From Foreign Policy:
The History of the Honey Trap
Five lessons for would-be James Bonds and Bond girls -- and the men and women who would resist them.
MI5 is worried about sex. In a 14-page document distributed last year to hundreds of British banks, businesses, and financial institutions, titled "The Threat from Chinese Espionage," the famed British security service described a wide-ranging Chinese effort to blackmail Western businesspeople over sexual relationships. The document, as the London Times reported in January, explicitly warns that Chinese intelligence services are trying to cultivate "long-term relationships" and have been known to "exploit vulnerabilities such as sexual relationships ... to pressurise individuals to co-operate with them."
This latest report on Chinese corporate espionage tactics is only the most recent installment in a long and sordid history of spies and sex. For millennia, spymasters of all sorts have trained their spies to use the amorous arts to obtain secret information.
The trade name for this type of spying is the "honey trap." And it turns out that both men and women are equally adept at setting one -- and equally vulnerable to tumbling in. Spies use sex, intelligence, and the thrill of a secret life as bait. Cleverness, training, character, and patriotism are often no defense against a well-set honey trap. And as in normal life, no planning can take into account that a romance begun in deceit might actually turn into a genuine, passionate affair. In fact, when an East German honey trap was exposed in 1997, one of the women involved refused to believe she had been deceived, even when presented with the evidence. "No, that's not true," she insisted. "He really loved me."
Those who aim to perfect the art of the honey trap in the future, as well as those who seek to insulate themselves, would do well to learn from honey trap history. Of course, there are far too many stories -- too many dramas, too many rumpled bedsheets, rattled spouses, purloined letters, and ruined lives -- to do that history justice here. Yet one could begin with five famous stories and the lessons they offer for honey-trappers, and honey-trappees, everywhere.
1. Don't Follow That Girl
In 1986, Mordechai Vanunu, an Israeli technician who had worked in Israel's Dimona nuclear facility, went to the British newspapers with his claim that Israel had developed atomic bombs. His statement was starkly at odds with Israel's official policy of nuclear ambiguity -- and he had photos to prove it.
The period of negotiation among the newspapers was tense, and at one point the London Sunday Times was keeping Vanunu hidden in a secret location in suburban London while it attempted to verify his story. But Vanunu got restless. He announced to his minders at the paper that he had met a young woman while visiting tourist attractions in London and that they were planning a romantic weekend in Rome.
The newspaper felt it had no right to prevent Vanunu from leaving. It was a huge mistake: Soon after arriving in Rome with his lady friend, Vanunu was seized by Mossad officers, forcibly drugged, and smuggled out of Italy by ship to Israel, where he was eventually put on trial for treason. Vanunu served 18 years in jail, 11 years of it in solitary confinement. Released in 2004, he is still confined to Israel under tight restrictions, which include not being allowed to meet with foreigners or talk about his experiences. Britain has never held an inquiry into the affair.
The woman who set the honey trap was a Mossad officer, Cheryl Ben Tov, code-named "Cindy." Born in Orlando, Fla., she was married to an officer of the Israeli security service. After the operation, she was given a new identity to prevent reprisals, and eventually she left Israel to return to the United States. But her role in the Vanunu affair was vital. The Mossad could not have risked a diplomatic incident by kidnapping Vanunu from British soil, so he had to be lured abroad -- an audacious undertaking, but in this case a successful one.
2. Take Favors from No One
One of the best-known honey traps in spy history involves Mata Hari, a Dutch woman who had spent some years as an erotic dancer in Java. (Greta Garbo played her in a famous 1931 film.) During World War I, the French arrested her on charges of spying for the Germans, based on their discovery through intercepted telegrams that the German military attaché in Spain was sending her money. The French claimed that the German was her control officer and she was passing French secrets to him, secrets she had obtained by seducing prominent French politicians and officers....MORE
In a March '09 post, "David Viniar, CFO of Goldman Sachs Blows Smoke at Journalists on AIG", I brought up the subject of honey traps:
...My question is, "If Goldman Sachs were still a partnership, would they have entered into these transactions in the same size?"
The answer, of course, is no.
If partners equity were at risk, there is no way that they would have depended on ratings agencies to ascertain the strength of their counterparty.
Junior partners would be expected to run honey traps on AIG employees.
Lower level employees would hone their dumpster-diving skills.
Whatever it takes to gain competitive intelligence and safeguard the partnership's capital.
Reading Mr. Viniar's words, I am reminded of his statement on market moves in August, 2007:“We were seeing things that were 25-standard deviation moves, several days in a row”Several folks, when they finally quit laughing, pointed out how blatently Mr. V was spinning.
Most however underestimated how infrequent 25SD events are, the most common guess being once in 100,000 years. Tee hee.
In a snappy little eight page paper "How Unlucky is 25 Sigma" we see that at 7 Sigma the odds are...