Poppy Quarter a spy tool?

Read this story from Canoe today ...............................

May 7, 2007

Harmless ‘poppy quarter’ led to spy coin warnings

By TED BRIDIS

"It did not appear to be electronic (analog) in nature or have a power source," wrote one U.S. contractor, who discovered the coin in a rental car.
WASHINGTON (AP) - The surprise explanation behind the U.S. government's sensational but false warnings about mysterious Canadian spy coins is the harmless poppy quarter, the world's first colourized coin.

The were so unfamiliar to suspicious U.S. army contractors travelling in Canada that they filed confidential espionage accounts about them.

The worried contractors described the coins as "anomalous" and "filled with something man-made that looked like nano-technology," said once-classified U.S. government reports and e-mails.

The 25-cent piece features the red image of a poppy inlaid over a maple leaf. The quarter is identical to the coins pictured and described as suspicious in the contractors' accounts.

The supposed nano-technology actually was a conventional protective coating the Royal Canadian Mint applied to prevent the poppy's red colour from rubbing off. The mint produced nearly 30 million such quarters in 2004 commemorating Canada's 117,000 war dead.

"It did not appear to be electronic (analog) in nature or have a power source," wrote one U.S. contractor, who discovered 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 confidential accounts led to a sensational warning from the U.S. Defence Security Service, an agency of the Defence Department, that mysterious coins with radio frequency transmitters 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 travelled through Canada.

One contractor believed someone had placed two of the quarters in an outer coat pocket after the contractor had emptied the pocket 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.

Meanwhile, in Canada, senior intelligence officials expressed annoyance with the U.S. spy-coin warnings as they tried to learn more about the oddball claims.

"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 a January e-mail to a subordinate.

"Could someone tell me more? Where do we stand and what's the story on this?"

Others in Canada's spy service also were searching for answers. "We would be very interested in any more detail you may have on the validity of the comment related to the use of Canadian coins in this manner," another intelligence official wrote in an e-mail.

"If it is accurate, are they talking industrial or state espionage? If the latter, who?" The identity of the e-mail's recipient was censored.

Intelligence and technology experts were flabbergasted by the warning when it was first publicized earlier this year. The warning suggested such transmitters could be used surreptitiously to track the movements of people carrying the coins.

"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," said H. Keith Melton, a leading intelligence historian.

But Melton said the army contractors properly reported their suspicions.

"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 disavowed its warning about spy coins after an international furore but until now it has never disclosed the details behind the embarrassing episode. The United States said it never substantiated the contractors' claims and performed an internal review to determine how the false information was included in a 29-page published report about espionage concerns.

The Defence Security Service never examined the suspicious coins, spokeswoman Cindy McGovern said.

"We know where we made the mistake," she said.

"The information wasn't properly vetted. While these coins aroused suspicion, there ultimately was nothing there."

Numismatist Dennis Pike, of Canadian Coin & Currency near Toronto, quickly matched a grainy image and physical descriptions of the suspect coins in the contractors' confidential accounts to the 25-cent poppy piece.

"It's not uncommon at all," Pike said.

He added the coin's protective coating glows peculiarly under ultraviolet light.

"That may have been a little bit suspicious," he said.

Some of the U.S. documents the AP obtained were classified "Secret/Noforn," meaning they were never supposed to be viewed by foreigners, even the closest U.S. allies. The government censored parts of the files, citing national security reasons, before turning over copies under the U.S. Freedom of Information Act.

Nothing in the documents - except the reference to nanotechnology - explained how the contractors' accounts evolved into a full-blown warning about spy coins with radio frequency transmitters. Many passages were censored, including the names of contractors and details about where they worked and their projects.

But there were indications the accounts should have been taken lightly.

Next to one blacked-out sentence was this warning: "This has not been confirmed as of yet."

The Canadian intelligence documents, which also were censored, were turned over for $5 under the Access to Information Act. Canada cited rules for protecting against subversive or hostile activities to explain why it censored the papers.

Karmen

[John McGillivray]

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.

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