Four Incredible Acts Of Corporate Espionage

Underwater jet packs, explosive toothpaste, grappling suspenders and the inimitable La Bombe Surprise; the public has long harbored a fascination with smooth-talking spies and thrilling tales of espionage. After all, who can forget Jason Bourne brutally dispatching of his foe with a rolled up magazine, or James Bond bungeeing off a dam, skydiving into a runaway plane, and pursuing his enemy through the streets of St. Petersburg in a stolen tank?

In the world of competitive intelligence, legal methods of gathering information about a corporation’s competitors are utilized in an effort to better inform the corporation’s decision making process.

In his paper, “Competitive Intelligence and the Economic Espionage Act,” Richard Horowitz, Esq. defines the methods of competitive intelligence as, “the sophisticated use of published material, databases, and on-the-record interviews, techniques which themselves are legal and proper means of acquiring information.”

However, sometimes laws are broken and lines are crossed. When this happens, competitive intelligence crosses the bridge into industrial espionage. The well-intentioned James Bond becomes the wrong-hearted Dr. No, and what was once governed by the order of ethics slips into the maw of chaos.

One of the earliest recorded instances of industrial espionage was the case of Jesuit priest and missionary Francois Xavier d'Entrecolles. In 1712, while “administer[ing] to the spiritual necessities of [his] converts” in China, d’Entrecolles recorded the secret Chinese technique of manufacturing porcelain.

Just as James Bond once employed a pager to communicate with MI6 rather than the ubiquitous cell phone seen in modern films, so has industrial espionage evolved its means but maintained its purpose. Where once a lone missionary could pen a letter to his superior that resulted in the creation — or destruction — of an entire industry, modern threats include payoff demands, double agents, and cyberwarfare.

So, from a $30,000 box of Girl Scout cookies to real life mysteries on the Orient Express, here’s a list of four blockbuster acts of corporate espionage.

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4 The Coca-Cola Job

In 2006, Joya Williams, an assistant to Coca-Cola’s global brand director, pilfered a secret sample of the company’s newest product. Stowing the vial away inside a brown Armani bag, Williams enlisted two friends to help her rekindle the fires of the famous cola wars.

The thieves penned a cryptic letter to Pepsi under the alias “Dirk”:

“I have information that's all classified and extremely confidential, that only a handful of the top execs at my company have seen. I can even provide actual products and packaging of certain products, that no eye has seen, outside of maybe five top execs.”

It’s easy to imagine this band of outlaws meticulously plotting their misdeeds in some smoke-filled basement or abandoned warehouse where Coca-Cola executives’ photos are pinned to a cork board with giant red Xs drawn across their faces. The trio, however, revealed themselves to be amateurs in their faulty assessment of their mark’s competition.

Pepsi executives immediately reported the encounter and Coca-Cola enlisted the help of the FBI. The FBI in turn arranged an undercover meeting with the thieves. On June 16, the two parties met and the thieves were given a yellow Girl Scout cookie box containing $30,000 in exchange for the sample and a series of internal documents.

The group — Joya Williams, Ibraham Dimson and Edmund Duhaney — were arrested shortly thereafter and charged with wire fraud and unlawfully stealing and selling Coke trade secrets.

3 The Inside Job

On October 6, 2006, an arrest warrant was issued for Hewlett-Packard (HP) chairwoman Patricia Dunn, alleging the “[f]raudulent use of wire, radio, or television transmissions,” “[t]aking, copying, and using computer data,” and “[u]sing personal identifying information without authorization.”

Rewind ten months.

In January 2006, HP learned that a mole had been leaking information to outside news sources. CNET, the popular tech media website, published an article outlining HP’s long-term strategy. The article detailed HP’s “plans to improve […] the technology the company uses to manage its direct sales, while it continues with commercial printing efforts and acquisitions of software companies.”

Dunn — later claiming to have been unaware of the use of specific tactics — hired a team of outside investigators to ferret out the mole. Leaving no stone unturned, the investigators immediately embarked on a series of illicit impersonations so vast in quantity they could make Rich Little envious. Claiming to be HP board members and journalists, they amassed a large cache of personal details and phone records in their search for the elusive informant.

Ultimately, George Keyworth was accused of leaking the information. Keyworth resigned, but the fallout that occurred as a result of HP’s underhanded tactics lingered for months. Participants in the investigation were charged in both state and federal courts. Dunn resigned as chairwoman, citing the “distraction her presence on our board” caused.

2 The Darjeeling Job

Robert Fortune lived among the enemy for four years. Beginning in 1848, Fortune disguised himself as a traveling Chinese merchant and infiltrated areas beyond the established treaty ports. His travels took him to areas of Fujian, Guangdong and Jiangsu that had rarely — if ever — been seen by European eyes.

Donning his disguise and with the assistance of his trusty sidekick Wang, Fortune would approach tea factories and introduce himself as a wizened official from a faraway province. Factory managers, surprisingly unsuspicious of the accented stranger abided, welcoming him in. With the gates opened to him, he would survey the factory and take note of any information pertaining to the growth, production or treatment of tea leaves.

Working for the British East India Tea Company, Fortune’s mission was to gather information about and transport tea from China to India. Packing tea plants and seedlings into portable greenhouses called Wardian cases, he covertly transported over 20,000 tea plants to India. In order to ensure the plants’ viability, Fortune enlisted the aid of double agents: a group of Chinese tea workers.

Though the East India Tea Company dissolved in 1874, the company sowed seeds that would contribute to the growth of the British Empire and, by the time Fortune passed in 1880, tea production in India had surpassed production in China.

1 The Shampoo Job

In 2001, Fortune magazine alleged that multinational consumer goods company Procter & Gamble (P&G) had paid personnel to misrepresent themselves to the company’s competitor, Unilever.

In a bid to gather information, it was alleged that P&G agents identified themselves as market analysts and subtly availed themselves to Unilever in order to extract information about the company’s hair care business. Further, P&G admitted that it had searched for and removed documents from trash cans outside Unilever’s Chicago offices.

It’s hard to put an exact figure on the number of wigs and fake mustaches involved in the operation, but it is safe to assume that they were all lustrous and silky smooth.

Not long after the infiltration began, P&G came clean and admitted their indiscretion to Unilever, dubbing it an “unfortunate incident.” Insisting that no laws had been broken, only its own internal ethical policies, P&G eventually agreed to pay Unilever $10 million and assured Unilever that it would take steps to ensure that their proprietary information was not used.

Industry analysts called for leniency and praised P&G for their forthright handling of the situation. Professor Laura Hartmann, a professor of business ethics at the College of Commerce at DePaul University, said, “'Procter & Gamble could not have handled this any better. […] What more could we expect Procter to do. They fired people and went beyond that and told Unilever what they had done.”

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