Suspected Russian “honeypot” prostitutes targeting tech execs and VCs in an infamous Silicon Valley lounge provide a salacious illustration of the region’s spy problem — but much of the espionage here looks like business as usual, according to a new report.
The West Coast is seeing a “full-on epidemic of espionage” centered largely on Silicon Valley’s technology industry, the report said.
A former U.S. intelligence official told online magazine Politico that local Russian and East European prostitutes may be getting money from Russia to target high-powered techies and VCs at the posh Rosewood hotel’s lounge on Sand Hill Road in Menlo Park, a drinking establishment known for so-called “cougar nights” on Thursdays.
“Sex workers targeting executives at high-end bars and nightclubs such as the Rosewood Sand Hill … and other spots have been identified as potentially reporting back to Russian intel officers,” the former official said, according to Politico.
The Rosewood, in a statement, disputed the report.
“Rosewood Sand Hill holds itself to the highest standards and does not tolerate illegal or immoral activity,” the statement Friday said.
“The statements made in the Politico article regarding our hotel are unfounded and without validity. We will continue to maintain the highest levels of security as we always have to ensure the safety, privacy and integrity of our guests and local patrons.”
China takes a more decentralized approach than Russia to spying here, according to Politico, which said it based its report on “extensive conversations with more than half a dozen former intelligence community officials with direct knowledge of, or experience with, U.S. counterintelligence activities in the Bay Area.”
In order to “grab as much targeted proprietary technology or (intellectual property) as possible, as quickly as possible,” China uses “opportunistic businessmen, ardent nationalists, students, travelers” and others, Politico reported.
“Chinese intelligence also undertakes very intentional efforts to recruit insiders placed within organizations whose technologies they are interested in,” a former intelligence official told Politico, according to the magazine.
The purported intrusion of Chinese agents into everyday Silicon Valley business echoes allegations in a recently filed lawsuit alleging a Santa Clara subsidiary of Chinese smartphone giant Huawei infiltrated a meeting at a telecommunications summit held at Facebook. Huawei, accused of espionage by some U.S. intelligence officials, has denied that the company or its products are a security threat to the U.S.
Tech companies have a strong incentive to keep quiet when they’ve been victimized by spies, Politico reported. Silicon Valley companies “downplay, or outright conceal” the extent of trade-secrets theft and corporate espionage, former intelligence officials said.
“Coming forward and saying you didn’t have controls in place — that totally impacts shareholder or investor value,” a former intelligence official told Politico.
“Especially when you’re dealing with startups or mid-level companies that are looking for funding, that’s a big deal. You’re basically announcing to the world, especially if you’re potentially going forward with a public trial, that you were not able to protect your information.”
