Risk Management

Spies Like…Us?

An alleged Russian spy, arrested last week by the FBI, attended the CFO Rising Conference in March, where he networked aggressively and focused on ...
Tim ReasonJuly 7, 2010

Among the 346 people who attended the CFO Rising Conference in Orlando in March this year was a prodigious networker named Donald Howard Heathfield, a man the FBI now says was a Russian spy operating under a false identity.

Heathfield and a woman who claims to be his wife, known as Tracey Lee Ann Foley, were 2 of 10 people arrested last week and accused of being unregistered foreign agents in a Russian spy ring operating in the United States. According to the FBI, the long-term goal of each of the individuals was “to become sufficiently ‘Americanized’ such that they can gather information about the United States for Russia, and can successfully recruit sources who are in, or are able to infiltrate, United States policy-making circles.”

Russian spies

Heathfield — or “Defendant #4,” as he is identified in a June 25 FBI affidavit seeking his arrest — registered for the CFO Rising Conference as CEO of Future Map, a company he operated out of his home in Cambridge, Massachusetts.

The FBI affidavit cites an expense report that appears to refer to Future Map as a “business (cover)” on which Heathfield spent $4,900. The expense report was allegedly sent to Heathfield’s Moscow handlers using steganography, a method of hiding text messages in images on publicly available Websites. The same report cites $1,125 spent on a “trip to meeting.” It is not clear from the affidavit what period of time is covered by that expense report, or which meeting it refers to. CFO’s subsequent reporting suggests that Heathfield attended at least two conferences with financial themes, and his LinkedIn profile shows he also was a subscriber to a forum for health-care CFOs.

The arrest of Heathfield and his alleged conspirators has generated a mix of surprise, concern, and some ridicule in the press — the last because of the clandestine, Cold War techniques that the suspects allegedly used to communicate with Moscow, including public bag exchanges, invisible writing, and encrypted Morse code messages. “What was wrong with flying to Europe to meet your control officer once a month?” asked former CIA field officer Robert Baer in a Time.com column. Likewise, networking at business conferences, no matter how enthusiastically done, seemed to many observers a slow and unlikely way to gain access to information that would be of use to a Russian intelligence agency.

Many of the attendees and sponsors contacted by CFO remember meeting Heathfield at CFO Rising, describing him as an aggressive networker, but also as someone whose actual objective seemed hard to pin down.

“I met him early on in the conference, and he was very persistent in trying to reengage,” recalls John Kahn, CFO of a private-equity-backed portfolio company. “I didn’t reengage with him. He just seemed slightly strange.” Kahn still has Heathfield’s business card, which folds out to twice the size of a normal business card and contains a somewhat inscrutable description of the company’s mission: “Future Map gives leaders a synthetic ‘big picture’ of anticipated future. Future Map helps building proactive collaborative leadership cultures.”

“He started talking to me, and I couldn’t shake him,” says Frank Quigley, CEO of CFO Publishing, who remembers Heathfield approaching him in a hallway outside the meeting rooms and seeking introductions to specific conference speakers and attendees. “There was no doubt in my mind when I saw his photo that I recalled the encounter and the persistence of it, and the vagueness of who he was.”

Thomas Roberts, director of the Corporate Finance Practice at the Corporate Executive Board, says Heathfield attended a CEB-sponsored breakfast roundtable. “He gave me his card and was trying to see if he could find a way to partner with CEB to use one of his mapping tools in our offering,” recalls Roberts, who says he subsequently never heard from Heathfield.

John Swirsding, senior manager in the Philadelphia office of accounting firm ParenteBeard, says Heathfield sat next to him at a lunch break and introduced himself to several people at the table as CEO of a “very small” consulting firm that helped companies develop performance-management systems.

“He was very forward with me in looking to develop a relationship with what seemed to me to be a legitimate business purpose,” says Swirsding. “To me, the guy seemed like a gentle human being. Very friendly. I’m hard pressed to picture him as he’s being shown.” Swirsding says he did not follow up with Heathfield, in part because Heathfield’s description of his own company’s size meant it would not be able to meet ParenteBeard’s needs. “But he was well educated and versed in topics of performance management and came across like he had some real insights to share,” says Swirsding.

Mona Leung, CFO of Alliant Credit Union, did not encounter Heathfield when she attended CFO Rising, but says she ran into him the following month at the Risk and Insurance Management Society’s annual conference in Boston. RIMS conference officials contacted by CFO confirm that Heathfield did attend the April conference and was a member of the association. Leung, who says she sat next to Heathfield at a RIMS lunch workshop, assumed Heathfield was European, though the FBI’s affidavit says he “purports to be a naturalized United States citizen, born in Canada.” Leung adds that Heathfield was “very interested in scenario planning and risk management.” According to The Boston Globe, Future Map purported to offer software that helps companies with strategic planning.

Indeed, Heathfield registered for four workshops and two roundtables at CFO Rising that focused primarily on risk management and strategic planning, including:

  • A CFO’s Role in Implementing Integrated Governance, Risk, and Compliance
  • IBM Global CFO Study 2010
  • What Is Business Intelligence Missing?
  • Who Will Prevail in 2010 — Confronting Six Enemies of Post-Recession Performance
  • Transformative Change: A Road Map for Turning Strategy into Operational Plans
  • Deploying Predictive Risk Analytics and Targeted Business Intelligence

Multiple news sources reported Wednesday that Heathfield and his wife had waived their right to contest a transfer from Boston to New York, a move the Associated Press reported might result in the two being repatriated to Russia as part of a “spy swap.”

Senior editors David McCann and Alix Stuart contributed reporting to this story.