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Defense Workers Warned About Spy Coins
By TED BRIDIS, Associated Press Writer
Wed Jan 10, 11:46 PMUPDATED 2 HOURS 58 MINUTES AGO
WASHINGTON - Can the coins jingling in your pocket trace your movements? The 
Defense Department is warning its American contractor employees about a new 
espionage threat seemingly straight from Hollywood: It discovered Canadian 
coins with tiny radio frequency transmitters hidden inside.
In a U.S. government report, it said the mysterious coins were found planted on 
U.S. contractors with classified security clearances on at least three separate 
occasions between October 2005 and January 2006 as the contractors traveled 
through Canada.
The U.S. report doesn't suggest who might be tracking American defense 
contractors or why. It also doesn't describe how the Pentagon discovered the 
ruse, how the transmitters might function or even which Canadian currency 
contained them.
Further details were secret, according to the U.S. Defense Security Service, 
which issued the warning to the Pentagon's classified contractors. The 
government insists the incidents happened, and the risk was genuine.
"What's in the report is true," said Martha Deutscher, a spokeswoman for the 
security service. "This is indeed a sanitized version, which leaves a lot of 
questions."
Top suspects, according to intelligence and technology experts: China, Russia 
or even France _ all said to actively run espionage operations inside Canada 
with enough sophistication to produce such technology.
The Canadian Security Intelligence Service said it knew nothing about the coins.
"This issue has just come to our attention," CSIS spokeswoman Barbara Campion 
said. "At this point, we don't know of any basis for these claims." She said 
Canada's intelligence service works closely with its U.S. counterparts and will 
seek more information if necessary.
Experts were astonished about the disclosure and the novel tracking technique, 
but they quickly rejected suggestions Canada's government might be spying on 
American contractors. The intelligence services of the two countries are 
extraordinarily close and routinely share sensitive secrets.
"It would seem unthinkable," said David Harris, former chief of strategic 
planning for the Canadian Security Intelligence Service. "I wouldn't expect to 
see any offensive operation against the Americans."
Harris said likely candidates include foreign spies who targeted Americans 
abroad or businesses engaged in corporate espionage. "There are certainly a lot 
of mysterious aspects to this," Harris said.
Experts said such tiny transmitters would almost certainly have limited range 
to communicate with sensors no more than a few feet away, such as ones hidden 
inside a doorway.
"I'm not aware of any (transmitter) that would fit inside a coin and broadcast 
for kilometers," said Katherine Albrecht, an activist who believes such 
technology carries serious privacy risks. "Whoever did this obviously has 
access to some pretty advanced technology."
Experts said hiding tracking technology inside coins is fraught with risks 
because the spy's target might inadvertently give away the coin or spend it 
buying coffee or a newspaper.
They agreed, however, that a coin with a hidden tracking device might not arose 
suspicion if it were discovered loose in a pocket or briefcase.
"It wouldn't seem to be the best place to put something like that; you'd want 
to put it in something that wouldn't be left behind or spent," said Jeff 
Richelson, a researcher and author of books about the CIA and its gadgets. "It 
doesn't seem to make a whole lot of sense."
Canada's physically largest coins include its $2 "Toonie," which is more than 
1-inch across and thick enough to hide a tiny transmitter. The CIA has 
acknowledged its own spies have used hollow, U.S. silver-dollar coins to hide 
messages and film.
The government's 29-page report was filled with other espionage warnings. It 
described unrelated hacker attacks, eavesdropping with miniature pen recorders 
and the case of a female foreign spy who seduced her American boyfriend to 
steal his computer passwords.
In another case, a film processing company called the FBI after it developed 
pictures for a contractor that contained classified images of U.S. satellites 
and their blueprints. The photo was taken from an adjoining office window.
___
On the Web:
CIA hollow coin: https://http://www.cia.gov/cia/information/artifacts/dollar.htm

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