Defense Department flips warning on Canadian coins

Reversing itself, the Defense Department says its espionage report that warned about Canadian coins with tiny radio frequency transmitters was not true.

The Defense Security Service said it never could substantiate its own published claims about the mysterious coins. It has begun an internal review to determine how the false information was included in a 29-page report about espionage concerns.

The service had contended since late June that such coins were found planted on U.S. contractors with classified security clearances on at least three occasions between October 2005 and January 2006 as the contractors traveled through Canada.

“The allegations, however, were found later to be unsubstantiated following an investigation into the matter,” the agency said in a statement published on its website last week.

Intelligence and technology experts had been flabbergasted over the initial report, which suggested such transmitters could be used to track the movements of people carrying the coins.

Experts said such tiny transmitters would have limited range. The metal coins also would interfere with any signals, they said -- and besides, the target might just spend the coin.