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"Poppy Coin", Culprit Behind U.S.
Spy Warning
WASHINGTON
(AP) -- An odd-looking Canadian coin with a bright red flower was
the culprit behind a U.S. Defense Department false espionage warning
earlier this year about mysterious coin-like objects with radio
frequency transmitters.
The harmless "poppy coin" was so unfamiliar to
suspicious U.S. Army contractors traveling 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
nanotechnology," according to once-classified U.S. government
reports and e-mails obtained by the AP.
The silver-colored 25-cent piece features the red
image of a poppy -- Canada's flower of remembrance -- inlaid over a
maple leaf. The unorthodox quarter is identical to the coins
pictured and described as suspicious in the contractors' accounts.
The supposed nanotechnology actually was a
conventional protective coating the Royal Canadian Mint applied to
prevent the poppy's red color 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 Defense Security Service, an agency of the Defense
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 traveled 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.
But the Defense Department subsequently
acknowledged that it could never substantiate the espionage alarm
that it had put out and launched the internal review that turned up
the true nature of the mysterious coin.
Meanwhile, in Canada, senior intelligence
officials expressed annoyance with the American spy-coin warnings as
they tried to learn more about the oddball claims.
"That story about Canadians planting coins in the
pockets of defense contractors will not go away," Luc Portelance,
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 over the warning when it was first publicized this
year. The warning suggested that 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 Defense Security Service disavowed its warning
about spy coins after an international furor, 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 Defense 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, Ontario, 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
that 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 America's closest 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 to the AP for $5 under that
country's Access to Information Act. Canada cited rules for
protecting against subversive or hostile activities to explain why
it censored the papers.
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