Russia’s Skolkovo Espionage Operation – How Kremlin Gained Access To Silicon Valley Secrets

Skolkovo was perhaps the Kremlin’s boldest maneuver yet. Envious of America’s technological success, the Russians sought to re-create the West Coast high-tech industrial hub in the suburbs of Moscow. But unlike the bottom-up innovation that defines Silicon Valley, where computer geniuses pinched their pennies and built the first personal computers in their garages, Skolkovo was a top-down state-run project that sought to replicate decades of trial and error seemingly overnight.

Russia Skolkovo Espionage Operation
Russia’s Skolkovo Espionage Operation – How Kremlin Gained Access To Silicon Valley Secrets

It was also a ploy to steal American intellectual property and transfer technological secrets to the Kremlin.

Former federal prosecutor Andrew C. McCarthy described the Skolkovo scam best: “The project was like an espionage operation in broad daylight, openly enhancing Russia’s military and cyber capabilities.”

Indeed, multiple Defense Department (DOD) agencies and the FBI condemned Skolkovo as an espionage front that posed a clear and present danger to U.S. national security.

In 2012, the U.S. Army Foreign Military Studies Program at Fort Leavenworth examined the security implications of Skolkovo and concluded that Skolkovo was an apparent “vehicle for worldwide technology transfer to Russia in the areas of information technology, biomedicine, energy, satellite and space technology, and nuclear technology.”

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The Kremlin and the Obama State Department praised the civilian endeavors of Skolkovo and its “clusters”—information, energy, biomedical, and even space technology (among other seemingly innocuous initiatives). The promoters of Skolkovo in Moscow and Washington conveniently neglected to mention the military applications.

According to the Army’s Fort Leavenworth report:

The Skolkovo Foundation has, in fact, been involved in defense-related activities since December 2011…the [Kremlin’s] operation of Skolkovo and investment positions in companies will likely provide [Russia’s] military awareness of and access to [American] technologies.

The FBI’s Boston field office sent warning letters to American companies involved with Skolkovo alerting them to the possibility that they had fallen prey to a Russian espionage trap. Assistant Special Agent in Charge Lucia Ziobro went so far as to publicly announce that Skolkovo “may be a means for the Russian government to access our nation’s sensitive or classified research, development facilities and dual-use technologies with military and commercial applications.”

DOD’s European Command (EUCOM) posted an alert that stated, “Skolkovo is arguably an overt alternative to clandestine industrial espionage—with the additional distinction that it can achieve such a transfer on a much larger scale and more efficiently.”

Then EUCOM asked the obvious question: “why bother spying on foreign companies and government laboratories if they will voluntarily hand over all the expertise Russia seeks?”

Former National Security Agency analyst John Schindler was a Navy officer and professor at the War College with deep contacts in the Pentagon. “It’s an obvious Kremlin front,” Schindler’s Pentagon source told him regarding Skolkovo. “In the old days, the KGB had to recruit spies to steal Western technology, now they do deals with you. The theft is the same.”

Skolkovo publicly announced numerous events and programs involving some variation of the word “hack,” including a cash prize “Hackathon,” a “RoboHack,” and the RoboCenter even had a place for Skolkovo visitors to work called a “hackspace.” Each event was, on the surface, rather benign, but the shadowy appeal to actual Russian hackers was undeniable.

Less benign was Skolkovo’s promotion of a hacker conference in St. Petersburg called Positive Hack Days (PHD). The hacker conference made a valiant effort to appear innocuous by stating (in the header), “We do not teach hacking, we learn to protect by understanding the mechanisms of hacking…”

However, the PHD hacker conference clearly did teach hacking. Each of the seminars had obvious cyberespionage implications, such as Sergey Gordeychik’s “How to hack into telecom and stay alive” class and Andrey Kostin’s “PostScript: Danger!” class on hacking PCs—both at noon.

Alexander Peslyak taught “Password protection: past, present and future” at 2 p.m.

The “Using radio noise for hacking…” seminar at 3 p.m. certainly sounded ominous.

Also at 3 p.m., Miroslav Stampar taught “Data Leaks Through DNS,” and advised attendees to “use sqlmap.”

More alarming still, the hacker conference was sponsored by Kaspersky Labs—accused of “helping the Kremlin spy on the U.S. intelligence agencies as part of its 2016 election meddling.”

Kremlin-owned Sberbank (Russia’s oldest and largest bank) later became a sponsor of the PHD hacker conference. Sberbank was particularly close to Putin and bankrolled his oil giant, Rosneft, during the plunder of Yukos oil in 2004.

Sberbank also provided financing for Rosatom investments and enterprises. When Sberbank underwrote a Rosatom affiliate bond offering in 2009, Putin’s nuclear giant obtained newly available funds to finance its investment in Uranium One.

“Sberbank is the Kremlin,” according to a former senior U.S. intelligence official. “They don’t do anything major without Putin’s go-ahead, and they don’t tell him ‘no’ either.”

Excerpt from the new book “Fallout: Nuclear Bribes, Russian Spies and the Washington Lies that Enriched the Clinton and Biden Dynasties.”

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