- The Washington Times - Monday, May 7, 2007

ASSOCIATED PRESS

An odd-looking Canadian coin with a bright red flower was the object behind a U.S. Defense Department false espionage warning earlier this year about mysterious coinlike objects with radio frequency transmitters, the Associated Press has learned.

The harmless “poppy coin” was so unfamiliar to suspicious U.S. Army contractors traveling in Canada that they filed confidential espionage accounts about them. The worried contractors described the coins as “anomalous” and “filled with something man-made that looked like nano-technology,” according to once-classified U.S. government reports and e-mails obtained by the AP.

The silver-colored 25-cent piece features the red image of a poppy — Canada’s flower of remembrance — inlaid over a maple leaf. The unorthodox quarter is identical to the coins pictured and described as suspicious in the contractors’ accounts.

The supposed nano-technology was a conventional protective coating the Royal Canadian Mint applied to prevent the poppy’s red color from rubbing off. The mint produced nearly 30 million such quarters in 2004 commemorating Canada’s 117,000 war dead.

“It did not appear to be electronic (analog) in nature or have a power source,” wrote one U.S. contractor, who discovered the coin in the cup holder of a rental car. “Under high power microscope, it appeared to be complex consisting of several layers of clear, but different material, with a wire like mesh suspended on top.”

The confidential accounts led to a sensational warning from the Defense Security Service, an agency of the Defense Department, that mysterious coins with radio frequency transmitters were found planted on U.S. contractors with classified security clearances on at least three separate occasions between October 2005 and January 2006 as the contractors traveled through Canada.

One contractor thought someone had placed two of the quarters in an outer coat pocket after the contractor had emptied the pocket hours earlier. “Coat pockets were empty that morning, and I was keeping all of my coins in a plastic bag in my inner coat pocket,” the contractor wrote.

But the Defense Department subsequently acknowledged that it could never substantiate the espionage alarm that it had put out and began the internal review that turned up the true nature of the mysterious coin.

In Canada, senior intelligence officials expressed annoyance with the American spy-coin warnings as they tried to learn more about the oddball claims.

“That story about Canadians planting coins in the pockets of defense contractors will not go away,” Luc Portelance, now deputy director for the Canadian Security Intelligence Service, wrote in a January e-mail to a subordinate.

Intelligence and technology specialists were flabbergasted over the warning when it was first publicized earlier this year. The warning suggested that such transmitters could be used surreptitiously to track the movements of people carrying the coins.

“I thought the whole thing was preposterous, to think you could tag an individual with a coin and think they wouldn’t give it away or spend it,” said H. Keith Melton, a leading intelligence historian.

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