Intelligence

ACCESSION NUMBER:298263
FILE ID:ECO406
DATE:08/05/93
TITLE:SENATE PANEL PONDERS THREAT OF FOREIGN INDUSTRIAL ESPIONAGE (08/05/93)
TEXT:*93080506.ECO  ECINTELD  COMPETITIVENESS  /te
SENATE PANEL PONDERS THREAT OF FOREIGN INDUSTRIAL ESPIONAGE
(Role of U.S. intelligence agencies explored)  (700)
By Sam Burks
USIA Staff Writer
Washington -- Members of an elite Senate committee generally agree that U.S.
intelligence agencies have an obligation to spy for their country but not
for American business firms.
"I think most members would agree with that proposition as far as it goes,"
Senator Dennis DeConcini said August 5.  "Certainly we don't want to cause
other countries to retaliate by mounting clandestine operations against
U.S. firms.  By the same token, there are those, like me, who wonder why
our intelligence agencies should be any less reluctant than those of other
countries to pass along information that would be useful to their domestic
business interests."
DeConcini, chairman of the Senate Select Committee on Intelligence, spoke
during that body's first public hearing on issues relating to economic
intelligence.
1e noted that the committee has held several closed hearings on this topic
over the last three years and has addressed it during recent confirmation
hearings.  It plans to hear from Clinton administration witnesses --
probably in closed session -- when Congress returns from its August recess,
he added.
"I think it's fair to say that despite the attention we've given this topic,
we have yet to reach a consensus...in terms of what the proper role of the
intelligence community should be," DeConcini said.
Representatives of the U.S. business community expressed similar concerns in
testimony before the committee.
"I see no value in the U.S. government engaging in clandestine industrial or
economic intelligence activities, although I believe the government well
could have a role in protecting American industry from foreign intelligence
collection," said Thomas F. Faught, Jr., managing partner of Faught
Management, Limited.  He formerly headed the National Center for Advanced
Technologies and served as assistant secretary of the navy.
Faught said he and his associates have nothing but praise for the quality
and business acumen of the commercial officers and counselors serving in
U.S. embassies abroad and the useful information they provide to the U.S.
business community.
As an example, he cited a "constructive program" underway at the U.S.
embassy in Beijing.  Each Thursday, he said, the commercial affairs officer
and his staff meet with U.S. businessmen to review and discuss the evolving
Chinese business environment and export opportunities that are available.
"It would be useful if this practice was extended to other countries," he
suggested.
Faught said the federal government can best help to improve U.S. global
competitiveness by protecting intellectual property rights, simplifying the
export licensing program, sustaining export-related financing and enacting
legislation to increase research and development, plant modernization and
foreign sales.
John F. Hayden, vice president of Boeing, a leading U.S. aircraft
manufacturer, told the committee that his company can compete successfully
abroad as long as the global marketplace is not distorted by
anti-competitive factors, such as foreign espionage.
"The Boeing Company is not dependent today, nor should we be in the future,
on U.S. intelligence community efforts to acquire for us technological
marketing or economic information about our competitors," Hayden said.  "We
must, however, rely on our government to help protect us from foreign spies
who wish to 'tilt the tables' in favor of their own national industries by
stealing our technology, our processes and materials and our marketing
strategies and plans."
Dr. Mark M. Lowenthal, senior specialist in U.S. foreign policy at the
Congressional Research Service and former deputy assistant secretary of
state for intelligence and research, testified that many U.S. business
firms may not be making the best use of government-provided data that are
already available.
Lowenthal also referred to the recent complaint brought by General Motors
that a former employee, Jose Ignacio Lopez de Arriortua, took with him
industrial secrets when he left to work for Volkswagen.
"If, as is alleged, he took proprietary documents with him, what amount of
U.S. counterintelligence likely would have prevented this?" he asked.  "As
we have learned over and over in the intelligence community, no amount of
internal security and periodic rechecks can completely or effectively stop
1n employee who wants to deal in secrets."
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