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Screen Shot 2013-03-04 at 20.44.48Disclaimer: We encourage a diversity of opinion and comment. The opinions/information expressed/provided by “Washington Observer” in this article are not necessarily endorsed or condoned by this website. For legal reasons we have removed the name of a well known U.S. company that was identified in the article. Shell did not take up our invitation to comment on the content of a related article published by us in 2010 (see below).

At that time, following our email correspondence with a high level U.S. intelligence source, the source was authorized by U.S. Dept. of Defense government attorneys to confirm to us that an investigation directed at Shell in the USA had been initiated by the US Department of the Navy, Naval Criminal Investigative Service (NCIS). The whole strange affair may apparently still be rumbling on, perhaps towards a conclusion that will make any Shell return to the Arctic even less likely.



In the last several months you have published a series of articles calling into question the competency and soundness of judgment exercised by senior level Royal Dutch Shell managers. This is an old and continuing story, and it has gotten worse over the last 15 years or so. The most recent chapter has been the saga of Shell Arctic drilling operations.

Over the last several years you have also published a series of articles related to Royal Dutch Shell, and its US subsidiary, and its appetite for the intellectual property of its partners, contractors, former employees, etc. The article I found to be of particular interest, which you originally published in 2010, relates to Shell’s apparent targeting of IP that had been classified by the US Dept. of Defense.

I am somewhat familiar with this area of the law. What makes this case so interesting is that the US government cannot classify privately owned IP, by law, except in one very exceptional and unusual case. That case is where the IP in question has applications to the design and manufacture, etc., of military nuclear reactors, nuclear materials, or nuclear weapons. However, it is virtually unheard of for the US government to classify IP held by a private citizen under this classification authority. When such information is classified it is also designated as ‘RESTRICTED DATA’, as well as being classified SECRET, etc. Furthermore, the private individual could only retain ownership of such IP if it has a ‘dual use’, i.e., both civilian and non-military, and uses other than those related to the design of nuclear weapons, etc. If the use of the IP is strictly related to the above applications then the US government takes ownership, by law, compensating the inventor for his IP.

By international treaty with the UK, RESTRICTED DATA is usually not declassified unless proper authorities in the UK likewise consent to declassification. In other words, such information is not only classified in the US, it is also classified in the UK and must be declassified in both countries before release. So, any conspiracy to violate US espionage laws relating to RESTRICTED DATA is also most probably conspiracy to violate UK law relating to state secrets, etc., as well.

In every other circumstance the US government can only issue Secrecy Orders on privately owned IP. It cannot classify said material unless the owner is a defense contractor working under government contract. Simple Secrecy Orders require the owner of the material to keep his inventions secret, except where permitted for use by the US government and its authorized contractors.

Information can be classified as RESTRICTED DATA by properly trained classification ‘experts’ from both DoE and DoD, but only DoE has the authority to downgrade such data to a FORMERLY RESTRICTED DATA status. By law, this information is considered classified from birth and is very rarely declassified. It is it not declassified unless both the Depts. of Energy and Defense agree that there is a NEED to downgrade and declassify. This policy is contrary to other types of classified data, i.e., national security information. To classify IP as national security type information there must be a justification to classify, and there are sunset provisions that provide for the automatic downgrading of the classification and eventual declassification of such material.

All of this legal information is available online.

Interestingly, under US law, if by some chance classified material is inadvertently or maliciously released into the public domain that classified material remains classified unless some sort of positive action is taken to declassify it. Public release of classified information does not automatically result in declassification. Possession of such information, even if it was obtained from the public domain, is a violation of US espionage laws.

For example, consider the US patent applications for manufacture and dispersion methods of mustard gas, phosgene gas, etc., filed during WWI, almost a hundred years ago. Those patent applications are still classified. However, the information found in those patent applications is readily available on the web. After all, many countries know how to manufacture and disperse those types of chemical weapons. However, in the US that information is classified. Possession of said information in the US without proper authorization and need (and security clearances) is a violation of Federal espionage laws, and it will get you in very serious legal trouble. It doesn’t make any difference whether the information was downloaded off the web or not. The rationale here is that only properly authorized individuals have a NEED to be in possession of such information. Anybody else found with that type of information is probably up to no good. Clearly, no private citizen (or any private corporation not under an appropriate government contract) has any NEED to be in possession of WMD design or fabrication technology.

What is also fascinating about your story is that Shell management, and their army of lawyers, probably were absolutely clueless that the privately owned IP material they were targeting was actually classified under the provisions of the Atomic Energy Act, and lawfully classified from the moment this fellow who invented this material put pen to paper (this is the ‘classified from birth’ concept at work). Think about it. How many private citizens are capable of inventing something that relates to the design and manufacture of nuclear reactors, or weapons, etc. Hence, Shell management and attorneys probably thought they could beat any security/espionage issues if they got caught in their little scheme by simply claiming they owned the information/technology. But what is Shell doing working on nuclear weapons design, etc.?? This is a potential legal nightmare for Shell and the involved personnel because there are no statutes of limitations on conspiracy to commit espionage, etc., in the US. None. It goes without saying that Shell management screwed up in this case, big time.

(As a side note it is interesting to note, and I do know this to be the case, that (COMPANY NAME DELETED) also targeted this fellow, and got caught in a scheme to gain unlawful access to the material. So, Shell was not the only large corporation that had this fellow in their gun sites).

What is even more interesting is that under US law RD Shell and its subsidiaries cannot even own or have access to this type of information. It is prohibited under US law. Back in the day when Shell USA was an independent US corporation that would have been possible, but not after RDS took complete control of Shell USA. Under US law RD Shell’s current US subsidiary could have access/ownership to certain types of classified information but only if the company operated as a defense contractor and as independent legal entity under the terms and conditions of a Special Security Agreement (SSA) with the US government. However, under the terms of an SSA any access to, and ownership of Restricted Data, or Special Access Data, or Compartmented Information is strictly prohibited.

If your story is accurate Shell was undoubtedly targeting the IP developed by this particular individual with the idea of forcing the relinquishment of ownership through the threat of extended civil litigation and filing of criminal charges. However, Shell was clearly on a very dangerous and futile quest, only they did not realize it. By law Shell USA could not legally gain access or ownership of the material. Any claims that the material was legally their IP would have triggered a serious Federal investigation of such claims. In all likelihood Shell’s scheme would have come unraveled and there would have been undoubtedly legal hell to pay for those involved.

Espionage cases are notoriously difficult to prove and prosecute, but eventually the Feds usually close the case. Someone gets sloppy and over confident and shoots off their mouth. And that is all it takes. It could take ten or twenty years, but it makes no difference. My guess is that the Feds will eventually break this case. There are too many ‘little people’ involved, none of which wants to spend life in prison protecting Shell management from their own stupidity. These people are loose ends and Shell cannot ‘eliminate’ them all. Given that RD Shell did not succeed in their quest, and that this alleged scheme was really a case of corporate industrial espionage gone bad, it won’t have a high priority with DOJ. China’s efforts and espionage and industrial espionage are on the front burner and warrant far greater concern.

I don’t have any particularly special knowledge of this case, but it is safe to say this particular individual is well known within certain circles of the defense industry. Rumor has it that he hob-knobs with Admirals these days, or at least has access to the upper levels of power with in the Navy, etc. I don’t really know, but after your mailing campaign this case is known within government circles, that is for certain.

There are, of course, many rumors floating about regarding this case. One is that this individual has made some significant breakthroughs/discoveries in basic, fundamental physics, the sort of thing that ‘Nobel prizes are made of’. I have no special knowledge about this, but it goes without saying that if this is the case, he will most likely become a wealthy man, if he is not there already. If the government agrees to declassify his work he might even get that Nobel prize, among others. I do know however, that at the present time, ALL of his work remains classified, and that is something that is relatively easy to confirm. In fact, ALL of his work remains classified although that condition could change in the not too distant future. However, if his work is declassified I have little doubt this individual will gain some public notoriety. Then I believe that there is a good chance RD Shell will have a PR debacle to deal with, not to mention some very serious legal problems. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.


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