actors. They're the governments of Iran, the governments of Syria, the governments of China, Russia in some cases, Pakistan. And so they use middlemen. And in Operation Shakespeare that's exactly what they did. They -- the Iranians used a middleman and that's why it focused on a guy who had worked in their procurement network. And he would get order from the Iranian government, what they needed, whether it was for planes or for radar or for whatever it was. And then he would try to buy them from American companies.

  • 13:32:58

    NNAMDIRecently we've become very locked into stories about hacking and the threats to our national security posed by those trying to intrude both our private and our public networks. But you've reported that the physical theft of technologies is equally concerning. Why is that?

  • 13:33:15

    SHIFFMANIt is and it's almost like it's old school theft. You know, we think a lot about hacking, and we should. And we think a lot about cyber security and the government spends a great deal of money on cyber security. But, you know, if you steal the plans, which happened maybe a couple weeks ago, it was announced that someone from China had stolen plans for the F22 and the F35, the blueprints, that's one thing. Then you have to build the item. So in some ways it's just as dangerous if they steal a microchip. You can have the plans for a microchip but it doesn't mean that you can recreate and reproduce it.

  • 13:33:53

    NNAMDIOn the other hand, if you have one, you can use it. To what degree can the successful acquisition of a particular technology tip the scales of the outcome of a modern conflict? You point to the outsized influence of American tools on Afghanistan's conflict with Russia several decades ago.

  • 13:34:14

    SHIFFMANRight. For a long time the Russians dominated the battlefield in Afghanistan. And anybody who's seen Charlie Wilson's war or read the book certainly know that once the United States was able to supply -- CIA supposedly was able to supply the mujahideen in Afghanistan with weapons to down aircraft, it really changed the outcome. And this has gone on throughout history. The U.S. advantage in the Pacific war in World War II, the U.S. had much better radar than the Japanese. And this really helped one side win the war.

  • 13:34:53

    NNAMDIWhat sense do you have for how all of this might inform a decision that President Obama might grapple with about whether to, say, arm rebels in Syria?

  • 13:35:05

    SHIFFMANI think it has to be a consideration. I mean, when you look on television and you see ISIS wielding American weapons and you look at what's going on in our drawdown in Afghanistan, and the Pentagon has to make decisions, you know, which equipment will they leave for the Afghan government? Which will they simply destroy because it's too expensive to ship back to the United States, in which they will send back?

  • 13:35:28

    SHIFFMANYou have to think about where that weapon or where that technology could end up. If we send technology to country A, do we know that we will be still friendly with country A in two, three years? Who will be running country A? Will country A need the money and sell the items to Iran or country B or country C? So once we sell them -- and the United States is the largest arms dealer in the world -- once we send our technology overseas despite promises, we really do lose control of it.

  • 13:36:04

    NNAMDIAnd that's really complicated in parts of the world where there are shifting alliances, isn't it?

  • 13:36:09

    SHIFFMANAbsolutely. You know, it is hard to tell who's going to be in charge of which country and, you know, whether we're going to have any say in how our technology is used.

  • 13:36:22

    NNAMDIHere is Ben in Berryville, Va. Ben, you're on the air. Go ahead, please.

  • 13:36:29

    BENThank you for taking my call. It seems to me that more and more of our technology on the battlefield is based on one technology, which is GPS. And portable GPS jammers have been around and they are probably developed here. How is that going -- how is the eventual adoption of these to basically be a destructive force in our command and control going to affect the cost of engaging in any area against an opponent that had these?

  • 13:36:54

    NNAMDII don't know if that's in John Shiffman's area of expertise but I'll give it to him anyway.

  • 13:36:59

    SHIFFMANWell, I think it's a really good question and I'm sure it's going to be expensive. And every technology takes over, you know, the succeeding technology every generation. I think it's interesting that the Chinese are incredibly interested in the last couple years, and we've reported this at Reuters fairly extensively, that the Chinese have been really interested in commanding control. They've been buying microchips that are made in Colorado, or trying to buy them and smuggle them back to China, that can be used in satellites that help control GPS. And they -- there's a huge interest by the Chinese which goes to the caller's point, which it is very important.

  • 13:37:38

    NNAMDIOn to the sting at hand. Ten years ago the U.S. launched the sting operation at the center of your book. How would you describe the rough outline of Operation Shakespeare, who was running it, what were they trying to do?

  • 13:37:51

    SHIFFMANYou know, when we think about arm smuggling these days, we tend to think about bulletin bombs. And this is the technology side. So it's a different side of what the government was trying to protect. We also, when we think of the Homeland Security Department, we think of the TSA, we think of protecting the border, you know, immigration.

  • 13:38:12

    MR. CRAIG WHITLOCKThis sting was launched in a storefront, a shopping center, a strip mall in suburban Philadelphia between a dentist office and a chiropractor's office. And the Department of Homeland Security, ICE which is Immigration and Customs Enforcement, set up a sting there. They set up a fake business to draw international arms dealers. And they also set up a sister site in Eastern Europe that was also designed to draw arms dealers. Arms dealers are -- international arms dealers, especially the Iranians, the Chinese, they're smart and they know not to deal with the Americans if they can. And so...

  • 13:38:54

    NNAMDIWell, what does it take -- I was about to say, what kind of work does it take to set this up? It was called Cross International and the place you described is called Yardley, Pennsylvania. What kind of work does it take to set this up as a legit company? Because as you're about to point out, it can't seem like an American company?

  • 13:39:14

    SHIFFMANRight. It can't seem like an American company and it can't just seem like a website and a phone number. So they had to set up an actual office because the intelligence from American Intelligence Agencies, was it the North Koreans, the Chinese, the Iranians have people inside the United States who will go and visit, eyeball the place. So they set up posters of -- I mean, military posters. They put "Jane's Fighting Ships" books on their desks. They had cards printed up. The -- one of the undercover agents drove a sleek Mercedes. And they tried to look as legitimate as they possibly could.

  • 13:39:50

    NNAMDIBetween a dentist and a chiropractor's office.

  • 13:39:52

    SHIFFMANRight, right.

  • 13:39:53

    NNAMDIHow did this company Cross go about soliciting potential clients? How did they throw a flag to the rest of the internet that they were engaged in an illegal business?

  • 13:40:04

    SHIFFMANOne of the ways that they did it -- they did it in several ways. One of the ways they did it is they created websites that had the correct metadata search terms for the things that the Iranians were trying to buy. So embedded in the website metadata would be -- if you were looking up the -- if you were looking for AK-47s, if you were looking for a specific kind of infrared radar. They put the technological terms in there and it worked because a lot of these guys who are buying on behalf of the Iranians and the Chinese, they're just using this thing called Google.

  • 13:40:41

    NNAMDIAnd they're looking for keywords.

  • 13:40:42

    SHIFFMANJust looking for keywords to see who sells or who can resell this equipment. They also use some words like freight forwarder, they use some words that are sort of known in the industry as buzz words. And sure enough, it did attract people. Now, the other way that they did it was they used a British arms dealer who…

  • 13:41:01

    NNAMDII'm going to stop you at this point so that our listeners can be, I guess, in a state of suspense while we discuss what you can read about in the book called "Operation Shakespeare: The True Story of an Elite International Sting." We're talking with the author John Shiffman. This is a finalist for the Pulitzer Prize. John Shiffman is a journalist and author. His book is called "Operation Shakespeare: The True Story of an Elite International Sting."

  • 13:41:29

    NNAMDIHe's an investigative reporter for Reuters. If you have questions or comments, call us at 800-433-8850. And when we come back the name of the man who they used to set up this operation. I'm Kojo Nnamdi.

  • 13:43:38

    NNAMDI"The True Story of an Elite International Sting." John is a journalist and author. He's an investigative reporter for Reuters. If you have questions or comments for him give us a call, 800-433-8850. What concerns do you have about the potential for America's technological advantages on modern battlefields to erode because of illegal arm sales? 800-433-8850.

  • 13:44:02

    NNAMDIWhat additional safeguards do you think are necessary to keep American contractors from selling military technologies to those who may be looking to do harm to the United States? You can also send us email to kojo@wamu.org, go to our website, kojoshow.org, ask a question or make a comment there. Or just call, 800-433-8850.

  • 13:44:22

    NNAMDIJohn Shiffman, the team behind Operation Shakespeare came into contact with a few men who set off all kinds of alarms. One of whom went by the name Alex Dave, whose email was traced to Iran. But the team needed guidance, if you will, on how to engage with these potential targets. And they brought on a British man who advised them on how to think and how to interact with the smugglers. You are about to talk about him now. Who is Clyde Pensworth?

  • 13:44:50

    SHIFFMANClyde Pensworth is a fascinating character. He's been dealing arms for perhaps 50, 60 years. He began in the Middle East in the '50s and '60s. He worked with the East German Stasi in the '80s. He worked with Robert Mugabe and his murderous regime in Zimbabwe. He has worked with the North Koreans. And by the way, that's a pseudonym because he asked that we not use his real name. And, you know, he's an expert on finance and paperwork. And he made all of his connections over the last half century because nobody wanted to do the paperwork.

  • 13:45:29

    SHIFFMANAnd he was really good. That's how he started. And he learned that, you know, every black-market deal needs paperwork. Even a black-market deal. And so he, you know, in banking and finance. And so he put that together. And he helped teach the Americans. The American undercover agents in Homeland Security were willing. And many of them are former U.S. Customs agents. But they didn't know much about the arms-dealing business.

  • 13:45:54

    SHIFFMANAnd the U.S. had conducted many undercover stings in the last 10 years previous to this and just almost all of them had failed because the U.S. lacked knowledge and the U.S. agents they lacked a lot of patience in how to deal with these kinds of things. And so some of the undercover agents traveled with him to the Dubai Air Show and got a real education on how to -- on arms dealing, the black market arms dealing.

  • 13:46:20

    SHIFFMANAnd Clyde Pensworth also came here to the United States, as a guest of the U.S. government and trained at least 100 agents on how to buy on the black market.

  • 13:46:33

    NNAMDIWhy was he so willing to cooperate?

  • 13:46:35

    SHIFFMANI think he got a kick out of it. I think he just got a kick out of being on whatever was hot at the time. You know, he just -- he liked to have fun. He's sort of nearing the end of his career.

  • 13:46:47

    NNAMDIYeah, if he's been around doing it since the '50s. What were the kinds of technologies that the Alex Dave, the guy whose email was traced to Iran, who went by that name, what kind of technologies was he on the market to buy?

  • 13:47:04

    SHIFFMANHe said that he was on the market to buy just about anything that the Iranian government wanted. At one point that included radiological equipment, it included helicopters, bullet-proof vests, night-vision, drone equipment. He did buy drone equipment. In Operation Shakespeare what he wanted was he wanted these radar chips that are about the size of a fingernail for Iranian Air Defense, so that they could stop any U.S. or Israeli attack against any nuclear facility or for any other reason.

  • 13:47:42

    SHIFFMANAnd he wanted gyroscopes, which can be used to steer rockets and make them more accurate. And he also wanted replacements for the F-14 fighter jet. The Iranian entire infrastructure is American because we supplied the Iranians in the '60s and '70s with most of their military equipment. And then there were embargoes. And so they still have a lot of American equipment, but it all needs to be upgraded.

  • 13:48:10

    NNAMDIWhat was so significant about Alex Dave's eventual arrest? And what did American intelligence officials learn from him after he was detained?

  • 13:48:19

    SHIFFMANThe thing about Alex Dave's arrest was that he was arrested after six hours of conversation with the agents -- when he didn't know they were agents -- undercover agents. And what they talked about during that time period gave the U.S. agents a great window into the Iranian infrastructure and how the program worked. But what really helped was that he brought his laptop, foolishly, into the meeting with the American undercover agents, so that when he was arrested the U.S. government suddenly had a treasure trove of four years' worth of orders.

  • 13:49:05

    SHIFFMANAnd, you know, Amir Ardebili was not a Viktor Bout. He was not a sensational arms dealer. But what he was was typical and very representative. And so he was able to show the CIA and U.S. Homeland Security, through his laptop -- his laptop was able to show, not him -- what Iran was trying to buy, what it needed, which was really important. And then how it did it. And so inside the laptop there were links to all the banks that he used, and the American companies that he was buying from. And so it was just a treasure trove of information and intelligence that the U.S. government was able to get.

  • 13:49:41

    NNAMDIOn to the telephones. Here is Bob, in Loudoun, Va. Bob, you're on the air. Go ahead, please.

  • 13:49:48

    BOBThank you, Kojo, so much and for the great interviews and great inside stories for people like me and others. And congratulations are in order for John. I'm sure you'll win the Pulitzer Prize for this great book on "Operation Shakespeare," John. I have a two-part question. The first part, obviously, is I'm sure it's going to be -- sound like a movie sometime soon.

  • 13:50:13

    BOBAnd then, the second part is you have written about Alex and the (unintelligible) to this illegitimate transactions. How about the legitimate transactions to these other countries who have bought our aircraft and other equipment and the spare parts? And what do we know about those legitimate transactions then finding its way across borders, somewhere in the Middle East to these other countries for who we have an embargo?

  • 13:50:47

    NNAMDIThat's one of the things I asked about earlier, but so I'll go to his first question, first. Movie in the works?

  • 13:50:52

    SHIFFMANYes. There is a movie in the works. The rights to the story were purchased by Legendary Pictures, which has done a whole range of films, from "42," the "Dark Knight" movies and even getting "Godzilla," recently. So they certainly will make it entertaining if they end up making the movie. And, yes, I mean, one of the big problems is that people from countries that shouldn't be ordering or it's illegal at least for them to be ordering equipment, they'll order it, have it shipped to a transshipment point, say Singapore, Hong Kong, Dubai, Amsterdam, and they'll just simply have it redirected.

  • 13:51:34

    NNAMDIAnd that's one of the problems we were discussing earlier. Thank you very much for your call, Bob. It would seem that very little of this would be possible were it not for the willingness of American businesses to put their technology up for sale on international markets or to make their technology available to foreign buyers. What role have American entities played in all of this?

  • 13:51:55

    SHIFFMANThat might be the most surprising thing. It shouldn't really surprise it that the Iranians and the Chinese are trying to buy our military equipment or smuggle it. But the sad thing is, is that some American companies are willing to put, you know, profits over protection of the troops. And, you know, in some cases it's inadvertent. Hopefully, most cases it's inadvertent or unknowing. In other cases it hasn't been. And there have been some major U.S. corporations who have been fined over the last 10 years for giving away some of the most important technology.

  • 13:52:31

    SHIFFMANI mean, one example is ITT Corporation, which developed night vision that the U.S. government makes, U.S. military makes -- uses. And they were the primary supplier. And they outsourced, essentially, part of the production of the night vision. And they outsources outside the United States and then Chinese engineers got involved. The U.S. government fined them $100 million for this transaction.

  • 13:52:59

    NNAMDIHas anybody ever gone to jail, though, for violating these rules?

  • 13:53:03

    SHIFFMANNo one at a big corporation has. No one at a big corporation to my knowledge has gone to prison for doing this. And in ITT's case, which was really the most -- probably the most egregious case, the Pentagon couldn't even stop using ITT as its night vision supplier because at the time we were in the middle of fighting two wars. And they couldn't risk stopping the production of night vision for our troops. So they couldn't -- it wasn't like they could go to another manufacturer.

  • 13:53:33

    NNAMDIIs that what you mean by the company considered being too big to fail by the American government?

  • 13:53:39

    SHIFFMANYes. Precisely. And, you know, it -- part of the fine, the $100 million fine, what's interesting about that is that half of the fine ITT was told to use to reinvest, to find technologies to counter the technologies that they had given away. And it's just remarkable that this kind -- whether it's sloppiness, whether it's greed, whether it's just a lack of control, who knows. But things that are -- no one would argue that night vision -- sophisticated military technology that's used in night vision is something that we really want to protect because that allows our army to fight at night in ways that others cannot.

  • 13:54:25

    NNAMDIHere is Steve, in Washington, D.C. Steve, you're on the air. Go ahead, please.

  • 13:54:29

    STEVEThank you, Kojo. I enjoy listening to your show. You kind of just talked about a subject, though, that I wanted to raise because I am reading Mr. Shiffman's book. And it's a great read. And I just kind of started. And toward the beginning he does lay out the instances of where U.S. companies have really blatantly flaunted U.S. laws and restrictions about setting up companies in China and using Chinese manufacturing. There's an interesting story about a professor who brought a laptop over there and how that was compromised.

  • 13:55:05

    STEVEAnd, you know, Mr. Shiffman, you mention a $100 million fine, but that's a drop in the bucket for these companies. I mean -- and I understand it's very hard to get a corporate official in jail, but, I mean, can there be anything more done to stop these companies from doing this? Because it didn't seem like it was sloppiness. It -- the way you described it, it seemed like they just willfully, you know, broke the law.

  • 13:55:28

    SHIFFMANI think the government is trying to do what it can. It is -- it's added some agents. They have a new export enforcement center in northern Virginia that coordinates the attempts to try to stop this. The government also now sends agents out -- or they have been doing this for a while. They send agents out to defense manufacturers and tries to train them, things to look for, to see if there's suspicious things going on.

  • 13:56:00

    SHIFFMANIt's very hard, under the law, to get a criminal conviction against a person for this kind of act because you have to know that what you're doing is illegal. It's one of the few laws that's written in that way. And so it's a very difficult challenge.

  • 13:56:18

    NNAMDIThank you very much for you call. We move on to Norm, in Arlington, Va. Norm, your turn.

  • 13:56:24

    NORMHey, thanks, Kojo. I've got a quick question relating to weapons systems that U.S. government provides to foreign fighters and nations. And that is what are the obstacles to implementing remote enabling, remote disabling, remote destruction of the electronic control components of those U.S. weapons systems?

  • 13:56:47

    SHIFFMANWell, I -- if we can do that, it's probably classified. I don't know. I do know that we have sent inert weapons systems overseas. And that the CIA has done all sorts of -- played all sorts of games with foreign adversaries.

  • 13:57:09

    NNAMDIBut in order for individual companies to design the kind of tiny devices that you're talking about and being able to insert into those devices something that government could use to stop them from working, I suspect that's a non-starter.

  • 13:57:26

    SHIFFMANYou know, I would have said that a year ago, but after reading the Snowden documents I wouldn't put anything past the U.S. government at this point.

  • 13:57:37

    NNAMDIAnd I'm afraid that's all the time we have. John Shiffman is a journalist and author. His new book is titled, "Operation Shakespeare: The True Story of Elite International Sting." John Shiffman is an investigative reporter for Reuters. John, thank you so much for joining us. Good luck to you.

  • 13:57:51

    SHIFFMANThanks a lot.

  • 13:58:00

    NNAMDIAnd thank you all for listening. I'm Kojo Nnamdi.

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