The Pentagon is planning a deep-cover spy program in which U.S. operatives would pose as businesspeople and other private-sector workers to support economic competition with China, The Washington Post reported on Wednesday, Oct. 21, 2026. The report was circulating by 7:10 p.m. ET that evening, according to Political Wire's summary of the Post story. The Pentagon denies any such effort is underway.
The Post's account rests on about half a dozen unnamed people familiar with the initiative, according to the IANS wire report and Kurdistan24's summary. No U.S. official has confirmed the program on the record, so the core claim remains a single-outlet report.
On Oct. 22, Politico reported a separate classified Pentagon sabotage office, which the Pentagon rejected in nearly identical language, according to Raw Story's account of the Politico piece.
Key Facts
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When: The Washington Post report appeared Oct. 21, 2026, and Politico's report on a related sabotage office followed Oct. 22.
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What: The program would use "nonofficial cover officers" (NOCs), spies with no visible government ties or diplomatic immunity, against China and other rivals.
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Who: Tom Rakusan, a 39-year CIA veteran who is now a senior adviser to Deputy Defense Secretary Steve Feinberg, is reportedly overseeing the planning.
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Status: The Post reported the program is in the planning phase and not yet operational. The Pentagon denies it is underway.
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Pentagon response: Deputy Press Secretary Jacob Bliss told the Post its query "appears to be built on information that is simply not true."
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Congress: Congressional committees do not appear to have been briefed, the Post reported.
What Happened: Inside the Pentagon Deep-Cover Spy Program Report
According to the Post's account as relayed by IANS and Chinese state news agency Xinhua, the effort has drawn in experts from the military services, the Office of the Under Secretary of War for Intelligence and Security, and retired CIA officers. The Post reported that where the program will sit inside the Pentagon remains unclear.
The Pentagon's existing clandestine human-intelligence arm is the Defense Intelligence Agency's Defense Clandestine Service, but Ecker Geopolitics could not verify any role for it in the new effort.
The Post also reported that early discussions about housing the effort inside the Pentagon's Economic Defense Unit stalled amid media and congressional scrutiny, IANS reported. Feinberg formally established that unit in an April memo, which tasks it with "deterring, denying, disrupting, and helping to defeat adversaries through economic means."
On legal authority, the Pentagon would operate under its Title 10 military powers, while the CIA's covert work runs under Title 50, according to the Libertarian Institute's summary of the Post. Former officials joked to the Post that the program would fall under "Title 60," a law that does not exist.
The Post cited a COVID-era CIA internal report that found about 75% of the agency's deep-cover officers could be eligible for retirement by the mid-2020s, Kurdistan24 reported. Former officials told the Post that biometrics and other "digital dust" have made working under an alias increasingly fraught, IANS reported.
One former senior CIA official told the Post that "Rakusan just wants to build his own CIA down in the Pentagon," as quoted by the Daily Caller. The CIA declined to comment, and Rakusan did not respond to a request for comment, IANS reported.
The Pentagon's answer came in a statement to the Post from Bliss, who said the newspaper's query "appears to be built on information that is simply not true," as quoted by Kurdistan24 and IANS. He went further in the same statement, according to the Daily Caller.
"Whoever is feeding you these claims are either badly misinformed or deliberately leading you astray." — Jacob Bliss, Pentagon deputy press secretary, in a statement to The Washington Post
The statement responded to the Post's query. Ecker Geopolitics found no later Pentagon briefing or release addressing the report.
Politico's Oct. 22 story, citing about a dozen current and former national security officials, described a separate Technology Support Office, reportedly created by an April 14 memo signed by Feinberg. It reportedly develops custom hacking tools and deceptions meant to get adversaries to install defective components in their weapons, and a former senior Pentagon intelligence official estimated its classified contracting budget likely exceeds $1.5 billion. Bliss rejected that reporting as "built on information that is simply not true," according to Raw Story and Trending Topics.
Timeline
| Date/Time (ET) | Event |
|---|---|
| April 2012 | Pentagon approves a Defense Clandestine Service inside the DIA, modeled on the CIA's clandestine service |
| Nov. 16, 2022 | MSS officer Yanjun Xu sentenced to 20 years for trying to steal U.S. aviation trade secrets |
| April 2026 | Feinberg memos formally create the Economic Defense Unit and, per Politico, the Technology Support Office (April 14) |
| Sept. 8, 2026 | CIA Deputy Director Michael Ellis speaks at the Billington CyberSecurity Summit in Washington |
| Sept. 11, 2026 | China's commerce ministry calls Ellis's remarks "bandit logic" |
| Oct. 21, 2026 | Microsoft ties the ConnectWise breach to China state-aligned Storm-0940 |
| Oct. 21, 2026, by 7:10 p.m. | Washington Post deep-cover program report circulates; Pentagon denial included |
| Oct. 22, 2026 | Politico reports the Technology Support Office; China's MFA briefing does not address either report |
Who's Involved
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Tom Rakusan: Senior adviser to Feinberg. He retired from the CIA in 2021 after a 39-year career that included serving as deputy director of operations, according to IANS.
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Steve Feinberg: Deputy defense secretary (officially styled deputy secretary of war since the department's September 2025 renaming), sworn in March 17, 2025, and founder of Cerberus Capital Management. Reuters reported in September, citing three people familiar with the discussions, that the White House had reviewed possible replacements for him, though no decision had been made to remove him.
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Jacob Bliss: Pentagon deputy press secretary, who issued both denials.
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Michael Ellis: CIA deputy director, who spoke at the Billington CyberSecurity Summit on Sept. 8. That week he said the agency needs to collect intelligence on the economic security dimension of competition with China, saying the "CIA has to respond differently," according to an AFP report carried by Vanguard.
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Congress: Ecker Geopolitics found no public statement from a lawmaker on the deep-cover report as of early Oct. 23. On the sabotage office, Politico reported that only a small group of congressional staffers had been briefed, according to Raw Story.
The OSINT Picture
The story rests on the Post's anonymous sourcing, with no public document or imagery trail. Ground News tallied 44 articles on the story; every one Ecker Geopolitics reviewed traces back to the Post.
The institutional history is public. In 2012 the Pentagon approved a Defense Clandestine Service, with plans for as many as 1,600 collectors abroad, including military attachés, before the Senate Armed Services Committee moved to suspend the expansion pending a cost estimate and review, Lawfare reported.
China's own economic espionage is documented in U.S. court records. In 2022, Ministry of State Security deputy division director Yanjun Xu was sentenced to 20 years for trying to steal GE Aviation technology, the Justice Department said.
On Oct. 21, Microsoft said a "China-state aligned actor" it tracks as Storm-0940 used ARTEX, an open-source penetration-testing framework that can use AI models to automate attacks, in a campaign tied to the ConnectWise Cloud Backup compromise. Microsoft said the actor tried to sign in to more than 2,250 tenants. A Chinese Embassy spokesperson in Washington rejected the allegations, saying China "opposes and fights hacking activities in accordance with the law," Business Standard reported.
Geopolitical Players
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China: At its Oct. 22 regular briefing, the Foreign Ministry was not asked about the report and did not address it, according to the official transcript. Chinese state media outlet Global Times, in an opinion piece rather than an official statement, claimed that almost no one believes the Pentagon's denial. In September, China's Commerce Ministry urged Washington to "immediately stop all" espionage against Chinese companies, the South China Morning Post reported.
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Russia: On Oct. 21, Sen. Mark Warner, D-Va., and Rep. Jim Himes, D-Conn., the top Democrats on the intelligence committees, said a classified intelligence community report showed Russian disinformation targeting Democratic candidates and Ukraine supporters in both parties ahead of the midterms, Nextgov reported. "The Russians are kind of throwing everything out there," Himes said, Reuters reported via KSL.
The report lands amid wider U.S.-China friction, including the guilty plea in a scheme to divert Nvidia AI servers to China, and Chinese pressure on Taiwan's coast guard around Pratas.
What It Means for the United States
This section is Ecker Geopolitics analysis.
Benefits and opportunities
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If real, a Pentagon NOC program could help close the CIA's reported deep-cover gap while Beijing's spies keep targeting American companies.
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Placing human collection beside the Economic Defense Unit's investment work could give U.S. planners earlier warning on Chinese control of critical minerals and dual-use technology.
Risks and dangers
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NOCs have no diplomatic immunity, and exposure of the plan may make Chinese security services more suspicious of American business travelers.
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A "Title 60" hybrid with unclear legal footing and no apparent committee briefing invites clashes with Congress and the CIA.
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Feinberg's past Cerberus ties could fuel conflict-of-interest charges that undercut a legitimate mission.
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What's Next
The House Intelligence Committee has a bipartisan classified election briefing planned for next week, Nextgov reported. That is a likely setting for members to raise the Post and Politico reports. Watch also for oversight letters and for a response from China's Foreign Ministry if asked.
Any espionage dispute could also shadow talk of a Trump-Xi meeting floated by Vladimir Putin. Ecker Geopolitics will update this story if officials comment on the record.
For live breakdowns of this story, watch Ecker Geopolitics and cast your vote on whether the Pentagon should run its own deep-cover spies.
Sources
- Political Wire: Pentagon Builds Spy Program for Economic Warfare, October 21, 2026.
- Social News XYZ (IANS): Pentagon plans deep-cover spy programme to wage economic warfare on China: Report, October 22, 2026.
- Kurdistan24: Pentagon Building Deep-Cover Spy Network Against China, October 22, 2026.
- Libertarian Institute: Pentagon to Develop Deep-Cover Espionage Capabilities to Wage Economic War Against China, October 22, 2026.
- Daily Caller: The Deep State Is Leaking Trump's Most Sensitive Undercover Operations To The Washington Post, October 22, 2026.
- Xinhua: Pentagon eyes deep-cover spy network targeting rivals: report, October 22, 2026.
- Raw Story: Pete Hegseth's secret 'movie-level spy craft' agency sparks oversight alarm: report, October 22, 2026.
- Trending Topics: Pentagon Has Reportedly Set Up a Secret Office for Tech Sabotage, October 22, 2026.
- Ground News: Pentagon looks to build a deep-cover spy program to confront China: Report, October 22, 2026.
- DefenseScoop: DOD officially launches new Economic Defense Unit, April 10, 2026.
- Military Times (Reuters): White House reviews candidates to replace Hegseth deputy, sources say, September 5, 2026.
- Vanguard (AFP): China slams 'bandit' CIA after economic espionage remarks, September 11, 2026.
- South China Morning Post: China urges US to 'stop all spying' or face retaliation, September 12, 2026.
- Lawfare: DoD-CIA Convergence: DIA's Defense Clandestine Service Initiative Runs Into Trouble, December 11, 2012.
- U.S. Department of Justice: Chinese Government Intelligence Officer Sentenced to 20 Years in Prison, November 16, 2022.
- Microsoft Security Blog: AI-driven, large-scale nation-state campaign using ARTEX enables supply chain compromise, October 21, 2026.
- Business Standard: Chinese-linked hackers use AI to compromise firms globally: Microsoft, October 22, 2026.
- Ministry of Foreign Affairs of the PRC: Foreign Ministry Spokesperson Mao Ning's Regular Press Conference on October 22, 2026, October 22, 2026.
- Global Times: The Pentagon denies sending 'merchant spies' to China, everyone laughed, October 22, 2026.
- KSL (Reuters): Lawmakers say US briefing showed Russia targeting Democrats with misinformation, October 21, 2026.
- Nextgov/FCW: Russia targets Democrats and Ukraine supporters ahead of midterms, top intel lawmakers say, October 21, 2026.
- The Record: CIA Deputy Director Michael Ellis on AI and cyber operations, September 8, 2026.
- Office of the Secretary of Defense Historical Office: Stephen A. Feinberg, accessed October 23, 2026.