Foreign Spies Target U.S. Industry Fbi Says At Least 23 Nations Take Part In Economic Spying
Despite passage of the 1996 Economic Espionage Act, the FBI says foreign spies have stepped up their attacks on U.S.-based companies. A new national survey estimates that intellectual property losses from foreign and domestic espionage may have exceeded $300 billion in 1997 alone.
Governments of at least 23 countries, ranging from Germany to China, are targeting American companies, according to the FBI.
More than 1,100 documented incidents of economic espionage and another 550 suspected incidents that could not be fully documented were reported last year by major companies in a survey conducted by the American Society for Industrial Security. The Los Angeles Times obtained results of the survey, which is scheduled to be released Wednesday.
The society’s periodic surveys, which FBI Director Louis Freeh has cited in congressional testimony, provide the federal government with its only estimate of potential damage from economic espionage.
The 1997 survey disclosed that high-tech companies, especially in California’s Silicon Valley, were the most frequent targets of foreign spies, followed by manufacturing and service industries. Among the spies’ most sought-after information were research and development strategies, manufacturing and marketing plans and customer lists.
As a matter of policy, the FBI does not identify governments that sponsor economic espionage. But in a recent article in an academic journal, an FBI agent who works in the field named some of the countries and provided a rare look into commercial spying by foreign intelligence services.
France, Germany, Israel, China, Russia and South Korea were named as major offenders in the article by Edwin Fraumann, a New York-based FBI agent who teaches at John Jay College of Criminal Justice. His article appeared in “Public Administration Review,” published by the American Society for Public Administration.
The FBI confirmed Fraumann’s report that pending before the bureau are more than 700 foreign counterintelligence investigations involving economic espionage. It said economic spying by countries considered friends as well as adversaries of the United States has been increasing.
French intelligence, according to Fraumann, has spied on U.S. companies by wiretapping U.S. businessmen flying on Air France between New York and Paris. France also has used such clandestine methods as surveillance of business personnel and communications inside France, including telephone conversations and faxes.
The CIA, FBI and other U.S. agencies engage in counterespionage, but officials of the agencies insist that official U.S. policy bars spying on foreign companies and governments. However, U.S. intelligence sources have engaged in commercial espionage - with decidedly mixed results.
As recently as 1995, five Americans - four of them CIA agents - were expelled from France after being accused of economic spying against the French government. U.S. sources said the bungled operation forced the CIA to temporarily suspend virtually all of its operations in France. In addition, sources said, it made U.S. intelligence agencies much more conservative in their overall approach to commercial espionage.
Whatever the extent of U.S. economic spying, foreign governments appear to be much more unabashed in their approach. And that frustrates intelligence agents who think the United States should be much more aggressive and unapologetic.
“We don’t do much of it,” said one agent. “But there are societies where it’s second nature. It’s second nature to the French, to the British.”
France, intelligence sources say, is among the world’s worst offenders and at one time targeted more than 70 big U.S. corporations, including Boeing, IBM, Texas Instruments and Corning Glass.
Fraumann wrote that Germany’s Federal Intelligence Service had been “very active and quite successful” in economic espionage by using a top-secret computer facility outside Frankfurt to break into data networks and databases of companies and governments around the world.
Their operation, code-named project RAHAB, he wrote, involves gaining systematic entry into computer databases and accessing computer systems throughout the United States, targeting electronics, optics, avionics, chemistry, computers and telecommunications. xxxx SPY STRATEGIES An article by FBI agent Edwin Fraumann listed a series of “intrusive methods” used by foreign countries, including: Eavesdropping by wiretapping, bugging offices or capturing cellular telephone conversations. Penetrating computer networks. Stealing proprietary information in drawings, documents, floppy disks and CD-ROMs. Using prostitutes for blackmail purposes. Using a “swallow” (an attractive woman) or a “raven” (an attractive man) to form a close personal relationship with an employee with access to trade secrets. Hiring a competitor’s employee who has valuable knowledge. Bribing a supplier or employee. Planting an agent or “mole” in a company with the mission to compromise key employees, tap into computer databases, and intercept communications to ferret out confidential research, technologies and other information.