Pentagon Deep-Cover Spy Program Would Put Officers in China as Businesspeople

The Pentagon deep-cover spy program reported by The Washington Post on Oct. 21, 2026, would place U.S. operatives inside China and other rival economies posing as businesspeople, with no visible tie to the American government, according to half a dozen people familiar with the planning. The Defense Department flatly denies the effort exists, and congressional committees do not appear to have been briefed.

According to the Post’s report by Zach Dorfman and Warren P. Strobel, the initiative is meant to be a covert arm of a broader Pentagon economic warfare campaign. The people described it as being in the planning phase and not yet operational.

What the Pentagon Deep-Cover Spy Program Would Do

The plan centers on “nonofficial cover officers,” known in intelligence circles as NOCs. Unlike officers who work out of embassies under diplomatic cover, NOCs live and work as private citizens, typically as executives, consultants or other commercial staff. That makes them harder for foreign security services to identify, but it also means they cannot claim diplomatic immunity if they are caught.

The Post reported that the effort is being overseen by Tom Rakusan, a 39-year CIA veteran who rose to deputy director of operations, the agency’s top spymaster, in 2017 and retired in 2021. Rakusan now serves as a senior adviser to Deputy Defense Secretary Steve Feinberg. Specialists from the military services, the Office of the Under Secretary of War for Intelligence and Security, and retired CIA officers have been brought in to help design it, the people said. It is not yet settled whether the effort would be a stand-alone unit or an expansion of the Pentagon’s existing clandestine human-intelligence work.

Pentagon Denial and the CIA’s Shrinking NOC Corps

The Defense Department rejected the reporting outright. “This query appears to be built on information that is simply not true,” deputy press secretary Jacob Bliss said in a statement to the Post, adding that whoever supplied the claims was “badly misinformed.” The CIA declined to comment, and Rakusan did not respond to the newspaper.

Former officials told the Post that the CIA’s own NOC program has withered in recent years, partly because the cover is so hard to maintain. Biometric border checks, digital records and what officers call “digital dust” make living under an alias far riskier than it was during the Cold War. Military service records are also difficult to hide, and former officials said undercover Pentagon personnel are often easy to spot.

Title 10, Title 50 and Congressional Oversight

The legal footing for such a program is one of its biggest open questions. The military operates under Title 10 of the U.S. Code, which the Pentagon has read broadly to cover espionage tied to “intelligence preparation of the battlefield.” The CIA operates under Title 50, which governs intelligence collection and covert action and carries specific requirements to notify Congress. A Congressional Research Service overview explains that covert action, meaning activity meant to influence conditions abroad without U.S. sponsorship being acknowledged, triggers presidential findings and reporting to the intelligence committees, while some clandestine military activity follows separate rules.

Several former officials quoted by the Post joked that the new effort would effectively be a “Title 60” entity, a nonexistent mix of the two authorities. That ambiguity is likely to interest lawmakers, especially if, as the Post reported, the oversight committees have not been told about it.

Part of a Wider Economic Warfare Push

The reported program fits a larger shift in how Washington competes with Beijing, where export controls, sanctions and industrial policy now sit alongside traditional military planning. The Boston Report’s recent coverage has examined several of those tools, including the reversal on U.S. chip export controls for China and Beijing’s critical-mineral export controls.

China’s state news agency Xinhua published its own summary of the Post’s report on Oct. 22, repeating the Pentagon’s denial. For businesses, the report raises a practical concern: a government program that places intelligence officers under corporate cover could make foreign authorities more suspicious of ordinary American executives working in China.

Until the Pentagon or Congress says more, the program’s scope, budget and legal authority remain unconfirmed. What is on the record is a detailed account from six sources, a named overseer, and a categorical denial from the Defense Department.

Featured image: The Pentagon in Arlington, Virginia. Photo: David B. Gleason from Chicago, IL, CC BY-SA 2.0, via Wikimedia Commons.

Sources

• The Washington Post: Pentagon looks to build a deep-cover spy program to confront China
• The Seattle Times (syndicated Washington Post report)
• Congressional Research Service: Covert Action and Clandestine Activities of the Intelligence Community
• Xinhua: Pentagon eyes deep-cover spy network targeting rivals (state media summary)