US Pentagon mulls covert spy network to target China’s economy: Report

Washington: The Pentagon is planning a deep-cover intelligence programme aimed at conducting economic warfare against China and other US competitors, according to a report in The Washington Post. The US Defence Department has denied that any such initiative is underway.

Citing six people familiar with the initiative, the report said US operatives could work undercover as businesspeople or other private-sector personnel, without any visible affiliation to the US government.

The programme would involve “nonofficial cover officers”, or NOCs, and is intended to form a covert part of the Pentagon’s broader economic warfare campaign. It is currently in the planning stage and is not operational, the report said.

The initiative is being overseen by Tom Rakusan, a 39-year CIA veteran who now serves as senior adviser to Deputy Defence Secretary Steve Feinberg, according to the report.

Rakusan retired from the CIA in 2021. He became deputy director of operations, the agency’s top spy-running post, in 2017 and later led the CIA’s response to Russian interference in the 2016 US presidential election.

The report said experts from the military service branches, the Office of the Under Secretary for Intelligence and Security and retired CIA officials have been involved in planning the programme.

The Defence Department rejected the report. Deputy press secretary Jacob Bliss said the claims were “simply not true” and accused those providing the information of being misinformed or deliberately misleading.

The CIA declined to comment, while Rakusan did not respond to a request for comment. The report added that congressional committees do not appear to have been briefed on the initiative.

The Washington Post said the Trump administration has made economic warfare a central tool of statecraft through tariffs, export controls, investments in critical resources and technologies, and a greater focus on economic intelligence.

In a September speech, CIA Deputy Director Michael Ellis reportedly said the United States was expanding espionage against China, targeting Chinese companies in areas including artificial intelligence, biotechnology and advanced semiconductors.

The Pentagon also established an Economic Defence Unit this year, which has invested in oil and mineral ventures, including 750 million dollars towards a major rare earth mine in Brazil. The report said there were early discussions about placing the spy programme under this unit, but the idea was shelved amid media and congressional scrutiny.

Former officials told the newspaper that deep-cover spying presents major challenges for the Pentagon. Military service records are difficult to conceal, while biometric data and other digital traces have made operating under an alias increasingly difficult.

The legal authority under which such a programme could function also remains unclear. The CIA has traditionally treated overseas human intelligence operations as its own domain, and a former senior CIA official accused Rakusan of attempting to build a separate version of the agency within the Defence Department, according to the report.

(Inputs from IANS)