Chinese intelligence was translating for the NSA

The Washington Times reported on December 21 that several years ago, Chinese intelligence successfully subverted the National Security Agency in Hawaii. First, by creating a company based in Hawaii to do Chinese translations which successfully obtained government contracts with the NSA to translate intercepted Chinese communications. The intercepted communications included sufficient information to identify the sources, giving the Chinese the ability to control what information was obtained by the NSA either by preventing significant information from being carried over by the compromised channel or by introducing disinformation.

This shows one of the problems that faces a world superpower whose own language is commonly used and which does little or nothing to encourage its citizens to learn other languages. Understanding communications in other languages require the assistance of translators who may be working for the enemy, and the enemy can almost get away with speaking freely anywhere while being overheard, since the likelihood of comprehension is so small. The more communications you need translated, the more translators you need, and the greater the likelihood of compromise.

UPDATE (January 2, 2008): Noah Schachtman at Wired and Jeffrey Carr at IntelFusion cast some doubt on this story.