01/31/2013 09:10 EST | Updated 04/02/2013 05:12 EDT

Damage done by navy spy disputed by lawyers

Lawyers arguing the case of Sub-Lt. Jeffrey Paul Delisle, the Halifax naval officer at the centre of an international espionage embarrassment, gave a court conflicting accounts of the scope of damage his treachery did to Canada's foreign relations.

Delisle, 41, has a two-day hearing in a Nova Scotia court after pleading guilty in October to one count of breach of trust and two counts of passing information to a foreign entity that could harm Canada's interests.

The case of a Canadian in uniform selling a vast horde of secrets to the Russians for about $72,000 is unprecedented.

Delisle is the first Canadian charged under the Security of Information Act, which was passed after the Sept. 11 attacks. That means the judge has no prior cases to help him sentence the former threat assessment officer with a top secret clearance.

At stake for Delisle is the possibility of a life sentence for attempting to sell Canadian and allied secrets over a four-year period.

Security breach

The Crown's three witnesses testified Delisle's betrayal endangered the lives of Canadian intelligence agents, while the defence's lone witness referred to the damage as "theoretical harm" because the scale of what Delisle leaked is unknown.

The first witness to take the stand on Thursday was Michelle Tessier, director general of internal security at the Canadian Security Intelligence Service. She is responsible for personal security and damage assessment after a security breach.

Tessier told the court that the damage caused by Delisle is still being assessed because it is "ongoing."

Delisle's crimes could mean that CSIS receives less intelligence and, at the extreme, lives could be lost, she said.

"There's a risk we might be cut off of certain intelligence," Tessier told the court when asked by the Crown what might happen if the agency doesn't meet deadlines to repair the damage.

Two CSIS documents that Delisle tried to transmit to the Russians on Jan. 11, 2012, just before he was arrested, contained information that could potentially identify CSIS sources, she said.

"For us, there is a potential loss of life," Tessier said.

"There's an expectation that you will protect that information. It's all about trust. It's about trust. It's about confidence."

Tessier testified she has been dealing with the Five Eyes group — which includes Canada, Great Britain, the United States, New Zealand and Australia — which have decided to "increase the safeguarding of information" following Delisle's actions. She didn't elaborate.

If Canada doesn't satisfy its allies with security upgrades "there's a risk we may be cut off," she said.

Under cross-examination, Tessier said she doesn't know the extent of the information Delisle gave to the Russians.

"There's a lot of uncertainty," said Mike Taylor, Delisle's lawyer. "You're still offering opinion without definite confirmation."

Tessier maintained that what Delisle did was "very severe."

"We can't take that information back. It's gone," she said.

Taylor continued to press Tessier and said, "Security, quite frankly, was lax — to put it mildly."

She responded, "If the store window is broken, it doesn't give you the right to go in and steal the TV."

Defence minister briefed in June

The second witness was Brig.-Gen. Rob Williams, the director general of military signals intelligence for the Department of National Defence.

He echoed many of Tessier's points, saying leaking top-secret information "could cause exceptionally grave damage to the national security of Canada."

Williams said the Department of National Defence assumes that everything Delisle had access to was passed on to the Russians and that a "lack of trust" could prevent the flow of top secret information to Canada from its allies.

Taylor asked if Williams had been told by any of the so-called Five Eyes community members that Canada was not receiving intelligence.

"We have not been told we have been cut off," Williams said. "[But] I would not say [it's] business as usual."

He revealed Defence Minister Peter MacKay was debriefed in June.

The last Crown witness was James Abbott, a senior officer with Communications Security Establishment Canada, the country's cryptologic agency.

He testified one document Delisle attempted to supply to Russians contained names and numbers of agents.

Abbott said Canada is a net importer of intelligence.

"If we do not implement the enhancements by a certain time, we will lose access to information," he said.

'Theoretical harm'

Wesley Wark, an expert in security and intelligence from the University of Toronto and the defence's only witness, also said it would be difficult for the Canadian intelligence community to prove Delisle caused much real damage because police intercepted only two attempted transmissions during the years he was selling secrets.

He said he hadn't seen any evidence of a Russian reaction or response to the material they received over the years.

"It is, in a way, theoretical harm," testified Wark. "To be honest, it is very difficult to assess the harm he has done."

He dismissed the Crown's assertion that Canada is at risk of being cut off from intelligence-sharing with its partners, saying that more serious breaches in other countries have not resulted in them being frozen out.

"It is a real reach to say that Canada will suddenly be cast out," he said. "I can't imagine we'll be cast out."

Since he was arrested in January 2012, Delisle has remained silent while behind bars.

Approached Russians

The story began when Delisle walked into the Russian Embassy in Ottawa wearing a red ball cap and civilian clothes. He flashed his Canadian military identification and asked to meet with someone from GRU, the Russian military intelligence.

Delisle was posted to the security unit HMCS Trinity, an intelligence facility at the naval dockyard in Halifax. It tracks vessels entering and exiting Canadian waters via satellites, drones and underwater devices.

There he had access to Stone Ghost, an allied system.

On Thursday, the Crown revealed that Delisle also had access to a Department of National Defence secret system and a computer system dealing with message traffic, a NATO system and Mandrake, a Government of Canada secret system.

Delisle had to sign a confidentiality agreement to get access to all these secret data bases, according to the Crown.

In court on Thursday, he sat next to his lawyer, wearing a blue hooded sweatshirt. Delisle stared straight ahead with his hands in his lap, except when he was taking notes during the testimony from Crown witnesses.

Delisle is still officially in the navy and drawing pay. The Department of National Defence says that will change once the judge renders his sentence.

Delisle's sentencing hearing is scheduled to end Friday.