http://www.independent.co.uk/news/World/Americas/2000-07/coldwar020700.shtml
The new Cold War: How America spies on us for its oldest friend –
the Dollar
Exclusive: Documents shed light on US policy of covert
surveillance of British and European industry
By Duncan Campbell and Paul Lashmar
2 July 2000
It is the new Cold War. The United States intelligence agencies,
facing downsizing after the fall of the Berlin wall, have found
themselves a new role spying on foreign firms to help American
business in global markets.
Documents obtained by the Independent on Sunday reveal how the
CIA and National Security Agency (NSA) – propelled by the
newly-elected Clinton administration's policy of "aggressive
advocacy" to support American firms compete for overseas
contracts – have immersed themselves in the new hot trade war.
Targets have included UK and European firms. At stake are
contracts worth billions of dollars.
For America's spies an important tool has been the global
eavesdropping system known by the code name Echelon, which has
come to invoke the tag of the Big Brother of the cyberspace age.
Echelon is part of a British and American-run world-wide spy
system that can "suck up" phone calls, faxes and e-mails sent by
satellite. America's intelligence agencies have been able to
intercept these vital private communications, often between
foreign governments and European businesses, to help the US win
major contracts.
The implications of eavesdropping business communications are
dramatic, according to Dr Brian Gladman, a British former top
Nato computer expert.
"The analogy I use is where we were 250 years ago with pirates on
the high seas. Governments never admitted they sponsored piracy,
yet they all did behind the scenes. If we now look at cyberspace
we have state-sponsored information piracy. We can't have a
global e-commerce until governments like the US stop
state-sponsored theft of commercial information," he says.
Britain's role in Echelon, via its ultra-secret eavesdropping
agency GCHQ, has put Tony Blair's government in the dock facing
its European partners.
European politicians meet on Wednesday in Strasbourg and Berlin
to call for inquiries into electronic espionage by the US to beat
competitors. These debates follow two years of controversy about
Echelon as its astonishing power has gradually been revealed.
But the real origin of the current row lies in the early
Nineties, when US politicians and intelligence chiefs decided
that the formidable but under-employed Cold War US intelligence
apparatus should be redirected against its allies' economies.
At stake was not just routine international trade, but new
opportunities created by the demise of communism and fast-growing
markets in countries that US trade officials dubbed "BEMs" – Big
Emerging Markets, such as China, Brazil and Indonesia.
Perhaps the most startling result of the new Clinton policy came
in January 1994, when the then French Prime Minister Edouard
Balladur flew to Riyadh to conclude a $6bn (£4bn) deal for arms,
airliners and maintenance, including sales of the European
Airbus. He flew home empty-handed.
The Baltimore Sun later reported that "from a commercial
communications satellite, NSA lifted all the faxes and
phone-calls between the European consortium Airbus, the Saudi
national airline and the Saudi government. The agency found that
Airbus agents were offering bribes to a Saudi official. It passed
the information to US officials pressing the bid of Boeing Co."
Clinton's government intervened with the Saudis and the contract
went to Boeing.
A second contract where US intelligence played a decisive role
concerned Brazil. In 1994, NSA intercepted phone-calls between
France's Thomson-CSF and Brazil concerning SIVAM, a $1.4bn
surveillance system for the Amazon rain forest. The company was
alleged to have bribed members of the Brazilian government
selection panel. The contract was awarded to the US Raytheon
Corporation – which announced afterwards that "the Department of
Commerce worked very hard in support of US industry on this project".
This is just one of hundreds of "success" stories openly boasted
by the US Government's "Advocacy Center" up to the present day.
They do not say where the CIA or NSA was decisive in winning the
contract, but often brag of beating UK, European or Japanese competitors.
Cases where the US "beat British" competitors include power
generation, engineering and telecommunications contracts in the
Philippines, Malawi, Peru, Tunisia and the Lebanon. In India, the
CIA tracked British competitive strategies in a competition to
built a 700MW power station near Bombay. In January 1995, the
$400m contract was awarded to the US companies Enron, GE and Bechtel.
Also in 1995, General Electric Power Systems won a $120m tender
to build a plant in Tunisia. "They beat intense competition from
French, German, Italian and British firms for the project," the
Center boasts.
Documents and information obtained by the IoS show that the
critical question of whether US intelligence should
systematically help business was resolved after the election of
Clinton in 1993. He appointed key Democratic National Party
fund-raisers, including the late Secretary of State for Commerce,
Ron Brown, to senior posts and launched a policy "to aggressively
support US bidders in global competitions where advocacy is in
the national interest". Soon, every US government department,
from the Bureau of Mines to the CIA and the giant, super-secret
National Security Agency, was playing a role in landing contracts
for the booming US economy.
The new policy, dubbed "levelling the playing field" by the
Clinton administration, included arrangements for collecting,
receiving and handling secret intelligence to use to benefit US commerce.
Three Sigint (signals intelligence) reports obtained by the IoS
are economic in nature. One details messages between Banque
Nationale de Paris offices in France and Delhi, concerned with
loans to build an atomic power station near Madras. A second
gives details of OPEC negotiations, including French diplomatic messages.
A 1997 report details phone calls and faxes between Pakistani
officials in Islamabad and Beijing, and laments that the
Chinese-based official was told to send future messages by the
diplomatic pouch. The report warns that if this order was obeyed,
it would "severely limit our ability to monitor". All the reports
are classified "TOP SECRET UMBRA", indicating that
highly-sensitive monitoring techniques were used to get the information.
The heart of the new, co-ordinated Clinton trade campaign is the
"Advocacy Center" inside the Department of Commerce. The Center
is run by the "Trade Promotion Co-ordinating Committee", part of
the US Department of Commerce. Declassified minutes of the Trade
Promotion Co-ordinating Committee from 1994 show that the CIA's
role in drumming up business for the US was not limited to
looking for bribery, or even lobbying by foreign governments. For
a series of meetings dealing with Indonesia, 16 officials were
circulated with information. Five of the officials were from the
CIA. Three of the five worked inside the Commerce Department
itself, in a department called the "Office of Executive Support".
The fifth, Robert Beamer, was from CIA headquarters.
The "Office of Executive Support" is, in reality, a high-security
office located inside the Commerce Department. It is staffed by CIA officials with top-secret security clearances and equipped
with direct links from US intelligence agencies. Until recently,
it was known, more revealingly, as the "Office of Intelligence Liaison".
According to Loch K Johnson, a staff member of the US
intelligence reform commission set up in 1993, officials at the
departments of Commerce, Treasury and State pass information to
US companies without revealing the intelligence source. "At
Commerce, there's no code or book to consult to say when and what
information can be passed to a US company," he says.
If, for instance, a government official learned that a foreign
competitor was about to win a contract sought by a US company, he
explained, "someone in Commerce might call a US executive and
say: 'Look, you might have a better shot at that contract if you
sweetened your bid a little,'" Johnson added. "They pass on the
information. But they usually do it in a very veiled fashion."
In 1994, a report to the Congressional (house) intelligence
committee said that the "core of the intelligence community in
this area [industrial espionage] has focused on alerting US
policymakers about government-to-government lobbying efforts to
disadvantage US firms seeking international trade. "A review of
intelligence reporting since 1986 has identified about 250 cases
of aggressive lobbying by foreign governments on behalf of their
domestic industries that are competing against US firms for
business overseas", the report stated, adding that since the
start of the Clinton administration, 72 cases involving $30bn had
been under intelligence scrutiny.
In a March article for the Wall Street Journal, entitled "Why we
spy on our allies", former CIA director James Woolsey claimed
there was only one reason why the CIA tracked European companies.
"Most European technology just isn't worth our stealing." he
wrote. "We have spied on you because you bribe. Your companies'
products are often more costly, less technically advanced, or
both, than your American competitors."
Yet some of the earliest deals clinched by US "advocacy" with CIA
support are among the most corrupt deals of all time. In 1994,
President Clinton signed off on $40bn of business agreements
between Indonesia and US firms on one day. Among the deals was a
$2.6bn power plant at Paiton, Java. At the time the contract was
signed, the US knew one of President Suharto's daughters had been
cut in on the deal, and was given a stake in the project worth
more than $150m.
Two months ago, the directors of the CIA and NSA appeared before
the US Congress intelligence committee. CIA director George Tenet
told the Committee: "With respect to allegations of industrial
espionage, the notion that we collect intelligence to promote
American business interests is simply wrong. We do not target
foreign companies to support American business interests.
"If we did this, where would we draw the line? Which companies
would we help? Corporate giants? The little guy? All of them? I
think we quickly would get into a mess"
Three years before European politicians had heard about ECHELON,
news of how the satellite spy system was gaining business for the
US was revealed in the US. A May 1995 report by NBC news said
that the US National Security Agency was intercepting business
faxes and phone calls from stations in the US, the UK and Hong Kong.
Earlier this year, NBC published more revelations about how US
intelligence has been spying for business. For the original
reports see 'U.S. spying pays off for business', by Robert
Windrem (14 April 2000) and 'U.S. steps up commercial spying', by
Robert Windrem (7 May 2000)
> Robert Windrem of NBC News contributed to this report.