Financial Cryptography

Unwinding secrecy -- busting the covert attack

Have a read of this. Quick summary: Altimo thinks Telenor may be using espionage tactics to cause problems.

Altimo alleges the interception of emails and tapping of telephone calls, surveillance of executives and shareholders, and payments to journalists to write damaging articles.

So instead of getting its knickers in a knot (court case or whatever) Altimo simply writes to Telenor and suggests that this is going on, and asks for confirmation that they know nothing about it, do not endorse it, etc.

Who ya bluffin?

...Andrei Kosogov, Altimo's chairman, wrote an open letter to Telenor's chairman, Harald Norvik, asking him to explain what Telenor's role has been and "what activity your agents have directed at Altimo". He said that he was "reluctant to believe" that Mr Norvik or his colleagues would have sanctioned any of the activities complained of.

.... Mr Kosogov said he first wrote to Telenor in October asking if the company knew of the alleged campaign, but received no reply. In yesterday's letter to Mr Norvik, Mr Kosogov writes: "We would welcome your reassurance that Telenor's future dealings with Altimo will be conducted within a legal and ethical framework."

Think about it: This open disclosure locks down Telenor completely. It draws a firm line in time, as also, gives Telenor a face-saving way to back out of any "exuberance" it might have previously "endorsed." If indeed Telenor does not take this chance to stop the activity, it would be negligent. If it is later found out that Telenor's board of directors knew, then it becomes a slam-dunk in court. And, if Telenor is indeed innocent of any action, it engages them in the fight to also chase the perpetrator. The bluff is called, as it were.

This is good use of game theory. Note also that the Advisory Board of Altimo includes some high-powered people:

Evidence of an alleged campaign was contained in documents sent to each member of Altimo's advisory board some time before October. The board is chaired by ex-GCHQ director Sir Francis Richards, and includes Lord Hurd, a former UK Foreign Secretary, and Sir Julian Horn-Smith, a founder of Vodafone.

We could speculate that those players -- the spooks and mandarins -- know how powerful open disclosure is in locking down the options of nefarious players. A salutory lesson!

Posted by iang at November 20, 2008 06:25 PM | TrackBack