The murky side of trade meetings

The murky side of trade meetings

By LES BLUMENTHAL & MICHAEL DOYLE, Nando Washington Bureau

WASHINGTON (November 25, 1999 2:00 a.m. EST http://www.nandotimes.com) - Even trade wars have their shadow side. And even allies snoop around, when big money is at stake.

So when negotiators from 134 World Trade Organization nations convene in Seattle next week to set the agenda for high-stakes trade talks, they'll be armed with every scrap of information they've been able to scoop up from sources both public and private.

Information, some of it covertly gathered, will be the coin of the realm at the four-day WTO meeting.

Richest by far will be the U.S. negotiating team, endowed with the latest economic and political intelligence gathered by the nation's $30 billion-a-year spy network.

"You can rest assured the (spies) will be there in vans or rented hotel rooms and apartments," said Mike Frost, the former deputy chief of the Covert Collection Program at Canada's spy agency, the Canadian Security Establishment. "They will have their earphones on and they will provide real-time support for the American delegation."

It is impossible to know precisely what role spying plays at a big trade summit.

But it is all part of the old game of cat and mouse. Only now, with the Cold War over, it is being played with powerful new tools and an eye on economic, rather than political, targets. Every country seeks an intelligence advantage for its trade negotiators, but some countries get carried into explicit industrial espionage. The question for many is: Where does a country draw the line?

"Some foreign intelligence services have turned from politics to economics, and the United States is their prime target," former CIA Director Robert Gates warned a congressional panel in the early 1990s.

Three years ago, FBI Director Louis Freeh told Congress that his agents were involved in 800 separate investigations into economic spying by foreign countries, and the agency lists at least 23 countries actively involved in economic espionage against the United States.

According to some allegations, their targets have included Boeing, Intel and Corning.

For their part, U.S. intelligence agencies are not supposed to supply information to American companies, though there have been allegations the information flows through the Commerce Department to the private sector.

"To use our intelligence services to be, in effect, private investigators for corporate America, I would certainly recommend against that," Freeh said. "I think it's bad policy."

But to use intelligence services to inform U.S. economic policy-makers and trade negotiators -- that, officials agree, is fitting.

"There were times when the intelligence people came in and briefed," recalled one former U.S. official involved with trade negotiations. "They would normally brief the lead (U.S. negotiator) and one other person. ... It's a very, very private kind of thing and there's not a lot of paper floating around."

U.S. officials, in turn, assume in the days leading up to a trade negotiation that they are being spied on.

"We operate on the assumption they are listening to us and we are listing to them," said one former trade official.

John Pike, an intelligence specialist with the Federation of American Scientists, said that anyone not sharing that assumption "is in for a rude awakening." He expressed little doubt that the Seattle WTO meeting would be a hotbed of surveillance.

"Of course, I would hope so," Pike said of the likelihood of U.S. spying in Seattle. "And they (other nations) are trying to do the same thing to us. We haven't signed a non-aggression pact and except for our closest allies, it's a war against all."

The information can flow in different ways.

From a satellite dish in central Washington state known locally as "Ollie North's Ear," to facilities in Australia's Outback and England's North Yorkshire, the National Security Agency uses sophisticated computers to monitor millions of phone calls, e-mails and faxes from around the globe.

Europeans believe they have been especially singled out.

European security specialists believe the NSA may have tapped an e-mail system that linked 5,000 European Parliament officials at a time when sensitive trade negotiations were under way.

A recent European Parliament report concluded "all electronic communications in Europe are routinely intercepted by a global system of spy satellites and listening antennas."

In another reported case, NSA intercepts allegedly helped U.S. trade negotiators in their talks with the Japanese over luxury car imports in 1995. And, the 1994 meeting of Asia-Pacific leaders in Seattle also reportedly attracted spies from all over.

The United States doesn't have a monopoly on snazzy spy equipment.

A congressional panel, for instance, was reminded several years ago of an allegation that French intelligence had set up an "electronics operation" in Everett, Wash., to listen to and monitor flight tests of Boeing's new 747-400. The jumbo jets are built at a Boeing plant in Everett. The French are major partners in the Airbus Industrie consortium, Boeing's chief competitor.

Old-fashioned human intelligence gathering, too, has its place. It can be as routine as collecting published documents, or as sneaky as cultivating a secret source.

In one case cited by Congress' General Accounting Office, a French national working for Corning Inc., sold trade secrets to the French spy agency, Direction Generale de la Securite Exterieure, which in turn allegedly gave this information to a competitor firm.

The United States is not just the victim.

"Of course we gather economic intelligence on what other people do," said Rep. Norm Dicks, D-Wash., who served on the House Intelligence Committee for eight years.

Economic intelligence collected by the NSA and other U.S. intelligence agencies is shared with the White House and executive agencies. But private businesses can still benefit.

In 1993, Boeing, McDonnell Douglas and Airbus Industrie were fiercely competing to sell planes to Saudi Arabia's national airline. The airline was about to announce a $6 billion order for Airbus planes when the CIA "inadvertently" picked up information that a member of the Saudi royal family had engaged in questionable activities, a source close to the U.S. intelligence community said.

The White House passed that information on to Saudi King Fahd, and the deal with Airbus was put on hold. Several months later, Boeing and McDonnell Douglas split the order.

"If it disadvantages U.S. companies, it is given to the White House," former CIA Director James Woolsey said in an interview. "They decide how to deal with it. It's up to the policy-makers how to handle it. Sometimes foreign countries are approached and are told certain of their people may be corrupt and it is impacting American business."

In 1994, the NSA intercepted messages indicating the Indonesian government was planning to give a $200 million telephone contract to NEC of Japan. According to published reports, President George Bush personally called Indonesian President Suharto, and the contract was eventually split between NEC and AT&T.

The intercepted message that led to the Bush phone call was likely picked up by the listening dish located in the sagebrush hills of central Washington's Army Yakima Firing Range. The dish is thought by the U.S. intelligence community to be part of a program code-named Echelon, which uses supercomputers programmed with a "dictionary" of key words to comb million of intercepts picked up by listening posts around the world.

The information is shared with Canada, New Zealand, Great Britain and Australia.

The Canadians reportedly used an Echelon intercept to underbid the United States on a $5 billion wheat deal with China after a car phone conversation was detected in which the U.S. ambassador to Canada and the American Embassy in Ottawa discussed the United States' bottom line in the negotiations.

Sometimes, the economic espionage can prove embarrassing for allies.

Earlier this year, the German government insisted the United States recall three Americans believed to be CIA operatives working out of Munich. The Americans were said by German state television to be engaged in efforts to recruit German citizens for economic espionage.

Such spying on friends isn't always a topic for polite diplomatic conversation. But there's no doubt about its significance in a world bound by trade.

"Of course it is going on," said Canada's Frost.