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Canadian poppy quarter triggered U.S. spy alert
Updated Mon. May. 7 2007 8:15 AM ET
CTV.ca News Staff
Canada's harmless poppy quarter has given some suspicious U.S. army contractors red faces after it was revealed they filed espionage accounts on the world's first coloured coin.
The contractors came across the 25-cent coin, which features the red inlaid image of a poppy over a maple leaf, while travelling in Canada.
The contractors described the suspicious coins as "anomalous'' and "filled with something man-made that looked like nano-technology,'' some once-secret U.S. government reports and emails said.
"It did not appear to be electronic (analog) in nature or have a power source,'' one U.S. contractor wrote after he found the coin in the cup holder of a rental car.
"Under high-power microscope, it appeared to be complex consisting of several layers of clear but different material, with a wire like mesh suspended on top.''
The technology they referred to was actually a protective coating the Royal Canadian Mint applied to the coins to ensure the poppy's red colour couldn't be removed.
Nearly 30 million poppy coins were produced by the mint in 2004 to commemorate Canada's 117,000 fallen soldiers.
The classified accounts lead to warnings from the U.S. Defence Security Service, an agency of the Defence Department, that the quarters contained radio frequency transmitters and were strategically planted on U.S. contractors.
One contractor was so suspicious of the red coins that he believed someone has planted two quarters in his coat pocket after he had emptied the contents of his coat hours earlier.
"Coat pockets were empty that morning and I was keeping all of my coins in a plastic bag in my inner coat pocket,'' the contractor wrote.
Canada's senior intelligence officers were annoyed with the U.S. espionage warnings.
"That story about Canadians planting coins in the pockets of defence contractors will not go away,'' Luc Portelance, now deputy director for the Canadian Security Intelligence Service, wrote in an email.
"Could someone tell me more? Where do we stand and what's the story on this?''
Intelligence experts believed the warnings, which stated the quarters could be used to follow the whereabouts of contractors with high-level clearance, were ridiculous when the information was first released.
"I thought the whole thing was preposterous, to think you could tag an individual with a coin and think they wouldn't give it away or spend it,'' H. Keith Melton, a leading U.S. intelligence historian, said.
However, Melton said the army contractors were only doing their jobs when they reported their suspicious findings.
"You want contractors or any government personnel to report anything suspicious,'' he said.
"You can't have the potential target evaluating whether this was an organized attack or a fluke.''
The Defence Security Service has since renounced its warning about spy coins but this is the first time that details of the embarrassing accounts have been made public.
The U.S. government said it performed an internal review to determine why the false information was included in a 29-page published report detailing espionage concerns.
The coins were never actually examined by the Defence Security Service.
"We know where we made the mistake,'' Cindy McGovern, a Defence Security Service spokesperson, said.
"The information wasn't properly vetted. While these coins aroused suspicion, there ultimately was nothing there.''
Some of the U.S. documents obtained by the Associated Press were deemed "Secret/Noforn,'' meaning the documents were never supposed to be seen by foreigners.
Many passages in the report were censored, citing national security reasons, before it was turned over under the U.S. Freedom of Information Act.
Next to one blacked-out section of the report was the cautionary sentence, "This has not been confirmed as of yet.''
The Canadian intelligence documents, which also were censored, were released under the Access to Information Act citing protection against subversive activities.
With files from The Associated Press

www.ctv.ca/servlet/Art...ub=SciTech

Here is the original story from this past January.

Defense Dept. warns about Canadian spy coins
Tiny transmitters found on contractors with classified security clearances
Updated: 3:43 p.m. ET Jan 11, 2007
WASHINGTON - Money talks, but can it also follow your movements?
In a U.S. government warning high on the creepiness scale, the Defense Department cautioned its American contractors over what it described as a new espionage threat: Canadian coins with tiny radio frequency transmitters hidden inside.
The government 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.
Intelligence and technology experts said such transmitters, if they exist, could be used to surreptitiously track the movements of people carrying the spy coins.
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.�
'A lot of mysterious aspects'
Top suspects, according to outside 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 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.
'Pretty advanced technology'
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. The metal in the coins also could interfere with any signals emitted.
“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 arouse suspicion if it were discovered 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 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.

www.msnbc.msn.com/id/16572783/

The mind truly boogles... I'll have to use this on my webcast!

Hi Folks!

That is an OUT STANDING example of 1st intell reports are often WRONG.

Sgt, Scouts Out!

- JimWeb

The mind truly boogles... I'll have to use this on my webcast!

Was that pun intentional?

- Roy_A_Lingle

Hi Folks!

That is an OUT STANDING example of 1st intell reports are often WRONG.

Sgt, Scouts Out!

Roy, I'll bet you never sent a spot report like that!

Maybe the coin has a miniature camera that sends realtime video of the owner's pocket?

JG300 has a couple of Canadian members we've been keeping chained to toilets in the latrine over in the "Pig Sty" we've been kicking whenever we "used the facilities" since this story first came out. Guess we can restore 'em to flight status and maybe even owe 'em an apology.

What denomination coin will you be using for that webcast?

- JG300-Ascout

JG300 has a couple of Canadian members we've been keeping chained to toilets in the latrine over in the "Pig Sty" we've been kicking whenever we "used the facilities" since this story first came out. Guess we can restore 'em to flight status and maybe even owe 'em an apology.

What denomination coin will you be using for that webcast?

Don't worry they'll all be dead soon. Since they have all that unsafe cheap prescription medicine that is too dangerous to allow into the U.S. they must be dieing like flies anyway. As unsafe as the the drug industry is telling Congress that medicine is it's a wonder ther is anyone left up there.

Bob,
Sounds like you had to have a persciption filled recently .

Joe D

Actually no but living in the DC area we here the ads targetted to the Hill staffers about how the world will end if we allow all that unsafe medicine to be re-imported. It just amazes me that Canadians have been able to survicve so long

Sounds like we had the wrong people chained to the toilets all along...

Hi Mark! Hi Folks!

- MarkHolloway

- Roy_A_Lingle

Hi Folks!

That is an OUT STANDING example of 1st intell reports are often WRONG.

Sgt, Scouts Out!

Roy, I'll bet you never sent a spot report like that!

I spent a year working in the S2 shop for the 1st Bn 30th Infantry, 3rd ID as the Intell Sgt.

There was a few field problems that I was ...( )..... and while none where that out landish, they fit the bill.

Once I was on the receving end of a series of daily reports coming out of ....( )....Headquarters that when on for almost two weeks on a new Soviet.....( ).... AFV before someone figured out it was just an .....( ).....!

So, I can say, I have been there and I have done that.

Sgt, Scouts Out!