This story has been popping up all over (sort of like poppies I guess). Tim Gueguen had it in his blog Monday (but after I read it yesterday) and it was in the Saskatoon Star-Phoenix today. And if it was in the Star-Phoenix today it must have been out in the rest of the media sometime last week – the Star-Phoenix isn't exactly the quickest paper to jump on a story.
So here's the scoop as they used to say in the newspaper business (but rarely around the Star-Phoenix offices – the usual phrase there is "here's the wire copy and the latest slams against the NDP"). In 2004 Canada issued a 25₵ coin (technically we don't have "quarters" in Canada; that word's not on the money unlike the United States) commemorating veterans. The design was unique in that it had what amounts to a decal on it depicting a red poppy. The decal is covered with a coating that is supposed to prevent the colour in the centre of the coin from wearing off due to handling (with varying degrees of success – mine was quite faded when I got it). In Canada and many Commonwealth countries, including the United Kingdom, the red poppy is the symbol of remembrance for the casualties of wars – plastic poppies are sold to raise funds for veterans' organizations and worn in the week leading up to November 11th. The Royal Canadian Mint issued 30 million of the coins, primarily through the Tim Horton's donut chain.
In 2005 and 2006 US defense contractors working in Canada submitted reports to the Defense Security Service, an agency of the US Department of Defense. According to the reports the coins were "filled with something man-made that looked like nano-technology." One contractor discovered one of the coins in the cup holder of his rental car. He gave it a thorough examination: "It did not appear to be electronic (analog) in nature or have a power source. Under high-power microscope it appeared to be complex consisting of several layers of clear but different material, with a wire like mesh suspended on top." One contractor believed someone was planting the coins on him when he found two in the outer pockets of his coat: "Coat pockets were empty that morning and I was keeping all of my coins in a plastic bag in my inner coat pocket." The contractor reports led to the DSS issuing a security warning that "mysterious coins with radio frequency transmitters were found planted on US contractors on at least three separate occasions between October 2005 and January 2006 as the contractors travelled through Canada." The warning suggested that the coins could be used to track the movements of people carrying them. However, at no time did the Defense Security Service actually examine any of the coins.
Needless to say this caused concerns with officials of the Canadian Security and Intelligence Service (CSIS). Luc Portelance, now Deputy Director of CSIS wrote to a subordinate in January of this year, "That story about Canadians planting coins in the pockets of defence contractors will not go away. Could someone tell me more? Where do we stand and what's the story on this?" Other CSIS officials were also seeking answers: "We would be very interested in any more detail you may have on the validity of the comment related to using Canadian coins in this manner. If it is accurate are they talking industrial or state espionage? If the latter, who?"
No one seems to have an explanation of how the coins could be effectively used to track someone, given that they could be disposed of through the simple method of spending them on a gumball.