Washington, Oct 22 — The Pentagon is looking to build a more robust deep-cover spying programme to conduct economic warfare against China and other US competitors, The Washington Post reported, citing half a dozen people familiar with the initiative. The Defence Department has denied that any such effort is underway.
Under the planned programme, US operatives would go undercover as businesspeople or other private-sector personnel, without any overt US government affiliation, the newspaper said. It is intended to be a covert prong of the Pentagon’s larger economic warfare campaign, the people told the Post.
The programme of “nonofficial cover officers”, or NOCs, is being overseen by Tom Rakusan, a 39-year CIA veteran who is now senior adviser to Deputy Defence Secretary Steve Feinberg, according to the report.
Rakusan, who retired from the CIA in 2021, rose in 2017 to deputy director of operations, the agency’s top spy-running post, and later led the CIA’s response to Russia’s interference in the 2016 presidential election, the Post said.
Experts from the military service branches and the Office of the Under Secretary for Intelligence and Security, as well as retired CIA officials, have been brought in to work on the initiative, the report said. The programme is in the planning phase and is not operational, the people said.
Where it will sit inside the Pentagon remains unclear. It could function as a new stand-alone deep-cover unit or as an expansion of existing Pentagon clandestine human intelligence capabilities, according to the Post.
The Defence Department rejected the report.
“This query appears to be built on information that is simply not true,” Pentagon deputy press secretary Jacob Bliss said in a statement to the newspaper. “Whoever is feeding you these claims are either badly misinformed or deliberately leading you astray to paddle [sic] their fantasies.”
The CIA declined to comment, and Rakusan did not respond to a request for comment, the Post said. Congressional committees do not appear to have been briefed on the initiative, it added.
The Trump administration has embraced economic warfare as a key tool of statecraft, imposing tariffs and export controls, investing in critical resources and technologies, and prioritising economic intelligence, the newspaper noted.
In a September speech, CIA Deputy Director Michael Ellis said the United States was broadening its espionage against China, targeting Chinese companies in areas such as artificial intelligence, biotechnology and advanced semiconductors, according to the Post.
The Pentagon also set up an Economic Defence Unit this year, which has put money into oil and mineral ventures, including $750 million towards a major rare earth mine in Brazil. There were early discussions about placing the spy programme under that unit, but the idea was shelved amid growing media and congressional scrutiny, the Post reported.
Former officials told the newspaper that deep-cover spying poses multiple challenges for the Pentagon. Military service records are difficult to hide, and biometrics and other “digital dust” have made working under an alias increasingly fraught, they said.
The legal authority under which the programme might operate also remains murky, the people familiar with it said.
The CIA has historically treated overseas human intelligence operations as its own domain. A former senior CIA official accused Rakusan of trying to build his own version of the CIA inside the Defence Department, the report said.