U.S. Lists Allies Trying to Gather Secrets
March 5, 2001 -- The United States says some of its closest allies are suspected of attempting to obtain U.S. commercial and technology secrets.
Japan, Israel, France, South Korea and Taiwan are highlighted as some of the most aggressive in attempting to obtain U.S. business information, through lawful and/or illegal means. China and India, less closely aligned with the U.S., are also named.
The countries were listed in a little-noticed report to Congress published last month on foreign economic and industrial espionage issued by the U.S. National Counter Intelligence Center. The list was based on a survey of about a dozen Fortune 500 companies.
The center coordinates government efforts to identify and counter foreign intelligence threats to U.S. national and economic security. It's staffed by the FBI, CIA, Defense Intelligence Agency, National Security Agency, State Department, Energy Department and various Pentagon agencies.
"The risks to sensitive business information and advanced technologies have dramatically increased in the post-Cold War era as foreign governments — both former adversaries and allies — have shifted their espionage resources away from military and political targets to commerce," the report said.
Previous reports by the center and other U.S. agencies described the level and types of economic spying but did not name specific countries, citing a need to protect intelligence sources and avoid possible foreign policy repercussions.
Listing specific countries is an important development in light of the need for companies to be aware of who might be targeting them, says Steve Aftergood, a senior research analyst at the Federation of American Scientists. "I think there is a utility in speaking frankly about the issue and letting people know what the hazards might be," he says.
Remi Marechaux, deputy spokesman for the French Embassy in Washington, D.C., says making the list is not necessarily a bad thing.
"It depends on what you call economic espionage," he says. "We have a network of consulates, and all the consulates have a trade section which is in charge of looking for information regarding trade with the U.S. So that's the basic job of our trade section, and that's also what exists with regard to the American presence in France."
Few Convictions
Former President Clinton signed the U.S. Economic Espionage Act in 1996, designed by Congress to strengthen U.S. efforts to identify and counter commercial espionage. But there have been few convictions under the act.
The first came in January 2000, when a federal judge sentenced a Taiwanese executive to two years probation along with six months of home detention for stealing adhesive formulas and innovations from an American company.
"Successful espionage seldom comes to light, and even when economic espionage is discovered, companies are often reluctant to report to authorities that they have been the victim of such activity because of the embarrassing publicity and legal complications that may follow," the report said.
Types of Information Sought
Much of the information most desired by foreign information gatherers has military utility, and is restricted from exports by the U.S. government.
The most sought-after critical technology categories in 1999 in rank order were information systems, sensors, lasers, electronics and aeronautic systems technologies, according to the report.
But the targets of espionage can include everything from information on missile defense technology and pharmaceutical technology to manufacturing processes and encryption.
Dumpster Diving, and Other Methods
Commercial spies, according to the report, include government and company employees. But people on the periphery like contractors, consultants, and business competitors are also involved.
And the report said computers have made it easier to steal secrets.
"Using today's technology, information can be downloaded into small disks and readily removed from the premises," it said. Theft of laptops was also identified as a problem area.
Foreign intelligence collectors gather U.S. secrets through such legal methods as conversations during social gatherings, and through conferences and symposiums, trade show and by simply requesting technical information.
The report identified other techniques for stealing U.S. technology secrets:
People breaking away from tour groups;
Attempts to steal information after normal working hours;
Foreign customs officials holding laptops for extended periods of time;
Interception of Internet messages;
Dumpster diving — searching through trash and discarded materials.
"As long as the United States remains the world's leading industrial power and U.S. industry continues to lead the world in technology development, the United States will remain a prime target of foreign economic collection and industrial espionage," the report concludes.
But Aftergood says, while the consequences of espionage can be devastating for a U.S. company, the implications are much less significant for the U.S. economy in general and the U.S. military.
"I think it's important to keep in mind the magnitude of the threat. Our economy does not depend on secrets, it depends on [vast resources] and the whole economic infrastructure and our political system and our military," he says.