by Eamon Javers
The satellite analysts looked to see what it was about the placement of the stores in their communities that made them successful. What were the housing demographics? How close was the nearest high school? What were the road patterns? They dug deeper. Did the parking lots have room for trailers, where RV owners could plug in and charge up their vehicles? Did the doors face north, south, east, or west? How many entrances did the parking lot have? Were there islands with trees in the parking lots, or were the lots just large expanses of asphalt?
From the detailed analysis, Wal-Mart was able to create templates of success: a list of all the things that successful stores had in common, such as the neighborhoods where they were located and the configurations of their parking lots. And then the company could make sure that all its new locations had as many of those features as possible
For all its sophistication, this kind of analysis is not very expensive.
Imagery from the company’s extensive archive costs $7 per square kilometer, with a minimum order of fifty square kilometers. That makes the minimum purchase price $350. At the top end, accurate 3-D map images can cost as much as $30 per square kilometer. A few thousand dollars will generate the highest-quality images of any relatively large location in the world. A company can also pay extra fees to keep the images it seeks out of GeoEye’s archive for several months, or indefinitely.
With a GeoEye satellite, companies can see objects the size of home plate on a baseball diamond, and with GPS technology, they can plot that object’s location anywhere on the planet to within nine feet. It’s a spy’s dream.
SPY SATELLITE TECHNOLOGY wasn’t available at all to private individuals until 1972, when NASA launched the first civilian remote sensing satellite, Landsat-1. The images that this satellite delivered back were eighty-meter resolution, too rough for much commercial use. The technology remained largely in the hands of scientists and teachers.6 Early on, the U.S. government established a key principle called “nondiscriminatory access.” Landsat images would be available to anyone who requested them, for a price.7
In 1979, President Carter transferred authority over the Landsat program from NASA to the National Oceanic and Atmospheric Administration (NOAA) and pushed NOAA to help expand the civilian satellite market. But the corporate world was slow to realize the potential of the available satellite images, and Congress had to act again in 1984 to push satellite images into the private sector. The legislators did this by turning the entire Landsat program over to a private contractor, Earth Observation Satellite Company (EOSAT), a joint venture of RCA Corporation and Hughes Aircraft Company.
But the government didn’t come through with expected federal subsidies, and the venture faltered. Without much federal cash flowing into the program, prices soared to a point where one image could cost $4,000 or more. Academics and many scientists were priced out of the market, and the number of orders dwindled. EOSAT limped along for the next several years as a cobbled-together public-private partnership. It had to go hat in hand to Congress for funds.
By the early 1990s Congress and the Pentagon had begun to panic. The French had launched two satellites of their own, which were selling more pictures than the Landsat program was. And in 1991 the Gulf War in Kuwait showed the Pentagon how helpful satellite imagery could be during a land war—planners began to realize that a thriving commercial satellite system could be a national security asset if another war broke out.
Congress weighed in with the Land Remote Sensing Policy Act of 1992, which shuttled the troubled Landsat program back into the purview of NASA and the Department of Defense, and streamlined the licensing process for potential corporate satellite operators. That move, and the end of the cold war, helped lift the culture of secrecy from the satellite community. Companies began to issue optimistic predictions of the size of the future commercial market.
In early 1993, WorldView, Inc., became the first company licensed to operate a commercial land view satellite. WorldView’s corporate descendant is DigitalGlobe, which is still going strong today. Since then, NOAA has issued seventeen licenses.8 As the 1990s went on, advances in computing technology and the availability of broadband Internet access meant that a much wider audience had the means to access and process satellite images instantly. And in 2006, Google introduced its GoogleEarth application, bringing instant satellite images into the home of anyone in the world with an Internet connection.
But even as the government pushed for two decades to get satellite technology into the private sector, it placed restrictions on how far that technology could go. Today, companies like DigitalGlobe and GeoEye operate under several federal constraints.9 First, image resolution is limited to 0.5 meter and higher. That means that the U.S. military and intelligence agencies still maintain an edge in picture clarity. By some accounts, American military satellites can see images as small as ten centimeters, but their true ability is classified.
The U.S. government also maintains what’s known as “shutter control” over American satellite imaging companies. This means that at any time, for national security reasons, the feds can declare any part of the world off-limits for U.S. commercial satellites. This provision was written into federal law in the mid-1990s when defense experts began to worry about the implications of having such sophisticated spy technology available in the private sector. They were thinking of General Norman Schwartzkopf’s famous “left hook” maneuver in the Gulf War, in which American armored units swept hundreds of kilometers to the west of the location where Iraqi forces were expecting them. Surprise meant everything in such a situation. What if Saddam Hussein’s forces could simply have downloaded satellite images of the American positions from the Internet? That would have been a disaster for Schwartzkopf’s troops.
In the real world, though, such concerns have been swept aside by the astonishing pace of technology. Since shutter control was implemented, the United States has fought two wars, in Afghanistan and Iraq.
In 2001, as the Pentagon was drawing up plans for the battle against the Taliban in Afghanistan, planners wrestled with the issue of what to do about commercial satellites. If they used shutter control to block the Afghanistan region, they might face lawsuits from American media over freedom of information. Instead of hashing out the issues in court, the Pentagon decided to buy up the entire inventory of commercial satellite imagery of Afghanistan.* For GeoEye, that meant the entire inventory of IKONOS images of the region for three months.10
The military didn’t need the IKONOS pictures—it has plenty of satellites of its own of far higher quality. It just wanted to keep the images out of private hands: otherwise, anyone with a few hundred dollars to spend might have been able to spy on preparations for the ground war against the Taliban. During the invasion, no images of Afghanistan were available to the public. But after the three-month period, many pictures taken at that time entered the public archive, and they can now be purchased commercially.
Just a year and a half later, when the United States laid its war plans for Iraq in early 2003, the government made a different decision. Figuring that by then there were so many satellite images available from foreign companies, the U.S. military didn’t restrict American commercial satellite imagery at all. The genie was now out of the bottle. From that point on, any military force invading any location in the world would have to assume that cheap and accurate satellite images would be available to its enemies. Today, anyone with a computer can do a Google Maps search, pull up a picture of downtown Baghdad’s Green Zone, and admire the swimming pools and Blackhawk helicopters of the U.S. occupying force there.*
During the long coming-out period of commercial satellite imagery, private-sector companies recruited veterans of the U.S. military and intelligence agencies—these were the biggest pipeline of experienced satellite jockeys. So it is not surprising that GeoEye is linked to the CIA: the company’s board of directors includes James M. Simon, Jr., a veteran of the CIA who served as the senior intelligence official for homeland security
. Simon established and chaired the Homeland Security Intelligence Council after 9/11. Earlier in his career at the CIA, he was responsible for acquiring technology, overseeing budgets, and setting policy for the fourteen agencies that make up the intelligence community. He started his own intelligence consulting firm outside government in 2003.
SUCH CLOSE AFFILIATION with U.S. intelligence can scare away global customers, who fear that their own use of satellite imagery companies based in the United States will be monitored by American intelligence agencies.
In 1994, because of that fear, a group of American and Israeli entrepreneurs and defense veterans had an idea: why not start up an international satellite company which would be free from the perception that it was controlled by U.S. intelligence? There were plenty of clients around the globe that wanted to buy satellite imagery, but not necessarily have the CIA know what they were buying.
To avoid giving the company an American feel, these entrepreneurs incorporated their company in the Cayman Islands, naming it West Indian Space, Ltd. They moved its official registration to the Netherlands Antilles in 2000. That year, too, they gave the company its present name, ImageSat.
In the early days, the company focused on giving global clients confidence that they could conduct surveillance without the U.S. government knowing about it. Companies and national governments could snoop aggressively without having to worry that agents in Langley were looking at their pictures, too. To that end, the American investors were never allowed to own more than 50 percent of the company. (American ownership of more than 50 percent would subject it to the same licensing requirements as its fully American-owned competitors, GeoEye and DigitalGlobe.)
Here’s how several company founders described the need for a non-American business plan in a court filing:
ImageSat’s competitors were (and still are) backed by the largest United States aerospace companies and the U.S. government. ImageSat’s principal competitive advantage against its financially superior and technically more experienced competitors was its profile as an independent and robustly international company able to sell truly independent high-resolution satellite imaging capabilities to governmental customers worldwide, free from the unwanted influence of a politically motivated regulatory or licensing regime, such as that of the United States.11
The foreign clients were allowed to operate ImageSat’s satellite from their own ground stations, control the pictures taken, and keep those pictures from ImageSat’s other customers. The only restrictions came from the Israeli government: the company would not be allowed to sell to any country or customer within a 2,500-mile radius of Israel’s own ground station, and it would not be able to sell to the “rogue states” of Iran, North Korea, and Cuba. Clients began lining up for the service, and ImageSat sold satellite surveillance to countries including Venezuela, Angola, China, Taiwan, and India.
But soon, some shareholders grew disillusioned with ImageSat’s management. The group of dissident shareholders felt that the company was being brought under the control of the Israeli government—which, because of the historic ties between Israel and the United States, meant that American intelligence would be able to obtain the details of ImageSat’s operations. In July 2007, they filed a lawsuit for up to $300 million in damages, alleging corporate malfeasance and arguing that the effective takeover was ruining the company’s business prospects. Shareholders bringing the suit included American and Israeli businessmen, and companies registered in the Cayman Islands, Switzerland, and the British Virgin Islands.
Citing this international constellation of plaintiffs, and noting that most of the relevant action took place in Israel, Judge Denise Cote of the U.S. District Court dismissed the case a year later on jurisdictional grounds. Even so, allegations that the Israeli government may influence ImageSat could continue to scare off the company’s international clientele.
It’s no use pitching yourself as a non-American company if your customers think the U.S. government has access to your top executives. As we’ll see in Chapter Nine, the business of corporate espionage has gone global. And not everyone in this business has America’s best interests at heart.
CHAPTER NINE
Nick No-Name
The wiry former British special forces officer introduces himself only as Nick* and sits on the edge of his plush chair in the lounge bar at the Hilton London Green Park hotel. Nick is not tall—only about five feet, seven inches. He is dressed casually: long-sleeve black crew-neck shirt, dark jeans, and gray sneakers. “No voice recordings,” he says, putting up one hand. “I just can’t afford to have my voice on tape. And no company name either. Sorry.”
Nick has a good reason to be cautious. Now in his early forties and just beginning to show specks of gray in his military-cut hair, he is one of the top corporate surveillance operatives in London, and thus in the world. He knows how far people will go to win in the corporate spying wars, and he knows that if he’s identified, his lucrative career could be over.
Today London is the crossroads of western corporate executives, Russian oligarchs, oil-rich Middle Eastern sheikhs, and the troops of lawyers, aides, drivers, bodyguards, and bag carriers who hang around them. This neighborhood, Mayfair, may be the dead center of corporate spying. Mayfair exudes money. Bentleys and BMWs cruise the streets. Billion-dollar hedge funds set up shop in elegant townhouses, many of which display small signs letting passersby know which kings and notable members of British royalty once lived on the premises. In spring and summer evenings, the neighborhood’s pubs spill out into the streets, with expensively tailored young lawyers and financiers toasting one another’s success. Buckingham Palace is just a short walk across the park from here.
Because the money is in Mayfair, the spies are here, too. Nick is sitting just a brief walk from several of the most important spy firms in the world, including Hakluyt, whose own townhouse headquarters and small brass nameplate understate its global reach, substantial fees, and world-class corporate connections.
Surveillance operatives hate talking to a reporter, even when they’ve done everything they can to ensure that their comments will never be matched with their identity. Nick No-Name says he’s agreed to this interview only because it’s been arranged by one of his most important clients, a man who thinks nothing of paying Nick as much as $30,000 to place some of the world’s highest-powered corporate executives under surveillance. It’s a good living: A top operator in London can earn as much as $200,000 per year.
“If my colleagues knew I was here talking to you,” says Nick, “I wouldn’t say I’d be ostracized, but they’d be upset. There’s no good reason for a surveillance man to talk to a reporter. I’ve never done it before. Nothing good can come of it.” Maybe his colleagues have him under surveillance right now? “No, I’m clean at the moment,” Nick says matter-of-factly. “I’ve got a man in here.”
Which of the people in the bar is Nick’s “man?” There are two young women at a far table, looking over a map of London and comparing notes. There’s a bespectacled, balding gentleman reading a newspaper over a late-afternoon lunch. And several waiters in maroon suits glide into and out of the room. Nothing seems at all out of the ordinary. But then just as Nick sits down at the table facing a window overlooking an interior courtyard, a workman puts a large sheet over the window, blocking sunlight and the view to the outside. Maybe it’s a surveillance-related precaution; maybe it’s just routine maintenance. Nonetheless, Nick has cased the room. Satisfied that he’s in control of the situation, he agrees to sketch his life story, explaining how he came to be one of the world’s most effective corporate spies.
NICK JOINED THE British army right out of school, and he says his superiors in the army noticed that he had a certain potential. He’s sharp, he’s attentive to detail, and he handles weapons well. His commanding officers steered him toward a career in the special forces, where he became a trained killer and a master of weapons and tactics. More important, Nick says he learned how to match his resp
onse to the situation. Sometimes, it is far better not to kill—to defuse a situation long before it becomes violent. And that’s a far more nuanced skill than being good with guns once the shooting starts.
Nick won’t say what theaters of combat he served in, but he notes, “I was in the British military. And we’ve only gone a certain number of places in the past fifteen to twenty years.” It’s likely that his résumé includes stints in Bosnia, Northern Ireland, and the Middle East. Nick says he was often assigned to security details, where he learned the basics of what the British call “close protection” and Americans call bodyguarding.
Generally, special forces units protecting a dignitary or some other high-value target include several bodyguards who stand within two or three feet, each monitoring a different area to the front, side, or rear. You often see them on television. They are mostly big men, unsmiling in the midst of cheerful crowds greeting a president or prime minister. They seldom look up. They are watching people’s hands. Nick calls them “big, hairy-assed monsters.” But that’s not a description of Nick. He was typically assigned to the perimeter of security, working undercover. Dressed as normal members of the public, Nick and the others on his undercover team watched the crowd from outside the security area around the subject.
Under his jacket, Nick kept a Heckler and Koch MP5 nine-millimeter submachine gun, a lightweight, air-cooled weapon favored by more than forty military forces around the world. With its stock tucked under his armpit and its barrel pointing down toward his waist, the 26.8-inch MP5 barely made a bulge in Nick’s street clothes.
In theory, anyone who wanted to attack Nick’s subject would be watching the target and the highly visible big men near him. The members of Nick’s undercover team—positioned well back from any would-be assailant—could watch without themselves being spotted.