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Keith Alexander’s Investments While NSA Director: Cutting Edge Surveillance Tech & China/Russia-Linked Commodities in “Cartel” Market

In Archive, China, Keith Alexander, NSA, Russia, Surveillance on October 26, 2014 at 12:01 AM

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10/10/2014

Jason Leopold/VICE:

Former National Security Agency (NSA) Director Keith Alexander has held investments in a corporation that identifies itself as a “world leader in cloud solutions.” And in a “data gathering and research” firm. And in a company that develops software that improves the quality of images captured by surveillance cameras. And in a radio frequency business that, among other things, manufactures amplifiers for air traffic control, radar, and surveillance.

The NSA once said that if revealed, this information would threaten national security.

In a lawsuit against the NSA, attorney Jeffrey Light argued that the agency had misinterpreted the laws it cited to justify the ongoing secrecy. Earlier this week, before the case hit a courtroom, a government attorney turned over 59 pages of financial disclosure reports Alexander filed between 2009 and 2014. Brown said in a letter dated October 2 that the NSA was releasing the material “in the interest of transparency.”

Although Alexander was head of the NSA from 2005 through March of this year, NSA’s ethics officer Shadey Brown said the Ethics and Government Act only requires financial disclosure reports to be released for a period of six years before receipt; therefore, he would not provide reports Alexander filled out prior to 2008.

Alexander resigned as NSA director following a tumultuous year that saw former agency contractor Edward Snowden leak highly classified documents about top-secret NSA surveillance. Alexander then launched private consulting firm IronNet Cybersecurity Inc., reportedly offering to help banks and other firms protect their computer networks from hackers for up to $1 million a month (he later reduced that figure to $600,000 a month). See Also: Ex-Spy Chief’s Private Firm Ends Deal With U.S. Official

Representative Alan Grayson accused Alexander of profiting off the sale of classified information.

Alexander’s private consulting work and allegations made by Grayson are what prompted VICE News to seek Alexander’s financial reports to determine whether he had a stake in any firms with whom he entered into consulting arrangements.

Alexander invested as much as $15,000 in: Pericom Semiconductor, a company that has designed technology for the closed-circuit television and video surveillance markets; RF Micro Devices designs, which manufactures high-performance radio frequency technology that is also used for surveillance; and as much as $50,000 in Synchronoss Technologies, a cloud storage firm that provides a cloud platform to mobile phone carriers (the NSA has been accused of hacking into cloud storage providers).

Alexander also held shares in Datascension, Inc., a data gathering and research company. The Securities and Exchange Commission suspended trading in Datascension last August “due to a lack of current and accurate information” about the company. (Datascension was linked to telemarketing calls that apparently prompted one person in a complaint forum to remark the company is “trying to gain personal information.”)

An NSA spokeswoman did not respond to requests for comment, and spokespeople for the technology firms did not respond to VICE News’ questions about whether Alexander has offered his consulting services or whether they were awarded contracts with the NSA. Many of the firms have been awarded contracts by the Department of Defense and other government agencies.

10/22/2014

Shane Harris/ForeignPolicy:

At the same time that he was running the United States’ biggest intelligence-gathering organization, former National Security Agency Director Keith Alexander owned and sold shares in commodities linked to China and Russia, two countries that the NSA was spying on heavily.

At the time, Alexander was a three-star general whose financial portfolio otherwise consisted almost entirely of run-of-the-mill mutual funds and a handful of technology stocks. Why he was engaged in commodities trades, including trades in one market that experts describe as being run by an opaque “cartel” that can befuddle even experienced professionals, remains unclear. When contacted, Alexander had no comment about his financial transactions, which are documented in recently released financial disclosure forms that he was required to file while in government. The NSA also had no comment.

On Jan. 7, 2008, Alexander sold previously purchased shares in the Potash Corp. of Saskatchewan, a Canadian firm that mines potash, a mineral typically used in fertilizer. The potash market is largely controlled by companies in Canada, as well as in Belarus and Russia. And China was, and is, one of the biggest consumers of the substance, using it to expand the country’s agricultural sector and produce higher crop yields.

“It’s a market that’s really odd, involving collusion, where companies essentially coordinate on prices and output,” said Craig Pirrong, a finance professor and commodities expert at the University of Houston’s Bauer College of Business.

“Strange things happen in the potash market. It’s a closed market. Whenever you have Russians and Chinese being big players, a lot of stuff goes on in the shadows.”

On the same day he sold the potash company shares, Alexander also sold shares in the Aluminum Corp. of China Ltd., a state-owned company headquartered in Beijing and currently the world’s second-largest producer of aluminum. U.S. government investigators have indicated that the company, known as Chinalco, has received insider information about its American competitors from computer hackers working for the Chinese military. That hacker group has been under NSA surveillance for years, and the Justice Department in May indicted five of its members.

Alexander may have sold his potash company shares too soon. The company’s stock surged into the summer of that year, reaching a high in June 2008 of $76.70 per share, more than $30 higher than the price at which Alexander had sold his shares five months earlier.

He may also have dodged a bullet. Shares in the company plunged in the second half of 2008, amid turmoil in the broader potash market. In 2009, “the bottom fell out of the market,” Pirrong said. Alexander may not have made a lot of money, but he also didn’t lose his shirt.

That didn’t keep the intelligence chief out of the trading game. In October 2008, in the midst of the potash downturn, Alexander purchased shares in an American potash supplier, the Mosaic Company, based in Plymouth, Minnesota. It was a good time to buy: On the day of the purchase, the stock closed at $33.16, having plummeted from highs of more than $150 per share during the summer.

But inexplicably, Alexander sold the shares less than three months later, in January 2009. The stock had barely appreciated in value, and Alexander again disclosed “no reportable income.”

The timing of both the potash and aluminum sales in January 2008 is also intriguing for political reasons. In the spring of 2008, shortly after Alexander sold his positions, senior U.S. officials began to speak on the record for the first time about the threat of cyber-espionage posed by Russia and especially China. Public attention to the intelligence threat was higher than it had been in recent memory. The optics of the NSA director owning stock in a company that his own agency believed may have been receiving stolen information from the Chinese government would have been embarrassing, to say the least.

In May 2008, four months after Alexander sold the shares, Joel Brenner, who at the time was in charge of all counterintelligence for the U.S. government and had previously served as the NSA’s inspector general, gave an interview to me when I was with National Journal and accused China of stealing secrets from American companies “in volumes that are just staggering.” Brenner’s comments came just three months ahead of the opening of the 2008 Olympic Games in Beijing. He eventually went on national U.S. television to warn Americans attending the games that they were at risk of having their cell phones hacked.

U.S. officials at the time said that computer hackers in both China and Russia were routinely breaking into the computers of American businesses to steal proprietary information, such as trade secrets, business strategy documents, and pricing information. Eventually, Alexander himself went on to call state-sponsored cyber-espionage “the greatest transfer of wealth” in American history, blaming it for billions of dollars in losses by U.S. businesses and a loss of competitive advantage.

By 2009, Alexander held no more direct shares in any foreign companies, his records show. His financial transactions while in government apparently garnered no additional scrutiny beyond a standard review by ethics officials, who found no violations. Under official rules governing conflicts of interest, a government employee is prohibited from owning more than $15,000 in holdings of a company “directly involved in a matter to which you have been assigned.” For Alexander, spying on foreign governments and protecting the United States from cyber-espionage would seem to meet that criteria. But his records indicate that he never owned in excess of $15,000 in any foreign company.

U.S. officials have long insisted that the information that intelligence agencies steal from foreign corporations and governments is only used to make political and strategic decisions and isn’t shared with U.S. companies. But whether that spying could benefit individual U.S. officials who are privy to the secrets being collected, and what mechanisms are in place to ensure officials don’t personally benefit from insider knowledge, haven’t been widely discussed.

  1. […] Keith Alexander’s Investments While NSA Director: Cutting Edge Surveillance Tech & China/Russia-Linked Commodities in Opaque “Cartel” Market #WakeUp http://leaksource.info/?p=25822 […]

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