-Caveat Lector-
Not for Commercial Use
Source: Nando/Christian Science Monitor
Published: 9/6/99 Author: Peter Ford
ECHELON
What's a little spying between friends?
You are not supposed to spy on your friends. As details emerge of
U.S. intelligence agencies eavesdropping on the e-mail, faxes,
and phone calls of European businesses, politicians in Europe are
calling for better ways to safeguard industrial secrets.
The most contentious source of trenchcoat contretemps among
trans-Atlantic allies: Internet encryption.
The United States is trying to persuade the European Union to
allow only Internet codes for which law enforcement and national
security agencies would have a "key." That would help to combat
terrorists and drug smugglers. But it would also give U.S.
officials potential access to the commercial secrets of foreign
companies.
"Unless we have guarantees of safeguards, controls over who
listens to whom and what for, Europe is not going to leave the
key under the doormat so that the Americans can walk in and steal
the family silver," says Glyn Ford, a member of the European
parliament.
But with no communist threat to occupy them, Western intelligence
agencies in the 1990s appear to be devoting more of their time
and resources to industrial espionage against each other. And,
says Michael Hershman, chairman of DSFX, the world's largest
private investigative agency, "Industrial espionage is going up
steadily" because of "globalization and increased competition."
Before the end of the year, the European Parliament is due to
discuss a series of reports detailing the manner in which the
U.S. National Security Agency (NSA) intercepts international
electronic communications.
The operation, which uses an international network of listening
posts and supercomputers known as "Echelon," was described last
year as "an intolerable attack against individual liberties,
competition, and the security of states" by Martin Bangemann,
outgoing European commissioner for industry.
The latest report, issued earlier this summer, described how the
top-secret system scoops up electronic signals from satellites,
undersea cables, and microwave relay stations all over the world
and scans them for key words of interest to participating
intelligence agencies. Echelon includes Britain, Canada,
Australia, and New Zealand, as well as the United States, in a
grouping called UKUSA.
"There is wide-ranging evidence" the report found, that
Washington is "routinely using communications intelligence to
provide commercial advantages to companies and trade."
The report cited a number of examples, including the NSA's
interception of phone calls in 1994 between the French firm
Thomson-CSF and Brazilian officials concerning a $1.4 billion
satellite surveillance system for the Amazon jungle. The
eavesdropping allegedly revealed that the company was bribing
Brazilian officials. Washington informed the Brazilian
government, and Lexington, Mass.-based Raytheon Corp. won the
contract instead.
The U.S. government is also said to have used communications
intelligence to ferret out Tokyo's positions during past trade
talks, and to help Seattle-based Boeing beat out the European
Airbus consortium in a 1994 battle to sell $6 billion worth of
airplanes to Saudi Arabia.
"There are serious allegations in the report ... that need
investigating," says Ford.
The NSA refuses to comment on the claims. "We will not confirm or
deny the existence of any system called Echelon," says NSA
spokeswoman Judy Emmel. The Central Intelligence Agency (CIA)
denies that it engages in industrial espionage. "We are not in
the business of spying for private firms," said then-CIA director
James Woolsey in January 1995. "We assess international economic
trends ... and support trade negotiations."
That is presumably what CIA agents were doing in Paris a month
later, when they were expelled by the French government for
spying. The agents had been seeking information on the French
position at international telecommunications negotiations.
They also illustrated one of the major drawbacks to economic
espionage. "The main problem is you don't want to get caught with
accusations of espionage against your friends," says Adm.
Stansfield Turner, CIA chief under President Jimmy Carter.
A Turner launched a program to hand over to the Commerce
Department such CIA intelligence as might be useful to U.S. firms
bidding for international contracts - such as the value of
opposing bids - but his successors have insisted the agency now
gathers only general economic information with which to brief
U.S. policy-makers.
Intelligence experts say that all major governments engage in
economic espionage of one sort or another. Some even boast about
it: In his 1993 memoirs, a former French spy chief claimed his
agents discovered the United States was about to devalue the
dollar in 1971, allowing Paris to make a large profit by currency
speculation.
Certainly, Washington is worried by the threat of foreign
industrial spies.
In 1996, President Clinton signed the Economic Espionage Act, the
first nationwide U.S. statute prohibiting the theft of trade
secrets. Eleven cases have been brought under the act so far, and
a Taiwanese businessman has been convicted. The Justice
Department is preparing other cases, some of them against foreign
governments, according to knowledgeable sources.
The Clinton administration has attached especial importance to
economic intelligence, setting up the National Economic Council
(NEC) in parallel to the National Security Council. The NEC
routinely seeks information from the NSA and the CIA, officials
say. And the NSA, as the biggest and wealthiest communications
interception agency in the world, is best placed to trawl
electronic communications and use what comes up for U.S.
commercial advantage.
The European Parliament reports have sparked Continent-wide
anger. Questions have been raised by officials in Denmark,
Germany, Norway, and Holland, while the Swedish government has
launched an investigation into whether Swedish companies have
been victims of covert NSA surveillance.
In Italy, a Rome deputy district attorney has opened an inquiry
to determine whether NSA activities violate Italian privacy law.
More important, perhaps, the reports encouraged France and
Germany to lift their restrictions on the use and sale of strong
encryption software, which Washington has been trying to limit.
Arguing that strong encryption will allow international criminals
to conduct electronic business unhindered, Washington has long
been seeking to persuade European governments to regulate the use
of such software.
Specifically, the United States has demanded that Europe should
adopt a "key escrow" system, whereby a third party would have a
"spare key" to all code systems. The recent revelations of the
NSA's activities have only deepened European suspicions that this
demand has more to do with U.S. intelligence needs than law
enforcement.
"The reports provide another argument to confirm our position
that high-level encryption should be freely allowed to protect
perfectly legal confidential messages," says Joachim Kubosch,
spokesman for - Bangemann.
"I am in favor of using all these technologies to catch people
like the Oklahoma bombers," adds Ford. "But we cannot allow the
United States to use them to steal tens of thousands of jobs from
Europeans."
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