The next NewsCorp/NDS undercover operation after the debacle in Toronto would be played straight by the book—perhaps for that reason, it was one of NDS’s successful operations.

In September 1997 Ray Adams, European chief for NDS Operational Security, had told his boss Reuven Hasak of his plan to provide 1000 blank smartcards to help a European hacker codenamed Ilean perfect his pirate hack of digital Irdeto cards used by News Corp competitors.

In October 1997, Adams had sent Oliver Koemmerling to Toronto to pose as a pirate hacker, only to have NDS’s client DirecTV alert the Royal Canadian Mounted Police and the FBI to put out a Stop and Detain alert for Oliver. The NDS hacker fled over the border into the US, then was flown discreetly back to Europe.

In the days following, DirecTV security chief Larry Rissler, the head of Signal Integrity, forced NDS’s John Norris to admit that Oliver worked for NDS.

DirecTV was outraged that NDS had pulled an undercover operation, offering to priate DirecTV cards as a cover, without telling them. With the future of the business at stake, NDS was forced to agree to a moratorium on any further undercover operations that were not approved by NDS.

So in November 1997, NDS pitched a new operation and won DirecTV’s approval. It was called Operation Johnny Walker, and it was the first undercover operation by Chris Tarnovsky, who had become a full-time NDS employee on July 1. Tarnovsky had previously worked as a programmer for Canadian pirate Ron Ereiser using the name ‘biggun’.

The plan was recorded in an NDS internal email dated November 24 1997. Tarnovsky would produce pirate software and pirate programmer devices on order from a group of Canadian pirate dealers, which would be engineered in a way that meant that the pirate cards they produced could be “killed” by an electronic counter measure by DirecTV.

The object was to disrupt the pirates’ business model and cashflow. And it was all subject to getting approval from Larry Rissler at DirecTV.

Ron Ereiser said later that the warning lights were there that Tarnovsky was working for NDS, but at the time “I didn’t have a clue.”

Tarnovsky testified about his undercover role in the 2008 EchoStar trial. The trickiest moment was when one of the pirates saw from his ticket that he had caught a connecting flight to meet them in Calgary via Dallas, Texas.

NDS had secretly moved Tarnovsky and his family to southern California to live, which was why his ticket went via Dallas, but his cover story was that he lived in Virginia.

Tarnovsky testified that one of the dealers “threatened to break my legs or my knees or something, some part of my lower body, if he ever found out that I was a ‘narc’”.

It’s not clear how real the threat to Tarnovsky was. But the operation as a whole received DirecTV’s approval and it appears to have been an outstanding success.

This makes it all the more surprising then, that the following year when NDS initiated another undercover operation, which appears to have been within the moratorium period, they did it without DirecTV’s knowledge. Perhaps even more surprisingly, it ran into problems.