CSIS denies U.S. warning on spy currency, warning then retracted

It has been a week since U.S. officials claimed they found spy technology in Canadian currency, while CSIS is continuing to deny any knowledge of those claims.

A recent report by the U.S. Defense Security Service (DSS) advised that Canadian currency had been found “embedded with espionage miniaturization technology.”

On at least three separate occasions between October 2005 and January 2006, cleared defense contractors’ employees traveling through Canada discovered radio frequency transmitters in Canadian coins placed on their persons, according to the report.

“At this point, we don’t know of any basis for these claims,” said CSIS spokeswoman Barbara Campion.

The accusation has since been rescinded by the DSS.

The warning in the 2006 Defense Security Service Technology Collection Trends in the U.S. Defense Industry report claiming radio frequency transmitters were discovered embedded in Canadian coins is not true, according to the DSS.

This information was based on a report provided to the DSS although the allegations were found later to be unsubstantiated following an investigation.

When questioned about the report and investigation by InterGovWorld, a DSS spokesperson requested anonymity and said “(DSS) has nothing else to say and we stand by our retraction statement and (I will) leave it at that.

“What’s in the report is true,” said DSS spokesperson Martha Deutscher last week about the original accusations. “This is indeed a sanitized version, which leaves a lot of questions.”

As part of its oversight responsibilities under the National Industrial Security Program the DSS receives reports from U.S. cleared defense industry participants to enhance overall security awareness in cleared industry.

The Associated Press reported experts were astonished by the disclosure and the novel tracking technique but rejected suggestions Canada’s government might be spying on American contractors.

“It would seem unthinkable,” said David Harris, former chief of strategic planning for CSIS. “I wouldn’t expect to see any offensive operation against the Americans.”