BUSINESS-USA: New Role For Spies

By Pratap Chatterjee Reprint | | Print |

Pratap Chatterjee

WASHINGTON, Oct 29 1995 (IPS) - The Federal Bureau of Investigation (FBI) earlier thjis month launched a special “threat awareness” fax service for key business concerns – ostensibly to warn them of the danger of foreign espionage.

It’s one of the new services that spy agencies in this country are offering which has raised questions from politicians and the public whether the United States should continue to spend 28 billion dollars a year on intelligence.

There are signs, however, that the cloak-and-dagger days of the Central Intelligence Agency (CIA) may not yet be over. Already this year the Australians and the French have claimed that the part of the CIA’s new job is to undermine companies in other countries.

That is not the view from Washington. Earlier this month, Ron Brown, the commerce secretary, told Congress that he had documentation of almost 100 cases of foreign firms using bribery to win 45 billion dollars in contracts. He said foreign firms that offer bribes typically win 80 percent of the deals.

“There is a role for the intelligence community to play in detecting foreign attempts to seek unfair advantage over U.S. businesses through industrial espionage,” said Larry Summers, the second-in-command at the U.S. Treasury and former chief economist for the World Bank.

“Many of the talks which are now the subject of international economic discussions are highly complex and involve acts and assertions that are difficult to verify. …Verification approaches taken by foreign governments to limit criminal activity overseas is particularly important,” he added.

Summers was testifying before the U.S. Senate last month about the future role of the spy agencies. Other government officials testified before the House of Representatives in July this year as part of the “IC21” review of U.S. intelligence needs for the 21st century.

In recent months, the media has featured stories extolling the CIA’s success in helping U.S. companies win business.

The New York Times recently said the CIA helped expose that French concerns bribed Brazilian officials in an attempt to win a 1.4-billion-dollar contract to monitor the Amazon and had paid Saudi officials to nab a six-billion-dollar aircraft supply deal.

As a result, U.S. corporations were able to win the contracts, it said.

But U.S. efforts at trade espionage were dealt a blow in February when five U.S. citizens were expelled from France for trying to bribe government officials to obtain French technology and trade secrets.

French newspapers said that Henri Plagnol, an aide to then Prime Minister Eduard Balladur, was courted by a U.S. woman who claimed to be the public relations director for a Texas rainforest foundation.

Another CIA agent allegedly paid P|agnol 500 francs (100 dollars) each time he provided information on French stances on matters being negotiated under the General Agreement on Tariffs and Trade (GATT) trade talks, such as agricultural and film export matters.

Two other CIA agents asked communications ministry officials for information about the GATT, while yet another CIA officer tried to bribe a France Telecom engineer to give him information on how to bug French telecommunications.

Media stories have also revealed the role that the CIA had played in assisting Mickey Kantor, the U.S. Trade Representatives in global trade talks as well as in a trade dispute with Japan over car sales.

Intelligence sources say that much of this work is a cooperative effort of the Central Intelligence Agency (CIA) and the FBI.

On trade issues, the CIA has the Office of Resources, Trade and Technology (RTT) which prepares advance information on trade negotiations and monitors “environmental trends and civil technology challenges.” This office, set up in June 1990, replaced the Office on Global Issues, which, among other tasks, tracked Third World debt.

Other agencies are reportedly working more secretly.

In July, L’Expansion, a French business magazine, said that the French government has discovered spy plots to challenge French companies in key sectors ranging from armaments to agriculture, especially high-tech industries such as aerospace and telecommunications.

L’Expansion accused the CIA of framing several French chief executive officers such as Didier Pineau-Valencienne, chairman of Schneider SA, an electrical and mechanical products company, and Pierre Suard, who resigned as chairman of Alcatel Alsthom SA, a leading exporter of telephone equipment, after being indicted for allegedly overbilling France Telecom, the national phone company.

In May this year reports leaked out that U.S. and Australian agents had been bugging the Chinese embassy in Canberra. Allegedly, Australian intelligence agents and U.S. operatives planted dozens of bugs in the new multimillion-dollar Chinese embassy that opened in Canberra in 1992.

It appeared the Australians leaked the information because data picked up from the embassy was first being given the U.S.National Security Agency (NSA) for translation and analysis before it was passed on to Australian intelligence.

This gave U.S. officials the upper hand in bidding for business with the Chinese. Australian and U.S. companies often bid against each other for large contracts.

Some government officials have tacitly acknowledged that “disinformation” tactics are being used. At a Pentagon-sponsored conference, Bowman Cutter, deputy assistant to the president for economic policy and member of the National Economic Council, briefly alluded “to a program that involved using disinformation to give competitors a false and outmoded impression of how U.S. companies operate.”

In fact, the CIA’s role in helping U.S. business is not new. In 1954, the CIA orchestrated the overthrow of the democratically elected government led by Jacobo Arbenz to help United Fruit, a family-owned, Boston-based business to protect its interests in the Central American nation.

In 1953, it moved successfully against Iranian Prime Minister Mohammed Mossadeq when he threatened to nationalise British and U.S. oil investments.

It also worked unsuccessfully with telecommunications giant ITT to try to prevent the election of Chilean President Salvador Allende Gossens in 1970.

Business has also lent a helping hand to the CIA. William Casey, CIA director under president Ronald Reagan, who was a former chair of the Securities and Exchange Commission (SEC), recruited more than 150 companies to help provide “cover” for the CIA overseas.

The programme of gathering information from business people abroad is called the “non-official cover” (NOC) programme.

Japanese and French news services have repoorted on NOC operations in their countries, which have not always been successful. According to John Quinn, a former NOC officer in Japan, the Japanese caught a team of 13 NOC officers in 1989.

The 15 year effort was broken up by Japan’s Public Security Investigative Agency, which simply hired thugs to “bust up the homes and offices of NOcs,” causing the CIA to recall them in a panic.

BUSINESS-USA: New Role For Spies

By Pratap Chatterjee Reprint | | Print |

Pratap Chatterjee

WASHINGTON, Oct 29 1995 (IPS) - The Federal Bureau of Investigation (FBI) earlier thjis month launched a special “threat awareness” fax service for key business concerns – ostensibly to warn them of the danger of foreign espionage.
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