US agencies vie in curbing exports - to Soviet arsenal
When Dietmar Ulrichshofer pried open the crate in a Vienna warehouse on the evening of June 3, 1981, he expected to find the best in American technology. Instead, he found enough sand to start a small beach.
The semiconductor manufacturing equipment he was waiting for was still in Los Angeles, where it had been seized by US Customs agents and replaced with sand.
Mr. Ulrichshofer, an electronics dealer, was part of an L.A.-based network that allegedly sneaked sensitive American electronics gear into the Soviet Union for three years, using false export licenses and third-country routes. The smashing of his California Technology Corporation syndicate was a conspicuous success in the fight to stem the flow of technology with possible military applications to potential enemies - one of the Reagan administration's top law enforcement priorities.
In the 16 months since President Reagan took office, this export control effort has sparked indictments, charges of mismanagement, congressional inquiries, some government reorganization, and a subtly waged bureaucratic turf war.
So far Operation Exodus, a US Customs Service program in the Department of the Treasury, is a touted success. This fiscal year agents have seized more than equipment being shipped out of the United States illegally. Two weeks ago, for instance, they grabbed a shipment of 32 aircraft engines outward bound for Argentina.
The US Commerce Department, with jurisdiction over most nonweapon exports, has been criticized for not devoting enough staff, money, and effort to the fight. A US Senate report issued this month says Commerce should not be involved in illegal export enforcement.
Commerce, stung by the charges, has struck back by upgrading its export compliance division. Along with more money and staff, the office will get a new chief, Theodore W. Wu, a highly respected assistant US attorney who oversaw the snaring of the California Technology Corporation. This effort, which resulted in a 60-count indictment against Mr. Ulrichshofer and three cohorts, is called one of the most important export cases ever brought to trial.
For the moment, Operation Exodus is the most visible part of the export compliance effort. Exodus, begun in October, aims to halt leakage of three types of technology: critical items the Soviets can't manufacture themselves; US high technology that's cheaper and better made than Soviet goods, such as computer parts; and equipment shipped in violation of various sanctions and embargoes, such as the aircraft engines intended for Argentina.
The program has tightened inspections at 22 US ports, to snare mislabeled or smuggled goods. But the real effectiveness of Exodus, customs officials say, lies in traditional customs contacts -- exporters, importers, and customs authorities overseas -- who can be milked for tips on goods being illegally diverted behind the Iron Curtain.
Investigations based on such intelligence have ''knocked out this year three good organizations that were set up solely to deal with the Soviet bloc,'' says Patrick O'Brien, director general of customs investigations.
In Cleveland three weeks ago, Exodus agents seized a Hewlett-Packard Company logic analyzer, falsely labeled as a harmless minicomputer, that would have ended up in East Germany, via Austria. In February, at Boston's Logan Airport, sensitive computer testing equipment also bound for Eastern Europe was seized.
Exodus ''seems very effective,'' a congressional source says. ''Customs wanted to make a dramatic demonstration of their ability in this area.''
The Commerce Department does not get similar praise. A Senate report written by the minority staff of the Permanent Subcommittee on Investigations found Commerce had but six inspectors and eight investigators for export compliance. Only one agent, for instance, was assigned to enforce President Carter's Soviet grain embargo.
In addition, the report says Commerce has no law enforcement tradition, and that its agents can't carry guns and seize suspected goods, as Customs agents can.
''The Commerce Department enforcement function should be abolished,'' says Fred Asselin, the Senate investigator who wrote the report.
Commerce, prodded by the criticism, has moved to protect its turf. The compliance division has been elevated to office status, a higher bureaucratic level. Resources devoted to export compliance are to be increased 40 percent. New field offices are being established in San Francisco and Los Angeles. Mr. Wu , well known in law enforcement circles, is being brought in as honcho.
''I agree that the (Senate) report has identified some of the fundamental problems in the Commerce enforcement mechanism,'' Assistant Secretary of Commerce Lawrence Brady told the committee last week. But he complained that ''the report does not address the organizational realignment and enhancement . . . we now have under way.''
Commerce also plans to obtain search-and-seizure and weapons-carrying authority for its agents.
''There'll be some real teeth added to the organization,'' says a Commerce official who asked not to be named.
Though Commerce and Customs authorities work closely trying to catch illegal technology exports, exchanging liaison workers and intelligence information and often sharing an investigation, a turf war seems to be taking place over who will emerge bureaucratically dominant.
Neither side will publicly disparage the other. Both praise the other's effort and invoke common goals.
But privately, Commerce officials complain that Exodus is a showboat operation partly intended for self-aggrandizement, and that Customs is not an intrinsically tougher cop of an agency -- witness its loss of enforcement authority over illegally dumped foreign steel.
Customs officials, on the other hand, say Commerce is stultified by ''a psychology of bureaucracy'' that hampers its law enforcement efforts.