Transnational Espionage—Australian Defense Officer

An apparent associate of Noshir Gowadia, who we mentioned a couple of weeks ago, is being questioned about his alleged role in the sale of B-2 Stealth bomber technology to foreign powers.^[1] What makes this case especially interesting is that the associate in question is a Defence Materiel Organisation [hereinafter DMO] officer in Australia’s Department of Defence.^[2] Arthur Lazarou “is the subject of an internal Defence investigation over his links” to Mr. Gowadia.^[3] Mr. Lazarou, who is a retired Australian Navy lieutenant-commander, became employed by the DMO only two weeks ago, just after Mr. Gowadia’s arrest, and was a joint director and shareholder with Mr. Gowadia in the Canberra-based company NTech Australia Pty Ltd.^[4]

According to US prosecutors, NTech is one of two companies that allegedly were used “to launder the proceeds of the sale of the military secrets that funded Mr. Gowadia’s lavish lifestyle.”^[5]

Mr. Gowadia has apparently admitted that he “provided classified information to approximately eight named countries,” and that, while he knew it was wrong, he “did it for the money,” and to “establish technological credibility with potential customers for future business.”^[6] The technology that he disclosed concerned the B-2’s ability to reduce its infrared signature in order to foil heat-seeking missiles.^[7]

Mr. Lazarou acknowledged his links to Mr. Gowadia before being hired by DMO, and “denies having any knowledge of his former business partner’s activities.”^[8]

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[1] Michael McKenna et al., Aussie in Spy Scandal, The Australian, Nov. 17, 2005, available here. See also Aussie Implicated in U.S. B-2 Spy Scandal, Free Internet Press, Nov. 16, 2005, available here.
[2] McKenna, supra note 1.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.