An unlikely spy is accused of industrial espionage.

Inside Job 

An unlikely spy is accused of industrial espionage.

The houses on Willowdale Drive all look the same, distinguished only by differing shades of white, gray, and tan. It's a neighborhood of porch swings, basketball hoops, and American flags. Only one yard appears messy enough to be lived in -- and the neighbors are probably uptight about it.

Jack Buffin gave the people of Stow no reason to suspect he was anything other than he appeared. His were the trappings of a typical suburban dad: thinning hair, glasses, and growing paunch that bespoke settling into middle age. He had the requisite wife and three kids, one of whom served as an MP in Iraq. An elder for his Presbyterian church, he occasionally taught the flock how to translate sections of the New Testament from the original Greek.

Even co-workers struggled to describe his job. He worked for Permco, a hydraulic gear-pump maker in Streetsboro, a fast-growing industrial town just off I-480. It was among the rare manufacturers that not only weathered Ohio's limp economy, but flourished, earning $25 million a year and providing 140 jobs. Buffin was manager of special projects, a title accompanied by a six-figure salary, few deadlines, and plenty of latitude.

If the job lacked adventure, at least it provided the comforts of the middle class. But that apparently wasn't enough.

Beneath his affable demeanor, Buffin had been growing increasingly frustrated with the limitations of his job and his company. He felt that Permco invested too little to keep it competitive in an increasingly high-tech climate. He sneered at what he thought to be antiquated machinery, some of which dated back to World War II. So when a more forward-looking rival approached him, it was an opportunity he couldn't turn down.

This, at least, was how he would later explain his actions.

But if you believe a lawsuit filed by Permco, Buffin sold out his company and his co-workers for the promise of more money and more power. Working secretly with a South African competitor, he spent 10 months as a mole inside Permco, allegedly leaking closely guarded secrets and covertly working to establish a local plant for the rival, according to the suit. It is claimed that he even enrolled unwitting Permco employees in the scheme.


Editor Jaime Gerard's streak of oddball individualism is evident in her burgundy hair, lime-green sweater, and busy yet bored expression. She shares a cramped office no bigger than a walk-in closet with the other two employees of the Tallmadge Express, a community weekly. Her desk is a sea of paperwork and empty Diet Pepsi cans. On the shelf above, a phalanx of Lord of the Rings action figures stands guard. Asked whether she's a fan of the movie, she replies, "What was your first clue?"

Gerard noticed something slightly unusual when she attended a city council meeting on September 23. The city announced that Dosco GPM, a South African gear-pump manufacturer, was building its U.S. distributorship in Tallmadge -- hardly the sort of city you'd expect to find on foreign radar.

Though it's grown to house 17,500 people, Tallmadge has retained its small-town feel, from its quaint central green to its pride in the Blue Devils, its state-champion baseball team. While Tallmadge retains a healthy industrial base -- one-fifth of its workforce is in manufacturing -- even city leaders found it baffling that the South African company wanted to operate here. After all, Dosco GPM's other foreign hubs were in London and Sydney.

"You almost wanted to say, 'Are you in the right location?'" says Tallmadge Development Director Pat Sauner.

The choice made more sense once Sauner learned of Jack Buffin. He was the American point man for the project, and he lived in nearby Stow, just a 15-minute commute away.

Besides, city officials knew better than to question good fortune. They went to work securing a generous incentive package that would save the company $35,000 in taxes over the next decade. When the deal was sealed at the council meeting, Tallmadge's long-serving mayor, Christopher Grimm, crowed that it would bring 30 to 35 jobs. "It's nice to see a company move from overseas into the U.S. for a change," he said.

Gerard dutifully filed her story in the Express, a six-paragraph item about another new business. "I went and covered a meeting, and that's it," she says. "I didn't think anything of it."

The article was buried on page four of that Sunday's edition, but it caught the eye of a Permco employee, who thought it was something his boss, Permco President Rick Olszewski, might want to read.

Olszewski is a folksy man with hands like baseball mitts, who bears a passing resemblance to Kenny Rogers. An engineer by trade, he tends to approach life analytically, as a series of math and logic puzzles. "Let's think about it," he'll say. "Let's look at what the problem is and try to figure out the solution."

For him, the newspaper story just didn't add up. The hydraulic-pump business is a small niche industry, with only a handful of major players worldwide. Why would one of Permco's chief foreign rivals open its U.S. distributorship just a stone's throw away, in tiny Tallmadge, Ohio?

Olszewski knew he would need more information to solve this riddle, so he went undercover. He called Gerard, pretending to be an engineer looking for work. "Is there anyone I can contact about getting a job?" he asked.

Gerard helpfully provided the phone number for her contact. But when Olszewski punched it into his cell phone, he received a rude surprise: The number was registered to one of his own employees -- none other than Jack Buffin.

Immediately, Olszewski realized that the situation was far more dire than he had feared. Buffin had spent eight years as Permco's special-projects manager. He knew the company inside and out. Now it appeared that he had been secretly working for the enemy -- and for who knew how long?

"I felt really betrayed," Olszewski recalls. "The people you suspect the least could do this to you."

Frantically, Olszewski called his attorney and explained what he'd learned.

"Rick, do you think he's done anything?" the lawyer asked.

"I don't know," Olszewski said. But he was damn sure going to find out.


Tractor-trailers rumble down Streetsboro's roads, their tires kicking up dirt from nearly finished developments sprouting from vast tracts of leafy land. "For Sale" and "For Lease" signs are everywhere, advertising Ikea-perfect subdivisions with bucolic names like Settler's Landing, symbolized by a duck taking flight.

Permco's plant is in a vast L-shaped building. Signs reading "Positively No Admittance" and "Do Not Enter This Shop Without Eye Protection" surround garage doors left open on a 90-degree day. An industrial fan whirs inside. A man in a grease-stained shirt dips a piece of ductwork into a metal barrel of murky cleaning fluid.

Off to the side, in a squat, no-frills building, is the office where Buffin worked. The lobby displays plaques commemorating Permco's sponsorship of a youth baseball team and the Streetsboro Marching Rockets Band.

The secretary, a polite but assertive woman, thought of Buffin as an affable man, quick with a quip. Ask about him today, and she'll only murmur, "You think you know somebody . . ."

Down the hall is Olszewski's office. It's a rustic, den-like affair -- three rooms in various states of disarray. This is where he summons workers when they need a talking to; he can be a real hardass sometimes, he admits. But Olszewski never had reason to browbeat Buffin. The man went about his duties in a quiet, efficient manner. "When you have a person who's deeply religious, you give them a lot more rope, because you figure he's not going to hurt me," Olszewski says.

Buffin was a model employee -- or so it seemed.

But on October 4, Olszewski summoned Buffin to his office and thrust the Express article in his face.

"Did you have anything to do with this?" Olszewski asked.

"Yes," Buffin said.

"Is there anything you need to tell me?"

Buffin was silent.

A few days earlier, a foreman had told Olszewski of a weird incident. Buffin had led a stranger through the plant late at night. The foreman wouldn't have thought anything of it, except Buffin and his guest weren't wearing safety glasses.

Now Olszewski suspected the worst. "Who'd you bring through the plant?" he asked.

"I'd rather not say," Buffin replied.

Olszewski had heard enough. "You're terminated," he barked. "Clean out your office."

Buffin's work computer -- which Permco quickly seized -- would yield more answers. It revealed that by January 27, 2004 -- fully 10 months before Buffin was discovered -- he was already in contact with GPM. The company had invited Buffin to South Africa to tour its facilities, and the meeting had apparently gone well.

"A short mail to thank you for your visit," GPM Managing Director Ken Barnard wrote in an e-mail to Buffin. "We hoped this would help you understand GPM and be able to make the correct decision."

"I did very much enjoy the trip," Buffin responded. "You should be proud of what you have built over the last several years."

The conversations progressed quickly. The following day, Barnard forwarded an e-mail from another GPM employee, Tony Payne, asking his advice on what products they should stock at their U.S. distributorship. By August, GPM had incorporated Gear Pump Distributors USA as an Ohio company. By September, Buffin was firmly in the corporate loop, patched in on e-mails discussing minute details of the company's plans.

Buffin even forwarded the Express article to GPM executives, apparently unaware that media coverage would be bad for business. "Please see attached for your entertainment," he wrote. "It was an announcement in the local Tallmadge newspaper. Cheers, Jack."

When the e-mails were eventually printed out, they added up to a stack the size of Ulysses. Within the trove was everything a rival would want to know about a competitor, including manufacturing costs, price lists, supplier names -- even the wage scale for Permco employees. It appeared that Buffin had also duped unsuspecting co-workers into providing information he otherwise wouldn't have had access to, which he then forwarded to GPM.

Buffin had also led several GPM executives on tours of Permco's plant. Not only was he sleeping with the enemy, he was bringing her home.

His betrayal of Permco was complete. The company had spent 40 years of sweat developing new contacts, inventing better products, and streamlining production. And with a simple mouse click, it had all been handed over to a competitor.

"When you're in this business, you can just walk by something and say, 'That's how you do it,'" Olszewski says. "And that's what they did."


On a recent afternoon, Buffin answered his door to find a reporter on his porch. He seemed dumbstruck at being face-to-face with the media and wasn't eager to talk. "Nope, not interested," he said, pushing the door closed. He then peered out his window wearily, waiting for the reporter to leave his driveway.

Weeks passed before Buffin agreed to be interviewed in the presence of his attorney. In the well-appointed office of Larry Zukerman, Esq., Buffin, wearing a pair of pressed khakis and a polo shirt, folded his legs decorously. He glanced over at Zukerman before answering even the most innocuous of questions and refused to be photographed.

Only when he got to talking about the business of hydraulic pumps -- or as he calls it, "the liquid-power industry" -- did Buffin loosen up. He got into the business in 1971. In his home state of Indiana -- his speech still bears the hint of an accent -- Buffin worked for what was then Muncie Power Products. He took a break to earn his college degree in history, then went back to his old position.

New jobs would carry him to North Carolina and Arkansas. By 1996, Permco hired him as a special-projects manager. He seemed a perfect fit. During his quarter-century in the tight-knit field, he had met everybody who was anybody. Along the way, he had been the buyer for some of Permco's biggest customers. "I have made Permco an enormous amount of money over the years," he says with both pride and resentment.

But during the next eight years, Buffin's discontent would grow. He believed that Permco didn't invest nearly enough to stay competitive. "Now, they have 'reasons' for doing that," he says, making air quotes and speaking in the universal tones of an employee who thinks he knows better than his boss.

So Buffin began to explore. A mutual friend recommended the folks at GPM as "good, solid businesspeople" -- something Buffin thought was in woefully short supply at Permco. After he had a brief conversation with GPM, the well-heeled company was ready to fly him into Johannesburg.

South Africa impressed Buffin enormously. It wasn't the culture, the wildlife, or the people. No, Buffin was blown away by GPM's business acumen. "It was honestly the cleanest, neatest, most efficiently run hydraulics shop I have ever been in," he says, as if describing something holy.

Despite the contrary evidence offered by his e-mails, Buffin claims that he didn't decide to officially join GPM until long after he returned from the January trip -- sometime in the fall, he says elusively.

Buffin adamantly denies that there was anything untoward about his relationship with GPM. The materials Permco calls "trade secrets" were hardly that, Buffin claims. A court order bars him from going into detail, but much of the information he provided to GPM was readily available, he says. Some is even posted at Permco.com.

"It's on their website, for the whole world to see," Attorney Zukerman interjects.

Even the tours of Permco's plant were fair game, Buffin claims. After all, the company leaves its garage doors open. "I guarantee, if you drive by there today with a pair of binoculars, you can see everything we saw," he protests.

Whatever his motivations, Buffin seems genuinely surprised that his actions led to accusations of industrial espionage. "I'm just a person who goes to work every day, does the best job I can with the resources I'm given, and this was totally unexpected," he says.

Zukerman takes it a step further, claiming that Buffin and GPM are actually the victims in all this. He argues that Permco felt threatened by a company that figured out how to do a better job cheaper. Unable to compete on a level playing field, Permco is desperately trying to tie up its rival in legal red tape.

"This case has nothing to do with trade secrets," Zukerman says, finding what could be the last line of his closing argument. "It's only about an old dog who couldn't be taught new tricks."


The FBI takes corporate spying very seriously these days. Terrorism remains the top priority, but industrial espionage, while far less publicized, is No. 2. The theory is that the wars of the future will be fought in the boardroom instead of on the battlefield. In a world with one superpower, innovations and patents may trump bullets and bombs.

"It's become a global market," says Robert Hawk, spokesman for the FBI's Cleveland office. "Cheaters, if they can cheat effectively and efficiently, have an edge."

Northeast Ohio has emerged as a front line in the effort. Local authorities were the nation's first to bring a case to trial under Congress' Industrial Espionage Act of 1996, a law that made it a federal crime to steal trade secrets. And in 2001, they were the first to pursue charges under a section of the law that imposes stiffer sanctions for industrial espionage that directly benefits a foreign government.

Still, prosecution is rare. Part of the problem is that complex science is a hard sell to jurors. Another hurdle: international boundaries. In 2001, a scientist was accused of stealing proprietary genetic material used in the Cleveland Clinic's Alzheimer's research. But the defendant fled to Japan, and Tokyo refused extradition, killing the case.

Often, the crime goes unreported. Some companies choose to handle incidents internally, fearing that negative publicity will jeopardize the bottom line. Or a business may not even know it was victimized -- after all, industrial espionage is hardly as high-profile as bank robbery.

"These people are usually discreet. They're very intelligent," says Hawk. "I'm not naive enough to think that, as we speak, someone isn't trying to penetrate a company in Northeast Ohio."

Permco says that it's passed evidence from its investigation to the FBI, but Hawk will neither confirm nor deny a criminal investigation, taking a line from Hogan's Heroes. "I'm gonna do my Sergeant Schultz impression: 'I know nothing,'" he says.

Regardless, Buffin faces a reckoning in civil court. Permco has sued him for breach of loyalty. The company wants to be reimbursed for 10 months' salary and advances totaling $13,500 that Buffin never paid back after his first year of employment. Permco also wants a judge to bar GPM from using the pilfered information and is seeking more than $25,000 in damages.

But no amount of money will ease the sting of being duped. When Olszewski sent out an e-mail announcing Buffin's betrayal, a female worker came to his office in tears. "How could someone do this to us?" she asked.

It reminded Olszewski of a conversation he had three decades ago, when he first came to Permco. The company chairman, Robert Shell Jr., had asked him to name the most important traits to look for in new employees. Olszewski rattled off his list, but left off "trustworthy."

"Never forget: People are dishonest," Shell lectured.

Now, at 56, Olszewski says, he has once again learned that lesson.

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