Industrial Spying Becomes a Growing Problem

SEVERAL years ago, International Business Machines Corp. advertised in France for computer specialists. Among the respondents hired were three people who also happened to work for French intelligence and began stealing trade secrets. IBM eventually found out and contacted the United States government, which complained quietly but vehemently to the French foreign ministry. The French government apologized and rapped the intelligence service on the knuckles.

This incident illustrates a persistent and widespread problem for US industry - spying by the intelligence services of US allies such as France, Japan, Germany, and South Korea, which then convey the information to government-owned industries.

Should the US respond in kind by stealing secrets from foreign companies to help American firms compete in an increasingly tough world market?

The answer, from a host of government officials who have studied the problem, has been a resounding "no."

As former CIA Director Robert Gates was fond of recounting, an intelligence officer once said to him, "You know, I'm prepared to give my life for my country, but not for a company."

"Fraught with complexities" was how James Woolsey, the newly installed director of the CIA, described the issue. He promised senators at his confirmation hearing that he would immediately order a study on the subject of so-called economic espionage.

The debate underscores the basic differences between the arms-length relationship of business and government in the United States, and the close ties between industry and government in all major trading partners of the US.