When Walls have Ears, Call a Debugging Man
(Business Week, October 31, 1964, Industries)

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Business counter-espionage experts use electronic marvels in their work, and their dollar volume gives only a hint of their importance in a world where secrets have a price

After long and costly geological work, an Oklahoma oil company finally pinpointed a tract it wanted to prospect. But when it turned its land agents loose, they found every drilling company in the area already there and much of the land newly leased.

It seemed too much of a coincidence, and the company president called in one of the dozen "sound men" in the U.S., experts on surveillance by electronic listening devices-"bugs." The sound man wired up every office, tapped every phone. With the records thus obtained, he was able to find the culprit who had been selling the company's hard-earned intelligence to outsiders. And just as in a Hollywood movie, it turned out to be the president's brother-in-law.

Across the country, a construction company that repeatedly was nosed out on important bids also suspected an inside leak. Again a sound man was called in and all the phones hooked up to recorders. The payoff came one night when a janitor found a paper so important that he picked up the nearest phone and spilled the information to the man outside who was buying it.

Counterspying. These case histories both are examples of what the sound men call legitimate bugging or counter-intrusion. In each case, a company was exercising its right to guard its own security. This is the end of the business all the electronic surveillance operators claim to be in.

As Robert Jefferies, vice-president of Police Systems, Inc., of Santa Ana, Calif., puts it: "We are the white hats." In the classic cowboy movie, you may recall, the good guys always wore the white hats. The black hats in the surveillance business are worn by somebody else, all the operators insist. They engage in aggressive espionage, where a company seeks to learn another's secrets.

One of the more notorious cases came out in the open a few years ago when a nine-camera television system was found installed behind overhead ventilation louvers in a Detroit auto design room. According to Jefferies, head offices of supermarket chains are prime targets for listening devices.

Big Brother. Cases of electronic surveillance invariably make headlines, often creating the impression that George Orwell's 1984 is upon us. The subject of spying is popular enough to have made Vance Packard's 'The Naked Society' a best seller earlier this year. Packard suggests reasons for what he calls the boom in bugging: more security-consciousness these days, the depersonalization in vast business and governmental organizations, the rise in number of people trained in surveillance techniques.

Still those in the know say the extent of business espionage is exaggerated. They estimate that less than $1 million a year is spent on equipment, even when sales to government agencies are counted. They think another $1 million to $3 million may be spent for services of the sound men.

Under scrutiny. Small as it may be in dollar volume, the business of bugging has stirred a hornet's nest. At least two investigations have been launched:

*Cornelius E. Gallagher (D-N.J.) heads a House subcommittee that will hold hearings early next year. He feels Congress should redefine the rights of privacy.

*The New York City Bar Assn. will soon publish a major study of the effect of Orwellian technology on individual privacy in the U.S. Herbert Brownell, president of the group, says recent inventions "sharply challenge many of our basic assumptions as to what can be held private by individuals or organizations."

I. Like science fiction

Space Age technology has developed miniaturized but powerful electronic spying devices that rival science fiction, says Jefferies of Police Systems, Inc.

A listening device made up of a microphone and a tiny transmitter can be installed surreptitiously in a room or in a telephone itself. It will carry conversations to a listening post several hundred yards away, or it can be hooked up to a hidden recorder that's sensitive enough to be turned on and off by the sound of voices.

The telephone itself can be used to trigger the recorder when someone wants to monitor a conversation in the room; dialing the phone and letting it ring once might be the signal to turn the recorder on. Devices planted in houses or offices can also be triggered by radio energy, light, even a laser beam.

Smaller and smaller

Improvements continue to be made in shrinking the equipment.

Already well known is a transmitter the size of a lump of sugar. Now miniaturization has been extended to recorders. Jefferies has just returned from Japan, where he sewed up U.S. and Canadian distribution rights for a miniature wire recorder with a transmitter about twice the size of a pack of cigarettes. Its accessories include a tie-clasp microphone, a telephone pickup, remote pocket switch, and an earphone for monitoring the recording.