DATE=10/6/1999
TYPE=BACKGROUND REPORT
TITLE=C-I-A / SILICON VALLEY
NUMBER=5-44431
BYLINE=ALISHA RYU
DATELINE=LOS ANGELES
CONTENT=
VOICED AT:


INTRO:  In a unique experiment, the U.S. Central 
Intelligence Agency (C-I-A) has set up a company to 
invest in high-tech companies in California's Silicon 
Valley.  Surprisingly, the spy agency says none of 
these activities will be conducted in secret.  V-O-A's 
Alisha Ryu in our West Coast Bureau has details of the 
C-I-A's entry into the world of venture capitalism.  

TEXT:  The C-I-A calls the new company "In-Q-It."   
The "In" stands for intelligence, the "It" for 
information technology.  And the "Q" in the middle is 
a humorus nod toward the beloved gadgets expert "Q" in 
the James Bond movies.  
 
But there is little else light-hearted about the 
agency's new venture.  Using 28-million dollars in 
start-up money from previously classified funds, In-Q-
It will invest in high-tech companies and 
entrepreneurs and form joint ventures with others.  
The objective -- to integrate Internet technology and 
applications that could benefit the C-I-A.

In-Q-It's chief operating officer, Gilman Louie, says 
this is the first time a government agency has adopted 
a private-sector model to meet its needs.  He believes 
the company's success will be critical to the long-
term viability of the agency.

            /// FIRST LOUIE ACT ///

      Without it being able to achieve a state-of-the-
      art level of information technology, the basic 
      mission of the C-I-A would be in jeopardy.  We 
      are talking about wrong decisions or information 
      getting out into the wrong persons' hands that 
      can cost lives.      

            /// END ACT ///

Mr. Louie cites the accidental bombing of the Chinese 
embassy in Yugoslavia, a target chosen by the C-I-A, 
as an example of what happens when the agency 
generates erroneous or incomplete information.   

But in order to attract the best minds to help upgrade 
its information-gathering system, Mr. Louie says the 
C-I-A realized it needed to make In-Q-It's activities 
highly visible and public.

            /// SECOND LOUIE ACT ///

      The problem today is that "operating in the 
      black" (in secret) is not a viable solution.  
      First of all, to attract a talent, the talent 
      needs to be able to take that technology and 
      spin it to the commercial side in order to get 
      financial gain.  And without that financial 
      gain, the government takes a second seat to 
      commercial needs.  So, in terms of attracting 
      talent, they realize they need to do this in the 
      open. 

            /// END ACT ///

Mr. Louie, who is a veteran Silicon Valley software 
executive, says the C-I-A faces the same competitive 
challenges as any other large corporation trying to 
tap into Silicon Valley's talent pool.  While In-Q-It 
will remain non-profit for the time being, he says his 
eventual goal is to make the company self-sustaining 
from its investments. 

            /// THIRD LOUIE ACT ///

      I think this model will take some time to prove 
      out whether or not it is a model that will 
      really work.  I think there is some level of 
      risk.  I applaud the C-I-A for taking the risk.  

            /// END ACT ///

In-Q-It will not be entirely based in California.  Mr. 
Louie says the company will keep an office in 
Washington D.C. to coordinate with the agency and with 
a board of directors that includes well-known high-
tech executives, as well as former Defense Secretary 
William Perry.  (Signed)

NEB/AR/TVM/gm



06-Oct-1999 18:21 PM EDT (06-Oct-1999 2221 UTC)
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Source: Voice of America
.