The role of U.S. intelligence in promoting economic interests.

• Author: DeConcini, Dennis
• Position: Contemporary Issues in World Trade

For the U.S. intelligence community, the end of the Cold War meant a change to what had been its focus for more than 40 years. While intelligence agencies worried about a myriad of issues during this period, the military threat to the United States posed by the former Soviet Union and its Warsaw Pact allies had without question been its chief concern and, in the eyes of many, its raison d' etre since the end of the Second World War. While the breakup of the Soviet Union and the demise of communism did not eliminate this concern entirely, it did call into question the continued efficacy of U.S. intelligence activities in the post-cold War world. What were intelligence agencies now expected to do?

Several commentators have suggested that U.S. intelligence ought to refocus on economic matters - in particular, on supporting U.S. commercial firms as they compete for markets around the world. Their rationale is that an increasing decline in U.S. competitiveness is the greatest long-term threat to the nation's security. As long as other countries use their intelligence services to support their domestic industries, why should the United States hamstring itself?

But the Bush and Clinton administrations have resisted using intelligence agencies to support the business interests of the private sector. Former Director of Central Intelligence Robert M. Gates came directly to the point when he told the Senate Select Committee on Intelligence that CIA agents were willing to spy for their government but not for General Motors. Gates did say that the intelligence community was prepared to inform the FBI of efforts by foreign governments to penetrate U.S. companies, but he said it was not appropriate to go beyond a defensive role. Gates's successor, R. James Woolsey, has taken the same position in public statements.

It is fair to say that even those in the private sector who urge an expanded role for U.S. intelligence regard the issue as relatively minor when compared with larger problems preventing government from improving competitiveness. Pointing to such sore points as cumbersome export controls, inadequate export subsidy funding and the failure to protect intellectual property rights abroad, they say that increased support from the intelligence community would be beneficial but not imperative.

The policy issue for U.S. intelligence, however, remains on the table. The Senate Select Committee on Intelligence has been examining this issue for the last three years. While it has worked mostly behind closed doors, the committee held its first public session on this subject on 5 August 1993 to hear testimony from several representatives of the U.S. business community. It has taken considerable time for a consensus to emerge, but now, opinion on the committee is beginning to crystallize. This article examines the status of the debate and makes clear where I stand. The paper first will describe what the intelligence community traditionally has done regarding economic issues. Next it will explain some of the ideas that have been presented to the Select Committee on Intelligence, in both public and private session, of what role the intelligence community might play in the post-Cold War world. Finally, the paper will close with what I have come to believe should be the appropriate role of intelligence agencies in promoting U.S. economic interests abroad. While I share Mr. Gates's view that the intelligence community should not conduct espionage on behalf of specific private companies, it can play an important role in supporting the departments and agencies of the U.S. government who have responsibility for keeping the playing field level for American business abroad.

THE TRADITIONAL ROLE OF THE INTELLIGENCE COMMUNITY IN ECONOMIC AFFAIRS

Typically, the U.S. intelligence community(2) has collected and analyzed information regarding the economic activities of, and economic developments in, other countries. Collection has been accomplished by several agencies: the Central Intelligence Agency and the departments of State, Commerce, Treasury and Defense, among others. Analysis has largely been the province of the CIA. Relying primarily upon information reported from U.S. diplomatic posts around the world, open source collection and signals intelligence, CIA analysts have produced thousands of intelligence reports annually on economic topics. The reports analyze a government's economic policies, its long-term economic strategy, its level of success and the likely political repercussions of its policies.

These analyses were written primarily for U.S. government consumers at the State, Commerce and Treasury departments and the Executive Office of the President, in support of their respective functions. In some cases, the analysis served as the basis for U.S. diplomatic initiatives or as evidence in trade negotiations. In other cases, it was used to assess the effects of U.S. policies toward the country concerned - to determine, for example, whether assistance should be instituted or continued, or whether trade sanctions should be imposed or terminated. Sometimes the intelligence analysis was used to promote U.S. trade interests abroad by identifying countries and areas of commerce in which U.S. companies might compete successfully.

For the most part, however, economic analyses were not written for the use or benefit of the private sector. While the private sector might have benefitted indirectly from actions taken by the U.S. government vis-a-vis another country, the intended recipients of intelligence analysis were usually government officials.

Nor was economic analysis typically geared toward specific foreign companies or particular commercial transactions. Intelligence agencies generally did not report on the status of foreign commercial transactions (especially if U.S. companies were participating in them, given the restrictions that limit intelligence gathering on U.S. citizens and companies). Unless national security was obviously involved, intelligence agencies did not see their mission as keeping up with commercial developments in foreign companies.

On the other hand, although I am unaware of any formal policy that requires it, the intelligence community (usually through the FBI) traditionally has advised U.S. companies when intelligence reporting suggested that they may be the target of an intelligence operation by a foreign government. Although the government may not reveal the source of such information, U.S. companies have received warnings that their proprietary information (or classified information, where government contractors are concerned) may be at risk. To regard such warnings as intelligence analysis might be something of an exaggeration. Nonetheless, these notices are important to the companies concerned.

The post-Cold War intelligence community continues to do this sort of intelligence gathering and analysis of economic information for government consumers, and few seriously dispute the need for it to continue. Indeed, economic issues now are likely to require even more attention from U.S. policy makers. The issue is whether a new, supplementary approach is needed, geared more directly to the commercial needs of the private sector. After all, the argument goes, these companies are U.S. taxpayers, and the departments of State and Commerce have statutory responsibilities to promote the international competitiveness of U.S. firms. If the government has information that would assist these firms in competing abroad, why not make such information available, selectively or otherwise?

In the last three years, proponents of economic intelligence have presented the Senate Intelligence Committee with many suggestions in this regard, which will be discussed here in order from extreme to relatively benign.

POSSIBLE ROLES FOR THE INTELLIGENCE COMMUNITY

Economic Espionage

What most seems to capture the attention of both the public and pundits is the idea that U.S. intelligence agents should clandestinely penetrate foreign companies to steal their proprietary data for U.S. competitors. While this idea may appeal to those who enjoy the swashbuckling exploits described in spy novels, it seems to have garnered virtually no support within the government or, more important, the business community. At his confirmation hearings, Gates testified:

Economic intelligence is something where we need to proceed with

some care. ...We've tried for ten years or more to find a way to get

it [economic intelligence] into the hands of U.S. business, and we

can't find a way that does not get tangled up in the law, in

advantaging one company over another.(3)

Similar comments have been heard from U.S. business leaders. When he testified before the Intelligence Committee, John F. Hayden, corporate vice president of the Boeing Company, said:

The Boeing Company is not dependent today nor should we be in

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