empty your pockets

This is so bizarre, I hesitated to blog about it, thinking it might be a hoax. There appears to be some validity to it - but I still have no idea what to make of it.

From an AP Story, via Lawyers, Guns and Money, sent to me by fellow political expatriate Diamond Jim.

In a U.S. government warning high on the creepiness scale, the Defense Department cautioned its American contractors over what it described as a new espionage threat: Canadian coins with tiny radio frequency transmitters hidden inside.

The government said the mysterious coins were found planted on U.S. contractors with classified security clearances on at least three separate occasions between October 2005 and January 2006 as the contractors traveled through Canada.

Intelligence and technology experts said such transmitters, if they exist, could be used to surreptitiously track the movements of people carrying the spy coins.

The U.S. report doesn't suggest who might be tracking American defense contractors or why. It also doesn't describe how the Pentagon discovered the ruse, how the transmitters might function or even which Canadian currency contained them.

Further details were secret, according to the U.S. Defense Security Service, which issued the warning to the Pentagon's classified contractors. The government insists the incidents happened, and the risk was genuine.

"What's in the report is true," said Martha Deutscher, a spokeswoman for the security service. "This is indeed a sanitized version, which leaves a lot of questions."

Top suspects, according to outside experts: China, Russia or even France — all said to actively run espionage operations inside Canada with enough sophistication to produce such technology.

The Canadian Security Intelligence Service said it knew nothing about the coins.

When I asked my Chief Researcher for some corroboration, he found this US retraction:

Reversing itself, the Defense Department says an espionage report it produced that warned about Canadian coins with tiny radio frequency transmitters was not true.

The Defense Security Service said it never could substantiate its own published claims about the mysterious coins. It has begun an internal review to determine how the false information was included in a 29-page report about espionage concerns.

The service had contended since late June that such coins were found planted on U.S. contractors with classified security clearances on at least three separate occasions between October 2005 and January 2006 as the contractors traveled through Canada.

"The allegations, however, were found later to be unsubstantiated following an investigation into the matter," the agency said in a statement published on its Web site last week.

Intelligence and technology experts were flabbergasted over the initial report, which suggested such transmitters could be used to surreptitiously track the movements of people carrying the coins.

Experts said such tiny transmitters almost certainly would have limited range to communicate with sensors no more than a few feet away, such as ones hidden inside a doorway. The metal coins also would interfere with any signals emitted, they said.

Experts warned that hiding tracking technology inside coins would be fraught with risks because the spy's target might inadvertently give away the coin or spend it buying coffee or a newspaper.

Whenever the US retracts something, I am very suspicious.