Washington, D.C. 8-8-2018


An investigation of the U.S. Government intelligence community reports that the National Security Agency (NSA) in league with other Federal agencies are bypassing the Foreign Intelligence Surveillance or FISA Court to conduct intelligence gathering operations against U.S. citizens.

The FISA Act strictly prohibits the NSA, FBI and other Federal agencies from targeting ordinary American citizens residing in the U.S. to gather intelligence. “The actions of the intelligence community violate the Constitutional principles upon which our nation was founded. No matter what your political persuasion, these reports are extremely troubling,” said John Hnatio. Hnatio is the Executive Director of the Institute for Complexity Management, or ICM, that provides pro bono help to small businesses that become the victims of unfair U.S. Government competition.

ICM is investigating reports that various U.S. intelligence agencies have been conducting so-called “black” programs to misappropriate advanced technologies from small companies for secret use in highly classified military and intelligence programs. “The U.S. intelligence apparatus is wantonly violating the very Constitutional principles upon which our nation was built by stealing from America’s best and brightest entrepreneurs,” Hnatio declared.

Hnatio ought to know. For thirty years he worked for the secretive National Nuclear Security Administration (NNSA) conducting security and nuclear proliferation investigations, doing intelligence work and identifying and working with small businesses to commercialize their advanced technologies. He was even a loaned executive from the Department of Energy (DOE) working for Senator Pete Domenici. Hnatio helped to draft technology transfer legislation and the rules the ten DOE national labs are supposed to be using as they work with industry.

Hnatio and ICM have been conducting a multi-year investigation into the matter of a small New Jersey-based company called Demodulation. Demodulation developed highly advanced products that use microwire radio-frequency (MWRF) integrated technology. MWRF products are thinner than a human hair and give off a burst of energy every time they are moved in the earth’s magnetic field. They need no batteries to operate and their signals can be detected at both near and far distances—even by satellites in space. These characteristics make the Demodulation technology ideal for military, intelligence and counterterrorism uses.

“We have found incontrovertible evidence of three unconstitutional intelligence operations mounted by the U.S. Government specifically targeting Demodulation all in a misplaced effort to steal their technology,” Hnatio reported.  ICM reports that Demodulation was the victim of the U.S. Navy as part of a massive “pay-to-play” grant fraud scheme being orchestrated by Federal and State of New York officials.

The Federal and New York State Governments invest nearly a billion dollars of taxpayer funds every year to bring small business entrepreneurs together with large industry at economic development centers across New York State. The purpose of these programs is to spur economic development to produce high paying jobs for workers in New York. But the results of a recent study published by New York’s Empire Development Corporation show that after investing tens of millions of dollars over the last two years only 408 jobs have been created.

“Way back in 2014, we reported that New York State’s economic development programs are riddled with corruption to the FBI—we gave Preet Bharra and the FBI the irrefutable proof but they did nothing because they succumbed to the politicization of the justice system. It wasn’t until years later that the indictments, prosecutions and guilty verdicts we see rolling out of Albany lately started happening,” Hnatio told us.

The ICM investigation also reveals that the NSA and the U.S. Army stole military munitions off the Picatinny Arsenal to test Demodulation’s MWRF products as part of a so-called “black” intelligence operation for testing by the NSA and the Navy at the Patuxent Naval Air Station. The FBI refused to investigate the theft. Finally, the intelligence community “baited” Demodulation into a cooperative research contract with promises to help the small company commercialize their MWRF technology. The DOE at its Y-12 National Security Complex then broke their contract by stealing Demodulation’s MWRF technology and secretly reverse engineering their MWRF products to use them in nuclear weapons. The DOE is an important member of the intelligence community. “Again, the FBI did nothing when we reported what was going on to them,” Hnatio said.

“All of our reports to congressional oversight committees were either ignored and any opportunities for investigation were intentionally shut down by the politicians.  When we tried to report that Federal Judges and the lawyers involved with the Demodulation case were intentionally scuttling Demodulation’s legal cases and obstructing justice as the result of improper Department of Justice (DOJ) and FBI influence, DOJ, another member of the intelligence community, covered everything up. Our investigation provides the irrefutable proof of what really happened—all you have to do is read the facts,” Hnatio concluded.

Revelations that intelligence agencies are bypassing the FISA Court to conduct espionage against U.S. citizens take on special significance with respect to the FBI’s recent use of a bogus “dossier” that they knew was not factual to improperly convince the FISA Court to grant the U.S. Government’s request to surveil U.S. citizens.

ICM recently sent a letter to President Trump, Attorney General Sessions, leaders of Congress and the Supreme Court sharing the results of ICM’s investigative findings. We will keep you informed of developments in this breaking story.

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