Why spy? The uses and misuses of intelligence.

• Author: Kober, Stanley

U.S. intelligence agencies should devote their resources to serious security threats, such as international terrorism and adverse political trends. Instead, the Clinton Administration has diverted their mission to economic espionage.

When Pres. Clinton took office, his administration made several assumptions about foreign policy: first, that the Cold War was over: second, that during the Cold War, Washington had allowed political-military allies to take advantage of the U.S. in international trade; and third, that because of that indulgence, as well as the traditional American aversion to any sort of government guidance of the economy, the U.S. was losing its international competitiveness.

According to that view, international rivalry in the post-Cold War world was going to be economic, rather than political-military. Consequently, the Administration established the National Economic Council in the White House to give economic issues the same importance the National Security Council gives national security; the State Department established its own office to deal with economic issues; the Office of the U.S. Trade Representative became much more confrontational in foreign negotiations; and the Commerce Department established its "war room," whose very name summarized the new attitude toward international trade.

That change in focus also affected U.S. intelligence agencies. After all, if international trade and competitiveness were the new areas of battle, should not the intelligence agencies contribute to America's overall effort? Economic intelligence, Central Intelligence Agency director-designate R. James Woolsey said at his confirmation hearings in February, 1993, had become "the hottest current topic in intelligence policy."

Woolsey is gone, but the focus on economic intelligence survives. The Los Angeles Times reported in July, 1995, that "President Clinton has ordered the Central Intelligence Agency to make economic espionage of America's trade rivals a top priority." A month later, the London Sunday Times revealed that "the Foreign Office is voicing alarm over a strategy by the Central Intelligence Agency to spy on foreign companies, including British firms," adding that "the scheme has been devised by John Deutch, the new CIA director, who plans to ask American spies to recruit agents inside foreign businesses and use electronic eavesdropping to gather details of company operations." Indeed, in early 1995, the French government exposed an American economic espionage attempt, and shortly afterward, a similar effort against Japan was revealed by the U.S. press. Neither country took kindly to that treatment, and the French insisted that five U.S. citizens, four of them diplomats attached to the embassy, leave the country.

Although some economic espionage may be necessary when there is a clear national security connection (e.g., tracking foreign arms sales), the assumptions that have guided the Clinton Administration are badly flawed. Perhaps worse, the Administration's assumptions about the international security environment are indicative of a failure to comprehend the dangerous world that has begun to emerge from the debris of the Cold War.

When the Cold War ended, it was widely believed that a new era of international cooperation had begun. The Gulf War seemed to confirm that impression, with former rivals uniting to oppose Saddam Hussein's aggression. Yet, the allied victory in that conflict has not deterred other wars, as the fighting that has accompanied the disintegration of Yugoslavia demonstrates. Indeed, the victory in the Persian Gulf has not even brought stability to that troubled region.

Simply put, the end of the Cold War has not led to a more peaceful world and, as the attacks on Americans in Saudi Arabia testify, the U.S. is the target of those who challenge the status quo. The failure of U.S. intelligence to anticipate such attacks is significant.

Intelligence agencies are America's eyes and ears in a dangerous world. Their purpose is to warn the nation of threats, so that the U.S. has time to take measures to protect itself. When their resources are diverted in an effort to improve American "competitiveness," they are less able to perform their security mission. In a world in which terrorists openly have declared war against the U.S., that mission should not be compromised.

There are several reasons for economic espionage. One identified by the White House is to "contribute where appropriate to policy efforts aimed at bolstering our economic prosperity" by "helping policymakers understand economic trends." However, economic trends are not secret. To rely on intelligence analysis to identify underlying trends that are, by definition, out in the open, is to place unwarranted faith in the cachet of secrecy. Since such trends can not be hidden, analysis of them will benefit from open discussion and should not be pushed behind closed doors. Nevertheless, three specific areas have emerged as the focus of economic espionage: stopping foreign practices, especially bribery, that hurt U.S. firms; halting thefts of American corporate secrets; and supporting U.S. negotiators in trade talks. Each of those areas may seem reasonable at first glance. Precisely because they seem reasonable, those issues have not received the scrutiny they deserve.

Stopping bribery. On July 18. 1994, CIA Director Woolsey addressed the Center for Strategic and International Studies in Washington on the future direction of intelligence. After that appearance, he was asked about the role of economic and commercial intelligence. His reply stressed the importance of using the intelligence agencies to win contracts for American firms by exposing bribery attempts by competitors:

"A number of countries in other parts of the world, including some of our oldest friends, are very, much into the business of bribing their way to contracts that they can not win on the merits .... And when we find out about those ... we go not to the American corporation that's competing, but the Secretary of State, and he sends an American ambassador to see a president or a king, and he -- that ambassador -- says, `Mr. President,' or `Your Majesty, your minister in charge of construction is on the take, and you have a lot going with the United States, and we don't really take kindly to your operating that way." And so rather frequently what happens -- not always -- is that the contract is rebid.... We calculate, really very conservatively, that several billion dollars a year in contracts...