Canadian spy coin case baffles observers

A U.S. defence report claiming Canadian coins were used as surveillance devices has raised security concerns and a few eyebrows since it became public knowledge this week.

A U.S. defence report claiming Canadian coins were used as surveillance devices has raised security concerns and a few eyebrows since it became public knowledge this week.

The report, entitled Technology Collection Trends in the U.S. Defence Industry, listed the use of Canadian currency in an appendix on recent cases.

"On at least three separate occasions between October 2005 and January 2006, cleared defence contractors' employees travelling through Canada have discovered radio frequency transmitters embedded in Canadian coins placed on their persons," reads the brief explanation in the U.S. Defence Security Service report.

The story of the coins was little more than an appendix inthe recently declassified report until a U.S. newspaper picked it up.

Jeff Richelson, a researcher and author of books about the CIA, was skeptical of the incident, saying coins would be a poor choice as a tracking device because of their high turnover rate.

"It wouldn't seem to be the best place to put something like that; you'd want to put it in something that wouldn't be left behind or spent," said Richelson.

"It doesn't seem to make a whole lot of sense."

An unnamed U.S. official also told the Globe and Mail the incidents have been blown out of proportion, saying odd-looking Canadian coins triggered suspicions but that the fears were groundless.

But the U.S. Defence Security Service,which works with defence contractors to protect them from espionage, defendedits findings.

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

The report doesn't detail who might be tracking the defence contractors, how the ruse was discovered or any detail about how the transmitters functioned.

CSIS not aware of incidents

The Canadian Security Intelligence Service said it knew nothing of the incidents.

"This issue has just come to our attention," CSIS spokeswoman Barbara Campion told CBC News Online. "At this point, we don't know of any basis for these claims.

"Canadian agencies, including CSIS, work closely with their U.S. counterparts to address potential threats. If further action is required on this issue, we will follow up with U.S. counterparts," she said.

A radio frequency identification device (RFID) can be embedded in anything from humans to clothing to credit cards and can emit a signal on its own or activate and send a signal in response to radio waves.

A RFID tag or chip small enough to hide in a coin would likely not have its own power source and would likely have a limited range, making its use as a tracking tool questionable.

With files from the Associated Press