The Spies of Silicon Valley

Between the recent indictments of 12 Russian military officers accused of hacking during the 2016 election and the subsequent unmasking of alleged Russian spy Maria Butina, foreign espionage has become the nation’s political topic du jour. Just when we were beginning to feel a little left out of the mystery and intrigue, Politico writer Zach Dorfman has published a bone-chilling exposé on the influx of spycraft in California’s own Silicon Valley.

We tend to think of espionage in the United States as an East Coast phenomenon: shadowy foreign spies working out of embassies in Washington, or at missions to the United Nations in New York; dead drops in suburban Virginia woodlands, and surreptitious meetings on park benches in Manhattan’s gray dusk.

But foreign spies have been showing up uninvited to San Francisco and Silicon Valley for a very long time. According to former U.S. intelligence officials, that’s true today more than ever. In fact, they warn—especially because of increasing Russian and Chinese aggressiveness, and the local concentration of world-leading science and technology firms—there’s a full-on epidemic of espionage on the West Coast right now. And even more worrisome, many of its targets are unprepared to deal with the growing threat.

California has been in the crosshairs of Russian intelligence since the Cold War era. But the sort of espionage gaining prominence in California’s Bay Area today is described as a “newer, ‘softer,’ ‘nontraditional’ type” that mainly centers around trade secrets, technology, and intellectual property. According to Dorfman, the Bay Area is home to a full 20% of all intellectual property cases handled by the counterintelligence units of the FBI. Russia and China are the culprits in most of the cases, but other countries -- including U.S. allies -- are increasingly flexing their intelligence gathering muscles.

The results sometime read like pages out of a spy novel. A former intelligence officer who spoke under condition of anonymity told Politico that Chinese intelligence once recruited a staffer with a California office for Senator Dianne Feinstein. A prominent political power broker in San Francisco who has since passed away was also believed by some to have been co-opted by the Chinese.

Intelligence operations range from the super-secret to the fairly obvious. Last year, the Trump administration shut down Russia’s San Francisco Consulate, as well as two others, which had been considered a major hub for Russian espionage for years. But experts believe the operations merely moved to new venues, possibly including a venture capital firm in Menlo Park owned by the Russian government.

The more than half a dozen former intelligence community professionals who spoke to Politico believe these operations will only grow with time, and many express concerns that the region is not prepared to handle it. That appears to be especially true in the case of China.

Because of California’s economic and political importance, as well as its large, well-established, and influential émigré and Chinese-American communities, the People’s Republic places great weight on its intelligence activities here, said multiple former intelligence officials. Indeed, two told me that California is the only U.S. state to which the Ministry of State Security—China’s main foreign intelligence agency—has had a dedicated unit, focused on political intelligence and influence operations. (China has had a similar unit for Washington.)

And if California is elevated among Chinese interests, San Francisco is like “nirvana” to the MSS, said one former official, because of the potential to target community leaders and local politicians who may later become mayors, governors or congressmen. Their efforts are becoming increasingly sophisticated.

For U.S. officials tasked with maintaining security, one of the biggest obstacles continues to be reluctance on the part of the private sector in Silicon Valley.

“Silicon Valley firms continue to downplay, or outright conceal, the extent to which the theft of trade secrets and other acts of economic espionage occur,” Dorfman writes. He adds that a culture of openness among Bay Area startups leaves companies particularly vulnerable to infiltration.

But that could ultimately change. The hacking of the 2016 election and the shocking revelations that have emerged in recent months, including a new report about Russia’s targeting of the U.S. power grid, should underscore the seriousness of all forms of espionage.

If that isn’t enough, there is undoubtedly more to come.