Gold Nuggets? The Puzzling Tolerance of Official Cover Espionage

• In Event: Intelligence in Democracies: Dynamic or Dormant

Abstract

Spying can be costly for its victims. States can lose military, political, and economic advantages. Given these costs, it is unsurprising that that states make considerable efforts to prevent it. Yet despite these risks and states’ investments in counter-espionage, states simultaneously tolerate official cover espionage by other states—even determined enemies. This was vividly demonstrated in the weeks after the Russian invasion of Ukraine, when dozens of Russian spies with official cover were expelled from European states. Likewise, many US embassies are known to include CIA stations. Punishments for official cover espionage are minimal.

This paper argues that states tolerate espionage because it offers two extremely important benefits. The first is the potential for novel information about what other states’ intentions and capabilities. Often talked about under the guise of ‘strategic warning,’ novel information helps states avoid nasty surprises.

The second, perhaps more important, is that espionage can generate credible information. Credible information is difficult for states to come by in international relations. The opportunity to gain credible information about other states—and for them to gain credible information about one’s own intentions and capabilities—make states willing to tolerate the costs of being spied upon.

These arguments are examined empirically through an analysis of the Reagan Administration’s 4 year long response to official cover espionage—termed “hostile presence” in the lingo of the administration—which lead to a significant executive order and eventually the highly unusual expulsion of 85 Soviet diplomats in 1986 (‘Operation Famish’).

Author

• Thomas M. Dolan, University of Central Florida