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Allies ... or enemies?

Allies ... or Enemies?

THE INTELLIGENCE THREAT TO THE US government and American companies has always been perceived as coming from the Soviet Union and other Communist countries. While all the attention and publicity were centered on the Soviet threat, another intelligence threat went unnoticed - the threat from friendly governments.

The primary duty of an intelligence operation is to gather information about a country's industrial, technological, and manufacturing procedures as well as military and political information. Obtaining this information helps a country, both politically and economically. During the past decades, our allies have been caught conducting operations against the US government and corporations.

One of the most famous cases involved Jonathan Jay Pollard, an intelligence analyst for the US Navy who provided classified information on Arab terrorists to the Israelis.

Another operation involving Israeli intelligence occurred in 1979. The Israelis were suspected of leaking information about a meeting between US Ambassador to the United Nations Andrew Young and representatives of the Palestine Liberation Organization (PLO).

The information allegedly was leaked to Newsweek to discredit Young and discourage further attempts by American diplomats to open dialogue with the PLO. The operation was successful, the dialogue was dropped, and Young lost his job.(1)

While the Israeli government's aggressive behavior might have shocked the American public, it did not shock US security and intelligence personnel. A 1977 CIA document, "Israel: Foreign Intelligence and Security Services," alleged that Israeli intelligence blackmailed, bugged, wiretapped, and offered bribes to US government employees to gain sensitive information.(2)

According to John Davitt, former head of the Justice Department's Internal Security Section, "The Israeli Intelligence Service were more active than anyone but the KGB....They were targeted on the US about half the time and on Arab countries about half the time."(3)

Another country with which the United States has maintained a friendly relationship but that has also obtained classified US information is South Africa. The South African operation ran from 1979 to 1983 and involved an employee of the United States Army's Material System Analysis Activity, Thomas J. Dolce. During this operation, Dolce provided South Africa with classified information on Soviet military equipment.(4)

In 1978, the Senate issued a public report on activities of "friendly" foreign intelligence in the United States. It examined operations conducted in the early- to mid-1970s by another US ally, South Korea.(5) One of the operations attempted to develop agents of influence in Congress through the use of bribes and favors.(6)

IN ADDITION TO OPERATIONS AGAINST the government, our allies are aggressively conducting industrial espionage against American companies to gather economic information. This onslaught against industry only adds to the advantages held by many foreign countries in competing with American firms and, indirectly, has an adverse affect on the United States' economic position in the world. According to Oliver "Buck" Revell, FBI associate deputy director of investigations, "A number of nations friendly to the US have engaged in industrial espionage, collecting information with their intelligence service to support private industry."(7)

One of the most flagrant cases was by the French. French intelligence conducted a full-scale operation against the European offices of IBM, Texas Instruments, and other high-tech American companies. They planted spies in offices, intercepted communication, and used any other method they could to collect information about the companies.

The information was provided to Compagnie des Machines Bull, a French computer firm partially owned by the French government. The purpose of the operation was to give the French company an advantage over its competitors in bidding on multimillion contracts.(8)

Another country dedicated to using intelligence services to advance the economic position of its companies is Japan. Japanese agents were using overt and covert methods to obtain information in Silicon Valley as far back as 1978. By using these methods, what normally would have taken years to discover through research could be learned in a day.

A case occurred during the mid-1970s where the photomask used to create semiconductor silicon chips disappeared from an American company and later was reported to have turned up in Tokyo. The case was never solved. A couple of years later, however, Japanese semiconductor companies were able to sell silicon chips at a price American firms could not compete with.(9)

The Israelis have also been conducting an aggressive campaign in the United States to obtain scientific and technological information and equipment. The agency responsible for these operations was called the Lakam (Bureau of Scientific Relations).(10)

The Lakam originally was organized in the mid-1960s to provide security for Israel's nuclear program. Over the years, however, the agency became more and more involved with gathering scientific and technological information, primarily nuclear and electronic.(11) For a number of years, the Lakam was very successful. Most western intelligence agencies, including the CIA, were not even aware of its existence.

Among the operations carried out in the United States by the Lakam was obtaining enriched uranium in 1965 from NUMEC, an American firm. Another case came to light in 1985 when the owner of the MILCO Corporation was indicted for selling krytrons to Israel. Krytrons are triggering devices for nuclear weapons.(12) In 1985, the Lakam left technological intelligence and entered the arena of political and military intelligence by recruiting Jonathan Pollard. The rest, as they say, is history.

After Pollard was discovered, the Lakam was disbanded. The mission of obtaining scientific and technological information, however, was most likely divided between the ministry of defense and the ministry of science and technology.(13)

THE LIST OF ALLIES CONDUCTING ESPIonage against American businesses is endless. According to security consultant Robert Courtney, Britain, West Germany, the Netherlands, and Belgium have all conducted operations against American companies.(14)

The challenge for security professionals in the '90s is to make employees aware that the Soviets are not the only ones after American corporate and government secrets. The difficulty is convincing employees that our allies also are our enemies.

The answer lies in taking a more proactive approach. If a friendly government is caught conducting intelligence operations against an American company, our government should ensure that the same amount of publicity is generated in that case as would be for a Soviet operation. Unless the government takes a more public stand on these operations, employees will continue to ignore the risk.

American businesses also must take a more aggressive attitude in protecting technical secrets. The same effort American companies extend in protecting government secrets should be extended in protecting their own.

Developing an information protection program, using many of the same techniques and procedures used to safeguard government secrets, can serve just such a purpose. It will make employees more sensitive to safeguarding company information and to the danger to the company if the competition obtains that information.

The real challenge for corporate security professionals is that in protecting government secrets they are governed by government regulation and law, while in protecting company secrets they are governed only by their ability to sell management on the subject. In selling this idea to management, security professionals should point out that in this age of shrinking budgets and tighter controls over expenses - particularly research - industrial espionage can be very profitable for a competitor. The less money a company has to spend on research, the greater its profit margin.

(1) Jeffrey T. Richelson, Foreign Intelligence Organizations (Cambridge: Ballinger Publishing Company, 1988), p. 237. (2) Jeffrey T. Richelson, The U.S. Intelligence Community, 2d ed. (Cambridge: Ballinger Publishing Company, 1989), p. 431. (3) Foreign Intelligence Organizations, p. 240. (4) Department of Defense Security Institute, Recent Espionage Cases: Summaries and Sources, March 1989, p. 22. (5) Department of Defense, Security Awareness Bulletin, No. 1-87, October 7, 1986, p. 10. (6) The U.S. Intelligence Community, p. 257. (7) "When |Friends' Become Moles." Time, May 28, 1990, p. 50. (8) "When |Friends' Become Moles." (9) Richard Deacon, Kempei Tai: A History of Japanese Secret Service (New York: Berkley Publishing Company, 1985), pp. 259-260. (10) Foreign Intelligence Organizations, pp. 193-194. (11) Dan Raviv and Yossi Melman, Every Spy a Prince: The Complete History of Israel's Intelligence Community (Boston: Houghton Mifflin Company), pp. 70, 201. (12) Raviv and Melman, pp. 198, 304. (13) Foreign Intelligence Organizations, p. 195. (14) "When |Friends' Become Moles."

Daniel P. Scuro is a security officer for AT&T Bell Laboratories in Whippany, NJ. He is a member of ASIS.
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Title Annotation:industrial espionage against American corporations
Author:Scuro, Daniel P.
Publication:Security Management
Date:Jan 1, 1992
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