113. How To Protect Your Secrets: Is The Toaster Spying On You? (Ep 2)

17:23And so you look at China, for example, which has turned its whole country into an intelligent state, not just to surveil and oppress its own population, but to steal economic information from the United States and Great Britain and Japan and South Korea and Australia and all the rest. And really, it's turned intelligence into a mass activity where both the actors, the intelligence collectors, are no longer full-time professionals. They are business people. They are proxies for the government, or they turn the government into proxies for their businesses. And the objects of that intelligence are not state actors and government officials.

18:07They are companies like Apple and Google and GM and Goldman Sachs and anybody else who has, as we talked about at the beginning of the first show, who has information of value. And so what China has done has really taken this technology and expanded intelligence and attacks on its adversaries into the private sector. So it's a version of the old fashioned, you know, Francis Drake stealing Spanish gold, except on steroids, to use a cliche. David's going to be mad at me as a professional novelist.

18:50Gordon:We'll edit that out. We'll edit out the cliche. Don't be trite, Glenn. But it's taken that and turbocharged and energized it and turned it into a mass activity. And so you look at, say, the 2017 intelligence law in China, Article 7, which says that every individual and every company in China must, must cooperate with China's intelligence services. And that goes both ways. So these companies go to the intelligence services and say, hey, we would like to get this information. And what you do is instead of use this for a purely national security purpose, you use it for a business purpose to literally put rival companies in the United States and abroad out of business.

19:36This is the technology revolution plus the intelligence revolution. One of our old colleagues, Anthony Vinci, calls the fourth intelligence revolution together with neo-mercantilism. And that's the world that we're in right now. And that's the business that I'm in right now is helping companies figure out how to defend their valuable information against companies and countries that work together to do what you just referred to, Gordon, which is steal all kinds of information using all of the means available.

20:08Gordon:I want to make sure we come back to this because I want to park this idea because I think there's a bigger question kind of rolled up in all of this, which is, does the Western intelligence model still work and how will it be able to compete with the Chinese model? But maybe we could come back to that because I wanted to ask again on the communication side. We talked about the idea that Gordon and I are talking. Okay, that's probably enough for an investigator to start to make investigation, right? If they just see two people that shouldn't be in communication. But Glenn, I want to ask about quantum computing here and whether we should expect that in the future we'll even have encryption.

20:52Gordon:So in other words, what's the prospect that five, 10 years down the road, there actually won't be any privacy even in the content of the communication? Wow, a great question. Yeah, so quantum decrypts in seconds or minutes or hours that which under traditional encryption would take centuries to decrypt. And that's horrifying because our adversaries have already hoovered up untold quantities of encrypted information as they can and as we could. I mean, it's there for the taking out of the air and over the wires, but it's pretty useless right now because it's encrypted. But when you have quantum decryption, it's not useless.

21:43And all of that information at rest and all of that information in transit now is no longer secret. And that's horrifying. and the way to protect that information going forward is to use quantum encryption, which everybody is aware of, but they're not doing, not at a large scale. And the problem is we're not going to know that anybody has quantum decryption until it already exists. I mean, think about this. If you could decrypt everything that's encrypted, would you tell anybody about it? Hey, I'm all of a sudden able to read your mail and read your messages, you wouldn't. And we're not going to know if an adversary has that until after we're already sunk.

22:25David:I mean, the parallel to me is always a bit like Bletchley Park. When Bletchley Park could break codes, you keep it quiet and you keep selling the people the idea that their messages are completely unbreakable. Crypto AG did this for decades. The Brits kept Bletchley secret for decades because they could still read loads of information and gain loads of intelligence because everyone went oh my communications are perfectly secure on these devices and so the reality might be who knows you know somewhere in china right now there's a quantum computer you know which is cracking all all the messages and which is a game changer for intelligence because suddenly you then have this kind of radical transparency in which anything which isn't built with a new standard of kind of quantum resistant encryption is going to be transparent you know a whole layer of secrecy and secrets and private information suddenly disappears I mean, that's a kind of potential game changer, isn't it?

23:18Oh, it's a nightmare, Gordon. I mean, think about all the information that's already sitting in storage in data lakes that's encrypted and then the capability to decrypt that. Think about the financial system, which depends on standard encryption. What's going to happen then?

23:34Gordon:I don't want to think about that, Glenn. That's terrifying. I would like you to think about it. David, perhaps that's your next novel.

23:39David:All your financial information, David, all transparent to the world. imagine all your secrets, David.

23:46Gordon:If you put on your MSS hat, Glenn, which maybe you have behind you on the table there, if you have that capability, what do you do with it? Whatever you want, David, whatever you want. The sky is the limit. I mean, imagine, again, we're doing a hypothetical here, but imagine China has hoovered up some quantity of encrypted information that goes over the wires and over the air about the U.S. military, about the U.S. government, about the U.S. intelligence establishment. And it's all encrypted. And then one day, because they've succeeded in decryption, they can read all of that mail. They can read all of that messages.

24:30Think about all of the things that they know. Think all of the things that the United States government wants to keep secret from China. And then you expand that beyond government to, okay, this is everything that Apple does and Google and Amazon and Anthropic and Microsoft and Goldman Sachs. I mean, it's just horrifying. The short answer is whatever they want. And so our secrets aren't safe. Our military planning isn't safe. Our intelligence operations aren't safe. Our money isn't safe. Money, credit, that's all based on trust. That's all based on the idea that these ones and zeros that are in computers are safe from theft.

25:14And now it's attacked now and again in a cyber way. The North Koreans have a nice little industry in attacking banks and crypto. But that's going to look like child's play. That's going to look like a tiny iota, a sty, compared to the absolute forest of secrets that are going to be revealed when quantum comes online.

25:36Gordon:Is it a certainty that it is coming? Is it just a matter of when? Is it like, maybe it's five years, maybe it's 10? Or like, is it -

25:44David:The joke is, it's always five years away. Quantum computing is always five years away, the breakthrough. But I mean, I was talking to someone yesterday who said, might be really only five years away now. Yeah. That might actually be true. Yeah, I don't know, but I wouldn't take the risk, David, that it's not. That we continue to make progress. It's not as if human beings are not making progress on quantum decryption. They are. I can't tell you whether it already happened. I can't tell you which is another thing that would keep me up at night, or if it's a day away or 10 years. I don't know. I don't think anybody knows.

26:18David:That might be a good place to take a quick break on that moment of slight doom and gloom, And we'll come back after the break and see what we can do about this. No, no, no, no. We'll tell everyone everything is fine about how we should think about this world of technology. One last look at it with Glenn. And we'll see you after the break.

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28:39Gordon:Welcome back. I think, Gordon and Glenn, we've been talking for most of this kind of two-part series to this stage about how tech is changing the world of espionage and in particular human espionage. We've been trying to do it from the lens of, I think, some key elements in the trade of human espionage. I thought we might switch for a second and actually talk about some specific pieces of technology because there are some that I think the impact that they have spreads across the entire field of the intelligence business and it'd be good to talk about them individually. I mean, I guess one that pops immediately into my mind that I think we really haven't talked much about yet, is how cheaper, smaller drones or UAVs are impacting espionage today.

29:29Gordon:Because obviously, I mean, we had the world of sort of armed drones that we see all around us in Ukraine. But I'm kind of thinking here, Glenn, of how maybe more from a just surveillance standpoint, the proliferation of really effective, high-quality drones that I can buy for my son that cost about$30. How does that whole landscape impact this kind of the business of human espionage today? It's developed by leaps and bounds over the last few years, and I think we'll continue to see improvements in capability and reductions in price as technology goes in the next few years. So obviously it is a sensor platform and it is cheap and it is capable and it's controllable.

30:23And that represents a danger, I think, both for state actors and for non-state actors. There was a story, I think a few months ago in the New York Times about a drone loitering outside the window of Ericsson in Copenhagen. You know the story I'm talking about, David, where it's photographing.

30:46Gordon:No, no, I'm just laughing, thinking about a drone sitting outside a window just watching. Well, I mean, think about this, right? You know, access to somebody's computer screen or keyboard is gold, right? If I could photograph you typing away, I could learn a lot about what you're doing. If you think you're safe because you're on the 40th floor of a building or the 14th floor of a building, and I just park a very quiet, very small drone outside that window and photograph the whole thing, I have all kinds of information that's useful. So that's a nifty little collection tool, you know, which is partly human because you have the operator.

31:25But I can imagine scenarios in which the human is further and further away from the actual collection. And then it's stored and it's beamed, sometimes in real time, and then used. So that's an exceptionally valuable tool to have. We've already seen how valuable they are in the battlefield, but I would be worried about how valuable they are in terms of business intelligence. A lot of companies have very good access controls. And I'm not talking about companies in defense. I'm just talking about companies that might be targets of other companies abroad, principally from China, where that information confers tremendous advantage, getting back to our definition of intelligence.

32:09But they don't have any counter drone program. You know, they don't operate in skiffs. They have windows for their people. They don't want their people to be like we had to be back in the day in these windowless offices deep inside buildings without windows. And so the possibilities really go from there. Add microphones to the cameras and you're really in business. Wi-Fi detectors, all kinds of sensors.

32:37David:sensors microphones cameras are now in cars they are in you know watches they're in phone you know we used to think of it as just as phones as the tracking devices or the sensor devices but the extent to which everyday items are effectively connected to the internet internet of things exactly you know your fridge your fridge speaks to the internet right you know and it's the point is convenience to tell you have you run out of milk and i can order it for you But it also may be able to tell someone who could easily hack into it, because I bet cybersecurity isn't very good, is this person at home at the moment?

33:11David:Have they not opened the fridge for two days? In other words, is that a good time to break in? Or are they stocking up extra bottles of vodka in their freezer, which maybe is a sign of alcoholism or some other indicator? So, you know, it's that kind of everyday pervasiveness of this, which I just think is really game-changing, isn't it? Well, everything you buy, I have a real ambivalence about these loyalty programs, right? The point of the loyalty program is not to, it's to charge people who don't share information more money is the point of the loyalty program. Right? So you go to the store, right?

33:43And they're like, oh, I see you're buying, this was obviously many years ago, I'm buying a newspaper. Can I have your phone number? No, you can have my money and then you give me the newspaper. What do I have to give you my phone number for so that you know that I bought the Wall Street Journal on Friday? That's not, you know, why do I want a networked scale? Good God, no. I don't, you know, and then your credit card bill tells people masses of information about you. And, of course, after COVID, no one uses cash anymore. The wonderful thing about cash is it divorced your identity from your behavior.

34:18but try spending cash in a lot of places and you can't or they discourage you and so definitely

34:24David:china right no you can't i mean but cryptocurrency i mean cryptocurrency offers some no no it's some benefits to people now you spend the time you can track it it's you know they have tumblers and and um but but eventually um given enough effort you're not going to be able to hide so yeah i I mean, blockchain offers some advantages and it really discourages investigators because it's a lot of work. But I mean, you know, and Tor, same thing. But all of those things can eventually be unwound. It's the time and effort of the investigator. Yeah, it's interesting. I mean, just you mentioned Tor, which is the onion root of the kind of dark web.

35:03David:I think we started the first episode with a quote from the chief of MI6, the last chief of MI6, Richard Moore. And in that same speech, he also launched, I think, something called Silent Courier. which was a kind of portal, a platform for people to contact MI6 on the dark web. And on the one hand, that's a kind of example maybe where technology is an enabler for a spy service because you've got the equivalent of walk-ins, people who want to offer themselves up to a spy service. I think of Mitrokit, just because I've written a book on him, who walks into the American and then the British embassies in the Baltics in 1992.

35:38David:In those days, you had to walk into an embassy to contact them. Now you can try and use one of these dark web platforms. They promise a degree of anonymity to contact MI6. And I think CIA runs a kind of similar thing, you know, quite openly saying to Russians, particularly if you're aggrieved with your government, you know, use this platform to approach us. So I guess, you know, that is an example where some of that technology is an enabler, but I guess it also creates a single point of failure and some risks as well. But you've got a lot of pressure on that one platform and that one point of contact.

36:09Well, Gordon, I don't want to talk about that one.

36:12David:That's okay. That's not what I want to comment on. No, that's fine. But I'll comment on it. I think it's really interesting because I think it is an example where technology, it's the fact it's enabling and a risk. I think that's the kind of interesting thing about technology, isn't it? Is that there's two sides to the coin for lots of this.

36:31Gordon:Going back to the Internet of Things point, I was having a conversation, I don't know, us a couple of weeks ago with a cybersecurity expert who's actually doing book research. And he was telling me a story about the proliferation of cases he's seeing of people who have their Wi-Fi hacked by someone going in through a device like a washing machine or a refrigerator or your connected scale that does not have the same level of defense as the traditional router, but it's still connected to it all the same because you just sort of don't think about it. Like, well, am I doing software updates on the washing machine?

37:10Gordon:No. And it's a weak link, but you just almost don't even think about it now. So yeah, it's totally normal to have a washing machine that's connected to my Wi-Fi. Why not? Your toaster is spying on you. That could be the title of your next book. It's horrifying. One topic we've talked about in little bits and pieces throughout this conversation, has been artificial intelligence. This is a huge question. And obviously, the impact of AI on the intelligence business, it's not just impacting human, it's impacting analysis and everything. But I'm curious from your standpoint, Glenn, how should we think about the way that AI is disrupting the human intelligence game?

37:59To the degree that it speeds up collection, analysis, interpretation, it represents, I think, an offensive weapon in terms of collection, a potential tool for counterintelligence and a potential tool for analysis. What do all of these features mean and how quickly can we make these associations that we wouldn't do if we didn't automate them? So I don't think everybody understands yet all of the implications for AI and machine learning. The one that I've probably paid attention to the most is the collection of faces and the analysis of faces and how it has made that a lot better. It can also be used for spoofing voices and spoofing videos.

38:48So we've had a number of cases where we look at companies and they're vetting people and they're doing these interviews like this one over a video channel. And the person is not the person they're purporting to be because they've used AI tools to disguise what their face looks like and what their voice looks like. And now, right now, that's fairly crude and there's some very easy ways of determining that, but that's going to get harder and harder as time goes on. You talked about identity earlier, Gordon, really face to face, but you also have identity over the phone and you have identity over video chats.

39:26And I think that's easier to disguise. And people have to determine fakes. And then you have to look at influence operations, what's real. And intelligence services, malign intelligence services, could flood the zone with fakes. Now, it doesn't matter that it's determined to be a fake necessarily from their perspective in the sense that nobody then believes anything. Yeah. You have the inability to separate fact from fiction.

39:55David:Am I really speaking to David or not? Yeah, that definitely scares me. But I mean, I guess as we kind of, you know, start to round things up, I mean, this world of deep fakes, of AI, of not being sure who's who, human intelligence, the point of it, as opposed to kind of cyber or digital intelligence, is that there is a human relationship, I guess. And at some point it requires two people in a room, probably to be physically together and to talk to each other and have a relationship and look into each other's eyes, not in a romantic way, but in a kind of intelligence way and say, do I trust you?

40:28David:That is the kind of core of the business. Does it survive, do we think? It certainly shrinks. I think the opportunities for doing that have shrunk. I think the opportunities for HUMIT have shrunk in part because you can achieve so much now with data, with collecting commercially available and openly available information and parsing that together. And that makes the analyst, the targeter, a much more important piece, the OSINT investigator, a much more important piece of intelligence collection and analysis. but there's still a role for humans, none of that data can tell me what a foreign adversary leader, you know, call it Xi, call it Putin, whomever.

41:09No one can tell me what he perceives at a particular time, what he plans, what he intends. That can only be gleaned from someone in the inner circle. And then getting in touch with that person in the inner circle and determining whether that person is willing to share. And then arranging the transfer of that information is much more difficult now. And I think the opportunities to have long conversations where you build that relationship have diminished because we're trying to have those conversations in a sea of sensors and data. And that's just hard.

41:48Gordon:I remember reading an article, I think a couple years back, and I know you won't comment on it, but just I'll put it out there. There was a a Washington Post article that was quoting somebody from the agency as saying, hey, the number of recruitments is down over the last four or five years. We're recruiting fewer human sources than we used to. And it seems like I'd always sort of conceptually thought, oh, it's a supply side problem in that it's just harder to do it because of all these tech challenges. So we're trying, but we're not having as much success or it's just in certain cases, it's impossible.

42:25Gordon:But I guess I'm hearing you say it's also kind of a demand side problem in that a lot of the questions that we would have had in the past where we would have tasked human collection, we don't need to anymore. So in some ways, if human is kind of the market share is shrinking, it's not necessarily just because it's harder. It's because there might actually be less demand to actually put some of these questions to humans than we had in the past. The exception being the plans and intentions point that you're raising, which is what is she thinking? What is Putin thinking? Those are evergreen questions where you actually really want a well-placed human to give you that perspective.

43:07I would just go back to the scenario where you have a leader you want to know something about, right? That leader's scale is networked. His toaster is spying on him. He's got social media. He drives in a car made after 2003 or is driven in a car made after 2003, which means that it produces a digital exhaust, which can be tracked. The leader speaks on a cell phone. The leader's photographed. The leader's roundly quoted. There's all sorts of information about that leader, both intentionally and unintentionally, produced that tech companies derive great insights from, great analysis from, and governments can do the same.

43:50And so what we had to collect via human about that person, about any person, has logically shrunk because you can do that remotely by buying that data. So that's not a failing. That's just a change in technology. I can't comment on any story about numbers or quality of recruitment. And I don't even know. I mean, I've been retired for years now. I would just say logically, knowing the capabilities of big data, and let's call this tech revolution big data, you can find out facts and derive additional facts from that data that you could not do 10 years ago, 15 years ago, 20 years ago. It's even so much better now than it was five years ago.

44:39David:Open source intelligence and digital intelligence and cyber espionage. They all offer new ways of kind of stealing secrets. Sure. Getting hold of useful information, I guess. And then you combine all of those. But I guess what's interesting, isn't it, is the fusion of all of these things. Because you get a sense that these days, you know, human espionage is enabled by the digital or the open source. The kind of mixing of it means that the old days where you think back to the old kind of Cold War spy stories, and it would always be about that kind of fighter pilot, you know, case officer or MI6 officer, who is the individual who just is the kind of loan operator who would kind of go and talk that agent into being.

45:17David:That doesn't work in the modern spy world, does it? Because you need digital analysts around you as well to build up the profile of the person you're going to talk to. You need maybe some cyber espionage around it. You might need some technical knowledge. It's changed the game in that way. Yeah, I certainly think it's become much more of a team sport now than it used to be because of technology. I think the best operations have a bit of all of these elements in them. A lot of cyber operations are enabled by Hument. A lot aren't, right? Social engineering, I mean, a lot of cyber operations are a result of people getting people's logons, right?

46:03Getting their credentials. Simple things like overhearing a conversation or shoulder surfing can enable cyber operations. Parking a camera on a drone outside someone's window can see somebody type in a password. You slow it down and you see how they type it in. There's all kinds of ways to blend cyber and signal and human intelligence. And our adversaries do this every single day.

46:31Gordon:I wanted to go back because I think when we were talking about communication before the break, I parked a question on the kind of intelligence business model that we've built up versus maybe the Chinese one. And I'm curious if you think, are we adapting? Is our business model catching up? No. Yeah. No. No, we're not. I mean, we're playing two different games. So China, which is the best example is an intelligent state in which the party state and companies, I won't call them the private sector because there is no true private sector in China, doesn't have a rule of law. They steal from each other just as they steal from us, but they have a national theft program.

47:15And NSA Director General Keith Alexander talked about this 20 years ago. It was the most massive transfer of wealth in human history. This is getting back to the neo-mercantilism

47:27David:Yeah. Where it's not to say that China doesn't innovate. It certainly does, but it doesn't have to innovate as much as as we do, because it's we're subsidizing. It's R &D. American companies don't do that. It's against the law here. It's against the law to do it to ourselves. And it's against the law to do it to Chinese companies. China doesn't have that problem. It steals private sector information. This is, again, what I work on now is helping companies protect themselves against this because they don't realize the degree and scale of the theft. And this has national security implications because essentially what China is doing, as the Ottomans and the Portuguese and the Dutch did to Venice, they're trying to put us out of business.

48:12And that's going to destroy our economy and it's going to destroy or certainly diminish our strength as a state. And it's not just the United States, it's all of its allies. And I think very few companies are aware of this. And our national security establishment is not set up to deal with this. It was set up to do with the Cold War and to a certain degree terrorism. It wasn't set up to deal with an adversary that wages a gray zone hybrid war on the U.S. private sector and national infrastructure.

48:44Gordon:My next question was going to be what keeps you up at night, Glenn? That. I think you might have just answered it. Yeah, that. That does. I mean, that keeps me up at night. Quantum keeps me up at night. I mean, the fact that companies are still rushing to do business with China, knowing that their IP is at risk, at least understand what your valuable information is and take steps to protect it. But in many cases, the information is not stolen. It's freely given away. I'll give you our IP if you allow us access to your market. I don't think that's worked out terribly well for the United States economy or private sector.

49:23Gordon:Maybe this is the question I'll close on then, which is just to go back to this central topic of tech and how it's impacting the espionage business. For people who are listening or thinking about the job of a case officer, what do you think that job is going to look like in the future? Give it all the changes we've talked about. At the human level, what does that job look and feel like, do you think? Yeah, you really put me on the spot there, David. That's a huge question. I expect it's going to involve a lot more reliance on data and technology than it does now. I think the case officers now, I mean, currently need to have much greater technological aptitude than they did back in my day.

50:14I think that's only going to increase to understand the capability of sensors, to understand the capability of computation, to be able to separate out fakes from reality. I don't think human, old fashioned human, people to people relationships are ever going to disappear, as Gordon was talking about a few minutes ago. But I think it's going to shrink because the idea of a case officer, even protecting his identity and job, has gotten so much more challenging. And so the way that China has dealt with this is they've turned their whole country into intelligence collectors through things like the national intelligence law and the national security law.

50:59And this, you know, massive intelligence establishment and a giant hacking cyber intrusion force. It's an intelligence state. The way they've changed intelligence. And again, this is out in the open. They don't hide their law. Oh, they say, oh, we wouldn't do that to you. Well, then why do you have the law? If you're not going to use your population as intelligence collectors, why do you mandate that they become intelligence collectors? I think you're going to see a lot of that. I can't speak to the United States, but other countries, China, Russia, among them, have blended the private sector together with the national security sector to make something that's even more dangerous.

51:42David:Well, Glenn, I think that's probably a good place for us to wrap up. I think we've got a real understanding of why we started off with a former chief of MI6 saying adapt or die, basically, when it comes to technology. And I think what we've hopefully done over these two episodes is unpick what that means, what technology is doing to both the intelligence business, but also to privacy, secrecy. It's making us all spied on all spies, but also restricting the space for some of the old-fashioned spying we think about. Not as easy to write about, is it for your books, David? I think some of this stuff, but it's the reality.

52:17David:You do capture some of it in the novels. It's harder, isn't it?

52:20Gordon:It is. I deal with it every day when I'm writing, or you're trying to write a story about characters, about people in a business that is dealing less and less with actual human interaction. So a lot of the scenes that I would have written in books, to point Glenn 15, 20 years ago, they don't happen. It's that meeting of the source in the parking garage. That's a great scene to write about, but does it work anymore? Not really. So the real downside here for novelists, novelists are the ultimate losers in this case. Cool novelists. Two words for you, David. Historical fiction. Historical fiction.

53:01That's the takeaway. Go back to the Cold War. Revert to the past, baby.

53:05Gordon:That's right. Yeah. That's right. Thanks for joining us on this journey, Glenn. We appreciate you coming along and educating us and our listeners in this, I mean, hugely important topic and one that I think we'll be coming back to over and over again on the stories we tell on the pod. So thanks for being with us. Thanks very much for having me. It was a pleasure.

53:24David:So thanks to Glenn. Thank you all to listening. Just a reminder that if you want more of these kind of interviews with people who are insiders in the spy world, then do join the Declassified Club at therestisclassified.com, where you'll get plenty more like that, won't they, David?

53:42Gordon:that's right and gordon would be remiss if we didn't say uh we do have our live show coming up oh yeah in london on the 31st of january uh so you can go to the rest is classified.com i think we've still got a few tickets left get those there uh and join the club as well we'll see you next time see you next time

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