Kudos to House Intelligence Committee Chairman Mike Rogers for telling the American public about the significant efforts of countries like China to utilize every means available to spy on American companies – something the National Economic Security Grid has designated as the “Advanced Persistent Asymmetrical Threat.”
In 2009, FBI Director Mueller testified in front of Congress that his Bureau was aware of 3200 Chinese front companies operating in the United States. Ironically, the FBI has been unwilling to share the names of those companies with American businesses so they can have an opportunity to determine if they want to do business with any of those companies. At least if American businesses decide to do any work with these front companies they do so at their own peril – with their eyes wide open.
In 2011, the Office of the National Counterintelligence Executive issued a report that identified China and Russia as the number one and number two bad actors in cyber-based espionage. Clearly the U.S. Intelligence Community has every reason in the world to protect their “SOURCES” . . . but it is time that they stop protecting the “Methods” these bad actors are utilizing to rape and pillage American companies of their technological innovations. Compounding this national travesty was the decision in Congress last year to transform America’s Patent laws that from the days of our Founding Fathers recognized and protected the rights of “the First to Invent” and replaced those historic protections with a new law based on whoever is “First to File” for a patent – something the National Economic Security Grid has coined “Steal First – Patent First.”
The Cyber Review that was published in February 2009 by the White House estimated that the loss of intellectual property from companies as a result of cyber-based hacking in 2008 alone exceeded $1 trillion in value. Simply study the Chinese Communist Party’s 12th Five-Year Plan and a roadmap of industries and technologies that the Chinese intend to dominate is clearly delineated. Ironically, U.S. industrial sectors tend to dominate all of those industries and technologies. I would hate to be the CIO who has to explain to his or her CEO today why they felt that partnering with Huawei Technologies Ltd or ZTE Corp was a sound decision.
In all likelihood, shareholders of publically traded companies will begin to seriously question corporate executives strategies relative to operating in places like China and Russia or doing business with companies from these countries. Questions will certainly arise about how thorough corporate due diligence processes have been. What level of protection exists in any agreements that publically traded corporations have entered into with firms in these countries? People seem to forget that 95 percent of all Chinese companies are State-owned and the remaining 5% is heavily controlled. It’s time for American business leaders to WAKE UP to these very real risks that that threaten their companies’ stability, viability and survivability.