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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