Oracle spy work on MS leaves a stink

"Whether it’s using sex or stealing briefcases while you’re out at dinner," US business people, particularly those in high technology with military applications, were often targets when travelling abroad, he said in a telephone interview. But the flap pitting Oracle against Microsoft threw a light on the bitterness dividing the corporate titans vying for dominance of the multibillion-dollar global software market. Oracle chairman Larry Ellison has long been a bitter critic of Microsoft chairman Bill Gates and Microsoft’s competitive tactics.

Oracle, the world’s second biggest software maker, acknowledged on Tuesday it had hired a detective firm to investigate groups sympathetic to Microsoft, the industry leader. The detective agency, the Investigative Group International (IGI), allegedly offered janitors cash for trash from the Washington office of one of the pro-Microsoft trade groups, the Association for Competitive Technology (ACT).

Microsoft condemned Oracle’s involvement in hiring IGI. An ACT spokeswoman, Allison May Rosen, said on Wednesday that her organisation was mulling legal action against both the detective firm and Oracle for alleged dirty tricks. Jeffrey Zuck, president of the association, said he was "shocked" by the purported $1,200 offered to a cleaning crew on June 6, the second such alleged undercover effort in Washington to gather documents that might embarrass Microsoft. Oracle said it had been seeking to uncover links between MS and the groups during Microsoft’s landmark anti-trust battle with the government. "Left undisclosed, these Microsoft front groups could have improperly influenced the outcome of one of the most important anti-trust cases in US history," Oracle said in a statement. The company named after a CIA project that was its first commercial contract said it had no knowledge of any illegal activities by its contractor. It said it had ordered IGI to stick to the law.

IGI founder Terry Lenzner, a one-time Watergate scandal investigator, did not return a telephone call seeking comment, but has said in the past that his firm abides strictly by the law. "Dumpster diving" may not break any US law, but it is just one tactic that may be used by firms or foreign intelligence agencies to gather competitive intelligence on rivals or steal their secrets.

Sex is an old standby, according to investigators. Just this week, the General Accounting Office, the audit arm of Congress, highlighted the use of the tactic to win over US nuclear scientists, even in countries deemed non-threatening to the United States. One US scientist admitted to "extensive sexual contact with women from the host country and another sensitive’ country while on foreign travel," the report said. "This included a prostitute, a waitress and two female employees at the facility where he was visiting."

EC (Mike) Ackerman, a retired CIA operative and president of Ackerman Group, a Miami firm that helps Fortune 100 companies on security issues, said he dealt only in teaching companies to defend their business secrets, "not the other side of the equation.”