Spies step up attacks on US firms, claims FBI

The FBI says foreign spies have stepped up attacks on US-based companies, and a new survey estimates that intellectual property losses from foreign and domestic espionage in the US may have exceeded US$300 billion in 1997 alone.

Governments of at least 23 countries, ranging from Germany to China, are targeting American companies, according to the FBI.

Urging US firms to notify the FBI if they suspect espionage, Mr Larry Torrence, deputy assistant director of national security, said: "The odds are not favourable for any American company when they are targeted for clandestine action by some country's intelligence service."

More than 1,100 documented incidents of economic espionage and another 550 suspected incidents that could not be fully documented were reported last year by major companies in a survey conducted by the American Society for Industrial Security.

The society's periodic surveys, which FBI Director, Mr Louis Freeh, has cited in congressional testimony, provide the federal government with its only estimate of potential damage from economic espionage.

The 1997 survey disclosed that high-tech companies, especially in California's Silicon Valley, were the most frequent targets of foreign spies, followed by manufacturing and service industries.

Among the spies' most sought-after information were research and development strategies, manufacturing and marketing plans and customer lists.

As a matter of policy, the FBI does not identify governments that sponsor economic espionage.

But in a recent article in an academic journal, an FBI agent who works in the field named some of the countries and provided a rare look into commercial spying by foreign intelligence services.

France, Germany, Israel, China, Russia and South Korea were named as major offenders in the article by Mr Edwin Fraumann, a New York-based FBI agent who teaches at John Jay College of Criminal Justice.

His article appeared in Public Adminis- tration Review, published by the American Society for Public Administration.

Both Mr Fraumann and intelligence sources say China has accelerated its efforts to penetrate the security of US companies.

In fact, China was involved in one of the relatively few cases the FBI has brought so far under the 1996 Economic Espionage Act, which makes theft of proprietary economic information a felony punishable by a $10 million fine and 15-year prison sentence.

Harold C. Worden (56) a retired Eastman Kodak manager, pleaded guilty last November to stealing Kodak's formulas, drawings and blueprints and passing them on to China. He agreed to co-operate in a continuing investigation.

US District Judge, Mr Michael Telesca, in sentencing him to a year in prison under a plea bargain negotiated by prosecutors, denounced Worden for providing trade secrets to "not just any foreign national, but China," a long-time US adversary with a bad human rights record.

France, intelligence sources say, is among the world's worst offenders and at one time targeted more than 70 big US corporations, including Boeing, IBM, Texas Instruments and Corning Glass.

Mr Fraumann wrote that Germany's Federal Intelligence Service had been "very active and quite successful" in economic espionage by using a top-secret computer facility outside Frankfurt to break into data networks and databases of companies and governments around the world.