Clinton Administration Grapples With New CIA Role

Move toward `industrial espionage' is sharply disputed

WITH the cold war over and trade wars heating up, the United States intelligence community is facing new pressures to redirect its efforts to support American industry.

In its first weeks in office, the Clinton administration launched a policy review to determine whether the Central Intelligence Agency should become more deeply involved in gathering economic intelligence, including the possibility of passing on trade secrets of foreign companies to US firms.

The review began after consultations involving the Director of Central Intelligence R. James Woolsey, White House national security adviser Anthony Lake, and National Economic Council chief Robert Rubin.

Industrial espionage has become "in some ways, the hottest current topic in intelligence policy," Mr. Woolsey said during his Senate confirmation hearings last month.

The concept was actually introduced in the late 1970s by Stansfield Turner, then- director of the CIA, who floated the idea of using the agency's vast information-gathering ability to aid the US private sector.

Woolsey told the House Intelligence Committee last month: "Our nation demands not that we just keep up with change but that we stay ahead of it." But while clearly laying out the issues, Woolsey has yet to say how far the CIA should go at a time at which economic issues are increasingly intertwined with national-security concerns. The question is still a matter of intense debate. His predecessor, Robert Gates, opposed deepening the CIA's role in industrial espionage. Enemies not defined

Part of the policy dilemma is that, in the world today, the US has few clearly defined enemies. The handful that exist do not challenge US interests the way the former Soviet Union and its allies did, militarily and politically, as well as economically.

Nonetheless, Admiral Turner says that his recommendation of industrial espionage grew from the discovery that other countries, looking for an economic advantage, were engaging in it. The CIA "found very friendly countries spying on our industries - trying to get good information about technology, the areas we planned to expand, and so on," Turner says.

More recently, the CIA found that "the overseas office of a major US computer company and visiting company executives were the target of sophisticated industrial espionage by a foreign intelligence agency," Woolsey told the House Intelligence Committee.

The delicate diplomacy surrounding espionage among friends leaves past and present CIA directors reluctant to cite specifics.

But in the recent book "Friendly Spies," author Peter Schweizer cites evidence linking France, Germany, Japan, South Korea, and Israel to state-sponsored industrial espionage against American companies. "They look at the American view of surprise over these activities as being rather naive," Mr. Schweizer said. "They see a division between military alliances and economic rivalry - and in economics, anything goes." A different tradition

In the US, the government traditionally stays out of promoting the marketplace, and this peculiarity of American political culture seems to run counter to the CIA going tit-for-tat in the world of economic spying.

Who would benefit if it did? "In a democracy such as ours, we can't favor one company over another," said William Webster, whose tenure as CIA director straddled the Reagan and Bush administrations.

If a trade secret from a foreign company were given out to everyone, no one would get much additional benefit from it, Mr. Webster added. "So for the United States to embark on a policy of industrial espionage suggests the real possibility of a sinkhole CIA resource."

Another factor, Webster notes, is that in today's globalized economy, "We're dealing with many international companies. And it's hard to know which side of the fence you're on when you're doing this kind of work."

Despite differences of opinion about whether or not the US should deepen its involvement in industrial espionage, there appears to be more agreement on the need for evermore vigilant counterintelligence to limit the increasing threat of espionage from abroad. Improving data analysis

Support also appears to be mounting for finding ways to use the CIA's powerful analytic resources to improve the economic data the federal government makes freely available.

Only a small part of intelligence work involves covert operations - the "cloak and dagger" work.

Most of it more closely resembles high-class, specialized journalism - with analysis based on information from available publications and documents, as well as interviews and site visits.

Turner says: "Even if it's not a matter of spying, it's a matter of publicizing to American industry what is going on in the rest of the world. Sometimes other places are ahead of us."

But such efforts would appear to require new structures in the federal government. Previous CIA studies "failed to come up with clear-cut answers as to where ... that type of information would best be disseminated," Webster says.

With economic issues given top billing at the White House, a new thrust by the CIA into economic intelligence would seem in line with administration policies, when the policy review is done. But it would clearly require a certain amount of redirection in an agency more accustomed to watching out for enemies than friendly adversaries.

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