From Russia (Without U.S. Love): CEO Accused of Illegally Exporting Sensitive Microelectronics to Russia
It seems Cold War spy plots and James Bond come and go, hand-in-hand.
Last week James Bond celebrated 50 years in cinema, shaken/not stirred. And, at the same time as this celebration, an indictment was unsealed in the U.S. District Court for the Eastern District of New York. The indictment stated eleven unregistered Russian agents were involved in illegally exporting microelectronics from the U.S. to Russia. Alexander Fishenko, the president and CEO of Houston-based Arc Electronics, Inc., was charged with violating exportation laws and wire fraud.
James Bond’s sophomore feature film From Russia With Love (1963) and last Wednesday’s indictment share a common twist: A country’s military technology will arrive at the same center – international tension.
Movie-wise the aptly-named “Lektor,” a cryptographic device, was the object of concern in From Russia With Love. And Fishenko is accused, last Wednesday, of establishing exporting companies which provided Russia with microelectronic technology – “analog-to-digital converters, static random access memory chips, microcontrollers and microprocessors” that have “applications, and are frequently used, in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers.”
A legal ball of wax, even for James Bond and MI-5.
Fishenko’s criminal defense attorney Eric Reed told reporters that there “are some dramatic allegations in the indictment . . . we want to take a hard look at.” (http:// www.cbsnews.com/8301-201_162-
Reed may have a good point. U.S. Attorney Loretta Lynch stated in her release (http://www.justice.gov/usao/
However, a federal criminal attorney might consider this: If these sensitive microelectronics were illegal to export, were they also illegal to obtain? The release continually argues presumed fact: Fishenko’s businesses misrepresented themselves in order to illegally obtain the goods in question.
But it seems this criminal attorney defensive move all too easily washes U.S. hands of any blame in the matter. Just how easy was it for Fishenko to obtain these goods? And if they were illegal to obtain in the first place, then who – other than the U.S. government, or one of its outfitters – did allow Arc Electronics to obtain them? Will the U.S. be willing to admit that one of its own may be discretely helping Russia? It seems to be the U.S. can only be as hard on Fishenko as it is willing to be hard on itself. In addition, the Russian Foreign Ministry has maintained Fishenko, and others accused, were “not charged with espionage.”
Perhaps Fishenko has not been charged with outright espionage because the U.S. will have a difficult time proving its own agencies are not Russian suitors. In truth, it would take a federal criminal attorney to show how “dramatic” [to quote Reed] these charges are. As the adage goes, when you point a finger, there are four pointing back at you – north, south, east, west.
And to add: This seems like a movie is meeting reality – with a bad script.
IT’S A COLD BREW
Brewing coffee in cold water takes longer . . . but it brews stronger – a more concentrated, caffeinated drink.
And, yes, we all thought the Cold War ended when the Berlin Wall came down. But to the contrary, it seems tensions have been brewing cold for quite some time, with occasional spills like last week’s incident.
And where is this headed? To revisit the matter, does the Fishenko case contextualize or frame a larger, more complex problem?
In his article, “The New Economic Cold War,” Danny Esposito, writing for Investment Contrarians, zooms out – a bigger focus so to speak – to take a look at how the “BRIC” countries (Brazil, Russia, India, China, South America) are moving away from the reserve currency to engage in direct currency trade with each other. (http:// www.investmentcontrarians.com/
Keep in mind, these economic developments are occurring amid civil war in Syria, a country that is a customer of Russian arms. One can sense a chasm widening between the U.S. and its overseas counterparts. A “bridge too far” at this point, despite all the diplomatic gestures?
And also consider this: The sensitive tension between Russia and the U.S. is namely missile defense systems. This yanks us back to an all-too-real Cold War tension, that of the scary threat of nuclear war. (One has to be careful when bringing up this often-used slippery-slope argument, but here it is: it’s quite relevant.) The Associated Press reported Sunday that Moscow believes even a “limited capability against its ICBMs [intercontinental ballistic missiles] could destabilize the balance that deters the United States and Russia from contemplating nuclear confrontation.” (http://www.washingtonpost.
So . . . could these microelectronics have anything to do with ballistic missile defense systems?
But before we get to uppity about some new Cold War, it should be remembered: The reason any of this even entered into the conversation is “look back” . . . look back to the bottom-line question of import-export controls, something which New York attorneys are surely now paying attention to after this indictment came to light.
The District Court’s press release stated “Fishenko and the other defendants engaged in a surreptitious and systematic conspiracy to obtain [microelectronics] . . . while carefully evading the government licensing system set up to control such exports.” The export controls that Fishenko and company are accused of violating include the International Emergency Economic Powers Act (“IEEPA”) and the Arms Export Control Act (“AECA”). Violation of these acts result in import-export crimes that involve the President’s discretion on further action.
If the charged are convicted of alleged crimes, the President, according to the powers enumerated in IEEPA and AECA, could freeze Russian assets and threaten embargoes. Hopefully, it may not come to this. But will this present legal conflagration – and the U.S. trying to flex overseas muscle – spur resentment from Russia? Alexander Lukashevich, spokesman for the Russian Foreign Ministry, told reporters he “lamented the fact that the United States failed to inform the Russian authorities of the impending arrests.” (http://www.cbsnews.com/8301-
It’s difficult to say how these dynamics will affect any developments in U.S./Russia relations. But these aren’t, never were, the calmest of waters – and it’s certainly not difficult to see how the U.S.’s quickness to accuse Fishenko also implicates its own, maybe aniquated, security measures.
Four years of alleged illegal exportation of technology sensitive to national security doesn’t occur without a helping hand from the inside. A federal criminal defense lawyer’s concern would be: Show that Fishenko’s involvement in these transactions was only possible because of U.S. lax export controls, controls more puffery than content.