Canada's Spy Agency from the Inside

A state worthy of the name has no friends - only interests.

Canada's Spy Agency from the Inside

A state worthy of the name has no friends - only interests.- French President Charles de Gaulle, 1962, paraphrasing Britain's Lord Palmerston, 1848

The agency's name is absent from the address board in the lobby. But on the fifth floor of an unassuming office tower at Ottawa's Billings Bridge Plaza - right beside a local Zellers - are several sub-offices of the Communications Security Establishment, Canada's most secret and least-accountable spy service. "Communications Security Establishment?" asks an Ottawa directory assistance operator. "We don't have a telephone listing under that name." The faxes that the CSE sends do not carry a return fax number. Its letterhead address is the anonymous sounding P.O. Box 9703.

In fact, the CSE's main headquarters in the Sir Leonard Tilley Building at 719 Heron Rd. houses most of the agency's 875 civilian employees. Many sit for hours under headphones, gazing at computer screens at desks that are grouped according to the regions of the world whose airwaves they monitor electronically. Here, mathematicians and linguists, political scientists and engineers collect and analyse foreign signals intelligence - known as SIGINT - for the CSE's "clients": the Prime Minister, the department of foreign affairs and international trade and other government departments. Set up in 1941 to decode enemy telegraphy and radar, the service's technology has now evolved to cover cellular telephones, faxes and even emissions from computer screens or electric typewriters. "There isn't a thing that's radiating that they can't get," says Mike Frost, a former undercover agent with the service.

While most Canadians are aware of the domestic security activities of the 12-year-old CANADIAN SECURITY INTELLIGENCE SERVICE, few had heard of the foreign-focused CSE before 1994, when Frost published his Cold War memoir of 19 years at the agency. Then, last November, former CSE linguist Jane Shorten revealed on national television that Canada had, since 1990, also spied on friendly nations Japan and South Korea for economic reasons, as well as on free-trade partner Mexico during negotiations leading up to the 1992 North American Free Trade Agreement. "My colleagues who were Spanish linguists were working really hard at that, doing extra hours," remembers Shorten. Indeed, the CSE has, in one guise or another, conducted electronic eavesdropping on a global basis since the Second World War, with virtually no parliamentary oversight. The first time the government publicly acknowledged the agency's existence was in 1983.

Shorten and Frost are the only former employees who have risked breaking their pledge under the Official Secrets Act to speak publicly about the surveillance agency. Lawyers correctly predicted that the CSE would rather ride out a few days of bad publicity than face more information coming out during a trial. Although the two support Ottawa's involvement in intelligence-gathering, both came to believe that the CSE's activities cross the line of what is acceptable. "It was going into the privacy of Canadians' communications," Shorten says. "I was getting physically sick over it. It was so stressful." Frost says he was coming out of an alcoholism recovery program when the agency retired him six years ago - his office already cleaned out and locks changed before he even heard his fate. All prospective CSE employees undergo an exhaustive security check before joining the agency. Once hired, they are not allowed to talk about their work, to travel abroad without filing an itinerary or to move in with a romantic partner without reporting it to superiors. Frost says his family life suffered from his clandestine work +setting up signal-collection stations at Canadian embassies around the world - among them Moscow, Bucharest, Caracas and New Delhi.

In his book Spyworld: How C.S.E. Spies on Canadians and the World, co-written with Michel Gratton, a former spokesman for former prime minister Brian Mulroney, Frost also describes more dubious operations: eavesdropping on Margaret Trudeau in 1975 to find out if she smoked marijuana; monitoring two of former prime minister Margaret Thatcher's dissenting cabinet ministers in London on behalf of Britain's secret service; and collecting information about Quebec separatism - chiefly by tapping into the Parti Québécois government's communications with France and other countries - in a section known as "the French Problem." CSE has roundly denied the Quebec claims, a rare departure; otherwise, it has issued a terse "no comment" to assertions by Frost and others. Allegations are virtually impossible to confirm independently, since every operation the agency carries out is known only to those who work on it. Says Shorten: "The person down the hall, you don't know what they're doing. It's all on a need-to-know basis." Citing policy and national security, the CSE declined a Maclean's request for interviews and said it had chosen not to respond to any of the 32 questions the magazine submitted by fax.

For Shorten, the moment of truth came in 1991, some time after she transferred from the Russian section to N2, or "rest of the world." Her job was to translate South Korean "intercept" as part of a project code-named Aquarian. At first, Shorten scanned diplomatic communications - Korean reaction to meetings with Canadian trade officials about the CANDU nuclear reactor, for example. Then, her tasks changed to include monitoring all telephone and fax traffic in and out of the South Korean Embassy in Ottawa, which included conversations of locally hired Canadian staff. "That's where I drew the line," says Shorten. "I said 'Look, this is Canadian content now,' because anyone could phone up the South Korean Embassy and I would have it on tape." Shorten says she clashed with her supervisor when she expressed discomfort with the work and asked for guidelines on what to report.

One of the first things Shorten heard was a conversation between a Canadian woman and her doctor about gynecological problems. "I was just appalled. I talked to the senior linguist and said, 'I can't believe this, it's outrageous, I shouldn't be listening to this.' " Ultimately, after a prolonged leave of absence, Shorten was officially dismissed in 1994.

Frost, who now travels the country speaking to luncheon groups about Canadian intelligence issues, insists it was a sense of ethics that moved him to disclose the questionable CSE capers that he knew of. "If the taxpayers are paying three quarters of a million dollars a day for it, Canadians have a right to know," he says. The CSE's official budget, buried within the defence department's financial figures, is $116.8 million this year. But the military provides an additional 1,100 people and much equipment, bringing CSE's employee count to within about 100 of CSIS's 2,077 and its total expenditure - estimated at nearly $250 million - to 1 ½ times the current CSIS outlay. The CSE's formidable resources include a Cray supercomputer, which at the time of purchase in 1985 was the most powerful data-cruncher in the country. After upgrades and maintenance, CSE had, by 1994, spent more than $34 million on that machine alone. Despite the end of the Cold War and government belt-tightening, a $35-million, windowless extension to the main CSE building was completed in 1992, creating what is known in spy circles as a "Tempest-proof" structure, impenetrable to outside surveillance equipment. Connected by an underground tunnel is yet another smaller building where experts on codes and ciphers work on securing all Canadian government communications against interception. That division, known as INFOSEC, accounts for about 20 per cent of the CSE's total operations, officials have said in the past.

It is impossible to know the current budget breakdown. Unlike CSIS, which was set up under an act of Parliament and is answerable to an independent review committee, the CSE has no mandate beyond one paragraph in a 1975 cabinet order. It also had no system of review until Defence Minister David Collenette appointed a watchdog commissioner in June, after years of outside pressure. The agency's current chief, Stewart Woolner, answers to Margaret Bloodworth, deputy clerk of the Privy Council Office, on matters of policy, and to Collenette on its budget. But defence ministers - some by their own admission - have most often been outside the loop. "In theory, the minister of national defence is accountable to the House of Commons for the money. But on a day-to-day basis, he or she would never be involved in the operations," says Derek Lee, Liberal MP for Scarborough/Rouge River, one of those who has pushed for an accountability mechanism.

Now, former Quebec chief justice Claude Bisson has just set up an office in downtown Ottawa with three newly hired staffers to help him in his part-time position as CSE commissioner. Bisson, who has a budget of $500,000, is to report annually to Collenette, who will in turn report to Parliament. A veteran of three judicial inquiries, Bisson is supposed to make sure the CSE stays within the law and does not abuse its considerable power. But already critics have complained that the new measure does not go far enough. "I don't have high hopes," says Shorten. "If something is in the interest of national security, it may not all be reported. They always get out of it with 'national security.' " Bisson confirmed he must first vet his reports with Bloodworth, who acts as deputy minister for CSE, before he submits them, but he insists he does have some clout. "Everything is supposed to be open to me," Bisson says, adding that he will alert the attorney general if there is something that concerns him.

Bill Robinson, a researcher at the disarmament group Project Ploughshares in Waterloo, Ont., complains that the commissioner's status is not enshrined in law, that the job is carried out by one individual rather than an arm's-length panel, and that his mandate is merely to check legality. "You can do a significant amount of invading privacy that is legal but isn't appropriate," says Robinson. "There could be much better safeguards in place against spying on Canadians."

Government agencies must get a court warrant to tap into telephone calls, faxes or other "private" communications within Canada. But under long-existing laws, the CSE needs no court order to monitor text or radio messages that begin or end outside Canada. The legality of cross-border telephone eavesdropping is less clear. Another wrinkle is that, even inside Canada's borders, cellular telephones can legally be intercepted - although certain uses of gleaned material is unlawful. The privacy of electronic mail has yet to be legally tested.

Further, even if the CSE operates entirely within the law on Canadian soil, its close relationship to spy organizations in the United States, Britain, Australia and New Zealand can still allow it to circumvent the rules. Frost, for one, says CSE has carried out missions for both London and Washington that they deemed too delicate domestically to be handled by their own intelligence agencies. "Why not the reverse, especially in the case of Quebec?" he asks. He also says the CSE purchased Scandinavian interceptions of French communications to gain information about Quebec separatists.

Commissioner Bisson, who had hardly heard of the CSE before being asked to accept his three-year appointment, says this is the type of issue he intends to examine. "They cannot do indirectly what they are forbidden to do directly," he asserts. In a rare 1995 appearance before the standing committee on national defence, Bloodworth reiterated the organization's standard response to such questions. "CSE does not in any part of its collection target Canadians, or the communications of Canadians," she said. "A fundamental part of the agreements we have with our close allies is that we do not target each other and we do not ask each other to target our own citizens either."

Still, the practice of exchanging material goes back decades. Until recently, the CSE functioned as a virtual branch office of Washington's National Security Agency, which has 38,000 people on its payroll. One large satellite dish stationed outside the CSE's Ottawa headquarters is dedicated exclusively to messages to and from NSA headquarters in Fort Meade, Md. Numerous CSE employees have done training there. For years, Canada got a lot more than it gave to the partnership, until increasing pressure from the NSA, along with bountiful financial and technical inducements, persuaded the CSE to take a more activist role. By the late 1980s, Canada had become a major player. During the last few years of the Soviet regime, says Frost, the CSE even took over the interception of all Moscow-based signals on behalf of the United States and Britain, whose listening operations in the capital had been jammed by Soviet intelligence experts.

Ottawa's move to the big leagues may have come in the nick of time. Since the collapse of the Soviet Bloc six years ago, a higher priority has been placed on economic intelligence - a sphere where even the best political allies never give away their secrets. "A few years ago, the CSE had recruitment ads for university students in psychology and humanities. Now, they are looking for graduates in economics, commerce and business. Five to 10 years ago, that wouldn't have figured into it," says Reg Whitaker, a political science professor at Toronto's York University. Whitaker points out that Shorten's reports of economic spying surfaced at a time when the government is putting top priority on trade. Prime Minister Jean Chrétien will make his third "Team Canada" deal-making mission to Asia early next year, this time to the Philippines, Thailand and South Korea.

But in the absence of an obvious enemy like nuclear-armed Soviet communism, the ethics of modern-day spying are far less clear-cut, as Shorten found. Today, she remains unemployed and is considering going back to school, to put her CSE years behind her. "All I wanted to do was show Canadians what the CSE was all about, and that it is dangerous," she says of her decision to speak out. "Somebody should be looking over their shoulders."

To be sure, the agency has become slightly more open in recent years. Its budget has been cut by about 10 per cent since the heady Cold War days, chief Woolner testified to a parliamentary committee last year. In an effort to raise funds, the INFOSEC side has begun consulting to the private sector on how to secure corporate communications. Yet there is no sign - and no reason to expect - that CSE will curb its increasingly complex operations at a time when many experts believe the world has in fact become less secure. Terrorists, organized criminals and money launderers have discovered that Canada is a choice base from which to run international operations. And, as Woolner confirmed in his testimony, trade has become a prime component of the new national interest.

"Knowledge is power," says MP Lee. "When we as Canadians sit down with another country to negotiate an agreement, our negotiators must be possessed of as much knowledge as they can get their hands on. There isn't a country in the world that wouldn't do that." But whether that information should be obtained meticulously from open sources or gleaned clandestinely is a matter of debate. To Lee, "Canadians have a sense of morality. They don't want to be bad guys." He believes they want their spies to obtain "as much information as they could covertly without breaking major rules or embarrassing anyone." Perhaps too, many are just as happy that the CSE, with its troubling tactics, is as secret as it is.

See also INTELLIGENCE AND ESPIONAGE.

Maclean's September 2, 1996