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Douglas Thomas discusses industrial espionage and counterintelligence

Above is a video of Douglas Thomas’ lecture “U.S. National Security: Funded and Executed by Government, Delivered by Industry.” Below is a written summary of the event. This lecture took place at the Institute of World Politics on May 5th, 2015.

On May 5th, The Institute of World Politics hosted Mr. Douglas Thomas for a lecture titled, “U.S. National Security: Funded and Executed by Government, Delivered by Industry. 

Mr. Thomas is one of the most influential practitioners in the counterintelligence establishment of the United States. He has formerly been the principal Deputy Director of Counterintelligence, where he advised the Director of National Intelligence and President of the United States on counterintelligence matters, and he has chaired the National Counterintelligence Board of Directors of Counterintelligence within the intelligence community. Prior to these posts, Mr. Thomas served twenty years in the Air Force Office of Special Investigations. Currently Mr. Thomas is the Director of Counterintelligence and Corporate Investigation at Lockheed Martin.

His positions at the highest strata of American counterintelligence offered him a perspective which few intelligence officers are granted: he could see all of the operations being run by the CI apparatus of the United States government. In the last three years of his public service, he “saw a major shift in what the bad guys are focused on.” Industrial espionage was becoming the dominant front of foreign intelligence collection. His movement from the public to the private sector was driven by these needs.

His shift into the private sector has offered him a different perspective. Ultimately, he learned that: “The government does not build national security. They fund and execute it, but they do not build it.” This paradigm shift was what Mr. Thomas needed to understand the current mentality of foreign intelligence and security services. He challenged the audience to experiment with this perspective and to see the security of the United States in the broadest sense.

He noted: “Penetrating the Central Intelligence Agency, Federal Bureau of Investigation, State Department, and Department of Energy is their (foreign intelligence and security service’s) crown jewel, but a higher crown jewel today is penetrating corporate America and stealing our trade secrets and intellectual property.” The private sector defense industry is where the research, development, and production takes place.

The Federal Bureau of Investigation has reported a 105% increase in economic (aka. industrial) espionage since 2009. The Defense Security Service has witnessed an 862% increase in suspicious contact reports submitted by the defense industry from 2009-2014. These suspicious contact reports are the raw intelligence that provides the preliminary readings of penetration efforts by foreign intelligence services.

According to Mr. Thomas, attempts to spy on the American defense industry are not relegated to the activities of our competitors and enemies alone. He remarked that “Some of our closest allies are taking us to the cleaners.” While it is known that China commits this form of espionage, it is not out of the realm of possibility that France would do the same.

Having identified the problem, Mr. Thomas outlined some of the ways he believes the United States can mitigate this threat. Awareness is the first defense. Mr. Thomas’ work and research has shown that a majority of the employees who labor in the defense industry simply do not consider counterintelligence to be relevant to their job.  CI is viewed as “inherently a government role.” But unfortunately, the government does not have the resources to secure the entire supply chain of the defense industry. Mr. Thomas has led Lockheed Martin in a campaign to educate the company’s workforce and has found success.

Secondly, Mr. Thomas contends that the federal government must be willing to provide private sector companies with estimates of the key targets of foreign espionage. If the private sector counterintelligence sections do not understand the rationale and direction of their adversaries, then their efforts will be inefficient. Mr. Thomas is currently leading Lockheed Martin in a pilot program designed to test this approach.

Mr. Thomas also outlined some of the obstacles inherent in the American system. Private sector industries are traditionally averse to government intervention in their affairs. This disposition is so engrained in the fabric of American life that even preliminary cooperation with the government is viewed with concern. When companies are asked for usable data to define and quantify industrial espionage in the United States (something that is necessary for the drafting of legislation), the answer often is that provision of this information “is not in line with our company values.”

Furthermore, the current policies and legislation regarding counterintelligence simply do not consider industrial espionage as a major issue. Mr. Thomas understands this position of the federal government in an intimate way, as he was there when it was drafted. 

He states that the Federal Bureau of Investigation has been of great help in his efforts to combat industrial espionage. He envisions a Lockheed Martin whose theme and philosophy includes “delivering our products uncompromised.” He hopes that such a success would drive other companies in the U.S. defense industry to do the same. According to Thomas, the minimum counterintelligence requirements should not be the high bar: excellence should be pursued in the securing of a company’s work product.