My Point of View

Chinese Take-Out: Not Just for Dinner Anymore


Decades ago, when the United States was still considered the world’s dominant economic power, the business mantra was “what’s good for General Motors is good for America.” Unfortunately for both GM and America, the car company posted a loss of $38.7 billion in 2007, the biggest ever for an automaker. Now, in a world economy turned upside down by globalization, miniaturization, digitalization and capitulation the enormous pressures faced by corporate CEOs to deliver profitability have opened this country to unprecedented security threats.
The globalization of U.S. business has created uneasy relationships with foreign powers. And although the economic gains for both sides have been considerable, our ability to protect commercial and dual-use trade secrets has been made almost impossible. As U.S. and foreign firms continue to partner, myriad information breaches are exploding, including cyber-theft from Internet and e-mail sources, data collection through cell phones and PDAs, social engineering, software theft and supply-chain vulnerabilities.
The barbarians are at the gate and they don’t need a battering ram. In most cases we are handing them the keys!
“It is D-Day and China has already declared war on us,” says Tom Mahlik, who currently serves as Chief of the Counterintelligence (CI) Strategy and Domain Section, CI Division for the FBI. Mahlik’s role with this new FBI private-sector outreach program is to help foster partnership initiatives focused on strengthening the CI posture of corporate America, the defense industrial base and academia. “Our corporate security executives are on the frontline and they are waiting for the Calvary.”
Corporate America’s haste to chase cheap overseas labor, outsourced technology resources and prospecting of new markets has created the perfect security storm in China. As the world views the Chinese through strange rose-colored glasses, this faA§ade of western-styled capitalism is nothing more than a grand ruse for its Communist leadership, which is determined to build its nation’s technological sophistication and military dominance at any cost.
“Building higher walls doesn’t work anymore,” says Mahlik, who addressed more than 80 Fortune 50 global security managers recently in Atlanta at the Global Security Operations 2010 conference, held at the headquarters of The Home Depot. “Business relies on a global economy now, so we are working in a flat landscape. Six out of every 10 post-graduate students in American colleges involved in science and R&D are foreign. We are faced with a paradigm shift at the (FBI) because our mission now is all about collaboration with the private sector. Because of this globalized perspective, we don’t work in a vacuum anymore.”
The FBI has increased the number of agents assigned to counter alleged Chinese espionage from about 150 in 2001 to more than 350 today, according to Mahlik, who adds that about one-third of all economic espionage cases in the United States were linked to China.
Mahlik says the key to this growing threat is to focus on building internal mechanisms within corporate America to help them work through the security issues. He sees little of the Hollywood cloak and dagger intrigue, but much more leveraging of students, teachers, businessmen and travelers to China who are at risk.
The fact is, far too many American corporations and their CEOs are focused on short-term profits instead of long-term growth strategies. This thirst to provide immediate gratification to its shareholders at the expense of prudent risk management promotes expediency at the expense of diligence. Which leaves us with the new mantra for American business: “Let the next CEO clean up the mess.”

If you have any questions or comments for Steve Lasky regarding this or any other security industry-related issue, please e-mail him at steve.lasky@cygnusb2b.com.