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Zack Wasserman: Hijacking of US tech didn’t start with Facebook
September 13, 2018
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The 2016 presidential election wasn’t the first time Russia attempted to use Silicon Valley and its technologies against the US. During the 1980s, Soviet spies plied their trade up and down the San Francisco Peninsula, stealing technology, recruiting agents and infiltrating local banks. It’s worth remembering that those efforts were ultimately thwarted and may have contributed in a small way to the collapse of the Soviet Union.

The episode almost 40 years ago even inspired an otherwise forgettable installment of the James Bond franchise, “A View to a Kill,” in which a rogue KGB operative tries to flood Silicon Valley. The movie ends as Bond, having foiled what would have been the “greatest cataclysm in human history,” is awarded the Order of Lenin from the KGB. Why? “I would have expected the KGB to celebrate if Silicon Valley has been destroyed,” Bond’s incredulous commanding officer tells a KGB official. “On the contrary, admiral,” explains his Russian counterpart. “Where would Russian research be without it?”

For all its 1980s campiness, “A View to a Kill” captured a largely forgotten story: Silicon Valley was a clandestine battleground in the twilight years of the Cold War. During the Reagan presidency, the US regained its military edge over the Soviet Union, which had recently caught up in the production of intercontinental ballistic missiles, by modernizing its command, control, communications and intelligence systems with advanced microelectronics. Most of those semiconductors were designed in northern California.

Although the Soviet Union was a huge industrial power during the 1970s, it quickly fell behind as the digital revolution took hold. Innovating in the rapidly changing microelectronics industry required entrepreneurship, which was impossible within the centralized, hierarchical Soviet system. So the communist giant fell back on espionage instead.

Spies fanned out across Silicon Valley from their base at the Soviet consulate in San Francisco, which opened just a year after Intel commercialised the microprocessor.

Operatives spied on personnel at local technology companies and prominent universities like Stanford and the University of California, Berkeley, stole semiconductor manufacturing equipment, and tried buying stakes in local banks to gain access to borrowers’ intellectual property, a practice New York Senator Daniel Patrick Moynihan called a “new form of industrial espionage” that “doesn’t involve people stealing blueprints; they own the blueprints.”

“High tech has both raised the stakes and broadened the game,” Time reported in 1985. “It has made Silicon Valley microchips as valuable as NATO war plans.”

But President Ronald Reagan and Secretary of State George Shultz also saw that Soviet misdeeds offered a strategic opportunity. They used Silicon Valley’s entrepreneurial success both as a cudgel to discredit the Soviets’ closed, failing system and as an example of the benefits the Soviets could gain through liberalisation.

Of course, neither Silicon Valley nor entrepreneurial capitalism “won” the Cold War. Yet Reagan, the most popular Republican president of the modern era, used them to convert Russian malfeasance into leverage for the U.S. with a strategic resolve that is conspicuously absent today.

Tribune News Service

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