-
- While the U.S. government has long maintained that its
intelligence agencies don 't participate in industrial espionage, NBC News
has learned that companies have benefited from Echelon, the long-rumored
worldwide electronic spying network.
-
- Digging through mountains of testimony has revealed several
references to U.S. intelligence gatherers specifically the Central Intelligence
Agency -- using information it 's collected to indirectly help U.S. firms
in their bids for international projects.
-
- Examples given by R. James Woolsey, the former CIA director,
include interfering in the awarding of contracts if the U.S. learns one
of the international parties is bribing local government officials. Such
activity has earned U.S. companies 'billions of dollars. '
-
- Evidence that the U.S. has used Echelon for economic
advantage -- however justified it might sound -- will 'set half of Europe
aflame, ' according to the Continent 's anti-Echelon group.
-
- At the center of the controversy over the Echelon system
is European -- and to a lesser degree other nations ' -- fears that the
U.S. and its English-speaking allies are using the worldwide eavesdropping
network to vacuum up economic intelligence, which in turn is provided to
American companies.
-
- U.S. officials have repeatedly denied that. The rationale,
officials say, is not to gather intelligence for the benefit of U.S. corporations,
but to ferret out information on how foreign companies are bribing Third
World government officials to obtain lucrative contracts, particularly
in the growing East Asian markets. The information, officials say, is not
turned over to U.S. companies.<!--- Stand-alone Graphic in Wide Column
(Narrow left; Wide right) ---
-
-
- But an NBC News analysis of testimony, speeches and government
reports -- buttressed with interviews done over the past several years
-- shows that U.S. companies have benefited when U.S. intelligence redirected
its Cold War assets towards economic intelligence. And according to senior
U.S. intelligence officials, the program is ongoing, but they were unable
to estimate the value of the the contracts won by U.S. companies as a result
of the intelligence since 1994. ëThe numbers -- that U.S. companies
have gotten billions of dollars of business -- will astound, astonish and
enrage not because European politicians would deny that some of their companies
go over the line, but because the U.S. has no right to be judge, jury and
executioner on this. ' --DUNCAN CAMPBELL author of European Parliament's
report on Echelon
-
- According to reports buried in congressional testimony
and in speeches by intelligence officials, U.S. companies have reaped billions
of dollars in contracts after the U.S. quietly went to foreign governments
and presented intelligence showing that European and other companies were
bribing their officials in hope of winning big contracts. The U.S. often
threatened problems with U.S. relations unless the U.S. was cut in on the
contract or the contract re-bid.
-
- "LEVELING THE PLAYING FIELD"
-
- In the parlance of diplomatic and intelligence speak,
this was dubbed 'leveling the playing field, ' with U.S. officials noting
how, unlike their competitors, U.S. companies are prohibited by law from
bribing government officials responsible for approving contracts.
-
- 'This information will set half of Europe aflame, ' said
Duncan Campbell, the author of a European Parliament commission 's report
on Echelon. 'The numbers -- that U.S. companies have gotten billions of
dollars of business -- will astound, astonish and enrage not because European
politicians would deny that some of their companies go over the line, but
because the U.S. has no right to be judge, jury and executioner on this.
'
-
- The Echelon report issued in February by the special
commission said that the electronic intelligence-gathering network had
the potential to violate the privacy of millions of European citizens,
suggesting that it has been used to benefit U.S. corporations in economic
and industrial espionage. The ground- and satellite-based intercept system
was targeted primarily at nonmilitary concerns, including terrorists, drug
traffickers and money launderers.
-
-
- "As an added benefit [of the intelligence networks],
we will be able, in normal times, to use these networks to learn much that
is of great use to our country on other subjects--e.g., where the world's
poppy and cocaine fields are located, or when a foreign country is trying
to bribe its way into a contract to the detriment of American companies
that play by the rules... "We also devote our economic analytical
efforts to assess whether nations are skirting the rules of international
trade by using their intelligence services for industrial espionage, or
exerting pressure to win contracts for their firms at the expense of American
business and American jobs. This does not mean we are conducting economic
espionage--we are not the in business of spying for private firms. But
it does mean that we bring these corrupt foreign practices to the attention
of the White House and the State and Commerce Departments, who then seek
redress--often successfully." -- R. James Woolsey, Director of Central
Intelligence, in a hearing before the Select Committee on Intelligence,
U.S. Senate, January 10, 1995.
-
- As recently as this past week, both CIA Director George
Tenet and NSA Director LTG Michael Hayden reiterated the U.S. position
in testimony before the House Permanent Subcommittee on Intelligence.
-
- 'With respect to allegations of industrial espionage,
the notion that we collect intelligence to promote American business interests
is simply wrong, ' testified Tenet. 'We do not to target foreign companies
to support American business interests.
-
- 'If we did this, where would we draw the line? Which
companies would we help? Corporate giants? The little guy? All of them?
I think we quickly would get into a mess and would raise questions of whether
we are being unfair to one or more of our own businesses. '
-
- But while Tenet denied that foreign companies are 'targeted,
' he did admit that when the U.S. found that foreign countries were trying
'to deny U.S. businesses a level playing field, ' that information is passed
on to 'other government agencies responsible for enforcing U.S. laws. '
What Tenet did not discuss -- as one of his predecessors, Admiral Woolsey,
did in detail -- was what those 'other government agencies ' do with that
information and how it ultimately benefits U.S. companies.
-
- FROM SERENDIPITY TO INTENTION
-
- Officials confirm that among other deals U.S. intelligence
did help Boeing on a sale of 747s to Saudi Arabia, Raytheon on the sale
of a sophisticated surveillance system to Brazil, and Hughes Network Systems
on a sale of a telecommunications system to Indonesia during the Clinton
administration, and that the effort actually began in the Bush administration.
At first, during the Bush administration, the corporate intelligence gathering
was serendipitous, say officials, with the U.S. intelligence apparatus
picking up evidence of bribery while focusing on other issues. And those
involved in both the Bush and Clinton administration efforts say that the
companies often were unaware of the help ... but not always.
-
- "We are assessing how some governments violate the
rules of the game in international trade. This does not mean the CIA is
in the business of economic espionage--for example, trying to learn the
business plans of foreign companies in order to give such information to
American firms. It does mean, however, that we are paying careful attention
to those countries or businesses who are spying on our firms, to the disadvantage
of American businesses and American workers, and and to those governments
and foreign companies that try to bribe their way into obtaining contracts
they cannot win on the merits.
-
- "Frequently, we are able to help the US government
obtain quick redress when such foreign bribery occurs or is about to occur,
to the benefit, measured in billions of dollars, of American companies.
Most such companies never realize that they have received our assistance
and even state publicly that they do not need it. This is fine with us.
It is the nature of the intelligence business." ---R. James Woolsey
in a hearing before the Select Committee on Intelligence, U.S. Senate,
January 24, 1994:
-
-
- In articles and interviews, Randall Fort, former official
of the State Department 's Intelligence and Research Bureau, has said that
the intelligence community was first tasked to come up with economic counterintelligence
during the Bush administration. He says the first case -- and apparently
the case that made the White House realize the value of such information
-- came when the U.S., 'using the normal net for gathering communications
intelligence, ' found that the 'Japanese were bribing the s**t out of Syria
' on a power plant contract. 'It came to our attention that a U.S. company
was also trying to win this contract ' worth nearly a half billion dollars.
As a result, 'quiet approaches were made to the Syrian government ' that
if Syria wanted to improve its position with the U.S., it should not go
along with the bribery. As a result, the U.S. company won the contract.
-
- Prior to that, there was a lot of 'derivative information
' gathered from the intelligence community 'casting its net globally. '
Using spy satellites, phone taps, and secret bases that downlinked communications
satellites, the intelligence community created a vast net it could use
to gather voice communications, faxes, e-mail, etc. In fact, 85 percent
of U.S. intelligence comes from such 'communications intelligence ' assets.
-
- 'Periodically, reports would come through that indicated
activities were nefarious, not above-board. ' The intelligence was usually
sigint [electronic eavesdropping or signals intelligence] or humint [old-fashioned
spying]. 'Sourcing was more frequently obtained if government was procuring.
We would have penetrations of that government, hearing something from a
deputy vice-premier or a cabinet minister. ' 'Those sorts of things came
up periodically, but they were dealt with on an ad hoc basis ... not ignored
but handled ad hoc. ' After Syria, if something was discovered watching
the flow of intelligence, 'it became more pro-active. If we knew of something,
an ëintelligence requirement ' would be levied, ' meaning word would
go out in 'an aggressive, pro-active manner ' to gather what can be gathered.
-
- GATHERING THE DATA
-
- Things began to happen. The U.S. would go to a 'nominally
clean guy ' and essentially say that 'if a hand is caught in the cookie
jar, then the U.S. company is to be cut into the program. ' In some cases,
part of the contract will be given to the U.S. company, and in others,
the U.S. will be told how to counteract the bribery. And sometimes, the
U.S. company would get the whole contract. On the opposite end of the spectrum,
the U.S. would simply 'demarche ' -- send a letter of diplomatic protest
-- to the offending nation. 'The level of success depends on U.S. relationship
with the country ... It is part of the overall political dynamic, not something
that governs it. '
-
- In transition documents, the Bush administration advised
the incoming Clintonites of the effort and the pro-trade forces within
the new administration pushed it even harder. Economic intelligence gathering
became policy. The CIA designed a new daily intelligence digest, called
the 'Daily Economic Intelligence Briefing. ' Highly classified with a limited
run of 100 copies, it 's distributed to officials at the White House and
cabinet-level departments throughout the government 's economic bureaucracy.
Of the agency 's four daily publications, only the 'President 's Daily
Briefing, ' with a run of 32 copies, is more restricted. It regularly contained
information on foreign bribery.
-
- And at the Commerce Department, the intelligence data
was combined with other trade data at an office called the 'Advocacy Center,
' set up by then-Commerce Secretary Ron Brown. Borrowing the CIA term,
Brown talked about the Advocacy Center 'fighting to level the playing field
and promote open competition in the international bidding arena. '
-
- "As we have looked at government-to-government lobbying
cases where foreign leaders use pressure tactics to help their firms win
international contracts-- and questionable business practices, we have
detected an array of tools that are used--often in combination--including
bribes, insider information, and disinformation to limit the ability of
US firms to compete for international contracts. "Specifically, in
1993, we alerted the policymakers to 51 cases involving some $28 billion
in total sales where these tactics among others were being used to disadvantage
US firms seeking business overseas. "In the cases where policymakers
were able to take action, US firms obtained contracts worth some $6.5 billion."
---Letter from Colin Jellush, Intelligence Community Issues Division, to
Don Mitchell, Select Committee on Intelligence, U.S. Senate, April 8, 1994.
-
-
- No one was more enthusiastic than Woolsey, who described
the effort in a speech at the Center for Strategic and International Studies
in July 1994: 'In the commercial area, what we do is very specific. American
corporations have to operate under a statute called the Foreign Corrupt
Practices Act. It 's a very tough statute. As a private counsel, I 've
done investigations under it for boards of directors. It keeps American
corporations playing honest 99-plus percent of the time in their bidding
on contracts overseas. We 're the only country with anything even remotely
approaching a foreign corrupt practices act. A number of countries in other
parts of the world, including some of our oldest friends, are very much
into the business of bribing their way to contracts that they cannot win
on the merits.
-
- 'We collect intelligence on those efforts to bribe foreign
companies and foreign governments into, for example, awarding an airport
contract to a European firm rather than an American firm. And when we find
out about those, and we do a fair amount of the time, we go not to the
American corporation that 's competing, but the secretary of state, and
he sends an American ambassador to see a president or a king, and he --
that ambassador says, ëMr. President, ' or ëYour Majesty, you
're minister in charge of construction is on the take, and you have a lot
going with the United States, and we don 't really take kindly to your
operating that way. '
-
-
- 'And so rather frequently what happens -- not always
-- is that the contract is re-bid, sometimes the American corporation gets
a share of it, sometimes the whole thing is done right, sometimes not.
But we calculate, really very conservatively, that several billion dollars
a year in contracts are saved for American business by our conducting that
type of intelligence collection. We intend to continue to do it. It is
relatively new. We are very -- frankly -- very good at it, and we have
had some very positive effects on contracts for American businesses.
-
- 'I sometimes smile as I read the newspaper because some
of the same corporations for whom we have saved very, very large contracts
by operating this way will have officials or executives go public and say,
ëWe don 't need any help from the American intelligence community.
' That 's fine, that 's the way the intelligence business goes. '
-
- More to the point, the CIA wrote the Senate Intelligence
Committee that same year in a letter obtained by NBC News:
-
- 'As we have looked at government-to-government lobbying
cases where foreign leaders use pressure tactics to help their firms win
international contracts and questionable business practices, we have detected
an array of tools that are used -- often in combination -- including bribes,
insider information, and disinformation to limit the ability of U.S. firms
to compete for international contracts.
-
- 'Specifically, in 1993, we alerted the policymakers to
51 cases involving some $28 billion in total sales where these tactics
among others were being used to disadvantage U.S. firms seeking business
overseas.
-
- 'In the cases where policymakers were able to take action,
U.S. firms obtained contracts worth some $6.5 billion. '
-
- By the next year, Woolsey told a Detroit press conference
that U.S. firms obtained contracts worth another $10 billion in 1994. Woolsey
was in Detroit to meet with the heads of the Big Three automakers on how
to protect the U.S. competitive position in overseas bidding. Neither the
CIA nor the automakers would reveal what Woolsey talked about.
-
- ëIT WAS VERY HELPFUL '
-
- A high-ranking official at the CIA says that examples
of intelligence community success in this area included awards for telecommunications
systems in Indonesia and infrastructure improvements in Saudi Arabia --
the case hinted at by Woolsey in his example about approaching a king about
corruption. Other sources report that the $6 billion Saudi airliner contract
and the $1.4 billion Amazon surveillance system in Brazil were also helped
by the CIA 's efforts.
-
- 'It was very helpful, ' said an official of Raytheon
at the time.
-
- The Commerce Department hinted at the role of the intelligence
community in the Raytheon contract when it laid out its efforts in an unclassified
'Success story ' memo: 'Faced with stiff competition from a European group
of companies, the U.S. government was able to assist the Raytheon consortium
-- helping to level the competitive playing field in Brazil. '
-
- CIA officials often sat in on Commerce Department briefings.
In one, on pushing contracts in Indonesia, five of the 16 people at a key
meeting were CIA representatives. At the meeting, the highest ranking of
the CIA officers asked for a list of 'any primary competitors known to
the group for these projects. '
-
- "A number of countries in other parts of the world,
including some of our oldest friends, are very much into the business of
bribing their way to contracts that they cannot win on the merits. We collect
intelligence on those efforts to bribe foreign companies and foreign governments
into, for example, awarding an airport contract to a European firm rather
than an American firm. And when we find out about those, and we do a fair
amount of the time, we go not to the American corporation that's competing,
but the secretary of state, and he sends an American ambassador to see
a president or a king, and he -- that ambassador says, "Mr. President,"
or "Your Majesty, you're minister in charge of construction is on
the take, and you have a lot going with the United States, and we don't
really take kindly to your operating that way. And so rather frequently
what happens -- not always -- is that the contract is rebid, sometimes
the American corporation gets a share of it, sometimes the whole thing
is done right, sometimes not. But we calculate, really very conservatively,
that several billion dollars a year in contracts are saved for American
business by our conducting that type of intelligence collection. We intend
to continue to do it. It is relatively new. We are very -- frankly very
good at it, and we have had some very positive effects on contracts for
American businesses. I sometimes smile as I read the newspaper because
some of the same corporations for whom we have saved very, very large contracts
by operating this way will have officials or executives go public and say
"We don't need any help from the American intelligence community."
That's fine, that's the way the intelligence business goes." --- R.
James Woolsey in an address to The Center for Strategic and International
Studies on July 18, 1994
-
-
- Overall, said a former intelligence official, 'These
things are on the margin, they are not a cash cow for the agency. ' The
numbers may or may not be real, since it 's the tendency of a government
agency to 'aggregate every conceivable thing. '
-
- 'In the scheme of things in the scale of things, it 's
small potatoes, ' the former official said. 'We have to keep a perspective
on all this. Among the big drivers of the intel community ... econ intel
is really pretty small. '
-
- Campbell says that is not the point. The CIA 's efforts,
he says, are extralegal. 'If you find evidence of wrongdoing, bribery,
your duty is to go through the legal process, not use it for the benefit
of U.S. companies. There are mechanisms for legal cooperation between countries.
'
-
- A GROWTH INDUSTRY
-
- Beyond 'leveling the playing field, ' as Woolsey liked
to call it, the CIA began doing other things in the area of economic intelligence.
Economic intelligence is in fact one of the few growth industries at the
CIA. With the Cold War over, the vast intelligence infrastructure of spy
satellites, remote eavesdropping stations, and human agents was being,
to some extent, redirected toward gathering economic intelligence.
-
- Woolsey again: 'What we do in the area of economic intelligence
is follow such things as wheat crops and oil reserves and currency flows
that are available for macroeconomic decisions by the U.S. government.
We follow such developments in technology around the world, particularly
where that can be dual-use technology that might be used for military applications
... We watch the economies of Russia and China very closely now, because
the future of the inflation rates and the stability of those economies
both are going to have a huge impact on the future stability of those two,
to put it mildly, very important states. '
-
- That, of course, is a very narrow view of what the CIA
does. The intelligence community has always done economic intelligence.
But now, whether because the CIA needs a new justification for its budget
or because economic intelligence is a higher priority, the agency has put
a new priority on economic matters.
-
- More importantly, the CIA has been charged with determining
which nations ' intelligence services are targeting which U.S. industries
and how U.S. companies can protect themselves against foreign intelligence
services.
-
- 'Our intelligence helps policymakers understand the way
other countries sometimes violate the norms of international trade, so
that we can protect our economy from the unscrupulous practices of others,
' Woolsey testified March 9, 1993, before the House Select Committee on
Intelligence, 'For example, we have uncovered cases of illegal and unethical
behavior by foreign firms and governments -- behavior which directly affects
our national interest in fair trade -- and have thus helped protect American
economic and technological secrets. In just one example, we discovered
how the overseas office of a major U.S. computer company and visiting company
executives were the target of sophisticated industrial espionage by a foreign
intelligence agency.
-
- 'During the Cold War, although we watched this sort of
thing happen, I think it is fair to say that sometimes our interest and
the greater objective of dealing with the Soviet Union in the Cold War
-- and some of these countries that were involved in these activities were
and are friends and allies of the United States -- we saw these things
happen and sometimes we would, the intelligence community, would report
to the executive branch of the government, the rest of the executive branch,
and it would bring these matters to the foreign government 's attention
or otherwise take action. But it is fair to say that during the Cold War,
from time to time, we were fairly gentle about this. '
-
- "Our intelligence helps policymakers understand
the way other countries sometimes violate the norms of international trade,
so that we can protect our economy from the unscrupulous practices of others.
For example, we have uncovered cases of illegal and unethical behavior
by foreign firms and governments --behavior which directly affects our
national interest in fair trade--and have thus helped protect American
economic and technological secrets. In just one example, we discovered
how the overseas office of a major U.S. computer company and visiting company
executives were the target of sophisticated industrial espionage by a foreign
intelligence agency. "Historically, the United States has watched
very carefully while several foreign countries have engaged in two practices:
One is their conducting industrial espionage against American corporations;
and the other is their being involved, sometimes with their governments,
in bribing foreign governments to give contracts to their country's companies
rather than to American companies.
-
- "During the Cold War, although we watched this sort
of thing happen, I think it is fair to say that sometimes our interst and
the greater objective of dealing with the Soviet Union in the Cold War--and
some of these countries that were involved in these activities were and
are friends and allies of the United States--we saw these things happen
and sometimes we would, the intelligence community, would report to the
executive branch of the government, the rest of the executive branch, and
it would bring these matters to the foreign government's attention or otherwise
take action. But it is fair to say that during the Cold War, from time
to time, we were fairly gentle about this. We would see bribery to the
detriment of American companies, we would see foreign intelligence services
conducting industrial espionage against American companies, and we would
perhaps remonstrate but not be firm, in the interest of the greater good
of defeating the Soviet Union in the Cold War.
-
- "The Cold War is now over, and I don't want to second-guess
where our executive branch review of all these issues will come out, but
I would say to you that if the result of this review is that the United
States should be prepared to be considerably more forceful and effective
in stopping industrial espionage against American companies and in making
the consequences of bribery by foreign companies and foreign governments
unhappy for those government and those companies, and if I am given the
task of helping to come up with ways in which we might be effective in
countering such bribery and such industrial espionage against us, I will
approach that subject with particular vigor and I would say particular
relish. --R. James Woolsey a in Hearing before the Permanent Select Committe
on Intelligence, U.S. House of Representatives, March 9, 1993
-
-
- That change had congressional backing. In fact, the Intelligence
Authorization Act for FY 1995 requires the White House to report on foreign
industrial espionage 'to improve the awareness of United States industry
of foreign industrial espionage and the ability of such industry to protect
against such espionage. ' The report, due every March, requires the President
to inform Congress of the various efforts directed against U.S. industry
in terms of both targeted industries and the nations involved in such espionage.
-
- THE SHADOWY SIDE
-
- But there are problems with all this corporate espionage
and counterintelligence. One is the temptation to delve deeper into corporate
espionage, which the CIA says it will not do. It will not provide covertly
procured documents or technology to U.S. companies.
-
- There is another problem as well: it may lead to an intelligence
war with our allies, a war that could effect intelligence cooperation on
more important matters when they arise.
-
- Still, the CIA and other parts of the U.S. intelligence
community are enthusiastic about the program. One reason, critics contend,
is that the intelligence community needs to justify huge expenditures for
espionage in some way that is easily quantified. This is a very politically
savvy way to do so.
-
- In particular, the intelligence community must justify
the enormous expense required for electronic eavesdropping, or signals
intelligence, the most lucrative and most expensive intelligence source.
Intelligence experts note that the best way of gathering any kind of corporate
data -- for counterintelligence or corporate espionage -- is through electronic
eavesdropping on corporate and foreign government telecommunications. There
is no better way to get the hard facts, the documentary proof needed for
meeting with the prime minister or king. This is not to say other intelligence
means, like human spies, can be utilized. The judgment among intelligence
experts is that eavesdropping is the most useful and also the means most
in need of justification.
-
-
-
- From: sightings@mindspring.com Mime-Version: 1.0 Date:
Sun, 16 Apr 2000 15:54:58 -0700 To: neff1@mindspring.com Subject: COMMENT
US Spying Pays Off Big (Puff Piece) Cc: eotl@west.net
-
-
-
-
- Comment
-
-
- From Victor Fletcher
- <vpflet@remoteviewing.com>
- 4-16-00
-
-
- That is quite a puff piece for the CIA by the NBC reporter.
Regardless of bribing by foreign corporations, nowhere does he report that
the CIA determines the bid price of foreign corporations so that U.S. corporations
are able to bid slightly under the competition.
-
- I've never seen such a clever puff piece on the CIA for
a long time. What slanted reporting that NBC reporter has done. I guess
he's probably paid the CIA himself. They sit around putting a "positive"
spin on their crookery by saying the other guys are the bad guys.
-
- How come, I would like to know, after Canada sent jets
and highly sikilled pilots to the Gulf War that Canada is reported to be
barred from follow-up trade with the U.S.? To the victors go the spoils;
to the bigger victors go all the spoils and Canada gets nothing.
-
- Victor P. Fletcher
-
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