German Intelligence Connection in Lernout & Hauspie Scandal

According to a belgium newspaper the BND tried to obtain advanced language technologies through a network of front companies

What first seemed to be an ordinary story about creative bookkeeping, speculation and greedy managers, now turned into the disclosure of a secret project by the German intelligence service to get advanced technologies for interception purposes. A Belgian company, Lernout & Hauspie, is the leading actor in an European espionage scandal, as the Belgian paper De Standaard revealed last week.

Lernout & Hauspie (L&H) is a Belgian company that is specialised in all kind of language technologies. L&H was a booming business, mostly because it got some great deals with thirty smaller companies. These so called Language Development Companies (LCD's) paid a huge amount of money to get licences for using technology developed by L&H. These business deals rocketed the price of L&H shares sky high, which gave L&H the opportunity to buy some big companies, like Dictaphone and Dragon. But the American paper Wall Street Journal found out that these LCD's where in fact launched by close business partners of L&H and accused L&H of fraud. The revelations by the Wall Street Journal led to an investigation by the American watchdog SEC.

Further investigative journalism by the Belgian newspaper De Standaard however led to the disclosure of an espionage connection in the fraud scandal. The newspaper tried to figure out why the LCD's were specialised in developing language tools for commercially irrelevant languages like Hindi, Farsi and Turkish. The answer was simple: those languages are very interesting for intelligence services, to analyse intercepted foreign communications.

De Standaard found out that one of the grounders of the LCD's was Stephen Bodenkamp, whose real name is Christop Kionowski. Bodenkamp/Kionowski is an agent of the German intelligence service BND. The BND has got a cell that is specialised in language technology. Stephan Bodenkamp is 'technical director' of this department and monitored for years the international market of language technologies. Officially Bodenkamp works for the Amt für Auslandfragen (AFA) in Munchen, which according to De Standaard is a front for the BND.

Bodenkamp worked closely together with a former Belgian banker, Frans van Deun. Van Deun used his company, Radial Belgium, to support the establishment of the LCD's. Radial Belgium is connected to the German company Radial Sprachtechnologie GmbH in Munich. According to De Standaard, the German Radial and its network of companies was created in 1997 by Bodenkamp and other top officials from the intelligence service. The aim of the Radial network is to build a secret bridge between police and intelligence services, developers of strategically important technologies, and investors.

The concept is simple: the front companies of the intelligence service promised the companies which developed interesting technologies financial support, markets for their technologies and a helping hand in getting orders from other government agencies. It was supposed to be a win-win situation. The BND got first class technology, which it couldn't develop itself because of the huge development costs. The companies got the money to develop their technologies. Companies like L&H could book the license agreements with the LCD's as earnings and push up the value of their stocks.

But sloppy bookkeeping of some LCD's and investigative journalism of the Wall Street Journal and De Standaard put an end to the fairy tail. The spy connection was revealed when Bodenkamp was sentenced a few weeks ago by a German court for the forgery of a contract with the German company Polygenesys, which develops technology to scan and analyse huge amounts of information. The sentence revealed the real name and function of Bodenkamp.

Meanwhile, Bodenkamp is suspended from the BND. But Bodenkamp isn't the only one who suffers from the scandal. L&H now face bankruptcy. The European Commission has an interesting problem, because Bodenkamp was also the co-ordinator of the Sensus project. This project financed by the European Commission, is aimed at the development of language technologies which must facilitate the co-operation and information exchange between European police and intelligence agencies. The headquarter of the Sensus project is based at the same address as Radial Sprachtechnologie GmbH. Sail labs, the spin-off from L&H, is one of the leading partners in this research project.

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