How Usama bin Laden made the world safe for spies
For a brief period of time after the Cold War ended it looked as if some effort would be put forth to address economic espionage. This was not because economic espionage represented a real threat to American business (which it did), or because lack of a common enemy (Russia) emboldened us to confront our allies who were targeting our economic interests (which they were), or even because the end of the Cold War had allowed foreign intelligence collection agencies to shift from military intelligence to economic intelligence (which it had). Rather, it was because, with the Cold War over, and with no Russian enemy, we had to either find something for our intelligence and counterintelligence people to do, or send them home.
During this heady period, we saw the passage of the Economic Espionage Act of 1996, and a commitment on the part of a number of federal law enforcement agencies to address this $300 billion dollar annual drain on American industry. It was, however, even then clear that nobody’s heart was in it. After all, it seemed something of a comedown to go from stopping the Red Menace to protecting Avery Dennison’s stickum. Nonetheless, resources were moved to begin, however grudgingly, to seriously address what was then – and is now – a serious threat.
Unfortunately for American business interests, the world of intelligence went back to normal on 11 September 2001. With the fall of the Twin Towers, which we had the misfortune to watch out of our office window, there was an immediate refocusing of our national intelligence and law enforcement efforts away from economic espionage.
Thus, Usama bin Laden single handedly eliminated the emphasis on dealing with economic espionage, and made the world again safe for spies.
We race to point out, however, that while the intelligence and law enforcement communities may have lost interest in economic espionage, the SEC, which understands the implications of our $300 billion annual loss, has not lost sight of the threat to American industry.
Thus, you still have an explicit responsibility under Sarbanes-Oxley to have internal controls in place to track, account for, and deal with losses from economic espionage, competitive intelligence, and theft.